Lovell v The Western Australian Police Union of Workers - [2004] WASC 19

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: LOVELL -v- THE WESTERN AUSTRALIAN POLICE UNION OF WORKERS & ORS [2004] WASC 19

CORAM: MASTER SANDERSON

HEARD: 9 FEBRUARY 2004

DELIVERED : 17 FEBRUARY 2004

FILE NO/S: CIV 2034 of 2003

BETWEEN: AVON FRANCIS LOVELL
Plaintiff
AND
THE WESTERN AUSTRALIAN POLICE UNION OF WORKERS
First Defendant
PATRICK JAMES EDWARD STINGEMORE
Second Defendant
THE STATE OF WESTERN AUSTRALIA
Sixth Defendant
DENNIS WILLIAM HENLEY
HENRY HOOFT
KENNETH GEORGE HENNING
WILLIAM ROUND
ANDREW ALBERT TOVEY
EDWARD JOHN BILLING
Fifth Defendants

FILE NO/S :CIV 2077 of 2003

BETWEEN :JOHN CHARLES THOMAS
Plaintiff
AND
THE WESTERN AUSTRALIAN POLICE UNION OF WORKERS
First Defendant
PATRICK JAMES EDWARD STINGEMORE
Second Defendant
THE STATE OF WESTERN AUSTRALIA
Sixth Defendant
DENNIS WILLIAM HENLEY
HENRY HOOFT
KENNETH GEORGE HENNING
WILLIAM ROUND
ANDREW ALBERT TOVEY
EDWARD JOHN BILLING
Fifth Defendants

Catchwords:

Practice and procedure - Application for leave to amend statement of claim and leave refused - Action struck out as statute barred

Legislation:

Limitation Act, Crown Suits Act, s 6

Result:

Action struck out and judgment for defendants

Category: B

Representation:

CIV 2034 of 2003

Counsel:

Plaintiff:     Mr M L Bennett
First Defendant             :     Mr L A Tsaknis
Second Defendant         :     Mr L A Tsaknis
Sixth Defendant            :     Mr R J Sefton
Fifth Defendants           :     Mr L A Tsaknis

Solicitors:

Plaintiff:     Bennett & Co
First Defendant             :     Michelle Ridley
Second Defendant         :     Michelle Ridley
Sixth Defendant            :     State Crown Solicitor
Fifth Defendants           :     Michelle Ridley

CIV 2077 of 2003

Counsel:

Plaintiff:     Mr M L Bennett
First Defendant             :     Mr L A Tsaknis
Second Defendant         :     Mr L A Tsaknis
Sixth Defendant            :     Mr R J Sefton
Fifth Defendants           :     Mr L A Tsaknis

Solicitors:

Plaintiff:     Bennett & Co
First Defendant             :     Michelle Ridley
Second Defendant         :     Michelle Ridley
Sixth Defendant            :     State Crown Solicitor
Fifth Defendants           :     Michelle Ridley

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

Darling Island Stevedoring and Lighterage Co Ltd v Long (1956) 97 CLR 36
Forsayth NL v Northern Gold NL, unreported; FCt SCt of WA; Library No 940012, 20 January 1994
Hawkins v Clayton (1987) 164 CLR 539
State of Western Australia v Rothmans of Pall Mall (Australia) Ltd (2001) WASC 25
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514

Case(s) also cited:

