Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd

[2010] NSWDC 232

CITATION:	Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd [2010] NSWDC 232
HEARING DATE(S):	3 September 2010
JUDGMENT DATE:	20 October 2010
JURISDICTION:	Civil
JUDGMENT OF:	Bozic SC DCJ
DECISION:	1. The notice of motion is dismissed. 2. The defendants are to pay the plaintiff’s costs of the motion.
CATCHWORDS:	TORTS - whether Federal Court proceedings exposed plaintiff to a civil penalty - whether tort of malicious prosecution available in respect of civil proceedings involving no risk of civil penalty - Abuse of process - whether pleadings disclosed cause of action - Strike out - whether paragraph of amended statement of claim should be struck out
LEGISLATION CITED:	Corporations Act 2001 (Cth) Legal Profession Act 2004 Uniform Civil Procedure Rules
CASES CITED:	A v New South Wales [2007] HCA 10, (2007) 230 CLR 500 Australian Securities and Investments Commission v Neolido Holdings Pty Ltd [2006] QCA 266 Chapel Road Pty Limited v ASIC [2006] NSWSC 1014 Dey v Victorian Railway Commissioners (1949) 78 CLR 62 Edenden v Bignell [2007] NSWSC 1122 Fodare Pty Ltd v Shearn [2010] NSWSC 737 Foyster v Foyster Holdings Pty Ltd [2002] NSWSC 768 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621 General Steel Industries Incorporated v Commissioner for Railways (NSW) [1964] HCA 69 Gregory v Portsmouth City Council [2000] 1 AC 419 Jervois Sulphates (NT) Ltd v Petrocarb Explorations NL [1974] 5 ALR Kable v State of New South Wales [2010] NSWSC 811 Litmus Australia Pty Ltd v Canty [2007] NSWSC 670; (2007) 25 ACLC 1141 Little v Law Institute of Victoria [1990] VR 257 Martin v. Watson [1996] A.C. 74, 80 Noyce v Robbins [2007] WASC 98 One.Tel Ltd v Rich [2005] NSWSC 226; (2005) 190 FLR 443 Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158; (2007) 25 ACLC 160 Savile v. Roberts (1698) 12 Mod. Rep. 208 Scott Darren Pascoe in his capacity as liquidator of Charter Workforce Pty Ltd (IN LIq) v Divisional Security Group Pty Ltd [2007] NSWSC 211 Supercar International Holdings Ltd v Sommers [2009] NSWSC 1488 The Beach Club Port Douglas v Page [2005] QCA 475 Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 Williams v Spautz (1992) 174 CLR 509
PARTIES:	Geoffrey Andrew Kinghorn plaintiff HKAC Asset Management Services (AFFL) Pty Ltd first defendant Peter Gothard second defendant
FILE NUMBER(S):	2010/113658
COUNSEL:	S Chrysanthou (plaintiff) M Richardson (first and second defendants)
SOLICITORS:	Dibbs Barker (plaintiff) Corrs Chambers Westgarth Lawyers (first and second defendants)

Introduction

1 By a notice of motion the defendants seek to have the whole or part of the amended statement of claim struck out. The defendants seek the following orders:

1. That the proceedings be dismissed on the grounds that no reasonable cause of action is disclosed and/or that the proceedings are an abuse of process.
2. In the alternative, the claim for malicious prosecution be dismissed on the ground that no reasonable cause of action is disclosed and/or that the proceedings are an abuse of process.
3. That the amended statement of claim be struck out on the ground that no reasonable cause of action is disclosed and/or that the pleadings are an abuse of process
4. In the further alternative, that paragraph 9 of the amended statement of claim be struck out.

2 The defendants rely upon an affidavit of Jim Micallef sworn 8 July 2010 which annexes correspondence relating to particulars and to the notice of motion.

3 The principles relating to applications for summary dismissal and to strike out parts of a statement of claim are well known and are not in dispute. The defendants accept that the motion must be determined on the basis of the principles in General Steel Industries Incorporated v Commissioner for Railways (NSW) [1964] HCA 69, (1964) 112 CLR 125.

4 Under Rule 13.4 Uniform Civil Procedure Rules the Court has the power to dismiss the proceedings if the pleading discloses no reasonable cause of action. If the statement of claim is absolutely hopeless or there is no possibility of the facts pleaded giving rise to a good cause of action it is liable to be dismissed. Before part of a pleading can be struck out there must be a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial: Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 90; General Steel Industries Inc v Commissioner for Railways (NSW)(1964) 112 CLR 125 at 130.

