Jane v Jane

[2012] VCC 807

Revised
IN THE COUNTY COURT OF VICTORIA	Not Restricted

AT MELBOURNE

CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-12-01024

ROBERT FREDERICK JANE	Plaintiff
v
RODNEY BRUCE JANE	First Defendant
and
BOB JANE CORPORATION PTY LTD	Second Defendant
(ACN 005 870 431)
and
PORT 471 PTY LTD (ACN 117 288 061)	Third Defendant
and
RF AND RB PROPERTIES PTY LTD (ACN 104 484 308)	Fourth Defendant

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JUDGE:	HIS HONOUR JUDGE GINNANE
WHERE HELD:	Melbourne
DATE OF HEARING:	20 June 2012
DATE OF JUDGMENT:	28 June 2012
CASE MAY BE CITED AS:	Jane v Jane & Ors
MEDIUM NEUTRAL CITATION:	[2012] VCC 807

REASONS FOR JUDGMENT

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CATCHWORDS –  CONTRACT – claim for repayments of  loan – loans alleged to be repayable on demand - whether cause of action statute barred - application by defendants for judgment - striking out of the pleading - Limitation of Actions Act 1958 s 5(1)(a), Civil Procedure Act 2010 s 61,64, County Court Civil Procedure Rules O. 23.01(1)(a)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G McCormick	Stephen Leonard & Associates
For the Defendants	Mr I Waller SC and Mr J S Mereine	HWL Ebsworth Lawyers

HIS HONOUR:

1       The plaintiff, Robert Frederick Jane, has sued his son, Rodney Bruce Jane and three companies.  The claim against Rodney Jane is for the sum of $2,298,177.09 alleged to be  lent and for the return of chattels.  The claim against the second defendant, Bob Jane Corporation Pty Ltd, is for the return of chattels and for moneys alleged to have been lent in the sum of $520,244.86 and for what is described as a loan account claim.  The claims against the third and fourth defendants, Port 471 Pty Ltd and RF and RB Properties Pty Ltd are for moneys lent in the sums of $2,402,723.73 and $82,753.73 respectively.

2       The defendants deny the plaintiff’s allegations.

3       The sums of money, that the plaintiff alleges that he lent to the defendants, consisted of many payments which are said in combination to total the amounts claimed.  These payments are detailed in six schedules to the statement of claim.

4       The defendants claim, by summons, judgment for the first defendant and for the fourth defendant against the plaintiff on the grounds that particular parts of them are an abuse of process of the Court or are scandalous, frivolous or vexatious. Those parts of the claims are the individual payments comprising the loans said to have been made to the first and fourth defendants, that are alleged to have been made more than six years before the proceeding was commenced, which was on 5 March 2012.

5 The defendants seek orders under Rule 23.01 of the County Court Civil Procedure Rules 2008, alternatively under the inherent jurisdiction of the Court. Alternatively, the defendants seek an order that the relevant paragraphs of the statement of claim as particularised in the Schedules be struck out pursuant to Rule 23.02, alternatively under the inherent jurisdiction of the Court.

6       The defendants argue that the plaintiff’s cause of action in respect of each alleged loan was repayable instantaneously on the payment of the moneys by the plaintiff.  They rely on the principle expressed by Fullagar J in Ogilvie v Adams[1] that where there is a loan of money simpliciter (ie with nothing at all said as to repayment), the money is repayable instanter.  That decision has been often applied since, see the judgment of Nettle J in VL Finance Pty Ltd v Legudi[2] and of Keane JA in Haller v Ayre[3]. The defendants relied on s 5(1)(a) of the Limitation of Actions Act 1958 and have pleaded that provision in their defence.

[1][1981] VR 1041 at 1043

[2][2003] VSC 57 at [39] to [58]

[3][2005] 2 Qd R 410

7       The defendants sought further and better particulars of the Statement of Claim in respect of the alleged loans.  The particulars given were: 

“The terms of the loan were never discussed.  It was implied that they would be repaid when the first defendant was in a position to do so or otherwise on demand.”

8       In respect of the loans made to the fourth defendant, the particulars given were:

“The terms of the loan were not discussed.  It was implied that they would be repaid when called upon by the plaintiff to do so.”

9       The plaintiff, in the schedules attached to the statement of claim, describes the purposes for his alleged loans to the first defendant as including home loans and what are described as “monthly payments.” There is little detail given of purpose in the description of the moneys alleged to have been made to the fourth defendant.

10      The defendants rely on the proposition that a term, that a loan would be repaid when the borrower was in a position to do so, is void for uncertainty see Bailes v Modern Amusements Pty Ltd.[4] The consequence of the term being void for uncertainty  is that  the loan becomes repayable on demand.[5]

[4][1964] VR 436

[5]Ward v Eltherington [1982] Qd R 561 and Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd (receiver and manager appointed) (1993) 11 ACSR 1

11      The plaintiff did not dispute any of the legal propositions advanced by the defendants.  Rather, he submitted that a limitation of actions defence did not extinguish the cause of action but was a bar to a remedy.  Therefore the Court should not give judgment to the defendants or strike out the claim, but leave the matter to go to trial.  Alternatively, he  sought the right to replead.

