Ross v Perpetual Trustees Victoria Ltd
[2017] SASC 61
•28 April 2017
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
ROSS v PERPETUAL TRUSTEES VICTORIA LTD & ORS
[2017] SASC 61
Judgment of Judge Roder a Master of the Supreme Court
28 April 2017
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS
Application for strike out pursuant to Rule 104 or in the alternative application for summary dismissal pursuant to Rule 232 - application dismissed.
Federal Court of Australia Act 1976 s 31A; Limitation of Actions Act 1936 (SA) s 25; Australian Securities and Investments Commission Act 2001 (Cth) s 12DA; Law Reform (Contributory Negligence and Apportionment of Liability Act 2001 (SA) s 3(2), referred to.
Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; General Steel Industries Inv c Commissioner for Railways (NSW) (1964) 112 CLR 125; Spencer v Commonwealth of Australia (2010) 241 CLR 118; Proude v Visic (No 4) [2013] SASC 154; Collins v Djunaedi [2016] SASCFC 48; Wilson v United Counties Bank Ltd [1920] AC 102; Wan v Sweetman [1998] WASC 8; Callinan v West Australian Newspapers Ltd [1988] WAR 212; Sutherland Shire Council v Heyman (1985) 157 CLR 424; Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514; Brabazon v Western Mail Ltd (1985) 8 FCR 122; Estate of the Late Sir Donald Bradman v Allens Arthur Robinson (2010) 107 SASR 1, considered.
ROSS v PERPETUAL TRUSTEES VICTORIA LTD & ORS
[2017] SASC 61Background
The fifth to eighth defendants apply by FDN 90 for orders that:
1.The fourth statement of claim be struck out pursuant to Rule 104; or in the alternative
2.The fourth statement of claim be summarily dismissed pursuant to Rule 232 (I take that to mean that there be summary judgment dismissing the action).
At an earlier stage of the proceedings the first defendant made an application for summary judgment. On 21 August 2015 Judge Withers gave reasons for dismissing that application. I have borrowed from his Honour’s description of the background to the action.
The first defendant is a company in the business of providing finance and was when the proceedings were commenced the holder of a registered mortgage on the plaintiff’s residence in Greenwith.
The second defendant is a wholesale financier and was the mortgage manager.
The third defendant was the “originator approver” for the second defendant.
The fourth defendant was an authorised signatory of the second defendant.
The fifth defendant was a mortgage manager.
The sixth defendant was a director of the fifth defendant.
The seventh defendant was a director of the fifth defendant at the time of the events the subject of the action.
The eighth defendant was the sole shareholder of the fifth defendant.
The first, second and fourth defendants are collectively described as the “Perpetual parties”.
The fifth, sixth, seventh and eighth defendants are collectively described as the “Boardroom Finance parties”.
The ninth and tenth defendants are collectively described as the “Merritt parties”.
The ninth defendant is a firm of taxation consultants and accountants.
The tenth defendant was an accountant employed by the ninth defendant.
The plaintiff obtained finance from the first defendant to purchase her residence. The other defendants were involved in the process. The plaintiff subsequently sought more finance and the first defendant re-financed the property.
The plaintiff claimed in the proceedings that the first loan was one which she could not service and that the second loan was granted on the basis of fraudulent documents not put forward by her but by the fifth defendant, of which she had no knowledge.
In September 2009 the plaintiff was charged with deception and dishonest dealings relating to the second loan. Eventually, the Director of Public Prosecutions filed a nolle prosequi in the District Court. In the course of the criminal proceedings the plaintiff for the first time saw a number of documents which related to the applications for finance and became aware of the allegedly fraudulent activity of the Boardroom Finance parties.
In the fourth statement of claim the plaintiff seeks damages and other relief.
It appears that the plaintiff has settled her claims against the Perpetual parties and the Merritt parties. She proceeds against the third defendant and against the Boardroom Finance parties. The third defendant has been served and has filed a Notice of Acting in Person. He does not appear to have otherwise participated in the action.
The Rules
Rule 104 provides:
The Court may strike out a pleading in whole or part if the pleading—
(a)does not comply with these rules; and
(b)is an abuse of the process of the Court or prejudices the proper conduct of the action.
Example—
If a statement of claim discloses no reasonable cause of action, or a defence discloses no reasonable ground of defence, the Court may strike it out as an abuse of the process of the Court.
