Haigh v Haddad

[2024] NSWSC 904

Supreme Court

New South Wales

Medium Neutral Citation:

Haigh & Anor v Haddad & Anor [2024] NSWSC 904

Hearing dates:

19 – 20 July 2023
23 August 2023

Date of orders:

26 July 2024

Decision date:

26 July 2024

Jurisdiction:

Common Law

Before:

Weinstein J

Decision:

With respect to the Notice of Motion brought by the defendants dated 20 July 2023:-

(1) The time for service of the Notice of Motion be abridged pursuant to r 1.12 of the UCPR;

(2) The first defendant be removed as a party to the proceedings pursuant to r 6.29(a) of the UCPR; and

(3)   Each of the plaintiffs and the defendants is to bear their own costs of the motion.

With respect to the substantive proceedings:-

(1)   Orders 2 and 4 made by Harrison AsJ on 21 October 2022 be set aside;

(2) Pursuant to r 13.4 of the UCPR, the proceedings are dismissed;

(3)   The plaintiffs are to pay the defendants’ costs of these proceedings; and

(4)   In the absence of an agreement as to the costs reserved by Harrison AsJ, the parties are to contact my Associate within 14 days of this judgment, so that the matter can be listed for argument.

Catchwords:

CIVIL PROCEDURE — summary disposal — dismissal of proceedings — appeal from Associate Justice — No reasonable cause of action disclosed — reflective loss — whether reflective loss principle applies to indirect shareholders — abuse of process — where multiple prior proceedings brought on behalf of related party — proceedings dismissed

Legislation Cited:

Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2)

Civil Liability Act 2002 (NSW)

Civil Procedure Act 2005 (NSW)

Crown Proceedings Act 1988 (NSW)

Environmental Planning and Assessment Act 1979 (NSW)

Fair Trading Act 1987 (NSW)

Limitation Act 1969 (NSW)

Supreme Court Act 1970 (NSW)

Trade Practices Act 1974 (Cth)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Ballard v Multiplex (2008) 68 ACSR 208; [2008] NSWSC 1019

Ballard v Multiplex Ltd [2012] NSWSC 426

CBRE (V) Pty Ltd v Trilogy Funds Management Ltd (2021) 107 NSWLR 202; [2021] NSWCA 316

Central Coast Council v Norcross Pictorial Calendars Pty Ltd (2021) 391 ALR 157; [2021] NSWCA 75

City of Botany Bay Council v Jazabas Pty Limited [2001] NSWCA 94

D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12

Dey v Victorian Railways Commissioners (1948) 78 CLR 62

Do Carmo v Ford Excavations Pty Ltd (1981) 1 NSWLR 409

Emanuele v Hedley& Ors (1998) 179 FCR 290

Fleet v Royal Society for the Prevention of Cruelty to Animals (NSW) [2005] NSWSC 926

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69

Jazabas Pty Ltd v Haddad [2006] NSWSC 559

Jazabas Pty Ltd v Haddad [2007] NSWCA 291

Jazabas v Botany Council [2000] NSWSC 58

Johnson v Gore Wood & Co [2002] 2 AC 1

Jones v State of New South Wales [2020] NSWSC 830

Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90

Magill v Magill (2006) 226 CLR 551 at 562; [2006] HCA 51

Massalski v Owners SP 90255 [2023] NSWSC 23

Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 2) (2021) 57 WAR 468; [2021] WASCA 105

Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377

Neilson v City of Swan (2006) 147 LGERA 136; [2006] WASCA 94

New South Wales v Mulcahy [2006] NSWCA 303

New South Wales v Spedding [2023] NSWCA 180

Northern Territory v Mengel (1995) 185 CLR 307; [1995] HCA 65

Pao v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2011] NSWSC 1216

Plaintiff M83A/2019 v Morrison (No 2) [2020] FCA 1198

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

Strickland (a pseudonym) v Director of Public Prosecutions (Cth) (2018) 266 CLR 325

Thomasv D’Arcy [2005] 1 Qd R 666; QCA 68

Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1

Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28

Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69; [1974] HCA 25

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Victoria International Container Terminal Ltd v Lunt (2021) 271 CLR 132; [2021] HCA 11

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533; [1992] HCA 55

Wickstead v Browne (1992) 30 NSWLR 1

Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1

Category:

Procedural rulings

Parties:

Stephen William Haigh (First Applicant)
Dimitrios Kikiras (Second Applicant)
Department of Planning NSW (First Respondent)
Sam Haddad (Second Respondent)
State of New South Wales (Third Respondent)

Representation:

Counsel:
P King (First and Second Applicants)
V Thomas (First, Second and Third Respondents)

Solicitors:
Mihalatos & Associates Solicitors (First and Second Applicants)
Crown Solicitor’s Office (First, Second and Third Respondents)

File Number(s):

2020/308863

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2022] NSWSC 1434

Date of Decision:

21 October 2022

Before:

Harrison AsJ

File Number(s):

2020/308863

JUDGMENT

1. This is an appeal and cross-appeal from a decision of Harrison AsJ striking out a Statement of Claim filed by the plaintiffs (“the SOC”) on 28 October 2020 pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) but permitting the second plaintiff to replead one aspect of the claim, being a claim for mental harm and psychiatric injury (“Order 2”). Costs of the application were reserved (“Order 4”). The proceedings before me were heard over three days, and were then the subject of an unsuccessful mediation in November 2023. I refer to the applicants in these proceedings as the plaintiffs, and the respondents as the defendants.

2. The facts underlying these proceedings have been the subject of two prior claims in the Supreme Court of NSW, first in 1998 (“the 1998 proceedings”) and then in 2005 (“the 2005 proceedings”). Although the plaintiffs were initially successful at trial in the 1998 proceedings (see Jazabas v Botany Council [2000] NSWSC 58 (“Jazabas v Botany Council”)), that decision was overturned by the Court of Appeal in City of Botany Bay Council v Jazabas Pty Limited [2001] NSWCA 94 (“City of Botany Bay v Jazabas”). The 2005 proceedings, commenced by Jazabas Pty Limited (Jazabas) and two related companies, were stayed when the plaintiffs in those proceedings failed to comply with an order for security for costs. The plaintiffs in these proceedings are natural persons, rather than the corporate entities who were the plaintiffs in the 1998 and 2005 proceedings.

3. Harrison AsJ found that the loss claimed by the plaintiffs in the current proceedings is the same loss claimed by Jazabas in the 1998 proceedings. Her Honour held that all the losses claimed in the current proceedings are reflective losses which the two plaintiffs cannot recover. She found that the only exception was a claim for damages for mental harm suffered by the second plaintiff (“the personal injury claim”). With respect to that claim, her Honour found that further pleadings and particulars were required and she permitted the second plaintiff to replead that part of the claim.

4. The plaintiffs’ Amended Notice of Motion filed on 9 December 2022 seeks the following relief:-

“1. Order to set aside or vary the orders and Judgment of Harrison AsJ of 21 October 2022 pursuant to s 118(3) of the Supreme Court Act 1970.

2. The appeal is from the whole of the decision.

3. Costs.”

5. The plaintiffs set out the grounds of their appeal pursuant to r 49.9(b) of the UCPR as follows:-

“4. The Associate Judge erred in failing to give appropriate weight to the significance of the factual case of the Plaintiffs as pleaded in the Statement of Claim.

5. The decision of the Associate Judge to strike out the proceedings without leave to replead was provoked by error such that the Court should intervene.

6. The Associate Judge erred in characterising the sum of the Statement of Claim as that it merely reflects the loss suffered by Jazabas Pty Ltd and should be struck out pursuant to UCPR 14.28(1)(a).

7. The Associate Judge erred in finding that the loss and damage claimed by the Plaintiffs amount to damages with regard to losses suffered by the company.

8. The Associate Judge erred in adopting as the test of strike out or dismissal whether the Defendants or persons in their position are unable to identify an explanation in the evidence served by the Plaintiffs as to why the Plaintiffs’ claims were not made in the earlier proceedings.

9. The Associate Judge erred in holding that the claims brought by the Plaintiffs in the proceedings in this Honourable Court should have been brought in proceedings in 2005 either in their own right even though not so claims and not then known to the Plaintiffs.

10. The Associate Judge erred in holding that if the present Plaintiffs had viable causes of action in their own right, they could and should have brought them in the 2005 proceedings initiated by persons not parties to those proceedings.

11. The Associate Judge in error and the Defendants misconstrued and/or erroneously represented the nature and effect of the Plaintiffs’ claims and the particulars.

12. The Associate Judge misconstrued and/or misapplied the principle in Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 at 223.

13. The Associate Judge erred in holding that the loss and damage claimed by the Plaintiffs were as shareholders in Jazabas Pty Ltd a company which last traded in 1999 and deregistered in 2002.

14. The Associate Judge erred in holding that the Plaintiffs’ proceedings are an abuse of process and/or that the claims of business interruption loss and damage amounted to an abuse of process.

15. The Associate Judge erred in holding the claim of the Plaintiffs relating to the chlorine plant is an abuse of process.

16. The Associate Judge erred in holding that the same causes of action pleaded in the current proceedings were pleaded against Mr Haddad and the State of NSW in the 2005 proceedings in circumstances where one of the Plaintiffs was not a party thereto, and they were unable to sue as the facts alleged were admittedly not known to the plaintiffs.

17. The Associate Judge erred in holding that the loss and damage found in favour of the company in the 1998 proceedings was the same loss and damage the Plaintiffs now claims.