12      The plaintiff relied on the judgment of French J in Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd[6], where in dealing with a claim for damages for breach of  s.74B and s.75AC of the Trade Practices Act 1974, His Honour stated:

“To plead a cause of action which is, on the face of it, out of time cannot, without more, amount to an abuse of process where the expiry of the limitation period does not extinguish the cause of action.  For until the respondent has pleaded it is not known whether the statutory time bar will be raised.  And if the time limitation is pleaded, the applicant may raise in reply some plea such as waiver or estoppel on the part of the respondent.  It is not always the case that the respondent will plead the limitation point.  In some cases, particularly when the respondent has been aware of the applicant’s concern for a long time and that action is a possibility, it may regard it as inappropriate to raise the plea.  For the same reasons, it cannot be said that the commencement of proceedings out of the time defined by a non-extinguishing limitation provision is frivolous or vexatious.”

[6](2001) 112 FCR 336 at 350 [38]

13      In that case, the respondent’s defence had not been filed at the time of the decision, whereas in this case the defence has been filed and the limitations defence pleaded.

14       French J also referred to the statement in the joint judgment of the High Court in Wardley Australia Ltd v State of Western Australia:[7]

“We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.”

[7](1992) 175 CLR 514 at 533

15      The judgment of French J in Carey-Hazell was applied by the Victorian Court of Appeal in PSL Industries Ltd v Simplot Australia Pty Ltd[8] which concerned  a claim under the Fair Trading Act.

[8](2003) 7 VR 106

16      There are some judicial statements that in a clear case the Court will dismiss a case as an abuse of process where there is a clear limitation defence.

17      It is true that this case is different from many where the present issue has arisen, because a defence has been delivered pleading the limitation defence and no reply has been served. The plaintiff did not propose a form of amended pleading.  However, the solicitor for the plaintiff did write to the defendants’ solicitors agreeing to consent to orders that the statement of claim be struck out with a right to re plead.

18      The statement of claim is unsatisfactory because, as I raised with counsel during the hearing, it pleads allegations in a rolled up manner see eg paragraphs 1 and 14. While particulars have been provided that does not cure the defects in the pleading.

19      The defendants relied on the decision in Wilmott Forests Ltd (in liq) v Kumnick[9], in which Davies J, dealing with an application by the plaintiffs for summary judgment, stated:

“The application was made under r 23.01(1)(a) of the SCR on the ground that the defence did not disclose an answer or was frivolous or vexatious. Before the enactment of s 61 of the Civil Procedure Act 2010 (Vic) the court would not make an order under this rule unless it was clear on the pleadings or from extrinsic evidence that the defence was unsustainable in fact or in law. The test applied for summary judgment under r 23.01 (1)(a) has now been changed by s 61 of the Civil Procedure Act 2010 (Vic) which provides that a plaintiff in a civil proceeding may apply for summary judgment on the ground that a defendant’s defence ‘has no real prospects of success’. This is a less stringent test. Certainty of failure need not be demonstrated. In Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd ( Ruling  No 2) J Forrest J followed English authority  on the test of ‘no real prospect of succeeding on the claim or issue’ to hold that a court may dismiss a claim where it determines that the prospects of success are fanciful, rather than real.”

[9](2011) 85 ACSR 71

20       However, in Manderson M & F Consulting (a firm) v Incitec Pivot Limited[10] the Victorian Court of Appeal,  consisting of Redlich JA and Judd AJA, stated:

“The authorities reviewed by Croft J in JBS Southern Aust v Westcity Group Holdings, which disclosed the underlying rationale for s 63 of the Act, make it clear that an inquiry as to whether a case has ‘no real prospects of success’ involves considerations extending beyond an analysis of the sufficiency of the statement of claim to plead a cause of action. The new power under s 63 is not one to be exercised by reference only to the sufficiency of the pleading. For as Croft J said in JBS Southern Aust v Westcity Group Holdings ‘even if the Court had doubts as to the prospect of success of a defendant’s claims…in terms of the s 63 test, the proper course would be to exercise the discretion under s 64 and to require a full trial of the claims.”

[10][2011] VSCA 444 at [32]

21 Section 64 of the Civil Procedure Act is significant. It provides that:

“Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because –

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.”

22 The discretion contained in s 64 of the Civil Procedure Act is important, particularly as cases where a limitation defence is pleaded, are usually determined after a final hearing at trial.

23 In all the circumstances, I consider that the proceeding should not be dismissed at this point. I take into account that the case pleaded was not, when commenced, an abuse of process, even if there is a limitation defence, which may ultimately succeed. Courts are very reluctant to dismiss proceedings at an interlocutory stage, even where a limitation defence is likely to succeed. It is generally preferable to allow such cases to go to trial. The pleadings at the moment are deficient and do not properly identify the relevant separate factual allegations. I consider that within the meaning of s 64 of the Civil Procedure Act, that it is not in the interests of justice to dismiss the proceeding and that, at least at this point, only a full hearing on the merits is appropriate.

24       I consider that the existing statement of claim should be struck out because it does not properly plead a cause of action. I will hear the parties as to the terms of an order for repleading.

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