Maurice Klein v and National Australia Bank Ltd
[2016] VSCA 144
•22 June 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2015 0106
| MAURICE KLEIN | Applicant |
| v | |
| Respondent | |
| NATIONAL AUSTRALIA BANK LTD |
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| JUDGES: | REDLICH, SANTAMARIA and KYROU JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 19 May 2016 |
| DATE OF JUDGMENT: | 22 June 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 144 |
| JUDGMENT APPEALED FROM: | Klein v National Australia Bank Ltd [2015] VSC 460 (Rush J) |
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PRACTICE AND PROCEDURE – Summary judgment for respondent – Whether judge denied applicant procedural fairness in refusing to grant him leave to issue subpoenas and serve a notice to produce – Whether Civil Procedure Act 2010 requires that, in resisting application for summary judgment, a party is confined to evidence held as at time proceeding commenced or as at scheduled hearing of application – Application for leave to appeal refused.
MALICIOUS PROSECUTION – Elements of cause of action – Meaning of ‘actively instrumental’ in instigation or maintenance of prosecution – Lack of causal relationship between alleged conduct of respondent and instigation or maintenance of prosecution by prosecution authorities.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M A Strang | Lewis Allen Janover |
| For the Respondent | Ms G A Costello | Legal Department, National Australia Bank Ltd |
REDLICH JA
SANTAMARIA JA
KYROU JA:
Introduction and summary
This is an application for leave to appeal against a decision made by a judge of the Trial Division to grant summary judgment to the respondent (‘NAB’) in respect of the applicant’s action for malicious prosecution.[1] The proposed grounds of appeal seek to impugn the judge’s refusal to grant leave to the applicant to issue subpoenas (‘Proposed Subpoenas’) directed at the Chief Commissioner of Police (‘CCP’), Detective Senior Constable Robert Baker (‘Informant’) and the Director of Public Prosecutions (‘DPP’), and to serve a notice to produce on NAB.
[1]Klein v National Australia Bank Ltd [2015] VSC 460 (‘Reasons’).
The action for malicious prosecution was commenced on 19 December 2014, following the DPP’s discontinuance on 15 April 2014 of a number of dishonesty charges against the applicant. Those charges were laid by the police on 19 July 2012, following a complaint from NAB, and related to the applicant’s withdrawal on 3 February 2010 of uncleared funds from a NAB personal bank account in his name (‘Account’).
In his statement of claim, the applicant alleged that NAB was actively instrumental in bringing and maintaining the prosecution by the provision of information to the police which it knew was false.
On 22 April 2015, NAB filed a summons seeking summary judgment. NAB relied on s 63 of the Civil Procedure Act 2010 (‘CPA’) and other powers of the Court. At a directions hearing held on 24 April 2015, the applicant submitted draft orders which included the following:
2The [applicant] have leave to issue and serve a subpoena pursuant to Order 42A upon the [CCP, the Informant and the DPP] on or before 8 May 2015.
3The [applicant] have leave to issue and serve a Notice to Produce upon [NAB] on or before 5 June 2015 (such Notice to Produce relating to any matter in dispute between the parties and/or any matter arising from the production of documents by the subpoenae served upon the [CCP, the Informant and the DPP]).
The judge refused to make the above orders. However, he acceded to the applicant’s request for an adjournment to enable him to prepare affidavit material in opposition to NAB’s application for summary judgment. That application was heard on 19 June 2015 and was granted on 2 September 2015.
For reasons that follow, we have concluded that the application for leave to appeal should be refused.
Facts
The applicant has operated the Account since at least 15 August 2000.
On 2 February 2010, an unknown person deposited a cheque for $314,270.95 (‘Cheque’) in the Account at NAB’s Chadstone branch. Later that day, cheques deposited at that branch, including the Cheque, were stolen from a courier car.
On 3 February 2010, the applicant attended NAB’s Elsternwick branch and withdrew from the Account $2,000 in cash and further amounts to purchase a bank cheque for $94,500 payable to Mark Potter Automotive and a bank cheque for $212,500 payable to Mario Anthony Cigana. The Cheque was drawn on a closed account with the ANZ Bank and was worthless. In any event, as the Cheque had been stolen, it could not be presented. Although clear funds of $314,270.95 were never credited to the Account, the two bank cheques which were purchased with uncleared funds were presented by the payees and they received the relevant amounts.
On 5 February 2010, NAB sent a letter to the applicant to inform him that the Cheque had been stolen and to request that he replace it. The applicant responded that NAB should contact the drawer’s bank for a replacement cheque.
A fraud investigator employed by NAB, Ms Rozlyn Simms, investigated the deposit of the Cheque into the Account and the withdrawals made by the applicant and formed the view that NAB had been a victim of fraud. On a date prior to 19 July 2012, Ms Simms provided to the police information obtained in the course of her investigation. That information was not before us. However, it can be inferred that NAB provided documents showing the deposit into the Account on 2 February 2010 and the withdrawals on 3 February 2010. It can also be inferred from the extract from Ms Simms’ subsequent statement to the police — which is set out at [14] below — that she informed the police that, as at 3 February 2010, the applicant’s customer status was such that he was able to withdraw uncleared funds from the Account.
On 19 July 2012, the applicant was arrested and interviewed by the Informant and another officer. He denied that he deposited the Cheque into the Account. He said that the person who had arranged the deposit had died and that he was not prepared to disclose the person’s identity without first speaking to his solicitor. The questions and answers in the record of interview include the following:
Q63It’s alleged that … a series of withdrawals were made … a bank cheque for $212,500 … [a] $94,000 bank cheque and $2,000 cash was withdrawn. What do you say in relation to that?