The requirements for a statement of claim are given in Rule 99, which provides:
(1)A statement of claim—
(a) must state the name of each cause of action; and
(b) must state the basis of each cause of action (including reference to any statutory provision on which the plaintiff relies); and
(c) must contain a short statement of the material facts and matters on which each cause of action is based; and
(d) must state any remedy for which the plaintiff asks; and
(e) if the plaintiff seeks an ancillary remedy (such as an extension of a period of limitation or a temporary injunction) – must state the nature of the remedy and the basis on which it is sought.
(2)If the plaintiff relies on separate causes of action, the statement of material facts and matters must differentiate between—
(a) facts and matters that are common to both or all causes of action; and
(b) facts and matters that are relevant only to a particular cause of action.
(3)If a plaintiff claims damages for personal injury, the statement of claim must state—
(a) the general nature of the injury and any resulting disability; and
(b) the general nature of treatment received; and
(c) the general effect of the injury and any resulting disability on the plaintiff’s—
(i) capacity to work; and
(ii) enjoyment of life; and
(d) the kinds of economic and non-economic loss suffered by the plaintiff, (but is not to contain details of treatment and loss that are required for the statement of loss).
The general rules about pleadings, established by Rule 98, provide that:
…
(2)A pleading—
(a)must be as brief as the nature of the case allows; and
(b) must state only material facts and matters relied on and not the evidence or arguments by which the facts and matters are to be proved; and
(c) must not contain matter that is—
(i)scandalous; or
(ii)evasive or ambiguous; or
(iii)frivolous or vexatious; or
(iv)an abuse of the process of the Court in some other respect.
(d) must plead such facts and matters as give fair notice of the party’s case at trial.
Rule 232, which relates to summary judgment, is as follows:
(1)The Court may, on application by a party, give summary judgment for that party.
(2)Summary judgment may only be given if the Court is satisfied that—
(a) if the applicant is a plaintiff – there is no reasonable basis for defending the applicant’s claim; or
(b) if the applicant is a defendant – there is no reasonable basis for the claim against the applicant.
In Ceneavenue Pty Ltd v Martin[1] the Full Court concluded that the burden to be discharged by a defendant in an application under Rule 232(2)(b) is lighter than the burden that had to be discharged under the former Rule 25.04 and that the reasoning in General Steel Industries Inc v Commissioner for Railways (NSW)[2] is no longer applicable.
[1] (2008) 106 SASR 1.
[2] (1964) 112 CLR 125.
Debelle J (with whom the other members of the Court agreed) said [at 94]:
The only question to be considered is whether there is a real question to be tried and whether that question has reasonable as distinct from fanciful prospects of success. Once the court concludes that there are reasonable prospects of success, it must dismiss the application for summary judgment.
In Spencer v TheCommonwealth of Australia[3] the High Court had considered s 31A of the Federal Court of Australia Act 1976. Subsection (2) of s 31A has been said not to be “materially different” from Rule 232(2).[4]
[3] (2010) 241 CLR 118.
[4] Davies v Minister for Urban Development and Planning (2011) 109 SASR 518 at [37] (“Davies”).
In their joint judgment, Hayne, Crennan, Kiefel and Bell JJ stressed that no paraphrase of the expression “no reasonable prospect” (the expression in Rule 232 is: “no reasonable basis”) should be adopted. There should be no judicial gloss on the statutory provision.[5]
[5] cf Singer v Berghouse (1994) 181 CLR 201, 209.
In Davies Bleby J held that the decision of the plurality in Spencer was binding on this Court. In Proude v Visic (No 4)[6] Blue J took a similar approach.
[6] [2013] SASC 154.
In Collins v Djunaedi[7] Kourakis CJ, with whom Stanley and Parker JJ agreed, said at [17]:
In the case of a summary judgment application, there is a reasonable basis for a claim, or a positively pleaded defence, when there is an evidential foundation for facts upon which arguable propositions of law would result in judgment for the plaintiff or the defendant as the case may be. In cases in which the defendant merely denies the claim there must be reasonable grounds on which to contend that the plaintiff will not discharge its onus of proof or make good the propositions of law on which it relies. In the case of a SCR 232 application the evidential basis or grounds must at least be pleaded. [Emphasis added.]
[7] [2016] SASCFC 48.
