McKay v Findex Group Limited
[2022] ACTSC 191
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | McKay v Findex Group Limited |
Citation: | [2022] ACTSC 191 |
Hearing Date: | 17 February, 15 November 2021 |
DecisionDate: | 27 July 2022 |
Before: | McWilliam AsJ |
Decision: | (1) Paragraphs [5], [6] and [7] of the Statement of Claim filed 23 March 2020 are struck out. (2) The plaintiff is to file an Amended Statement of Claim on or before 31 August 2022. (3) The proceeding is to travel with SC 172 of 2020 and the matters are listed for directions as to the further case management of the proceedings on Monday 5 September 2022 at 9.30am. (4) The application is otherwise dismissed. (5) The plaintiff is to pay 80% of the defendants’ costs of the application, with such costs not to be recoverable until the conclusion of the substantive proceeding. |
Catchwords: | PRACTICE AND PROCEDURE – summary dismissal – whether a good defence disclosed – whether doctrine of Anshun estoppel applies – whether waiver operates within the adjudicative process by the deliberate act of a party in previous proceedings – where counsel communicated to a court that the plaintiff was not going to rely upon the point now raised – whether proceedings otherwise an abuse of process where same arguments are brought in separate proceedings seeking to enforce an undertaking given as to damages. PRACTICE AND PROCEDURE – strike out – whether proceedings barred by s 16B of the Limitation Act 1985 (ACT) – whether plaintiff failed to comply with s 51 of the Civil Law (Wrongs) Act 2002 (ACT) – whether damages allegation properly pleaded |
Legislation Cited: | Civil Law (Wrongs) Act 2002 (ACT) s 51 Commonwealth Constitution ss s 51, 118 Uniform Civil Procedure Rules 2005 (NSW) rr 6.1, 10.20, 10.19 |
Cases Cited: | A Goninan & Co v Atlas Steels [2003] NSWSC 956 ACCC v Jutsen (No 3) [2011] FCA 1352; 206 FCR 264 Young v Hones [2014] NSWCA 337 |
Parties: | David McKay ( Plaintiff) Findex Group Limited ( First Defendant) Spiro Paule (Second Defendant) Danielle Ludbey (Third Defendant) Phillip Hart (Fourth Defendant) |
Representation: | Counsel P.J. Dunning QC and M Karam ( Plaintiff) J. Kirk SC and M Friedgut ( Defendants) |
| Solicitors Just Dispute Resolution ( Plaintiff) Harmers Workplace Lawyers ( Defendant) | |
File Number: | SC 109 of 2020 |
McWilliam AsJ:
On 20 September 2016, an apartment in Kingston where Mr McKay (the plaintiff) resided was searched pursuant to a search order made by the Supreme Court of New South Wales days earlier on 16 September 2016 (Search Order). Computers, hard drives, telephones, USB sticks, and documents were seized and the parties to these proceedings have been litigating in various courts and jurisdictions since that time.
In this proceeding brought by Mr McKay, the dispute concerns what occurred pursuant to the Search Order. Mr McKay alleges a common law trespass against each of the parties who obtained the Search Order. Although it is not as clear from the pleading as it might have been, following the extensive argument it is apparent that the plaintiff is claiming trespass for two separate reasons:
(a)First, an allegation of procedural invalidity, in that the Search Order was not registered in the ACT before it was executed, and as further developed in argument, because there was a failure to effect proper service under the Service and Execution of Process Act 1992 (Cth) (SEPA Act); and
(b)Second, an allegation that the execution of the Search Order was an unauthorised interference with the Premises, Vehicles and Chattels (as defined in the pleading), which appears to be based on any or all of the following:
(1) Access to the apartment via the common property was unauthorised,
(2) Access in the apartment was unauthorised or by protest or permitted by mistake,
(3) An “unauthorised” security guard was involved,
(4) What was seized went beyond the terms of the order.
Mr McKay makes a general claim for damages, including aggravated and exemplary damages, in an unspecified sum.
Also travelling with this proceeding is SC 172 of 2020 (Search Order proceeding). That litigation between the parties commenced in the Supreme Court of NSW and concerned access to the material seized pursuant to the Search Order, including whether the material could be used in other proceedings: see Findex Group Ltd v iiNet Ltd [2019] NSWSC 1198 at [3]-[29] (Findex v iiNet) as to the procedural history of the dispute.
Relevantly to the arguments on the present dispute, there was no challenge in those proceedings to the validity of the Search Order or the lawfulness of the search carried out pursuant to the Search Order. On 13 March 2020, Mr McKay filed a motion seeking an order for the enforcement of the undertaking as to damages, which was given by the plaintiffs (the defendants here) on 16 September 2016. The motion also seeks an inquiry as to damages suffered by Mr McKay, various costs orders and dismissal of the proceeding. A “Points of Claim” document attached to the motion outlines the claim by Mr McKay for damages. The motion has yet to be determined. The proceeding was transferred to this Court on 1 April 2020 by consent and is awaiting the outcome of this application.
The first defendant and Mr McKay have also been involved in a dispute about whether Mr McKay was subject to a restraint of trade clause: see Findex Group Limited v McKay [2019] FCA 2129 and Findex Group Limited v McKay [2020] FCAFC 182.
To complete the litigation matrix, there are two other extant proceedings in this jurisdiction, one involving allegations of defamation made by Mr Spiro Paule (the second defendant here) against Mr McKay, and the other involving the present defendants, among others, as plaintiffs alleging that Mr McKay breached his employment contract and engaged in conduct that was misleading and deceptive in trade and commerce and in breach of statutory obligations under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and sch 2 of the Competition and Consumer Act 2010 (Cth) (CCA), known as the Australian Consumer Law (ACL). Each of those separate proceedings was also commenced in the Supreme Court of NSW and then cross-vested to this jurisdiction.
