Perera v Genworth Financial Mortgage Insurance Pty Ltd

[2019] NSWCA 10

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Perera v Genworth Financial Mortgage Insurance Pty Ltd [2019] NSWCA 10
Hearing dates:	7 February 2019
Decision date:	07 February 2019
Before:	Basten JA; Macfarlan JA
Decision:	(1)   Dismiss the application for leave to appeal from the judgment and orders made in the Common Law Division on 10 April 2018.  (2)   Order that the applicant pay the respondent’s costs in this Court.
Catchwords:	APPEAL – interlocutory appeal – leave – claim in tort dismissed as disclosing no reasonably arguable cause of action – Uniform Civil Procedure Rules 2005 (NSW), r 13.4(1) – whether judge erred in failing to exercise exceptional caution before summarily dismissing the proceedings – whether reasonably arguable that judge erred in law in identifying the elements of the cause of action   TORT – malicious prosecution – claim for malicious prosecution arising from dismissal of earlier civil proceedings – applicant not a defendant in earlier proceedings – whether arguable case that a person not a party to earlier proceedings could sue for malicious prosecution
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), r 13.4
Cases Cited:	A v State of New South Wales (2007) 230 CLR 500; [2007] HCA 10 Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366; [2013] UK PC 17 Genworth Financial Mortgage Insurance Pty Ltd v Perera [2017] NSWSC 640 Little v Law Institute of Victoria [1990] VR 257 Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 Sahade v Bischoff [2015] NSWCA 418 Willers v Joyce [2016] UKSC 43; [2016] 3 WLR 477
Category:	Procedural and other rulings
Parties:	Madura Perera (Applicant) Genworth Financial Mortgage Insurance Pty Ltd (Respondent)
Representation:	Counsel: Applicant in person R Mansted (Respondent)   Solicitors: Applicant self-represented Hicksons Lawyers (Respondent)
File Number(s):	2018/135198
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Division Citation: [2018] NSWSC 448 Date of Decision: 10 April 2018 Before: Garling J File Number(s): 2017/295462

Judgment

1. THE COURT: On 29 September 2017 the applicant, Madura Perera, commenced proceedings against Genworth Financial Mortgage Insurance Pty Ltd (“Genworth”) seeking damages for malicious prosecution. On 26 October 2017 an amended statement of claim was filed in those proceedings.

2. On the same day, namely 26 October 2017, Genworth filed a notice of motion seeking that the proceedings be dismissed pursuant to r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW). The motion was amended on 8 November 2017 to refer to the amended statement of claim.

3. Genworth’s motion was heard on 10 April 2018 by Garling J in the Common Law Division. In accordance with the orders sought, the proceedings were dismissed. [1]

   1. Perera v Genworth Financial Mortgage Insurance Pty Ltd [2018] NSWSC 448 (“Perera”).

4. The applicant filed and served a notice of intention to appeal and, on 10 July 2018, a summons seeking leave to appeal. The application for leave to appeal is before the Court for separate hearing.

Background

5. The claim for malicious prosecution related to proceedings commenced in 2008 by Genworth against a company associated with the applicant, known as Hodder Rook & Associates Pty Ltd (“Hodder Rook”). Genworth carried on business as a mortgage insurer; Hodder Rook undertook property valuations. The proceedings brought by Genworth alleged that eight valuations prepared for it by Hodder Rook were negligently undertaken with the result that Genworth suffered economic loss. With respect to some of the valuations, Hodder Rook held indemnity insurance. The proceedings with respect to those valuations were settled. Genworth pursued the proceedings in relation to some of the remaining valuations.

6. In 2011 Hodder Rook went into liquidation, being deregistered on 12 August 2017. However, the proceedings had been discontinued on 28 March 2017, on the application of Genworth. [2]

   2. Genworth Financial Mortgage Insurance Pty Ltd v Hodder Rook & Associates Pty Ltd [2017] NSWSC 640 (Black J).

Dismissal of proceedings

7. The primary judge noted that there was a large question as to whether the tort of malicious prosecution extends to the commencement and carrying on of civil proceedings, as opposed to criminal proceedings. Nevertheless, he accepted that it would have been inappropriate to summarily dismiss the proceedings for malicious prosecution on that basis.

8. Accepting that the cause of action was available in relation to civil proceedings, he concluded that it was not available to Mr Perera, who had not at any stage been a party to the proceedings commenced by Genworth against Hodder Rook. He concluded that the applicant had “failed to demonstrate the existence in his favour of such a cause of action and it is inevitable that the proceedings as presently constituted must fail.”[3] That being so, he determined that the proceedings should be dismissed on the basis that they were misconceived and disclosed no reasonable cause of action. [4]

   3. Perera at [46].

   4. Perera at [48].

Proposed appeal

9. The draft notice of appeal filed by the applicant included numerous grounds, which may be identified under two headings. First, the applicant alleged that the primary judge erred in his approach to a summary dismissal application. He alleged that the primary judge (a) failed to take exceptional caution before summarily dismissing the proceedings, (b) risked stifling the development of the law with respect to the tort of malicious prosecution and (c) identified no particular defect in the form of the pleading.