I also note the observations of Judge Withers in his Honour’s decision on the earlier application for summary judgment in this action: [8]
The interaction of the oral evidence at trial subject to cross-examination is the only way in which the Court will be able to satisfactorily determine the complex factual issues underlying those competing claims and to decide what, if any, relief is appropriate to any party.
[8] See also Toldale Pty Ltd v Sloper (1989) 51 SASR 360, 364.
I consider that I should apply the words of the Rule, attempting to avoid any gloss on those words and giving them their natural meaning. In doing that I try to exclude concepts that guided judges applying previous Rules.
The Boardroom Finance parties’ arguments
Mr Floreani, counsel for the Boardroom Finance parties, advanced three main attacks on the fourth statement of claim:
·first, he attacked what was in his outline described as the “purported Defamation Claim”;
·secondly, he submitted that all of the causes of action – identified in the fourth statement of claim or potentially available from the facts pleaded – are out of time; and
·thirdly, he submitted that on any view the plaintiff could not now recover damages against the Boardroom Finance parties – there remains no recoverable loss.
The “purported Defamation Claim”
For this argument to be fully understood it is necessary to set out the pleading at paragraphs 33 to 36 of the fourth statement of claim:
33.In about April 2009 the Plaintiff was served by the South Australian Director of Public Prosecutions (“DPP”) with a complaint containing allegations of deception, dishonest dealing with documents relating to the Second Loan.
34.On 22 November 2010 the DPP filed a nolle prosequi in relation to the complaint.
35.The laying of the criminal charges against the Plaintiff were the direct consequence of the fraud of the Boardroom Finance Parties and the Merritt Parties referred to in paragraphs 23 and 37 hereof.
36.The laying of the criminal charges against the Plaintiff:
36.1 caused great harm to the Plaintiff’s reputation;
36.2 caused the Plaintiff hurt and distress; and
36.3 caused the Plaintiff to incur legal fees of $15,000.00 in the defence of the complaint laid by the DPP.
36.4 caused the Plaintiff to suffer loss and damage to her reputation as set out at items 18 and 21-26 of the schedule.
The relevant items in the “Schedule” are:
18.Legal fees charged in relation to court costs and legal fees –
Defending charges by DPP $15,000.00
19.If property could be sold value at approximately $440,000.00 and home bought for $320,000.00 Equal loss of approximately $120,000.00.
TOTAL MONIES ALREADY PAID $309,206.97
Loss of money if house sold at value $120,000.00
TOTAL MONEY LOST = $429,206.97
20.No affordability of future home loan.
21.Damage to reputation due to arrest by Major Crime Detectives in front of plaintiff’s home with a search of body in front of neighbours.
22.Damage to reputation being taken to Police Station at Holden Hill, fingerprinted and placed in holding cell.
23.Damage to reputation by way of name being publicly named on Courts Cause List.
24.Defamation of character by way of appearance in the Adelaide Magistrates Court and District Court with open gallery.
25.Physical and Mental Health issues relating to exhaustion and depression and anxiety.
Despite the plea in paragraph 36.4, no item 26 is pleaded.
Mr Floreani complained that the Boardroom Finance parties did not know what cause of action was being advanced against them. He speculated that it might be defamation. As he correctly submitted, the necessary elements of a cause of action and defamation are not pleaded.
Mr Riggall for the plaintiff expressly disclaimed any reliance on defamation. The transcript records this exchange at page 14: [9]
HIS HONOUR: Can I be particularly clear about this: do you seek to advance a cause of action in defamation?
MR RIGGALL: No, we don’t.
[9] The transcript then goes on to attribute to me words that were spoken to me by Mr Riggall.
That disclaimer does not completely answer Mr Floreani’s complaint. The Boardroom Finance parties are entitled to know what cause of action is alleged against them[10] and what the material facts of that cause of action are.
[10] Rule 99(1)(a).
