Riva NSW Pty Ltd v Key Nominees Pty Ltd

[2014] NSWSC 301

Supreme Court

New South Wales

Medium Neutral Citation:

Riva NSW Pty Ltd CAN 113 881 815 v Key Nominees Pty Ltd [2014] NSWSC 301

Hearing dates:

6 December 2013; 4 March 2014

Decision date:

21 March 2014

Jurisdiction:

Equity Division

Before:

Young AJA

Decision:

The orders made on 4 March 2013 are affirmed.

The proceedings against the first defendant are dismissed. The plaintiffs to pay the first defendant's costs.

Catchwords:

PLEADINGS - strike out application - previous defects not cured - document generally defective

ABUSE OF PROCESS - threshold for abuse of process

Legislation Cited:

Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663
Adams v Bank of New South Wales [1984] 1 NSWLR 285
C2C Developments Pty Ltd v Commonwealth Bank of Australia (2012) 16 BPR 31
Project Research Pty Ltd v Permanent Trustee of Australia Ltd (1990) 5 BPR 11
Cyclone Proprietary Ltd v Stewarts and Lloyds Ltd (1916) 16 SR (NSW) 629
Lamerand v Lamerand (No 2) NSWR 248
Lamerand v Lamerand (No 3) [1962] NSWR 1233
American Flag Manufacturers Co Inc v Rheen (Aust) Pty Ltd (No 2) [1965] NSWR 193

Texts Cited:

Tyler, T; Young, P; Croft, C, Fisher & Lightwood's Law of Mortgage, (3rd ed 2014, Butterworths)

John P Hamilton, J; Lindsay, G, Morahan, M, NSW Civil Procedure Handbook 2013, (2013, Thomson Reuters)

Category:

Principal judgment

Parties:

Riva NSW Pty Ltd CAN 113 881 815 (plaintiffs)
Key Nominees Pty Ltd (first defendant)
Chris Stomo (second defendant)

Representation:

Mr AE Maroya (plaintiffs)
Mr RA Parsons (first defendant)
Ms PA Horvath (second defendant)
Beau Jackson (first defendant)
Moray & Agnew (second defendant)

File Number(s):

2012/173688

Publication restriction:

Nil

Judgment

1. On 20 December 2013 I gave Judgment in this matter on a Notice of Motion filed by the first defendant and amended on 30 September 2013. That Notice of Motion was heard before me on 6 December 2013 and sought to strike out a Statement of Claim filed by the plaintiffs on 30 September 2013. The second defendant was not a party to the Notice of Motion.

1. The first defendant was successful on its motion to strike out the Statement of Claim filed by the plaintiffs. I found the Statement of Claim to be hopelessly defective, principally because there was a nine page long Definitions section which contained statements of fact. Given this it would have been embarrassing and virtually impossible for the plaintiffs to plead to the document. As the Statement of Claim could only be cured by being put in proper form, I made an order for the plaintiffs to file a fresh one before 4:00 pm on 4 March 2014.

1. In addition to the Notice of Motion heard on 6 December 2013, Mr RA Parsons, counsel for the first defendant, made it clear on that day that he sought that the entire proceedings be dismissed as an abuse of process. For the reasons contained in my earlier Judgment I did not accept at that stage that the case was one where the action against the first defendant should be dismissed. I also made it clear that if the plaintiff's pleadings were not in order by 4 March 2014 I would revisit this issue.

1. The matter returned before me at 9:30 am on 4 March 2014. At that time Mr A.E. Maroya appeared amicus curiae. He informed the court that the plaintiffs no longer retained the services of his former lawyers, and that he had been told a fresh Statement of Claim would be filed before 4:00 pm.

1. I adjourned the matter until 4:05 pm, at which time the fresh Statement of Claim was handed to the court. Mr Maroya told the court that he was instructed that an attempt had been made to file the fresh Statement of Claim before the deadline but the Court Registry had refused to accept it.

