Morris v Whitehorse City Council
[2023] VSC 336
•19 June 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROFESSIONAL LIABILITY LIST
S ECI 2023 00450
BETWEEN:
| MARK MICHAEL JAMES MORRIS | Plaintiff |
| v | |
| MUNICIPAL BUILDING SURVEYOR FOR THE CITY OF WHITEHORSE & ANOR (according to the attached Schedule) | Defendants |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 5 June 2023 |
DATE OF JUDGMENT: | 19 June 2023 |
CASE MAY BE CITED AS: | Morris v Whitehorse City Council |
MEDIUM NEUTRAL CITATION: | [2023] VSC 336 |
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JUDGMENTS AND ORDERS — Claims of negligence, unconscionable conduct, misfeasance in public office, and deprivation of natural justice — Failure to file a defence within time specified by the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) — Default judgment regularly obtained — Defendants’ application to set aside default judgment pursuant to r 21.07 of the Rules — Relevant principles — Kostokanellis v Allen [1974] VR 596 and JRC Enterprises Pty Ltd v Zoomlion Australia-New Zealand Pty Ltd [2013] VSC 646 referred to — Default judgment set aside — Claim brought against incorrect defendant —Comments upon adequacy of the statement of claim — Leave to file an amended statement of claim granted.
APPEARANCES: | Counsel | Solicitors |
| The Plaintiff in person | ||
| For the Defendants | Ms A J Golding | Minter Ellison |
HER HONOUR:
These reasons concern an application by the defendants in this proceeding to set aside an interlocutory default judgment obtained by the plaintiff on 28 March 2023 against the defendants for damages to be assessed (‘default judgment’).
The plaintiff is a resident of Surrey Hills, which falls within the municipal boundaries of the City of Whitehorse. The first defendant is a statutory officer responsible for, among other things, enforcing provisions of the Building Act 1993 (Vic) (‘Building Act’) in the municipality. The second defendant is the Whitehorse City Council (‘Council’), which is, among other things, the local planning authority, and the employer of the person who occupies the office of the first defendant from time to time.[1]
[1]The defendants complain that the Municipal Building Surveyor is not a person or a legal entity. I agree, but that defect in the way in which the proceeding is constituted can be easily remedied.
The judgment was obtained in default of a defence being filed. The judgment was obtained regularly, and was interlocutory in nature, as the plaintiff’s claim was for the recovery of damages, not a debt.[2]
[2]See r 21.02 and r 21.03(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).
The plaintiff, in his statement of claim filed on 2 February 2023, alleged that the defendants provided the plaintiff with negligent advice in response to requests by the plaintiff for advice in relation to an extension of a deck at his property in Surrey Hills (‘deck’). The statement of claim also made claims against the defendants for unconscionable conduct and against the first defendant for misfeasance in public office by depriving the plaintiff of his right to natural justice.[3]
[3]On the same day that this proceeding was issued, the plaintiff issued another proceeding by way of an originating motion, naming the first defendant and the Building Appeals Board as defendants, seeking to overturn the decision of the Building Appeals Board to uphold the Building Notice, on the basis that the Building Appeals Board had erred in law. The judicial review proceeding is listed for trial on 12 March 2024.
The plaintiff claims the following relief from the defendants:
a)Actual damages of $10,000 (estimated) for full recovery of application and court costs relating to this matter and other related disbursements.
b)The full cost to the Plaintiff of complying with the Building Order and reconstructing his original timber deck, which unless overturned on Judicial Review, is estimated be $20,000.
c)General damages of $300,000 to compensate the Plaintiff for the time he has spent and will spend dealing with this matter, including his copious correspondence with the Defendants (priced at $1,000 per hour)
d)General damages of $900,000 to compensate the Plaintiff for the stress caused by the Defendants’ reprehensible conduct and the injustice their decisions have caused him. (3 times the damages above)
e)Exemplary damages of $50 million to be paid to a charitable trust to be established and managed by the Plaintiff and others appointed by him. ($50 million represents about 20% of the Defendants’ annual income, which percentage roughly equates to the cost the Plaintiff expects to incur in complying with the Building Order and reconstructing his original timber deck compared to the average annual income of Australians.)
In summary, the plaintiff sought advice from the defendants on 21 and 22 January 2022 as to whether a building permit would be required for the deck. The plaintiff says that a tradesperson alerted him to the possibility that he may require a building permit to construct the deck. He contacted the Council’s building department by email on 21 January 2022. This email stated as follows:
I would like to extend a deck by 1 metre, which increases the total deck by about 7 square metres. I have been told by a tradie that I won’t need a building permit as the extension is less than 10 sq. metres. Is that correct?
On 22 January 2022, a Building Surveyor’s Assistant replied as follows:
I can confirm, based upon the information provided to me that a building permit is not required for the proposed deck extension.