The present application
By application filed 10 June 2020, the defendants sought summary judgment or alternatively summary dismissal of Mr McKay’s Originating Claim and Statement of Claim filed 23 March 2020, or that the Claim be struck out. In the alternative, they sought that the proceedings be permanently stayed.
Detailed grounds supported by numerous particulars were included in the application. It is not necessary to set them out in their entirety here. It suffices to divide the grounds into the following primary topics:
(a) A good defence on the merits is established: no reasonable cause of action is disclosed because the search order was authorised.
(b) Waiver or Estoppel: Mr McKay has waived his right to challenge the validity of the search order or is estopped from making the argument.
(c) Abuse of Process: The proceedings are otherwise an abuse of process as they raise essentially the same issues and seek substantively the same relief as what is now sought in the Search Order proceedings.
(d) Limitation period: The claim in trespass is not maintainable by reason of s 16B of the Limitation Act 1985 (ACT) (Limitation Act) as it was brought more than three years after the date the alleged injury happened, and/or more than three years after Mr McKay knew that he suffered the injury alleged.
(e) Failure to comply with statutory pre-litigation requirements: For any claim in relation to a personal injury, s 51 of the Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act) requires the claimant to give the respondent written notice of the claim. That requirement was not complied with. Accordingly, Mr McKay is barred from proceeding with the claim in trespass.
(f) Other pleading deficiencies: The defendants also rely on various pleading points under the Court Procedures Rules 2006 (Rules) concerning a failure to state the damages claim with sufficient specificity.
The application was heard in February 2021 but not completed in the time allocated. A further hearing was originally listed for May 2021. However, orders were made in the meantime, by consent, to permit the parties to mediate the entirety of the disputes between them and their associated entities across the four proceedings extant in this Court. That process itself became drawn-out due to difficulties associated with the Covid-19 pandemic. Ultimately, the parties returned to Court on 15 November 2021 to complete their arguments on the interlocutory application.
The Court’s discretionary power to grant summary dismissal
The defendants’ application was made pursuant to r 1147 and/or r 425 of the Rules.
Rule 1147 permits the Court to enter summary judgment for a defendant if satisfied that either the claim (or part of it) is frivolous or vexatious; or there is a good defence on the merits; or the proceeding should be finally disposed of summarily or without pleadings.
Rule 425 permits the Court to strike out a pleading in whole or in part if it:
(a)discloses no reasonable cause of action or defence appropriate to the nature of the pleading,
(b)may tend to prejudice, embarrass or delay the fair trial of the proceeding,
(c)is frivolous, scandalous, unnecessary or vexatious or
(d)is otherwise an abuse of the process of the court.
Over 900 pages of evidentiary material was filed in support of the application, with extensive argument in both written and oral submissions. It is therefore important to explain the task being undertaken by the Court. Whether the proceedings ought to be dismissed or the pleading struck out occurs at a summary level.
I have set out the principles in Findex Group Limited v McKay [2022] ACTSC 192. What follows is repeated here for ease of reading. The grant of summary relief (whether in part or in whole) is a discretionary remedy, to be exercised with the utmost caution and only in very clear cases: O’Brien v Bank of Western Australia Ltd [2013] NSWCA 71 at [66]; Young v Hones [2014] NSWCA 337 at [163], citing General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-129.
A case is not to be summarily dismissed unless there is a high degree of certainty that it would fail if it were allowed to go to trial in the ordinary way: Agar v Hyde [2000] HCA 41; 201 CLR 552 at [57].
The principles applying to an application for summary judgment pursuant to r 1147 or striking out a pleading pursuant to r 425 have been set out in Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132 (Galovac)at [5] per Jagot J. Her Honour there considered a similar application pursuant to rr 425 and 1147 and helpfully collected the leading authorities from which the principles guiding the exercise of the Court’s discretion have emerged at [5]:
There was no dispute about the principles that apply:
(1) The party seeking summary judgment faces a “very high threshold” (Financial Integrity Group Pty Limited v Farmer[2009] ACTSC 143 at 12).
(2) The lack of a cause of action must be “clearly demonstrated” (General Steel Industries Inc v Commissioner for Railways (NSW)[1964] HCA 69; (1964) 112 CLR 125 at 129).
(3) The procedure calls for “exceptional caution” (General Steel at 129).
(4) The necessity for argument, even extensive argument, is no bar. However, as soon as it appears that there is a “real question” to be determined on which relief depends, the summary judgment procedure is not available (General Steel at 130 citing Dey v Victorian Railways Commissioners[1949] HCA 1; (1949) 78 CLR 62 at 91).
(5) Mere implausibility of the claim or improbability of success is insufficient; there must clearly be no real question to be tried in the sense that the claim is bound to fail (Seven Network Ltd v News Ltd (No 4)(2005) 214 ALR 686; [2005] FCA 244 at [14] citing Lonrho Plc v Fayed (No 2) [1992] 1 WLR 1 (Ch D) at 5; [1991] 4 All ER 961 at 965).
(6) The application is to be assessed on the assumption that every fact pleaded by the plaintiff is true (West v New South Wales[2007] ACTSC 43 at [9]).
(7) The application must be determined on the substance, not the mere form or expression, of the claim (Financial Integrity Group at [15]).
The principles set out in Galovac are well-established, and have been reiterated by this Court in numerous cases including: Commissioner for ACT Revenue v Arcidiacono t/as Rose Cleaning Service [2017] ACTSC 379 at [18] per Murrell CJ; McColley v Commonwealth of Australia [2014] ACTCA 21 at [31] per Murrell CJ, Refshauge and Penfold JJ;and Bolas v Calvary Healthcare Limited [2016] ACTSC 58 at [1] per Mossop AsJ (as his Honour then was).
