Knorr v CSIRO
[2014] VSCA 84
•12 May 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2012 0237
| ANDREW KARL KNÖRR |
| Applicant |
| v |
| COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION (CSIRO) AND OTHERS |
| Respondents |
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JUDGES: | Neave and Osborn JJA, Sifris AJA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 6 March 2014 |
DATE OF JUDGMENT: | 12 May 2014 |
MEDIUM NEUTRAL CITATION: | [2014] VSCA 84 |
JUDGMENT APPEALED FROM: | [2012] VSC 529 (Beach J) |
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PRACTICE AND PROCEDURE – Pleadings – Appeal against refusal of leave to file a further amended Statement of Claim – Prolix pleadings – Pleading likely to delay the fair trial of the proceeding – Manifestly defective pleading.
PRACTICE AND PROCEDURE – Joinder – Appeal against refusal of leave to join a corporation as a plaintiff to the proceeding – Where the corporation would not be represented by a legal practitioner – Discretion of primary judge correctly exercised – Supreme Court Rules (General Civil Procedure) Rules 2005 rr 1.17 and 2.04 – Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595.
PRACTICE AND PROCEDURE – Appeal against dismissal of proceeding for want of prosecution – Whether any prospects of a fair trial on plaintiff’s pleadings – Where dismissal of proceeding was consistent with the interests of justice and with the overarching purpose contained in the Civil Procedure Act 2010 (Vic) – Civil Procedure Act 2010 (Vic) s 7, Part 2.4 – Appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | In person | |
| For the 1st Respondent | Mr J Slattery | Clayton Utz |
| For the 3rd Respondent | Ms E A Strong QC | Australian Government Solicitor |
| For the 4th Respondent | Ms C van Proctor | Ashurst |
| For the 5th Respondent | Mr P G Liondas | Perry Maddocks Trollope Lawyers |
| For the 6th Respondent | Mr J S Mereine | King & Wood Mallesons |
| For the 7th Respondent | Mr D A Klempfner | Colins Biggers & Paisley |
| For the 8th Respondent | Mr M S Osborne QC with Mr H De Kock | Moray & Agnew |
| For the 9th Respondent | Dr M J Collins QC with Ms R L Enbom | Victorian Government Solicitors’ Office |
NEAVE JA
OSBORN JA
SIFRIS AJA:
Introduction
The appellant, Andrew Carl Knörr (‘Mr Knörr’), is the managing director of Radial Corporation Limited (‘Radial’). He is also the sole director of Radial. Mr Knörr describes himself as an expert in and designer, innovator and inventor of sawmill machinery and wood product and utilisation technology (‘the technology’). According to Mr Knörr, the technology is a revolutionary or major industrial advance in the field of forestry and timber products. Not everyone agrees with this view and Mr Knörr takes issue with statements made and steps taken by others in the course of or as a result of processes of purported independent evaluation of the asserted technical advantages and commercial benefits of the technology.
The appellant sought relief against each of the respondents[1] attempting to plead various causes of action. These causes of action included:
[1]In the first of the three Statements of Claim and drafts referred to below, the appellant also sought relief against a second defendant.
(a) defamation, in relation to a number of different documents to which various respondents were allegedly either parties, authors, funders and/or otherwise publishers;
(b) breach of contract;
(c) fraudulent misrepresentation;
(d) deceit;
(e) conspiracy;
(f) breach of the Corporations Act 2001 (Cth);
(g) breach of the Trade Practices Act 1974 (Cth);
(h) breach of statutory duty;
(i) negligence; and
(j) malicious falsehood.
In the course of the proceeding before Beach J, the appellant’s Statement of Claim, filed on 12 December 2011 (‘SOC’) and Amended Statement of Claim, filed on 26 April 2012 (‘ASOC’) were struck out, and leave to file a draft Further Amended Statement of Claim (‘draft FASOC’) was refused. On 12 November 2012, an application for leave to file and serve a second draft Further Amended Statement of Claim (‘draft 2FASOC’) was refused and the proceeding was dismissed.
By Notice of Appeal dated 26 November 2012, the appellant appeals against the orders of Beach J made on 12 November 2012 (‘the 12 November Orders’).
Relevantly, the 12 November Orders comprise:
(a) an order dismissing Mr Knörr’s application to file and serve the draft 2FASOC (‘the Pleading Order’);
(b) an order refusing leave to join Radial as a plaintiff to the proceeding (‘the Joinder Order’);
(c) an order dismissing the proceeding (‘the Dismissal Order’); and
(d) an order that Mr Knörr pay the respondents’ costs of and incidental to the proceeding, and that those costs be fixed (in relation to each of the fifth to ninth respondents) in the total sum of $20,000 (‘the Costs order’).
On 1 March 2013, the Court of Appeal held that leave was required by Mr Knörr to appeal the Pleading and Joinder Orders, but not the Dismissal Order. Following Mr Knörr’s oral application for leave to appeal the Pleading and Joinder Orders, the Court of Appeal ordered that the application be heard together with the appeal of the Dismissal Order. By summons dated 13 December 2012, Mr Knörr also seeks leave to appeal the Costs Order.
Relevant Background and Procedural History
This proceeding was issued on 12 December 2011. Mr Knörr filed a SOC containing 378 paragraphs and running to 202 pages. The respondents made an application to strike out the SOC or, alternatively, for the entry of judgment against Mr Knörr. On 9 March 2012, Beach J struck out the SOC on the basis that it was manifestly defective in failing to comply with any of the ordinary rules of pleading.[2] The appellant was ordered to pay the costs of the first, third and sixth respondents. Costs of the remaining respondents were reserved. Mr Knörr was given leave to re‑plead.
[2]Knörr v CSIRO & Ors [2012] VSC 83 (‘Knörr (No 1)’) [12].