The plaintiff subsequently built the deck. On 1 March 2022, following the inspection of the property by a building inspector on 28 February 2022, the plaintiff was served with a “show cause” notice and a Building Notice, both dated 1 March 2022 (‘building notices’) by the Council. The show cause notice was signed by a building inspector employed by the Council, and the Building Notice was signed by Mr Sean Grogan, the Municipal Building Surveyor. The plaintiff failed to comply with the building notices, and a Building Order was made on 1 June 2022 requiring the plaintiff to remove the deck by 1 August 2022 (‘building order’). The building order was affirmed by the Building Appeals Board of Victoria (‘Board’) on 16 December 2022.
The application to set aside the default judgment
By summons filed on 24 April 2023, the defendants applied to set aside the default judgment. The defendants relied on an affidavit of their solicitor, Mr Peter Coats, sworn on 24 April 2023 (‘Coats affidavit’) in support of the application.
The Coats affidavit deposed to the following matters and events:
(a) on 20 February 2023, Minter Ellison received instructions from the defendants’ insurer to act for the defendants in this proceeding in place of Russell Kennedy, the solicitors who had filed a notice of appearance on behalf of the defendants;
(b) there is a related proceeding in the Judicial Review and Appeals List of this Court (‘judicial review proceeding’), in which Russell Kennedy acts for the defendants;
(c) on 10 March 2023, Minter Ellison sought, amongst other things, instructions from the defendants’ insurer to file a Notice of Change of Solicitors in this proceeding;
(d) on 30 March 2023, Minter Ellison received a copy of the interlocutory default judgment from Russell Kennedy;
(e) Mr Coats was informed and believes that Russell Kennedy had not been informed of the plaintiff’s intention to apply for default judgment;
(f) a Notice of Change of Solicitors was filed by Minter Ellison on 31 March 2023;
(g) on 31 March 2023, the defendants emailed the plaintiff explaining the administrative oversight in not filing a Notice of Change of Solicitor and not seeking an extension of time for the filing of a defence. The defendants sought the plaintiff’s consent to have the default judgment set aside;
(h) on 4 April 2023, the plaintiff refused to provide consent to have the default judgment set aside, on the basis that he wanted more information from the defendants as to how they proposed to defend the proceeding before determining whether or not to provide his consent to setting aside the default judgment;
(i) Minter Ellison had received instructions prior to the default judgment being obtained to seek directions in relation to this proceeding and the judicial review proceeding, concerning:
(i) issues the defendants have regarding the statement of claim, including, but not limited to the difficulties they have understanding the case alleged against them;
(ii) their contention that the first defendant is not a proper defendant as it is not a legal entity; and
(iii) their contention that the judicial review proceeding will require the Court to make findings of fact with respect to the same subject matter as in this proceeding.
(j) in the absence of any instructions to file a Notice of Change of Solicitor, Minter Ellison did not request Russell Kennedy to request an extension of time to file a defence from the plaintiff;
(k) the statement of claim is fundamentally flawed, and the defendants have a prima face defence on the merits. In relation to the statement of claim:
(i) the first defendant is not a legal entity capable of being sued. Nor does the plaintiff plead the capacity in which the Council is sued;
(ii) the statement of claim does not provide particulars of the alleged negligent advice provided by the defendants;
(iii) the statement of claim does not provide particulars of how the defendants denied the plaintiff natural justice;
(iv) the plaintiff has not pleaded the necessary elements of a claim for misfeasance in public office;
(v) the plaintiff’s pleading that the defendants’ conduct was unconscionable is incomprehensible;
(vi) the plaintiff has not served any certificate of assessment claiming that he has suffered a significant injury within the meaning of the Wrongs Act 1958 (Vic);[4] and
(vii) the punitive damages claimed by the defendant are excessive and the basis for the claimed amount is unclear.
[4]However, the plaintiff is arguably not required to serve a significant injury certificate, given that he has advanced a claim for misfeasance in public office, which is an intentional tort.
Mr Coats also deposed that the defendants deny the plaintiff’s allegations of negligence, misfeasance in public office, deprivation of his right to natural justice, unconscionable conduct and improper exercise or abuse of power.
The Coats affidavit exhibited the following documents:
(a) the determination of the Board dated 16 December 2022;
(b) the plaintiff’s originating motion in the judicial review proceeding;
(c) correspondence between Russell Kennedy and Minter Ellison regarding the handover of the file;
(d) the default judgment and the Notice of Change of Solicitor;
(e) correspondence between Minter Ellison and the plaintiff about the default judgment;
(f) the writ and statement of claim filed in this proceeding;
(g) the emails exchanged between the plaintiff and Mr Adam Bright, a Building Surveyor’s assistant employed by the Council, on 21 and 22 January 2022 (‘January 2022 emails’); and
(h) the building notices.