From these principles, for the defendants to succeed on a summary basis, clearly there is a very high threshold. The Court must be satisfied the claim is obviously untenable, in that there must be a high degree of certainty that there is no real prospect of success on all or part of the plaintiffs’ claim. The application is assessed on the substance, not the form or expression of the claim.
Issue 1: Is there a good defence on the merits?
The plaintiff’s pleaded case was further explained during the hearing, so that it became clear that there were two causes of action in trespass for the defendants to address on the application for summary dismissal: one concerning the validity of the Search Order itself, and the other dealing with how it was executed – who was permitted to be there, what time it commenced, how access to the apartment was gained, and what was seized.
In respect of the latter claim, on the pleading that had been filed, it only arose as an aspect of Mr McKay’s claim for aggravated and exemplary damages. During the hearing, Mr McKay clarified that the manner in which the search was conducted was also an actionable trespass of itself. The defendants appropriately conceded that was a triable issue (that is, it involved disputed questions of fact or otherwise a serious issue to be tried about the consequences of established facts), which – if properly pleaded – was not amenable to summary dismissal on this discrete ground.
Trespass based on the Search Order itself being invalid or ineffective
The Originating Claim pleads that the Search Order was issued and then the following allegations are pleaded:
5. The NSW Search Order was not registered with or otherwise reviewed, approved, endorsed, proved, authenticated or sealed by the Australian Capital Territory Supreme Court prior to it purportedly being enforced by the defendants in the Australian Capital Territory (ACT).
6. Further, the defendants did not obtain an order in like terms to the NSW Search Order pursuant to Subdivision 2.9.4.3 of the Civil Procedure Rules 2006 (ACT) from the Australian Capital Territory Supreme Court.
7. As a consequence of the matters alleged in paragraphs 5 and 6 above, the defendants had no lawful entitlement to engage in the activities in the ACT contemplated by the terms of the NSW Search Order.
Subdivision 2.9.4.3 of the Rules deals with the procedures for obtaining a search order in the Territory.
Extensive argument was devoted to establishing that there can be no argument about the lawful authority or validity of the Search Order in question. However, the key points upon which the defendants relied can be reduced to two simple statements: the Search Order has never been set aside and must therefore be treated as valid, and it was made in the exercise of federal jurisdiction which enabled it to be executed in the ACT without any other step, such as registering it or obtaining an order in like terms in the Supreme Court of the ACT.
First, it was argued that the Search Order was a binding order of a superior court of record. It has been firmly established that the orders of such a court are valid and binding unless and until set aside, even if the orders were made in excess of jurisdiction. The defendants relied upon New South Wales v Kable [2013] HCA 26; 252 CLR 118 (Kable) at [32]; Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; 225 CLR 36 (Berowra Holdings) at [11]; Dowling v Prothonotary of the Supreme Court of New South Wales (2018) 99 NSWLR 229 (Dowling) at 225-256 [116]; Harrison v President of the Industrial Court of Queensland & Ors [2016] QCA 89; (2017) 1 Qd R 515 (Harrison) at [112].
The second reason was that because the Search Order was based upon both a federal cause of action as well as a non-federal cause of action, in making the Search Order, the NSW Supreme Court was duly exercising federal jurisdiction. The defendants relied upon LNC Industries Limited v BMW (Australia) Ltd (1983) 151 CLR 575 at 581 [7]; Felton v Mulligan (1971) 124 CLR 367 at 408 (Felton) as support for that proposition.
As a consequence, the Commonwealth of Australia was the law area and the ACT fell within that area: see John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; 203 CLR 503 at [2], [52]-[53]. The complaint about failure to register the Search Order in the ACT or the necessity to obtain an order in like terms pursuant to Part 2.9.4.3 of the Rules was therefore misconceived as it was based on an erroneous understanding of the jurisdiction being exercised by the NSW Supreme Court when the Search Order was made.
The defendants also relied upon a further argument in respect of the validity of the Search Order, based on s 118 of the Commonwealth Constitution. They submitted that full faith and credit must be given to the order of the NSW Supreme Court. It precludes the courts of one state from declining to apply the law of another state. That obligation arises even if they consider that the proceedings or order was tainted by a want of jurisdiction or a denial of natural justice. Again, the defendants relied upon the authorities of Kable, Berowra Holdings, Dowling and Harrison.
Separately, the defendants traversed the provisions of the SEPA Act and argued that the statute did not apply to the Search Order that was made, but even if it did, the provisions of service were complied with.
In response, Mr McKay did not dispute that he did not take steps to set aside the Search Order with the result that it remains an order of a superior court of record.
His argument focused on the following:
(a)A challenge to whether federal jurisdiction was in fact being exercised, because the anticipated cause of action pursuant to the ACL was against an individual not a corporation. Section 131(1) of the CCA provides that the ACL only applies to corporations. Accordingly, Mr McKay submitted the cause of action arose not under the Commonwealth statute, but under the State and Territory implementations of the ACL.
(b)A failure to comply with the requirements of the SEPA Act. In particular, Mr McKay complains about the motion by which the search order was sought not having attached to it a notice under the SEPA Act, and therefore not being validly served.
(c)To the extent that the defendants also relied upon s 118 of the Commonwealth Constitution, there was a serious question to be tried as to whether that section founded immediate execution of the Search Order, as opposed to requiring a court to whom an application for leave to execute is made to grant such leave. In that regard, Mr McKay drew attention to the comments of Mason CJ in Breavington v Godleman (1988) 169 CLR 41 at 93 to the effect that s 118 is not to be regarded as a special command that State laws should be recognised. That function is left to Commonwealth legislation pursuant to s 51(xxv) of the Constitution. Mr McKay also drew attention to the presence of penal consequences in a procedural order as raising uncertainty about the execution of the Search Order in the ACT arising from a matter in the NSW Supreme Court.