A That’s correct.
Q64It’s alleged that you withdrew those funds on the 3rd of February at the Elsternwick branch of [NAB]. What do you say in relation to that?
A That’s correct.
Q65And that the $212,000 cheque was made out to a Mario Anthony [Cigana] … [a]nd a secondary bank cheque … was made out for $94,500 to a Mark Potter Automotive. What do you say in relation to that?
A If you’re telling me that … I accept that …
…
Q67Okay. Do you know a Mark Potter Automotive, or had dealings with that company?
A No.
Q68 Do you know a Mario Anthony Cigana?
A No.
Q69Can you tell me why those two bank cheques were drawn on the funds that were deposited into your account on the 2nd of February, 2010?
AI was asked to withdraw the funds in those names by the person that arranged the … deposit.
Q70 And who was that?
A I’m not in a position to tell you at this point in time.
…
Q78[I]f you have an innocent explanation for the depositing of this money and … for why the funds were made out in the way they were and disbursed in the amount they were, I would like to know that today so I don’t have to waste yours, mine and the court’s time with an unnecessary commencement of a criminal prosecution. And I invite you to, if you so choose, I will suspend the interview and – so you can get … legal advice so we can truncate any unnecessary court process that may follow in the absence of [an] innocent explanation.
AThere is an innocent explanation. At this point in time I don’t wish to provide it to you until I [speak to a solicitor].
…
Q189Well, I’d put it to you that you’ve actively participated in a sophisticated fraud committed on [NAB]. What do you say to that?
A Incorrect.
Q190Alright. I put it to you that you’ve actively participated in a scheme to launder money, ie, dealing in proceeds of crime in the circumstances that have been discussed here today. That no reasonable person would have conducted themselves in the manner that you’ve conducted yourself in … relation to the withdrawal of funds and that amount of money in those circumstances. What do you say to that?
A Incorrect.
Q191And I put it to you that your conduct is clearly suspect in … that anyone who was to find $314,000 and change in their bank account and then been asked to … write cheques to two … people or two businesses that they’ve never heard of before. Any reasonable person would’ve realised that there was something very fishy going on. What do you say in relation to that?
A You could be correct.
…
Q209I put it to you, Maurice, that you have actively engaged in money laundering. That you’ve been contacted by a person known to you and agreed to this … transaction of depositing the … initial cheque and then withdrawing the two payable cheques from your account. You did all of that for what appears to be six and a half thousand dollars. And you’ve known you’re complicit involvement in all that.
A Incorrect. Absolutely incorrect.
On 19 July 2012, following the interview, the applicant was charged with one charge of obtaining financial advantage by deception, one charge of obtaining property by deception, one charge of knowingly dealing with the proceeds of crime, one charge of recklessly dealing with the proceeds of crime, one charge of negligently dealing with the proceeds of crime and one charge of conspiracy to defraud. The applicant was granted bail.
In her statement to the police dated 17 September 2012, Ms Simms provided the following explanation as to why the applicant was able to withdraw funds from the Account before the Cheque had cleared:
Because at the time [the applicant] was deemed to be a trusted long term customer his account was such that he was able to immediately draw down on these uncleared funds. Investigation of [the applicant’s] transaction history revealed that [he] had previously deposited a cheque for a significant amount and immediately drawn on the uncleared funds.
The applicant provided to the police a statement dated 18 March 2013 in which he disclosed that the person who called him on 3 February 2010 and told him that there was money in the Account was Wayne Jacobson. The applicant described the telephone calls he had with Mr Jacobson as follows:
[Mr Jacobson] contacted me [in] January 2010 … to tell me that he was expecting to receive some money soon, and will be able to repay the balance of the outstanding loan [of money that I lent him].
…
On the 3rd February 2010, I received a call from [Mr Jacobson] to inform me that the money was in my bank account. He then told me, that a mistake had occurred, and that $314,270.95 had been inadvertently … deposited into the account. Quite surprised … I said to [Mr Jacobson], give me the account details, and I will have the overpaid amount, transferred back from whence it came.
[Mr Jacobson] said that there was to be a property settlement, that day or the next, and requested that I get a couple of bank cheques.
The Summary of Charges included the following allegations:
The … successful frauds committed [include] … a … stolen and valueless cheque made out in the amount of $314,270.95 deposited on 02/02/2010 into the [Account].
…
The cheque clearance process normally takes 3 business days to occur. Some bank customers are exempt from the normal clearance process and are eligible to draw on funds immediately as trusted customers. [The applicant] was in this category of NAB customer.
…
On 2/2/2010 the … cheque for $314,270.95 was deposited into the [Account] by an unknown person.
…
On 3/2/2010 [the applicant] attended at the NAB at Elsternwick where he withdrew $309,000.00 in 2 bank cheques and $2,000.00 in cash.
…
When interviewed [the applicant] denied any knowledge of the theft of the deposited cheques or any subsequent deception.
[The applicant] stated he received the deposited money from a person he refused to identify and claimed that person was now deceased. He declined to state what he received the money for. …
[The applicant] later provided an unsigned statement to investigators implicating Wayne JACOBSON in the cheque fraud. Subsequent investigation revealed numerous phone calls between [the applicant] & JACOBSON … at the relevant dates of the [Cheque] deposit and the subsequent police involvement with JACOBSON & [the applicant].