The parties’ submissions
In their written submissions filed on 17 May 2023 in support of their application to set aside the default judgment, the defendants submitted as follows:
(a) there are many problems with the statement of claim, such that the defendants are not able to properly respond to the allegations contained in the statement of claim;
(b) the form and content of the allegedly negligent advice is not clearly set out in the statement of claim;
(c) the defendants deny that any negligent or incorrect advice was provided to the plaintiff. In any event, the advice provided to the plaintiff in the January 2022 emails was qualified by the statement that the advice was “based on the information provided to [it]”;
(d) the information provided by the plaintiff to the Council did not reflect the actual structure that was built by the plaintiff;
(e) the plaintiff did not provide information regarding the deck’s location, height, or the total area of the deck. Further, no sketches, illustrations, plans or visual representations were provided nor did he mention that the deck was subject to overlooking issues;
(f) the plaintiff failed to respond to the building notices. Had the plaintiff produced the documents requested in the show cause notice to the satisfaction of the second defendant, the deck could have remained in place;
(g) this proceeding concerns a matter of public safety;
(h) the allegations in the statement of claim are intertwined with the judicial review proceeding, and it is likely that the Court will be required to make findings of fact and law in both this proceeding and the related proceeding in relation to the same issues;
(i) the claim of misfeasance in public office is not pleaded clearly in the statement of claim;
(j) the statement of claim contains serious allegations against the defendants in respect of the Board’s review, namely that the defendants “manufactured” a statement to the Board;
(k) the damages claimed are excessive;
(l) the defendants acknowledge that neither of Russell Kennedy or Minter Ellison sought an extension to file a defence. This oversight was on the part of the solicitors and not the defendants themselves, and the defendants should not be shut out from litigating their defence;[5]
(m) the application to set aside the default judgment was made promptly; and
(n) the plaintiff will not suffer any prejudice by the setting aside of the default judgment that could not be met by an appropriate order for costs.
[5]White v Dortenzio [2004] VSC 381.
The plaintiff filed written submissions in reply dated 24 May 2023, which submitted that the defendants:
(a) have made their application on a false premise, and have made a false statement in an affidavit, and have made false and misleading statements in their submissions;
(b) have failed to show a reasonably arguable defence to the plaintiff’s claim of negligence as they have not explained how the advice provided by them was correct nor have they addressed the elements of a claim in negligence;
(c) have failed to show a reasonably arguable defence to the plaintiff’s claim of misfeasance in public office, as the defendants could have required the plaintiff to erect a screen, rather than remove the deck;
(d) have failed to show a reasonably arguable defence to the plaintiff’s claim that he was denied natural justice. The plaintiff says that the defendants did not properly consider his arguments in support of retaining the deck; and
(e) have not set out any defence to the allegations of unconscionable conduct outlined by the plaintiff in his statement of claim.
The plaintiff submitted that the defendants’ claim that they lack sufficient information to file a proper defence does not constitute a proper basis for setting aside the default judgment, and the defendants’ suggestion that the first defendant did not have the aggregate knowledge of Mr Bright (the council officer who provided advice to him about the question of whether he needed to apply for a building permit) is incorrect.
The plaintiff denied that he had not consented to having the default judgment set aside: rather, he had requested further information from the defendants in response to their request.
The plaintiff submitted further that:
(a) he had provided the Council with the relevant details as to the size of the extended deck and that there were no reasonable grounds for the defendants to assume that the plaintiff would have knowledge of the Building Act, the Building Regulations 2018 (Vic) or industry practice;
(b) he could not be expected to know that the “overlooking issue” was relevant to the advice he sought from the Council;
(c) the fact that the plaintiff did not respond to the building notices is not relevant to the current application;
(d) the advice provided by the defendants was not “general guidance”, but was particular to the plaintiff’s property and deck;
(e) the judicial review proceeding and this proceeding concern separate and distinct matters. The related proceeding concerns whether the deck complies with the Building Act, and this proceeding relates to allegations of negligent advice, therefore there will be no risk of inconsistent findings;
(f) the plaintiff’s submission that the statement of claim is deficient does not amount to a reasonably arguable defence; and
(g) the plaintiff was not under a positive obligation to provide notice to the defendants of any application for default judgment.
The plaintiff’s submissions also included submissions in relation to an alleged contravention of the Civil Procedure Act 2010 (Vic) (‘CPA’) by the defendants.[6]
[6]On 29 May 2023 the plaintiff filed a summons which was returnable for directions at the hearing of the defendants’ application, which sought the following relief under s 29 of the CPA:
1.Written apologies from both Defendants clearly stating the sections of Part 2.3 of the Civil Procedure Act 2010 the court finds them to have contravened.
