Johnston v Australia & New Zealand Banking Group Ltd
[2006] NSWCA 218
•7 August 2006
NEW SOUTH WALES COURT OF APPEAL
CITATION: JOHNSTON v AUSTRALIA & NEW ZEALAND BANKING GROUP LTD & ORS [2006] NSWCA 218
FILE NUMBER(S):
40046/05
HEARING DATE(S): 2 June 2006
DECISION DATE: 07/08/2006
PARTIES:
Daryl Lindsay Johnston - Appellant
Australia and New Zealand Banking Group Ltd - First Respondent
John Edward Star - Second Respondent
Stuart Karim Ariff - Third Respondent
JUDGMENT OF: Giles JA Santow JA Basten JA
LOWER COURT JURISDICTION: Supreme Court
LOWER COURT FILE NUMBER(S): SC 20553/00
LOWER COURT JUDICIAL OFFICER: Hoeben J
COUNSEL:
Mr W. Washington/Ms M. Coroneos - Appellant
Mr J W J Stevenson SC/Mr C D Wood - First Respondent
Mr A Leopold/Mr R K McPherson - Second and Third Respondents
SOLICITORS:
J. P. Leong & Co - Appellant
Minter Ellison - First Respondent
Ebsworth & Ebsworth - Second and Third Respondents
CATCHWORDS:
MALICIOUS PROSECUTION – pleadings – elements of the tort – who is the prosecutor – what is the required belief of the prosecutor – whether defects in pleading incapable of correction – “rolled up” pleadings
LEGISLATION CITED:
Inclosed Lands Protection Act 1901 (NSW), s4
Real Property Act 1900 (NSW), s57
DECISION:
(1) Appeal allowed
(2) Order of primary judge dismissing the proceedings be set aside
(3) Orders of the primary judge with respect to the costs of the application before him be set aside
(4) In lieu thereof
(a) grant leave to the Appellant to file a further amended statement of claim in the form in which it was provided to this Court with amendment of clauses 40 and 41 to comply with these reasons
(b) there be no order of the costs of the proceedings before the primary judge
(c) the Respondents pay the Appellant’s costs of the proceedings in this Court
(5) The Respondents have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise so entitled
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40046/2005
SC 20553/2000GILES JA
SANTOW JA
BASTEN JA7 August 2006
JOHNSTON v AUSTRALIA & NEW ZEALAND BANKING GROUP LTD & ORS
The Appellant, Mr Johnston seeks to bring proceedings against the Respondents for malicious prosecution concerning two charges under the Inclosed Lands Protection Act 1901 (NSW). The charges were dismissed in 1998.
The Respondents have been successful in having several statements of claim previously struck out. On the most recent occasion, the judge struck out a second further amended statement of claim and dismissed the action as the pleadings showed no reasonable cause of action and the defect is of such a kind as to be incapable of correction by further pleading. Mr Johnston appealed.
The issues for determination in the Court of Appeal were:
what are the elements of the tort of malicious prosecution;
whether his Honour erred in concluding that the defect in the pleading then before him was of such a kind as to be incapable of correction by further pleading;
whether this Court, in the exercise of its discretion, should grant the Appellant leave to file a further statement of claim.
Held by Basten JA (Giles and Santow JJA generally agreeing):
In relation to (i):
A person who is not a party to a prosecution but actively puts the criminal process in motion may be liable for malicious prosecution: at [36].
David v Gell (1924) 35 CLR 275; Danby v Beardsley (1880) 43 LT 603, applied.
Several defendants could be liable for malicious prosecution if each was involved in actively, and maliciously, putting the criminal process in motion: at [37].
Evans v London Hospital Medical College [1981] 1 WLR 184
As a matter of principle, there is no reason why the nominal prosecutor, or the person authorising the prosecution, should be a joint tortfeasor: at [40].
Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343; Mahon v Rahn (No.2) [2000] 1 WLR 2150, applied.
Whether a complainant will be liable in circumstances where a charge was laid and proceedings undertaken by the police, will depend upon the extent to which responsibility for setting the criminal process in train can properly be sheeted home to the complainant. But an independent exercise of discretion by the police could only be relied on as a defence where it is shown that the decision-making process was not materially tainted by false evidence provided by, or misleading conduct on the part of, the complainant: at [43].
Martin v Watson [1996] 1 AC 74, applied.
An instigator who believes that the probability of the plaintiff’s guilt is such that upon general grounds of justice a charge is warranted will not be liable for malicious prosecution. However, that belief must be based upon material sufficient to support such a belief in the mind of a person of ordinary prudence and judgement. His Honour erred in his reformulation of the test: at [46] and [73].
A v State of New South Wales (2005) 52 NSWLR 681, considered.
It is incorrect to say that a prosecutor is not required to consider a defence in determining whether to lay a charge: at [56].
Held in relation to (ii):
Caution would be required before holding, as a matter of law, that a pleading should be struck out because it did not reveal a reasonably arguable cause of action: at [50].
The proposed pleading alleges facts from which it might reasonable be inferred that the decision to lay the charge was based on the Respondents’ conduct. Thus there is evidence before this Court to demonstrate a reasonably arguable case and his Honour’s conclusion to the contrary is in error: at [59] and [70]
The statement of claim was not so embarrassing that it cannot be appropriately amended: at [65].
Held in relation to (iii):
Once this Court is satisfied that the proposed pleading contains a tenable cause of action against each Respondent, that there is evidence which indicates that a trial would not inevitably fail, and that the pleading, whatever its infelicities, sufficiently sets out the matters on which the Appellant seeks to rely, leave to amend should be granted: at [75]
Changes to the pleadings are required so as to specify in separate paragraphs the allegations against each defendant. Where liability for the acts of an agent is alleged, that fact, the facts leading to the allegation of agency and the relevant acts of the agent must be identified: at [65] and [75].
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEALCA 40046/2005
SC 20553/2000GILES JA
SANTOW JA
BASTEN JA7 August 2006
JOHNSTON v AUSTRALIA & NEW ZEALAND BANKING GROUP LTD & ORS
Judgment
GILES JA: I agree with Basten JA
SANTOW JA: I agree with Basten JA both as to his conclusions and reasons, though I would prefer to express no view as to what is said at [49] until that question arises.
BASTEN JA: The Appellant, Mr Daryl Lindsay Johnston, seeks to bring proceedings against the Respondents for malicious prosecution. The prosecution in question concerned two charges under the Inclosed Lands Protection Act 1901 (NSW) (“the 1901 Act”) alleging that he, on one occasion, remained upon inclosed lands after being requested to leave and, five days later, entered onto the inclosed land without lawful excuse.
The charges concerned events which occurred almost 10 years ago, in October 1996. They were heard before the Magistrate at Corowa Local Court on 6 August 1998 and each was dismissed. About one year later, the Appellant sought to commence proceedings for malicious prosecution in relation to the laying of the charges. The named defendants were the Australia and New Zealand Banking Group Ltd (“the Bank”), Mr John Edward Star, and an employee of Mr Star, Mr Stuart Karim Ariff. The “inclosed lands” the subject of the charges were a farming property known as “Lilydale” which was owned by a company controlled by the Appellant. The Bank had been a secured creditor of the company and, when it failed to repay moneys outstanding to the Bank, the Bank had appointed Mr Star of Star Dean-Willcocks as receiver and manager of the company. The Bank itself entered into possession of the property.
It is now more than six years since the Appellant sought to commence proceedings against those parties for malicious prosecution. The Respondents have been successful on a number of occasions in having various statements of claim struck out. However, on the most recent occasion, Hoeben J in the Equity Division not only struck out a second further amended statement of claim, but also dismissed the proceedings: see Johnston v ANZ Banking Group Ltd & Ors [2004] NSWSC 1250 at [78].
