Mahommed v Unicomb

[2016] NSWDC 114

District Court

New South Wales

Medium Neutral Citation:	Mahommed v Unicomb [2016] NSWDC 114
Hearing dates:	21 June 2016
Date of orders:	24 June 2016
Decision date:	24 June 2016
Jurisdiction:	Civil
Before:	Gibson DCJ
Decision:	(1) First and second defendants’ application for Mr Smits to be refused leave to appear for the plaintiff is refused. (2) First and second defendants’ Notice of Motion granted; proceedings struck out and dismissed pursuant to UCPR rr 13.4 and 14.28 (the Fair Trading Act claim set out in paragraphs 9(b), 13(a) and 18(f) of the amended statement of claim) and s 44 District Court Act 1973 (NSW) (the remainder of the claim). (3) Plaintiff pay defendants’ costs. (4) Liberty to apply in relation to costs, provided that any such application must be made within fourteen (14) days. (5) Direct the Registry to forward a certified hardcopy of this judgment to the parties.
Catchwords:	JURISDICTION – plaintiff brings proceedings described in the statement of claim as being for “debt recovery” but in fact seeking a long and complex series of declarations as to resulting or constructive trusts, equitable compensation (Barnes v Addy) and relief under ss 197 and 237 Corporations Act 2001 (Cth) as well as damages under Pt V Trade Practices Act 1974 (Cth), ss 236 and 243 Competition and Consumer Act 2010 (Cth) and/or s 68 or 72 Fair Trading Act 1987 (NSW) – plaintiff brings application for summary dismissal as an abuse of process or alternatively a stay consistent with orders made in two other proceedings commenced in the District Court – jurisdiction of District Court in relation to claims for equitable relief (s 134 District Court Act 1973 (NSW)) and as restricted by s 44 District Court Act – whether claims for equitable relief and/or misleading or deceptive conduct would have been assigned to the Common Law Division of the Supreme Court – extent of District Court’s jurisdiction to hear claims for equitable relief – all claims except the Fair Trading Act claim likely to have been assigned to the Equity or Commercial Division of the Supreme Court and thus outside the jurisdiction of the District Court – claim under the Fair Trading Act hopelessly pleaded – statements relied upon inadequately particularised or arose outside the limitation period – claims brought in other courts on similar subject matter stayed, struck out or unsuccessful - undesirability of claims in different jurisdictions in relation to similar subject matter – Fair Trading Act claim struck out under UCPR rr 13.4 and 14.28 – alternative finding that claim should be stayed consistent with orders made in other District Court proceedings
Legislation Cited:	Competition and Consumer Act 2010 (Cth), ss 236, 243 and Sch 2, ss 18 – 22 Corporations Act 2001 (Cth), ss 197 and 237 District Court Act 1973 (NSW), ss 9(1), 10, 44(1)(a), 134 and 135 Evidence Act 1995 (NSW), s 91 Fair Trading Act 1987 (NSW), ss 68 and 72 Supreme Court Act 1970 (NSW), s 53 Trade Practices Act 1974 (Cth), Part V, ss 52, 51AA, 51AC and 75B Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28 and 36.16
Cases Cited:	Abbott v Klein [2015] NSWDC 45 Barnes v Addy [1874] 9 Ch App 244 Cairns v Freeman [2008] NSWSC 792 Commonwealth Bank of Australia v Hadfield (2001) 53 NSWLR 614 Emmerton v University of Sydney [1969] 1 NSWR 83; (1969) 89 WN (Pt 1) (NSW) 306; [1970] 2 NSWR 633 Fistar v Riverwood Legion and Community Club Ltd (2016) 18 BPR 35,799 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13 In the matter of Greenhills Securities Pty Ltd [2015] NSWSC 2021 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd & Ors (No 6) (2007) 63 ACSR 1 Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435 Smits v Unicomb; Smits & Mahommed v Unicomb [2016] NSWDC 26 Watson v Foxman (1995) 49 NSWLR 315 Xiang v Ward [2016] NSWDC 64
Category:	Principal judgment
Parties:	Plaintiff: Peter Shah Mahommed First Defendant: Pamela Margaret Unicomb Second Defendant: Greenhills Securities Pty Ltd Third Defendant: Loire Consultants Pty Ltd Fourth Defendant: David William Dixon
Representation:	Counsel: Plaintiff: Mr L Smits (paralegal, with leave) First and Second Defendants: Mr M D Foley (solicitor) Third and Fourth Defendants: No appearance   Solicitors: Plaintiff: Wall & Company Lawyers First and Second Defendants: Foleys Third and Fourth Defendants: Licardy & Company
File Number(s):	2016/53923
Publication restriction:	None