2.Written apology from the Chief Executive Officer & Managing Partner of MinterEllison, Ms Virginia Briggs, clearly stating the sections of Part 2.3 of the Civil Procedure Act 2010 the court finds to have been contravened by the Defendants and/or Mr. Peter Coats.
3.The Court to remind Counsel for the Defence of Counsel’s obligations under the Legal Profession Uniform Conduct (Barristers) Rules 2015, in particular the principles set out in Section 4 ((a) barristers owe their paramount duty to the administration of justice, (b) barristers must maintain high standards of professional conduct, (c) barristers … must act honestly, fairly, skilfully, bravely and with competence and diligence, …), and Rules 23 (A barrister has an overriding duty to the court to act with independence in the interests of the administration of justice), and 42 (A barrister must not act as the mere mouthpiece of the client or of the instructing solicitor and must exercise the forensic judgments called for during the case independently, after the appropriate consideration of the client’s and the instructing solicitor’s wishes where practicable).
4. Financial compensation to the Plaintiff for 16 hours at MinterEllison, Managing Partner (or equivalent) charge-out rates.
The defendants filed written submissions in reply on 31 May 2023, in which the defendants submitted that whether there is a reasonably arguable defence is to be assessed with reference to the statement of claim. Further, the statement of claim should contain proper notice of the allegations made against the defendants.
The defendants submitted that the first defendant is not a legal entity, noting that the office is defined in the Building Act as follows:
municipal building surveyor means a person for the time being appointed, employed or nominated by a council as its municipal building surveyor for the purposes of this Act;
The defendants say that the plaintiff’s claims of unconscionable conduct in the statement of claim do not currently have any clearly articulated legal basis, and the allegations of unconscionable conduct, misfeasance in public office and denial of natural justice clearly overlap with the allegations in the judicial review proceeding.
During the course of the hearing of the application, the defendants made further criticisms of the statement of claim, and in particular, the plaintiff’s failure to address the necessary elements of the torts of negligent misstatement and misfeasance in public office.
Relevant legal principles
The exercise of the Court’s discretion to set aside a regularly obtained default judgment requires consideration of the explanation for the default, along with the merits of a defence that a defendant puts forward in any affidavit supporting its application.[7]
[7]Kostokanellis v Allen [1974] VR 596.
The Court’s approach to applications of the current kind is well established. The applicable principles were set out in Kostokanellis v Allen[8]:
what the judge is required to do is to determine what, in his opinion, is the just way in which the court’s discretion should be exercised. To do this must involve weighing up the extent to which the defendant is prejudiced by allowing the order and judgment to stand and the prejudice to the plaintiff in setting them aside. In many cases the situation will be that the plaintiff will not suffer any prejudice that cannot be remedied by an appropriate order as to costs…
On the other hand, if the defendant does show on affidavit a prima facie defence on the merits from it would seem that usually he will be seriously prejudiced if he is debarred from being able to present his defence at a trial of the action.[9]
[8]Ibid.
[9]Ibid, 605.
The applicable principles were also referred to in JRC Enterprises Pty Ltd v Zoomlion Australia-New Zealand Pty Ltd[10] (citations omitted):
… Assuming the judgment was regularly entered (as this one was) the appellate authorities have endorsed the principle that if merits are shown it is undesirable to let a judgment pass on which there has been no proper adjudication: see Lubura. The language of the test varies but if a ‘defence on the merits’ or a ‘prima facie defence’ or ‘some defence’ or ‘adequate defence’ is shown, the courts say the strength or weakness of the case does not matter, for it is not the function of the judge on the application to decide whether the defence would succeed. There will usually be matters of facts to be investigated, and it will be a miscarriage of discretion to make decisions about the credibility of factual assertions made by the defendant: see Lou v Citic Australia Commodity Trading Pty Ltd.
A contiguous principle in forming the exercise of the discretionary judgment is whether the defendant has given an adequate explanation for the failure to file an appearance. The cogency of the explanation can reflect on the merits of the defence. A procedural default attributable to a mistake has been accepted as an adequate reason, but it depends on the particular facts, or the true nature of the mistake. In Lubura the Court of Appeal accepted that ‘a plasterer from Noble Park with a non-English speaking background’ might not have understood the difference between a criminal proceeding and a civil proceeding, especially when, as in that case, both proceedings were based on the same facts. Absent a testing by cross-examination, a disbelief of an explanation given from which a conclusion is then reached that a defendant deliberately disregarded a legal obligation under court process, could miscarry unless it could be said that there was no other conclusion open on the evidence.
But the absence of a sufficient reason for the procedural default does not necessarily mean that the application to set aside the judgment must fail. What dominates, in the end, is whether the defendant is able to show a prima facie defence on the merits. If so, the law’s attitude is not to inflict the serious prejudice of preventing a defendant from defending the claim especially if there is no actual prejudice to the plaintiff.[11]
[10][2013] VSC 646.
[11]Ibid [6].
