Lashansky v The Legal Practice Board of Western Australia

[2012] WASC 16

JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS
CITATION	:	LASHANSKY -v- THE LEGAL PRACTICE BOARD OF WESTERN AUSTRALIA [2012] WASC 16
CORAM	:	ACTING MASTER CHAPMAN
HEARD	:	20 OCTOBER 2011
DELIVERED	:	19 JANUARY 2012
FILE NO/S	:	CIV 1733 of 2010

BETWEEN : ROBERT JAMES LASHANSKY

Plaintiff

AND

THE LEGAL PRACTICE BOARD OF WESTERN
AUSTRALIA
First Defendant

DIANE HOWELL Second Defendant

MICHELLE LOUISE GILCHRIST

Third Defendant

PETER JOSEPH BOGUE

Fourth Defendant

Catchwords:

Practice and procedure - Summary judgment - Leave to make the application - Limitation period - Applicability of Limitation Act 1935 (WA) or Limitation Act 2005 (WA) - Limitation period expired

[2012] WASC 16

Legislation:

Limitation Act 1935 (WA) Limitation Act 2005 (WA) Rules of the Supreme Court 1971 (WA), O 16 r 1

Result:

Leave to make the application granted

Judgment entered for the first defendant

Category: B

Representation:

Counsel:

Plaintiff	:	In person
First Defendant	:	Mr J C Vaughan
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	In person
First Defendant	:	MDS Legal
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Case(s) referred to in judgment(s):

Energex Ltd v Alstom Australia Ltd [2005] FCAFC 215
Honey v McLennan (Unreported, WASC, Library No 970574, 30 October 1997)
Melbourne Steamship Co Ltd v Moorehead [1912] HCA 69
Mutua v The Foreign and Commonwealth Office [2011] EWHC 1913

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ACTING MASTER CHAPMAN

ACTING MASTER CHAPMAN:

The application

1. The first defendant by chamber summons filed on 9 August 2011 sought a number of orders. The first two are as follows:

   1. The first defendant have leave to make an application for summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court 1971.

   2. The plaintiff's action be dismissed and judgment be entered for the first defendant pursuant to O 16 r 1 of the Rules of the Supreme Court 1971.

2. The third order is in the alternative to orders 1 and 2, and reads as

   follows:

3.1

the time for filing of the first defendant's application to strike out the statement of claim, alternatively part of the statement of claim, be extended to the date of this application;

3.2

the statement of claim be struck out pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 and this Court's inherent jurisdiction;

3.3

alternatively to order 3.2 above, the following paragraphs of the statement of claim be struck out pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 and this Court's inherent jurisdiction:

(a)	paragraphs 11, 12, 13, 15, 16, 19, 20 and 22 (inclusive); and
(b)	paragraphs C, D, E, F and G of the prayer for relief.

1. I am told the second, third and fourth defendants have not been served with the writ or statement of claim.

Leave

4

Order 16 r 1 of the Rules of the Supreme Court 1971 (WA) requires that an application for summary judgment must be filed by the defendant within 21 days after appearance, or at any later time by leave of the court. The first defendant entered an appearance on 29 April 2011. It is accepted by the first defendant that the application is made outside the 21 days. At par 7 of his affidavit sworn on 5 August 2011, Mr Shung Kee Neoh deposes as follows:

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ACTING MASTER CHAPMAN

7.          I am informed by Mr Macknay and believe that the reasons for the delay in filing the application for summary judgment are as follows:

(a)	at the time this action was commenced the writ of summons was only generally indorsed;
(b)	as the writ was only generally indorsed the allegations against the first defendant were not known with any degree of particularity;
(c)	for the purpose of considering whether to make a summary judgment application it was appropriate to wait until the plaintiff had filed his statement of claim so that the full extent of the plaintiff's case was known, and in particular whether any issues as to statutory limitations arose, and a decision could be made as to an application for summary judgment; and
(d)	the parties engaged in conferral as is more fully described in paragraph 19 below.