On 7 November 2005, this Court granted the Appellant leave to appeal from that decision, subject to conditions some of which will be noted below: see Johnston v Australia New Zealand Banking Group Ltd & Ors [2005] NSWCA 383.
The Appellant does not, on this appeal, challenge the decision of Hoeben J in so far as it struck out the second further amended statement of claim: rather, the challenge is limited to his Honour’s order dismissing the proceeding and thus precluding any further attempt by the Appellant to replead his case. The issues before this Court are whether his Honour was in error in concluding that the defect in the pleading then before him was “of such a kind as to be incapable of correction by further pleading”: at [78]. If persuaded that this conclusion was in error, there is a further question as to whether this Court, in the exercise of its discretion, should grant the Appellant leave to file a further statement of claim.
As will be noted below, there are respects in which the elements of the tort of malicious prosecution have been controversial. One aspect of controversy is discussed in A v State of New South Wales (2005) 63 NSWLR 681. Nevertheless, it might have been thought that the key elements of the tort could have been identified with some precision and the material facts concisely pleaded without great difficulty. The fact that the document to be considered on this appeal is the fifth attempt at such a pleading raises squarely the inference that there may be a major flaw or flaws in the case sought to be presented.
As a basis for satisfying the Court that an appropriate cause of action could be pleaded and that, in the circumstances, it would not be futile to grant leave to amend, the Appellant put before the Court a third further amended statement of claim, which was in effect the fifth attempted pleading of his cause of action.
The Respondents did not object to reliance being placed on this further proposed pleading, and indeed sought to make mileage from what they asserted were further difficulties revealed by the drafting.
Neither the Appellant nor the Respondents treated this case as an abstract discussion of the pleadings. Each side sought to demonstrate from various aspects of the evidence (not all of which was before the primary judge) that there was merit on their side of the argument. In particular the Respondents sought to rely on two pieces of evidence which had been prepared by the Appellant, but not served by the time of the hearing before the primary judge, or relied upon before him. One was an affidavit of Senior Constable Hawes dated 8 August 2005, recounting conversations he had had with the Respondents and their agents prior to the laying of the charges. Particular paragraphs from that affidavit were sought to be read on behalf of the Bank, in order to demonstrate alleged inconsistencies between that evidence and the case as pleaded. The Appellant then sought to tender the whole of the affidavit, so that the paragraphs were taken in context. That affidavit, it may be noted, was only sworn after the hearing before the primary judge and some weeks before the hearing of the application for leave to appeal.
The second affidavit was one of the Appellant himself, sworn on the day of the hearing before the primary judge, but not relied upon at that hearing. Again, the Bank sought to rely upon particular paragraphs in the affidavit as admissions, inconsistent with the proposed pleading. The Appellant stated that he relied on the remaining parts of the affidavit to provide context, but little of that material intruded into the argument.
In each case the affidavit was accepted in evidence, subject to a ruling on the relevance of the material relied upon. I would treat all of the material in the affidavits as admitted on the appeal, for the limited purposes material to an interlocutory decision.
Circumstances surrounding the charges
Against this general background in relation to the proceedings, it is necessary to set out some further matters concerning the circumstances in which the charges were laid.
In July 1994, the Australia and New Zealand Banking Group Ltd (“the Bank”) obtained a mortgage from a company, Hurworth Nominees Pty Ltd (“Hurworth Nominees”) which was the registered proprietor of a farming property near Corowa, known as “Lilydale”, to secure moneys owing to the Bank. The Appellant, Mr Johnston, was the secretary and director of Hurworth Nominees. Within two years, the Bank sought to enforce its security over the property. On 6 June 1996, it appointed itself the controller of Hurworth Nominees and appointed the Second Defendant (Mr Star of Star Dean-Willcocks) as receiver and manager of the property.
The property was security for financial accommodation provided by the Bank to three companies controlled by the Appellant. On 6 June 1996 the Bank took possession of the property and appointed Mr Star as receiver and manager of the owner of the property, Hurworth Nominees. According to the proposed pleading, the Bank appointed Mr Star and his employee, Mr Ariff, as its agents. They in turn appointed Mr Morton and Ms White to occupy the farm as caretakers. Norton Smith & Co were solicitors acting for both the Bank and for Mr Star in relation to the Bank’s interests in the property.
The Bank’s right to possession of the property was initially disputed by the Appellant who himself sought to occupy the farmhouse in August 1996. That led the Bank to take urgent proceedings in the Equity Division and orders were made on 19 August 1996 by Bryson J requiring both the Appellant and Hurworth Nominees to vacate the property, “taking with them their personal belongings and no other property” and restraining them from taking any step “to retake possession of the property”.
It is common ground that the Appellant complied with that order and that, in mid-October 1996, he was residing elsewhere. At that point the Bank took steps, through Norton Smith & Co, to serve on Hurworth Nominees a notice under s 57(2)(b) of the Real Property Act 1900 (NSW) . The notice was addressed to the secretary, Hurworth Nominees at the registered office of Hurworth, which was the property. According to the pleading, that notice was served on Hurworth Nominees on or about 19 October 1996. The pleading further asserted that as at that date, the Appellant was the secretary of Hurworth Nominees. That action by the Bank was the trigger for certain steps taken by the Appellant to obtain the notice, which led to the laying of the two charges. The proposed pleading deals with these matters in the following paragraphs: references to “the plaintiff” are to the present Appellant; references to the first, second and third defendants are references to the First, Second and Third Respondents on the appeal, namely, the Bank, Mr Star and Mr Ariff respectively.
“20.On 21 October 1996 the Plaintiff spoke by telephone with Mr Mitchell and informed him that he understood that a s. 57 Notice had issued to Hurworth and requested permission to take delivery of any such Notice. The Plaintiff was informed by Mr Mitchell that he would take instructions and contact the Plaintiff’s solicitor.
21.Mr Mitchell did not at any time prior to, or on, 31 October 1996 inform the Plaintiff or his solicitor that the Plaintiff could not take delivery of the said Notice.
22.On 26 October 1996 the Plaintiff attended the Farm and requested the s. 57 Notice from Ms White, one of the caretakers. Ms White informed the Plaintiff that she knew nothing of any such Notice and directed the Plaintiff to leave the property, which the Plaintiff did.
23.On 28 October 1996 the Plaintiff in a telephone conversation with the Third Defendant stated that he sought permission to go to the Farm to collect the s. 57(2)(b) Notice. The Third Defendant informed the Plaintiff that the Plaintiff would have to make his request of the Second Defendant but did not, himself deny the Plaintiff access.
24.On 29 October 1996 the Plaintiff in a telephone conversation with Mr Star sought permission to attend at the Farm to collect the original s.57 Notice. Mr Star informed the Plaintiff that his request would be referred to the solicitors for the bank, but did not himself deny the Plaintiff access.
25.On 31 October 1996, the Plaintiff approached the Farm in the sight of Mr Morton and Ms White who took no steps to deny the Plaintiff entry to the Farm.
26.On meeting with Mr Morton and Ms White at the Farm, the Plaintiff stated he was there to collect the Notice and Ms White advised the Plaintiff that the Notice was not at the Farm. Mr Morton then engaged the Plaintiff in conversation at the Farm whilst Police were summoned to attend the Farm.
27.On 26 October 1996 Ms White, informed Snr. Const. Hawes of Corowa Police that the Plaintiff had remained on the Farm that day.
28.On 31 October 1996, Ms White and Mr Morton, informed S.C. Hawes that the Plaintiff had entered the Farm without consent and each of them stated that the Plaintiff should be charged with trespass.”