Discussion
The plaintiff does not take issue with the defendants’ explanation for their failure to file a defence. What he does take issue with is the defendants’ submission that they have an arguable defence.
I accept that the defendants’ failure to file a defence within time was an oversight, and that the plaintiff has not established he would suffer any prejudice beyond losing the advantage of having a default judgment in his favour. Accordingly, the issue in the current application is whether the defendants have established, by affidavit, that they have a good arguable defence.
The position is complicated somewhat by the (legitimate) criticisms of the defendants of the statement of claim, in that the defendants are required to respond to what is, in some respects, a defective pleading.
However, to say that a pleading is defective does not necessarily establish a good arguable defence by way of affidavit (emphasis added). It seems to me that any deficiencies in the pleading go to the question of prejudice: that is, if the pleading is defective, then the defendants lose the opportunity to apply to strike out the pleading and/or apply for summary judgment if the default judgment is not set aside. However, the requirement that the defendants establish a good arguable defence by affidavit indicates that the defendants must grapple with the allegations of fact in the pleading as best they can.
In my view, the defendants have established that they have a good arguable defence on the merits. That is not to say that the defendants will succeed at trial: rather, the defendants have adduced sufficient evidence to clear the relatively modest hurdle set for them in the current application by the authorities.
The critical section of the Coats affidavit is paragraph 19(g) of the affidavit where Mr Coats deposed as follows:
the defendants deny that incorrect advice was provided to the plaintiff and further state that when the plaintiff enquired about the requirement for a building permit he provided only limited information. General guidance was subsequently provided by an employee of the council via email to the plaintiff under the caveat that such guidance was based on the information provided by the plaintiff. Following the guidance, the council became aware of further information that the plaintiff did not provide to council, which would have affected the original guidance provided to the plaintiff. Namely, the size of the plaintiffs deck extension exceeded the relevant legislative threshold, such that the works required a building permit. In that email chain with council, the plaintiff refers to a 'tradie' that he ostensibly received advice from concerning the need for a building permit. Council intends to investigate and consider pleading contribution and/or proportionate liability in respect of any advice that the plaintiff received. There were also overlooking issues with the extended deck.
The plaintiff says that the defendants’ responses to the allegations made by him in the statement of claim are spurious. However, this is not the occasion to determine whether or not the defendants’ contention that the advice provided by Mr Bright was correct or incorrect, or whether in fact the information provided by the plaintiff to the defendants was correct or incorrect. The proper occasion for determining those questions is at a trial. Certainly the contents of the January 2022 emails indicates that the defendants’ position is at least arguable, given the limited information provided in the plaintiff’s request, the qualification in Mr Bright’s response, and given that the Board’s reasons indicate that the deck was reconstructed rather than extended.
As for the remaining claims in the statement of claim, I accept that there are issues with the pleading of the statement of claim which make it difficult for the defendants to directly respond to the allegations made at this point in time, as discussed later in these reasons.
However, given that the defendants have established an arguable defence to the claim in negligence, that is sufficient to justify setting aside the default judgment. I would add, however, that claims of misfeasance in public office are notoriously factually complex, and, at this stage, given that the Board has upheld the validity of the building notices, the plaintiff has not yet cleared the first hurdle of establishing that the decision to issue the building notices was invalid.
Issues associated with the statement of claim
The defendant’s submissions made a number of complaints about the statement of claim. During the course of the hearing of the application, counsel for the defendants confirmed that, if the default judgment is set aside, the defendants will apply to strike out the statement of claim. The defendants’ complaints can be summarised as follows:
(a) the first defendant is not a legal entity capable of being sued;
(b) the pleading of the claim of negligent misstatement lacks particulars, and is confusing;
(c) the plaintiff has not pleaded the necessary elements of a claim for misfeasance in public office;
(d) there is no standalone action for unconscionable conduct;
(e) no particulars have been provided of the alleged denial of natural justice;
(f) the plaintiff failed to plead what he would have done or not done had he not received negligent advice to support his claim for damages; and
(g) the claim for exemplary damages is excessive, and the basis for the claimed amount is unclear.
The defendants also object to the statement of claim on the basis that there are overlapping issues of both fact and law in this proceeding and the judicial review proceeding, such that there is a risk of inconsistent findings in the two proceedings. However, as I indicated during the course of the hearing of the application, my preliminary view is that it does not seem to me to be inappropriate for the plaintiff to pursue the relief he does in two separate proceedings. The judicial review proceeding challenges the validity of the Board’s decision, not the defendants’ conduct, and this proceeding alleges that the defendants have committed torts. Rather, it seems to me that the outcome of the judicial review proceeding may well have consequences for the plaintiff’s claims in this proceeding. If the plaintiff is successful in the judicial review proceeding, it may well be that his claim to have suffered at least part of his loss and damage as a consequence of the allegedly negligent advice falls away. If he is unsuccessful, it may well be very difficult for him to prosecute a claim for misfeasance in public office, as he will be bound by any finding in the judicial review proceeding that the decision to issue the building notice was lawful. Further, the Board is a necessary party to the judicial review proceeding, but is not a proper party to this proceeding.