The District Court Pleadings

5 By an amended statement of claim dated 27 May 2010 the plaintiff brought an action against the first and second defendants. The second defendant is a partner of Ferrier Hodgson and in November 2008 was appointed receiver of the first defendant. It is alleged that at least until 6 January 2010 the second defendant had control of the conduct and affairs of the first defendant. The amended statement of claim alleges that on 10 December 2009 the second defendant caused the first defendant to initiate proceedings in the Federal Court against the plaintiff seeking declarations pursuant to section 21 or 22 of the Corporations Act 2001 (Cth) (“the Act”), seeking injunctions pursuant to s 1324 (1) of the Act and alleging that the plaintiff had engaged in, or threatened to engage in conduct in contravention of sections 181, 182 and 183 of the Act.

6 The plaintiff alleges that sections 181, 182 and 183 of the Act are civil penalty provisions within the meaning of s 1317E of the Act and that the Federal Court proceedings exposed the plaintiff to pecuniary penalty orders within the meaning of s 1317G of the Act and/or orders suspending the plaintiff from acting as a director of any company.

7 The plaintiff alleges that the second defendant in causing the first defendant to initiate the proceedings, was actuated by malice and/or an improper motive, and that there was no reasonable or probable cause for the institution of the proceedings by the first defendant. On 24 March 2010 the first defendant was ordered to file a statement of claim on or before 3 April 2010 setting out the precise allegations against the plaintiff. On or about 3 April the first defendant filed a notice of discontinuance and the Federal Court proceedings were discontinued. In these circumstances it is alleged that the first defendant engaged in malicious prosecution of the plaintiff or, alternatively, engaged in proceedings that were an abuse of process.

8 The plaintiff claims damages for injury to his reputation, for mental distress, for expense incurred by way of legal costs in defending the proceedings and damages for losses incurred to his business. There is also a claim for aggravated damages by reason of the second defendant's knowledge of the falsity of the allegations made by the defendants in initiating the proceedings and the second defendant’s express malice in publishing the allegations to a journalist from the Sydney Morning Herald who then republished the allegations to readers of the Sydney Morning Herald.

The nature of the Federal Court proceedings

9 It is necessary at the outset to deal with the nature of the Federal Court proceedings and, in particular, whether the Federal Court proceedings were proceedings for a civil penalty. The plaintiff alleges that in the Federal Court proceedings the defendants alleged that the plaintiff was guilty of conduct in contravention of sections 181, 182 and 183 of the Act.

10 Under s 1317E (1) (a) of the Act states:

“ Declarations of contravention
If a Court is satisfied that a person has contravened 1 of the following provisions, it must make a declaration of contravention:
(a) subsections 180(1) and 180(10 and (2), 182(1) and (2), 183(1) and (2) (officers’ duties)”

11 Section 1317J (1) and (4) state:

“Who may apply for a declaration or order
Application by ASIC
(1) ASIC may apply for a declaration of contravention, a pecuniary penalty order or a compensation order.
…………
No one else may apply
(4) No person may apply for a declaration or contravention, a pecuniary penalty order or a compensation order unless permitted by this section.”

12 Section 206C, which deals with the Court’s power of disqualification commences in sub-section(1) with the phrase “on application by ASIC.”

13 In Fodare Pty Ltd v Shearn [2010] NSWSC 737 the plaintiff alleged that the first defendant breached her duties as a director of the plaintiff by causing certain moneys to be paid to the second defendant. The plaintiff sought a declaration of contravention under s. 1317E of the Act. The defendants submitted that by reason of the application for a declaration of contravention the defendants were, in effect, exposed to a penalty and that certain evidence was therefore inadmissible. Barrett J held that the court could not make a declaration of contravention in the proceedings because the provisions of s 1317J (1) and (4) of the Act gave standing to ASIC but not the plaintiff to seek a declaration of contravention: See paragraphs 21 to 23. At paragraph 24 his Honour said, “This conclusion removes the basis for the objection based on perceived exposure to a penalty.”