18. The Associate Judge erred in characterising the loss and damage claimed as a ‘reflective loss’ not available to the Plaintiffs.

19. The Associate Judge erred in dismissing the proceedings with costs in response to the Notice of Motion save and except for one aspect of the Second Plaintiff’s claimed.

20. The Associate Judge erred in striking out the Second Plaintiff’s claim limiting any repleading of the Statement of Claim only so far as it relates to the psychological harm suffered by the Second Plaintiff.

Particulars under Part 49.9(c)

In place of the decision and orders of the Associate Judge of 21 October 2022 the Plaintiffs seek an order dismissing the Defendant’s Notice of Motion filed 28 May 2021 with costs and in the alternative an order varying the orders of 21 October 2022 by granting leave to the Plaintiffs to replead with costs.”

[sic]

6. The defendants filed a Notice of Motion on 3 February 2023 setting out the nature of their cross-appeal, the orders sought in lieu of her Honour’s decision and a Notice of Contention as follows:-

“Cross Appeal pursuant to rule 49.11

The appeal is from part of the decision of Harrison AsJ of 21 October 2022.

Grounds relied on in support of the cross appeal

1. The primary judge erred by failing to dismiss the proceedings under UCPR 13.4(1) on the ground that the whole of the proceedings represented an abuse of process, because:

a. the claims pleaded in the statement of claim should have been brought in earlier proceedings commenced by companies controlled by the plaintiffs in 1998 or alternatively in 2005;

b. the proceedings, having regard to the time that has elapsed since the circumstances giving rise to the claims, are such as to occasion unjustifiable oppression to the defendants; and

c. the continuation of the proceedings would bring the administration of justice into disrepute.

2. The primary judge erred by failing to dismiss the whole or alternatively part of the proceedings under UCPR 13.4(1) on the ground that no reasonable cause of action was disclosed by the Statement of Claim, because:

a. the causes of action alleged in the statement of claim are statute barred;

b. the statement of claim pleaded causes of action based on facts that engaged the principle of witness immunity; and

c. the statement of claim failed to plead essential elements of causes of action alleged against the defendants.

3. On the same grounds as set out in paragraphs 1 and 2(b) and (c), the primary judge erred by granting the second plaintiff leave to replead a claim for mental harm and psychiatric injury.

Orders sought in place of the decision

The defendants seek the following orders:

i. Orders 2 and 4 made by Harrison AsJ on 21 October 2022 are set aside.

ii. The proceedings are dismissed pursuant to Uniform Procedure Rules 2005 (NSW) r 13.4; and

iii. The plaintiffs pay the defendants’ costs of the proceedings.

Notice of contention pursuant to rule 49.13

The defendants contend that orders 1 and 2 made by Harrison AsJ, in their favour should be confirmed on following grounds:

4. Other than a potential claim by the second plaintiff as described in order 2:

a. The proceedings represented an abuse of process, for the reasons set out in ground 1 of the defendant’s cross appeal; and

b. no reasonable cause of action was disclosed by the statement of claim filed on 28 October 2020, for the reasons set out in ground 2 of the defendant’s cross appeal.

5. The whole of the statement of claim filed on 28 October 2020 had a tendency to cause embarrassment within the meaning of UCPR 14.28.”

7. For the following reasons, I dismiss the appeal, allow the defendant’s cross-appeal and make the orders sought by the defendant.

Nature of appeal

8. The Court has jurisdiction to hear an appeal from the decision of an Associate Justice in accordance with ss 104 and 118(3) of the Supreme Court Act 1970 (NSW) and r 49.4 of the UCPR

9. In Pao v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2011] NSWSC 1216, Hoeben J set out the principles governing an appeal from the decision of an Associate Justice at [79]-[80]:-

“The application before the Court is an appeal from the decision of an Associate Justice pursuant to UCPR 49.4. The appeal is by way of rehearing (s.75A(5) of the Supreme Act 1970 ) and the Court has the powers and duties of the Court from which the appeal is brought (s.75A(6)). The applicant carries the onus of showing the decision appealed from ought to be reversed. Subject to the power to receive further evidence, the appeal by way of rehearing is conducted on the transcript of evidence taken in the Court below.

Such an appeal is largely governed by the same principles as those applicable to an appeal from a single Judge to the Court of Appeal. Subject to the impact of fresh evidence admitted under UCPR 49.12, the Associate Justice's primary findings of fact are to be followed by the Judge hearing the appeal unless the facts found or inferences drawn attract review under the principles in Warren v Coombes (1979) 142 CLR 531 at 553; Do Carmo v Ford Excavations Pty Limited (1981) 1 NSWLR 409 at 419C-421B.”

10. In Do Carmo v Ford Excavations Pty Ltd (1981) 1 NSWLR 409, Cross J set out the following principles in relation to the approach by a single judge of the Court to findings of fact made by an Associate Justice (referred to by Hoeben J above) at 420A-B:-

“Appeals from a Master go, depending on their subject matter, either to the Court of Appeal (Pt 60, r 17) or to a single judge. The nature of all such appeals, as opposed to their forum or their subject matter, is the same: see s 75A. And the Court of Appeal has always treated appeals from a Master precisely in the same manner as appeals from a judge: see Knight v Kelly (Court of Appeal, 25^th July, 1978, unreported). In my view a similar approach should – indeed must – be adopted where the Master’s decision is brought on appeal to a single judge. It follows that on such an appeal, if no fresh evidence is called to warrant a departure from a Master’s primary findings of fact, those findings of fact are binding on the court hearing the appeal unless those findings, or the inferences drawn from them, are so flawed as to attract the approach taken in Warren v Coombes (1979) 53 ALJR 293. In my view this is the manner in which I must approach the findings of fact by the learned Master in the present case.”

11. Cross J went on to outline the ambit of the power of the Court to examine the discretion exercised by the Master in that case at 420C-F:-

“My view is that in relation to the exercise of a discretion by a Master the Judge on appeal is bound to approach the matter in the same way as the Court of Appeal would examine the exercise of a discretion by a Judge (or by a Master in cases under Pt 60, r 17) ie in the manner revealed in the well-known passage from House v The King (1936) 55 CLR 499, at pp 504, 505, where Dixon, Evatt and McTiernan JJ said:

“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

12. See also Fleet v Royal Society for the Prevention of Cruelty to Animals NSW [2005] NSWSC 926 at [16] per Johnson J.

Notice of Motion to remove first defendant

13. On 20 July 2023, the second day of the hearing, the defendants filed a Notice of Motion seeking an order that the first defendant be removed as a party to the proceedings pursuant to r 6.29(a) of the UCPR. The application was made on the grounds that the first defendant was not a legal person capable of being sued, and Ms Thomas, who appeared for the defendants, invoked s 5 of the Crown Proceedings Act 1988 (NSW), which provides that “[any] person … may bring civil proceedings against the Crown under the title ‘State of New South Wales’ in any competent court.” Thus the Crown, appropriately, undertook to assume any liability that may have been shot home to the named first defendant, the Department of Planning NSW. The plaintiffs agreed with this course of action, and I made the substantive order as sought by the plaintiff.

Factual background

14. The factual background to these proceedings was outlined by Rolfe J in Jazabas v Botany Council, Fitzgerald JA in City of Botany Bay v Jazabas and Simpson J, as her Honour then was, in Jazabas Pty Ltd v Haddad [2006] NSWSC 559 (“Jazabas v Haddad”). I have also had regard to the voluminous affidavit and documentary evidence tendered in these proceedings.

15. During the 1980s, the City of Botany Bay Council (“the Council”) (now the Bayside Council) leased land located at 2–10 Nilson Avenue, Hillsdale (“the Hillsdale land”) from Amcor Limited (“Amcor”) and used that land as a public park. The zoning of the Hillsdale land allowed for medium-density residential development with the Council’s approval.

14. The Hillsdale land was located, in part, on land constituting the Botany Randwick Industrial Complex (“the Complex”). This was the largest industrial area in the Sydney region and accommodated industrial installations and storage terminals, including a number of chlorine storage tanks. Due to health and safety concerns arising from this industry, in 1983 the Department of Planning NSW carried out a Risk Assessment Study (“the 1983 RAS”) of an area that included the Complex and adjacent areas, including the Hillsdale land. This study exposed certain risks around the Complex, including risks of fire, explosion, and toxicity but it was never published. A further study was prepared and published in 1985 (“the 1985 RAS”). It identified a Risk Reduction Zone (“RRZ”) that included the Complex and the Hillsdale land. The RRZ was an area subject to varying degrees of risk of fire and explosion arising from activities in the Complex, but not, according to the plaintiffs, from toxicity. The 1985 RAS established an environmental safety strategy for the Complex that included, inter alia, no intensification of residential development within the risk affected area and the implementation of strict assessment requirements for proposed development to ensure no increase in cumulative risks relative to existing conditions.

15. Both the 1983 RAS and the 1985 RAS were allegedly prepared, written, and approved for publication by Sam Haddad, who is the named second defendant in these proceedings, and who was a public officer of the State of New South Wales, the named third defendant in these proceedings. The plaintiffs allege that the 1985 RAS was a “sanitised” version of the 1983 RAS, and that the 1985 RAS failed to disclose the true nature and extent of the hazard risks in and around the Complex. The plaintiffs say that they did not find out about the 1983 RAS until January 1999, after they initiated the 1998 proceedings, and did not find out about certain annexures to the report until December 2002.