In striking out the SOC, Beach J concluded that:
(a)permitting a trial to proceed on the basis of it (the statement of claim as then pleaded) would undoubtedly prejudice, embarrass and delay the fair trial of the proceeding;
(b)there had been a general failure throughout the pleading to supply dates and plead acts or omissions with sufficient particularity to enable the defendants to know the various cases made against them;
(c)there were paragraphs which did not plead material facts – but rather, attempted to plead in an anticipatory way matters which might defeat defences, which may or may not have been taken by a particular defendant;
(d)many of the sentences in the statement of claim were no more than high level conclusionary propositions, without any underlying material facts in support;
(e)insofar as the plaintiff’s case relied upon causes of action and defamation, there did not appear to have been any attempt to comply with well known rules of pleading in that field of law; and
(f)at base, the statement of claim was a largely impenetrable document which, if allowed to stand, would be likely to generate endless debate about the scope and ambit of the plaintiff’s claims against the defendants.[3]
[3]Knörr v CSIRO & Ors (No 3) [2012] VSC 529 (‘Knörr (No 3)’ [2], summarising his Honour’s conclusions in Knörr (No 1).
On 25 April 2012, Mr Knörr filed the ASOC, containing 618 paragraphs and running to 223 pages. Each of the respondents filed a summons seeking orders including the striking out of the ASOC. A number of the respondents also sought orders that the proceeding be summarily dismissed as against them.
In a further summons filed on 14 June 2012, Mr Knörr sought leave to join Radial to the proceeding. In addition, Mr Knörr sought leave to file the draft FASOC. The draft FASOC contained 618 paragraphs and ran to 282 pages.
On 20 June 2012, Beach J struck out the ASOC and refused Mr Knörr leave to file and serve the draft FASOC or to join Radial as a plaintiff. Further, his Honour required Mr Knörr to obtain leave before filing and serving any further proposed pleading.[4] Beach J also ordered that the appellant pay the respondents’ costs.
[4]Knörr v CSIRO & Ors(No 2) [2012] VSC 268 (‘Knörr (No 2)’).
In his reasons for striking out the ASOC, Beach J said:
The amended statement of claim must be struck out. It is manifestly defective. The criticisms of the original statement of claim which I have summarised above are equally applicable to the amended statement of claim;[5]
… nowhere in the amended statement of claim can one find an identified cause of action pleaded in compliance with the rules of pleading.[6]
…
[The] minimum standard is not met in the plaintiff’s amended statement of claim. Instead, the amended statement of claim is replete with high level, prolix, repetitive generalizations.[7]
[5]Ibid [15].
[6]Ibid [16].
[7]Ibid [21].
With regard to the joinder application, his Honour applied the principles set out in Worldwide Enterprises Pty Ltd v Silberman[8] in considering whether to exercise his discretion to permit Radial to be joined to the proceeding in circumstances where it was not represented by a legal practitioner. His Honour held that:
… the plaintiff (who does not have legal qualifications) has shown himself unable to prepare a pleading which satisfactorily identifies his causes of action and pleads the material facts (and only the material facts) relied upon in support of these causes of action … it would be a wrong exercise of discretion to allow the plaintiff to make this proceeding (not compliant as it has been to date with ordinary and well-known pleading principles) more complicated by joining Radial Corporations and advancing such claims as the plaintiff might seek to advance on its behalf.[9]
[8](2010) 26 VR 595 (‘Worldwide Enterprises’), 602 [41], citing with approval the principles laid out by J Forrest J and upholding the decision in Worldwide Enterprises Pty Ltd v Silberman & Anor (2009) VSC 165, 5 [20].
[9]Knörr (No 2) [29].
His Honour was prepared to permit Mr Knörr to make a further application to join Radial but stated that ‘it is unlikely that [the Court] would permit the joinder of Radial unless there was a solicitor prepared to act for it in the proceeding’.[10]
[10]Ibid [49].
With regard to the application for summary dismissal, Beach J referred to Udowenko & Ors v Chief Executive Officer and Board of Directors of St George Bank – A Division of Westpac Banking Corporation & Ors (No. 2)[11] in which Johnson J struck out what was only the second version of a statement of claim, refused leave to re-plead and dismissed the proceeding. His Honour held that while ‘there was much to be said for the defendants’ submissions that the plaintiff should not be given leave to re‑plead and there should be summary judgment in their favour’,[12] the Court was prepared to give Mr Knörr one more opportunity ‘to plead an intelligible case in compliance with the rules of pleading’.[13] However his Honour said:
…[In] all likelihood, unless the plaintiff produces a further amended statement of claim which is intelligible, enables the relevant defendants to know the cases they have to meet and is limited to pleading (in accordance with the rules and authorities in the relevant area), the material facts (and only the material facts) relied upon, together with particulars of each material fact as required by the rules, then there is every likelihood that the plaintiff will not be permitted to file and serve the document, and that there will be summary judgment for the defendants.[14]
[11][2011] NSWSC 1122 (‘Udowenko’).
[12]Knörr (No 2) [47].
[13]Ibid [48].
[14]Ibid.
In the course of the proceeding, a number of the respondents filed defences to the SOC and ASOC.[15] In the appeal, these respondents submitted that, while they had sought orders to strike out the SOC and ASOC, their defences were filed for the purposes of compliance with the requirements of the Supreme Court Rules (General Civil Procedure) Rules 2005 (‘the Rules’). Several of the defences included a paragraph asserting that the SOC, the ASOC and/or allegations against the respondents (the defendants below), should be struck out under r 23.02 of the Rules; namely, that the allegations did not disclose a cause of action, were scandalous, frivolous or vexatious, were apt to prejudice, embarrass and/or delay the fair trial of the proceeding, and/or were an abuse of process.[16]
[15]The third, fourth, fifth, seventh, eighth and ninth respondents filed defences to the SOC in February 2012. The first, third and eight defendants filed defences to the ASOC in May 2012.
[16]For example: the defence of the fourth defendant to the SOC dated 24 February 2012 [5]; defence of the seventh defendant to the SOC dated 3 February 2012 [2]; defence of the ninth defendant to the SOC dated 6 February 2012 [2]; the defence of the eighth defendant dated 1 March 2013 [1]; defence of the first defendant to the ASOC dated 28 May 2012 [2]; defence of the third defendant dated 25 May 2012 [1]; defence of the sixth defendant to the SOC filed 9 February 2012 [1]; defence of the eight defendant to the ASOC dated 25 May 2012 [1].