Nil

MASTER SANDERSON: This is the return of a number of summonses issued in these two actions. The position of the plaintiffs in each action differs only slightly and given the conclusion that I have reached, the reasoning in one applies to the other. Insofar as there are differences between the two actions which are relevant to these reasons, I will indicate which action I am referring to.
In each case there were a number of summonses. In both actions there were applications by the first, second and fifth defendants to set aside default judgments entered against them on 6 October 2003. The same defendants also sought an extension of time within which to bring a summary judgment application under O 16. In the alternative they sought to strike out the plaintiff's statements of claim as disclosing no reasonable cause of action. The sixth defendant sought to have the statements of claim struck out and the action against it dismissed.
In the event, a day or two before the hearing, the solicitors for the plaintiff produced what was described as a "Minute of Proposed Substituted Statement of Claim" (the minute). At the hearing of the applications, counsel for the plaintiffs indicated there would be no objection to the default judgment being set aside. Counsel also sought leave to amend the statement of claim in terms of the minute. Counsel for the first, second and fifth defendants and counsel for the sixth defendants objected to leave being granted to the plaintiffs to amend in terms of the minute. Counsel maintained that the problems with the earlier statement of claim which had led them to move for judgment were still present in the minute. With the consent of all parties, the matters proceeded on the basis that the plaintiffs were moving to amend the statement of claim in terms of the minute. It was further agreed by all parties that the issue to be determined at this stage was whether or not the plaintiffs' actions were statute barred under the provisions of the Limitation Act. If I determined that to be the case then each action would be dismissed and there would be judgment for the plaintiffs. If I determined that the plaintiffs had an arguable case in relation to the limitation question, then each of the defendants represented was to be given the opportunity to further consider the minute with a view to raising any objections they may have to the pleading. Although not an entirely satisfactory method of proceeding, counsel were satisfied that the limitation question was such a discrete issue that it could be dealt with at the hearing, although counsel had had a limited opportunity to consider the minute.
(Neither the third nor the fourth defendant were represented at the hearing. So far as the third defendant is concerned, the minute makes no claim against them. Counsel for the plaintiffs advised that an application for pre‑action discovery was to be made and once discovery was provided further consideration would be given as to whether action would be taken against the third defendant. With respect to the fourth defendant, a claim is made against him, but he is impoverished and of no practical interest to the plaintiffs. His position was not addressed during the course of the hearing and, for the present, his position with respect to the action can be put to one side.)
Turning then to the pleaded cause of action, the first six paragraphs of the minute identify the parties. The second defendant is said to have been at all material times the general secretary of the first defendant. The fifth defendants are said to have been at all material times police officers in the employ of the sixth defendant. That is also the case of the fourth defendant. By paragraphs 7 through to 10 it is pleaded that one Donald Lesley Hancock (deceased) was a police officer employed by the sixth defendant and was in command of a group of police officers who investigated what is known as the "Perth Mint swindle". The fourth and fifth defendants were members of that investigative team. By paragraph 10 it is pleaded that Raymond, Peter and Brian Mickelberg were convicted in relation to the Perth Mint swindle.
By paragraphs 11 through to 13 it is pleaded that Lovell (the plaintiff in CIV 2034 of 2003) published a book entitled "Mickelberg Stitch". Just prior to publication, it is pleaded, Lovell entered into an agreement with Thomas (the plaintiff in CIV 2077 of 2003) to distribute the book. The terms of that distribution agreement are pleaded in paragraph 13. By paragraph 14 it is pleaded that a solicitor who was a member of the third defendant, acting on behalf of the first defendant, threatened legal proceedings if the book was not withdrawn from distribution. The book was not withdrawn (that is implicit but not actually pleaded) and on 19 March 1985 the second defendant, supported by the first defendant, applied for and obtained an ex parte interlocutory injunction restraining the sale and distribution of the book.
By paragraph 16 it is pleaded that on 10 April 1985 the fourth defendant swore an affidavit in support of the application for the interlocutory injunction. Paragraph 17 pleads the contents of that affidavit. Essentially, the fourth defendant said that he did not fabricate any of the evidence in relation to the Mickelbergs and the Perth Mint swindle. By paragraph 18, it is said that the granting of the injunction by Justice Pidgeon against distribution of the book was consequent upon the affidavit sworn by the fourth defendant. (There is a problem with the dates pleaded in paragraphs 16 and 18 of the minute. By paragraph 16 it is pleaded that the fourth defendant pleaded his affidavit on 10 April 1985. By paragraph 18 it is said that the injunction was granted by Pidgeon J on 17 March 1985 based upon the fourth defendant's affidavit. Nothing turns on this inconsistency. None of the facts pleaded in paragraphs 16 and 18 are contentious.) Paragraphs 19 and 20 detail the consolidation of certain actions. These paragraphs are not presently relevant.
