Mayart Pty Ltd v Knight
[2020] VCC 1170
•6 August 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-18-04868
| MAYART PTY LTD & ORS | Plaintiffs |
| v | |
| PHILIPPA CHRISTINE KNIGHT & ORS | Defendants |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 July 2020 | |
DATE OF RULING: | 6 August 2020 | |
CASE MAY BE CITED AS: | Mayart Pty Ltd & Ors v Knight & Ors | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1170 | |
REASONS FOR RULING
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Legislation Cited: Civil Procedure Act2010 (Vic); Family Law Act 1975 (Cth); Property Law Act 1958 (Vic); Legal Profession Uniform Law Application Act 2014 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Dr M Wolff | Noble Lawyers Pty Ltd |
| For the First Defendant | Mr M J Galvin, QC | |
| For the Third Defendant | The third defendant appeared in person |
HIS HONOUR:
Issue
1 The main question in this application is whether by reason of alleged contraventions of the Civil Procedure Act2010 (Vic) (“the CPA”) the plaintiffs should be precluded from proceeding with an application for summary judgment which they issued against the third defendant (“Mr Knight”) by summons dated 9 June 2020.
Background
2 On about 22 June 2020, Mr Knight made a request for interlocutory determination to this court in which, in effect, he asked that the court stop the plaintiffs’ summary judgment application because the plaintiffs and their legal representatives had breached the CPA, thereby materially disadvantaging the defendants and causing them financial and other loss.
3 The proceeding has quite an extensive history. On 14 July 2020, I was scheduled to hear a number of different applications in the proceeding:
(a)the plaintiffs’ application for summary judgment against the first defendant and third defendant;
(b)the third defendant’s application for summary judgment against the plaintiffs;
(c)the third defendant’s application to file an amended defence; and
(d)the third defendant’s application to prevent the plaintiffs from pursuing their summary judgment application.
4 Over a whole day, I heard applications (c) and (d). I did this because if either the third defendant obtained leave to file a new defence to the plaintiffs’ further amended statement of claim or the plaintiffs were prevented from pursuing their summary judgment application, it would consequentially affect the summary judgment application by the plaintiffs. Accordingly, I considered that there was no utility in dealing with that application until these other applications were first determined. I have dealt with the third defendant’s application to file an amended defence in a separate judgment.[1] That judgment provides some broader context for this application.
[1]Mayart Ptd Ltd & Ors v Philippa Christine Knight & Ors [2020] VCC 1169
5 Mr Knight relies upon an affidavit sworn on 6 July 2020 and submissions filed on 10 July 2020. The affidavit asserts that the plaintiffs and their legal representatives have breached their overarching obligations under the CPA as set out in the submissions. Mr Knight refers to and exhibits contracts for the sale of apartments 10 and 11 at the property development undertaken on the land at 39 Parkers Road, Parkdale, in Victoria (“the property”), an historical company search of the first plaintiff (“Mayart”), and a copy of the orders made by Judge Kelly in the Federal Circuit Court on 14 January 2019. The last-mentioned orders appear to relate to a proceeding between Ms Knight and Mr Knight regarding a property settlement between them, presumably arising from the breakdown of their marriage.
Relief sought
6 As part of his submissions and in a separate document, Mr Knight set out the specific orders he sought in connection with his application for interlocutory relief as follows:
(a)that the proceeding be dismissed and the further amended statement of claim be struck out due to the contraventions of the CPA;
(b)by reason of section 29(1)(e) of the CPA, the plaintiffs and their lawyers and counsel are unable to proceed with their application for summary judgment against any defendant based on the further amended statement of claim;
(c)the plaintiffs, Noble Lawyers, and counsel (Dr Wolff) pay the first defendant all her costs on a full indemnity basis and all reasonable costs (of any nature; section 29(1)(a) of the CPA) of the third defendant (sic) in relation to this proceeding to the date of these orders;
(d)that the costs awarded under order (c) be payable and enforceable immediately (section 29(1)(b) of the CPA);
(e)that the plaintiffs take all necessary steps, actions, and corrections to rectify the breaches of the CPA;
(f)Noble Lawyers be precluded from continuing to act for any of the plaintiffs in this proceeding;
(g)Dr Michael Wolff be precluded from appearing on behalf of any plaintiff in this proceeding;
(h)pursuant to section 29(1) of the CPA, any other order the court considers appropriate in the interests of justice;
(i)breaches of the Family Law Act1975 (Cth) be referred to the appropriate authorit;
(j)the law practice of Noble Lawyers, Mr Darren Noble, Mr Matthew Widmaier, Dr Michael Wolff (counsel) conduct be referred to the Commissioner as “unsatisfactory professional conduct” as defined in section 296 of Schedule 1 of the Legal Profession Uniform Law Application Act2014.
7 Mr Knight relied upon the submissions filed in support of his application. Much of the written and oral submissions focused on alleged shortcomings in the further amended statement of claim which the plaintiffs filed last year.
8 I do not propose to analyse every allegation made because they were numerous and there was an element of repetition. But I will consider the major criticisms raised.