16. In 1993, the Hillsdale land was offered for sale by public auction by Amcor. On 5 November 1993, Amcor applied to the Council for a certificate pursuant to s 149 of the Environmental Planning and Assessment Act 1979 (NSW). That certificate was issued on 11 November 1993 (“the s 149 certificate”). It contained representations that no development control plan applied to the Hillsdale land and that the land was not affected by any council policy to restrict development by reason of land slip, bush fire, flooding, tidal inundation, subsidence or any other risk.

17. The first plaintiff, Stephen William Haigh, was engaged in building and development work in the region of Randwick and adjoining areas. For this purpose, he used various corporate entities including BAS Developments Pty Ltd (“BAS”) and Permtree Pty Ltd (“Permtree”), of which he and his wife were the sole shareholders. The second plaintiff, Dimitrios Kikiras, was a licenced real estate agent and auctioneer operating principally in Randwick and Botany. He and his wife were the sole shareholders of Kikiras Real Estate Pty Ltd (“KRE”).

18. The two plaintiffs met in 1991 and agreed to enter into what is described as a “joint venture” by which BAS would purchase and develop property which KRE would sell. For this purpose, the plaintiffs established Evenvest Pty Ltd (“Evenvest”). They became interested in purchasing and developing the Hillsdale land. In December 1993 Evenvest entered into a contract with Amcor for the purchase of the Hillsdale land. The plaintiffs planned to develop the land by constructing 15 “walk up” units.

19. Due to concerns about possible litigation, the plaintiffs decided to wind up Evenvest and incorporated Jazabas on 12 May 1993. The contract to purchase the Hillsdale land was later novated and Jazabas was substituted as the purchaser. Initially, shares in Jazabas were held by the plaintiffs and their wives, but the shares were later transferred to Permtree and KRE respectively on 24 June 1994. As set out above, at all material times, the plaintiffs were the shareholders in the two companies (Permtree and KRE) that were the sole shareholders of Jazabas.

20. The purchase of the Hillsdale land by Jazabas was completed on 28 June 1994 and it became the registered proprietor. On 24 October 1994, Diane Cuthbert, the Council’s director of Planning and Environment, wrote to Jazabas advising that the Council had prepared a development control plan for the land. On 1 April 1996, Jazabas made an application to the Council for approval of the development of 10 townhouses. This was approved on 4 June 1996. At no point up to this time had the Council disclosed the existence of the 1985 RAS.

21. On 4 September 1997, Metway Bank approved the finance application to fund the development. In October 1997, Jazabas lodged a building application with the Council to build 10 townhouses on the Hillsdale land (“the building application”). At this point, the Council ascertained that the property fell within the RRZ pursuant to the 1985 RAS. Approval for the building application was withheld and the time for approval of the application eventually lapsed.

The Land and Environment Court proceedings

24. On 23 December 1997, Jazabas applied to the Land and Environment Court of NSW (“LEC”) in relation to the Council’s deemed refusal of Jazabas’s application (“the LEC proceedings”). That application was heard by a LEC Assessor who dismissed it on the basis of the 1985 RAS and expert evidence, which established that the land was unsuitable for further residential development. The Council then took the unusual step of appealing against the decision in its favour. On 16 April 1999, Lloyd J delivered a decision allowing the appeal and remitting the proceedings to a LEC Assessor to be determined in accordance with law. Building approval was eventually granted, but not before Jazabas had sold the Hillsdale land in an effort to mitigate its losses arising from the delayed building approval.

The 1998 proceedings

25. On 30 July 1998, Jazabas commenced proceedings against the Council in the Federal Court of Australia, later transferred to the Supreme Court of NSW, which were heard before Rolfe J. It claimed that the Council or its officers had made various negligent or false representations, including in the s 149 certificate, to the effect that the Hillsdale land was not affected by a policy of the Council to restrict development on the land due to any risk and that they were false because of what was contained in the 1985 RAS. Jazabas claimed that, but for those negligent or false representations, Evenvest/Jazabas would not have entered into the contract to purchase the Hillsdale land and would instead have pursued other, more profitable, ventures. The damages claimed were for, inter alia, loss of opportunity and business interruption.

26. Rolfe J held that the various representations each constituted negligent misstatements in breach of the Council’s duty of care and that Evenvest/Jazabas would not have entered into the contract to purchase the Hillsdale land but for those misstatements. His Honour rejected a statutory claim for misleading and deceptive conduct pursuant to ss 52 and 53A of the Trade Practices Act 1974 (Cth) (“TPA”) and s 42 of the Fair Trading Act 1987 (NSW), finding that the Council was not a trading or financial corporation and that the misstatements were not made in the conduct of trade or commerce. Rolfe J awarded Jazabas damages in the sum of $1,218,832: see City of Botany Bay v Jazabas at [262] per Fitzgerald JA.

27. The Council appealed. The Court of Appeal held that the s 149 certificate was not inaccurate or misleading. By majority, the Court held that Jazabas’s alternative claims also failed, and the appeal was allowed. An application for special leave to the High Court was refused on 19 April 2002.

The 2005 proceedings

28. On 3 February 2005, Jazabas, BAS, and Permtree commenced proceedings against Mr Haddad, the State of NSW, and the Council. An application for security for costs was heard by Simpson J, as her Honour then was, on 25 and 26 May 2006. The factual matrix underlying the 2005 proceedings, as identified by her Honour, was largely the same as that in the 1998 proceedings. The Amended Statement of Claim in the 2005 proceedings contained a claim against Mr Haddad in deceit for false representations as to the boundaries of the RRZ in the 1985 RAS. Her Honour further identified that the pleadings contained allegations against Mr Haddad for negligent misrepresentation, in misleading and deceptive conduct pursuant to the TPA, for misfeasance in public office and injurious falsehood. The plaintiffs claimed that they had suffered loss and damage in reliance on those representations.

29. The plaintiffs claimed that the State of NSW was vicariously liable for Mr Haddad’s acts and omissions. Further, they claimed a case in negligence and a case in conspiracy, alleging that the State of NSW “combined and conspired” with Mr Haddad “by unlawful means”. The conspiracy was allegedly aimed at concealing the 1983 RAS and “the unlawful means” were allegedly the misstatement of the risks in the 1985 RAS.

30. As against the Council, the three companies pleaded four causes of action: negligence, deceit, abuse of process and misfeasance in public office. The claim for negligence included a failure to warn persons about the hazards of the relevant areas, adopting a policy of concealment of those risks, failing to produce a plan for acceptable land use in the area; tendering incorrect evidence in the LEC, and appealing from the decision of the LEC Assessor and submitting that the building application should be granted despite the hazards present in the area. The claim in deceit was based upon the representations by Council officers that there was no risk to development on the land. The abuse of process claim relied upon the Council’s appeal from the decision of the LEC Assessor, alleging that it was made for an improper purpose and to obtain a collateral advantage extraneous to those proceedings, to circumvent the 1998 proceedings and to reduce its liability for damages. The pleading of the misfeasance in public office claim asserted that the Council was a public officer within the scope of that tort. It alleged that the Council engaged in unauthorised or invalid acts that caused loss or damage to Jazabas. Her Honour noted that a significant aspect of the pleaded case lay in the assertion that the 1983 RAS was concealed by one or more of the defendants.

31. On 9 June 2006, Simpson J stayed the proceedings until the plaintiffs provided security for the defendants’ costs. The plaintiffs appealed from her Honour’s decision. On 25 October 2007, the Court of Appeal granted leave to appeal but dismissed the appeal: Jazabas Pty Ltd v Haddad [2007] NSWCA 291. After yet another hearing and an appeal, the proceedings were eventually dismissed on 14 September 2010.

The current proceedings

32. The plaintiffs commenced these proceedings on 28 October 2020. The SOC sets out the pleadings and some new allegations of fact. It is appropriate to observe that the pleadings in the SOC are opaque. It is a document that is neither easy to interpret nor follow.

New allegations of fact

33. Three new allegations of fact that were not part of the 2005 proceedings were identified by Harrison AsJ. The plaintiffs submitted that it is a misunderstanding of the plaintiffs’ case that these are the only new allegations made. However, leaving to one side the causes of action advanced by the plaintiffs, the following are the only new allegations that I can discern which comprise the factual matrix of these proceedings which were not part of the 2005 proceedings.

34. In 1988, Mr Haddad prepared a third report establishing an up-to-date environmental planning and safety strategy in respect of the cumulative hazard risks arising from activities in the Complex (“the 1988 report”). The 1988 report noted that since the publication of the 1985 RAS, there had been a number of significant changes in industrial and other developments in the area, including improved safety of existing plant, and that rigorous safety requirements had been applied to new industrial developments. It recommended that “site A”, which included the Hillsdale land, be further reassessed for toxic risk in light of chlorine-safety updates. The 1988 report was not published. The plaintiffs allege that the 1983 RAS and the 1988 report were “abandoned” by the defendants and that the defendants acted in bad faith by not disclosing to the public the cumulative risks identified in the 1988 report.

35. In November 1998, the Minister for Urban Affairs and Planning, upon the recommendation of the Department of Planning NSW, approved the installation of a replacement chlore-alkali plant to produce gaseous chlorine, owned and operated by Orica Australia Pty Ltd at its site within the Complex (“the Orica plant”). The plaintiffs allege that this decision failed to take into account transport risks associated with the transportation of chlorine to and from the plant, and that the decision was made contrary to State Environmental Planning Policy 33 (“SEPP 33”) and Hazardous Industry Planning Advisory Paper No 6 (“HIPAP 6”) and was based upon the 1985 RAS, rather than the 1983 RAS or the 1988 report. The plaintiffs allege that but for these failures, the Orica plant would have been refused.