The steps taken by the Respondents to have the police charge the Appellant appear from three categories of evidence, the first being the conversations with Senior Constable Hawes on 26 and 31 October and on 2 and 5 November 1996. Those conversations will no doubt form a significant part of the Appellant’s case if the matter goes to trial. To a significant extent, he will be dependent upon the evidence of Senior Constable Hawes in that regard. The content of those conversations may be sufficiently identified by reference to the following material, taken from Mr Hawes’ affidavit of 8 August 2005:
“13.On 26 October 1996, I received a complaint from Ann White, a caretaker at the property. Ms White alleged in words to the effect; ‘Mr Johnston has trespassed on the property and he attempted to enter the homestead.’
14.I investigated the complaint and I obtained a written statement from Ms White after I held several conversations with her. I also … conducted a conversation with Mr Ariff. Ms White and Mr Ariff each seemed to me to be anxious to see the Police lay charges … against Mr Johnston. During the course of my investigation Ms White provided me with a Supreme Court Order dated 19 August 1996. … Mr Ariff said to me in words to the effect; ‘Johnston has breached the Court Order. Johnston should be prosecuted for trespassing and attempting to break into the house.’ …
…
16.On 31 October 1996, Donald Morton, another caretaker at the property complained to me that ‘Mr Johnston is in attendance at Lilydale’. I attended the property and interviewed Mr Morton and Ms White. After discussing the alleged event with Mr Morton and Ms White I believed that both Ms White and Mr Morton wanted the Police to prosecute Mr Johnston.
17.I then interviewed Mr Johnston and after the interview and upon reviewing a transcript that he had provided me, I concluded that he had a lawful excuse to be in attendance at the property and that the Order did not exclude him from casual attendance provided his attendances were for lawful business purposes. I recall saying to Mr Johnston in words to the effect; ‘Don’t worry about it, you’ve done nothing wrong.’
18.On Saturday 2 November 1996, I advised Ms White and Mr Ariff of my decision not to prosecute Mr Johnston.
19.I made it clear to Ms White and Mr Ariff that the Police could not commence criminal proceedings against Mr Johnston based on the Order. I recall saying to both Mr Ariff and Ms White in words to the effect; ‘I won’t be able to prosecute Johnston unless I see a Court Order giving possession to the Bank and denying Johnston access. We must see black and white evidence of this. As it stands at the moment the claim for possession is in dispute and there is no order denying Johnston entry to the property for a lawful purpose.’ Mr Ariff said in words to the effect; ‘The Bank wants Johnston charged. I will discuss what you have told me with John Mitchell and I will get him to contact you to set out the facts so you will have the evidence to charge Johnston.’
20.On or about 5 November 1996, I conducted a telephone conversation with Mr Mitchell to the following effect; I said; ‘I have made it clear to Ms White and Mr Ariff that on the basis of the Supreme Court Order dated 19 August 1996, Johnston has not committed any offence when he entered the property. If you want the Police to charge Johnston you must give us black and white evidence that sets out beyond doubt that the Bank legally took possession of Lilydale and that it now has a right to deny Johnston access for all purposes. Unless you can provide this additional information I will not be recommending a prosecution.’ Mr Mitchell said to the effect; ‘Any entry onto the property by Johnston is viewed by the Bank as trespass. His entering the property is a breach of the Court Order and an act of criminal trespass, I will send you a letter setting out the facts of the Bank’s entering into possession of Lilydale and our legal opinion setting out the Bank’s position on this issue.’”
The Bank’s letter, referred to in the last paragraph set out above from Senior Constable Hawes’ affidavit, was the second category of evidence. It was accorded significance in the proposed pleading. The Appellant sought to draw the inference from the material set out above that, prior to receipt of the letter, the relevant police officer did not think that a prosecution of the Appellant was warranted: following receipt of the letter, charges were laid. Thus, paragraph 37 of the proposed pleading stated that “in reliance upon the letter”, on 24 December 1996, Senior Constable Hawes laid two informations against the Appellant.
The letter, which was dated 5 November 1996, from Norton Smith & Co and signed by Mr Mitchell, was addressed to “Senior Constable Howes” at Corowa Police Station. It set out various uncontroversial facts, to similar effect as those set out above, in relation to the steps taken by the Bank to obtain possession, up to the obtaining of the order in the Equity Division on 19 August 1996. It then made the following assertions in its final three paragraphs:
“14Since being in possession of the property since 6 June 1996, we have on behalf of the Bank informed Mr Johnston on several occasions that he is not entitled to re-enter the Property. …
15.We are instructed that neither the Bank nor the Receiver consented to Mr Johnston entering the property on the weekend of 26/27 October 1996.
16.Mr Johnston disputes the Bank’s appointment of the Receiver and the Bank’s entitlement to possession of the property. However, in our view, until Mr Johnston obtains an order from the Court overturning or varying the orders made by Justice Bryson on 19 August 1996, the Bank is entitled to remain in possession of the property, the Bank is entitled to decide who is and who is not entitled to enter the property, Mr Johnston is prevented from attempting to retake possession of the property and Mr Johnston is prevented from interfering with the Bank exercising its rights under its mortgage and charge.”
The proposed pleading makes the following complaints in respect of the contents of the letter:
“36 The letter contained no reference to any of:
(a)The issuing by the First Defendant of the s.57 Notice.
(b)The request made by the Plaintiff to Mr Start to attend to collect the Notice.
(c)The request made by the Plaintiff to Mr Mitchell to attend to collect the Notice.
(d)The fact that neither Mr Star nor Mr Mitchell had informed the Plaintiff or his solicitor in response to his requests that he could not attend the Farm to collect the Notice.
(e)The denials by servants of Mr Star on 26 and 31 October 1996 of the Notice being at the Farm.
(f)The giving of directions by Mr Ariff on 4 November 1996 to Mr Morton to send the Notice on to the Plaintiff.”
The third category of evidence was the explanation given by Senior Constable Hawes as to the steps he took in deciding to lay the charges. Senior Constable Hawes’ affidavit related his beliefs and activities on receipt of the letter:
“23.I relied on the evidence set out in Mr Mitchell’s letter that the Bank had legally taken possession [of] the property. I was however still unsure in respect to whether Mr Johnston had a lawful excuse to enter the property in some circumstances.
24.At no time during the conversations I had held with Mr Mitchell and Mr Ariff, was the term 57(2)(b) notice (‘the notice’) used. Mr Johnston had alleged he was at the property to collect the notice. I investigated the whereabouts of the notice. I was satisfied that the notice had been at the property at all material times and that it had been sent by post to Mr Johnston after he had been [in] attendance at the property. This fact convinced me that the notice was always intended for Mr Johnston. It seemed unfair to me that the complaints had been made that Mr Johnston was trespassing when he was there to collect the notice, but I did not know the civil law in respect to the rights of the various parties and I chose to accept the advice set out in Mr Mitchell’s letter.”
At the hearing of the appeal, the Respondents relied upon these last two paragraphs as demonstrating that the police officer was not ignorant of the issue of the s 57(2)(b) notice, nor of its presence on the property at the times the Appellant sought to collect it. Accordingly, so it was contended, the omission of those facts from the letter was immaterial. If the principal omissions were immaterial, the letter was, it was suggested, innocuous.
Following the decision referred to by Senior Constable Hawes, “to accept the advice set out in Mr Mitchell’s letter”, he prepared two charges against the Appellant and included them in a “brief”, with the evidence, including statements he had taken from the Appellant and Ms White, together with Mr Mitchell’s letter and its attachments. This material was forwarded to Sergeant Hanzic, the police prosecutor at Albury, to make a final determination on whether to prosecute. On 23 November 1996 Mr Hanzic made a recommendation that each “summons be issued” and provided handwritten reasons for the decisions. Those reasons were in nearly identical terms in each case, the one with respect to the first charge read as follows:
“Repeated offender – decamped and avoided police each time police were called to Lilyvale [sic]. Receivers required police action.”