14 In Scott Darren Pascoe in his capacity as liquidator of Charter Workforce Pty Ltd (In Liq) v Divisional Security Group Pty Ltd [2007] NSWSC 211 White J at paragraph 14 of the judgment stated that neither a corporation nor its liquidator has standing to apply for a declaration of contravention under s. 1317E. At paragraph 16 his Honour said:

“It follows that a finding that the third defendant contravened s 588G could not itself be relied upon in separate proceedings brought by ASIC against the third defendant seeking the imposition of a civil penalty. ASIC is not a party to these proceedings. There would be no res judicata or issue estoppel as between ASIC and the third defendant. There would be no declaration of contravention under s 1317E because neither the corporation nor its liquidator has standing to apply for a declaration of contravention under that section. Section 1317F would not make a finding of contravention, or a declaration of contravention made in the Court’s equitable jurisdiction and not under s 1317E , binding as between the third defendant and ASIC.”

15 In my view it is clear from Fodare and Scott Darren Pascoe that neither a corporation nor its liquidator has standing to apply for a declaration of contravention under s 1317E. Only ASIC has the standing to apply for such declarations: s 1317J(1) and (4). See also: Foyster v Foyster Holdings Pty Ltd [2002] NSWSC 768; One.Tel Ltd v Rich [2005] NSWSC 226; (2005) 190 FLR 443; Australian Securities and Investments Commission v Neolido Holdings Pty Ltd [2006] QCA 266; Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621; Edenden v Bignell [2007] NSWSC 1122; Litmus Australia Pty Ltd v Canty [2007] NSWSC 670; (2007) 25 ACLC 1141; Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158; (2007) 25 ACLC 160; Supercar International Holdings Ltd v Sommers [2009] NSWSC 1488.

16 In relation to an application for the disqualification of a person from managing a corporation, section 206C of the Act makes clear in its opening words that only ASIC has the standing to make such an application.

17 It follows, therefore, that the proceedings in the Federal Court were not civil proceedings which exposed the plaintiff to a penalty. I will, therefore, deal with the question of whether the action for malicious prosecution should be struck out on the basis that the Federal Court proceedings were simply civil proceedings which did not expose the plaintiff to a penalty.

Malicious prosecution

18 The question of whether the tort of malicious prosecution applies to a civil proceeding has elicited different responses.

19 In Gregory v Portsmouth City Council [2000] 1 AC 419 Lord Steyn with whom the other Law Lords agreed, took a narrow view of the tort of malicious prosecution, namely:

“..To ground a claim for malicious prosecution a plaintiff must prove (1) that the law was set in motion against him on a criminal charge; (2) that the prosecution was determined in his favour; (3) that it was without reasonable and proper cause, and (4) that it was malicious: Martin v. Watson [1996] A.C. 74, 80. Damage is a necessary ingredient of the tort. This element was explained in a dictum of Holt C.J. in Savile v. Roberts (1698) 12 Mod. Rep. 208. Holt C.J. defined the interests protected by the tort as follows:
“there are three sorts of damages, any one of which is sufficient to support this action. First, damage to [the plaintiff’s] fame, if the matter whereof he be accused be scandalous. Secondly, to his person whereby he is imprisoned. Thirdly, to his property, whereby he is put to charges and expenses.”

20 In relation to civil proceedings, Lord Steyn said at page 427 that the tort of malicious prosecution was available in civil cases of abuse of legal process in certain recognised categories, malicious prosecution of a winding up order or petition in bankruptcy, procuring the issue of a search warrant without reasonable cause and with malice, obtaining ex parte a bench warrant without reasonable excuse and maliciously and setting in train execution of property without reasonable cause and maliciously. The common feature of these civil cases was the initial ex parte abuse of the legal process with arguably immediate and irreversible damage to the reputation of the victim.

21 At page 432F to 433A Lord Steyn considered whether the tort of malicious prosecution extended to civil proceedings. Under the heading “The extension of the tort to civil proceedings” his Lordship said:

“My Lords, it is not necessary for the disposal of the present appeal to express a view on the argument in favour of the extension of the tort to civil proceedings generally. It would, however, be unsatisfactory to leave this important issue in the air. I will, therefore, briefly state my conclusions on this aspect. There is a stronger case for an extension of the tort to civil legal proceedings than to disciplinary proceedings. Both criminal and civil legal proceedings are covered by the same immunity. And as I have explained with reference to the potential damage of publicity about a civil action alleging fraud, the traditional explanation namely that in the case of civil proceedings the poison and antidote are presented simultaneously, is no longer plausible. Nevertheless, for essentially practical reasons I am not persuaded that the general extension of the tort to civil proceedings has been shown to be necessary if one takes into account the protection afforded to other related torts. I am tolerably confident that any manifest injustices arising from groundless and damaging civil proceedings are either already adequately protected under other torts or are capable of being addressed by any necessary and desirable extensions of other torts.
Instead of embarking on a radical extension of the tort of malicious prosecution I would rely on the capacity of our tort law for pragmatic growth in the response to true necessities dictated by experience.”