10. There is no substance in this challenge. If a necessary element of malicious prosecution proceedings is that the plaintiff was the defendant in the proceedings alleged to have been maliciously commenced, then this proceeding for malicious prosecution would, as the primary judge correctly noted, inevitably have failed. There would have been no error in dismissing them in those circumstances. [5] The standard of “exceptional caution” would be satisfied.

    5. Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 at [30], [31], [38] (Leeming JA, Macfarlan and Simpson JJA agreeing).

11. The application must turn on the second set of grounds, relating to the elements of the cause of action. The only relevant element was the first, being that relied upon by the trial judge. The first element of the cause of action in relation to criminal prosecutions is that the plaintiff was the defendant in the proceedings alleged to have been maliciously commenced. As no proceedings had been brought by Genworth against the applicant it followed that that element was not satisfied. It also followed that the second element (namely, that the proceedings had terminated favourably to the applicant) could also not have been satisfied.

12. The applicant sought to address that difficulty by submitting that, although not a named party in the proceedings challenging the valuations, the valuations had in fact been prepared by him personally and accordingly his reputation was at stake. Further, as the party conducting the proceedings on behalf of the corporate defendant, he was at risk of an adverse costs order. He then noted that in relation to prosecutors, the law recognised a category of “extended parties” who might be liable for malicious prosecution, even though they were not the party instituting the proceedings. The applicant referred, in this regard, to the decision of this Court in Sahade v Bischoff. [6] That case held that a person could be sued for malicious prosecution if he or she had taken “some positive conduct to maintain the prosecution, such as giving evidence in support of the prosecution, which was known to be false.”[7] (Simply calling police to the scene of a fracas did not render the alleged victims prosecutors for the purposes of the tort.)

    6. [2015] NSWCA 418.

    7. Sahade at [121].

13. The focus on the real wrong-doer, against whom a claim of malicious prosecution may be brought, raises quite a different question from the proposed expansion of the class of persons who can claim damages for malicious prosecution. The expansion proposed by the applicant would give rise to difficulties with other elements of the cause of action for malicious prosecution, such as malice. As counsel for the respondent noted, the proposed expansion would effectively create a new tort.

14. The applicant sought to rely upon the decision of the Privy Council in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd. [8] That case upheld a claim for malicious prosecution with respect to a civil proceeding. The applicant submitted that the facts were on all fours with his claim because the plaintiff in the malicious prosecution proceeding was a Mr Paterson, a professional chartered surveyor, who operated through two companies. However, that was not to the point. The point of distinction which is presently critical, is that Mr Paterson was sued as a defendant in the earlier civil proceeding. While the case provided support for the proposition that malicious prosecution could arise from a civil proceeding, it provided no support for the proposition that a person could sue for malicious prosecution who had not been a defendant in the earlier proceeding.

    8. [2014] AC 366; [2013] UKPC 17.

15. Otherwise, the applicant accepted that there was no authority for the proposition that any extended category of defendants who might sue for malicious prosecution existed at law. There is, in other words, no case in which a person who has not been the subject of proceedings has successfully complained of malicious prosecution; nor as a matter of legal principle is there any reason to suppose that the tort (which is itself controversial in relation to civil proceedings) would be extended to cover such a case. The mere fact that a third person may suffer injury to reputation as a result of proceedings brought against a defendant, in circumstances in which the third person was not sued, will not found a cause of action by the third person for malicious prosecution.

16. Indeed, authority is clearly against the proposition proposed by the applicant. In A v State of New South Wales,[9] the High Court expressed the first element of the tort of malicious prosecution as being “that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant”. As counsel for the respondent noted, while this statement appeared to leave open the possibility that the tort applied in relation to proceedings other than criminal proceedings, it nevertheless required that those proceedings have been brought against the plaintiff by the defendant.

    9. (2007) 230 CLR 500; [2007] HCA 10 at [1].

17. Counsel for the respondent further noted that the majority in the United Kingdom Supreme Court in Willers v Joyce,[10] upholding a claim involving the alleged malicious prosecution of civil proceedings, did not suggest any variation in the elements of the tort. [11]

    10. [2016] UKSC 43; [2016] 3 WLR 477 at [5] (Lord Toulson, Lady Hale, Lord Kerr and Lord Wilson agreeing).

    11. See also Little v Law Institute of Victoria (No 3) [1990] VR 257 at 262, 265 (Kaye and Beach JJ) and 276 (Ormiston J).

18. The contrary view is not reasonably arguable and, accordingly, there is no basis for asserting error on the part of the primary judge in dismissing the proceedings. The application for leave to appeal should be dismissed. The applicant must pay the respondent’s costs in this Court.

19. The Court makes the following orders:

1. Dismiss the application for leave to appeal from the judgment and orders made in the Common Law Division on 10 April 2018.

2. Order that the applicant pay the respondent’s costs in this Court.

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Endnotes

Decision last updated: 08 February 2019