That recommendation was approved by the Patrol Commander Corowa on 29 November 1996.
On 24 December 1996 two charges were laid by Senior Constable Hawes alleging separately that on 26 and 31 October 1996 the Appellant had breached s 4(1) of the Inclosed Lands Protection Act 1901 (NSW). That section provides:
4 Unlawful entry on inclosed lands
(1)Any person who, without lawful excuse (proof of which lies on the person), enters into inclosed lands without the consent of the owner, occupier or person apparently in charge of those lands, or who remains on those lands after being requested by the owner, occupier or person apparently in charge of those lands to leave those lands, is liable to a penalty not exceeding …
The charges were heard on 6 August 1998 by Magistrate Gould in the Local Court at Corowa and both were dismissed. The police were ordered to pay the Appellant’s costs of those proceedings.
At some time in 2000 the Appellant commenced proceedings for malicious prosecution in the Common Law Division of this Court. The Second and Third Respondents identify those proceedings as having been commenced on 17 November 1999.
History of proceedings
The history of the pleading may be briefly outlined. On 6 April 2001, Master Harrison ordered that the whole of the statement of claim be struck out. An amended statement of claim was filed, but on 17 July 2001 Master Malpass ordered that the parts relating to the Bank be struck out. From that judgment, an appeal was taken by the Appellant. However, on 19 December 2001 Ireland AJ dismissed the appeal. A further amended statement of claim was filed on 16 January 2002. On 4 June 2003, Davies AJ ordered that it be struck out. On 16 February 2004 the Appellant sought leave to file a second further amended statement of claim, but a document satisfying that description did not become available until shortly before a hearing of the leave application before Hoeben J on 16 December 2004.
His Honour handed down judgment of 22 December 2004 with respect to the second further amended statement of claim (“the SFASC”): see Johnston v ANZ Banking Group Ltd and Ors [2004] NSWSC 1250.The final paragraph of that judgment, [80], read:
“I refuse the plaintiff’s application to file the SFASC. I grant leave to the parties to restore the matter to the list on 7 days’ notice for the purpose of dealing with the defendants’ motion in relation to costs and of dealing with the costs of this application.”
On the front page of the judgment, that is identified as the “decision”. However, at [78], his Honour had stated:
“As I have indicated, apart from the significant defects in the SFASC as a pleading, it is also apparent that in two essential respects the pleading discloses no reasonable cause of action and the defect is of such a kind as to be incapable of correction by further pleading. In those circumstances I am of the opinion that the appropriate course is to dismiss the action and I do so.”
On 22 February 2005 his Honour gave a further judgment with respect to costs. Broadly speaking, his Honour ordered that the Appellant pay the defendants’ costs of the motion before him. The defendants were directed to prepare short minutes of order, reflecting his Honour’s reasons. The resulting costs orders were entered on 24 February 2005. Whether the substantive orders have been entered is not clear. Nevertheless, the current appeal has been argued on the basis that orders were made to the effect of those outlined at [78] and [80] of his Honour’s judgment of 22 December 2004.
On 29 September 2005 an application for leave to appeal was heard by this Court, constituted by Hodgson and Ipp JJA. On 7 November 2005 their Honours handed down judgment granting leave, but on a limited basis: see Johnston v Australia and New Zealand Banking Group Ltd & Ors [2005] NSWCA 383. Hodgson JA (Ipp JA agreeing) identified two broad grounds on which an appeal was sought to be agitated. The first involved a denial of procedural fairness, due to the shortness of time allowed to the Appellant to consider and address the request for an order dismissing the proceedings. That issue was dealt with at [10]-[17] of his Honour’s judgment and leave to pursue that ground was refused. The second ground involved a challenge to the conclusion that the pleading not merely disclosed no reasonable cause of action, but that “the defect was incapable of correction”. In relation to that question, his Honour set out at [18]-[36] some brief background to the proceedings and the findings of the primary judge. At [37]-[48] his Honour set out a number of issues raised by the second broad ground of appeal which the Court accepted could reasonably be raised on an appeal and with respect to which leave was granted. The grant of leave was also subject to a direction that the Appellant not file any further submissions or materials, except in response to submissions filed by the Respondents, or by leave of the Court. It was no doubt for that reason that the Appellant thought it necessary to file a notice of motion seeking to rely upon a fifth version of the statement of claim. The Respondents, in the course of the hearing of the appeal, both sought to tender further evidence and to restrict the opponent’s submissions where they were thought to have strayed beyond the matters identified in the grant of leave.
In the present appeal, the following orders were sought by the Appellant:
“(1) The order dismissing the action be set aside.
(2) The costs order of 22 February 2005 be set aside.
(3)Leave be granted to the Appellant to file a third and further amended statement of claim as submitted or as approved … .
(4) Costs of the appeal.”
By these orders, the Appellant effectively took the position that he accepted that there were flaws in the document considered by Hoeben J, but did not accept that they were incapable of being remedied. In order to demonstrate that this position was justified, he filed a further (fifth) version of the statement of claim. It was that document which he invited this Court to consider as a proper pleading.
Legal principles
(a) liability of complainantThe informant in the summary proceedings brought against the Appellant was Senior Constable Hawes. He would therefore be considered the “prosecutor” for the purposes of a charge of malicious prosecution. However, the evidence demonstrates that the decision to prosecute was not taken by him alone, but with the approval of Sergeant Hanzic, a Police Prosecutor based at Albury. No doubt Sergeant Hanzic could also be a “prosecutor”, for the purposes of the tort. However, neither police officer was sued: the defendants were, rather, those said by the Appellant to be liable, in a practical sense, for the decision to charge him with a summary offence. The first question raised thus concerns whether, and in what circumstances, such persons can be liable for malicious prosecution.
That a person who is not legally a party to a prosecution may nevertheless be sued is beyond doubt. In Davis v Gell (1924) 35 CLR 275 at 282, Isaacs ACJ stated:
“For the purposes of this form of action the law looks beyond theory and regards the person in fact instrumental in prosecuting the accused as the real prosecutor. It enables the person innocently accused to treat his virtual accuser as party to the criminal charge … . The substance and not the legal form must in all cases govern, and while, on the one hand, a person giving information to the police is not necessarily the prosecutor yet, on the other, the mere fact that the police conduct the prosecution does not exclude him from that position.”
The availability of the tort in such circumstances followed naturally from its early life which was based upon the fact of a conspiracy between two or more persons to procure the indictment of the plaintiff for treason or felony, so that his life was in danger: Davis v Gell, 35 CLR at 284 (Isaacs ACJ). The fact that two persons were necessary for a conspiracy suggests that more than one person can be ‘the real prosecutor’ for the purposes of the modern tort of malicious prosecution. Such a conclusion is consistent with the approach of Lopes J in Danby v Beardsley (1880) 43 LT 603 at 604 that a prosecutor for the purposes of the tort is a person “actively instrumental in putting the law in force”. In Evans v London Hospital Medical College [1981] 1 WLR 184, the plaintiff was the mother of a five month old son who had died from “sudden infant death syndrome”. A post mortem analysis carried out on the infant, by the defendant hospital (the first defendant), through an employed medical officer (the second defendant) resulted in specimens being sent for toxicological analysis, which was carried out by the third and fourth defendants. Their reports were provided to the police and formed the basis for the laying of a murder charge against the plaintiff, on the basis that the child had died from morphine poisoning. A subsequent analysis by a pathologist briefed on behalf of the plaintiff suggested that there had been no morphine in the baby’s body at the time of death. Nevertheless, the charge was not retracted, but when the matter came on for hearing at the Central Criminal Court, the prosecution offered no evidence and the plaintiff was acquitted. Proceedings were initially commenced against the defendants in negligence, but an amendment was sought to introduce a cause of action for malicious prosecution against each, because they had “caused the law to be set in motion”. Drake J dismissed the application to amend on the basis that all that was alleged was the placing of reports before the police which was not in itself sufficient to constitute the tort. However, there appears to have been no dispute that the several defendants could have been liable for malicious prosecution if it could have been established that each was involved in actively, and maliciously, putting the criminal process in motion. In any event, no argument was presented in the present case to suggest that the multiplicity of defendants was an obstacle to a properly pleaded claim.