22 Gregory v Portsmouth City Council was cited with approval in The Beach Club Port Douglas v Page [2005] QCA 475 at [14] and in Noyce v Robbins [2007] WASC 98 at [221-229] where Heenan J held that an action for malicious prosecution was not available in relation to police disciplinary proceedings.

23 In a Victorian case decided before Gregory v Portsmouth City Council, Little v Law Institute of Victoria [1990] VR 257 the Victorian Full Court took a less restrictive view of the tort of malicious prosecution than was taken by the House of Lords in Gregory v Portsmouth City Council. The plaintiff was a solicitor against whom the Law Institute took out a summons. The summons sought to restrain the solicitor from practising as a solicitor on the ground that he had not entered into a contract of professional insurance. A judge made the order and the secretary of the Law Institute sought to have the plaintiff committed for contempt of court for breach of the order. A judge committed the plaintiff to prison for 21 days. The Full Court subsequently set aside the order on the ground that the regulation fixing the contribution for insurance was invalid. The plaintiff instituted proceedings against the Law Institute alleging that the defendants had been guilty of, amongst other things, ‘malicious use of civil proceedings.’

24 The defendants obtained a permanent stay proceedings. The plaintiff appealed to the Full Court. Kaye and Beach JJ discussed the scope of actionable malicious prosecution and concluded:

“In our opinion, there is no longer justification for confining to a bankruptcy petition and an application to wind up a company the remedy for malicious prosecution of civil proceedings where the damages claimed is to the plaintiff’s reputation.
The issue of a summons to enjoin a solicitor from practising without a practising certificate might not be expected in all cases to attract publicity by the media. Nevertheless evidence might establish that the service of the summons upon the appellant was an event which became know within Melbourne legal circles. Evidence might further establish that the order of the court restraining the appellant from acting as a solicitor received publicity by the media or professional journals, or became known to members of the legal profession by other means. Similarly, by the evidence it might be established whether the committal order received publicity, so that both members of the legal profession and the appellant’s clients became aware of the term of imprisonment to which he was sentenced.”

25 Ormiston J, after carrying out a historical survey of the decisions and the law and procedure behind them, concluded at page 289:

“For the reasons which I have endeavoured to explain I have concluded that the policy of the law no longer would deny a party the right to assert that he has suffered damage to his reputation by reason of the wrongful and malicious institution of civil proceedings. Conscious as I am that the result of this appeal will be to deny defendants to actions for malicious use of civil process the right to have the action struck out or stayed for want of provable damages, the risk that maliciously made allegations in civil proceedings may cause perceptible harm to a person’s reputation is now a real risk under current law and procedures which is evidenced in practice by a reading of the daily newspapers, to say nothing of other sources of “news”.”

26 The defendants submitted that the claim for malicious prosecution should be dismissed or struck out for the following reasons:

(i) the tort of malicious prosecution is not available in civil proceedings except in certain limited and recognised exceptions. The plaintiff's case falls outside those limited exceptions; and
(ii) if the tort of malicious prosecution is available in civil proceedings it is not available in proceedings where there is no penalty, pecuniary or otherwise and a claim without even the potential for a disciplinary or punitive element.

27 The defendant points to the fact that there is no Australian case in which a claim of the kind advanced in the present case has proceeded to trial let alone succeeded. The plaintiff, on the other hand, submitted that the categories of the tort of malicious prosecution are not closed and that he should not be precluded at an interlocutory stage from arguing that his claim falls within the scope of the tort of malicious prosecution. The plaintiff says that there is no authority which precludes the expansion of the tort to cover a case such as the present.

28 For the following reasons I am of the view that the plaintiff should be permitted to advance a case which seeks to widen the tort of malicious prosecution.

29 First, as Associate Justice Harrison observed in Chapel Road Pty Limited v ASIC [2006] NSWSC 1014 at [67] “there has been considerable criticism of the current boundaries of the tort of malicious prosecution and this is one area where the development of the law should not be stifled at an interlocutory stage.”