Accordingly, at least for present purposes, it seems that the existence of the judicial review proceeding will affect the ultimate shape and timetabling of this proceeding, rather than being a ground for staying and/or dismissing this proceeding, at least at this point in time.
During the course of the hearing of the application to set aside the default judgment, the plaintiff said that he was prepared to reconsider and redraft his statement of claim if thought appropriate. I indicated that in the course of preparing my reasons with respect to the defendants’ application to set aside the default judgment that I would consider and make observations upon the adequacy of the statement of claim, regardless of the outcome of the defendants’ application. Given that I have determined to set aside the default judgment, the viability and adequacy of the statement of claim is the next pressing case management issue going forward.
I make the observations in the following section of these reasons without having heard full argument from either party, but with the hope that they will assist the parties to move towards resolving the real issues in dispute in this proceeding.
First, as a preliminary observation, a statement of claim must plead the material facts necessary to support a cause of action known to the law. It is not enough for a claimant to have a grievance against someone in order to obtain damages or other relief. Further, a statement of claim must fairly put a defendant on notice of the case they have to meet at trial, and the Court on notice of the case it has to manage and try. Those objectives are not met by a statement to the effect that the defendants can find the information they need from their own files, or by reviewing documents filed in the judicial review proceeding.
The principles governing the determination of whether a pleading is adequate and permissible are well settled, and were summarised in the decision of John Dixon J in Wheelahan v City of Casey (No 12)[12], as follows (omitting citations):
[12][2013] VSC 316.
(a)Order 13 of the Rules set out the relevant requirements of a sufficient pleading, while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;
(b)the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;
(c)the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence). The expression “material facts” is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;
(d)as a corollary, the pleading must be presented in an intelligible form – it must not be vague or ambiguous or inconsistent. Thus a pleading is “embarrassing” within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;
(e)the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;
(f)pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);
(g)a pleading which contains unnecessary or irrelevant allegations may be embarrassing – for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;
(h)it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;
(i)every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));
(j)the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);
(k)particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement – namely, to fill in the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;
(l)a pleading should not be so prolix that the opposite party is unable to ascertain with precision the causes of action and the material facts that are alleged against it;
(m)extensive cross-referencing of facts in a pleading may render parts of the pleading unintelligible;
(n)in an application under r 23.02, the court will only look at the pleading itself and the documents referred to in the pleading;
(o)the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown; and
(p)if the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.[13]
[13]Ibid [25].
Turning first to the question of whether the first defendant is a proper defendant to the proceeding, I agree that the proper defendant is the actual person who holds or held the position of Municipal Building Surveyor at the Council, if that is the person whose conduct gives rise to a viable cause of action. However, this issue is easily rectified, by giving the plaintiff leave to file and serve an amended writ and statement of claim identifying the proper defendant. The plaintiff may also wish to consider whether he should plead that the Council is vicariously liable for the acts and omissions of its employee.
Secondly, as for the pleading of the claim of negligent misstatement, I agree that if the plaintiff is relying upon the January 2022 emails as containing the alleged negligent misstatement, then those communications ought to be referred to and reproduced in the statement of claim. Otherwise, I do not see any particular difficulties with the pleading of this cause of action at this stage.
Thirdly, the defendants’ submissions state that the necessary elements of a cause of action in misfeasance in public office are as follows:
(a) a deliberate tort in which an invalid or unauthorised act or omission;
(b) is done knowingly or maliciously;
(c) by a public officer in the purported discharge of their public duties; which
(d) causes loss or harm to the plaintiff.
Subject to amending the writ and statement of claim to join the actual person holding office as the Municipal Building Surveyor at the relevant time, the plaintiff has pleaded element (c) above. Further, subject to my general observations regarding the plaintiff’s claim for damages later in these reasons, the plaintiff has pleaded element (d) above.
However, the pleading could benefit from greater clarity as to how the decisions to issue the building notices and the building order were invalid, and the facts upon which the plaintiff relies to support any contention that in making his decision, Mr Grogan acted knowingly and/or maliciously. I draw the plaintiff’s attention to the following statement in the decision of Judicial Registrar Baker in I-Cook Foods Pty Ltd v State of Victoria[14], and in particular, his observation to the effect that the pleading of claims of misfeasance in public office should provide a level of specificity and particularity commensurate with the gravity of the allegation:
Where a pleading alleges matters such as misfeasance in public office, it is clear that the requirements for a proper pleading are elevated, or somewhat more stringent, than would be expected for other claims in which such serious allegations are not raised. The authorities establish that a pleading such as the one the plaintiff proposes must provide a level of specificity and particularisation sufficient to allow the parties that are the subject of the allegations to know the case that they will be faced with at trial. Similarly, they establish clearly that a pleading that relies upon particulars or facts that are consistent with an honest discharge of the public officer’s function will not be permitted to proceed. There must be something more identified which provides a basis for asserting the impropriety that the proposed pleading raises. These requirements reflect the gravity of the kinds of allegations raised in such claims, and the expectation that assertions of fraud, dishonesty or misfeasance will not be raised lightly.[15]
[14][2022] VSC 587, upheld on appeal in [2022] VSC 649.