Mr Riggall commenced his submissions on this topic by saying that the cause of action relied on was fraud. He referred to a number of cases in which damages had been awarded in respect of loss of reputation.[11] In particular, Mr Riggall relied on Wilson v United Counties Bank Ltd.[12]That was a case where the plaintiff’s bank had agreed with the plaintiff to supervise the financial side of his business during his absence on military service and to take all reasonable steps to maintain his credit and reputation. It was found that the bank had been negligent in the discharge of its duties and caused the bankruptcy of the plaintiff. The plaintiff was awarded damages for loss and further damages for the injury caused to his credit and reputation. At p 128 Lord Atkinson said (the emphasis is mine):
Of course, the sum awarded in respect of the injury to Major Wilson’s estate vests in the trustee [in bankruptcy], but a question arises as to the person in whom vests the sum of 7500l damages awarded in respect of the injury done to Major Wilson’s credit and reputation. Is Major Wilson entitled to retain that sum for his own use, or does it pass to his trustee in bankruptcy? The difficulty involved in this question arises from the fact that the same breach of contract, the neglect of the defendants to take reasonable steps to maintain Major Wilson’s credit and reputation, caused loss to his estate, and at the same time inflicted upon him as a trader … pain and humiliation and loss of credit and repute. That credit and repute, though of great value to him, was not part of his assets. Injury to it, though it might do him much harm, did not lessen or depreciate his property; and it would appear to me that the right of action in respect of this injury would no more pass to his trustee than would his right of action for slander reflecting on him as a trader published in the course of the bankruptcy proceedings.
[11] Rolin v Stewartd (1854) 14 CB 595; Baltic Shipping Co v Dillon (1993) 176 CLR 344; Kpohraror v Woolwich Building Society [1996] 4 All ER 199; Wan v Sweetman [1998] WASC 8; Johnson v Unisys Ltd [1999] 1 All ER 854; Malik v BCCI [1998] AC 20; Thomson v Broadley [2000] QSC 100; Narni Pty Ltd v National Australia Bank Ltd [2001] VSCA 31; Thomson v Broadley [2000] QSC 100; Thomson v Broadley [2002] QSC 255.
[12] [1920] AC 102.
It could be argued that two losses were recoverable from the one breach –arguably one cause of action vested in the trustee in bankruptcy in respect of the financial loss and the other cause of action vested in Major Wilson in respect of the damage to reputation. That might form a basis – depending on the facts found at trial – for an argument as to when the cause of action in respect of damage to reputation accrued. I will consider that question further when I deal with the second category of complaint identified by Mr Floreani.
In all but one of the cases relied on by Mr Riggall damages were recovered – or considered to be potentially recoverable - in the context of a claim involving a breach of contract. The exception is Wan v Sweetman. [13] That was an action in malicious prosecution and abuse of process. The plaintiff was a resident of Hong Kong who, while in Perth, made an offer to purchase a property in Perth. The offer was accepted. The plaintiff took legal advice as a result of which his solicitor advised the vendor that the plaintiff did not consider himself bound by the offer and purported contract. The defendants obtained an absconding debtor’s warrant, pursuant to which the plaintiff was arrested. The plaintiff sought damages for malicious prosecution (the arrest) or alternatively abuse of process (issuing proceedings). The plaintiff failed on the facts. His action was dismissed. However, the trial judge indicated that if liability had been established an award of $10,000 for damages to reputation would have been appropriate.
[13] [1998] WASC 8.
That is a well-established head of damage recoverable in an action for the tort of malicious prosecution. [14] Malicious prosecution is not alleged in this case. However, I consider it arguable that if damages for injury to reputation can be recovered in malicious prosecution cases they can also be recovered in fraud cases.
[14] Assheton v Merrett [1928] SASR 11, 15.
I do not think that this part of the pleading should be struck out on that basis – nor do I think that the argument is so poor as to warrant summary dismissal. The case that the Boardroom Finance parties have to meet is, in my opinion, clear. It is an unusual case. It may not succeed. The case is:
·There was a fraud. The alleged fraud is clearly pleaded.
·The Boardroom Finance parties are liable for the fraud. The basis of the alleged liability is, again, clearly pleaded.
·As a result of the alleged fraud the plaintiff has suffered damages. The alleged damages are pleaded.
That case either will or will not succeed at trial. There is no reason, subject to consideration of the other two heads of attack raised by Mr Floreani, to strike out.
During the course of submissions, Mr Riggall indicated that he would seek, in any event, to further amend the plaintiff’s statement of claim to allege a breach of contractual duty. Understandably, the proposed new pleading was not formulated on the spot. I understand the purpose of the intended amendment is to bolster the claim that damages for loss of reputation are recoverable in the circumstances of this case. The plaintiff would say that the various categories of breach of contract cases referred to at footnote 11 support the claim.
The proposed amendment is not before me. I cannot rule on it. However, it is another reason why I should not dismiss the action. I will deal with the proposed amendment later in these reasons.