30 Secondly, while Lord Steyne in Gregory v Portsmouth City Council decided “for essentially practical reasons” against extending the tort of malicious prosecution to civil proceedings he acknowledged that there is a stronger case for extending the tort to civil proceedings than to disciplinary proceedings. In addition, as both Gregory v Portsmouth City Council and Little v Law Institute acknowledged, the traditional explanation for not extending the tort to civil proceedings, that the poison and the antidote are present simultaneously, is no longer plausible.

31 Thirdly, categories of case giving rise to the tort are not closed. In Kable v State of New South Wales [2010] NSWSC 811 Hoeben J held that proceedings for malicious prosecution could be brought in respect of proceedings under the Community Protection Act 1994. In Jervois Sulphates (NT) Ltd v Petrocarb Explorations NL (1974) 5 ALR 1 Foster J held that malicious prosecution was available in relation to an injunction which was subsequently quashed which prevented the plaintiff from operating mining leases and using a housing camp in the Northern Territory.

32 Fourthly, as Ormiston J pointed out in Little v Law Institute the damage essential to the cause of action has, for 300 years been confined to the three specific heads of damage laid down by Holt CJ in Savile v Roberts (1698) 1 Ld Raym 374. The plaintiff has pleaded in the amended statement of claim that he has suffered damage to his reputation as a result of the malicious prosecution. This is within the first of the three forms of damage in Savile v Roberts: see Little v Law Society at 266-267.

33 The defendant submitted that in an attempt to try and come within Little v Law Institute the plaintiff has pleaded damage to reputation caused by a single newspaper article. That article was published some five days after the proceedings were commenced and before any adjudication on the merits. All the article did was to report the fact that allegations had been made. This is not analogous to the claim in Little v Law Society where the plaintiff's complaint was about publicity reporting the fact that he had been restrained from acting as a solicitor and jailed for contempt. It was submitted that there was a qualitative difference between the nature of the damage in Little v Law Institute and the nature of the damage in this case.

34 The amended statement of claim alleges that the plaintiff suffered injury to his reputation by reason of the initial maintenance of the proceedings and by reason of the defendant’s conduct. He has, therefore, pleaded as damage one of the three categories in Savill v Roberts. Whether the damage suffered to the plaintiff’s reputation is qualitatively different from that suffered in Little v Law Institute is a question to be decided at a hearing not on an interlocutory application to strike out the pleadings.

35 Fifthly, as I set out below, the plaintiff’s statement of claim discloses a cause of action for the tort of abuse of process and I have declined to strike out that part of the statement of claim relating to the abuse of process. There is a considerable overlap between the factual basis for the malicious prosecution claim and the abuse of process claim. To permit the malicious prosecution claim will not add greatly to the time or costs of the proceedings.

36 The defendants submitted that to excise the malicious prosecution claim would save considerable time and costs. It is not immediately apparent why this would be so. The circumstances of the termination of the Federal Court proceedings may well be relevant to the abuse of process claim in demonstrating that the purpose of the defendants was not to prosecute the claim to its conclusion, in other words in showing that the defendants did not commence the Federal Court proceedings wanting to obtain a remedy within the scope of the proceedings. The defendants submitted that many of the particulars of malice would cease to become relevant because they are incapable of relating to collateral purpose. At the very least however, particulars relating to the fabrication of allegations and the knowledge of their falsity would be relevant in an abuse of process claim as going to the claim for aggravated damages. They would also arguably be relevant as disclosing that the true purpose of the defendants was not to prosecute the claim to conclusion but simply to exert pressure in the form of a “stalking horse.”

Does the statement of claim discloses a cause of action for abuse of process

37 The tort of collateral abuse of process differs from the tort of malicious prosecution in that a plaintiff suing for abuse of process does not need to show either that the initial proceeding has terminated in his or her favour or that there was a want of reasonable and probable cause for the institution of the proceedings. The critical element in the tort of abuse of process is that the party who has instituted proceedings has done so for a purpose or to effect an object beyond that which the legal process offers: see Williams v Spautz (1992) 174 CLR 509 at 523. It is not sufficient that there be an unworthy or reprehensible motive in bringing the action. What is required is that the purpose of the litigant in bringing the proceedings is outside the scope of the proceedings and improper: see Williams at page 525.

38 The defendants submit that the claim for abuse of process should be struck out because the pleading discloses no collateral or improper purpose still less an improper act accompanying any such purpose.

39 In the present case the plaintiff alleges that the predominant motive was an improper one, namely, the desire to obtain a commercial advantage over the plaintiff to harm the plaintiff, his business and his reputation and to defame him.