The modern action thus grew out of one for a kind of abuse of process, namely setting the criminal law in motion inappropriately and thereby causing damage. The criteria by which the involvement of persons not party to the prosecution might find themselves liable to suit, have not been clearly defined. This point was made by Dixon J in Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343 at 379:
“The legal standard of liability for a prosecution which is instituted neither by the defendant nor by his servant is open to criticism on the ground of indefiniteness. It is clear that no responsibility is incurred by one who confines himself to bringing before some proper authority information which he does not disbelieve, even although in the hope that a prosecution will be instituted, if it is actually instituted as the result of an independent discretion on the part of that authority … . But, if the discretion is misled by false information, or is otherwise practised upon in order to procure the laying of the charge, those who thus brought about the prosecution are responsible … . The rule appears to be that those who counsel and persuade the actual prosecutor to institute proceedings or procure him to do so by dishonestly prejudicing his judgment are vicariously responsible for the proceedings. If the actual prosecutor acts maliciously and without reasonable and probable cause, those who aid and abet him in doing so are joint wrongdoers with him.”
I do not read the last sentence as qualifying the propositions which came before: in other words, it is not a necessary condition for the effective pursuit of an action for malicious prosecution that the actual prosecutor himself was party to the wrongdoing. The prosecution in that case was made by a Detective Sergeant Lawrence, but apparently on the authority of a senior officer. At p 381-382, Dixon J stated:
“It is true that the detective-inspector sanctioned the prosecution. But upon his evidence it was open to the jury to take the view that he did not in the exercise of an independent judgment direct the prosecution, but, upon an account of the matter given to him by Lawrence with the view of obtaining his assent to a course already agreed upon between Lawrence, Clifford and Inch, as Lawrence’s superior officer, he authorised him to proceed.”
It is thus apparent that the nominal informant may have been party to the tort, but not the police officer who authorised the prosecution. As a matter of principle, there is no reason why the nominal prosecutor, or the person authorising the prosecution, should be a joint tortfeasor: nor do the relevant authorities suggest such a limitation. Dixon J may be understood as discussing the facts of the case before him, rather than imposing a novel limitation on the tort. This view is consistent with subsequent authority: see, eg, Mahon v Rahn (No. 2) [2000] 1 WLR 2150 at [255] (Brooke LJ). Otherwise, the statement of principle in Brain sufficiently identifies the relevant criteria.
(b) independent exercise of discretion
The limits to the circumstances in which private citizens will be liable for malicious prosecution, where they have reported possible unlawful activity to the police, will vary, depending upon the particular circumstances of a case. There are conflicting policy considerations: on the one hand, people should be discouraged from using the criminal courts for settling civil disputes or simply as places where old scores may be settled: see Commercial Union Assurance Co of NZ Ltd v Lamont [1989] 3 NZLR 187 at 198, Richardson J citing G. Kodilinye, “Setting in Motion Malicious Prosecutions: The Commonwealth Experience” (1987) 36 ICLQ 157 at 168. On the other hand, responsible citizens should not be discouraged from reporting possible unlawful behaviour to the authorities responsible for investigating and prosecuting offences and crimes, by the fear of civil action if a complaint proves to be unfounded. The tension between these policy considerations was helpfully expressed in the American Law Institute, Restatement of the Law, Torts (2nd ed, 1977) at section 653(g):
“Influencing a public prosecutor. A private person who gives to a public official information of another’s supposed criminal misconduct, of which the official is ignorant, obviously causes the institution of such subsequent proceedings as the official may begin on his own initiative, but giving the information or even making an accusation of criminal misconduct does not constitute a procurement of the proceedings initiated by the officer if it is left entirely to this discretion to initiate the proceedings or not. When a private person gives to a prosecuting officer information that he believes to be true, and the officer in the exercise of his uncontrolled discretion initiates criminal proceedings based upon that information, the informer is not liable under the rule stated in this Section even though the information proves to be false and his belief was one that a reasonable man would not entertain. The exercise of the officer’s discretion makes the initiation of the prosecution his own and protects from liability the person whose information or accusation has led the officer to initiate the proceedings.
If however, the information is known by the giver to be false, an intelligent exercise of the officer’s discretion becomes impossible, and a prosecution based upon it is procured by the person with responsibility for the initiation of proceedings by a public official, it must therefore appear that his desire to have proceedings initiated, expressed by direction, request or pressure of any kind, was the determining factor in the official’s decision to commence the prosecution, or that the information furnished by him upon which the official acted was known to be false.”
For recent United States cases having some similarity to the present, see First Valley Bank of Los Fresnos v Martin 144 SW 3d 466 (Tex 2004) and The Bank of Eureka Springs v Evans 109 SW 3d 672 (Ark 2003).
In circumstances where there is little by way of investigation of the facts to be undertaken by the police, the provision of false evidence by the complainant will readily support an action for malicious prosecution, even though the police may make the necessary inquiries, obtain a denial from the prospective defendant, and are then faced with conflicting stories. Such a case was Martin v Watson [1996] 1 AC 74, in which a woman complained that her neighbour had exposed himself to her (on more than one occasion). The neighbour was arrested, interviewed and granted bail to appear to answer the charge on a later date. At the hearing, the police prosecutor presented no evidence and the charge was dismissed. The defendant then sued the complainant for malicious prosecution and was successful, the trial judge having apparently concluded that the evidence given by the complainant was false. The Court of Appeal overturned that decision on the basis that the complainant had not been responsible for the decision to prosecute. That conclusion was, however, unanimously reversed by the House of Lords, the leading opinion being given by Lord Keith of Kinkel. In rejecting an argument that to uphold the plaintiff’s case would tend to discourage members of the public from bringing criminal activities to the notice of the police, Lord Keith stated (at p 88B-C):
“It is to be kept in mind also that in actions for malicious prosecution the onus lies on the plaintiff to prove malice and want of reasonable cause. This would not be possible in the case of genuine complaints. It is suggested that adequate remedies for false accusations are available by way of prosecution for attempting to pervert the course of justice or wasting the time of the police, and also by way of prosecution for perjury if the complainant has actually false evidence. But none of these remedies affords any compensation to a person who may have been arrested and imprisoned and perhaps subjected to the ordeal of a trial.”
It follows that whether or not a complainant will be found liable in circumstances where a charge was laid and proceedings undertaken by the police, will depend upon the extent to which responsibility for setting the criminal process in train can properly be sheeted home to the complainant. But an independent exercise of discretion by the police could only be relied on as a defence where it is shown that the decision-making process was not materially tainted by false evidence provided by, or misleading conduct on the part of, the complainant.
(c) lack of reasonable and probable cause: malice
Essential elements of the cause of action are that the prosecution was brought without reasonable and probable cause and that it was brought maliciously.