Determination
The Search Order was not set aside. Because of that fact, I accept that on the authorities cited, it was unarguably a valid order and the plaintiff cannot by collateral proceedings attack the order itself.
However, Mr McKay’s complaint is really directed to the next stage of whether the defendants were required to take any further steps, either by registration of the Search Order in this Court or by complying with the requirements of the SEPA Act before executing the Search Order.
The defendants relied upon the Search Order being made in federal jurisdiction as the first and complete answer to those complaints. Mr McKay is correct in submitting that s 131(1) of the CCA applies the ACL as a law of the Commonwealth to the conduct of corporations. Cases such as Banks v Galea [2019] FCA 986 have considered that issue on a summary basis (see at [10]-[13]) and, without more, there may have been an argument to be had about the exercise of jurisdiction. The defendants relied on cases to the contrary, such as Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279, where Katzmann J at [14] referred to the scope of s 18 of the ACL as now extending to both corporations and natural persons, but those authorities are sufficient to establish an arguable point about federal jurisdiction, if that were the only section of the CCA dealing with the application of the ACL.
However, there are three additional matters, each of which I consider to be beyond argument, and the combination of those matters means that I am satisfied there can be no issue about federal jurisdiction being exercised by Rein J on 16 September 2016 when his Honour made the Search Order.
The first is that s 6(3)(a) of the CCA, insofar as it is relevant to the present dispute, extends the operation of the ACL to apply to persons who are not corporations in certain circumstances, including where the conduct involves the use of telegraphic or telephonic services. The material parts of the section are as follows:
(3) In addition to the effect that this Act, … the provisions of Parts 2-1, … of the Australian Consumer Law have, by force of this subsection, the effect they would have if:
(a)those provisions …were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast; and
(b) a reference in the provisions of Part XI to a corporation included a reference to a person not being a corporation.
Section 18 of the ACL (being the misleading and deceptive conduct provision relied upon) falls within Part 2.1. Section 131 of the CCA is located within Part XI of that statute. Those words are unambiguous.
I do not consider there can be any argument that telegraphic or telephonic services includes the use of the internet or social media to transmit and receive electronic communications. That has been a matter about which it has been held judicial notice can be taken: see ACCC v Jutsen (No 3) [2011] FCA 1352; 206 FCR 264 at [100]. See also ALDI Foods Pty Limited as General Partner of ALDI Stores (a Ltd Partnership) v Transport Workers' Union of Australia [2020] FCA 269 at [9] and the cases there-cited.
The second is that I accept the defendants’ submission as to the established law being that once a matter is within federal jurisdiction, it retains that character even if the claims giving rise to the federal jurisdiction asserted are later withdrawn or defeated: See A Goninan & Co v Atlas Steels [2003] NSWSC 956 at [49], citing among others, Felton where Barwick CJ stated at 373:
…if federal jurisdiction is attracted at any stage of the proceedings, there is no room for the exercise of State jurisdiction which apart from any operation of the Judiciary Act the State court would have had.
The third is that the basis on which Rein J made the Search Order is not in dispute because his Honour delivered an ex tempore judgment under the pseudonyms (FGL v HNL (Supreme Court of New South Wales, Rein J, 16 September 2016) expressly dealing with the issue:
[3] The publications are disparaging of the first plaintiff and defamatory of the second, third and fourth plaintiffs on the plaintiffs’ case. The first plaintiff claims that the statements made by the author are misleading and deceptive within the meaning of s.18 of the Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law).
[4] The plaintiffs believing, and for good reason, that the aliases were aliases used by a former employee of the plaintiff, sought and obtained preliminary discovery from service providers and a social media organisation by which it has ascertained the true identity of the publisher, who, as it has turned out, is the author.
The reference to the federal statute is clear. The use of the internet is also made clear by the reference to the preliminary discovery obtained from service providers and a social media organisation.
The parties made further submissions disputing what was submitted by counsel or what followed as to the causes of action that were formally brought, however it is unnecessary to go further than the reasons of Rein J as to the nature of the jurisdiction being exercised at the time the Search Order was made.
Bringing those matters together, the law is clear that the CCA and the ACL apply as a law of the Commonwealth to individuals where the conduct in question involves the use of telegraphic or telephonic services. The law is also clear that once federal jurisdiction is attracted, it is not lost by subsequent events. In light of the facts of what caused Rein J to make the order, as set out above, the conclusion that Rein J was exercising federal jurisdiction cannot be disputed.
That conclusion means that it is unnecessary to express any view about the operation of the r 2.9.4.3 of the Rules, the SEPA Act or s 118 of the Constitution. Had such consideration been required, I will briefly record that I would have found that each of those aspects of the dispute did not give rise to a conclusion that was beyond argument and the claim was therefore not amenable to summary dismissal if either of those reasons were the foundation.
If I am wrong on the above conclusion in terms of surpassing the very high threshold for summary determination, and it is held to the contrary that there was a serious question to be tried as to whether the Search Order was made in the exercise of federal jurisdiction, it makes no difference in light of the reasons below on waiver and estoppel.
Issue 2: Should the claim be dismissed on the basis of estoppel or waiver?
The defendants relied on estoppel or waiver in respect of both allegations of trespass (being the validity/procedural deficiencies and the conduct involved in executing the Search Order).
For each aspect of the trespass claim, the defendants argued that the plaintiff waived any rights he may have had because of the way that the Search Order proceeding was conducted, and in particular because counsel for Mr McKay had been given the opportunity to challenge the Search Order itself and had indicated that there would be no challenge.