Judgment

The applications before the court

1. The first and second defendants, by Notice of Motion (as amended on the first directions date of 6 June 2016), seek orders which may be summarised as follows:

1. These proceedings be struck out and dismissed as an abuse of process pursuant to UCPR rr 13.4 and/or 14.28 and on the basis that the District Court has no jurisdiction to hear the claim;

2. Alternatively, these proceedings be stayed until further order for the same reason as the orders made by Levy SC DCJ in proceedings Smits v Unicomb; Smits & Mahommed v Unicomb [2016] NSWDC 26, pending the hearing of an appeal by Mr Smits from a decision of the Federal Court of Australia delivered on 21 January 2016 holding that Mr Smits had committed a relevant act of bankruptcy;

3. Alternatively, an order for security for costs in the sum of $57,750 or such other sum as the court may deem fit;

4. An order that the plaintiff’s amended statement of claim, which was filed without leave, be struck out; and

5. An order setting aside any default judgments by the plaintiff against the third and fourth defendants, as well as a stay in relation to each of these parties.

The circumstances leading to this application

2. The litigation which is the background to this application has been described by Levy SC DCJ in a related action, Smits v Unicomb; Smits & Mahommed v Unicomb (at [1]), as “a long history of controversy based upon disputed financial transactions” which has resulted in “multiple actions issued in various courts, which have included many interlocutory motions”.

3. The conduct of these particular proceedings in this court has been unsatisfactory from the beginning. The plaintiff filed a statement of claim for unliquidated damages on 19 February 2016 in the Newcastle Registry of the District Court. Under “TYPE OF CLAIM” on the front page of the statement of claim, the plaintiff put the words “debt recovery”. He then sought default judgment on 29 March 2016 for a liquidated claim of $496,537 and an order that “the defendant” [sic] pay the plaintiff’s costs”. The plaintiff was not entitled to seek either of these orders. He was not seeking payment of a liquidated claim, this was not a debt recovery as claimed, and he is not a legal practitioner so he is not entitled to claim “costs” (as opposed to the very limited disbursements a litigant in person may claim).

4. The circumstances in which the first and second defendants found out about these proceedings being commenced are shrouded in controversy. They did, however, file a defence just in time, and the default judgment applied for by the plaintiff 28 days after filing the claim should never have been entered. This was firstly because the first and second defendants had filed a defence and secondly because, as JusticeLink records show, on 1 April 2016 the registrar refused the plaintiff’s application for default judgment because it was not accompanied by an affidavit of service.

5. Unfortunately, despite the registrar refusing the application, judgment was entered in error by registry staff. On 1 April 2016 the registrar set aside this judgment under UCPR r 36.16. Contrary to the orders sought by the first and second defendants, default judgments were never entered against the third and fourth defendants (who I note were unrepresented in these proceedings).

6. On 6 June 2016, the first return date for the notice of motion, Mr Mahommed appeared for himself. I provided him with a copy of Xiang v Ward [2016] NSWDC 64 and inquired whether he proposed, having regard to the claims for declaratory relief or equitable compensation which make up nearly all of the claim, to make an application to the Supreme Court for transfer of these proceedings, or to amend the claim to limit it to issues of misleading or deceptive conduct falling within the jurisdiction of this court.

7. When the notice of motion was listed for hearing, Mr Smits (who is not only a paralegal but the person in whose shoes Mr Mahommed, the plaintiff, is standing) sought leave to appear, on the basis that he is a paralegal employed by the solicitor who is now on record for the plaintiff. Mr Foley, for the first and second defendants, submitted that leave should not be granted because of Mr Smits’s personal interest in the proceedings. Mr Smits provided me with a letter of authority from his employer which noted Mr Smits had been a solicitor for over 40 years who had not renewed his practising certificate because he was bankrupt.

8. I note, however, that Mr Smits was granted leave to appear by Levy SC DCJ when his Honour stayed two other proceedings brought by Mr Smits against Mr Unicomb in this court (see the list of other court proceedings between the parties as set out below). These are complex proceedings and Mr Smits was in a much better position to explain the issues to me than Mr Mahommed. Accordingly, I refused Mr Foley’s application.

9. The evidence put before me for the first and second defendants is an affidavit of Mr Michael Unicomb (“Mr Unicomb”), the first defendant’s husband. The evidence put before me by Mr Smits for the plaintiff consists of a large folder of 23 documents including written submissions, judgments and a list of objections to the affidavit of Mr Unicomb.