36. The plaintiffs allege that they first became aware of the true position of the nature and extent of the cumulative hazard risks, including transportation risks to residential and other development in the area of the Complex, when Mr Haigh read the Dangerous Goods Transport Qualitative Risk Assessment, Denison Street, Hillsdale report prepared by Scott Lister dated 12 February 2015 (“the Lister report”). That report was undertaken to assist in the evaluation of a proposed development of a Bunnings Warehouse store on Denison Street, Hillsdale, and to perform a risk assessment of the movement of dangerous goods along Denison Street, which is located within the Complex and close to the Hillsdale land.

37. The plaintiffs submitted that the Lister report revealed the transport risks on Denison Street and that this would have led to the application for the Orica plant being refused. The plaintiffs further submitted that the 1988 report identified traffic hazard risks, meaning that (at least) Mr Haddad knew of those risks and they allege that the defendants concealed the 1988 report. Further, with knowledge of the risks, the plaintiffs allege that the defendants intentionally did not undertake any risk analysis as required by SEPP 33 and HIPAP 6. The plaintiffs allege that this was concealed until 2015, such that the commencement of these proceedings in 2020 was within the six-year limitation period.

Pleaded causes of action

38. As I have said, part of the difficulty in this case is that the pleadings contained in the SOC are unclear. Further, given the submissions advanced by the defendants, I must consider what was pleaded in the 2005 proceedings, and I note that the 2005 Statement of Claim (as observed by Simpson J) was similarly opaque. Nevertheless, the following causes of action were identified by Ms Thomas as being pleaded in the current SOC, and Mr King, who appeared on behalf of the plaintiffs, did not disagree with Ms Thomas’s characterisation of the plaintiffs’ claim:-

1. The tort of misfeasance in public office (“first misfeasance claim”);

2. The tort of deceit;

3. Misleading or deceptive conduct within the meaning of the TPA or the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2) (“ACL”) (“the statutory claim”);

4. The tort of collateral abuse of process;

5. The tort of misfeasance in public office (“second misfeasance claim”); and

6. The aforementioned personal injury claim, which was pursued by Mr King at the hearing before Harrison AsJ.

39. At the end of the hearing, Mr King informed the Court that the plaintiffs no longer pressed the collateral abuse of process claim. Otherwise, the SOC, supplemented by a letter from McKell’s Solicitors (“McKell’s”), then solicitors for the plaintiffs, dated 23 April 2021 in response to a letter from the Crown Solicitor’s Office (“CSO”) seeking further and better particulars, sets out the following with respect to each cause of action.

First misfeasance claim

40. The plaintiffs allege that each of the defendants (the Department of Planning NSW being the government department responsible for planning and development decisions, Mr Haddad being an officer of the third defendant and the State of NSW being responsible for the first and second defendants) held public office at all material times and misconducted themselves in their public office. The basis for this claim appears to be the non-publication of the 1983 RAS and the 1988 report, as well as the “sanitisation” of the 1985 RAS. It is alleged that but for these events, the plaintiffs would have been informed, either by reading a planning instrument or by being notified by the Council, that the Hillsdale land was not suitable for development and they would not have purchased the land. The plaintiffs allege that the defendants acted in bad faith because they did not disclose the real hazards to the community and because they failed to provide a Regional Environmental Plan (“REP”) which was lawfully required of them. The plaintiffs further say that in failing to provide a REP, the defendants acted for an ulterior purpose; that is, to promote the development of the Orica plant without regard for the public interest.

Claim in deceit

41. The plaintiffs allege that the second defendant made false representations on 16 February 1998 to the effect that the RRZ was not only founded on risks from fire and explosion but took into account risks from all sources, being a cumulative assessment of risk, and that the Hillsdale land was “within the risk contours notwithstanding”. The plaintiffs say that these representations were false.

42. Further, the plaintiffs allege that Mr Haddad provided statements in both the LEC and the 1998 proceedings repeating the representations noted above, and made further representations to the effect that the 1985 RAS was one of the first of its kind worldwide which considered cumulative risks from all industrial activities in the Complex and the surrounding area. It is further alleged that Mr Haddad falsely represented that the advice from the Department of Planning NSW, contained in correspondence to the Council, was consistent with broad departmental policies for the formulation and implementation of land use planning criteria. The plaintiffs allege that each of these representations were relied upon by the plaintiffs and “their joint venture vehicle Jazabas” and that each representation was made with knowledge that it was false or that each representation was reckless as to whether it was false. The plaintiffs claim they were induced by each representation, acted in reliance upon them and suffered damage as a result.

Personal injury claim

43. I observe that the personal injury claim apparently arises in particulars given for the claim in deceit, being that the harm to the second plaintiff included “… very significant and hurtful family and personal losses.” No further particulars are provided.

Statutory claim for misleading and deceptive conduct

44. The statutory claim for misleading and deceptive conduct is based on the same pleadings as the deceit claim, and appears to be pleaded in the alternative.

Second misfeasance claim

45. The plaintiffs allege that the defendants by their agents made a number of errors with respect to the application for the installation of the Orica plant, which should have been carried out in accordance with SEPP 33 and HIPAP 6 as legally required. They allege that the State of NSW failed to correctly apply those instruments, did not lawfully assess the application and did not undertake a transport risk assessment or risk evaluation study as required by SEPP 33. They allege that had it complied with these requirements, the application to build the Orica plant would have been refused, reducing risks in the area. The plaintiffs allege bad faith on the part of the State of NSW on the basis that the defendants concealed the unacceptably high fatality risk to existing nearby residents and prospective developers. Because of these actions, the plaintiffs allege that they lost the opportunity to retain the Hillsdale land and to continue and maintain their joint venture business activities.

Legislative background

46. Before Harrison AsJ, the defendants sought to have the proceedings summarily dismissed pursuant to r 13.4 of the UCPR, which provides:-

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).

47. Alternatively, the defendants relied on r 14.28 of the UCPR, which provides:-

14.28   Circumstances in which court may strike out pleadings

(1)   The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading—

(a)   discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

(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.

(2)   The court may receive evidence on the hearing of an application for an order under subrule (1).

48. Both rr 13.4 and 14.28 are aimed at ensuring that the Court has control over its own proceedings and procedure and to allow it to prevent an abuse of its processes. An abuse of process may occur where, for example, the proceedings are doomed to fail, or no reasonable cause of action is disclosed, or the claim or issues in the proceedings have been previously determined. In Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 at 518-519; [2015] HCA 28 at [24], French CJ, Bell, Gageler, Keane and Nettle JJ remarked that there is an overlap between abuse of process and the doctrine of estoppel and said that:-

“… the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.”

49. As has often been said, the power to dismiss proceedings pursuant to r 13.4 of the UCPR should be exercised sparingly and only when the proceedings are manifestly groundless, or so clearly deficient that it would be inappropriate to allow the proceedings to continue or that no reasonable cause of action is disclosed: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at 129-130. As Harrison AsJ pointed out below, the application needs to be approached upon the basis that only in a very clear case will proceedings be summarily dismissed: Dey v Victorian Railways Commissioners (1948) 78 CLR 62 at 91 (“Dey”). The onus of demonstrating that proceedings are an abuse of process (and should be summarily dismissed) lies on the defendant: Wickstead v Browne (1992) 30 NSWLR 1 at 11.

50. In determining whether proceedings ought to be stayed as an abuse of process (and analogously whether proceedings ought to be dismissed on the same grounds), the test is whether the use of the Court’s procedures occasions unjustifiable oppression to a party or where the use serves to bring the administration of justice into disrepute: UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 at [1] (Kiefel CJ, Bell and Keane JJ) (“UBS”). A court is required to make a broad, merits-based judgment of all of the circumstances of the case in coming to its conclusion: UBS at [7], citing Johnson v Gore Wood & Co [2002] 2 AC 1 at 31 (“Johnson”).

51. However, the fundamental responsibility of a Court is to do justice between the parties and if the Court can cure any prejudice to a fair trial so as to ensure that justice is done by means other than the dismissal of proceedings, it ought to do so: Victoria International Container Terminal Ltd v Lunt (2021) 271 CLR 132; [2021] HCA 11 at [18]-[20] (“Lunt”); see also Dey at [91]. Leave should ordinarily be granted to recast defective pleadings: Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69; [1974] HCA 25 at 97 (“Turner”).

52. The plaintiffs submitted, generally, that the question before the Court was whether or not the plaintiffs had viable causes of action and if so, whether or not they should be given leave to replead them. The defendants accepted that if the plaintiffs had any viable cause of action, leave should be granted for them to replead.

Evidence

53. The parties relied on evidence contained in a joint court book, which was exhibited in the proceedings below. It contained affidavit evidence, the judgments in the 1998 and 2005 proceedings, and other sundry materials that were before Harrison AsJ. It was tendered subject to the objections upheld by her Honour below.

54. In support of their case, the plaintiffs tendered two expert reports: one by Jeremy Swan, town planner, dated 30 August 2021 (“the Swan report”) and one by Tim Watson-Munro, consultant psychologist, dated 15 March 2022 (“the Watson-Munro report”).

55. Mr Swan reviews the approval process with respect to the Orica plant. It concludes that there were a number of shortcomings with the approval, and that a Risk Evaluation Study should have been carried out in accordance with SEPP 33 guidelines, and that the failure of the consent authority to correctly apply SEPP 33 meant that it could not properly assess the application against the relevant matters of consideration provided for in legislation. Mr Swan believes that the application for the development of the Orica plant should have been refused.

