Johnston v Australia & New Zealand Banking Group Ltd

The appeal in *Johnston v Australia & New Zealand Banking Group Ltd* concerned a claim for malicious prosecution brought by the appellant against the respondent bank. The primary judge had dismissed the proceedings, finding that there were two essential defects in the appellant's pleading that were incapable of correction. The appellant sought to have this dismissal set aside.

The legal issues before the Court of Appeal were whether the primary judge erred in holding that the appellant's pleading failed to establish, as a matter of law, that the bank was the "prosecutor" for the purposes of the tort of malicious prosecution, and whether the pleading sufficiently alleged the absence of reasonable and probable cause for the prosecution. Specifically, the court had to consider whether the acts of a receiver and manager, or his employer, could be attributed to the bank, and whether the bank's solicitor's letter could be seen as instigating the prosecution, thereby overcoming the finding of an independent exercise of discretion by the police.

The Court of Appeal allowed the appeal, finding that the primary judge's conclusion that the appellant could not, as a matter of law, assert a tenable cause of action was wrong. The court reasoned that the proposed amended pleading alleged facts from which it could reasonably be inferred that the decision to lay the charge was based on the solicitor's letter, thus potentially establishing the bank as the instigator of the prosecution. The court also considered the issue of reasonable and probable cause, noting that while the primary judge inclined to the view that the magistrate's decision to dismiss the charge might have been in error, the critical question was whether there was a properly arguable question of law to be decided, which the court found there was.

The Court of Appeal ordered that the appeal be allowed, the primary judge's order dismissing the proceedings and his costs orders be set aside. Leave was granted to the appellant to file a further amended statement of claim, with specific amendments to clauses 40 and 41. There was to be no order as to the costs of the proceedings before the primary judge, and the respondent was ordered to pay the appellant's costs of the appeal, with a certificate under the Suitors' Fund Act 1951 (NSW) available to the respondent if otherwise entitled.