The charge sheet set out the following charges:
The [applicant] at Chadstone on or about 2/2/2010 did dishonestly obtain for himself and another a financial advantage namely $314,270.95, by deception namely by the presentation of a stolen ANZ cheque drawn on the closed account of WP & DD BEEVERS in the amount of $314,270.95 then and there presented to the credit of his [NAB] account …
The [applicant] at Elsternwick on or about 3/2/2010 did by deception namely by falsely purporting to be the lawful owner of $314.270.95 deposited into [the Account] on 2/2/2010 did dishonestly obtain property namely 2 [NAB] cheques made payable to Mark Potter Automotive and Mario Anthony CIGANA & 2000.00 cash belonging to [NAB] and valued at $309,000.00 with the intention of permanently depriving [NAB] of the said cheques and cash.
The [applicant] at Elsternwick between 2/2/2010 and 12/2/2010 did knowingly deal with property namely $314,270.95 suspected of being the proceeds of crime.
The [applicant] at Elsternwick between 2/2/2010 and 12/2/2010 did recklessly deal with property namely $314,270.95 suspected of being the proceeds of crime.
The [applicant] at Elsternwick between 2/2/2010 and 12/2/2010 did negligently deal with property namely $314,270.95 suspected of being the proceeds of crime.
The [applicant] between 11/04/2008 & 16/2/2010 at Melbourne and diverse other places in the State of Victoria did conspire with Grant ELLIOT, … Mario CIGANA, Mark POTTER … and diverse other people to defraud [NAB].
The Hand Up Brief of Evidence contained the following statements:
On 2/2/2010 the [applicant] received a deposit of $314,270.95 into his NAB account for which he was not entitled. …
Following the deposit of $314,270.95 on 2/2/2010 the [applicant] withdrew $308,000.00 on 3/2/2010 consisting of $2,000.00 cash, and two bank cheques in the amounts of $94,500.00 & $212,500 made payable to Mark POTTER & Mario CIGANA, two persons who were unknown to the [applicant] and gave the two bank cheques to an unidentified third party believed to be the co-accused Grant ELLIOT which were later deposited and further dispersed.
…
Between 2008 & 2012 the [applicant] along with numerous other co-accused including Grant ELLIOT, Mark POTTER, Mario CIGANA and diverse others engaged in an organised and sophisticated scheme to defraud [NAB] by depositing and attempting to deposit stolen and valueless cheques into various bank accounts, steal the deposited cheques before they were cleared and successfully draw on the fraudulently obtained credit to the bank accounts used to receive the valueless cheques.
The applicant was committed to trial on the basis of the Hand Up Brief of Evidence without a committal hearing.
In the Indictment, which was filed in the County Court on 4 March 2014, the applicant was charged with only recklessly dealing with the proceeds of crime and negligently dealing with the proceeds of crime.
As stated at [2] above, the charges against the applicant were discontinued on 15 April 2014.
Relevant statutory provisions and case law
Elements of the cause of action of malicious prosecution
It was common ground before the judge and on the hearing of the present application that, in order for the action for malicious prosecution to succeed, the applicant had to establish the following elements:
(a)NAB either initiated the prosecution or was actively instrumental in instigating or maintaining it (‘actively instrumental element’);
(b)The prosecution was brought or maintained without reasonable and probable cause;
(c)NAB acted with malice in instigating or maintaining, or being actively instrumental in instigating or maintaining, the prosecution; and
(d)The prosecution terminated favourably to the applicant.[2]
[2]See Beckett v New South Wales (2013) 248 CLR 432, 438 [4]; Skrijel v Mengler [2003] VSC 270 [198] (‘Skrijel’).
In Skrijel v Mengler,[3] Nettle J stated the following about the meaning of the actively instrumental element:
[B]eing ‘actively instrumental’ means either instituting or continuing the proceeding, as by the laying of an information or continuing the prosecution of the proceeding, or so dominating another by prevailing upon them or procuring them to institute or continue the proceeding as to be regarded as really taking that action through them.[4]
[3][2003] VSC 270.
[4]Skrijel [2003] VSC 270 [200] (citations omitted).
Where, as in the present case, the defendant to an action for malicious prosecution was not the prosecutor at any time, the plaintiff must establish that there was a sufficient causal relationship between the defendant’s conduct and the instigation or maintenance of the impugned prosecution.[5] Such a causal relationship will be established if the defendant provides false incriminating information to the prosecution authorities which is of such a nature that it results in the exercise of the prosecutorial discretion being distorted rather than truly independent because, in a real and practical sense, it requires the prosecution of the plaintiff.[6]
[5]Skrijel [2003] VSC 270 [202], quoting Commercial Union Assurance Co of New Zealand Ltd v Lamont [1989] 3 NZLR 187, 199; Johnston v ANZ Banking Group Ltd [2004] NSWSC 1250 [44]–[52] (‘Johnston’).
[6]See the statements of principle summarised in Johnston [2004] NSWSC 1250 [46].
An allegation that the defendant complained to the police and that the police then arrested the plaintiff is insufficient by itself to ground an action for malicious prosecution.[7]
[7]Mutton v Baker [2014] VSCA 43 [37].
Rules dealing with subpoenas
Pursuant to r 42.02 of the Supreme Court (General Civil Procedure) Rules 2005 (‘2005 Rules’), the Prothonotary had power to issue a subpoena at the request of a party to civil litigation without leave of the Court. Rule 42A.01 provided for a subpoena which required production of documents for evidence before the hearing of an interlocutory application.
Statutory provisions and case law on summary judgment
Section 63(1) of the CPA provides that a court may give summary judgment in favour of a defendant in a civil proceeding if the court is satisfied that a claim ‘has no real prospect of success.’ Section 64 provides that, despite there being no real prospect of success, a court may refuse to give summary judgment because it is not in the interests of justice to do so or the dispute is of such a nature that only a full hearing on the merits is appropriate.