All causes of action out of time
Mr Floreani’s next attack on the pleading was that every cause of action pleaded was out of time. There is no claim in the pleading for an extension of time. Mr Floreani submitted that as it is clear from the facts as pleaded that the causes of action are out of time and there is no claim for an extension, the causes of action must necessarily fail and so there should be summary judgment. It is to be noted that no extension of time could be available in respect of some of the causes of action relied on by the plaintiff. In his outline of submissions he relied on Callinan v West Australian Newspapers Ltd. [15]
[15] [1988] WAR 212.
In that case the plaintiff sued in defamation for damages arising out of an article in a newspaper published on 2 May 1986. The relevant Western Australian legislation provided that no such action could be brought after the expiration of 12 months from the date of the publication in the newspaper. The action was commenced on 15 May 1987 – one year and 13 days after publication of the article. Master Seaman QC considered that the submission of the plaintiff as to the limitation period was “manifestly groundless” and so struck out the relevant paragraph of the amended statement of claim and refused permission to further amend.
As to the causes of action pleaded by the plaintiff in negligence, the Boardroom Finance parties submitted that the relevant alleged conduct occurred in May 2006 or at latest August 2006, both of which dates are more than six years before commencement of the action. It was further submitted that any action in fraud must be based on the alleged conduct in May 2006 and was also out of time.
It is settled law that a cause of action in negligence accrues when damage is first suffered by the plaintiff. That is not necessarily the same date as the date on which the conduct in question occurs. Mr Floreani submitted that it is inherent in the plaintiff’s case as pleaded that damage occurred when the first loan was made – or at least when the second loan was made. That being the case, the cause of action in negligence accrued then, notwithstanding that the alleged reputational loss did not occur until 2009.
It is clearly arguable – and it may be a strong argument – that the cause of action in negligence did accrue in 2006 and that the action is out of time. It does appear to have been part of the plaintiff’s case that damage occurred when the loan contracts were entered into. However:
1.That may no longer be the claim that the plaintiff makes – in which case the question is, in my view, clearly one for trial; and
2.If it is still part of the plaintiff’s case, the plaintiff may be wrong about that.
As it is, Mr Riggall submitted that loss did first occur in respect of the actions of the Boardroom Finance parties at about the time of the arrest. Before then, he says, the plaintiff was managing to meet her commitments.
I do not think that it is appropriate to attempt to determine the question of accrual of any cause of action in negligence at this stage of the action.
The possibility of a separate cause of action as referred to in the discussion above of Wilson v United Counties Bank Ltd[16] is another reason why there should not be a summary dismissal based on a time point at this stage in the litigation. As Brennan J (as his Honour then was) said in Sutherland Shire Council v Heyman[17] the common law develops incrementally and by analogy with established categories.
[16] [1920] AC 102.
[17] (1985) 157 CLR 424, 481.
I was not referred to authority on the wrong (or tort) of “fraud”. In Salmond, The Law of Torts, [18] the learned author says, introducing Chapter 15:
Wrongs of fraud or misrepresentation are of two kinds, essentially distinct –
(a)the wrong of deceiving the plaintiff so that he causes harm to himself by his own mistaken act,
(b)the wrong of deceiving other persons so that they by their mistaken acts cause harm to the plaintiff.
The first of these injuries may be called, in a narrow and specific sense of the term, the wrong of deceit.
The second has no recognised distinctive title, and in default of a better designation it will here be called ‘the wrong of injurious Falsehood’.
[18] 3rd ed 1912, p 447.
In most common law jurisdictions in the world the limitation period for an action based in fraud – where the fraud has been concealed from the plaintiff – does not begin to run until the fraud is discovered. [19] That is not the law in South Australia. In this State, the law is that a cause of action in the tort of fraud[20] accrues when damage is first suffered by the plaintiff.
[19] Handford Limitation of Actions at [129].
[20] Handford at [37] and [129].
In submissions, Mr Riggall suggested that the relevant damage in respect of the cause of action in fraud (the damage to reputation) occurred when the plaintiff was arrested. Mr Floreani submitted that at least some damage must, on the plaintiff’s own case, have been suffered when the second loan was entered into.
The plaintiff alleges a common law action in fraud against the Boardroom Finance parties. In the plaintiff’s outline of submissions (which were relied on at the hearing) the plaintiff asserted that:
In South Australia time runs, in the case of fraudulent conduct, from the discovery of the deception. In this case the deception was discovered at the earliest when she was charged on 5 March 2009 but more likely when she was given access to documents at a later time.