1. Upon reading the fresh Statement of Claim, Mr Parsons on behalf of the first defendant moved a motion that the proceedings be dismissed on the basis that the plaintiff's pleadings were still not in order. He also contended that the plaintiff's actions in no longer retaining his solicitors was further evidence, additional to that called on 6 December 2013, of abuse of process. The success of the first defendant's Motion obviously turns on whether or not the fresh Statement of Claim is, in fact, in acceptable form.

1. I ordered that the proceedings be dismissed, but stayed that order up until 21 March to give Mr Maroya one last opportunity to justify his pleading. I did this because I was faced with a very voluminous document at 4:05pm on the last day for considering the matter, the redraft appeared to have retained many of the defects previously considered, and there appeared to be two different versions of the revised pleading. I thought that justice required that a little time be granted to review my summary decision.

1. Mr Maroya did take advantage of the extra time to make further submissions. I did not require further assistance from Mr Parsons.

The Statement of Claim

1. The basic reason for rejecting the former statement of claim was that it was embarrassing, in that it contained complicated series of statements which purported to be a definition clause but actually contained some statements of material facts. It also was verbose and made many allegations in the alternative, not always in the manner in which alternative allegations can be made in a sworn pleading. There was also a suspicion of multifariousness.

1. The latest version of the Statement of Claim has removed the definition provision. It also, without explanation, deleted the former third plaintiff August Pty Ltd. However, it is not at all clear as to whether sufficient adjustments have been made to the various allegations to reincorporate the definitions where applicable. Other objections still remain, and I will consider these below.

1. I consider it is appropriate to commence by general consideration of the principles of pleading.

1. Part 14 of the Uniform Civil Procedure Rules deals with pleading. Rule 8 specifies that "A pleading must be as brief as the nature of the case allows." This revised pleading, as its predecessors has every appearance of breaching this rule. In a word it is just prolix.

1. An example is paragraph 25, not only does it plead in the alternative what the mortgagor knew, or alternatively reasonably ought to have known (and the difference might be vital) it then sets out what the plaintiffs call "particulars" in a table with 6 columns and 17 items without specifying which particulars refer to which allegation or doing more than listing dates of letters and a telephone conversation.

1. Rule 6 provides that each matter in a pleading must be put in a separate paragraph so far as convenient. This rule appears to have been breached and there are some paragraphs, such as 41 & 42 which extend for half a page or more with rolled up multiple allegations.

1. The commentary to rule 6 in the NSW Civil Procedure Handbook 2013 truly says at 14.6.40, "As the pleadings will define the litigation they should be clear and unambiguous. To roll separate matters into one paragraph produces positive mischief for both the defendant and the trial judge". The authority for that proposition is Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663, 677 which was a defamation case, but the principle applies generally. The present pleading breaches this principle.

1. An example is paragraph 42 where the claim is that loss or damages has been suffered by A or "further or alternatively", B and that the defendant is required and ought to be ordered, to account to A "further or alternatively" B for what is called the "GST Amount" and interest.

1. The relief claimed is stated in the Statement of Claim to be as claimed in the summons.

1. The relief claimed in the summons is spread all over the place. It commences with a claim for a mandatory injunction to be granted under Trade Practices Act 1974 (Cth) to compel the first defendant to claim back payments it had main to various bodies. It then seeks a declaration that one or other of the three sets of plaintiffs is subrogated to the first defendant's rights of recovery, a order for accounts between mortgagor and mortgagee, "damages, equitable compensation, equitable damages or an account of profits and damages" under s 82 of the Trade Practices Act.

1. The Statement of Claim appears to say that there was a mortgage in which the first defendant was the mortgagee and the second set of plaintiffs was the mortgagor.

1. If this is the case, the second plaintiffs only right (excluding statutory rights) is to have one account of all dealings between mortgagor and mortgagee, and cannot have a partial account, Adams v Bank of New South Wales [1984] 1 NSWLR 285 and other authorities noted in Fisher & Lightwood's Law of Mortgage 3rd Australian Edition 2014 [39.1] & [39.21]

1. The present pleading not only asks for a full account but also for a partial account as well as common law damages. This would seem to be bad.