For the purposes of s 63(1) of the CPA, a claim has no real prospect of success if the prospect of success is fanciful.[8]
[8]Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 [47] (‘Mandie’).
Relevant allegations in the applicant’s statement of claim
The applicant’s statement of claim pleaded all of the elements of the cause of action of malicious prosecution. In relation to the actively instrumental element, the statement of claim relevantly alleged:
5.On or about 11 January 2010, an employee of NAB, who is identified by the code ‘7201-46785’, unilaterally, and without the [applicant’s] knowledge or consent, altered NAB’s customer personal summary and NAB profile relating to the [applicant] so that:
(a)The [applicant’s] status was classed as ‘GOLD’.
(b)The [applicant] was provided with a temporary credit limit that expired on ‘22/02/10’.
(c)The [applicant] was classed by NAB as a trusted long-term and valued customer.
(d)The [applicant] was designated as self-employed and that he ran a shop in South Melbourne.
(‘The NAB alterations’)
PARTICULARS
The NAB alterations are partly to be found in the NAB investigation file which is in the possession of NAB (‘the NAB Investigation file’) and copies of some of which are in the possession of the [applicant’s] solicitor and may be inspected by appointment.
6.The NAB alterations were false as the [applicant] was not a trusted long-term and valued customer, was not self-employed and did not run a shop in South Melbourne.
7.NAB initiated and/or was actively instrumental in the arrest and prosecution of the [applicant] and unduly influenced the independent discretion of the Informant by providing false and misleading information (‘the conduct’) and failing to provide the Informant with crucial material information (‘the omission’) by reason of which and in reliance upon which the Informant arrested the [applicant], commenced and maintained the prosecution.
PARTICULARS
(a)On a date prior to 19 July 2012 the NAB prepared a brief (‘the NAB brief') for the Victoria Police including the NAB’s own Investigation File and provided the NAB brief to the Informant and/or the Victorian Police. A copy of part of the NAB brief is in the possession of the [applicant’s] solicitor and is available for inspection upon appointment.
(b)In preparing the NAB brief (and in maintaining the prosecution) NAB:
(i)Falsely and misleadingly informed the Informant that on the 2 February 2010 the [applicant] deposited a cheque (‘the cheque’) drawn on the ANZ Bank on the account of a person by the name of WP & DD Beavers in the amount of $314,270.95 being ‘a valueless’ cheque at NAB Chadstone branch and that CCTV footage thereof was captured. Further NAB advised that the [applicant] completed the deposit form as required and went to the teller to have the transaction processed. …
(ii)Falsely and misleadingly informed the Informant that the [applicant] was deemed by NAB to be a trusted long-term and valued customer when NAB knew that he was not (Such matters in sub-paragraphs (i) and (ii) constituting the conduct);
(iii)Knew of the NAB alterations;
(iv)Knew that the [applicant] did not satisfy the NAB’s protocols for describing a customer as a trusted long-term and valued customer;
(v)Knew that the [applicant] did not satisfy the NAB’s protocols for being provided with a temporary credit limit;
(vi)Knew that the [applicant] did not request any of the NAB alterations;
(vii)Knew that the [applicant] was not informed by the NAB of the NAB alterations;
(viii)Knew that the purpose and effect of the NAB alterations was to facilitate alleged offences which were the subject of the investigation by the Informant and which inter alia; substantively comprised the charges.
(ix)NAB wrongfully omitted to inform the Informant of the matters in (iii) to (viii) hereof (such matters constitute the omission).
(x)The knowledge referred to in (iii) to (viii) hereof is contained in NAB's internal records and internal legal advice. The [applicant] is in possession of part of the NAB investigation file which contains some of the internal records, and such documents may be inspected at the [applicant’s] solicitor’s office by appointment. Full particulars of knowledge will be provided after discovery.
8.Thereafter, between 19 July 2012 and 15 April 2014 NAB maintained the prosecution and continued to persist with the conduct and failed to rectify the omission.
PARTICULARS
(a)On 17 September 2012 NAB provided a witness statement of Rozlyn Ann Simms a Fraud Investigator with the NAB to the Informant and/or the Victorian Police. …
(b)On various dates prior to April 2014 (Particulars of which will be provided after discovery), NAB provided information concerning the [applicant] and bank accounts held by NAB in the [applicant’s] name to the Informant and/or the Victorian Police and/or to the [DPP].
…
11.But for the conduct and the omission and the matters referred to in paragraph 5, 6, 7 and 8 hereof, the [applicant] would not have been arrested, bailed or prosecuted and/or the charges against the [applicant] would have been discontinued at a much earlier stage by the Informant and/or by the DPP.
12.At all material times there were no reasonable grounds to found a belief that the [applicant] was a trusted long term and valued customer of NAB.
PARTICULARS
The [applicant] refers to paragraph 5, 6 and 7 hereof and the particulars subjoined thereto.
13.Further or alternatively, at all material times there were no reasonable grounds to justify the conduct or the omission.
PARTICULARS
The [applicant] refers to paragraph 5, 6 and 7 hereof and the particulars subjoined thereto.[9]
[9]Emphasis in original.