The defendants also relied on Anshun estoppel, submitting that any complaints about the registration or service of the Search Order prior to execution, or about conduct of the search itself, were matters so relevant to the Search Order proceeding that it was unreasonable not to raise them in that proceeding, and instead hold back those complaints for a separate cause of action in trespass.
Mr McKay’s response to these claims was to submit:
(a) That the issue of any alleged waiver or Anshun estoppel cannot be resolved on a summary basis, given a number of factual disputes between the parties. A lengthy list of disputed facts was provided in the submissions.
(b) That the occasion to challenge how the documents were obtained did not arise because the defendants did not seek to adduce any of the seized documents in evidence in support of any cause of action. The Search Order proceeding only progressed as far as a dispute concerning access to documents and release of the implied Harman undertaking.
(c) In that regard, s 138 of the Evidence Act 2011 (ACT) relevantly provides that evidence obtained “improperly or in contravention of an Australian law…must not be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.”
The opportunity for Mr McKay to seek to exclude the evidence by operation of that section never arose.
I will deal with each in turn.
Is the allegation of failure to properly serve or otherwise register the Search Order precluded by waiver or estoppel?
Waiver is not a particular legal concept or doctrine. It is the result of the application of other principles, or the description of what has been done in other circumstances: see Commonwealth v Verwayen (1990) 170 CLR 394 (Cth v Verwayen) at 406 per Mason CJ and 451 per Dawson J.
In the same case, and relevant to the circumstances under consideration here, Toohey J (who was one of two judges who were in the majority of four and who decided the point on the basis of waiver) stated at 472, 473:
In this appeal, we are concerned with waiver as it exists within the adjudicative process. It is commonplace to speak of a person “waiving” a right, for instance, …by not taking advantage of some irregularity in proceedings or by not pressing a particular argument that is available at trial.
…
Waiver, in the sense used for the purposes of this appeal, may be found in the deliberate act of a defendant not to rely upon a defence available to him.
Toohey J went on to find at 474 that the unequivocal renunciation of a defence available to and for the benefit of a party constitutes waiver of that party’s right to reply upon that defence. Waiver in that sense was not capable of being withdrawn.
Again in the same case, and also forming part of the majority, Gaudron J stated at 484:
A party to litigation will be held to a position previously taken (that position having been intentionally taken with knowledge) if, as a result of that earlier position, the relationship of the parties has changed.
By contrast, Anshun estoppel is a doctrine or a legal concept. At its core, Anshun estoppel precludes a party from relying upon a cause of action or an issue if it was “so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it”: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589 (Anshun) at 602; see also Timbercorp Finance Pty Ltd v Collins [2016] HCA 44; 259 CLR 212 (Timbercorp) at [56]; Clayton v Bant [2020] HCA 44 (Clayton) per Edelman J at [70].
Generally, an Anshun estoppel arises where the new claim if it succeeds will result in a judgment which conflicts with an earlier judgment: Robinson v Deep Investments Pty Ltd [2018] FCAFC 232; 364 ALR 305 at [122], citing Timbercorp at [60].
A more expansive discussion of when such estoppel arises and who might be subject to it has been set out for the purposes of dealing with a different interlocutory dispute between the parties: see Findex Group Limited v McKay [2022] ACTSC 192 at [37]-[50]. The above general statements of the principle suffice for what follows here.
As submitted by the defendants, during the course of the first return of the Search Order on 22 September 2020, counsel on behalf of Mr McKay sought an adjournment to consider whether to make an application to set aside or vary the orders. Among the reasons why that was sought included to give consideration to the question that the Court did not have jurisdiction to issue a search order.
The transcript of what occurred before Rein J is telling. The relevant passages, submitted by counsel for Mr McKay, are as follows:
The second point is the jurisdictional point and your Honour I can state that pretty summarily. The orders of your Honour’s were not registered in the ACT prior to being enforced. I simply flag that as something that has been raised.
…
The complaint is made with reference to s 105 of the Service and Execution Act which requires registration of …[the] orders of enforcing.
Counsel for Mr McKay then indicated that if an application to set aside were to be brought, it would be brought promptly. The proceedings were adjourned for consideration of those issues (among others) and the legal representatives for Mr McKay on 23 September 2016 confirmed in writing to both the defendants and the Court that they would not be applying to set aside the Search Order.
A protracted procedural history of that litigation then ensued, with multiple judgments delivered. It was set out in detail in Findex v iiNet at [3]-[30]. What is important for the present issue is that the parties proceeded on the basis that when Mr McKay was joined as a party to the proceedings on 23 September 2016, there was no issue about proper service or registration of the Search Order in the ACT taken by him. Further, it is clear that there was active consideration given to those issues and either forensic or strategic decisions were taken not to pursue them. To use the words of Gaudron J in Cth v Verwayen, it was a position taken by Mr McKay intentionally and with knowledge (see 484).
The plaintiff has relied upon a number of “disputed facts” as supporting the case against summary dismissal, but as far as I have been able to discern, none of them touch upon disputing what occurred in the Search Order proceeding and the unequivocal position taken by counsel that the point was not going to be taken, or the asserted irregularity was not going to be pressed, as has been set out above.
Although, as the plaintiff here submitted, that proceeding has not concluded, there have been a series of judgments in the NSW Supreme Court finally disposing of rights between the parties in terms of access, public interest immunity and the question of whether the defendants ought to be released from the Harman undertakings impliedly given in the course of those proceedings. Thus, even on waiver as explained by Gaudron J, the threshold point was so fundamental that it may be said the positions of the parties were altered by the judgments given.