56. Mr Watson-Munro first examined the second plaintiff, Mr Kikiras, on 13 January 2021 and his opinion was based on the history obtained from Mr Kikiras. Mr Kikiras reported that after the Council advised their intention to defend the deemed refusal of the development application in the LEC, he began to develop significant symptoms of anxiety, depression and features of an adjustment disorder, which caused him to withdraw from friends, family and work, leading to a compounding and aggregation of his mental health issues. Mr Kikiras then turned to drug use and gambling. Eventually he began supplying cocaine, which led to his arrest, conviction and a 15-month term of imprisonment. Mr Watson-Munro observed that while Mr Kikiras’s mood state has improved somewhat, he continues to suffer a moderate and recurring depressive disorder and features of an anxiety disorder. Mr Watson-Munro believes that the second plaintiff’s depressive disorder developed and escalated because of the delays and events referrable to the purchase of the Hillsdale land.

57. The plaintiff tendered two additional volumes of the court book containing further affidavits, submissions, and the decision from the hearing below. The fresh evidence tendered by the plaintiffs that was not before her Honour included:-

1. An affidavit of Stephen Haigh affirmed on 27 March 2023;

2. An affidavit of Dimitrios Kikiras sworn on 27 March 2023; and

3. An affidavit of Stephen Haigh affirmed on 10 May 2023.

58. Most of the material contained in these three affidavits were submissions pertaining to this appeal and were therefore inadmissible as evidence. What remained contained evidence adduced for the purpose of contradicting the factual findings of Harrison AsJ below and the claims made by the defendants. Subject to objections, the great majority of which were upheld, the defendants did not object to the Court receiving the fresh evidence.

59. The defendants’ fresh material included an affidavit of Bruce Cantrill, solicitor at the CSO, sworn on 21 April 2023, which attached a number of documents including evidence about the shareholdings in Jazabas, BAS, Permtree and KRE and the dates on which the companies associated with the plaintiffs were formally wound up. No objection was taken to the adducing of this fresh evidence. From these documents it is clear that on 24 June 1994, Mr Haigh and his wife transferred their shareholdings in Jazabas to Permtree, and Mr Kikiras and his wife transferred their shareholdings in Jazabas to KRE. Thereafter, Permtree and KRE were the exclusive shareholders (each holding two shares) in Jazabas. I observe that these facts were discernible from other material that was before her Honour below.

Submissions

Plaintiffs’ submissions

60. Mr King did not make submissions, either orally or in writing, which addressed each ground of appeal. I have endeavoured to distil his submissions, as best as possible, from the lengthy oral argument before me.

61. The plaintiffs submitted that there is no commonality between the current proceedings and the previous claims brought in 2005. They submitted that the essence of the present case turns upon the wrongful approval of the Orica plant, which was not raised in 2005. Due to the fatality risks arising from that approval, the plaintiffs say they lost an opportunity to retain the Hillsdale land and to continue and maintain their joint venture business activities.

62. With respect to the reflective loss argument on which her Honour based her decision, the plaintiffs submit that Harrison AsJ erred in finding that the losses claimed by the plaintiffs are not distinct from those of Jazabas. In any event, the plaintiffs submit that they were not shareholders in Jazabas at the relevant times and that the reflective loss principle is limited to persons who hold their shares directly in a company, rather than third-parties, directors, or sub-shareholders. At the hearing, Mr King submitted that Rolfe J erred in treating the losses of “the Haigh Group”, referring to the various persons and corporate entities associated with the plaintiffs, as losses of Jazabas in the 1998 proceedings. It was submitted that in fact the plaintiffs suffered their own distinct losses, separate from Jazabas, due to the misconduct of the defendants in the 1998 proceedings.

63. With respect to the abuse of process grounds raised by the defendants, the plaintiffs submitted that the defendants have failed to demonstrate that the causes of action pleaded in these proceedings ought to have been pleaded in the 2005 proceedings. They submitted that those proceedings are not inconsistent with the current proceedings and that there are no additional factors, such as oppression or injustice, that would satisfy the Court that it would be appropriate to summarily dismiss their claims. The plaintiffs submitted that there was no joinder of issue in the 2005 proceedings, that no defences were filed and that there was no engagement with the merits of the claims. Rather, it was submitted that there was merely a stay and then a dismissal of the 2005 proceedings founded on a failure of the corporate plaintiffs to pay security for costs. The plaintiffs relied on s 91 of the Civil Procedure Act 2005 (NSW) (“CPA”), which provides that dismissal of proceedings does not prevent a fresh claim from being made or from the same relief being claimed in fresh proceedings where there has been no determination on the merits.

64. At the hearing, Mr King submitted that the claims of the plaintiffs are genuine and arise out of a different substratum of facts to the 2005 proceedings, being the lost opportunity suffered by the plaintiffs after 1997 due to the unlawful approval of the Orica plant and the consequential transportation fatality risks. Further, the losses include the “chain of litigation” commencing with the LEC proceedings. The lost opportunities were said to extend up to and including 2018. He submitted that this can be contrasted with the 2005 proceedings, where the loss claimed in those proceedings arose out of business interruption of Jazabas as landlord, and from the purchase of the Hillsdale land in 1993, on the basis of misrepresentations and misconduct.

65. The plaintiffs submitted that they have explained why these claims were not brought earlier. They argue that the causes of action were concealed by the defendants until 2015 when they became aware of the Lister report and the “mental disability” of Mr Kikiras which incapacitated him.

66. In answer to the defendants’ submission that all the plaintiffs’ claims are statute barred, the plaintiffs submitted that it is undesirable that limitation questions should be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases, citing Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533; [1992] HCA 55 at [31] (“Wardley”). It was submitted that the instant case was not the clearest case.

Defendants’ submissions

67. The defendants submitted that no reasonable cause of action is disclosed on the pleading and could never be, and that the proceedings are thus an abuse of process. The defendants submitted that all losses claimed by the plaintiffs, apart from the personal injury claim (to which see below), are reflective losses (i.e., Jazabas’s losses) which the plaintiffs cannot recover. They rely on the plaintiffs’ pleadings and particulars, which the defendants submitted all point to losses allegedly suffered by Jazabas.

68. The defendants submitted that the principle of reflective loss applies to situations where a person (corporate or otherwise) is not a direct shareholder of a company. It was submitted that the underlying rationale is that a plaintiff should not be permitted to recover damages for a loss caused by a breach of duty both to the company and to the shareholder, where the shareholder’s loss is in fact that of the company: Thomasv D’Arcy [2005] 1 Qd R 666; QCA 68 at [15]; Ballard v Multiplex (2008) 68 ACSR 208; [2008] NSWSC 1019 at [32]–[41] (“Ballard”); Central Coast Council v Norcross Pictorial Calendars Pty Ltd (2021) 391 ALR 157; [2021] NSWCA 75 (“Central Coast Council”).

69. With respect to abuse of process, the defendants submitted that these proceedings are an archetypal example of an abuse of process because a related party is suing the same defendant(s) in respect of the same loss: see CBRE (V) Pty Ltd v Trilogy Funds Management Ltd (2021) 107 NSWLR 202; [2021] NSWCA 316 (“CBRE”) at [22] per Bell P. The defendants submitted that the first three claims correspond almost entirely with claims brought by companies controlled by the plaintiffs in the 2005 proceedings. The only claim based on new facts is the second misfeasance claim, but that claim is based on the same losses and should have been brought in 2005 in accordance with the well-known principle in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 (“Anshun”). Further, it was submitted that the evidentiary basis for this claim neither establishes concealment, nor are the necessary elements set out in the pleadings and particulars.

70. Noting the procedural history of the 2005 proceedings, which involved two interlocutory decisions, an appeal, a further decision, and another appeal, the defendants submitted that allowing the current proceedings to go ahead would give rise to a perception that justice is inefficient, is profligate in its application of public money and contrary to contemporary principles of civil litigation.

71. Further, the defendants submitted that all the claims, including the personal injury claim, are hopelessly statute barred and that this case represents a “clearest case”, in the words of the majority in Wardley, for the proceedings to be dismissed on this ground alone. It was submitted that as Jazabas went into liquidation in 2010, no causes of action pleaded could possibly have crystalised after this date. Finally, it was submitted that the evidence adduced by the plaintiffs with respect to concealment does not rise high enough to prove that any cause of action was in fact concealed.

Consideration

The SOC discloses no reasonable cause of action

The losses sought are those of Jazabas

72. The plaintiffs’ claim appears to be advanced on the basis that purchase of the Hillsdale land and subsequent losses impacted the balance of the ventures of “the Haigh Group”. This is what appears to be meant by the statement in the SOC that the plaintiffs were interrupted from maintaining their dual occupancy business ventures of four per annum. In the 1998 claim, Rolfe J calculated damages based on roughly similar grounds, i.e., that Jazabas would have been able to commence four new dual occupancy projects each year and would have earned profits from an additional twelve developments but for the breaches of the defendants. The fact that losses are being claimed on similar grounds is supported by the particulars provided in the letter from McKell’s dated 23 April 2021, which states the following with respect to (at least) the first misfeasance, deceit, and statutory claims:-

“(i)   The alleged loss and damage is from business prevention or interruption to the plaintiffs from their joint venture dual occupancy development activities from 1994 to 2018.