No authority was given for that submission.
I am unable to accept the submission. To the extent that there is a cause of action in fraud, it is in tort. South Australia is one of the few jurisdictions in the common law world in which there is no general provision to the effect contended for by Mr Riggall as to the effect of concealed fraud. [21] The only provision in South Australia is in s 25 of the Limitation of Actions Act 1936 (SA) which provides:
(1)In every case of a concealed fraud, the right of any person to bring equitable proceedings for the recovery of any land or rent of which he or any person through whom he claims has been deprived by that fraud shall be deemed to have first accrued at and not before the time when that fraud was or with reasonable diligence might have been first known or discovered.
This is not a case of equitable proceedings for the recovery of land or rent.
[21] Handford Limitation of Actions at [129].
However, the plaintiff in any event contends that the relevant date for the accrual of the cause of action is on or after the arrest. For the reasons already given, I consider that that is a question for trial.
Paragraph 45.3 of the fourth statement of claim pleads that certain representations by the Boardroom Finance parties were misleading and deceptive or likely to mislead or deceive within the meaning of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”). The relevant time limit is in s 12GF(2).
An action under subsection (1) may be commenced within 6 years after the day on which the cause of action that relates to the conduct accrued.
I was not referred to any authority on that provision. It appears to me that insofar as the action is based on misleading and deceptive conduct the analogy drawn by the High Court in Wardley Australia Ltd v State of Western Australia[22] would be appropriately applied in this case. That simply means that the relevant limitation period is the same as in a cause of action in negligence. As I have already said, I think that that is a question for trial.
[22] (1992) 175 CLR 514.
There is a further claim that the Boardroom Finance parties’ conduct was “unconscionable” within the meaning of s 12CB of the ASIC Act. Section 12GF(2) appears to apply to such a cause of action. It is not at all clear to me that the analogy drawn in Wardley is appropriate in respect of a claim for unconscionable conduct. It may be arguable that, where the alleged unconscionable conduct involves a concealed fraud, any cause of action does not accrue until the discovery of the fraud. That is, I consider that it is arguable that the relevant analogy is with equity, rather than tort.
In submissions, Mr Riggall said that as he proposed to amend the statement of claim again in any case, he would like to take the opportunity to reconsider claiming an extension of time. There was some discussion as to the non‑availability of a “new” fact. No submission was made in respect of s 48(3)(b)(ii).
Section 48(3) of the Limitation of Actions Act provides that:
(3) This section does not—
(a) apply to criminal proceedings; or
(b) empower a court to extend a limitation of time prescribed by this Act unless it is satisfied–
(i)that facts material to the plaintiff’s case were not ascertained by him until some point of time occurring within 12 months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within 12 months after the ascertainment of those facts by the plaintiff; or
(ii)that the plaintiff’s failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances,
and that in all the circumstances of the case it is just to grant the extension of time.
In Wardley[23] Mason CJ, Dawson, Gaudron and McHugh JJ said:
We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in the interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.
[23] (1992) 175 CLR 514, 533.
I do not consider this to be “the clearest of cases”.
I note that while claims under the Fair Trading Act 1987 (SA) are made against certain parties there appear to be no such claims against the Boardroom Finance parties. It is not necessary to consider the question of limitations under that Act, nor the applicability of s 48(1) of the Limitation of Actions Act.
No loss
Mr Floreani submitted that, given the settlements with other parties, the plaintiff had been fully compensated for her loss (if any) and so there could be no damages in any event payable by the Boardroom Finance parties.
I reject that submission for the following reasons.
The submission appears to be based on the articulation of the claim for loss and damage in Schedule 1 to the fourth statement of claim. The submission fails to allow for a number of matters: They include:
1.The pleas at items 20-25 of the Schedule.
2.Damages for loss of opportunity or other use of money.
3.The fact that there is a claim for damages at large (paragraph 1 of Part 2 of the fourth amended statement of claim).
It may be that the plaintiff has – from the proceeds of sale of the property and the settlements with the Perpetual parties and the Merritt parties - received more money than she was liable for under the loans. That does not mean that there could not be any other damage.