Each of those judgments proceeded on the uncontested basis of valid service of the Search Order upon the plaintiff and the order being effective to found the seizure of the documents without separate registration in the ACT. If that aspect of the plaintiff’s claim were to proceed on a separate cause of action brought in trespass and Mr McKay were to succeed on it, the result would be a judgment which conflicts with the underlying premises of those earlier judgments.
Quite apart from Mr McKay’s legal representatives clearly having given consideration to service and registration and expressly indicating there would be no challenge, the same conclusion is reached by the operation of the applicable procedural rules.
Mr McKay was joined as a defendant and thus became a party to the Search Order proceeding on either 22 or 23 September 2016, after the search had been carried out. Rule 6.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides that a party may not take a step in a proceeding, including any appearance in court unless they have entered an appearance in the proceedings. An appearance was entered on 23 September 2016.
Rule 10.20(5) provides that a defendant who enters an appearance is taken to have been personally served with the relevant originating process on the date on which the appearance was entered.
Rule 10.19 deals with waiver of objection to service in the following terms:
A party who files a document in reply to a document alleged to have been served on that party is taken to have waived any objection to the fact or manner of service unless he or she files and serves notice of the objection together with the document so filed.
In October 2016, Mr McKay filed a notice of motion seeking to prevent access to the documents seized following service of the Search Order. He did not at that stage serve a notice of objection to the service of the Search Order. Even without counsel’s communication that no point would be taken about service or a lack of registration in September 2016, in my view, r 10.19 would have operated as a waiver of any objection.
Whether the adoption of such a procedural course is described as waiver or whether it is viewed as being subject to Anshun estoppel, I consider that either he should be held to the procedural course patently adopted in that proceeding or that those matters were clearly so relevant to the subject matter of the Search Order proceeding, including how it progressed and what judgments followed as a consequence, that it was unreasonable for Mr McKay not to pursue them when the opportunity to do so was given.
The position is so clear in this regard that I am persuaded it is appropriate to find on a summary basis that Mr McKay is precluded from challenging those aspects of the Search Order in this subsequent proceeding based in trespass.
However, that does not mean that summary dismissal of the entire cause of action follows, because I have reached a different view in respect of the other limb of the cause of action.
Is there waiver or estoppel in respect of the complaint that the defendants’ conduct went beyond what was authorised by the Search Order, including the manner in which the search was carried out, who participated and what was seized from the apartment?
Applying the same principles as those set out above, this aspect of Mr McKay’s complaint is affected by facts which are disputed regarding whether the defendants exceeded the terms of the Search Order. Areas of factual controversy raised (without being exhaustive) include what role the security guard played, what occurred in the apartment, how the search was conducted through those defined as the “search party” and what fell within the terms of the order.
I also accept Mr McKay’s point that there is a dispute about the effect of his decision not to contest the validity or service of the Search Order. Mr McKay submitted that he had never conceded or accepted that the execution of the Search Order was authorised. I agree it is arguable that the procedural course adopted in the Search Order proceeding from September 2016 did not extend to an acceptance of the manner in which the Search Order was executed, insofar as the additional complaints about what occurred are now made in a later cause of action.
The reasonableness or otherwise of raising those matters by way of a defence in the Search Order proceeding is also arguable so as to preclude any finding on a summary basis as to the application of Anshun estoppel.
Accordingly, the cause of action in trespass remains a triable action, but only on the second basis developed during the hearing.
Issue 3: Is the claim an abuse of process by virtue of parallel proceedings?
The court has an inherent power to prevent misuse of its procedures in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair or unjustifiably oppressive to a party to litigation before it, or otherwise bring the administration of justice into disrepute: Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529at 536; Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507 (Tomlinson) at [24]-[26]; UBS AG v Tyne [2018] HCA 45; 265 CLR 77 at [126].
What amounts to an abuse of process is impossible to comprehensively define: Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; 226 CLR 256 at [9]. It is capable of applying in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute: Tomlinson at [25].
It is not sufficient to say that the claim could have been litigated. As stated in UBS v Tyne at [119]:
The crucial question is whether, in all the circumstances, a party is misusing or abusing the process of the court. And the determination of that question calls for a "broad merits-based approach" of which one relevant factor is reasonable diligence.
The Court also takes into account of the objectives of the civil procedure rules: UBS AGv Tyne at [38]-[39]; Securum Finance Ltd v Ashton [2001] Ch 291 by Chadwick LJ at [34].
Competing arguments of the parties
The defendants argued that they should not be vexed by two proceedings raising essentially the same issues. That is a classical type of abuse of process as reflected in the authorities referred to above. The Points of Claim document that is attached to the motion being pursued in the Search Order proceeding (now SC 172 of 2020) raises overlapping issues in alleging that the search was conducted in a manner that exceeded authority and caused distress.
If there was any trespass, then it should be pleaded as part of the claim on the undertaking as to damages, rather than as a separate proceeding.
Mr McKay submitted that although the allegations in this proceeding and in the Search Order proceeding do overlap, there are differences and one is that declaratory relief is sought in this proceeding, which could not be obtained in the motion that seeks enforcement of the undertaking. It was submitted that the reason the Search Order proceeding was cross-vested to the Territory was to deal with any abuse of process issues, and with a view to the two proceedings travelling together.
Determination
When the Statement of Claim in the present proceeding is compared with the Points of Claim attached to the motion in the Search Order proceeding there is no doubt that the issues substantially overlap. However, due to the way in which the cause of action in trespass is presently pleaded, it is unclear as to what is actually said to amount to the trespass (an issue to which I will return below), and whether the same conduct is pleaded as the breach of the undertaking.
I agree that the defendants should not be twice vexed, but the appropriate way to avoid that result is for the matters to be ordered to travel together until there is sufficient clarity in the pleading and the parties are able to understand whether it really is the case that the declaration sought here could not also be made in the Search Order proceeding, in substance if not in the same form.