(ii)   The nature of the loss and damage is set of in Supreme Court proceeding No 55043/1998 and CA50159/2000, in which Rolfe J found; had the Council advised the plaintiff of the RAS and the RRZ, as it should have, Jazabas would not have purchased the land.

(iii)   In Supreme Court proceeding No 55043/1998 damages were assessed on the basis that Jazabas had not purchased the land, it would have commenced 4 dual occupancies every year and,

(iv)   The Council did not challenge the trial judges approach to the assessment of the Jazabas damages in the Supreme Court proceedings in the NSW Appeal Court and as such, the calculations for the loss and damage have been assessed on this basis.”

[sic]

73. The SOC is framed as if the losses are those of the plaintiffs. However, the claims arise, ultimately, out of the purchase of the Hillsdale land. The difficulty for the plaintiffs is that they were never the purchasers of the Hillsdale land, which was purchased, and later sold, by Jazabas. The plaintiffs may have suffered losses based on a diminution in the values of their shareholding in Permtree and KRE who were the shareholders of Jazabas, but the losses are still those of Jazabas. In my opinion (and as was the view of Harrison AsJ), the plaintiffs are prevented by the principle of reflective loss from recovering the losses of Jazabas (to which see below). This applies to each pleaded cause of action which I will consider separately.

74. With respect to the first misfeasance claim, the SOC apparently alleges that, had the plaintiffs known about the nature and extent of the risks to residential development in the Complex, “they” would not have purchased the Hillsdale land. “They” must refer to Jazabas, the actual purchaser of the land. With respect to the loss “they” suffered, McKell’s provided the particulars that I have quoted above. I conclude, therefore, that the first misfeasance claim is seeking the losses allegedly sustained by Jazabas.

75. With respect to the deceit and the statutory claims, there are a number of allegations made: first, that the defendants made several representations that misled the Council and the plaintiffs with respect to the RRZ; second, that the second defendant provided a statement to the Council in the LEC proceedings that repeated the above representations; and third, made other representations with respect to the 1985 RAS. The loss claimed is set out in the SOC, which states that:-

“Induced by each representation and in reliance thereon the plaintiffs proceeded with the chain of litigation and ultimately sold the land in reasonable mitigation of their losses.”

76. Later, the SOC sets out that, “[a]s a result of relying on each representation the plaintiffs have suffered loss and damage.” The particulars of 23 April 2021 refer back to those quoted above at [72]. The particulars also provide that the “chain of litigation” refers to the LEC proceedings, the 1998 proceedings and the 2005 proceedings. Jazabas was the plaintiff in all those proceedings, and so any loss suffered as a result of those proceedings, i.e., legal costs, was suffered by Jazabas, not by the plaintiffs. Any loss suffered through the sale of the land was also Jazabas’s loss. I am therefore satisfied that the deceit and statutory claims are seeking the losses of Jazabas.

76. With respect to the second misfeasance claim, it is the claim that has least in common with any claims brought in the 2005 proceedings. At [43], the SOC provides as follows:-

“In the premises by misconduct in public office as alleged in paragraphs 39 to 43 the plaintiffs have suffered the loss and damage alleged herein, and lost the opportunity to retain [the Hillsdale land] and continue and maintain their joint venture business activities.”

78. The only entity that could have lost an opportunity to retain the Hillsdale land is Jazabas, as it was the owner of the land. There is no further elucidation of the alleged losses in the pleadings or particulars. Thus, I am satisfied that the losses claimed are those of Jazabas.

Application of reflective loss principle

79. Mr King submitted that the reflective loss principle does not apply to shareholders who do not hold shares directly in the company. In this respect, Mr King submitted that her Honour erred in stating that this claim was brought by the plaintiffs in their personal capacity as shareholders of Jazabas. To the extent that her Honour’s judgment can be understood as stating that as a fact, it is incorrect. However, notwithstanding her Honour’s comment at [110] of her judgment, in my opinion, she was correct in her ultimate conclusion.

80. The reflective loss principle was explained by Bathurst CJ in Central Coast Council at [103]:-

“What has been described as the reflective loss principle articulated by the English Court of Appeal in Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 (Prudential Assurance) at 223-224 (the principle) is that where loss is suffered by a company as a result of wrongdoing in respect of which each of the company and the shareholder has a cause of action, a shareholder cannot sue to recover the diminution in the value of his or her shares (or loss of benefits associated with his or her shareholding) resulting from the loss suffered by the company. The rationale for the principle has been described as the prevention of double recovery (Prudential Assurance at 222; Johnson v Gore Wood & Co [2002] 2 AC 1 (Johnson) at 62-63, 66-67 per Lord Millett, Lord Goff agreeing), or on the basis that the shareholder does not suffer a loss distinct from the company and the shareholder is barred from pursuing the claim by the principle in Foss v Harbottle (1843) 2 Hare 461 (Foss v Harbottle) (Marex at [10] per Lord Reed PSC, Lady Black and Lord Lloyd-Jones JJSC agreeing), or perhaps because the shareholder has no legal or equitable interest in the company’s assets (Marex at [80] per Lord Reed PSC).”

81. At all material times, the shares in Jazabas were held by Permtree and KRE. The plaintiffs, in turn, held shares in those companies and were thereby the ultimate shareholders of Jazabas. Any loss suffered by Jazabas would have become their loss through a diminution of their shareholding in Permtree and KRE. As stated in Central Coast Council, a shareholder cannot recover the diminution in the value of their shares resulting from losses suffered by the company. If the plaintiffs were allowed to recover the loss of Jazabas, it would offend the underlying rationale in circumstances where Jazabas has already tried, unsuccessfully, to recover its loss.

82. Ms Thomas cited the cases of Ballard and Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 2) (2021) 57 WAR 468; [2021] WASCA 105 (“Mineralogy”) in support of her submission that the plaintiffs are prevented from recovering the losses claimed because they are reflective losses. In Ballard, the plaintiff held shares in Wingrove Pty Ltd, which held one-half of the issued shares in Stoneglow Pty Ltd. McDougall J held that a claim for loss of deprivation of income and dividends by Mr Ballard, as a result of Stoneglow Pty Ltd losing work, was a claim for reflective loss and could not be recovered. In Mineralogy, Clive Palmer, the second plaintiff, was variously described as an “ultimate shareholder” or an “ultimate beneficial owner” of the shares in the first plaintiff, Mineralogy Pty Ltd: Mineralogy at [6], [17], [254]. The Western Australian Court of Appeal held that the losses claimed by Mr Palmer reflected the loss suffered by the company and that those claims therefore disclosed no reasonably arguable cause of action.

83. In substance, there is no difference where the loss is that of an ultimate shareholder rather than that of a direct shareholder. In both cases, the loss is the diminution of value in their shareholding and is not a loss distinct from that of the company. In my view, there is no reason in principle to draw the technical distinction cavilled for by the plaintiffs. In any event, Ballard and Mineralogy are cases where Australian Courts, including a State appellate Court, have confirmed this position. I therefore reject the plaintiffs’ submission and accept the submission advanced by Ms Thomas.

84. I am satisfied that Harrison AsJ did not err in holding that the plaintiffs were precluded from recovering the loss that they seek based on the principle of reflective loss. In my view, no reasonable cause of action is disclosed with respect to the four causes of action opaquely pleaded, and they should not proceed. This effectively disposes of the plaintiffs’ appeal. I now turn to the other submissions advanced by the defendants as part of the cross-appeal.

The proceedings are statute barred

85. Mr King relied on the High Court’s statement in Wardley at 533 per Mason CJ, Dawson, Gaudron and McHugh JJ, that it is undesirable that limitation questions should be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. In response, Ms Thomas submitted that this case is the clearest of cases.

86. The claims advanced by the plaintiffs, except for the statutory claim, are all torts. The limitation period for a cause of action founded on tort is six years from the date on which the cause of action first accrues to the plaintiff: s 14(1)(b) of the Limitation Act 1969 (NSW) (“Limitation Act”). This includes the personal injury claim, which, it is agreed, arises out of the deceit claim. The limitation period for the statutory claim is either three or six years (to which see below). Jazabas was put into voluntary administration in 2010 and was deregistered in 2012. Leaving to one side that a limitation period with respect to a tort will run from the date damage is sustained, and that in this case damage was suffered long, long in the past, any causes of action accrued to Jazabas must have accrued by, at the very latest, 2012 when Jazabas ceased to be a legal entity. These proceedings were commenced eight years later in 2020. Given that I have found that all losses that are claimed are those of Jazabas, all the claims founded in tort are statute barred beyond doubt. This is, indeed, the clearest of cases.

87. With respect to the statutory claim, at [36] of the SOC, the plaintiffs allege that they have “suffered loss or damage entitling them pursuant to section 236, 237 and 243 of the Australian Consumer Law and/or sections 82 and 87 of the Trade Practices Act so as to provide for the amount of the loss and damage”. It is unclear why the plaintiffs have made a claim pursuant to the ACL, which is a part of the legislation that succeeded the TPA in 2010. It is not an alternative to the TPA. If the plaintiffs are claiming damages (or other orders that are not pleaded) under the ACL, then they have not particularised what harm they suffered after the commencement of the CCA in 2010. In other words, there are no pleadings or particulars whatsoever of any misleading or deceptive conduct occurring in or after 2010. In any event, the limitation period for claims made under ss 236 and 237 (s 243 sets out the types of orders that can be made under s 237), is six years: ss 236(2); 237(3) of the ACL. Alternatively, a claim pursuant to ss 82 and 87(1A) of the TPA (although again it is not clear what orders the plaintiffs are seeking) the limitation period is three years: ss 82(2); 87(1CA)(b) of the TPA. Without any doubt, any claim pursuant to either the TPA or the ACL is statute barred. This is the clearest of cases.