The cause of action thus has two elements relating to the state of mind of the prosecutor and the grounds for holding that view. In A v State of New South Wales (2005) 63 NSWLR 681, Beazley JA (with whom Mason P and Pearlman AJA agreed) held that on the material available at the time the decision to prosecute is taken, the prosecutor must genuinely hold a belief that the probability of the guilt of the proposed defendant is such that, upon general grounds of justice, a charge against the person is warranted: at [108], adopting the language of Dixon J in Sharp v Biggs (1932) 48 CLR 81 at 106. Dixon J had continued:
“Such cause may be absent although this belief exists if the materials of which the prosecutor is aware are not calculated to arouse it in the mind of man of ordinary prudence and judgment.”
In A v State of New South Wales, this Court held that it was sufficient that the prosecutor believe, upon reasonable grounds, that a charge was warranted, and it was not necessary for the prosecutor to believe that the plaintiff was in fact guilty.
Formulation of a relevant test in these terms is of assistance, but may not be decisive as to the correct approach in particular circumstances. In Mahon v Rahn(No. 2), Brooke LJ noted that there might be “simple cases” (of which a good example was Martin v Watson) to which the principles could readily be applied, and more complex cases, where a more sophisticated analysis might be necessary: [2000] 1 WLR 2150 at [269] and [270]. The simplest form of case is no doubt that in which the only real issue concerns the facts and the facts are known to the person who lays the charge. However, if the person who lays the charge is not directly aware of the facts, additional elements are introduced, including the accuracy and veracity of the witness or witnesses to the facts. A further level of complexity is introduced if there are conflicting stories which will need to be resolved by the tribunal of fact.
Different circumstances again may arise where applicable legal principles are uncertain or contested. In that case, the person who lays the charge (particularly in relation to a summary offence) may not have the relevant expertise to assess the legal arguments. In such a case, it is immediately apparent that to pose the relevant question in a form such as whether the prosecutor believes that the person to be charged is probably guilty, may be to put a question which simply cannot be answered. All the prosecutor can say is that if the witnesses for the complainant are believed, and if the law is as he or she has been advised, then the person will probably be convicted.
There are no doubt many cases in which the police are exhorted to lay charges on the basis of facts which are very likely true, but which in the view of a police prosecutor do not constitute an offence known to the law. Even if the lay complainant in such a case were pursuing an entirely personal and irrational vendetta, if the police did lay a charge it may well be that no cause of action would arise against the lay complainant. That would be because the police had, or should have, exercised their independent discretion. That exercise would not have been tainted by a false statement as to the facts (because they had been correctly relayed by the complainant), nor by the personal vindictiveness of the complainant, because the police are expected to be able to make objective judgments, putting irrelevant motives aside.
Adequacy of pleading
The facts in the present case illustrate the need to apply general principles with careful attention to the particular circumstances. That being so, caution would be required before holding, as a matter of law, that a pleading should be struck out because it did not reveal a reasonably arguable cause of action. (A further contention by the Respondents that that is not the appropriate test in this case will be considered below.)
Putting to one side for the moment questions of who was responsible for particular conduct, the claims made by the Appellant appear to rely upon three broad propositions, namely:
(a)assertions by the Respondents that, as a matter of law, the Appellant was not entitled to go on to land which was in the possession of the Respondents, without their consent;
(b)on the occasions in question, the Appellant did not have their consent, express or implied, and
(c)the Appellant had on other occasions gone on to the property without consent and such repeated offences warranted prosecution, to discourage repetition.
The effect of the proposed pleading is that:
(d)the Appellant had a lawful reason to go on to the property, namely to collect a legal document which had been served on the company of which he was the secretary, whose registered office was on the land;
(e)although he had sought permission, which had not been expressly given, nevertheless such permission had not been denied;
(f) the Respondents were aware of that fact;
(g)from his own investigations, the responsible police officer, Senior Constable Hawes, was not satisfied that the Appellant’s conduct justified the laying of a charge;
(h)Senior Constable Hawes invited the Respondents to provide him with material which would satisfy him that the conduct of the Appellant was unlawful;
(i)having been provided with the solicitor’s letter to that end, he sought legal advice from the police prosecutor as to whether the necessary justification had been supplied;
(j)the solicitor’s letter was deficient in that it failed to disclose material facts, relevant to its own conclusion based on the law, and
(k)the police prosecutor recommended the laying of a charge on the basis of the letter, not being aware of its deficiencies.
The gravamen of the Appellant’s case may be summarised in the following terms, sufficiently for present purposes. It is that the effect of Justice Bryson’s order in the Equity Division on 19 August 1996 did no more than deprive him of any legal claim to possession of the property, with the result that neither he nor the company was entitled to occupy the premises. As would appear from the judgment of Bryson J, and the deliberate failure to allow time to remove property from the premises, any common law right to enter for the purposes of recovering his personal property had been refused, on the basis that he had had ample opportunity to take appropriate steps in that regard prior to 19 August 1996. The result was not that he was forbidden to enter the property for any purpose or on any occasions, but rather that he could not do so in order to assert or retake possession, by way of occupation.
Perhaps curiously, Bryson J’s order was directed to the company as well as to the Appellant. Why the company was required to vacate the property is not entirely clear. Had it done so, any right of the receiver and manager of the company to occupy the property might also have gone. In any event, that aspect of the order was not sought to be enforced and the solicitors for the Bank thought it appropriate to serve the notice under the Real Property Act on the secretary of the company, by delivery to its registered office on the property. There might also have been an issue as to the right of the Appellant to receive the notice, in his capacity as secretary of the company, once the receivers and managers had been appointed to the company. However at no stage relevant to the present proceedings, was that point taken. In the result, the Appellant’s case was that the Bank had quite deliberately sent him an important legal document at a particular address and had then purported to exercise its legal rights to forbid him access to the premises to collect the document. When he sought express consent for his attendance for that purpose, it was not given, but neither was it clearly refused. On that basis it was said that the Bank, through its authorised agent, and the receiver and manager, through its authorised agents, acting to a common end, sought to persuade the police to prosecute the Appellant for seeking to exercise a lawful right to obtain a document which, in the case of the Bank, it had despatched to the property and which, in the case of the receiver and manager, it knew to be on the property. None of that was explained to the police in support of the request that the Appellant be charged. Nevertheless, in those circumstances, a reasonable person could not have thought that the Appellant lacked lawful excuse to come on to the property for the identified purpose and, it might be inferred, the Bank at least was acting mischievously (and thus maliciously) in creating the reason for his presence and then asserting that his presence constituted criminal conduct.
The first challenge raised by the Respondents against this case was that the reason for the Appellant’s presence on the property on each of the days was, at best, a “lawful excuse” for being on the property and that, according to the express terms of s 4(1) of the 1901 Act, is a defence, rather than an element of the offence. The onus of proof in that respect lay on the Appellant and it was not a matter which the Respondents were required to consider in pressing the police to prosecute.
A bona fide belief in that proposition, on the part of the relevant Respondents, might demonstrate lack of malice on their part. However, it is incorrect to say that a prosecutor is not required to consider such a defence, in determining whether to lay a charge. Were it otherwise, any person entering the lands of another could properly be prosecuted even if he or she had a good reason to enter, including a bona fide belief that entry was with the consent of the landowner. At the very least, that proposition is sufficiently arguable to allow a case in which a prosecutor is said not to have considered the possibility of a relevant lawful excuse, to go to trial.
The second basis on which the Respondents say this pleading fails is that the matters omitted from the letter of 5 November were known to Senior Constable Hawes. If he thought that they constituted a lawful excuse for the presence of the Appellant on the property, he was at liberty to determine that no charges should be laid. If he needed legal advice, that was available to him through the Police Prosecutor’s Branch, an opportunity of which he in fact availed himself. If the decision reached were the wrong one, that did not mean there was no independent exercise of discretion by the police, and on the facts as presented by Senior Constable Hawes himself, there clearly was.