Following the strike out of the SOC and ASOC, Mr Knörr was provided with advice from Glenn McGowan SC and Jonathan Gottschall of Counsel via the Victorian Bar Pro Bono Scheme, with regard to how to frame the amended statement of claim. Mr McGowan SC and Mr Gottschall reviewed the material provided by Mr Knörr comprising seven documents, and held a conference with Mr Knörr on 10 August 2012 which lasted seven hours. Mr McGowan SC and Mr Gottschall recorded their opinion concerning Mr Knörr’s proposed claim in writing in a 24 page memorandum dated 5 September 2012 (‘the Memorandum’), noting that they had previously expressed their views in a memorandum of advice dated 13 August 2012. The Memorandum concluded:
As a result, in conference we gave strong advice to the client that he should abandon this proceeding and that we were not prepared to sign a statement of claim as presently instructed. However, we allowed him the opportunity to further persuade us with further documents, provided the Court’s deadline could be extended.
The Court’s deadline having been extended, we considered all the further documents and instructions provided to us by the client since our conference. However, our position and advice remains unchanged.[17]
[17]Memorandum [41] – [42].
The Memorandum also contained the general observation that any cause of action which may have been disclosed in Mr Knörr’s claim sounded in damages to the company, and not to Mr Knörr personally.[18]
[18]Ibid [6].
After receiving the above advice from Senior and Junior Counsel, by summons dated 11 September 2012, Mr Knörr sought leave to file and serve the draft 2FASOC and to join Radial as a plaintiff to the proceeding with Mr Knörr being permitted to act on its behalf in place of a qualified legal practitioner. The draft 2FASOC contained 814 Paragraphs and ran to 388 pages.
Each of the respondents opposed that application and sought orders for the summary dismissal of the proceeding. Those applications were heard before Beach J on 2 November 2012. On 12 November 2012, Beach J made the orders the subject of this appeal and delivered his reasons for judgment.[19]
[19]Knörr (No 3).
In making the 12 November Orders, Beach J held in relation to the Pleading Order:
The proposed further amended statement of claim is as defective as its predecessors. While any individual sentence in it is capable of being understood, it fails to achieve the objective of identifying in some coherent and understandable way the precise claims and causes of action upon which the plaintiff relies against each defendant. As with the plaintiff’s original statement of claim, the proposed further amended statement of claim is almost completely impenetrable. If the plaintiff was permitted to file and serve the proposed amended statement of claim, the high probability is that the document itself would generate endless debate about the scope and ambit of the plaintiff’s claim against the defendants.
Wrestling with the proposed further amended statement of claim in an attempt to pin down with any sort of precision the content of the plaintiff’s claims is a fruitless and unrewarding exercise ... .[20]
[20]Ibid [10]–[11].
In relation to the Joinder Order, his Honour referred to what he had said in Knörr (No 2) and held that:
Notwithstanding what I said last time, there is still no qualified legal practitioner prepared to represent Radial Corporation. Having looked at the material afresh, I remain unpersuaded that I should exercise the Court’s discretion to permit the joinder of Radial Corporation in circumstances where it will not be represented by a qualified legal practitioner. If anything, the provision of the proposed further amended statement of claim has fortified me in this view.[21]
[21]Ibid [20].
With regard to the Dismissal Order, his Honour held:
In Udowenko & Ors v Chief Executive Officer of the Board of Directors of St George Bank – a division of Westpac Banking Corporation & Ors (No 2), Johnson J noted that the question of whether a court should take the exceptional step of dismissing a proceeding for want of prosecution was not necessarily dependent upon how long had passed while the proceeding has been on foot. Nor was it necessarily dependent upon there being a lengthy period of inaction on the part of a party. One can have a case where, although the proceeding has only been on foot for, in that case, some 13 months (and in this case, some 11 months), when one looks at what has happened in that time, one can see that the proceeding has not moved to first base – let alone beyond it.[22]
The present is such a case. If I permitted this proceeding to remain on foot, and gave the plaintiff a further opportunity to plead a case in compliance with basic and fundamental rules of pleading, or more particularly with law, I am comfortably satisfied that the plaintiff would continue to deliver lengthy and impenetrable documents, upon which no trial could reasonably or fairly be conducted.[23]
…
The fundamental problem with this proceeding is that, if it is left on foot, there will be no progress. What will occur will be contrary to the requirements of the Civil Procedure Act. Further, it will be contrary to law. I am satisfied, in the unusual circumstances of this case, that the plaintiff’s proceeding must be dismissed.[24]
[22]Ibid [26].
[23]Ibid [27].
[24]Ibid [29].
Notice of Appeal
Rule 64.05(1)(b) of the Rules requires a notice of appeal to state ‘specifically and concisely’ the grounds of complaint. Mr Knörr’s Notice of Appeal does not do so. It contains 50 grounds of appeal. They are expressed at a high level of generality and it is difficult to identify the precise grounds upon which Mr Knörr says the primary judge erred in making the 12 November Orders.
Nevertheless, Mr Knörr appeals against each of the orders and his grounds of appeal can broadly be classified as follows:[25]
[25]Given the generality, imprecision and repetitive nature of the grounds of appeal, it is not necessary to be more precise. In essence, the grounds relate to and attack all of the orders and are grouped for convenience.
(a) Grounds 1 to 6 appear to allege error on the part of the primary judge in refusing leave to file the draft 2FASOC.
(b) Grounds 41 to 46 appear to allege error on the part of the primary judge in not permitting the joinder of Radial as a plaintiff in the proceeding.
(c) A number of grounds appear relevant to the Dismissal Order:
· Grounds 7 to 10, 12, 15 to 21, 24 and 25 appear to allege error on the part of the primary judge by reason of his treatment of the Memorandum.
· Grounds 28 to 38 appear to allege error on the part of the primary judge in failing to consider whether the respondents had a ‘proper basis’, as required by the provisions of the Civil Procedure Act 2010 (Vic) (‘the CPA’), for their actions in seeking the summary dismissal of the proceeding.
· Grounds 13, 14 and 23 appear to allege error on the part of the primary judge in failing to give proper consideration to the rights of Mr Knörr under the Charter of Human Rights and Responsibilities 2006 (Vic) (‘the Charter’).
(d) Grounds 47 to 50 allege error on the part of the primary judge in relation to the Costs Order.