5              Given the seriousness of the allegations made by the plaintiff, I

consider this an appropriate course to take. The statement of claim was filed on 15 June 2011. At par 19 of the affidavit of Mr Neoh, he deposes as follows:

19.        I am informed by Mr Macknay and believe that consideration of the statement of claim was completed by 5 July 2011 and conferral was commenced on that day. In relation to conferral, I attach copies of the following correspondence:

(a)	letter from MDS Legal to the plaintiff dated 5 July 2011 ('SKN1');
(b)	letter from MDS Legal to the plaintiff dated 7 July 2011 ('SKN2');
(c)	facsimile from the plaintiff to the Court dated 17 July 2011 ('SKN3');
(d)	letter from MDS Legal to the plaintiff dated 11 July 2011 ('SKN4'); and
(e)	letter from MDS Legal to the plaintiff dated 14 July 2011 ('SKN5);

1. Attachment SKN5 of the affidavit reads:

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ACTING MASTER CHAPMAN

7              The delay in this case is not significant, it has been adequately

explained and no significant prejudice to the plaintiff has been
established. In those circumstances, I would grant the leave sought.

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ACTING MASTER CHAPMAN

Background

8              The plaintiff commenced litigation in the Federal Court on behalf of

his then clients which litigation is referred to in the statement of claim as the Colonnade litigation. The matter was ultimately settled and the first defendants in that matter paid the balance of settlement moneys to the plaintiff on or about 13 or 14 December 1999. At that time, the plaintiff alleges there was approximately $100,000 in fees outstanding in favour of him over which he had a lien.

9              During the morning of 16 December 1999, it is alleged that Mr Peter

Robert Jordan (Mr Jordan), who was an employee of the first defendant, rang the plaintiff. It is alleged that, as a result of that conversation, the plaintiff was induced to draw cheques on his trust account distributing the entire amount received in relation to the Colonnade litigation without any deduction for fees.

10            It is said the fraudulent representations made by Mr Jordan were

undertaken as part of a conspiracy between him and the second and third
defendants, or two or more of them.

11            It is further alleged that on 13 December 2000 and 28 November 2002, the first defendant, through the fourth defendant, removed material the property of and in possession of the plaintiff, without any court order or warrant.

12            At all material times, the fourth defendant was appointed as

supervising solicitor of the plaintiff's former practice, such appointment
being made on 30 November 2000, by the first defendant.

Causes of action

13            The plaintiff appears to plead three causes of action against the first

defendant; namely, deceit, conspiracy with intent to injure by unlawful means and conversion.
(a)	Deceit and conspiracy

14            Paragraphs 21 to 26 of the statement of claim are of particular

relevance. The basis of the cause of action in deceit is the telephone call between the plaintiff and Mr Jordan, which is said took place on 16 December 1999. The plaintiff pleads that as a result of that conversation, he was induced to draw certain cheques. It is said the telephone call made by Mr Jordan was undertaken as part of a conspiracy entered into between him and either the second or third defendants.

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ACTING MASTER CHAPMAN

15            The first defendant argues that on the plaintiff's case, the cause of

action in deceit and conspiracy occurred when the plaintiff disbursed the funds and the liens which are alleged to have existed were lost. It is not pleaded when the payment was made, but one can infer it was on or around 16 December 1999. The first defendant submits the claims the plaintiff seeks to agitate are statute-barred under the Limitation Act 1935 (WA) (the 1935 Act) and thus there is no real question to be tried.

1. The plaintiff accepts a period of six years has elapsed and at par 27 of his affidavit sworn on 21 September 2011 deposes as follows:

   27.        Although the events took place on 16 December 1999, I only became aware of the existence of the conspiracy during the course of an 'Inspection' of documents at the offices of the First Defendant's then solicitor, Minter Ellison on Thursday, 20 May 2004 pursuant to Orders for Discovery made by his Honour Justice Templeman on 5 April 2004.