[15]Ibid [123].
Fourthly, the claim that the defendants denied the plaintiff natural justice is not a claim that, of itself, gives rise to a cause of action that entitles the plaintiff to recover damages.
At best, a denial of natural justice is a ground upon which the plaintiff could seek to have the building notices set aside for legal error. However, given that the time limit for bringing proceedings under order 56 of the Rules is sixty days, the plaintiff is well out of time, given that the building notices were issued in March 2022. Instead, the plaintiff elected to challenge the building notices at the Board.
However, I accept that the allegations that the Council (or the Municipal Building Surveyor) denied the plaintiff natural justice are relevant to the question of whether the decision to issue the building notices was invalid for the purposes of the plaintiff’s claim of misfeasance in public office. I generally agree with the defendants’ submission to effect that these allegations lack particulars, which should be provided, perhaps with the benefit of a targeted request from the defendants.
The position is somewhat different with respect to the plaintiff’s allegations that the defendants have acted unconscionably. The lawfulness of an administrative decision maker in the position of the defendants or either of them is not capable of being challenged on the grounds of unconscionability, although arguably the same conduct could be relied upon to support a contention that the decision to issue the building notices was made in bad faith, for an improper purpose, or was unreasonable. Further, conduct which post-dated the making of the decision claimed of is largely irrelevant to the question of whether the relevant decision was lawful or not. However, I accept that this conduct, and any conduct relied upon to support a claim that the decision was unreasonable, could arguably be relied upon to support the plaintiff’s claim for exemplary damages. But that is not the way the statement of claim is currently pleaded.
Further, there is no standalone cause of action of unconscionable conduct, save for the statutory cause of action under the Australian Consumer Law.
However, liability for unconscionable conduct under s 21(1) of the Australian Consumer Law is limited to conduct ‘in trade or commerce in connection with the supply or possible supply of goods or services to a person’. While arguably the provision of advice by a council officer to a resident and/or ratepayer of a municipality about building regulations could be considered to involve the supply of a service, I very much doubt that in providing that service, the Council is engaging in conduct ‘in trade or commerce’.
In ACCC v Samton Holdings Pty Ltd,[16] the Full Federal Court identified the following types of cases where equity will grant relief for unconscionable conduct:
[16](2002) 117 FCR 301.
(a) contracts or dispositions of property resulting from the knowing exploitation of a special disadvantage;
(b) transactions entered into as a consequence of defective comprehension by a party to a transaction of the undue influence of another;
(c) cases of equitable estoppel;
(d) when providing relief against forfeiture and penalty; and
(e) contracts entered into by reason of a unilateral mistake.[17]
[17]Ibid [48].
Apart from the fact that no claim falling within the categories above has been pleaded in the statement of claim, it is difficult to see how, based upon the facts alleged in the statement of claim, a viable claim could be pleaded by the plaintiff which falls within the categories outlined above. That said, while it seems unlikely that the plaintiff could mount a valid claim based upon unconscionable conduct, it may well be that, again, the conduct he complains about could be relied upon to support his claim for exemplary damages.
As for the plaintiff’s claim for damages, three issues arise:
(a) the plaintiff will only be able to recover damages for any psychiatric or psychological injury said to have been suffered as a consequence of the defendants’ alleged negligence if he is able to establish that he has suffered a significant injury, and that injury would need to be a recognised medical condition;
(b) the plaintiff has failed to plead the facts supporting his counterfactual: that is, what he would have done or not done but for the defendants’ negligent advice; and
(c) the defendants say that the quantum of the plaintiff’s claim for general damages and exemplary damages is excessive, and the basis for claiming damages in that sum is not pleaded.
Turning first to (a) above, I would make the following observations:
(a) first, while the plaintiff seeks compensation for the stress caused to him by the defendants’ conduct, I doubt that “stress” is a recognised compensable injury, although the fact that the plaintiff suffered stress may be relevant to a claim for aggravated or exemplary damages;
(b) secondly, while a significant injury certificate is not required to recover damages for personal injury caused by misfeasance in public office (it being an intentional tort), if at trial the plaintiff is only successful in establishing negligence, then he will not recover damages for personal injury if he has not established that he has suffered a significant injury, which would require a diagnosis of a recognised psychiatric or psychological injury;
(c) while a significant injury certificate may be obtained at any time up until trial, I understand that is the practice in some jurisdictions to stay any proceeding claiming damages for personal injury pending the plaintiff obtaining a significant injury certificate; and
(d) I note that the cap on damages for non-economic loss (also known as general damages) for personal injury under s 28G of the Wrongs Act 1958 (Vic) is currently $577,050.