The crux of the plaintiffs' claims are to be found in paragraphs 21 and 22. Because of their importance I will quote them in full:
"21.At all material times up to and including the date of execution of the Deed referred to in paragraph 8 [sic] hereof, the fourth defendant intended that the plaintiff should act on the false statements contained in the affidavit referred to in paragraph 17 hereof.
22.At all material times up to and including September 1996 the fourth defendant intended that:
22.1this Honourable Court should act in reliance upon the false statements contained in the affidavit referred to in paragraph 17 hereof in maintaining the injunction against the plaintiff;
22.2the plaintiff should act in reliance upon the false statements contained in the affidavit referred to in paragraph 17 hereof in continuing to be bound by the terms of the injunction granted by this Honourable Court and being obliged to defend the consolidated proceedings referred to in paragraph 19 hereof."
(The reference to paragraph 8 in paragraph 21 of the minute should in fact be a reference to paragraph 24 of the minute.)
By paragraph 24 it is pleaded that in September of 1996 the plaintiff entered into a deed of settlement with the first and second defendants pursuant to which the actions brought against him were settled. The settlement required payment of a certain sum of the plaintiff. By paragraph 25 it is pleaded that in entering into the deed of settlement the plaintiff suffered loss and damage. By paragraph 23 it is pleaded that the plaintiff suffered certain financial loss as a consequence of the proceedings initiated by the first defendant. Essentially, it is said that the plaintiffs were not able to sell the book. It is alleged that had they been able to do so they would have earned considerably more than the sum they received by way of settlement from the first defendant. It is important to note that it is pleaded by paragraph 25 that the plaintiffs suffered loss and damage on entering into the deed of settlement.
For present purposes that is as far as I need go with the pleading. It is perhaps worth noting that the minute pleads a cause of action directly against only the fourth defendant. So far as the first, second and sixth defendants are concerned, they are said to be vicariously liable for the acts of the fourth defendants. The fifth defendants are not mentioned to any extent in the pleadings and it is difficult to know what case is put against them. Counsel for the first, second and fifth defendants and counsel for the sixth defendants made it plain that they did not concede that a claim based on vicarious liability was open as against their clients. As I indicated above, this application dealt only with limitation questions and other pleading issues were left for another day.
There are some further facts which are necessary to complete the picture. On 5 June 2002 the fourth defendant swore an "affidavit" in which he admitted that evidence against the Mickelberg brothers was fabricated. That affidavit appears as annexure "A" to the affidavit of Avon Francis Lovell sworn 6 October 2003. Subsequently, on 27 September 2002 the fourth defendant gave evidence before the Court of Criminal Appeal in relation to an application by Raymond and Peter Mickelberg to overturn their convictions. During the course of that evidence, given under oath, the fourth defendant confirmed again that he assisted in fabricating evidence against the Mickelbergs. It would appear then that there is no doubt that the affidavit referred to in paragraph 17 of the minute was false as alleged in paragraph 21 of the minute.
It is clear that the claim brought by the plaintiffs against the fourth defendant is for the tort of deceit. That cause of action has four essential elements. There must be a misrepresentation and the person making the misrepresentation must know that it is false. What is required is actual knowledge. The party making the claim must rely on the representation and as a consequence of such reliance must suffer actual damage. It is important to note that by paragraph 25 of the minute it is pleaded that the plaintiffs suffered loss and damage when they entered into the deed of settlement. That was done on 20 September 1996. The defendants say that it was on that day that the cause of action arose and consequently the action became statute barred in 2002. Both of these actions were issued in 2003. In each case the sixth defendant has a further ground upon which it relies. It is said that proper notice under the Crown Suits Act has not been given and it was not open to the plaintiffs to commence proceedings when they did. That further defence is not, of course, available to the first, second and fifth defendants.
While the claim brought against the fourth defendant is in deceit, as against the first, second, fifth and sixth defendants it is said that they are vicariously liable for the acts of the fourth defendant. What that means, of course, is that the plaintiffs say that the first, second, fifth and sixth defendants are liable not because the fourth defendant is liable, but because of what the fourth defendant has done: see Darling Island Stevedoring and Lighterage Co Ltd v Long (1956) 97 CLR 36 per Kitto J at 61. However, the way in which the alleged liability of these defendants arises – that is that they are vicariously liable – should not affect the way in which the limitation period is calculated. After all it is the acts of the fourth defendant for which it is said the other defendants are vicariously liable. Therefore the limitation period should be the same for claims brought against the fourth defendant and all of the other defendants. There was no argument to the contrary put by counsel for the defendants.
