Managed Growth Solutions Pty Limited v L H Williams Pty Limited
[2012] NSWDC 86
•03 May 2012
District Court
New South Wales
Medium Neutral Citation: Managed Growth Solutions Pty Limited v L H Williams Pty Limited [2012] NSWDC 86 Hearing dates: 3 May 2012 Decision date: 03 May 2012 Jurisdiction: Civil Before: Judge Peter Johnstone Decision: Amended Statement of Claim struck out
Catchwords: PLEADINGS - embarrassing and vexatious Amended Statement of Claim - struck out - indemnity costs Legislation Cited: Civil Procedure Act 2005
Legal Profession Act 2004
Uniform Civil Procedure Rules 2005 (UCPR)Cases Cited: Bailey v The Federal Commissioner of Taxation (1977) 136 CLR 214
Bank Commercial SA In Liquidation v Akhil Holdings Limited (1990) 169 CLR 279
Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Pty Limited (2008) NSWCA 243
Colgate Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225
Dare v Pulham (1982) 148 CLR 658
Kirby v Sanderson Motors Pty Limited [002] NSWCA 44
Kuligowski v Metrobus (2004) 78 ALR 1031
Ramsay v Pilgram (1968) 118 CLR 271Category: Interlocutory applications Parties: Managed Growth Solutions Pty Limited (Plaintiff)
L H Williams Pty Limited (Defendant)Representation: Mr P Dellit, a director, appeared for the plaintiff
Mr R Jefferis of counsel appeared for the defendant)
The plaintiff company was not legally represented
Gells Lawyers represented the defendant
File Number(s): 2011/99466 Publication restriction: None
REASONS FOR Judgment
HIS HONOUR: I propose to give some short ex tempore reasons for judgment.
These proceedings came before me today pursuant to an Amended Notice of Motion filed on behalf of the defendant on 27 February 2012. That motion sought various orders but in particular:
(a) That the plaintiff's Amended Statement of Claim filed on 20 June 2011 be struck out.
(b) Alternatively, security for costs.
The procedural background to that motion is briefly as follows. The plaintiff company commenced the proceedings by filing the original Statement of Claim on 28 March 2011. The solicitors were MSB Lawyers. The certificate under s 347 of the Legal Profession Act 2004 is signed by "Mr D Bartholomew per Mark Baden-Smith". The proceedings came before the Court on an interlocutory basis on 31 August 2011, 14 October 2011, 25 November 2011, 2 December 2011, 5 March 2012 and most recently on 30 March 2012.
The most recent hearing was before Judge Olsson pursuant to the defendant's Amended Notice of Motion, to which I have referred. After that hearing, in which the plaintiff was represented by Mr A C Casselden of counsel, her Honour made the following orders:
(i) Plaintiff has leave to file a Further Amended Statement of Claim no later than 20 April 2012.
(ii) The defendant has leave to file a Further Amended Notice of Motion (if required after it is served with a Further Amended Statement of Claim).
(iii) The defendant's Amended Notice of Motion filed 27 February 2012 (including any amendment to it) is stood over for hearing on 3 May 2012.
(iv) The parties have liberty to apply on three days notice.
(v) Plaintiff is to pay the defendant's costs of this Notice of Motion as agreed or assessed forthwith.
(vi) It is noted that this Notice of Motion is not to be adjourned again unless in the most exceptional circumstances.
(Order Number vi was underlined.)
When the matter was called this morning, Mr Paul Dellit announced his appearance for the plaintiff company. He told me he was the owner and is its sole director and shareholder. He did not have a formal authority to appear for the company as required by the rules but I dispensed with that formality on this occasion.
Mr Dellit told me that since the matter was before the court on 30 March 2012 his solicitors, MSB Lawyers, have ceased to act for him.
He handed up a Notice of Intention to File a Notice of Ceasing to Act, which is marked exhibit A. This is a curious document, which was not served on the defendant's solicitors. It is signed by a Mr Sean Devine and it is addressed to Mohmoud Osman. I do not know who Mr Osman is but he is certainly not Mr Dellit. I was further informed by Mr Dellit that Mr Bartholomew left MSB Lawyers some time last year. Apparently Mr Bartholomew represented himself to Mr Dellit as a lawyer but for some reason I am unable to find his name in the New South Wales Almanac. This is curious by reason of the fact that the certificate under s 347 of the Legal Profession Act 2004 in the Amended Statement of Claim was also signed by Mr Bartholomew.
Be that as it may, the reality was that the plaintiff company appeared today without legal representation. Mr Dellit applied for an adjournment. He told me that he had contacted a new solicitor, Mr Derek Molloy of Molloy Schrader, but Mr Molloy could only give Mr Dellit an appointment on 9 May 2012.
According to Mr Dellit, Mr Molloy knows that this matter is before the Court today.