At this interlocutory stage, I am of the view that case management directions may alleviate much of the abuse alleged by the defendants, in that orders may be made (for example) for the proceedings to be heard and determined together, with evidence in one proceeding being evidence in another.
That leads me to conclude that it is not appropriate to summarily dismiss or stay the proceeding for abuse of process, at least until the clarity brought by any amended pleading here is achieved.
Issue 4: Is the claim statutorily barred by the operation of the Limitation Act?
Mr McKay’s pleading currently seeks a declaration that the search on 20 September 2016 was unlawful, damages for trespass of the premises, vehicle and chattels (as defined in the claim) plus interest on that sum and aggravated and exemplary damages.
Paragraphs [20]-[22] of the current pleading are as follows (emphasis added):
20. The execution of the NSW Search Order was an unauthorised interference with the Premises, Vehicles and Chattels.
21. The defendants’ unauthorised interference with the Premises, Vehicles and Chattels was intentional or negligent.
22. The plaintiff suffered loss and damage as a result of the unauthorised interference with the Premises, Vehicles and Chattels, including severe psychiatric injuries.
Those paragraphs have caused the defendants to raise s 16B of the Limitation Act 1985 (ACT) (Limitation Act) which provides:
(1) This section applies to a cause of action for damages for personal injury other than a cause of action to which section 16, section 16A or section 16AA applies.
(2) The cause of action is not maintainable if brought—
(a)if the injury is or includes a disease or disorder—3 years or more after the day the person injured first knows—
(i) that the person has suffered an injury that is or includes a disease or disorder; and
(ii) that the injury is related to someone else's act or omission; or
(b)in any other case—3 years or more after the day the injury happened.
The causes of action referred to in s 16, 16A and 16AA of the Limitation Act concern compensation to relatives, workers compensation and motor vehicle accidents. They are immaterial here.
The Wrongs Act defines personal injury broadly to mean bodily injury. Section 35(1) of the Wrongs Act provides that damages must not be awarded for pure mental harm to a person resulting from negligence unless the harm consists of a recognised psychiatric illness. Chapter 5 deals with pre-court requirements for personal injuries claims, and within that chapter, s 50(1) provides that the chapter applies to “all claims for damages for personal injury”.
The plaintiff argued that a claim for personal injury damages was not pleaded, and that a trespass claim is actionable per se, without the plaintiff needing to demonstrate loss or damage. While the elements of trespass are not controversial, the fact is that applying those statutory definitions to the allegations pleaded at [20]-[22] of the claim, there is a claim pleaded for damages for personal injury, as severe psychiatric injury has been pleaded as part of the harm suffered “as a result of the unauthorised interference”.
It is appreciated that the reference in [21] of the claim to intentional or negligent conduct is language deliberately chosen by reference to the expression of the principle in Halliday v Nevill (1984) 155 CLR 1 (Halliday) at 10 that an action in trespass requires no finding of damage or harm to the plaintiff. In separately addressing pleading deficiencies raised by the defendants, the plaintiff drew the Court’s attention to Fanigun Pty Ltd v Woolworths Ltd & Anor; Woolworths Ltd v Fanigun Pty Ltd & Anor [2006] QSC 28; 2 Qd R 366 per Mullins J (as her Honour then was) at [90], which commences:
A trespass is constituted by an unjustified entry directly by a person on land in the possession of another which is carried out either intentionally or negligently: Halliday v Nevill [1984] HCA 80; (1984) 155 CLR 1, 10. A tortfeasor may be liable for trespass on the basis of having authorised or instigated others to commit the trespass for the tortfeasor: Doolan v Hill (1879) 5 VLR 290, 291.
However, even if the conduct is understood as limited to trespass using the language of Halliday, the limitation provision of s 16B would have applied to the plaintiff’s claim for “severe psychiatric injury”. That provision goes broadly to all claims for damages for personal injury, however that injury was occasioned (provided it is not captured by ss 16, 16A or 16AA) and thus covers causes of action such as trespass.
Given the plaintiff’s unequivocal confirmation that he does not make any claim for damages for personal injury it will be necessary for the plaintiff to clarify what is meant by the damages claimed for psychiatric injury. It may be that what the plaintiff was intending to plead were consequences of a kind pertaining to humiliation, embarrassment, distress, stress, and/or indignity as a result of trespass. Whatever the intended allegation, once the ambiguity about any claim for personal injury damages is removed, the reliance on the limitation period as being a ground for summary dismissal of that aspect of the plaintiff’s claim falls away.
Issue 5: Is the claim unable to be maintained without compliance with s 51 of the Civil Law (Wrongs) Act 2002 (ACT)?
The plaintiff’s clarification that no claim for personal injury damages was intended to be made also disposes of the defendants’ complaint that the prescribed pre-litigation procedures were not complied with.
Section 51(1) of the Wrongs Act provides:
Notice of claim
(1)Before a claimant brings a proceeding against someone else (a respondent ) based on a claim in relation to a personal injury, the claimant must give the respondent written notice of the claim.
There is no dispute that written notice of the claim did not occur in this case. Section 59 provides for the following consequences:
Claimant's failure to give complying notice of claim
(1) If a claimant does not give a complying notice of claim, the claimant cannot proceed further with the claim unless—
(a) the respondent to whom notice of the claim was purportedly given—
(i)has given the claimant a written notice to the effect that the respondent is satisfied the notice is a complying notice of claim or the claimant has taken reasonable action to remedy the noncompliance; or
(ii)is presumed, under section 54 (3) (Respondent's response to notice of claim), to be satisfied the notice is a complying notice of claim; or
(b) the respondent has waived any noncompliance; or
(c) the court, on application by the claimant—
(i)declares that the claimant has remedied the noncompliance; or
(ii)authorises the claimant to proceed further with the claim despite the noncompliance.