10. The objections to the contents of Mr Unicomb’s affidavit (which are five pages in length) would have taken hours to determine. It would be fair to say that every conceivable point had been taken, including many not generally available in relation to interlocutory applications. For example, the objections to paragraph 7 of Mr Unicomb’s affidavit are that the material that is set out therein is “irrelevant, misleading and inaccurate; question of law or the issue to be determined re the outcome or status of these proceedings”. Paragraph 7 simply consisted of a list of other litigation currently on foot between Mr Smits, Mr Mahommed (the plaintiff in these proceedings), Loire Consultants Pty Ltd (“Loire” – a company described in the pleadings as both the second plaintiff and the third defendant) and Mr Dixon (to whom representations were allegedly made either by Mrs Unicomb or by Mr Unicomb on her behalf). As Mr Smits’s written submissions included reference to other litigation between the parties in 2007 and 2008, I considered that it was appropriate for me to have regard to other litigation in the Supreme Court (a matter of public record), and the District and Local Courts (the nature of which can be ascertained from JusticeLink or from the Caselaw website). I have, however, otherwise disregarded the contents of Mr Unicomb’s affidavit, rather than spend a day dealing with the multiplicity of objections to its contents.

11. The relevance of these other proceedings referred to in paragraph 7 of Mr Unicomb’s affidavit is twofold. First, it confirms that other proceedings have been commenced in relation to either this transaction or other apparently related transactions against Greenhill Securities and Mr Unicomb (the present proceedings are commenced against Mrs Unicomb but the particulars appear to assert that Mr Unicomb was acting as her agent). Second, other judges have stayed, set aside or dismissed a series of proceedings as follows:

1. Supreme Court: Greenhills Securities, the second defendant in these proceedings, obtained orders setting aside two statutory demands by Loire, a company confusingly referred to in the amended statement of claim as both the second plaintiff and third defendant in these proceedings: Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13; In the matter of Greenhills Securities Pty Ltd [2015] NSWSC 2021.

2. District Court at Lismore and Newcastle: proceedings 2015/226676 were commenced in Lismore and stayed by Mahony SC DCJ, who ordered they be transferred to Newcastle; these proceedings (and proceedings 2014/325866) were also the subject of stay orders on 15 March 2016 by Levy SC DCJ ([2016] NSWDC 26).

3. Local Court at Maitland: Magistrate Elliott dismissed proceedings 2014/323386 and 2015/255646 on 6 November 2015.

12. Additionally, I note other proceedings relating to one or more of the parties are referred to by Mr Smits in his written submissions, such as Cairns v Freeman [2008] NSWSC 792.

13. Another issue which I was obliged to let pass is the first and second defendants’ objections to the filing of an amended statement of claim without leave. While I acknowledge Mr Foley has reason to complain about the circumstances in which an amended statement of claim was filed without leave, for practical reasons I have dealt with this application on the basis that leave to amend would be granted.

14. The first problem the plaintiff faces is the question of whether this court has jurisdiction to hear such a claim. The equitable nature of the claim and relief sought is clear from the language as well as the relief sought. Mr Smits states that Mr Mahommed has no intention of seeking orders in the Supreme Court for the transfer of these proceedings to the Equity Division. Nor has he provided an amended claim limited to issues justiciable in this court, such as a claim for misleading or deceptive conduct under the Fair Trading Act 1987 (NSW), which would fall within the jurisdiction of this court (s 135 District Court Act 1973 (NSW)), in proper form, although he has invited me to extract the relevant parts of the claim to help Mr Mahommed proceed with the non-equity part of the case.

15. The second problem the plaintiff faces is the question of abuse of process. While the drafter of the pleadings appears to have been doing his best to obscure the issues, the gravamen of the claim is against Greenhills Securities, in terms where Mr and/or Mrs Unicomb are asserted, on behalf of this company, to have made written representations to a Mr Dixon in November 2009 and oral representations of the same nature (presumably to induce Mr Dixon to enter into the November 2009 agreement). The circumstances in which other proceedings to the same effect have been brought and stayed, and the lack of jurisdiction of this court, are the bases for the abuse of process claim, rather than the requirement for the claim to be properly pleaded, and Mr Smits’s submissions that I should apply the General Steel test (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125) to those issues are misconceived.