17            For the purposes of this application, I will accept that as so. He

argues the limitation period runs from the date upon which he 'became aware of the existence of the conspiracy' which he says is 20 May 2004. He says because the alleged deceit and conspiracy were fraudulently concealed from him the time did not run until the date of his knowledge, namely 20 May 2004. The writ was filed on 19 May 2010 and the plaintiff argues it was therefore in time.

(b) Conversion

18            The plaintiff alleges that on two separate occasions, namely,

13 December 2000 and 28 November 2002, the first defendant, through the second and fourth defendants, removed property of the plaintiff which was in his lawful possession. Counsel for the first defendant argues that the causes of action in conversion occurred when the alleged removal took place. It is said therefore the causes of action in conversion expired on or around 13 December 2006 and 28 November 2008. Again, the first defendant argues the limitation defence is a good defence and there is no serious question to be tried. Further, counsel for the first defendant argues that the alleged conversion on 13 December 2000 is not referred to in the writ and to the degree it goes outside the writ, it would required amendment. With this I agree.

19            The plea relating to conversion is found at pars 27 and 28 of the

statement of claim. In his oral submissions, the plaintiff submitted he was denied the opportunity of pursuing his claim for costs in the Colonnade litigation. It is further said by the fourth defendant not pursuing the liens

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ACTING MASTER CHAPMAN

the plaintiff claims to have had in relation to costs, he has suffered loss.
Indeed, as recorded at ts 15, he submits:

LASHANSKY, MR: - - - that application was made to the Legal Practice Board and the documents, sir - the taking of the documents is not the issue, sir. It's the conversion of the proceeds of the lien.

20            If this is the case, he has not pleaded the necessary facts to support

such a claim. The plaintiff seems to accept this and requested an opportunity to amend his pleading. It is not clear the plaintiff is in a position to plead proper facts to support a claim of conversion of the proceeds of the liens. This dilemma comes about because of the submissions the plaintiff made during the course of the hearing. He made the following submissions at pages 23 - 24 of the transcript:

Well, the conversion claim arises, sir, at a date that I don't know.

When Mr Bogue converted these moneys, he might not have converted them, sir. They might be standing in some bank account over there for Robert Lashansky or to Mr Bogue under constructive trust. He has just never accounted to me for the moneys.

He has taken the files. He has handed them over, sir, and if he had any doubt as to this, sir, the doors of the Supreme Court are open; bring an interpleader summons as to who is entitled to the money. By Mr Bogue walking in, sir, he doesn't necessarily convert the documents on that day. He has got the power to go and have the moneys collected under the Legal Practice Act, but he holds those moneys under constructive trust for me, sir.

When he didn't pay them over, sir - if he hasn't paid them over. Well, I haven't received them for 10 years, so I presume that somewhere along the line I never got my moneys. Sir, at the end of the day, when he converted them is peculiarly known to Mr Bogue, Mr Vaughan and Mr Macknay. I don't know what he did with these moneys. He didn't write to me and say, 'I have gone and done this.' He just went ahead and took the files.

Limitation period

21            It is accepted by both parties that the nature of the claims pleaded are

subject to limitation periods. The parties are not in agreement as to the date upon which the respective periods would run and it is unclear whether or not the parties are in agreement as to which Limitation Act is applicable. This is highlighted by various passages from the transcript referred to below.

22            In his opening oral submission, the plaintiff submitted that the

Limitation Act 2005 (the 2005 Act) applied and, although he did not refer

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ACTING MASTER CHAPMAN

me to any particular provisions of that Act, submitted the following as
recorded at ts 2:

LASHANSKY, MR: ... The limitation period, sir, as set out under the Limitation Act of 2005 is when the party could reasonably have become aware of the fact that he had been the victim of fraud.