Having regard to the history of the proceedings, in particular the order of Judge Olsson made on 30 March 2012 that the defendant's Amended Notice of Motion is not to be adjourned again unless in the most exceptional circumstances, and taking into account the overriding purpose set out in s 56 of the Civil Procedure Act 2005, together with s 60 of that Act, I considered that an adjournment should not be granted.
Counsel for the defendant moved on the defendant's Amended Motion filed on 27 February 2012 and asked me to strike out the Amended Statement of Claim filed on 20 June 2011. The defendant does not at this stage seek to pursue its application for security of costs but may do so in the future if appropriate.
At a fundamental level pleadings have two functions:
(a) to identify the issues, the resolution of which will determine the outcome of the proceedings (the issues purpose) and,
(b) together with particulars, to appraise the other party of the case to be met (the notice purpose): see UCPR rule 15.1.
There are various cases that provide authority for these propositions. The most cited judicial statement in Australia appears in Dare v Pulham (1982) 148 CLR 658 at 664:
"Pleadings in particulars have a number of functions, they furnish a statement to the case sufficiently clear to allow the other party a fair opportunity to meet it ... they define the issues for decision in litigation and thereby enable the relevance and admissibility of evidence to be determined at trial ... they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court."
See also Bank Commercial SA In Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286.
Thus the pleadings will limit the scope of the particulars, discovery and interrogatories. They also assist in determining where the burden of proof lies, and in determining whether a party is to be estopped from raising decided issues again in subsequent litigation: Ramsay v Pilgram (1968) 118 CLR 271; Kuligowski v Metrobus (2004) 78 ALR 1031.
In the context of the overriding purpose set out in s 56 of the Civil Procedure Act 2005, and the requirement for proportionality set out in s 60, pleadings also serve the purpose of saving expense by minimising the extent to which a party might be taken by surprise and by keeping the conduct of the litigation in due bounds: Bailey v The Federal Commissioner of Taxation (1977) 136 CLR 214 at 219.
A pleading is to contain a summary of the material facts relied on. It is to be as brief as the nature of the case allows: UCPR 14.7 and 14.8. Pleadings should only be a summary of the facts and should not deal with the evidence by which those facts are to be proved: UCPR rule 14.7. Material facts are those matters a party must prove to make out the case or to deny the relief claimed: see Kirby v Sanderson Motors Pty Limited [002] NSWCA 44, per Hodgson JA.
In Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Pty Limited (2008) NSWCA 243, the President of the Court of the Appeal, Justice Allsop, visited these concepts at [160] - [163]. He said:
" The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and his or her, or its legal representatives in civil proceedings to assist the Court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute and to participate in the processes of the Court to that end. It may be that that provision no more than restates the proper approach of the modern law of procedure reflected in cases such as Nolan v Marson Transport. It places the proper approach however on a firm statutory foundation. These principles can be seen to be reflected in the longstanding rules of pleading requiring any matter that may cause surprise to be pleaded."
I have read the Amended Statement of Claim carefully. However, having doing so I am nevertheless unable to discern what the plaintiff's claim really is. It seems to be based on one or more contracts, the details of which are obscure. It is clear that the defendant has never been given any appropriate notice of the case that it may be required to meet. The pleading fails to comply with any of the basic requirements of the UCPR. In short it is embarrassing and vexatious.
In exercising my discretion I take into account that any causes of action the plaintiff might seek to rely on are not statute barred, but in any event I am not asked today to dismiss the proceedings generally, the result being it will always be open to the plaintiff, within the appropriate time limit, to file a further pleading, or even to recommence proceedings if that were to be necessary.
For all these reasons I strike out the Amended Statement of Claim filed on 20 June 2011.
In the circumstances the defendant has succeeded on its Amended Motion and I can see no reason why costs should not follow that event: see UCPR r 42.1. I therefore order the plaintiff to pay the defendant's costs of the Amended Notice of Motion.
The defendant applies for those costs on an indemnity basis. The court may order that costs be awarded on an indemnity basis: see s 98(1)(c) of the Civil Procedure Act 2005.
The making of such an order requires the exercise of a discretion which, though absolute, should be exercised judicially. There appears to be no fixed rule or rationale as to when the discretion might be exercised except that it requires a "sufficient or unusual feature": Colgate Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225, or some "relevant delinquency": Oshlack v Richmond River Council (1998) 193 CLR 72. Although it has been said that the power to award indemnity costs should be only exercised in exceptional circumstances, there are a surprising number of cases in which it has occurred, and in my view that will no doubt increase having regard to the strictures of s 56 of the Civil Procedure Act 2005. Generally, however, the impugned conduct that would justify an award of indemnity costs is conduct that involves the incurring of unnecessary costs. This case falls into that category.
I therefore order that the costs payable by the plaintiff to the defendant be assessed on an indemnity basis. For similar reasons it seems to me that it is appropriate to make an order under rule 42.7(2) to the effect that the costs I have ordered be paid should be payable forthwith, and I so order.
I stand the matter over for further directions before the list judge on a date which I will now discuss with the parties.
Decision last updated: 12 June 2012
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