(e) Grounds 11, 22, 26, 27, 39 and 40 appear to relate to other miscellaneous matters.
Refusal of Leave to File the Draft 2FASOC
The Pleading Order is interlocutory and leave to appeal is required. In order for leave to be granted, Mr Knörr must establish first that the Pleading Order was either manifestly wrong or attended with sufficient doubt to warrant it being reconsidered on appeal; and secondly, that substantial injustice is likely to be caused to the applicant if leave were refused.[26] This is a high hurdle especially where the matter is one of practice and procedure in a managed list.[27]
[26]Regent Holdings Pty Ltd (as trustee for V L Halliday Investment Trust) v Victoria [2012] VSCA 221 (‘Regent Holdings’), [7]; Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 [533]; Niemann v Electronic Industries Ltd[1978] VR 431, 432; Darrell Lea (Vic) Pty Ltd v Union Assurance Society of Aust Ltd[1969] VR 401, 407–408, following Perry v Smith (1901) 27 VLR 66; Ramton v Cassin(1995) 38 NSWLR 88, 91 (Kirby P, referring to Lovell v Lovell (1950) 81 CLR 513, 532); McHarg v Universal Stock Exchange Ltd [1895] 2 QB 81, 82; White v White [1947] VLR 434, 438.
[27]Regent Holdings [7] referring to Bailey v Farrow Mortgage Services Pty Ltd (in liquidation) (Unreported, Full Court of Supreme Court of Victoria, 23 August 1994).
In our opinion, the primary judge did not err in refusing leave to file the draft 2FASOC. The principles applicable to the preparation of a proper pleading were correctly summarised by the primary judge in Knörr (No 1).[28] For the reasons set out in Knörr (No 3),[29] the draft 2FASOC did not meet those requirements. There is no error in his Honour’s reasoning, and the decision is not attended with sufficient doubt. In fact, the decision is, with respect, plainly correct.
[28]At [1]–[5].
[29]At [9]–[17].
In addition to the matters specifically identified by his Honour in Knörr (No 3), the following are some of the more obvious defects in the draft 2FASOC.
First, the draft 2FASOC is unduly long. Despite clear indications from the Court as to the importance of brevity in pleadings, the draft 2FASOC is significantly longer than all of the previous versions of that pleading. It is prolix in the extreme. It does not comply with the requirement in r 13.02(1) of the Rules to ‘contain in a summary form a statement of all the material facts on which the party relies, but not the evidence by which those facts are to be proved’. Such prolixity creates confusion. The primary judge was right to conclude that it was likely to be productive of ‘endless debate about the scope and ambit of the plaintiff’s claim’.[30] This, in our view, was a sufficient reason to refuse leave to file the draft 2FASOC.[31]
[30]Knörr (No 3) [10].
[31]See ACCC v Pauls Ltd (2000) ATPR 41–747; [1999] FCA 1750.
In Perfection Fresh Australia Pty Ltd v Melbourne Market Authority,[32] Hargrave AJA summarised the view of the Court of Appeal regarding unreasonable prolixity in a pleading:
… I endorse the comments made by Hansen JA concerning the form and unreasonable prolixity of the statement of claim, including the prayer for relief. The statement of claim is inconsistent with both the overarching purpose and the overarching obligations under ss 7 and 24 of the Civil Procedure Act 2010 (Vic); and with r 13.02(1)(a) of the Supreme Court (General Civil Procedure) Rules 2005. A pleading in that form can only increase costs and complexity, and lead to an inefficient use of scarce judicial resources. Legal practitioners have a duty to ensure that pleadings are as concise as clarity and the nature of the case permits. [33]
[32][2013] VSCA 254.
[33]Ibid [78].
Secondly, the draft 2FASOC is replete with irrelevant allegations. Examples of this are to be found in paragraphs 16–28 and 30–31 of the draft 2FASOC which are irrelevant background matters, or at best, matters of evidence.
Thirdly, in the draft 2FASOC Mr Knörr makes vague and generalized allegations of wrongdoing that do not apparently form part of the subject of the proceeding. Examples are found in paragraph 29(g) of the draft 2FASOC which refers to ‘[o]pposite and contrary claims in and to the marketplace [which] were not restricted to those detailed in this Claim’.
Fourthly, in the draft 2FASOC Mr Knörr makes serious allegations of deliberate and knowing wrongdoing without properly pleading the basis for such allegations. For example, in paragraph 37, Mr Knörr alleges that each of the ‘False Claims’ were ‘fabricated findings’ made ‘deliberately with a knowledge of their falsity and baselessness’. The ‘False Claims’ were defined, in paragraph 33, to be ‘each of the claims and representations that are opposite and contradictory to Radial’s Claims’. That would appear to encompass each of the allegedly misleading and deceptive statements pleaded in the subsequent 400 odd paragraphs of the draft 2FASOC. No particulars are provided of the serious allegations contained in paragraph 37. Similar serious, and unparticularised, allegations are repeated in paragraphs 444 to 449 of the 2FASOC as against the first respondent (the CSIRO).
Fifthly, the defamation plea contained in paragraphs 450 to 454 of the draft 2FASOC is clearly defective. For example, no defamatory imputation has been specifically pleaded.
Sixthly, in paragraphs 464 to 474 of the draft 2FASOC, it is alleged that the CSIRO was a party to the manipulation of financial products and services in breach of ss 1041E and 1041H of the Corporations Act 2001 (Cth). However, the draft 2FASOC does not identify the financial product that the alleged false statements were said to have induced persons to acquire or dispose of, as required by those provisions. Similarly, it is alleged in the draft 2FASOC at paragraphs 42–43, 116–136, 479, 547, 557–560 and 563–565, that the fourth respondent breached sections of the Trade Practices Act 1974 (Cth) without any identification of the necessary elements of such claims. Similarly deficient claims of misleading representations are made against the eighth respondent.
The above defects are a limited selection of those contained in the draft 2FASOC. No cause of action has been properly pleaded in accordance with the Rules. It was not necessary for the primary judge to go through every paragraph of the draft 2FASOC and identify its manifest defects. In the circumstances, the primary judge was right not to grant Mr Knörr leave to file the draft 2FASOC.