Put simply, it was said on behalf of the defendants that the cause of action arose when the deed of settlement was signed. It was said that it was at that time the loss was suffered and that therefore was the date when the plaintiffs' cause of action crystallised. Against that, counsel for the plaintiffs made two submissions. The first that the deceit by the fourth defendant was ongoing; it was a continuous act. It was said that it was only when the fourth defendant appeared before the Full Court and admitted that his affidavit was a fabrication that the cause of action was complete.
With respect, that submission cannot be correct. Apart from anything else it is at odds with the pleaded case. But even leaving the pleading to one side, a cause of action in deceit is complete when a loss is suffered. Paragraph 23 of the minute makes it plain that the plaintiff's case is that all the losses that he suffered and which he was precluded from recovering by the settlement of 20 September 1996 were sustained prior to the settlement. They were amounts which it is said, as I understand the pleading, would have been recovered by the plaintiffs had they proceeded with their actions against the defendants. As at 20 September 1996 what they had was a chose in action – a right to proceed to recover losses allegedly sustained. When they accepted a settlement which was substantially less than what they say they would have recovered had they proceeded the loss was sustained and the cause of action was complete. Accordingly, that must be the date upon which the plaintiffs' cause of action arose: see Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514.
Even if it be accepted for the purposes of the argument that there was a continuing deceit until the date of the fourth defendant's appearance before the Full Court, there is no plea that any loss was suffered beyond that suffered at the time the deed of settlement was entered into on 20 September 1996. If, for instance, it was alleged that one or other of the plaintiffs had, in 2001, paid to a third party an amount – perhaps in compensation for an alleged defamation in the book – because of a reliance placed on the fourth defendant's affidavit then a claim might lie. But the claim would lie because the damage was incurred at the date the payment was made. It is that date which is critical. As this case is pleaded the date is more than 6 years before the writ was issued.
The second argument put by counsel was that the tortious act was concealed by the fourth defendant. Consequently, it is said the plaintiffs were not in a position to know that they had a good cause of action and it was not until the fourth defendant's appearance before the Full Court that they became fully aware of their right to proceed. Accordingly, it is said that the limitation period did not begin to run until the fourth defendant's appearance before the Full Court. This submission relies on what was said by Deane J in Hawkins v Clayton (1987) 164 CLR 539. The facts of that case were that in 1970 a testatrix made a Will appointing an executor and leaving him the residue of her estate. The Will was retained by the solicitors by whom it was drawn. The testatrix died in January 1975, but the solicitors made no attempt to locate the executor and inform him of the Will until March 1981. In October 1982 the executor obtained a Grant of Probate. Between the testatrix's death and March 1981 the main asset of her estate, a house, was permitted to fall into disrepair and to lie vacant for a substantial time. In November of 1982, the appellant took action against the respondent claiming damages for a failure to take reasonable steps to inform him of his interest under the Will until some 6 years after the testatrix's death.
The question was whether the Statute of Limitations provided the respondent with a defence to the appellant's claim. By a majority the High Court decided that it did not. It is important to remember that for the whole of the limitation period – 6 years - the appellant was unaware that he had been appointed executor of the testatrix's estate. Dealing with such a situation, Deane J said (at 590):
"If a wrongful action or breach of duty by one person not only causes unlawful injury to another but, while its effect remains, effectively precludes that other from bringing proceedings to recover the damage to which he is entitled, that other person is doubly injured. There can be no acceptable or sensible justification of a law which provides that to sustain the second injury will preclude the recovery of damages for the first. It would, eg, be a travesty of justice and commonsense if the law provides that a cause of action lay for damages for false imprisonment but then went on to provide that the cause of action would be lost if the false imprisonment continued for 6 years after the cause of action accrued. Likewise it would be a travesty of justice and commonsense if the law imposed a duty upon a solicitor to take positive steps to inform a third person of the contents of a document of which the solicitor was alone aware and then provide that any cause of action against the solicitor for damage caused by negligent failure to perform that duty would be lost if the negligence continued for 6 years."
It is immediately apparent that the facts in Hawkins v Clayton differ substantially from the facts in this case. The appellant Hawkins was unaware that he was the executor of the testatrix's estate and he had now way of ascertaining that fact. In this case, Lovell alleged in his book that the fourth defendant, with others, had fabricated the evidence against the Mickelbergs. It is reasonable to assume that he had some evidence for making that claim. It is true that the evidence of the fourth defendant contained in the affidavit filed in support of the interlocutory injunction provided a substantial impediment to the plaintiffs succeeding in their claim. But what was concealed from the plaintiffs was not their right to bring proceedings for damages. Indeed, that is precisely what they did. What was concealed from them was the true nature of the evidence that could be given by the fourth defendant. That is an entirely different thing.