The nature of the relief sought

16. This court’s jurisdictional problem is immediately apparent upon examination of the causes of action pleaded in the amended statement of claim. These may be summarised as follows:

1. Paragraph 1 seeks nine declarations, which effectively are declarations that the first and/or second defendant hold monies as a resulting or constructive trust, that certain trustees acted outside the scope of their trust and that pursuant to s 197 Corporations Act 2001 (Cth) the first defendant is liable to discharge such remaining part of liabilities totalling $207,594.27 as the second defendant has not or cannot discharge.

2. Paragraph 2 seeks declarations that the first defendant knowingly assisted or had knowledge of a third party (her husband) paying monies in breach of duties owed by him as well as the four defendants.

3. Paragraph 3 seeks declarations that the first defendant, as the sole director of the second defendant and the recipient of certain funds, committed breaches of trust, fraud, misleading or deceptive and unconscionable conduct.

4. Paragraphs 4 and 5 seek an order for consequential repayment in full or alternatively in such sums as are determined by the court.

5. Paragraph 6 seeks, alternatively or as a further cause of action, an order for equitable compensation.

6. Paragraph 7 is similarly drafted but seeks damages either under the repealed Pt V of the Trade Practices Act 1974 (Cth) or under ss 236 and 243 Competition and Consumer Act 2010 (Cth) and/or s 68 or 72 Fair Trading Act 1987 (NSW). The reason for the reference to former Pt V of the Trade Practices Act 1974 (Cth) is because the relevant representations were made in writing in 2009 and the dates for the oral representations are “between 9 October 2009 and 31 October 2010” (paragraph 18(ii)) and “at diverse times afterwards not recorded or recollected by Mr Dixon”.

7. Paragraph 8 similarly seeks damages under s 197 Corporations Act 2001 (Cth).

8. Paragraph 9 similarly seeks damages as assessed by the court for “breaches of duties” owed by the first and second defendants.

9. Paragraph 10 seeks an interlocutory order for the plaintiff to be granted leave under s 237 Corporations Act 2001 (Cth) “to intervene in these proceedings or bring any proceedings which the Court determines can only be brought” by the third defendant.

17. The manner in which the relief is claimed is more appropriate for a summons than for a statement of claim. It is followed by pleadings and particulars set out in 24 lengthy paragraphs and sub-paragraphs, the contents of which underline the equitable nature of the claims brought. For example, paragraph 24 provides:

“Further or alternatively, the first defendant and the second defendant respectively were knowing recipients and accessories or participants in respect of the said payment of the said Trust Funds from the Trustee of the LRUT to the first defendant and by it to the second defendant in breach of trust within the [sic] both limbs of Barnes v Addy [1874] 9 Ch App 244, 251 – 2 and thereby became constructive trustees, liable to account and to pay equitable compensation to the plaintiff as assignee of the Trustee of the LRUT.”

18. There is a recent and comprehensive analysis of the two limbs of Barnes v Addy [1874] 9 Ch App 244 in Fistar v Riverwood Legion and Community Club Ltd (2016) 18 BPR 35,799, the equitable nature of both of which are set out in some detail at [42]-[47].

19. However, there are also alternative claims for misleading or deceptive conduct. The amended statement of claim sets out that appropriations of the trust funds formed “part of conduct in trade or commerce” (paragraph 18) on the part of the first and second defendants and that “representations” were made in contravention of ss 52, 51AA, 51AC and 75B of the Trade Practices Act 1974 (Cth) as relevantly re-enacted in s 75B and ss 18 – 22 of Schedule 2 to the Competition and Consumer Act 2010 (Cth). Those representations were made “at diverse times” and were to the effect that the trust funds would be used towards the development and realisation of the Lovedale Property, of which Loire Developments (described in the dictionary to the pleadings as being both the second plaintiff and the third defendant) was then the registered proprietor and beneficial owner.

20. This part of the claim refers to “the plaintiffs” in paragraph 23. Who the second plaintiff may be is not revealed in the formal parts of the amended statement of claim but, as noted above, this must be Loire, the company which is also the third defendant. The acknowledgement is made in particular 23(i)(b) that the dates of the verbal representations “cannot be recalled by Mr Dixon”, which would explain why the date(s) for the verbal representations is/are not revealed in the particulars to paragraph 18 beyond a general time frame of 9 October 2009 to 31 October 2010. However, the date for the written representations is revealed as 25 November 2009 (particular (iii) to paragraph 18). This suggests a limitation issue may arise as the representations must have played some part in the entering into of the agreement. No particulars of detrimental reliance or for when the damage occurred are provided. However, the references to the Trade Practices Act 1974 (Cth) suggest that the misleading or deceptive conduct most probably occurred before that legislation was repealed.