Refusal of Leave to Join Radial as a Plaintiff to the Proceeding
As noted above,[34] Grounds 41 to 46 appear to relate to the Joinder Order. However, Mr Knörr does not appear to have addressed this issue in his submissions.
[34]Paragraph [25].
Rule 1.17 of the Rules provides:
1.17 Corporation a party
(1) Except where otherwise provided by or under any Act or these Rules, a corporation, whether or not a party, shall not take any step in a proceeding save by a solicitor.
Under r 2.04 of the Rules, the Court may, in its discretion, dispense with any requirement of the Rules, before or after the occasion for compliance arises.
The Joinder Order was made in the exercise of the primary judge’s discretion not to use r 2.04 to dispense with the requirement under r 1.17, that Radial not take any step in a proceeding save by a solicitor. The Court of Appeal will not ordinarily interfere with such an order unless it is satisfied that by reason of some error, whether of fact or law, the primary judge has not only taken a different view from that which the Court of Appeal would have taken if they had been in his place, but that he has failed properly to exercise the discretion committed to him. A mere preference for a different result is an insufficient basis for interference with the exercise of the trial judge’s discretion. Further, the Joinder Order pertained to matters of practice and procedure. In those circumstances, the restraint which the Court of Appeal should exercise in reviewing the order is even greater.[35]
[35]Mace v Murray (1955) 92 CLR 370, 378; Norbis v Norbis (1986) 161 CLR 513, 535; House v R (1936) 55 CLR 499.
The primary judge did not err in refusing to dispense with the requirement of r 1.17. In exercising his discretion, the primary judge applied the principles set out by the Court of Appeal in Worldwide Enterprises. In that case, the Court of Appeal endorsed J Forrest J’s articulation of the following factors to be taken into account in determining whether a departure from r 1.17 is warranted:
In determining whether there are circumstances which warrant a departure from the Rule, his Honour singled out the following matters as relevant:
(i) the manner in which the case has progressed at the time that the application is made;
(ii) the manner in which the case can proceed in the future without a solicitor;
(iii) the complexity of the issues involved in the case;
(iv) whether the lack of disciplinary measures in relation to the person seeking to represent the company will affect the administration of justice;
(v) whether the case can be conducted in an orderly and responsible fashion without a solicitor;
(vi) whether there are financial considerations which would inhibit a company from obtaining legal representation;
(vii) the stage which the case has reached;
(viii) whether the defendant is likely to expend more funds in defending the claim absent a solicitor acting for the company; and
(ix) what effect, if any, permitting a company to appear without a solicitor will have on Court resources and, particularly, the effect upon other litigants in the Court List.[36]
[36]Worldwide Enterprises, 602 [41] citing Worldwide Enterprises Pty Ltd v Silberman & Anor (2009) VSC 165, 5 [20].
The principles in Worldwide Enterprises were applied in the recent decision of Ilford Tower Pty Ltd v Equity One Mortgage Fund Ltd.[37] In Ilford, the Court noted that Mr Strangio, who was seeking leave to represent the appellant, ‘had little grasp of how to present factual material in a way admissible to the Court’, and would have ‘significant difficulties … in prosecuting the appeal himself’.[38] The Court concluded:
The rule that a company will not usually be permitted to appear without a legal representative is clear. There are sound reasons of policy that support this rule… The complexity of the issues involved and the significant challenges it is apparent Mr Strangio would face in prosecuting the appeal, and the fact that the burden on the Court and the respondent would be substantially increased if he were given leave to do so, means that, in our view, it is not appropriate to depart from the rule in this case.[39]
[37][2014] VSCA 16 (‘Ilford’).
[38]Ibid [22].
[39]Ibid [24].
The application of the principles in Worldwide Enterprises and Ilford to the circumstances of this case clearly suggests that the primary judge’s exercise of discretion was correct. Mr Knörr had not been able to file a compliant statement of claim in 11 months. The pleading he was attempting to put forward was extremely complex. The case was in its infancy and it was apparent that the respondents were being put to considerable additional expense as a result of Mr Knörr, and not a legal practitioner, having the conduct of the proceeding.
Mr Knörr claims that the primary judge erred by failing to define the complexity of the proceeding he was seeking to maintain. The complexity was self‑evident. Mr Knörr sought to pursue proceedings against nine parties for many interconnected causes of action. He appeared to be making numerous claims including claims of fraud, conspiracy, defamation, breach of contract, negligence and contravention of the Corporations Act 2001 (Cth) and Trade Practices Act 1974 (Cth). Despite four attempts, he was not able to express his claim in anything less than 200 pages. Mr Knörr relied upon Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd[40] and Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc & Or;[41] cases in which the Court found that the fact there is no scientific foundation for a statement in the realm of science may be sufficient to establish misleading conduct. However, there are few similarities between this case and the decisions in Janssen and Noone in this regard. Those cases simply involved claims for misleading and deceptive conduct and, in Noone, an issue concerning the Charter. There is nothing to suggest the pleading in those cases ran to hundreds of pages.
[40](1985) 6 IPR 227; (1986) ATPR 40–654 (‘Janssen’).
[41][2012] VSCA 91 (‘Noone’).
Further, Mr Knörr claims that the primary judge, when applying the principles set out in Worldwide Enterprises, did not have due regard to the fact that Mr Knörr was subject to the CPA. There is no substance in that claim. There is nothing in Knörr (No 3) to suggest that the primary judge did not take Mr Knörr’s obligations under the CPA into account when exercising his discretion. Notwithstanding the obligations of a party under Part 2 of the CPA, a legal practitioner is still subject to more onerous disciplinary measures under the Legal Profession Act 2004 (Vic). In any event, the fact that Mr Knörr is subject to the overarching obligations under the CPA reinforces rather than overcomes the other factors taken into account in the exercise of the primary judge’s discretion as set out in Worldwide Enterprises.