That response does not fairly represent the evidence of Mr Hawes, as set out above. The inference available from his evidence that he was prepared to act on the basis of legal advice provided by a reputable firm of Sydney solicitors acting for a major bank, in relation to questions of civil law relevant to the existence or otherwise of a lawful excuse. The inference may be drawn that his superiors took the same course. True it is that the letter of 5 November did not expressly address the argument that the Appellant had a lawful reason to go to the premises, namely to collect the notice sent there by the Bank itself, but by implication, the contention that he had no right to be on the premises, because of the order made in the Equity Division, constitutes an unequivocal rejection of that proposition. Senior Constable Hawes might reasonably have inferred from the failure to address either the facts or the law relating to the notice, that the author deemed them entirely irrelevant to any question of lawful excuse, and so clear was that position in law that it was not appropriate or necessary even to raise it.
In substance the Respondents’ contentions on this point constitute a denial that they are persons responsible for putting the criminal process in train, in the sense relevant to the tort of malicious prosecution. However, the pleadings are not deficient in this respect and the evidence before this Court demonstrates a reasonably arguable case on that issue.
Specific criticisms of pleading
The Respondents also criticise the pleading as embarrassing in that, especially in paragraphs 40 and 41, it contains a “rolled up pleading” directed at all three defendants. One specific consequence of this is that the proper role of Mr Ariff is obscured. It was put on his behalf that if all else failed, he should be removed from the proceedings.
The key paragraphs in the proposed pleading, paragraphs 40 and 41, with their particulars, read as follows:
“40The First, Second and Third Defendants prosecuted or caused the Plaintiff to be prosecuted pursuant to charges of entry upon enclosed lands whilst being aware of substantial evidence indicating that the Plaintiff had lawful purpose and excuse for attending upon the lands of the Farm and whilst they and each of them were aware of material non disclosure by them of that evidence to the Police and in circumstances where there was no reasonable and probable cause for the laying of the charges as laid.
Particulars
(a)None of Mr Star, Mr Ariff nor Mr Mitchell had a bona fide belief that there was material sufficient to prosecute, namely material that the Plaintiff was probably guilty of having committed the offence of entry upon enclosed lands on either 26 or 31 October 1996.
(b)There was no information in the possession of any of Mr Star, Mr Ariff or Mr Mitchell at the time of initiating the prosecution to found reasonable grounds for the holding of any required belief to the effect that the Plaintiff had committed the offence of entry upon enclosed lands on either 26 or 31 October 1996.
(c)There was no information in the possession of any of Mr Star, Mr Ariff or Mr Mitchell that would have justified a man of ordinary prudence and caution in believing that the Plaintiff was probably guilty of having committed the offence of entry upon enclosed lands on either 26 or 31 October 1996.
41.The charges were brought by the First, Second and Third Defendants maliciously.
Particulars
(a)None of Mr Star, Mr Ariff nor Mr Mitchell had a bona fide belief that there was material sufficient to prosecute, namely material to establish that the Plaintiff was probably guilty of having committed the offence of entry upon enclosed lands on 26 or 31 October 1996.
(b)There was no information in the possession of any of Mr Star, Mr Ariff or Mr Mitchell to found reasonable grounds for the holding of any required belief to the effect that the Plaintiff had committed the offence of entry upon enclosed lands on 26 or 31 October 1996.
(c)Malice can be inferred from Mr Mitchell’s failure to inform Snr. Const. Hawes of the fact of the Plaintiff having contacted him on 26 October 1996 seeking permission to attend at the Farm, the registered office of Hurworth for the purpose of collecting a Notice under s.57(2)(b) of the Real Property Act directed to Hurworth.
(d)Malice can be inferred from Mr Mitchell’s failure to inform Snr. Const. Hawes of the fact of the issuing by the bank of the s. 57 Notice at all.
(e)Malice can be inferred from Mr Ariff’s failure to inform Snr. Const. Hawes of the fact of the Plaintiff having contacted him seeking permission to attend at the Farm, the registered office of Hurworth for the purpose of collecting a Notice under s.57(2)(b) of the Real Property Act directed to Hurworth and that he had not responded in the negative to that request.
(f)Malice can be inferred from Mr Star’s failure to inform Snr. Const. Hawes of the fact of the Plaintiff having contacted him seeking permission to attend at the Farm, the registered office of Hurworth for the purpose of collecting a Notice under s.57(2)(b) of the Real Property Act directed to Hurworth and that he had not responded in the negative to that request.
(g)Malice can be inferred from Mr Ariff’s failure to inform Snr. Const. Hawes of the fact of his direction to Ms White and Mr Morton to deny the s.57 Notice to the Plaintiff on the occasions that he attended the Farm for the purpose of obtaining it.
(h)Malice can be inferred from untrue statements made by Mr Star to Mr Morton to the effect that the Plaintiff was dangerous and probably armed with a firearm.
(i)Malice can be inferred from directions given by Mr Ariff to Mr Morton on or about 4 November 1996 to post the s.57 Notice in the possession of Mr Morton and Ms White to the Plaintiff.
(j)Malice can be inferred from directions given by Mr Ariff to Mr Morton on or about 21 August 1996 to deny any access at all on the part of the Plaintiff to Lilydale.
(k)Malice can be inferred by the agents of Mr Star, being the caretakers of the Farm ‘Lilydale’ appointed by him refusing to hand to the Plaintiff the s.57 Notice when they were aware that the Notice had been delivered to the Farm and was at the Farm on the occasions when the Plaintiff attended the Farm on 26 and 31 October 1996.
(l)Malice can be inferred by the agents of Mr Star, being the caretakers of the farm ‘Lilydale’ appointed by him, causing the Plaintiff to remain on the property (or upon a public road adjacent to the homestead on the Farm), pending the arrival of Police at the Farm.”
So far as paragraph 40 is concerned, the allegations made against each of the defendants are particularised by reference to the beliefs, knowledge and the reasonableness of the beliefs, of each defendant. To the extent that the knowledge of the second defendant (Mr Star) was concerned, it was alleged at paragraph 4 that the third defendant (Mr Ariff) was an employee of Mr Star’s firm. Mr Mitchell was the solicitor acting on behalf of the Bank, but there were further allegations that each of Mr Star, Mr Ariff and Mr Mitchell were agents of the Bank: paragraph 14. The pleading is thus comprehensible. Nevertheless, it is in a form which is inappropriate and renders unduly difficult the task of the defendants in responding. Allegations against each should be made in separate paragraphs.
The same analysis cannot be applied in relation to paragraph 41, which alleges malice on the part of each defendant. At least in relation to particulars (c) and (d), the failures of Mr Mitchell cannot be sheeted home, on the pleadings, to the third defendant. Similar criticisms can be made of other paragraphs in the particulars, which must be read as directed to the individual named or his principal, but not the other defendants. By way of further example, particulars (k) and (l) assert that the caretakers acted as the agents of Mr Star, but it would not be inferred that they were the agents of Mr Ariff, who was Mr Star’s employee. On the other hand, Mr Ariff at least will be directly liable for any inference derived from his own directions to the caretakers, as alleged in particulars (g) and (i).
The difficulties caused by the rolled-up form of the pleading arise in part because the second and third defendants were alleged to be agents of the first, the third defendant was alleged to be an agent of the second, but not vice versa and the first defendant was not an agent of any other party. On the other hand, the relevant agent of the first defendant (the Bank) was its solicitor, who was also the solicitor for the second defendant (but not the third defendant).