18. The overlap between the claims by Mr Smits and Mr Mahommed appears in several of the particulars. For example, Mr Smits made demands for the return of both the first and second debt on 24 June and 26 September 2014 and the plaintiff repeated this demand on 15 November 2015. These demands appear to have played a part in the litigation stayed by Levy SC DCJ.

19. What is the District Court’s jurisdiction to hear a claim so clearly framed in terms of equitable principles and equitable relief?

The jurisdiction of the District Court

23. Section 9(1) of the District Court Act 1973 (NSW) (“the Act”) provides that the Court shall have civil jurisdiction consisting of:

1. Its jurisdiction conferred by Part 3, and

2. The jurisdiction conferred by or under any other Act or law on the Court, not being its jurisdiction referred to in subsection (2) (that is, the Court’s criminal jurisdiction).

24. Section 10 of the Act provides that the Court, wherever sitting (in other words, a circuit court), shall, subject to the Act, have jurisdiction throughout the whole of New South Wales.

25. The primary jurisdictional provision is s 44(1)(a), which provides:

“(1) Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions:

(a) any action of a kind:

(i) which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and

(ii) in which the amount (if any) claimed does not exceed the Court’s jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise,

other than an action referred to in paragraph (d) or (e),”

26. Section 53 Supreme Court Act 1970 (NSW) provides:

“53 Assignment of business

(1) Subject to the rules, there are assigned to the Common Law Division all proceedings:

(a) that, immediately before the commencement of this section, were assigned to the Division by or under any Act, or

(b) that are required by or under any Act from time to time in force to be commenced, heard or determined in that Division, or

(c) that are assigned to the Division by operation of Part 8 of the Fourth Schedule, or

(d) that are not assigned to the Equity Division by or under this Act.

(2) Subject to the rules, there are assigned to the Equity Division all proceedings:

(a) that, immediately before the commencement of this section, were assigned to the Division by or under any Act, or

(b) that are required by or under any Act from time to time in force to be commenced, heard or determined in that Division, or

(c) that are assigned to the Division by operation of Part 8 of the Fourth Schedule.

(3) Subject to the rules, there are assigned to each Division proceedings for the punishment of contempt of the Court, but only if the contempt consists of:

(a) contempt in the face of, or in the hearing of, the Court in that Division, or

(b) disobedience of a judgment or order of the Court in that Division, or

(c) breach of an undertaking given to the Court in that Division,

including proceedings in which the Court is constituted by an associate Judge.

(4) Without limiting subsection (1)(d), the proceedings assigned to the Common Law Division include proceedings for contempt of the Court or of any other court (other than proceedings referred to in subsection (3) or section 48 (2) (i)).”

27. Section 44(1)(a) of the Act provides that subject to the Act, the Court has jurisdiction to hear and dispose of any action of a kind which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and in which the amount claimed does not exceed the Court’s jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise (other than a motor accident claim or work injury damages claim, in respect of which there is no limit on the damages that may be claimed).

28. The question of whether an action of this kind would fall within the Common Law Division at the relevant date is explained by Taylor SC DCJ in Abbott v Klein [2015] NSWDC 45 at [53]-[72], and I adopt his Honour’s approach to the determination of such an issue. The question is not whether such proceedings would have been better off started in the Equity Division of the Supreme Court, but whether they could have been statutorily assigned to the Common Law Division:

“[61] If statutory “assignment” of proceedings to a Division is not exclusive, assignment of the action to the Equity Division or the Commercial Division is not fatal to jurisdiction under s 44 of the District Court Act 1973 so long as the action is also statutorily assigned to the Common Law Division.”

29. The equitable nature of the relief sought is so obvious that Mr Smits did not seek to dispute that such an action would, if brought in the Supreme Court on the relevant date (2 February 1998, the date of enactment of s 44(1)), never have been assigned to the Common Law Division, and moreover would have been transferred to the Equity Division if an attempt had been made to commence them in the Common Law Division. He sought instead to argue that the District Court now had equitable jurisdiction and that the provisions of s 44 were irrelevant.

Equitable jurisdiction of the District Court

30. The enlargement of the District Court’s equitable jurisdiction (Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435 at [118]-[120]) culminated in the enactment of s 134(1)(h) for a “wider reforming purpose”: Commonwealth Bank of Australia v Hadfield (2001) 53 NSWLR 614 at [68].