In relation to the issue identified in paragraph 55(b) above, during the course of the hearing of the application, the plaintiff stated that if the Council officer had told him that he required a building permit to construct the deck, he would not have proceeded to construct the deck. I agree that the plaintiff needs to expressly plead this in order for the defendants to know the case they have to meet at trial.
In relation to the issue identified in paragraph 55(c) above, the question of the plaintiff’s entitlement to damages is, strictly speaking, a matter for evidence and argument at trial. I would, however, repeat my observations about the cap on general damages under the Wrongs Act 1958 (Vic), noting that the award of general damages for pain and suffering in amounts at or near the cap are generally reserved for claimants who have suffered for example, catastrophic physical injuries, or horrific sexual abuse, not irritation or annoyance. Further, the claim for exemplary damages is out of all proportion to what might ordinarily be awarded, noting a recent Court of Appeal decision where the sum of $20,000 was awarded for exemplary damages in a case involving a blatant fraud.[18] Further, while at least for present purposes I am prepared to accept that a person in the position of the plaintiff may be able to recover by way of damages loss of income owing to the need to deal with the consequences of the building notices, the plaintiff would need to establish actual loss, not some notional sum based upon some notional charge-out rate. Finally the calculation of damages based upon the annual revenue of the Council represents a very novel approach to the assessment of damages, which would be unlikely to be adopted by a Court.
[18]Ikosidekas v Glenis [2023] VSCA 134.
To conclude my observations about the statement of claim, while, strictly speaking, this is not a pleading issue as such, the statement of claim is replete with inflammatory language which is expressed at a high level of generality, which does little to clarify the material facts upon which the plaintiff relies to support his claims, and does not assist the Court in determining what are the real issues in dispute between the parties. Further (and the same comment could be made about claims made in the plaintiff’s s 29 application), simply because the defendants have put forward a version of events or opinions regarding the facts or the law relevant to the dispute does not necessarily mean that their conduct is misleading. Finally, while this is a minor matter, I note the allegation in paragraph 5(b)(xliii) that ‘the Defendants’ conduct amount to gaslighting’, and refer to the following observations I made in my reasons in Rogerson v City of Greater Dandenong[19]:
the reference to ‘gaslighting’ in paragraph 14 of the statement of claim contains an unwarranted presumption that most readers of the statement of claim would be familiar with that particular popular culture reference, and as such, adds nothing to the statement of claim.[20]
[19][2022] VSC 612.
[20]Ibid [89].
Accordingly, subject to hearing from the parties regarding timetabling issues, I will make the following orders:
1. The default judgment dated 28 March 2023 be set aside pursuant to r 21.07 of the Rules.
2. By 4.00pm on 19 July 2023 the plaintiff file and serve an amended writ and statement of claim which must:
(a) set out the material facts supporting the plaintiff’s claims in negligence and misfeasance in public office, and provide particulars of the alleged negligent advice;
(b) exclude any standalone causes of action based upon unconscionable conduct and denial of procedural fairness;
(c) specify the facts, matters and circumstances relied upon to support the plaintiff’s claim for damages under each category of loss claimed, including, for the avoidance of doubt, any counterfactual scenario relied upon by the plaintiff;
(d) provide any necessary particulars of the knowledge, intention, belief or other state of mind of any officer or employee against whom allegations are made; and
(e) substitute Mr Sean Grogan (in his capacity as the Municipal Building Surveyor, for the first defendant).
3. The defendants be excused from the requirement to file and serve any defence until the later of:
(a) thirty days after the filing and service of an amended writ and statement of claim;
(b) a date to be fixed after the hearing and determination of any application by the defendants (including any substituted defendant) to strike out the amended statement of claim.
4. Any application of the kind referred to in paragraph 3(b) of these orders be filed and served within thirty days of the filing and service of the amended writ and statement of claim.
5. The proceeding be transferred from the Professional Liability List to the Major Torts List.
6. The defendants’ costs of the summons filed on 24 April 2023 be reserved.
SCHEDULE OF PARTIES
| S ECI 2023 00450 | |
| BETWEEN: | |
| MARK MICHAEL JAMES MORRIS | Plaintiff |
| - v - | |
| MUNICIPAL BUILDING SURVEYOR FOR THE CITY OF WHITEHORSE | First Defendant |
| WHITEHORSE CITY COUNCIL | Second Defendant |
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