1. In any event, the account is usually only if it is pleaded that there is a surplus due to the mortgagor, C2C Developments Pty Ltd v Commonwealth Bank of Australia (2012) 16 BPR 31,735. That matter is not pleaded. Again, an account is often refused if the mortgagee is not put in funds to prepare it Project Research Pty Ltd v Permanent Trustee of Australia Ltd (1990) 5 BPR 11,225.

1. On another point, the traditional rule was that, in equity, although the principles about joining parties and causes of action was more relax than at common law, it was a proper objection that a set of claims should be struck out for multifariousness. Even the reforms of the 1850s did not permit the joinder of separate causes of action by separate plaintiffs against the same defendant in the same statement of claim, Cyclone Proprietary Ltd v Stewarts and Lloyds Ltd (1916) 16 SR (NSW) 629

1. Rule 6.18 and following of UCPR have further modified the position. Although I had some doubt as to whether the proceedings were bad for multifariousness, I now consider that there is sufficient connection with the one transaction for the present proceedings to be justified under Rule 6.18.

1. Another concern I had was that the Statement of Claim, although verified, contained inconsistent allegations. This is not permitted unless the allegations are put in a particular way such as I say X, but if the Court should rule against me, then if the opponent's view is found to be correct, I say Y, see Lamerand v Lamerand (No 2) NSWR 248.

1. In the instant case paragraph 12 alleged that the mortgage was entered into by the second set of plaintiffs in their own right and not as trustees. However, in many places in the Statement of Claim it is alleged that the first defendant as mortgagee owed some duty to the trustee of a trust of which the second set of plaintiffs were the trustees. This appears to be inconsistent.

1. Part of the problem appears to be that the plaintiffs do not appreciate that no trusts are to appear on the Torrens Register so, of course, there is no mention of the second set of plaintiffs entering into the mortgage as trustees (if that be the case) on the mortgage document itself.

1. Finally, paragraph 39(k) of the pleading lists as particulars a matter which, if it is to be pleaded at all, must be in a separate numbered paragraph of the pleading itself.

1. This last would not of itself be sufficient o strike out the claim, but, added to the other defects, it is significant.

1. There are also various aspects of the case which one suspects would lead to an early termination of the proceedings if they were not struck out such as the expiry of the limitation period for action under the Trade Practices Act. However, they are not my concern at the present time.

1. Where a court is met with a document which is replete with defects, it is not the court's job to comb through it and identify every defect. If there are sufficient deficiencies, the whole document should be struck out, see Lamerand v Lamerand (No 3) [1962] NSWR 1233 per Jacobs J and American Flag Manufacturers Co Inc v Rheen (Aust) Pty Ltd (No 2) [1965] NSWR 193, 198.

Abuse of Process

1. The other attack on the plaintiffs is based on an alleged abuse of process.

1. As noted above, the case has had an unhappy history. When its predecessor was listed for final hearing before Windeyer AJ, the leading man on the plaintiff's side did not attend because of alleged business commitments. Windeyer AJ refused an adjournment and dismissed the suit.

1. The new action was commenced and the Statement of Claim was so defective that it was struck out. I gave until 4pm on 4 March for one last chance for amendment.

1. When the case was mentioned at 10am on 4 March, the plaintiffs still had not filed their amended statement of claim. Mr Maroya said that this was because the leading plaintiff had business commitments. I found this hard to accept as three months had gone by. Nevertheless, I adjourned the proceedings until 4 pm when, at last, a revised statement of claim was handed up. However, that document still contained many defects as outlined earlier.

1. Although this cavalier attitude to his own litigation is deplorable, I do not consider it quite goes far enough to constitute the continuation of the proceedings as an abuse of process.

1. However, these facts show that no further leave should be given to amend further the Statement of Claim. I thus affirm the orders I made on 4 March, dismissing the proceedings as against the first defendant with costs.

Orders

1. Order that the proceedings be dismissed against the first defendant with costs.

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Decision last updated: 21 March 2014