9 Mr Knight made specific criticisms:
(a)the lawyers acting for the plaintiffs made false claims in the submissions filed on their behalf;
(b)the plaintiffs and their legal representatives contravened section 121 of the Family Law Act and therefore sections 16, 17 and 19 of the CPA;
(c)the further amended statement of claim contained allegations which were misleading, and plainly false; and
(d)the plaintiffs contravened section 26 of the CPA by not revealing all relevant documents pursuant to their discovery obligations.
False claims in submissions
10 Mr Knight alleged that the lawyers for the plaintiffs falsely claimed that there was no dispute that Ms Knight and Mr Knight received $625,000 from the plaintiffs. In his submissions, Mr Knight said that there was no evidence that he received any funds from any plaintiff. Thus, he said, the plaintiffs’ allegation was false and made without any legal basis.
11 In my view, documents in the court book suggest that there is an arguable basis for the plaintiffs’ allegation.
12 The trust account records of Macpherson Kelly Lawyers, the previous solicitors of Ms Knight, record various payments to or on behalf of Ms Knight and Mr Knight. For example, there is a payment of $491,929.17 to Champions Lawyers’ trust account as payment in satisfaction of a bankruptcy notice. It appears that Ms Knight was the subject of bankruptcy proceedings. There are payments of $24,000 and $50,000 in August and September 2014 respectively which are said to be costs and disbursements payable to Mr Knight. There is another payment of $31,405.19 as costs and disbursements to an account of Mr Knight later in September 2014. Another payment on 28 August 2014 of $21,000 is said to be the release of loan funds to Mr Knight. When one adds up these various payments and includes costs and disbursements to Macpherson Kelly of $27,665.64, the amount paid out is exactly or almost exactly $625,000.
13 Accordingly, while Mr Knight might ultimately establish that he personally received none of the moneys said to have been paid by the plaintiffs, I do not consider that the plaintiffs’ allegation is without some basis.
Family Law Act contravention
14 To allege that the plaintiffs and their legal representatives have committed an indictable offence is a serious allegation. As I understand the point, Mr Knight says that the inclusion in the court book of an order made by Judge Kelly in the Federal Circuit Court constitutes the offence. The order sets out the terms of the property settlement between Ms Knight and Mr Knight. Without more argument, I am not satisfied that preparing a court book of relevant documents in accordance with the orders of a court would constitute an offence against section 121 of the Family Law Act. In particular, I am not satisfied that referring to a court order constitutes the publication of an account of the whole or part of a proceeding in the Family Court. Nor am I satisfied that producing a court book for the court and other parties to the particular proceeding (including Ms Knight and Mr Knight who are both parties to the proceeding and persons named in the court order) constitutes publication to a section of the public.
15 As they stand, these allegations about an indictable offence do not persuade me that the plaintiffs or their legal representatives have breached sections 16, 17 or 19 of the CPA as alleged.
Further amended statement of claim
16 Mr Knight has raised numerous complaints about the further amended statement of claim. He alleges that the pleading contains statements which are misleading and deceptive, untrue, and lack a proper basis in fact. For Mr Knight, the various errors and untruths in the pleading made it incomprehensible that the plaintiffs could be allowed to rely on the further amended statement of claim.
17 Ultimately, Mr Knight might demonstrate that some or all of his allegations regarding the pleading are well founded. However, I consider there is a major obstacle to him using this argument to prevent the plaintiffs making a summary judgment application. The further amended statement of claim was the subject of debate last year, and Judge Woodward in his judgment of 30 August 2019 specifically gave leave to the plaintiffs to file and serve that amended pleading. To the extent that Mr Knight had complaints or criticisms of the pleading, he should have raised them last year before Judge Woodward when the plaintiffs applied to amend. From the documents available to me, I cannot say whether Mr Knight did so. Either Mr Knight failed to or he did so but his Honour found against him and granted the plaintiffs leave to file the amended pleading.
18 Because Judge Woodward has allowed the pleading and I cannot effectively sit as an appellate court in relation to that decision, there is strictly no need to address the specific complaints made about the further amended statement of claim. However, I will deal with a few of the complaints to examine their potential strength.
19 In paragraph 57 of the further amended statement of claim, the plaintiffs alleged that a mistake was induced by Mr Knight acting as agent on behalf of Ms Knight (who is the first defendant) or alternatively as agent for both her and the second defendant, and that he informed the second and third plaintiffs that the first and second defendants had consented to a sale and the unencumbered transfer of apartment 11 to the second and third plaintiffs.
20 Mr Knight contends that this claim is without factual basis because he never met, spoke with, corresponded with or communicated in any form with the second plaintiff in the proceeding.
21 The second plaintiff in the proceeding is Lincoln Daley. In an affidavit which he swore in this proceeding on 20 June 2019, Mr Knight says that he met Lincoln Daley in August 2014 after being introduced to him by Mr Robert Cleary. The affidavit also says that Mr Knight discussed at length the proposal to sell two apartments to Mr Daley.