I am satisfied that in both cases the causes of action in these matters arose in September of 1996. The 6 year limitation period has expired and the present actions are statute barred. On that basis, in my view, both ought be struck out.
In fairness to counsel there are two further matters which I should deal with briefly. Both were touched upon in argument and although neither will affect the result of the applications both are matters of some importance.
First, there is the question of whether or not it is appropriate in a case such as this to determine a limitation question in interlocutory proceedings. In Wardley Australia Ltd v The State of Western Australia (supra) the majority, Mason CJ, Dawson, Gaudron and McHugh JJ, specifically warned against dealing with limitation questions in interlocutory proceedings "except in the clearest of cases": p 533-534. It is clear that their Honours were concerned that at an interlocutory stage it might be possible to determine what damage has been sustained by a plaintiff and the circumstances in which that damage was sustained. Despite the High Court's warning there have been a number of cases in which Courts have thought it appropriate to determine questions of limitation at an interlocutory stage. One such case is State of Western Australia v Rothmans of Pall Mall (Australia) Ltd (2001) WASC 25. In that case the question was whether or not a party proposing to take action had given notice in writing to the Crown Solicitor "as soon as practicable … after the cause of action accrued" pursuant to s 6(1)(a) of the Crown Suits Act. The Full Court was satisfied that an analysis of the undisputed facts was possible at an interlocutory stage and that summary judgment be granted. There are many other cases in which matters have been determined at an interlocutory stage when the issue of the Limitation Act is central to the dispute.
In my view, in this case the position is plain. The key to determining the issue is deciding the date upon which the damage was suffered. To do that one only has to refer to the pleading. In an O 16 application it is necessary to have regard to the plaintiffs' pleaded case and not to go searching for other causes of action: see Forsayth NL v Northern Gold NL, unreported; FCt SCt of WA; Library No 940012, 20 January 1994. In my view, it is proper to determine the limitation question on what is, in effect, a pleading summons.
The second point relates to the Crown Suits Act and whether or not the plaintiffs complied with s 6(1) of that Act. Essentially, what s 6(1)(i) requires is that a party gives notice to the Crown Solicitor as soon as practicable or within 3 months after a cause of action accrues notice in writing of the proposed action and the action should then be commenced before the expiration of 1 year from the date on which the cause of action accrued. It was the sixth defendant's position that irrespective of any other limitation defence the action was not commenced within 1 year from which the date of action accrued. The sixth defendant maintained that the cause of action accrued in September of 1996. However, it was argued that if that was found not to be the case the cause of action must still have accrued at the latest when the fourth defendant swore his affidavit admitting he had lied in the affidavit sworn in support of the interlocutory injunction. That was more than 12 months before the issue of the proceedings. On behalf of the plaintiffs it was argued that time did not begin to run until the fourth defendant actually gave his evidence to the Full Court. That was less than 12 months before the issue of proceedings.
It seems to me clear that in any circumstances time must have commenced to run from the time the fourth defendant swore his affidavit. Even if prior to that date it might be said that the plaintiffs' cause of action had been concealed from them, when the fourth defendant's affidavit was sworn they must have known that they could proceed. I can see no logical reason why it can be said time only runs from the date the fourth defendant gave his evidence.
I will hear the parties as to the precise form of orders and as to costs.