88. In response, the plaintiffs submitted that the causes of action were concealed from them until 2015, when Mr Haigh read the Lister report. Although not pleaded, fraudulent concealment which has prevented a plaintiff from bringing a cause of action is governed by s 55 of the Limitation Act, pursuant to which a plaintiff must plead and prove the facts that enliven its operation: Ballard v Multiplex Ltd [2012] NSWSC 426 at [95]. That section was referred to during oral argument, and relevantly provides as follows:-

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.

(2)   Subsection (1) has effect whether the limitation period for the cause of action would, but for this section, expire before or after the date mentioned in that subsection.

(3)   For the purposes of subsection (1), a person is answerable for fraud deceit or concealment if, but only if—

(a)   the person is a party to the fraud deceit or concealment, or

(b)   the person is, in relation to the cause of action, a successor of a party to the fraud deceit or concealment under a devolution from the party occurring after the date on which the fraud deceit or concealment first occurs.

89. The two misfeasance claims are not actions based on fraud or deceit and do not fall within subs (1)(a): New South Wales v Mulcahy [2006] NSWCA 303. Neither do they fall under subs (1)(b). Apart from bare assertions of fraudulent concealment, the plaintiffs have not elaborated on the assertion in pleadings, particulars or evidence. The first misfeasance claim is based on the non-publication of the 1983 RAS and the 1988 report, and the “sanitisation” of the 1985 RAS. The 1983 RAS was known to the plaintiffs and was part of the 2005 proceedings. In those proceedings, the plaintiffs also pleaded that the 1985 RAS was a “sanitised” version of the 1983 RAS. They also alleged that the 1983 RAS was “concealed” by the defendants. In short, the facts were known to the plaintiffs in 2005.

90. The second misfeasance claim relates to the approval of the Orica plant. This occurred in 1998. The plaintiffs say that they were not aware of the facts giving rise to this claim until the Lister report of 2015. I have read the Lister report. The report states that there had been no prior comprehensive study of dangerous goods on Denison Street and that it is the first study to look at the issue. At its highest, the Lister report proves only that there was no appreciation of the danger (of the transport of dangerous goods in Denison Street) until 2015. There are no suggestions of deception or fraud contained within the report. It certainly does not prove concealment.

91. The deceit claim arises from representations made by Mr Haddad on 16 February 1998, as well as in his evidentiary statement provided during the LEC proceedings and the 1998 proceedings. The same claims, based on the same alleged misrepresentations, were made during the 2005 proceedings. Thus, there was never any concealment. As the statutory claim relies on the same factual matrix as the deceit claim, there was likewise no concealment.

92. In my opinion, s 55 of the Limitation Act is inapplicable in the present case.

Tort of deceit claim and statutory claims

93. Part of the deceit and statutory claims is based upon evidence given by Mr Haddad in the LEC and 1998 proceedings. Ms Thomas correctly submitted that a witness is protected from suit, even if the allegations are that the witness’s acts were deliberate or malicious: D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12 at [39]. Thus that part of the pleading is unsustainable and to the extent that it informs those claims, they disclose no reasonable cause of action.

Personal injury claim

94. It is difficult to discern the precise nature of the personal injury claim advanced by Mr Kikiras from the pleadings. The SOC provides no detail, save for mentioning hurtful personal and family losses. Further, in response to a letter from the CSO specifically requesting particulars regarding the alleged loss and damage, as well as the nature, basis and calculations of the loss and damage claimed (referred to above), McKell’s provided no information suggesting that Mr Kikiras had a claim for personal injury arising from mental harm. This claim seems to only have arisen from oral submissions before Harrison AsJ.

95. Damages for psychiatric injury are available for an action in deceit: see Magill v Magill (2006) 226 CLR 551 at 562; [2006] HCA 51 at [20]. Presumably, given the pleadings from which the personal injury claim (apparently) arises, being the pleadings for the deceit claim, it is a claim for intentionally inflicted harm, rather than in negligence. The plaintiffs do not make any claim in negligence in these proceedings.

96. Given the above, the Civil Liability Act 2002 (NSW) (“CLA”) would not apply to this claim: s 3B(1)(a) CLA. However, I observe that the evidence required to prove this claim would be diagnosis of a recognised psychiatric illness rather than psychological damage: Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377 at [73]. No pleadings or particulars of a recognised psychiatric illness have been provided. The Watson-Munro report, which suggests that Mr Kikiras suffers from a depressive disorder and an anxiety disorder, was produced by a psychologist rather than a psychiatrist. I note that a psychologist cannot make such a diagnosis: see Jones v State of New South Wales [2020] NSWSC 830 at [50]. Thus, there are no pleadings or particulars setting out this claim, and no evidence in support of a recognised psychiatric illness. No reasonable cause of action is disclosed, and Harrison AsJ did not err in striking out the pleading (to the extent it exists) pursuant to r 14.28 of the UCPR.

97. There remains a question of whether or not leave should be given to Mr Kikiras to replead his personal injury claim. Harrison AsJ permitted repleading of the claim, on the basis that it was not a claim for reflective loss and may disclose a cause of action, and that it was up to the plaintiffs’ legal representatives to investigate as to whether or not the claim was statute barred. Mr King relied on Lunt and Turner, extracted above, to submit that leave to replead should be given where there may be a reasonable underlying cause of action.

98. It is not in dispute that the personal injury claim attaches to the claim in deceit. That claim relies on representations that occurred on 16 February 1998 and for statements made during the proceedings in the LEC and the 1998 proceedings. The nature of the loss and damage, at least for the deceit claim, is particularised in the letter from McKell’s referring to the purchase of the Hillsdale land, which was sold in 1999. According to the Watson-Munro report, Mr Kikiras believes that his psychological problems began to escalate in about 1996. All these events occurred at least 21 years prior to these proceedings being instituted. The limitation period for a tort is six years. To the extent that any claim can be discerned from the pleadings and from Mr King’s oral submissions, as the personal injury claim attaches to the claim in deceit, it is hopelessly statute barred. This is the clearest of cases. Thus, in my opinion leave should not be granted to replead and I find that this part of claim, to the extent that it exists, should be summarily dismissed.

Second misfeasance claim

99. The second misfeasance claim is the only claim that is based on facts that are, perhaps, somewhat different to those pleaded during the 2005 proceedings. The same losses are sought, and therefore in my view this claim has no reasonable prospects due to the principle of reflective loss. However, even if I am wrong, in my view the claim cannot be maintained as, even at this early stage in the proceedings, it is abundantly clear that the plaintiffs cannot establish the elements of the cause of action.

100. The elements of the tort of misfeasance in public office were recently restated by the Court of Appeal in New South Wales v Spedding [2023] NSWCA 180 at [48]:-

“Putting aside controversy relating to the requirement for the exercise of a public power, the elements of the tort of misfeasance in public office may be stated as follows per Deane J in Northern Territory of Australia v Mengel (1995) 185 CLR 307 at 370; [1995] HCA 65, citing Lord Diplock in Dunlop v Woollahra Municipal Council [1982] AC 158 at 172:

“(1)   an invalid or unauthorised act;

(2)   done maliciously;

(3)   by a public officer;

(4)   in the purported discharge of his or her public duties; and

(5)   which causes loss or harm to the plaintiff.”

This is an intentional tort although the element of intention to do harm may be satisfied where it is established that the defendant was recklessly indifferent to the harm caused.”

101. The second misfeasance claim is not pleaded against Mr Haddad, but against the State of NSW. A question arises as to whether the State of NSW can be “a public officer” for the purpose of this tort. There is no authoritative statement of a test which determines what constitutes a public officer: see Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90 at [3] per Spigelman CJ. The plaintiffs have raised in their reply to particulars the possibility that the State of NSW held the “office as the State of NSW appointed under Act of Parliament and by her Majesty Queen Elizabeth and her appointed Governor”. In Emanuele v Hedley& Ors (1998) 179 FCR 290 at [36], the Court (Wilcox, Miles and RD Nicholson JJ) stated that:-

“… it is a legal nonsense to suggest there can be conduct of the Commonwealth itself that constitutes a misfeasance in public office. The Commonwealth of Australia is a legal entity created by the Commonwealth of Australia Constitution Act 1900 (Imp). It is a juristic person but, of course, is incapable of acting except through agents. It is incapable itself of committing misfeasance in public office; it does not hold public office.”

102. This reasoning would apply to the State of NSW. Therefore, it cannot be liable as principal for the first or second misfeasance claim. The only possibility is that the State is vicariously liable, which is not pleaded in these proceedings. In my opinion, the defendant rightly submitted that this is fatal to the claim.

103. Another issue with this claim is the absence of pleadings or particulars of facts that are capable of supporting the inference about the requisite state of mind; i.e., that the exercise of power was malicious or in bad faith. Misfeasance will not be established where there is an alternative hypothesis that is consistent with an honest exercise of power: Plaintiff M83A/2019 v Morrison (No 2) [2020] FCA 1198 at [115] per Mortimer J, as her Honour then was. The pleadings have been set out above. They do not set out anything that is inconsistent with an honest exercise of power. The most that can be said about the pleadings is that the Minister did not correctly apply the SEPP 33 and HIPAP 6 and did not consider certain relevant issues. There is a mere conclusion or assertion that the determination was made “in bad faith” and that the defendants “concealed the unacceptably high fatality risk to existing nearby residents and to prospective developers”, but the evidentiary basis for this assertion is not identified. In their particulars, the plaintiffs only reiterate that “[t]he pleadings have adequately identified claims of the tort of misfeasance in public office giving rise to the claim of malice or bad faith and any wrongful conduct being undertaken with intent to injure the plaintiffs.” The Swan report says only that there were shortcomings in the approval of the Orica plant (to which see [55] above.