22 In an affidavit sworn in this proceeding on 21 June 2019, Robert Anthony Cleary says that he introduced Lincoln to Mr Knight. He also says that Mr Knight provided a detailed overview on the proposed purchase of two apartments in the Parkdale project.
23 Further, the court book contains emails passing between Mr Knight and Mr Daley on 2 March 2018 regarding a dispute about whether Mr Knight or the mortgagee was in possession of the property and able to lawfully complete the sale.
24 Given the affidavit material and the emails, the allegation by Mr Knight appears to lack credibility.
25 Paragraph 40 of the further amended statement of claim makes a claim in reliance upon the assignment of the fourth plaintiff’s interest to the first plaintiff. Mr Knight argued that the plaintiffs and their lawyers were aware on 8 July 2019 that they had not satisfied their statutory obligations under section 134 of the Property Law Act for assignment of a debt or chose in action. Thus, he said that there was no proper basis for making the claim. This was said to affect the standing of the plaintiffs in raising their claims and breached section 18 of the CPA.
26 The plaintiffs argued that the third defendant failed to understand the application or operation of section 134 of the Property Law Act. Either the assignee can sue if notice has been given to the debtor and the assignment is complete, or the assignor can sue. But the failure to give notice does not mean that a borrower is freed from his obligations. Here, both the purported assignor and assignee were parties to the proceeding and hence, between them, they were entitled to sue.
27 Further, the plaintiffs argued that in any event, if Mr Knight had an arguable defence arising from the lack of notice, he should plead that defence and not bother with alleging now breaches of the CPA.
28 In my view, there is substance in the plaintiffs’ position which makes their claim on this point plainly arguable.
29 The thrust of many of Mr Knight’s submissions appears to be to the effect that the plaintiffs will not be able to establish the particular point alleged either as a matter of fact or due to a legal difficulty. Put generally, Mr Knight often treats a difficulty with, or anticipated failure of, proof as tantamount to a contravention of the CPA. I regard Mr Knight’s view as representing an inaccurate understanding of the legal position.
Contravention of section 26 of the CPA
30 Mr Knight alleged that the plaintiffs and their lawyers breached section 26 of the CPA by failing to disclose the existence of all documents that are or have been in their possession, custody or control. Particular reference was made to the fourth plaintiff’s loan agreement (which was later produced) and the rescission and termination notices applicable to the contracts for sale for apartments 10 and 11. Reference was also made to an affidavit by the plaintiffs’ solicitor in which he said his clients were unaware of the existence of the rescission notice or had never received the notice in question.
31 The plaintiffs dispute that two rescission notices were served upon them. Indeed, it appears from the discovery that there is only one rescission notice which has been produced, and that has been included in the court book. After the rescission notice was exhibited to the affidavit of Rex Sheppard, who swore an affidavit of behalf of the second defendant, the plaintiffs became aware of it and, recognising its relevance, included it in the court book.
Consideration
32 In summary, I am not prepared to make the orders sought by Mr Knight. I say this for several reasons.
33 First, I have significant doubts about the veracity of some of the complaints raised by Mr Knight.
34 Secondly, the relief sought in some instances is significant and far reaching. To be sufficiently satisfied that there have been material breaches of the CPA in this particular case, it would be appropriate to have a proper trial which featured witnesses giving evidence and being cross-examined so that I could make considered factual findings.
35 Thirdly, even if there had been a proper hearing and Mr Knight established some breaches of the CPA, especially in the absence of clear authority, I am not satisfied to the requisite degree that there would have been a sufficient basis to make all the orders sought. That being so, I would not stop the plaintiff’s arguing their summary judgment application against Ms Knight and Mr Knight.
36 Mr Knight referred me to no case or statute which required me to refer a legal practitioner to the Legal Services Board in circumstances similar to those in the present case. If a practitioner has conducted himself inappropriately, then I assume that a person adversely affected can make that reference. There is no necessity for the court to be involved.
37 For me to prohibit Dr Wolff or Noble Lawyers from acting for the plaintiffs would require a clearer justification than that offered in the present instance.
38 In relation to the alleged breach of the Family Law Act, if Mr Knight is concerned that an offence has been committed, he should take up the matter with the appropriate police or prosecuting authorities.
39 As Mr Knight is a self-represented litigant and someone not admitted to practise law as a barrister or solicitor, the law appears to be that he could not recover an order for professional costs against other parties to the litigation. These costs would include the costs of preparing and conducting the proceeding together with applications made before the trial. It would not apply to out of pocket expenses. However, on the material before me, I am not satisfied that any order pertaining to costs or expenses should be made in Mr Knight’s favour.[2]
[2]Dal Pont Law of Costs 3rd edition para. 7.24.
Conclusion
40 Subject to hearing further from the parties I propose to order that
(a) the third defendant’s application to prevent the plaintiffs from bringing an application for summary judgment be dismissed; and
(b) the third defendant pay the plaintiffs’ costs of and incidental to the application, including reserved costs, such costs to be taxed on a standard basis in default of agreement.