Mr Knörr claims that the primary judge also failed to give proper consideration to Radial’s ability to afford legal representation and the severe consequences that may follow from any inability on the part of Radial to fund the litigation. There was no evidence before the primary judge at the 2 November 2012 hearing as to the financial situation of Radial. Nevertheless, it is safe to assume the primary judge considered that if Radial wanted to pursue this proceeding, and could afford a solicitor, it would have engaged one. The primary judge was aware that Mr Knörr had sought and obtained assistance under the Victorian Bar pro-bono scheme. There is no reason to conclude that the primary judge did not take that into account in determining not to exercise his discretion to permit Radial to be represented by Mr Knörr. On this issue, the statement of Bongiorno JA in Worldwide Enterprises cited by the primary judge is particularly pertinent:
Incorporation confers many benefits on those connected with the company. It also imposes some burdens, one of which is that, in litigation, a company must normally be represented by a lawyer.[42]
[42]Worldwide Enterprises 607, [76], cited in Knörr (No 3) [19].
Legal Advice
Beach J referred to the Memorandum in the context of considering whether leave ought to be granted to join Radial. His Honour noted that the views of counsel could not be determinative of whether the appellant had an available cause of action against any of the respondents.[43] The Memorandum was (correctly) not a consideration taken into account in refusing leave to file the draft 2FASOC or dismissing the proceeding and the grounds of appeal suggesting otherwise are not made out.
[43]Knörr (No 3) [24].
The Dismissal Order
Having refused the plaintiff’s application for leave to file and serve the draft 2FASOC and join Radial as a plaintiff, the trial judge dismissed the proceeding for want of prosecution.
It is as well to set out the reasons of the judge. They are short and comprise paragraphs [25]–[29] of Knörr (No 3):
25.Each of the existing defendants, in addition to opposing the plaintiff’s applications, seeks an order dismissing the proceeding. The bases upon which an order dismissing the proceeding is sought include reliance upon:
(a)the Court’s inherent jurisdiction to dismiss for want of prosecution;
(b)section 63 of the Civil Procedure Act 2010 on the ground that the plaintiff’s claims have no real prospect of success;
(c)rule 23.01 of the Supreme Court (General Civil Procedure) Rules 2005 on the grounds that the plaintiff’s claims do not disclose a cause of action and/or are scandalous, frivolous or vexatious or an abuse of the process of the court; and
(d) rules 24.01 and/or 24.05.
26In Udowenko & Ors v Chief Executive Officer of the Board of Directors of St George Bank – a division of Westpac Banking Corporation & Ors (No 2), [2011] BSWSC 1122, Johnson J noted that the question of whether a court should take the exceptional step of dismissing a proceeding for want of prosecution was not necessarily dependent upon how long had passed while the proceeding has been on foot. Nor was it necessarily dependent upon there being a lengthy period of inaction on the part of a party. One can have a case where, although the proceeding has only been on foot for, in that case, some 13 months (and in this case, some 11 months), when one looks at what has happened in that time, one can see that the proceeding has not moved to first base – let alone beyond it.
27The present is such a case. If I permitted this proceeding to remain on foot, and gave the plaintiff a further opportunity to plead a case in compliance with basic and fundamental rules of pleading, or more particularly with law, I am comfortably satisfied that the plaintiff would continue to deliver lengthy and impenetrable documents, upon which no trial could reasonably or fairly be conducted.
28Again, as was said by Nettle and Osborn JJA in Karam v Palmone Shoes Pty Ltd & Anor, [2012] VSCA 97 [36], ‘[t]here comes a point at which a self-represented litigant must be required to take responsibility for his choices’. Consistently with the principles enunciated in the Civil Procedure Act, Mr Knörr cannot be permitted to continue to subject the parties to this proceeding to significant cost and inconvenience and to add pointlessly to the load on the Court’s already limited resources. Ibid.
29The fundamental problem with this proceeding is that, if it is left on foot, there will be no progress. What will occur will be contrary to the requirements of the Civil Procedure Act. Further, it will be contrary to law. I am satisfied, in the unusual circumstances of this case, that the plaintiff’s proceeding must be dismissed.[44]
[44]Knörr (No 3) [25]–[29]. Citations omitted.
Other than to dismiss the proceeding for want of prosecution his Honour did not specifically deal with each of the grounds set out in paragraph 25 of the judgment.
The appellant appeals against the dismissal for want of prosecution on numerous grounds. The grounds are badly set out and are in many respects unintelligible, prolix, irrelevant and repetitive.
Each of the sixth and eighth respondents have filed a Notice of Contention. In short they contend that the judge should have granted summary judgment in their favour.
The power of the Court to dismiss a proceeding for want of prosecution is (as in the case of dismissal for other forms of abuse of process) incidental to the jurisdiction of the Court to hear and determine the proceeding.[45] Rule 24.05 preserves the Court’s inherent power to dismiss a proceeding for want of prosecution. The power to dismiss a proceeding which is frivolous or vexatious or an abuse of process extends to cases which are not reasonably prosecuted.[46]
[45]Duncan v Lowenthal [1969] VR 180, 182; Exell v Exell [1984] VR 1, 7–8; Muto v Faul [1980] VR 26; Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863.
[46]Muto v Faul [1980] VR 26.
The power to dismiss proceedings in the interests of the administration of justice on the ground that they have not been reasonably prosecuted, was recently confirmed by this Court in Pham v Ex Parte, Drakopoulos & Ors.[47]
[47][2013] VSCA 43 [43].
In AMP General Insurance Ltd v Victorian WorkCover Authority[48] the Court of Appeal held:
…the inherent power to stay or dismiss for want of prosecution is but one aspect of ‘the incidental powers which all courts have to prevent abuses of process’. Exactly the same point was made by the High Court majority in Batistatos v Roads and Traffic Authority (NSW) [(2006) 226 CLR 256]. … Whether the complaint advanced by the defendant relies on the general principles of abuse of process or the more specific category of want of prosecution, the criterion is the same. Is there a substantial risk that the defendant will be unable to obtain a fair trial in the circumstances of the case? ...[49]
[48](2006) 15 VR 175.
[49]Ibid [40] (Maxwell P and Neave JA).
Dismissal of a proceeding for want of prosecution involves the exercise of a discretion and the Court of Appeal will not interfere with the Dismissal Order unless it reaches a clear conclusion that by reason of some error, whether of fact or law, the primary judge not only has taken a different view from that which the Court of Appeal would have taken if they had been in his place, but has failed properly to exercise the discretion committed to him.[50]
[50]Mace v Murray (1955) 92 CLR 370, 378; Norbis v Norbis (1986) 161 CLR 513, 535; House v R (1936) 55 CLR 499.