102. In Northern Territory v Mengel (1995) 185 CLR 307; [1995] HCA 65, Deane J said at 370-371:-

“In the context of misfeasance in public office, the focus of the requisite element of malice is injury to the plaintiff or injury to some other person through an act which injuriously affects the plaintiff. Such malice will exist if the act was done with an actual intention to cause such injury. The requirement of malice will also be satisfied if the act was done with knowledge of invalidity or lack of power and with knowledge that it would cause or be likely to cause such injury. Finally, malice will exist if the act is done with reckless indifference or deliberate blindness to that invalidity or lack of power and that likely injury. Absent such an intention, such knowledge and such reckless indifference or deliberate blindness, the requirement of malice will not be satisfied.”

[citations omitted]

105. The defendants also relied on Lord Millett’s statements in Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1 (“Three Rivers”). His Lordship said the following at 235:-

“The tort is an intentional tort which can be committed only by a public official. From this two things follow. First, the tort cannot be committed negligently or inadvertently. Secondly, the core concept is abuse of power. This in turn involves other concepts, such as dishonesty, bad faith, and improper purpose. These expressions are often used interchangeably; in some contexts one will be more appropriate, in other contexts another. They are all subjective states of mind.

It is important to bear in mind that excess of power is not the same as abuse of power. Nor is breach of duty the same as abuse of power. The two must be kept distinct if the tort is to be kept separate from breach of statutory duty, which does not necessarily found a cause of action. Even a deliberate excess of power is not necessarily an abuse of power. Just as a deliberate breach of trust is not dishonest if it is committed by the trustee in good faith and in the honest belief that it is for the benefit of those in whose interests he is bound to act, so a conscious excess of official power is not necessarily dishonest. The analogy is closer than may appear because many of the old cases emphasise that the tort is concerned with the abuse of a power granted for the benefit of and therefore held in trust for the general public.”

106. His Lordship further stated at 235 that the tort can be established by proving “targeted malice” as well as “official acts without such intention but in the knowledge that his conduct will harm the plaintiff or such a class.” In both cases, intention must be proved, either by evidence or by inference: Three Rivers at 235. An inference of dishonesty or improper purpose will be “difficult and usually impossible to rebut” if it can be shown that the official appreciated that he was acting in excess of the powers conferred upon him and that his conduct would cause injury to the plaintiff: Three Rivers at 236. I accept these comments, which have been referred to in Australian cases: see, e.g., Neilson v City of Swan (2006) 147 LGERA 136 at 152 at [42]; [2006] WASCA 94.

107. Further, with respect to the requirement to prove fraud, Lord Millett made the following comments in Three Rivers at 291-292:-

“The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

108. After carefully considering the pleading and the further particulars provided by the plaintiffs, it is clear to me that what is alleged cannot rise to the level of malice, dishonesty or recklessness. There are no pleadings which connect the mental state to the conduct. The Swan report does not allege malice, dishonesty or recklessness. At its highest, all that can be said is that the Minister failed to have regard to the appropriate planning instruments.

109. The second misfeasance claim is merely speculative and should be struck out. As no repleading could ever cure its defect, it should be dismissed.

The proceedings are otherwise an abuse of process

110. The relevant legal principles governing summary dismissal for an abuse of process were helpfully set out by Chen J in Massalski v Owners SP 90255 [2023] NSWSC 23 at [54]:-

“(1)   The “varied circumstances in which the use of the courts processes will amount to an abuse … do not lend themselves to exhaustive statement” or being “susceptible of formulation which would confine it to closed categories”: UBS at [1] and [72].

(2)   An abuse of process will occur where either of two conditions are met: “where the use of the court procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute”: UBS at [1]; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [25] (Tomlinson).

(3)   There is no inflexible rule that a party is precluded from relitigating issues determined in an earlier proceeding, but it might do so: Tomlinson at [26]. The question will be whether, in doing so, it would be unjustifiably oppressive upon the other party or would bring the administration of justice into disrepute - issues that involve a “broad merits based judgment which takes account of the public and private interests and all the circumstances of the case: UBS at [7], citing Johnson v Gore Wood & Co [2002] 2 AC 1, 31.

(4)   Whether the circumstances constitute an abuse of process is to be assessed in light of, and must take into account, “the procedural law administered by the court whose processes are engaged”: UBS at [34] and [72].

(5)   It is unnecessary, in order to establish abuse of process, that subsequent proceedings involve the same parties as the first one, or their privies: Tomlinson at [26]; UBS at [63]. It is also unnecessary to show a superadded element - such as collateral attack or dishonesty - albeit that the presence of such an element may demonstrate, or assist in doing so: UBS at [67].”

111. In Lunt at [19], the majority cited Gageler J, as his Honour then was, in Strickland (a pseudonym) v Director of Public Prosecutions (Cth) (2018) 266 CLR 325 at 372-373 [113]:-

“The power of a superior court to stay its own proceedings as an abuse of process is a power to protect the integrity of its own processes. The power is in that limited respect and to that limited extent a power to ‘safeguard the administration of justice’.”

[Citations removed]

112. As pointed out by Chen J, there is no inflexible rule that a party is precluded from litigating issues determined in an earlier proceeding. The question is whether doing so would be unjustifiably oppressive to the other party or would bring the administration of justice into disrepute.

113. As I have already observed, it has been said that an archetypal case of abuse of process is one where related parties sue the same defendant in respect of the same loss: CBRE at [22] per Bell P. It has also been said that at the core of an abuse of process is the vexation of being required to deal with claims that should have been resolved in prior proceedings: UBS at [58], [67], [75].

114. Given my findings above with respect to reflective loss, the abuse of process point can be easily determined. It is a fact that these claims, in various incarnations, were brought by related parties in the 2005 proceedings and relate to the recovery of the same losses as sought in those proceedings and in the 1998 proceedings. Permitting such claims to be agitated again would be unjustifiably oppressive to the defendants who have already had to deal with these claims, or very similar claims, twice before. To permit the claims to advance any further would, in my opinion, bring the administration of justice into disrepute, as it gives rise to the perception that justice is inefficient and profligate in spending public time and resources. It is also contrary to contemporary principles of civil litigation.

115. What is required of the Court in determining whether or not there is an abuse of process, is a “broad merits-based approach” taking into account the “underlying public interest” that “there should be finality in litigation and that a party should not be twice vexed in the same manner”: Johnson at 31, cited with approval in UBS at [7]. In this case, the plaintiffs, who were the directing minds of the entities that brought proceedings in 1998 and 2005 have made several attempts to litigate almost entirely the same claims, based on almost entirely the same facts, seeking recovery of the same losses. Significant public resources have been expended to respond to these claims. Even if the plaintiffs’ current claims have any merit, which in my view they do not, they ought to have been brought as part of the 2005 proceedings to the extent that they were not. As I have said, allowing these proceedings to continue would bring the administration of justice into disrepute.

116. In my view, Harrison AsJ ought to have dismissed the proceedings, for the reasons set out above.

117. In my opinion, the proceedings should be dismissed pursuant to r 13.4(1) on the grounds that no reasonable cause of action is disclosed by the SOC because:-

1. The causes of action alleged in the SOC offend the principle of reflective loss;

2. The causes of action alleged in the SOC are statute barred; and

3. The SOC pleads causes of action based on facts engaging the principle of witness immunity.

118. Further, in my opinion the proceedings should be dismissed on the grounds that the whole of the proceedings represent an abuse of process, because:-

1. The claims in the SOC should have been brought in earlier proceedings brought by companies controlled by the plaintiffs;

2. Having regard to the time that has elapsed since the circumstances giving rise to the claims, the proceedings occasion unjustifiable oppression to the defendants; and

3. The continuation of the proceedings would bring the administration of justice into disrepute.

119. I therefore allow the defendants’ cross-appeal.

120. As to costs, they will follow the event in the current proceedings. I note that Harrison AsJ reserved the question of costs with respect to the matter before her. If an agreement cannot be reached as to the disposition of those costs, I will hear the parties on the question of reserved costs in due course. If an agreement can be reached, I will make those orders in chambers.

Orders

121. With respect to the Notice of Motion brought by the defendants dated 20 July 2023, I make the following orders:-

1. The time for service of the Notice of Motion be abridged pursuant to r 1.12 of the UCPR;

2. The first defendant be removed as a party to the proceedings pursuant to r 6.29(a) of the UCPR; and

3. Each of the plaintiffs and the defendants is to bear their own costs of the motion.

122. With respect to the substantive proceedings, I make the following orders:-

1. Orders 2 and 4 made by Harrison AsJ on 21 October 2022 be set aside;

2. Pursuant to r 13.4 of the UCPR, the proceedings are dismissed;

3. The plaintiffs are to pay the defendants’ costs of these proceedings; and

4. In the absence of an agreement as to the costs reserved by Harrison AsJ, the parties are to contact my Associate within 14 days of this judgment, so that the matter can be listed for argument.

**********

Decision last updated: 26 July 2024