31. However, this court’s equitable jurisdiction is not the same as that of the Supreme Court’s; as Mr Foley pointed out, it is of a restricted nature. Section 134 of the Act provides:

“134 Jurisdiction in equity proceedings

(1) The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for:

(a) the foreclosure or redemption of a mortgage or the enforcing of any charge or lien where the amount owing in respect of the mortgage, charge or lien does not exceed $20,000, as determined by the Court,

(b) the specific performance, rectification, delivery up or cancellation of any agreement for:

(i) the sale or purchase of any property at a price not exceeding $20,000, or

(ii) the lease of any property the value of which does not exceed $20,000, as determined by the Court,

(c) an order under section 3 of the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (as in force immediately before that Act was amended by the Succession Amendment (Intestacy) Act 2009) or a family provision order under Chapter 3 of the Succession Act 2006,

(d) relief against fraud or mistake where the damage sustained or the estate or fund in respect of which relief is sought does not exceed $20,000 in amount or value, as determined by the Court,

(e) the execution of a trust or a declaration that a trust subsists, where the estate or fund subject or alleged to be subject to the trust does not exceed $20,000 in amount or value, as determined by the Court, or

(f) the administration of the estate of a deceased person, where the estate does not exceed $20,000 in amount or value, as determined by the Court, or

(g) any application under the Property (Relationships) Act 1984, or

(h) any equitable claim or demand for recovery of money or damages, whether liquidated or unliquidated (not being a claim or demand of a kind to which any other paragraph of this subsection applies), in an amount not exceeding the Court’s jurisdictional limit.

(2) In any proceedings pursuant to subsection (1)(c), the Court shall not have power to make an order for provision under the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (as in force immediately before that Act was amended by the Succession Amendment (Intestacy) Act 2009) or Chapter 3 of the Succession Act 2006 that will or may result in the amount of provision so made exceeding $250,000.

(3) In any proceedings pursuant to subsection (1) (g), the Court has no power to make an order for financial adjustment under Part 3 of the Property (Relationships) Act 1984 that will or may result in the amount of the adjustment so made exceeding $250,000.”

32. Mr Smits was unable to explain to me how any of these exceptions apply to the equitable compensation and declaratory relief sought by the plaintiff or how, given the terms of s 44, this court could be seized with the same jurisdiction as the Equity Division of the Supreme Court of New South Wales.

33. I additionally note that this is not a case where the relief sought by the plaintiff should be pleaded by cross-claim or defence: cf Abbott v Klein at [41]-[50].

34. I am satisfied that, with two exceptions, this court has no jurisdiction to hear any of the claims brought by the plaintiff by reason of the causes of action pleaded and the relief sought. These exceptions are the claims under the Fair Trading Act or the Trade Practices Act.

The District Court’s jurisdiction to hear proceedings for misleading or deceptive conduct

35. As noted above, the jurisdiction of the District Court of New South Wales to hear a claim under the Fair Trading Act is straightforward. The jurisdiction to hear a claim brought under the former Pt V of the Trade Practices Act is, however, one which must be considered in light of the jurisdictional limitations of this court. These were explained in Xiang v Ward at [4]-[8], where Taylor SC DCJ observed:

“[4] Part 12 r 7 of the Supreme Court Rules 1970 current in February 1998 provided that misleading conduct claims under the former Pt V of the Trade Practices Act 1974 (Cth), “shall be assigned to the Common Law Division, the Equity Division or the Commercial Division as is appropriate to the nature of the proceedings”. Whatever uncertainties may lurk within a jurisdictional fact founded upon “appropriateness”, there is no suggestion that these proceedings have features warranting assignment to the Equity Division. As to the Commercial Division, Mr Xiang, by his senior counsel, submitted that the features of the Commercial Division included such matters as expeditious commencement of proceedings, a need for urgent resolution, a need for commercial expertise in the tribunal, expeditious justice to minimise interference with the economic imperative of trade and commerce, commercial matters of significance and the absence of delay in the litigation. Some of these features were referred to in the decision of Rogers CJ Comm D in Challenge Bank Ltd v Raine & Horne Commercial Pty Ltd (1989) 17 NSWLR 297at 300–307. It was submitted that this matter would be unlikely to remain in the Commercial Division because it does not exhibit these features.

[5] I am not persuaded that the law which governs where an action might be heard, maintained, managed or transferred is determinative of where it is statutorily assigned, see, for example, Abbott at [66]. Section 54 of the Supreme Court Act 1970, as it existed in February 1998, appears to distinguish between the transfer or retainment of proceedings and their division of assignment.

[6] Nevertheless, the features listed above which are indicative of whether the Commercial Division was appropriate to hear a matter are relevant to the application of Pt 12 r 7 because what is “appropriate” is the touchstone of assignment under that provision.