In its amended defence, NAB provided the following explanation as to why the applicant was able to withdraw uncleared funds from the Account:
The [applicant] was able to draw down on uncleared funds because he was a trusted long term customer of NAB in the sense that:
i.from at least around 2003 until around 2012, NAB’s standard procedure was that when a customer opened an account, the account was given an X indicator and once the account had been opened for more than 6 months, the X indicator would be removed which meant that customers were deemed to be a trusted long term customer who would be able to draw on uncleared funds; and
ii.in around 2003, the [applicant’s] X indicator had been removed under this usual process, giving the [applicant] capacity to draw on uncleared funds.
Directions hearing on 24 April 2015 and judge’s ruling
As stated at [4] above, a directions hearing was held on 24 April 2015. NAB’s summons for summary judgment was returnable on that day. The applicant submitted draft orders which included orders granting him leave to issue the Proposed Subpoenas and to serve a notice to produce on NAB. The applicant did not provide to the judge copies of the Proposed Subpoenas and the proposed notice to produce and did not identify the documents sought to be obtained. However, the following statements by counsel for the applicant made it clear that the applicant was seeking documents to bolster the evidence underpinning the existing allegations in the statement of claim rather than to obtain evidence in support of new allegations:
We say presently that we do have some information that is of substance that supports – some factual information in document form that supports the claim.
…
[We] believe that there is documentation in the possession of [NAB] which would substantiate further the claim, so there will be no doubt that [the applicant does] have a sufficient cause of action.
…
We want to put our best case forward to [resist the application for summary judgment] … And we want to just see this further material that will bolster our resistance to this application and it is not going to be very difficult. [NAB] is probably in a situation where it could … file and serve an affidavit of documents forthwith.[10]
[10]Transcript of Proceedings, Klein v National Australia Bank Ltd (Supreme Court of Victoria, SCI 2014 06768, Rush J, 24 April 2015, 4–5, 7.
Counsel for NAB resisted the grant of leave in relation to the Proposed Subpoenas and the notice to produce on the basis that they would constitute a fishing expedition.
During the course of oral argument, the judge said the following to counsel for the applicant:
Your solicitor … has signed [a] … proper basis certification, that is that there is a proper basis for bringing this claim against [NAB], and [NAB] … has said, ‘We want to strike out your claim’. … [W]hy shouldn’t we hear that application now, based on the normal protocols and procedures for strike out applications?[11]
[11]Transcript of Proceedings, Klein v National Australia Bank Ltd (Supreme Court of Victoria, SCI 2014 06768, Rush J, 24 April 2015) 10.
The judge then made a ruling refusing to grant leave to the applicant to issue the Proposed Subpoenas and serve the notice to produce (‘impugned ruling’) for the following reasons:
I do not see it as appropriate to grant leave and delay the application [for summary judgment] to allow subpoenas on the [CCP] or [a] notice to produce. But naturally enough there is a need for [the applicant] to be able to put in an affidavit with the materials that [he] relies upon to substantiate the statement of claim.[12]
[12]Transcript of Proceedings, Klein v National Australia Bank Ltd (Supreme Court of Victoria, SCI 2014 06768, Rush J, 24 April 2015) 11.
At the applicant’s request, the judge granted the applicant four weeks to file affidavits in opposition to NAB’s application for summary judgment. He also granted NAB two weeks to file affidavits in reply. The hearing of NAB’s application was adjourned until 19 June 2015. Both parties filed extensive affidavits prior to that hearing.
Judge’s decision to grant NAB’s application for summary judgment
At the hearing of NAB’s application for summary judgment, the applicant relied upon two items of information which he alleged that NAB provided to the police knowing that the information was false.
The first item was CCTV footage. NAB was said to have falsely claimed that the footage showed the applicant depositing the Cheque at NAB’s Chadstone branch on 2 February 2010. On the hearing of the application for leave to appeal, the submissions in the applicant’s written case regarding the CCTV footage issue were not pressed and therefore it is not necessary for us to set out the judge’s reasons in relation to that issue or to make any further reference to it.
The second item was NAB’s statement to the police that the applicant was able to withdraw uncleared funds from the Account on 3 February 2010 because he was deemed to be a trusted long term customer (‘customer status issue’). In relation to that issue, the applicant submitted the following:
[The applicant] was only able to withdraw from the account because there had been apparently someone at the NAB who facilitated his ability to draw on the uncleared cheques.
…
[I]f the bank had … not been misleading in advising the police that he was a long term trusted customer, the police may well have formed the view that he was an innocent victim of people who had been conspiring with insiders at the bank and … they didn’t form that view because the bank erroneously and misleadingly told the police that he was a long term trusted customer and because someone had altered his account when clearly there were warnings on the account in January of 2010.
If the police had been told that, rather than the fabrication that he was a long term trusted customer, they may well have formed a different view and may have wished to investigate further before charging.[13]
[13]Transcript of Proceedings, Klein v National Australia Bank Ltd (Supreme Court of Victoria, SCI 2014 06768, Rush J, 19 June 2015) 61–2.
The judge rejected the applicant’s submissions in relation to the customer status issue and granted NAB’s application for summary judgment for the following reasons:
As I understand the submission, [the applicant] is suggesting that, had the police known that an employee of NAB was involved in changing his customer status, then they would have been more likely to view him as innocent. This submission is misconceived. Firstly, the involvement of others does not change the nature of the conduct which resulted in [the applicant] being charged. During the interview on 19 July 2012, [the Informant] described the conduct of [the applicant], namely that he withdrew the money in cheques made out to individuals unknown to him, as being ‘fishy‘ in and of itself. This was the conduct giving rise to the charges; the Customer Status Information was irrelevant. Secondly, it is apparent on the evidence that, at some time before or during the prosecution of [the applicant], police became aware of an allegation that someone internal to NAB was involved in these or related offences. The Summary of Charges refers to a file note prepared by Ms Simms which states that one of the alleged conspirators ‘knew someone high up in NAB that could get this transaction through for him‘. In contradiction of the allegation made by [the applicant], the police, aware of this aspect of the Customer Status Information, decided to instigate or continue the prosecution.