1. He renewed the submission at ts 20, when he said:

   These claims have six years pursuant to the 2005 Limitation Act, but you're only allowed to count the limitation period against a plaintiff when he could by reasonable foresight - and this is set out - and this hasn't been brought to you, sir. This was not put into the attention - this limitation period under deceit can only run when by reasonable foresight I could have become aware of it, so I'm now going into what happened, sir.

2. At ts 22, he submits:

   They're inspected for the first time in Mr Goetze's office on 20 May 2004.

   That's when I discovered that I have been set up. That's the earliest date that I could have discovered. Sir, if I don't find - is this the 2005 limitation? We need the 1935 Limitation Act and this document - sir, this is the point that Mr Vaughan has studiously kept away from you. It's the application of limitation period under the 2005 act.

   THE ACTING MASTER: Yes.

   LASHANSKY, MR: This is the particularly nasty section, sir.

   THE ACTING MASTER: I would hope there's no such - - -

   LASHANSKY, MR: Paragraph 4 reads:

   The limitation periods provided for under this act apply only to causes of action that accrue on or after the commencement day.

   This cause of action has clearly accrued before the commencement day, sir. We're now dealing with the 1935 Limitation Act. We're not dealing with the 2005 act. Mr Vaughan is well aware of this, sir, and presumably as a practitioner who is an Honourable practitioner, he has a duty to explain to the court why he didn't point out application of limitation periods under this act. So we're now dealing with the 1935 Limitation Act.

   The 1935 Limitation Act sets out quite clearly, sir, that the cause of action can only arise when the person has a reasonable opportunity of becoming aware of the concealment.

3. He then says, at ts 23:

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ACTING MASTER CHAPMAN

LASHANSKY, MR: Mr Bogue - and I have taken you to the section - had the power. He walked in. He took the documents, sir, and he had the power to go and collect these moneys. It says under the Legal Practitioners Act 1893 that Mr Bogue can go and collect these moneys. He can enforce them.

...

You can't go around, as Wheeler J pointed out, these liens are valuable rights. You can't just go and extinguish them. Sir, I have to take you back to the 1935 act because it's the 1935 act that deals with this.

1. At ts 29, he further submits:

   The 1935 act clearly applies. There's six years under the 1935 act and the 1935 act - everybody knows the date that I inspected the documents in Minter Ellison's office. Everybody can work out that was the earliest time and the only reason this writ had to be put in is that the previous writ under 2465 went missing in the Supreme Court.

   There's no record on the court files, as is pointed out by Mr Duke. This happens regularly, sir. I don't want to cast any aspersions, but it seems that I happen to be the victim of it more than anybody else. The last two issues, sir, are the two issues I wish to deal with as to the basic and fundamental fairness when it comes to limitation issues.

27            It would seem from an analysis of the transcript the plaintiff accepts

the 1935 Act as applicable. In any event, counsel for the first defendant argues the 1935 Act is applicable. He referred to the 2005 Act in support of this proposition. Section 2 of that Act states:

2.          Commencement

This Act comes into operation on the day on which it receives the
Royal Assent.

1. The date of commencement was 15 November 2005. Section 4(1)

   states:

   4.          Application of limitation periods under this Act

(1) The limitation periods provided for under this Act apply only to
causes of action that accrue on or after commencement day.

1. Counsel for the first defendant submits that on any analysis the causes of action pleaded in this matter accrued before 15 November 2005, which, in turn, means the 1935 Act is applicable. I agree with this submission. He further argues that there is no discretion so far as limitation periods are concerned. Again, I am in agreement.

[2012] WASC 16

ACTING MASTER CHAPMAN

30            The plaintiff asserts the 1935 Act sets out quite clearly a cause of

action can only arise when the person has a reasonable opportunity of becoming aware of any concealment. He did not refer me to any sections of the 1935 Act or any authority to support this proposition. Counsel for the first defendant submits the only provision in the 1935 Act which deals with the concept of time not running when there is fraud is s 27, which reads:

27.        In cases of fraud no time shall run whilst the fraud remains concealed

In every case of a concealed fraud, the right of any person to bring a suit in equity to recover any land or rent of which he, or any person through whom he claims, may have been deprived by such fraud, shall be deemed to have first accrued at and not before the time at which such fraud is, or with reasonable diligence might have been, first known or discovered: Provided that nothing in this section contained shall enable any owner of lands or rents to have a suit in equity for the recovery of such lands or rents, or for setting aside any conveyance of such lands or rents, on account of fraud, against any bona fide purchaser for valuable consideration who has not assisted in the commission of such fraud, and who at the time when he made the purchase did not know and had no reason to believe that any such fraud had been committed.