In the circumstances of this case, it was entirely open to the trial judge to conclude that justice demanded that the proceeding be dismissed. Despite four attempts, Mr Knörr had been unable to produce a statement of claim that complied with the Rules. Despite the observations of the judge in Knörr (No 1) as to the need for brevity in pleadings, each successive version of the statement of claim had been longer than the last. While the form of the pleading prepared by Mr Knörr changed with each attempt, it did not improve. In the circumstances, the trial judge was right to conclude that if the proceeding was left on foot ‘there will be no progress’.[51]
[51]Knörr (No 3) [29].
If the proceeding had not been dismissed the probabilities were that Mr Knörr would have continued to deliver incredibly lengthy pleadings that did not comply with the Rules. The respondents would have been required to read and consider those pleadings and take appropriate steps to oppose them at significant expense. Court time would have been occupied by repeated strikeout applications. That would not have been consistent with the interests of justice, nor would it have been consistent with the overarching purpose contained in s 7 of the CPA, which is discussed below. The circumstances demanded that the proceeding be dismissed for want of prosecution. The judge did not err by doing so.
His Honour acknowledged that the circumstances of the case were unusual,[52] and that a proceeding would not ordinarily be dismissed because of a failure to file a pleading complying with the Rules within 11 months. But in this case, as pointed out, Beach J found that:
[52]Ibid.
(a) despite two prior judgments cataloguing the manifest failures in the appellant’s attempts to identify the case which he sought to make, the draft 2FASOC did not identify a case to answer;[53] and
(b)if the appellant was afforded a further opportunity to plead a case in compliance with basic and fundamental rules of pleading he would continue to deliver lengthy and impenetrable documents upon which no trial could reasonably or fairly be conducted.[54]
[53]Ibid [17].
[54]Ibid [27].
Nothing in the appellant’s submissions suggests that any further iteration of the claim would improve the position. Beach J was correct in finding that if the proceeding was not dismissed, the lack of progress would be contrary to the requirements of the CPA and contrary to law.
Lastly in this context we note that Mr Knörr’s submissions on the hearing of the appeal were expressly made on the basis that he was representing the interests of the shareholders in Radial. In turn the draft 2FASOC is essentially elaborated by reference to ‘Radial’s claims’. Read as a whole, it supports the view that if there be any arguable claim arising out of the underlying circumstances which Mr Knörr attempts to ventilate, that claim is Radial’s claim and not Mr Knörr’s.[55] This conclusion substantially reinforces the view that Mr Knörr’s personal claim should be dismissed in the procedural context elaborated by the trial judge.
[55]By way of example it is clear from the evidence that any claim against Mallesons – which is in any event doubtful – is that of Radial, and Mr Knörr did not contend otherwise.
The Charter
The appellant made submissions about the application of the Charter presumably in support of appeal Grounds 13 and 23. The submissions are confusing and unclear, but in any event, the issues before this Court do not concern the Charter. The Court’s power to dismiss a proceeding (including for abuse and want of prosecution) and an exercise of power pursuant to the Rules, even where such proceeding includes a claim in relation to reputation which is sought to be defended and protected, is not affected by the Charter.[56]
[56]The Charter does not apply to a court acting in its judicial capacity (rather than in an administrative capacity). See ss 4(1)(j) and 38(1) of the Charter. See also Slaveski v The Queen (on the application of the Prothonotary of the Supreme Court of Victoria) [2012] VSCA 48 (20 March 2012) [107].
Civil Procedure Act
The dismissal of the proceeding is also entirely consistent with, and indeed mandated by, the provisions of the CPA.
The main purposes of the CPA include ‘the overarching purpose in relation to the conduct of civil proceedings to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute’ (s 1(1)(c)).
Parties have a paramount duty to the Court to further the administration of justice (s 16) and an overarching duty to act honestly (s 17). Further and perhaps more relevantly the parties must have a proper basis for making a claim or defence (s 18).
Parties to a dispute have a number of other overarching obligations. They must not engage in conduct which is misleading or deceptive or likely to mislead or deceive (s 21). They must endeavour to narrow the issues in dispute (s 23). They must ensure costs are reasonable and proportionate (s 24). They also have an ongoing overarching obligation to minimise delay (s 25).
Part 2.4 of the CPA deals with sanctions for contravening the overarching obligations. There is no specific power to dismiss a proceeding. However under s 29(f) the Court can make ‘any other order that the Court considers to be in the interests of any person who has been prejudicially affected by the construction of the overarching obligations. Further, s 29(3) provides that the section ‘does not limit any other power of a Court to make any order, including any order as to costs’.
Each party has raised the CPA. Mr Knörr contends that the respondents do not have a proper basis for filing a defence. By their notices of contention the sixth and eight respondents seek summary judgment against Mr Knörr under s 63. The sixth respondent also seeks dismissal under s 29(1).
Proper basis
Section 42 of the CPA is in the following terms:
Proper basis certification
(1)A legal practitioner acting for or on behalf of a party to the proceeding must file a proper basis certification which complies with this section in the following circumstances—
(a)on the filing of a party's first substantive document in a civil proceeding;
(b)on the filing of any subsequent substantive document in a civil proceeding which—
(i)adds or substitutes a party; or
(ii)makes, adds or substitutes a claim or cause of action; or
(iii)makes, adds or substitutes a substantive defence or substantive matter by way of response or reply; or
(iv)makes, adds or substitutes a material allegation denial or non-admission of fact or law; or
(v)makes any significant amendment to a first substantive document or a subsequent substantive document;
(c)as provided for by rules of court;
(d)as directed by the court in any civil proceeding.
(1A)In the case of a civil proceeding which involves allegations of fact, a legal practitioner making a proper basis certification must certify that on the factual and legal material available—
(a)each allegation of fact in the document has a proper basis;
(b)each denial in the document has a proper basis;
(c)there is a proper basis for each non-admission in the document.
(2)A proper basis certification must be in accordance with the rules of court.