In submissions, [counsel for the applicant] also appeared to submit that, had the police known that [the applicant‘s] customer status was changed without his knowledge or consent, they would have been less likely to prosecute him. I reject the submission. The charges laid against [the applicant] had nothing to do with his knowledge or involvement in the changing of his customer status. Upon a reading of the Record of Interview, the Summary of Charges, the Hand Up Brief of Evidence and the Indictment, it is clear the decision made by police to prosecute [the applicant] concerned the actual withdrawal of funds. Customer status was only referred to by police as a background consideration. Whether [the applicant] knew of or consented to a change of his customer status was immaterial to police considerations to prosecute. It was [the applicant’s] conduct in withdrawing the funds that was the basis for the prosecution.
…
That the Customer Status Information was provided to or withheld from the police was not a consideration in the decision of the police to prosecute [the applicant]; it cannot ground an allegation that NAB was actively instrumental in instigating the prosecution.
…
In this case, I find that [the applicant’s] claim does not have reasonable prospects of success. [The applicant] has not satisfactorily alleged a key element of the cause of action of malicious prosecution, namely that NAB was actively instrumental in instigating the prosecution; the conduct alleged by [the applicant] is ‘insufficient by itself to ground an action in malicious prosecution’, and therefore ‘that part of the claim has no real prospect of success’.
The reason that [the applicant] has no reasonable prospects of making out his allegation is that the conduct of NAB, which he alleges establishes that NAB was actively instrumental in instigating or continuing the prosecution, is not causally connected to the decision of the police to prosecute him.
…
For the sake of completeness, I note that there was much documentary evidence placed before me in support of [the applicant’s] claim. As is set out above, I have not made summary judgment dismissing [the applicant’s] claim because of any lack of evidence of the allegations made by him. Rather, I have made this decision on the basis that the allegations made by [the applicant] cannot ground a claim in malicious prosecution.[14]
[14]Reasons [44]–[45], [47]–[49], [61] (citations omitted).
The judge rejected the applicant’s submission that summary judgment should be refused under s 64 of the CPA. The judge said: ‘it would be inappropriate for me, and contrary to the provisions of the CPA, to allow a claim to proceed in circumstances where “the assertions that are made [as at the time of the hearing] do not give rise to reasonable grounds for the plaintiff’s case”.’[15]
[15]Reasons [55] (citations omitted). In a footnote, the judge referred to s 9(1)(c), (d), (f) and (g) of the CPA.
The judge added the following observations about his decision on 24 April 2015 to refuse the applicant leave to issue the Proposed Subpoenas and serve the notice to produce:
Finally, it is important to note that at the hearing on 24 April 2015, I did not allow for the hearing of this application to be delayed in order that [the applicant] could seek further documentary evidence in the form of discovery from NAB to ‘bolster [his] resistance to this application’. At the hearing on 19 June 2015, [counsel for the applicant] indicated that such a course of action was appropriate for the hearing of a summary judgment application.[16]
[16]Reasons [60] (citations omitted).
Grounds of appeal
The application for leave to appeal relies on the following proposed grounds of appeal:
(1)The learned Judge erred in denying the Applicant procedural fairness and/or natural justice by refusing to permit the Applicant to serve [the Proposed Subpoenas] under Order 42A.01 … and further refused to permit the Applicant to serve a notice to produce upon [NAB] as set out in the Applicant’s proposed minutes of Order submitted to the Court on 24 April 2015.
(2)The learned Judge applied the wrong test in exercising his discretion as to whether the Applicant ought to be permitted to serve subpoenas and a notice to produce by determining that the Applicant ought to be limited to that material in his possession at the time of the issue of proceedings and should not be permitted to access extrinsic materials to enable [him] to produce further evidence before the Court on the summary judgment application.
(3)The learned Judge erred in law in failing to permit the Applicant to present his case effectively on a summary judgment application but rather considered that the application should not suffer delay.
Judge’s decision regarding Proposed Subpoenas and notice to produce
The applicant submitted that the impugned ruling denied him procedural fairness and constituted a miscarriage of the judge’s discretion concerning the granting of leave for the issuing of the Proposed Subpoenas and the service of the notice to produce. According to the applicant, the proper exercise of the judge’s discretion required the granting of such leave in order to enable the applicant to be in the best evidentiary position to support his pleaded case and thus resist NAB’s application for summary judgment.
In support of the above submission, the applicant relied on Queensland v JL Holdings Pty Ltd[17] and other cases which preceded Aon Risk Services Australia Ltd v Australian National University.[18]Those cases held that courts should exercise their discretion in relation to interlocutory applications — such as applications to amend pleadings — in a manner that enabled a party to pursue an issue that was fairly arguable even if it was raised belatedly provided that any prejudice to the other party could be compensated for by costs. Those cases also emphasised that courts should not give primacy to case management considerations.
[17](1997) 189 CLR 146, 155.
[18](2009) 239 CLR 175 (‘Aon’).
The applicant also relied upon Baker v Mutton.[19] In that case, the defendant to an action for injurious falsehood sought leave to appeal from orders of a judge of the County Court granting leave to the plaintiff to file a further amended statement of claim. The grounds upon which the defendant sought to impugn the proposed pleading included that the plaintiff had failed to set out the words that the defendant was alleged to have used in a statement he made to the police. The plaintiff argued that in order for him to plead those words, he needed to obtain access to documents held by the police.