1. I accept the submission of counsel for the first defendant that this section has no application to the causes of action pleaded in this case.

32            Counsel for the first defendant contends that the equitable doctrine

on concealed fraud does not operate to prevent a defendant to a purely legal claim, which is not a claim consignable in the concurrent jurisdiction of the court in equity, from pleading a limitation defence.

1. In support of that submission, he referred to Energex Ltd v Alstom Australia Ltd [2005] FCAFC 215, where the Full Court said:

   Energex also relied upon the doctrine of fraudulent concealment, as it is called in the United States, and cited Atlantic City Electric Co v General Electric Co 312 F 2d 236 (2nd Circuit 1962), which was a decision of the United States Court of Appeals, Second Circuit. The court there held that the fraudulent concealment doctrine applied unless Congress expressly provided to the contrary in clear and unambiguous language. A similar approach had been taken by the US Supreme Court in Bailey v Glover 88 US 342 (1874).

   However, his Honour found that the Full Federal Court in Wardley had expressly considered and rejected any such principle - Western Australia v

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Wardley Australia Ltd (1991) 30 FCR 245. In that case, the Full Court had said (at 269):

'The equitable doctrine of concealed fraud does not operate to prevent a defendant to a purely legal claim, not being a claim also cognisable in the concurrent jurisdiction of an equity court, from pleading the Statute of Limitations.'

Nothing said by the High Court in Wardley, on appeal, had cast any doubt upon the correctness of the approach taken by the Full Court. His Honour referred also to Scarcella v Lettice (2000) 51 NSWLR 302 at 306 and 308 (Handley JA) which he said pointed in the same direction. In any event, notwithstanding his Honour’s scepticism about the application of equitable doctrines to defeat a limitation plea, he was not persuaded that the Energex claims for damages under s 82(1) were untenable. He also referred to what the High Court said in Wardley (at 533):

'We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.' [37] - [38].

34            The first defendant contends that the pleaded claims are purely

claims at law rather than equitable claims and accordingly any allegation of fraudulent concealment is irrelevant to the issue of whether the plaintiff's claims are statute-barred.

35            The plaintiff in additional submissions and materials provided to the

court on 15 November 2011 submits that there has been recent developments in the law relating to limitation and referred me to the decision of Mutua v The Foreign and Commonwealth Office [2011] EWHC 1913 and, in particular, [154] which reads:

In my judgment, it may well be thought strange, or perhaps even 'dishonourable', that a legal system which will not in any circumstances admit into its proceedings evidence obtained by torture should yet refuse to entertain a claim against the Government in its own jurisdiction for the government's allegedly negligent failure to prevent torture which it had the means to prevent, on the basis of a supposed absence of a duty of care. Furthermore, resort to technicality, here the rules of constitutional theory (viz Quark and the notional divisibility of the Crown), to rule such a claim out of court appears particularly misplaced at such an early stage of the action.

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ACTING MASTER CHAPMAN

36            The plaintiff further submits that it is unconscionable for the first

defendant to resort to technicalities to deny him his day in court. He referred to the decision of Melbourne Steamship Co Ltd v Moorehead [1912] HCA 69, where Griffith CJ said:

The point is a purely technical point of pleading, and I cannot refrain from expressing my surprise that it should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings. and a fortiori not in criminal proceedings.

I am sometimes inclined to think that in some parts-not all-of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken.