40 There is no impropriety of purpose when a plaintiff commences proceedings desiring to obtain a result within the scope of the remedy even if proceedings are commenced with an ulterior purpose which will be fulfilled by obtaining the legal remedy which the proceeding was intended to produce: Williams v Spautz per Brennan J at p. 535. However, as the joint judgment in Williams v Spautz pointed out at pp 526-527, “It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers”. Isaacs J in Varawa v Howard Co Ltd (1911) 13 CLR at 91 referred to the proceedings being “merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal proceedings.”

41 The particulars provided as to the motivation of the defendants in the Federal Court proceedings are as follows:

“As for the particulars in relation to the facts, matters and circumstances relied upon to support the allegation that the fabrications were “motivated by desire to defame and injure the plaintiff and cause him nuisance in business”, those facts, matters and circumstances are:
During 2009, Mr Kinghorn was part of a bidding party for the purchase of the aviation business from the Receivers of the Allco Group of companies;
It was within the knowledge of the Receivers that Mr Kinghorn’s father, John Kinghorn, was also part of that bidding party, and was a financial backer of that bidding party;
The orders by AAFL in the Federal Court Proceedings against Mr Kinghorn extended to an injunction to restrain Mr Kinghorn from undertaking business with his father;
Furthermore, part of the sale by the Receivers involved the assignment of certain preference shares in companies of which Mr Kinghorn was a director and ordinary shareholder;
The assignment of those preference shares required the consent of the companies in which the preference shares had been issued;
At the date of the Federal Court Proceedings were instituted against Mr Kinghorn, the sale of the aviation business to interests associated with HKAC Asset Management Services (AAFL) Pty Limited had not concluded, and the institution of the Federal Court Proceedings against Mr Kinghorn personally by AAFL (at the time in the control of the Receivers) was therefore motivated by desire to effect Mr Kinghorn’s bid, to effect Mr Kinghorn’s decision regarding the consent to any assignment of the preference shares to any potential purchaser of the aviation business, and to defame and injure Mr Kinghorn and cause him nuisance in business.”

42 The case disclosed by the pleadings and the particulars is that the Federal Court proceedings were commenced based on fabricated allegations and following legal advice which did, or should have, made it clear that the proceedings were baseless. The proceedings were commenced for a purpose outside the scope of the proceedings, namely, a desire to affect the plaintiff’s bid, to affect his decision regarding his consent to any assignment of preference shares to any potential purchaser of the aviation business and to defame and injure him and cause him nuisance in business. It is alleged the second defendant published the false allegations to attract publicity adverse to the interests of the plaintiff and when subsequently ordered by the Federal Court to file a statement of claim setting out the precise allegations, the response of the second defendant was to file a notice of discontinuance.

43 In my view the pleadings sufficiently allege a predominantly improper or collateral purpose in the context of a failure by the defendants to prosecute the case when ordered to supply the particulars. I decline to strike out that part of the statement of claim relating to the claim for abuse of process.

44 Paragraph 9 of the amended statement of claim is as follows:

“There was no reasonable or probable cause for the institution by the first defendant of the proceedings.”

45 The defendant submits that this paragraph imports a criminal concept into a civil context. The defendant submits that there is no requirement that there should be a reasonable and probable cause before proceedings can be instituted. Rather what is imposed as a pre-requisite is contained in s 345 (1) of the Legal Profession Act 2004 , namely, that there must be a reasonable belief on the basis of provable facts and a reasonably arguable view of the law that the claim has reasonable prospects of success. The defendants submit that any litigant who had a bona fide belief along these lines could never be liable for malicious prosecution so that the "reasonable and probable” cause test enunciated in paragraph 9 cannot stand and ought to be struck out.

46 The test of “without probable cause” is an essential element of the cause of action for malicious prosecution that must be established by the plaintiff: See A v New South Wales[2007] HCA 10, (2007) 230 CLR 500 in the joint judgment of Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ at paragraph [1]. Whether, if a claim for malicious prosecution can succeed in the circumstances of the present case, the test is “without reasonable and probable cause” or some other test based on s 345(1) of the Legal Profession Act 2004 is a matter that should properly be decided at the hearing of the case and not decided at an interlocutory stage. I decline to strike out paragraph 9 of the amended statement of claim.

1. The notice of motion is dismissed.
2. The defendants are to pay the plaintiff’s costs of the motion.