[19][2014] VSCA 302 (‘Baker’).
Nettle JA and Sloss AJA agreed with the defendant’s submissions that the proposed pleading was defective. However, rather than granting the application for leave to appeal and allowing the appeal immediately, their Honours adjourned the further hearing of the application and in the meantime granted leave to the plaintiff to issue subpoenas under O 42A of the 2005 Rules to give him an opportunity to obtain documents that would enable him to ‘put his pleading in order.’[20]
[20]Baker [2014] VSCA 302 [21], [23].
NAB submitted that the impugned ruling did not constitute a denial of procedural fairness because leave to issue the Proposed Subpoenas and to serve the notice to produce was not required under the 2005 Rules and, in any event, the ruling did not preclude an application being made to the judge to reconsider the ruling.
NAB also submitted that the pre-Aon cases do not reflect the current attitude of the courts in relation to interlocutory applications and are inconsistent with the overarching purpose stated in the CPA as well as the overarching obligations which the CPA imposes on the parties to civil litigation. NAB also submitted that Baker is distinguishable.
In our opinion, while NAB was correct in submitting that leave was not required,[21] as the appropriateness of the Proposed Subpoenas and notice to produce had been argued before the judge and he had refused to grant leave, the applicant was justified in not acting in any manner that could have been construed as defiance of the impugned ruling. Likewise, while the applicant was not precluded from requesting that the judge reconsider the impugned ruling, in the absence of a change in circumstances or new arguments in favour of the granting of leave, it is unlikely that the judge would have changed his mind.
[21]See r 42.02(2) of the 2005 Rules.
In the circumstances of this case, the judge’s discretion did not miscarry. The applicant did not identify which documents — or even the types of documents — he sought to obtain by issuing the Proposed Subpoenas and serving the notice to produce. Nor did he identify any legitimate forensic purpose to be served by obtaining those documents other than the vague suggestion that the unidentified documents would ‘bolster’ and ‘substantiate further’ his claim.[22] The generalised manner in which the applicant sought to justify the Proposed Subpoenas and the notice to produce conveyed the appearance of a fishing expedition. This is particularly so having regard to the fact that, as an accused committed to stand trial on serious dishonesty charges, the applicant had been provided with considerable documentation by the prosecution (including documents the police obtained from NAB) and knew the details of what was alleged against him.
[22]See [31] above.
Baker is distinguishable. In that case, the pleading was defective because it did not comply with the rule that, in an action for injurious falsehood, the precise words allegedly used by the defendant must be pleaded. This Court held that that defect might be cured if the plaintiff were given leave to issue subpoenas for the purpose of obtaining documents that were said to contain the words used by the defendant. The present case did not involve an allegation that the pleading was defective. Rather, it involved a finding by the judge that, even if the applicant were able to adduce evidence to establish all the facts pleaded by him, those facts could not establish the actively instrumental element of the action for malicious prosecution.
To state the obvious, our conclusion that the judge did not err in refusing leave to the applicant to issue the Proposed Subpoenas and serve the notice to produce is based on the particular circumstances of this case. Depending on the facts, it may be appropriate in other cases for a plaintiff to be granted leave to supplement his or her evidence for the purpose of resisting a defendant’s application for summary judgment. Rule 22.21 of the Supreme Court (General Civil Procedure) Rules 2015 (‘2015 Rules’) contemplates such a course.
Insofar as the judge’s observations at [40] above may be construed as suggesting that the CPA requires that, in resisting an application for summary judgment, a party is to be confined to the evidence in the party’s possession at the time the proceeding was commenced or at the time of the scheduled hearing of the application, we would respectfully disagree. There is nothing in the CPA which supports, still less requires, such an approach.[23] The requirement in s 8 that, in exercising any of its powers, the court must seek to give effect to the overarching purpose,[24] may well require the court in a particular case to grant leave to a party to procure further evidence and to adjourn the scheduled hearing of an application for summary judgment to facilitate this. It would be contrary to the overarching purpose for the court to adhere to inflexible rules rather than act on a case by case basis according to the requirements of justice in each case.
[23]Rule 22.21 of the 2015 Rules provides that, where a defendant applies for summary judgment, the Court may order any party to attend to give evidence or to produce any documents.
[24]The overarching purpose is stated in s 7(1) of the CPA as follows: ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.’
It is true, as the judge pointed out during the directions hearing on 24 April 2015, that the CPA provides that, on the filing of a writ or other substantive document, a party’s legal practitioner must file a certificate which states that there is a proper basis for the allegations made in the document.[25] However, the certification requirement does not mean that, in pursuing a claim, a plaintiff is confined to the evidence held at the time of certification. Insofar as the judge’s observations at [33] above may be construed as suggesting otherwise, we would respectfully disagree.
[25]See s 18 and pt 4.1 of the CPA.
It follows that none of the proposed grounds of appeal can be made out.
Judge’s decision to grant the application for summary judgment
Although the proposed grounds of appeal do not seek to impugn the judge’s substantive decision to grant NAB’s application for summary judgment — and leave was not sought by the applicant to amend those grounds — both parties made submissions about the correctness of the substantive decision. As both parties conducted the application for leave to appeal on the basis that the correctness of the substantive decision fell within the scope of the application, we will briefly consider the parties’ submissions on this issue.
The applicant submitted that the judge erred in concluding that the allegations in the statement of claim ‘cannot ground a claim in malicious prosecution’[26] because:
[26]See [39] above.