[7] Further, the specific reference to misleading conduct proceedings under Pt V of the Trade Practices Act 1974 (Cth) in Pt 12 r 7 is directly applicable to the current misleading conduct proceedings, and more closely applicable than the more general provision in Pt 14 r 2 – assigning matters to the Commercial Division – which extends to proceedings having a commercial connection. This suggests an application of the maxim generalia specialibus non derogant, that Pt 12 r 7 should prevail in this instance over Pt 14 r 2.

[8] I also adopt the reasoning in Abbott at [67]–[68] that in these circumstances statutory assignment is not necessarily exclusive to one division.”

36. Xiang v Ward was a simple claim for misleading and deceptive conduct. By comparison, this is a highly complex commercial claim requiring case management and consideration of issues in the manner set out by Taylor SC DCJ in Xiang v Ward at [4]. It is hard to see how they could be unravelled from the claims for equitable relief; they are, essentially, a restatement of the same claims.

37. For those reasons, I am satisfied that these proceedings would not have been assigned to the Common Law Division even if unconnected to an equity claim (in that they would have been heard in the Commercial Division) and, by reason of s 44(1)(a), these proceedings are not within the jurisdiction of the District Court.

38. There is an additional problem in relation to these claims, and that is the determination of the relevant statutory regime which will apply. As is already noted, the dates for the oral representations are vague and the written representation was made on 25 November 2009. If so, these proceedings may well be brought outside the limitation period, but that is of no relevance to the jurisdiction argument.

39. I also note that, if I have erred in my findings in this regard, I would have struck out this part of the pleading for the same reasons as I have struck out the Fair Trading Act claim, which I next consider.

The Fair Trading Act claim

40. As noted above, the District Court has jurisdiction to hear claims brought under the Fair Trading Act. There are, however, other problems with this cause of action, and I am satisfied that these are sufficient for the claim to be struck out and dismissed under UCPR rr 13.4 and/or 14.28.

41. The first is the failure to identify representations within the limitation period. The importance of concise evidence in relation to the content of oral representations was stressed by McDougall J in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd & Ors (No 6) (2007) 63 ACSR 1 at [353]:

“It is in my view plain that, where representations are said to have been made orally, it is necessary to prove with some precision the words used.”

42. McDougall J set out the often-cited statement to this effect by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319:

“Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as “misleading”) within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court “must feel an actual persuasion of its occurrence or existence”. Such satisfaction is “not … attained or established independently of the nature and consequence of the fact or facts to be proved” including the “seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712; [1940] ALR 298.

Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration.”

43. Apart from a reference to a statement in an agreement signed on 25 November 2009, the statements relied upon as being “false and misleading” (paragraph 18(iv)) are not identified in terms of content. It would appear, from the terms of paragraph 18(v), that these statements may be asserted to have been made by Mr Unicomb, who is asserted to be an “agent” of the first and/or second defendants.

44. The next problem is the dates (or lack thereof) given for the oral representations. No date is given as to when the damage flowing from the loss occasioned by the representations occurred. While I express no concluded view as to whether these proceedings are time-barred, on their face, it would appear as if this is at least possible, certainly in relation to any representations made before February 2010, which appear to be the crucial ones, given the written agreement entered into in November 2009.

45. If these proceedings have been commenced out of time, as evidenced by pleadings where the moving party has not identified the date of the representation, the circumstances in which the court will grant leave to amend the pleading (as opposed to striking it out) are rare, for the reasons identified in Emmerton v University of Sydney [1969] 1 NSWR 83; (1969) 89 WN (Pt 1) (NSW) 306; [1970] 2 NSWR 633.

46. The third problem is whether the very brief references to the Fair Trading Act in the amended statement of claim can be extracted from the rest of the pleadings at all, as well as the submissions Mr Foley makes concerning abuse of process in terms of overlap with other proceedings.

47. The test for summary dismissal of proceedings is helpfully set out by Brereton J in Cairns v Freeman at [15], and I have applied the same principles. However, this does not mean that the same result will apply. These pleadings are not merely poorly drafted and potentially time-barred, but are a mere passing reference to an alternate cause of action in circumstances where the main cause of action should be heard in another court, and where the Fair Trading Act claim should not be heard separately.

48. Mr Smits submits that it is not open to this court to conclude the substantive rights of the parties by deciding that the amended statement of claim discloses no cause of action, because to do so would be to make final determinations of fact and law. That is asserted to be particularly the case here, as the Supreme Court has already handed down judgments setting aside a statutory demand by the second defendant in Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd and In the matter of Greenhills Securities Pty Ltd, on the basis that “GHS did not assert or contend that Mr Smits had any interest in the subject debts or in those proceedings”.