These matters demonstrate the difficulty in identifying the effect of the various particulars alleged in paragraph 41. The pleading in its present form should not be permitted to proceed. It is necessary to separate out the allegations against each defendant, with separate reference to the acts alleged to be his or its, and those of his or its agents. If that course were taken there is unlikely to be any practical difficulty for each defendant in admitting, not admitting or denying the relevant allegations. The precise issues in dispute will no doubt need to be identified with care once the pleadings are complete. That fact, by itself, does not demonstrate that the statement of claim is so embarrassing that it cannot be appropriately recast by amendment of paragraph 41. If leave to file a fresh pleading is given, the plaintiff should be required to reformulate those allegations by dealing separately with each defendant.
On one approach, Mr Ariff’s acts may be treated as those of Mr Star, being undertaken in the course of his employment by Mr Star. However, it does not follow that he may nor bear personal liability for his own actions. Accordingly, I would not be satisfied that the pleading demonstrates no arguable basis of claim against Mr Ariff.
Judgment of primary judge
As noted above, the Appellant concedes for the purposes of this appeal that there were defects in the pleading before the primary judge. No purpose is served by revisiting his Honour’s criticisms of the pleading before him, except to the extent that he held that particular defects could not be remedied.
As noted above, the primary judge dismissed the proceedings because there were two essential defects which were incapable of correction: at [78]. These were identified by the Bank as:
(a) the Bank was not the “prosecutor”, and
(b) there was reasonable and probable cause for the prosecution.
In relation to the first matter, the primary judge appears to have accepted, at [45], a submission made on behalf of the Bank that the assertions in the pleading before his Honour “do not and could not as a matter of law establish that the first defendant [the Bank] had instigated the prosecution”. At least in part that was because matters relied upon involved things done by the receiver and manager, or his employer or caretakers. In the absence of a pleading of material facts which could establish agency, those acts, his Honour held, could not be the acts of the Bank. On a somewhat different basis, at [49] his Honour concluded that relevant entries in the police records indicated how the decision to prosecute had been made. His Honour concluded:
“It is difficulty to imagine a clearer or more explicit instance of an independent exercise of discretion by a police officer.”
Perhaps because steps had been taken to allege facts from which agency could be inferred, in the proposed pleading, the approach adopted by the Bank on the appeal was to treat the critical fact as the letter sent on 5 November 1996 by the Bank’s solicitor. No issue of agency was raised in that respect. Rather, the Bank relied upon the proposition that his Honour had been correct in concluding that, on the basis of the facts alleged, the Bank could not in law be treated as a party responsible for putting the criminal process in train, because there had been an independent exercise of discretion by Constable Hawes in laying the relevant charge. However, for reasons set out above, the proposed pleading alleges facts from which it might reasonably be inferred that the decision to lay the charge was, in the manner described, based on the solicitor’s letter. If that analysis is correct, his Honour’s conclusion that the Appellant could not, as a matter of law, reasonably assert a tenable cause of action is shown to be wrong.
The second matter relied upon by the Bank in support of the conclusion that the proceedings should be dismissed concerned the absence of reasonable and probable cause. The primary judge dealt with this issue by reference to the submissions made for the receiver and Mr Ariff. In putting his contentions that the pleading then before the Court did not establish any basis for reaching such a conclusion, counsel challenged the actual finding of the magistrate in dismissing the charge, arguing that the Appellant in fact had no lawful excuse to be on the property. His Honour stated at [71]:
“Although I incline to the view that the learned magistrate was in error in his decision (it should be noted that he was not referred to any of the relevant cases) it is not necessary for the purposes of the argument to determine whether or not the learned magistrate was correct, but rather whether there was a properly arguable question of law to be decided. There clearly was.”
His Honour continued at [73]:
“Mr Leopold [counsel for the receiver and Mr Ariff] in his analysis of the elements required to prove a breach of s 4(1) in relation to the events of 31 October 1996 has clearly raised a doubt of the plaintiff’s innocence based on material which was available at the time of the prosecution. In those circumstances I do not see how as a matter of law the plaintiff could possibly establish an absence of reasonable and probable cause in the police prosecuting him in relation to the events of 31 October 1996.”
The relevant elements of the tort of malicious prosecution have been addressed above. To the extent that they focus on the beliefs of the defendant to the civil action, it will be sufficient if the defendant believes that the probability of the plaintiff’s guilt is such that upon general grounds of justice a charge against him is warranted. However, that belief must be based upon material sufficient to support such a belief in the mind of a person of ordinary prudence and judgment. There is a danger in reformulating those tests to ask whether there was an arguable question of law to be decided by the magistrate. The argument relied upon by counsel (as summarised by the primary judge at [67]-[68]) was that the magistrate confused reasonable excuse with lawful excuse. However, as noted above, there is a tenable argument that because the Bank’s solicitor well knew that he had sent the notice to the property, addressed to the secretary of the company (which was the Appellant), the solicitor actually believed that the Appellant had a lawful excuse to attend the premises, a belief which might be supported by evidence that, when he spoke to the Appellant on the telephone, he did not expressly and categorically deny that he could go on to the premises to receive the notice. If he held such a belief, no question of reasonable and probable cause would arise. In some circumstances, a reformulation of the legal test to reflect the matters argued before the Court may not demonstrate error. However, in the present case, at least as argued on appeal, his Honour’s reformulation would appear to have led to an erroneous result.
Exercise of discretion
The Respondents emphasise the fact that this was the fifth attempt by the Appellant to plead a tenable cause of action. Such leeway as might be granted in relation to a first or second attempt should not now be entertained. The real likelihood that the present proposed pleading will be the subject of further amendment in the future, even if it is not fatally defective, should lead the Court not to grant leave to allow it to be filed and served.
The premise which should be accepted, underlying this approach, is that each of the prior pleadings was properly struck out. On the other hand, the fact that in each case until the last, leave was given to replead, suggests that no judge, prior to the primary judge who made the ruling under appeal, concluded that the Appellant did not have an arguable cause of action. The converse, namely that he did have an arguable cause of action, was also not a conclusion reached. Nevertheless, once this Court is satisfied that the proposed pleading contains a tenable cause of action against each Respondent, that there is evidence which indicates that a trial would not inevitably fail, and that the pleading, whatever its infelicities, sufficiently sets out the matters on which the Appellant seeks to rely, it is not clear why leave to amend should not be granted. However, changes are required to paragraphs 40 and 41 of the document before this Court, so as to specify in separate paragraphs the allegations against each defendant. Where liability for the acts of an agent is alleged, that fact, the facts leading to the allegation of agency and the relevant acts of the agent must be identified. This will no doubt lengthen the pleading, but brevity at the cost of clarity is not a goal of good pleading. In my view the Appellant has demonstrated that it is appropriate to grant that leave, so conditioned.
Why the matter was instituted in this Court and why it has not been transferred to the District Court is not entirely clear. The likely damages would appear to be well within the jurisdiction of that Court. However, that consideration should not preclude a grant of leave to amend the pleadings in this Court, if otherwise appropriate. It was not relied upon by the Respondents.
Conclusion
For these reasons I would propose that the following orders be made:
(1) Appeal allowed.
(2) Order of primary judge dismissing the proceedings be set aside.
(3)Orders of the primary judge with respect to the costs of the application before him be set aside.
(4) In lieu thereof:
(a)grant leave to the Appellant to file a further amended statement of claim in the form in which it was provided to this Court with amendment of clauses 40 and 41 to comply with these reasons;
(b)there be no order of the costs of the proceedings before the primary judge;
(c)the Respondents pay the Appellant’s costs of the proceedings in this Court.
(5)The Respondents have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise so entitled.
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LAST UPDATED: 09/08/2006
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