(2) An order of the court under subsection (1) (c) may be made on conditions the court considers necessary or appropriate to minimise prejudice to a respondent from the claimant's noncompliance.
Had there been a claim for personal injury damages, the operation of ss 51 and 59 would not have been fatal to the plaintiff’s claim. Rather, an application in proceeding would have been required for authorisation to proceed despite the noncompliance.
However, as the plaintiff has eschewed any cause of action giving rise to these statutory obligations, the issue no longer arises.
Issue 6: Other pleading deficiencies
The remaining issues argued by the defendants were not relied upon as founding summary dismissal but were relevant to the alternative relief sought, namely that the claim be struck out.
In the defendants’ application in proceeding, the only deficiencies specified were directed to the damages claimed, and an asserted failure to state both the nature of the loss or damage suffered and the circumstances in which it was suffered. The complaint was that paragraph [22] of the claim (set out above) contains a rolled up and broad assertion with no particulars. I accept that the damages allegation has not been properly pleaded for the reasons submitted by the defendants. That paragraph will be struck out.
That result is not fatal to the entire Claim, because, as the plaintiff submitted, damages is not an essential element of the tort of trespass and declaratory relief has been separately sought.
Otherwise, the oral argument during the hearing traversed a broader range of deficiencies, two of which included an asserted deficiency in disclosing how the conduct pleaded gave rise to the vicarious liability of the defendants, and an asserted lack of proper articulation as to how it was said that the means by which the search party and security guard arrived at the front door of the plaintiff’s premises to execute the Search Order constituted a trespass of the premises itself.
The plaintiff was reluctant to fully engage with the pleading deficiencies raised orally by the defendants. His counsel evocatively argued that it was like “[wrestling] with a bowl of custard” because the rationale on which the pleading points were raised was not a stable one.
The plaintiff indicated that the preferable course was for the question of summary dismissal to be determined and for the parties to be given an opportunity to deal with the pleading issues through correspondence and in any amended pleading.
The plaintiff’s proposed course should be adopted for a combination of reasons. The additional deficiencies were not formally raised, but more significantly, the findings above mean that the Originating Claim will require amendment in a substantial way, as the plaintiff’s claim in trespass going forward will be on a more limited basis. In repleading the case, that may address the other arguments raised by the defendants.
Although as a consequence none of the additional deficiencies raised will give rise to any paragraphs being struck out, with a view to avoiding further litigation on any amended pleading and having received developed oral arguments from the parties on the present pleading, I will briefly make two observations.
First, there are difficulties with the way the second limb of the cause of action is presently pleaded. The only place where it is alleged that the terms of the Search Order were exceeded is in particulars to an allegation that “aggravated and exemplary damages are justified”. Paragraph [20] pleads that the execution of the Search Order was an unauthorised interference with the Premises, Vehicles and Chattels (as defined in the pleading) but nowhere is it set out what aspect of the “execution” is relied upon, even if merely to cross-reference the conduct alleged to be such an interference to other facts alleged in the pleading.
Second, the vicarious liability of the defendants for actions of the search party and the security guard may also need to be revisited in light of the above reasons. Mr McKay submitted that the vicarious liability alleged was clear, basing that submission on:
(a)Paragraph 4 of the claim, and the allegation that the Search Order “purport[ed] to allow them on the conditions set out in the order to enter and search those parts of the Premises.”
(b)Paragraph 9 of the claim, and the allegation that the Search Order was “executed… by the defendants’ agents… including …the Independent Solicitor and an unauthorized person, Mr Neil Chambers (the Security Guard).”
It was submitted that because the conditions of the Search Order included the nominated search party, and the members of the search party and Mr Chambers were pleaded as agents, it was sufficiently clear that Mr McKay was making an allegation of the kind referred to in Doolan v Hill (1879) 5 VLR 290 (see [94] above), in that an action in trespass is available against a person who authorized others to commit the tort on its behalf.
Following these reasons, the claim will only be permitted to proceed on the basis that the Search Order was valid and properly served. The plaintiff may need to more specifically address the “unjustified entry” that is the trespass said to have been authorised by the defendants.
Conclusion and Orders
It will be apparent from the conclusions in respect of each of the grounds of the application that summary dismissal of the entire Claim is not appropriate. However, the defendants have been substantially successful in relation to summarily disposing of the first limb of the cause of action currently pleaded. Those paragraphs which plead a cause of action based on invalidity, lack of registration in the Territory, or failure to properly serve the Search Order will be struck out and the Claim will otherwise need to be repleaded to give effect to the reasons above. No leave is required to replead as the pleadings have not yet closed (a defence is yet to be filed). Accordingly, r 505 of the Rules operates.
In relation to costs, I consider the defendants have been substantially successful, but that the Court declining to grant the full extent of the relief sought should be reflected in a proportionate exercise of the Court’s discretion on costs.
The orders of the Court are as follows:
(1) Paragraphs [5], [6] and [7] of the Statement of Claim filed 23 March 2020 are struck out.
(2) The plaintiff is to file an Amended Statement of Claim on or before 31 August 2022.
(3) The proceeding is to travel with SC 172 of 2020 and the matters are listed for directions as to the further case management of the proceedings on Monday 5 September 2022 at 9:30am.
(4) The application is otherwise dismissed.
(5) The plaintiff is to pay 80% of the defendants’ costs of the application, with such costs not to be recoverable until the conclusion of the substantive proceeding.
| I certify that the preceding one hundred and sixteen [116] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam Associate: Aislinn Grimley Date: 27 July 2022 |
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