(a)NAB’s statement to the police that the applicant was able to withdraw uncleared funds because he was a trusted long term customer was false.
(b) NAB knew the statement was false.
(c)NAB also knew that the reason why the applicant was able to withdraw uncleared funds was because a NAB employee had altered the applicant’s customer status in January 2010 rather than because he was a trusted long term customer.
(d)NAB did not tell the police the real reason why the applicant was able to withdraw uncleared funds.
(e)NAB inferred to the police that the applicant knew his customer status and used it to knowingly withdraw uncleared funds.
(f)The police charged the applicant because they were misled by NAB’s false statements and omission in the sense that they believed that he was knowingly involved in the fraudulent activity rather than being a customer who withdrew funds he believed were in the Account.
NAB submitted that there was no evidence to support the applicant’s assertions and that the judge had correctly concluded that the conduct alleged against NAB had no causative relationship with the decision of the police to charge the applicant.
In our opinion, the judge did not err in granting NAB’s application for summary judgment.
The role of a court hearing an application by a defendant for summary judgment is of course not to determine whether the evidence then available to the plaintiff establishes his or her claim on the balance of probabilities. That is a matter for the trial. The court’s role is to determine whether the plaintiff’s pleaded case, taken at its highest, has no real, as distinct from a fanciful, prospect of success.[27] Here the judge made no findings of fact, but concluded that the allegations of fact pleaded could not satisfy the actively instrumental element of an action for malicious prosecution.
[27]Mandie [2016] VSCA 4 [47].
The focus of the hearing before the judge was whether NAB’s ‘conduct’ and ‘omission’, as defined in para 7 of the statement of claim, were capable of establishing the actively instrumental element. The applicant has sought to impugn the judge’s conclusion on that issue on the basis of speculative assertions which are unsupported by the evidence.
The applicant could never establish that NAB had falsely informed the police that he was a trusted long term customer when it knew that he did not have that status because there was no evidence that NAB had told the police that he was in fact a trusted long term customer as distinct from having been deemed by NAB’s systems to be such a customer. What NAB said was accurate because its internal systems which then applied to personal accounts automatically resulted in the deemed status being accorded to the Account once the ‘X’ had been removed, which occurred before 2 February 2010.
There was no evidence that NAB had told the police that the applicant had deliberately used his customer status to facilitate a fraud on NAB. Even if an inference could be drawn from the information that NAB gave to the police that NAB believed that the applicant had acted in this manner, that would hardly be surprising. NAB was the victim of a fraud involving the Account and the applicant’s withdrawals from the Account were an important step in the commission of the fraud. A complaint to the police by a victim of a crime often involves an express or implied assertion of involvement by the accused in the criminality. The fact that such an assertion is made and is taken into account by the prosecution authorities in making decisions about instigating, maintaining or discontinuing particular charges, without more, is insufficient to satisfy the actively instrumental element of an action for malicious prosecution brought against the victim.
We now consider what the position would be if the applicant’s status as a deemed trusted long term customer was brought about by a NAB insider improperly altering the applicant’s status and if NAB knew this. In this situation, NAB’s statement to the police that the applicant had the status of a deemed trusted long term customer would still be accurate even though the reason for that status was the improper conduct rather than the removal of the ‘X’. On this scenario, the analysis at [63] above would still apply. The circumstances of the offences and the applicant’s involvement in them were matters for the police to investigate. The police persisted with the charges after they became aware of the allegation that an insider was involved.
It can be assumed that:
(a)the police reviewed all of the information that NAB provided to them and took into account any statements made by NAB about the applicant before they decided to charge him and subsequently in deciding to maintain the charges until the DPP took over the prosecution;
(b)the DPP reviewed all of the evidence and decided to prosecute only two of the charges; and
(c)the DPP reviewed the evidence again and decided to discontinue the two charges.
If a further assumption is made that the information that NAB provided to the police contained the falsehoods alleged in the statement of claim with regard to the customer status issue, the actively instrumental element could not be established. That is because there was no evidence that any falsity about that issue resulted in the exercise of the prosecutorial discretion by the police and the DPP being distorted rather than truly independent because, in a real and practical sense, they were required to prosecute the applicant.
On the contrary, the available evidence pointed to the exercise of the prosecutorial discretion having been entirely independent. In relation to the police, questions 78, 190 and 191 that were put to the applicant during the record of interview[28] strongly indicate that the police decided to charge the applicant because his conduct was considered ‘suspect’ and ‘very fishy’ and because he declined to disclose any innocent explanation for that conduct. It is readily apparent from the charge sheet, the Summary of Charges and the Hand Up Brief of Evidence that the underlying reason why the applicant became a deemed trusted long term customer — or indeed why he was able to withdraw uncleared funds — had no causative relationship with the decision by the police to charge the applicant and to maintain the charges until the DPP took over the prosecution, or with the subsequent decision by the DPP to initially pursue two of the charges. Indeed, the summary of prosecution opening did not refer to the applicant as a deemed trusted long term customer but alleged that his ‘status within [NAB] had been changed to allow the immediate drawdown.’
[28]See [12] above.
It follows that, based on the very specific allegations in the applicant’s statement of claim and the particular circumstances of this case, the judge was right to conclude that the applicant could not succeed in establishing the actively instrumental element of the action for malicious prosecution. It also follows that the judge did not err in granting NAB’s application for summary judgment.
Conclusion
For the above reasons, the applicant’s proposed appeal has no real prospect of success[29] and will be refused.
[29]Supreme Court Act 1986 s 14C.
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