(3)For the purposes of this section, a determination by a legal practitioner—
(a)as to whether any allegation or denial of fact has a proper basis, on the factual and legal material available, must be based on a reasonable belief as to the truth or untruth of the allegation or denial; or
(b)as to the proper basis of any non-admission is that the legal practitioner does not know, and therefore cannot say, whether a fact alleged or denial is true or untrue; or
(c)as to whether any claim, response to a claim, question posed or response to a question posed has a proper basis, on the factual and legal material available, must be based on a reasonable belief that the claim, response to a claim, question or response to a question has a proper basis.
(4) If a party is not represented by a legal practitioner—
(a)the proper basis certification must be completed personally by that party; and
(b)a reference in this section to ‘legal practitioner’ is to be construed as a reference to that party.
A not insubstantial part of Mr Knörr’s argument on appeal and in the grounds of appeal was to the effect that the respondents had no proper basis for their defences. The argument must be rejected for two main reasons.
First, the respondents were at all times entitled to challenge the adequacy of the SOC and the ASOC before being required to file a detailed defence that addresses the issues and causes of action which each is said to raise. It is at this stage that they are required to certify that there is a proper basis for such a defence. Filing a holding type defence foreshadowing a strike out is in a different position.
Secondly, Mr Knörr has misunderstood the nature and effect of the proper basis certificate. It will very rarely, if at all, be open to a litigant to assert at the outset that the opponent does not have a proper basis to defend the case. If it transpires that a party did not have a proper basis – usually at trial – costs and other consequences may follow. Final summary relief may be granted if there is no proper basis for a claim or defence. This is specifically provided for in CPA s 63 and is invoked by the notices of contention filed by the sixth and eighth defendants. Section 63 cannot of course be invoked by a plaintiff in the absence of a properly formulated claim.
The Costs Order
In Grounds 47 to 50, the appellant also alleges error on the part of the trial judge in relation to the Third Costs Order.
In Ground 48, Mr Knörr asserts that the trial judge erred in failing to inform Mr Knörr of his right to seek a stay of the Costs Order pending any appeal. Such assistance was not necessary to ensure that Mr Knörr obtained a fair hearing before the judge. In any event, any such error cannot serve to impugn the correctness of the Costs Order as it necessarily occurred after the order had been made.
As we have found against the appellant with regard to the Dismissal Order, it follows that the Costs Order should not be disturbed.
Further matters
The grounds of appeal include additional miscellaneous grounds. For the reasons set out below, each of these miscellaneous grounds must fail.
In Ground 11, Mr Knörr claims that Beach J erred in failing to properly consider his ‘rights to discovery and justice’. Mr Knörr did not seek orders for discovery from Beach J and did not make any application for preliminary discovery pursuant to r 32 of the Rules. In circumstances where Mr Knörr had not filed a compliant statement of claim, he had no ‘right’ to discovery. His Honour did not err by failing to specifically consider it.
In Ground 22, Mr Knörr alleges that his Honour erred by failing to properly consider the public importance of the issues in dispute and the desirability of judicial determination of those issues pursuant to s 9(2)(g) of CPA. There is no reason to conclude that Beach J failed to give consideration to such issues, to the extent that he was able to do so given the unsatisfactory articulation of Mr Knörr’s claim. His Honour clearly took into account the ‘principles enunciated in the Civil Procedure Act’.[57] In any event, there is no reason to conclude that the ’public importance’ of any issues in dispute in this proceeding was sufficient to overcome the obvious inefficiency and cost associated with allowing the proceeding to continue, in circumstances where Mr Knörr had proven himself unable to prepare a compliant statement of claim.
[57]Knörr (No 3) [28] and [29].
Our democracy provides a variety of avenues other than civil litigation for the ventilation of matters of public importance. Indeed insofar as matters of scientific and technical controversy are concerned it may be doubted that such litigation is well suited to their determination. The standard of proof applied by the Courts is not that applied in the pursuit of scientific fact and the process of litigation is constrained by evidentiary and procedural limitations.
In Grounds 26 and 27, Mr Knörr appears to claim that Beach J erred by not properly taking into account what had occurred when he sought legal assistance from the Victorian Bar pro-bono scheme and by determining that ‘there comes a point at which a self-represented litigant must be required to take responsibility for his own choices’.[58] There is no reason to conclude that his Honour failed to take into account what had occurred when Mr Knörr approached the Victorian Bar pro-bono scheme for assistance. Mr Knörr provided the Court with a copy of the Memorandum. Beach J noted its conclusion.[59] He noted that Mr Knörr disagreed with the conclusion and acknowledged that the Memorandum could not be determinative of whether Mr Knörr has any available cause of action.[60] Mr Knörr had been given ample time and opportunity to prepare a compliant statement of claim, whether with or without the assistance of legal representation. He chose not to accept the advice of Senior and Junior Counsel as contained in the Memorandum but rather to prepare the draft 2FASOC on his own. He was warned that the proceeding was likely to be dismissed if the draft 2FASOC did not comply with the Rules.[61] As the draft 2FASOC did not comply with the Rules, Mr Knörr must accept the inevitable consequences.
[58]Ibid [28], citing Karam v Palmone Shoes Pty Ltd & Anor [2012] VSCA 97 [36].
[59]Ibid [22].
[60]Ibid [23] and [24].
[61] Ibid [48].
In Grounds 39 and 40, Mr Knörr alleges that his Honour erred by not determining whether the statements apparently giving rise to his claim were indeed wrong and misleading, and by not properly considering that Mr Knörr’s legal rights may be lost as a consequence of the Dismissal Order. Beach J was undoubtedly aware of the fact that the Dismissal Order might result in a loss by Mr Knörr of any claim he may have had against the Respondents for the matters intended to be the subject of this proceeding. It was not possible, necessary or appropriate for his Honour to make a determination about the merits of such a claim in circumstances where Mr Knörr had not been able to articulate it in a satisfactory form.
Notice of Contention
Given the decision we have reached and the consequences of that decision we do not propose to deal with the Notice of Contention filed by the sixth to eighth defendants.
Disposition
For these reasons, leave to appeal in relation to the Pleading Order and the Joinder Order is refused and the appeal is otherwise dismissed.
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