37            With respect, I do not consider either case supports the proposition

put forward by the plaintiff. In the first place, the first defendant is not the government, nor is it a government instrumentality and secondly the facts are quite different.

38            Further, the plaintiff referred to newspaper articles, the first being an

article from the BBC News website of 28 July 2011, under the heading 'Nuclear Test Veterans Win Supreme Court Appeal' and the second being an article from the Guardian Newspaper on 21 July 2011, under the heading 'Mau Mau Torture Claim Kenyans Win Right to Sue British Government'. Neither, in my view, appear to be of any assistance in supporting the plaintiff's contention. In any event, the first article refers to a case argued in the Supreme Court of the United Kingdom. Should that case be in any way relevant to the matter before me, the authorised report should have been referred to in the usual way. Referring to newspaper articles is unhelpful.

39            The plaintiff is critical of the first defendant in not referring to the

decision of Scott J in Honey v McLennan (Unreported, WASC, Library No 970574, 30 October 1997). I do not consider the criticism well-founded, as the circumstances of that case are quite different from the matter before me and his Honour was dealing with a different Act.

40            As referred to above, the High Court in Wardle made it clear that it is undesirable to decide limitation questions in interlocutory proceedings except in the clearest of cases. The factual matrix pleaded by the plaintiff in the claim in deceit and conspiracy is clear and not complicated. I accept the contention by the first defendant the limitation period had

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expired before the writ was filed. I do not accept the contention by the plaintiff that the limitation period is extended because of the alleged concealment by any provision of the 1935 Act nor by any equitable doctrine.

1. So far as these claims are concerned, I consider the first defendant has a good defence and there is no serious question to be tried.

2. Different considerations may apply to the claim in conversion.

43            I am of the view that the limitation period so far as the claim in

conversion as pleaded has expired. However, in the course of his oral submissions the plaintiff stated it was the conversion of the proceeds of the lien that was in issue, not the taking of the documents. No facts were pleaded to support such a claim. The plaintiff now seeks leave to amend the pleading to plead such a claim.

44            Counsel for the first defendant submitted the plaintiff in this

application is confined to his pleading and referred me to par 16.0.1 of
Civil Procedures in Western Australia which, in part, reads:

In resisting an application for summary judgment under this Order the plaintiff may be confined to the causes of action raised by his or her indorsement or statement of claim and, as mentioned above, the defendant will succeed if he or she can demonstrate that there is no serious question to be tried upon any cause of action raised by the plaintiff. It is not for the court to identify causes of action which are not pleaded but which the evidence might arguably support: Forsayth NL v Northern Gold NL (WASC, Full Court, Lib No 940012, 20 January 1994, unreported, BC9401503).

An application for summary judgment may be combined with an application under the court's inherent jurisdiction to dismiss an action as vexatious and with an application under 0 20 r 19(1). See [20.19.1] to [20.19.12]. In a combined application of this sort, the court is not confined by the manner in which the plaintiff has formulated his case on the pleadings and may consider the undisputed facts as well as the facts which are in dispute: Bride v Peat Marwick Mitchell [1989] WAR 383 at 394.

45            Whilst I accept it is not for the court to identify causes of action

which are not pleaded, the court in appropriate cases, may consider the
undisputed facts as well as the facts which are in dispute.

46            From what is before me, there is nothing to suggest there is any

evidence which might arguably support the contention of the plaintiff. The plaintiff in his oral submissions stated he did not know whether or not

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the fourth defendant converted any moneys and thus was not aware when this may have happened. In the circumstances, I do not consider it would be just to allow the plaintiff to amend his pleadings.

47            In any event, if I were persuaded to allow an amendment, and it is

not clear what amendment is sought, in the circumstances of this case, I would order any amendment take effect as at the date the amendment was allowed, thus any limitation argument would be preserved. In the circumstances, I consider the first defendant has a good defence and there is no serious question to be tried.

Conclusion

1. For the reasons given, I consider judgment should be entered for the

   first defendant.