49. Whether or not this is the case (and I note, for example, s 91 Evidence Act 1995 (NSW) in this regard), the entitlement of a party to commence proceedings does not mean that he or she can split a case between various courts, or expect the court to tidy up pleadings which are not only hopelessly drafted but possibly time-barred.

50. Additionally, although it is a matter of peripheral relevance, it is not to the plaintiff’s credit that he applied for default judgment in these proceedings 28 days after filing the statement of the claim, in circumstances where he was not entitled to do so, and did not provide the registrar with evidence of service. That is not an appropriate way to conduct litigation, and the court is more likely to be on its guard as to abuse of process issues where conduct of this kind has occurred.

43. I have also taken into account that the plaintiff was given a copy of Xiang v Ward on the first return date and invited either to amend his claim in this court or, preferably, bring an application in the Supreme Court so that all his claims and causes of action can be heard together in the same proceedings. Although Mr Smits invited me to take a red pencil to the pleadings and cross out those for which this court has no jurisdiction, that is not an appropriate way for proceedings of an equitable nature to be conducted.

44. Another problem is the multiplicity of proceedings. There is no reason why the Fair Trading Act claim should remain in this court if the plaintiff proposes to seek equitable relief as well. It is time that Mr Smits and his client brought one set of proceedings in one court rather than bringing proceedings at all three levels of the court system as well as in a variety of country registries.

45. Accordingly the Fair Trading Act claim is dismissed under UCPR rr 13.4 and 14.28.

The application for a stay of proceedings

54. As I propose to dismiss these proceedings for other reasons, in the event that I have erred in those findings, I briefly note the reasons why I would alternatively have granted a stay in the same terms as the other proceedings already stayed in this court.

55. In Smits v Unicomb; Smits & Mahommed v Unicomb Levy SC DCJ stayed proceedings to which Mr Mahommed was also a party. Levy SC DCJ noted that the pivotal issue to be determined was the validity or otherwise of the assignment by Mr Smits to Mr Mahommed of the underlying cause of action against Mr Unicomb, where that assignment occurred after a relevant act of bankruptcy by Mr Smits. Levy SC DCJ was of the view that the consequences of that matter could only be resolved in the context of bankruptcy proceedings in the Federal Court, and that those proceedings had to be placed in the court’s inactive list until Mr Smits’s bankruptcy appeal was heard.

56. Mr Smits concedes that the claim brought by Mr Unicomb in these proceedings arises from the same matrix of facts as the 2014 proceedings which Mr Mahommed commenced against Mr Unicomb, who is the husband of the first defendant in these proceedings, and is referred to in the pleadings as a third party who conspired with her.

57. Conformably with Levy SC DCJ’s order, any other proceedings arising out of the same matrix of facts should be stayed until the Full Court of the Federal Court hands down its judgment in relation to Mr Smits’s appeal.

The application for security of costs

58. As I propose to dismiss these proceedings, I have not considered the issue of whether there should be an order for security for costs.

The third and fourth defendants

59. The third and fourth defendants have taken no part in these proceedings, although they have instructed lawyers. No application for default judgment was made against them by the plaintiff. The basis upon which relief is sought against them is not identified in the amended statement of claim. There is the additional problem for the third defendant, Loire, that it is referred to on at least one occasion in the amended statement of claim as being the second plaintiff.

60. I can see no point in allowing these proceedings to continue against these defendants when the remaining claims have been struck out. Mr Foley asks that the whole of the claim be dismissed and, given the unfortunate history of the proceedings between these parties in these and other courts, I consider that this is the wisest course.

Costs

61. Costs should follow the event. I grant liberty to apply in relation to costs but it must be exercised within 14 days.

Orders

1. First and second defendants’ application for Mr Smits to be refused leave to appear for the plaintiff is refused.

2. First and second defendants’ Notice of Motion granted; proceedings struck out and dismissed pursuant to UCPR rr 13.4 and 14.28 (the Fair Trading Act claim set out in paragraphs 9(b), 13(a) and 18(f) of the amended statement of claim) and s 44 District Court Act 1973 (NSW) (the remainder of the claim).

3. Plaintiff pay defendants’ costs.

4. Liberty to apply in relation to costs, provided that any such application must be made within fourteen (14) days.

5. Direct the Registry to forward a certified hardcopy of this judgment to the parties.

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Decision last updated: 29 June 2016