I note that in Brabazon v Western Mail Ltd[24] Toohey J considered that the words “loss or damage” in s 82 of the then Trade Practices Act 1974 (Cth) were wide enough to include injury to reputation. On the facts it was held that the defendant had not established misleading or deceptive conduct and so there was no need to proceed further. In the face of that authority, I cannot say that there is no reasonable basis for asserting a claim for damages for injury to reputation in, at least, the context of the various statutory claims that the plaintiff makes against the Boardroom Finance parties.
[24] (1985) 8 FCR 122.
I add to that that there are pleas - raised by the Boardroom Finance parties - in their third defence that the liability (if any) of the Boardroom Finance parties to the plaintiff is “apportionable liability” for the purposes of s 3(2) of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA). That in itself appears to me to raise an arguable case that any loss of the plaintiff in respect of reputational damage might be laid solely at the foot of one or more parties – including the Boardroom Finance parties.
Damages are notoriously questions of fact. There are pleas that support several heads of damages – particularly the plea for damages for loss of reputation. I cannot say on this application that those pleas have no merit. Rather, it seems to me that they do have merit – at the least, as pleaded. Questions of damages are almost always best left to trial. I do not think that this case is any exception.
In my opinion, the argument that the plaintiff has now suffered no loss is unsustainable at this stage. As I have indicated, there are many arguments available to the plaintiff on the basis of the pleadings that she has suffered loss that she should be compensated for by the Boardroom Finance parties. I think that there is a reasonable basis for the claim in that regard.
Summary Judgment
In his outline of submissions (adopted in oral submissions) Mr Riggall submitted that the failure of the Boardroom Finance parties to apply for summary judgment at an earlier time – ie, when the first defendant applied (unsuccessfully) for summary judgment was a matter that ought to bear against those parties on this application. Failure to be involved at that time was said to be “oppressive” and it was put that insofar as there is a discretion, that discretion should be exercised in favour of the plaintiff.
It may be that there is a discretion in respect of summary judgment. In Estate of the Late Sir Donald Bradman v Allens Arthur Robinson[25] the defendant sought summary judgment against the plaintiffs pursuant to Rule 232. Sulan and Layton JJ said:
The discretion to summarily dismiss an action, thereby depriving a party of a full hearing on the merits, should be exercised with extreme caution.
[25] (2010) 107 SASR 1 at [62].
If there is a discretion, I would not exercise it against the Boardroom Finance parties in the circumstances of this case. The first defendant sought summary judgment on a counterclaim. That is quite different from other defendants seeking summary judgment dismissing the plaintiff’s claim.
That said, I am unable to conclude that there is no reasonable basis for the plaintiff’s claim against the Boardroom Finance parties. There is, in my view, a reasonable basis for asserting that damages for reputation or loss are recoverable in fraud and under the statutory claims. Further, the plaintiff has indicated a proposal to amend to include a contractual claim. I consider that there is a reasonable basis for making a claim for damages for reputational loss on the basis of a breach of contract.
I do not think that it is appropriate to attempt to determine the limitation arguments at this stage. It may be that the Boardroom Finance parties succeed on those at trial. Trial is, I think, the appropriate place for those arguments to be considered. Not being able to determine the facts as to limitations and accepting that an interlocutory application of this sort is not a good vehicle to determine legal principles that have not yet been adversely decided unfavourably to the plaintiff’s arguments, I cannot say that there is no reasonable basis for the claim.
Conclusion
For these reasons, I refuse to grant summary judgment in favour of the Boardroom Finance parties. I reject the allegations of deficiency in the pleading of the plaintiff’s claims against the Boardroom Finance parties and will not strike out the fourth statement of claim on the basis of those complaints.
However, the plaintiff’s counsel conceded in argument that there are deficiencies in the pleading and that the plaintiff wishes to amend again. This should be the plaintiff’s last chance to amend. That being the case, I order that:
1.The application for summary judgment be dismissed.
2.The fourth statement of claim be struck out.
3.The plaintiff may apply for permission to file and serve a fifth statement of claim against the third defendant and the Boardroom Finance parties.
4.Any such application is to be made within 28 days of the delivery of these reasons.
5.Permission to the parties to apply to vary the timetable.
I will arrange for the matter to be re-listed for further directions.
In the circumstances, it appears to me that there should be no order as to the costs of FDN 90. The costs of the proposed amendment (if allowed) should be as provided by the Rules. If any party seeks a different order as to costs, that party should apply by interlocutory application within fourteen (14) days from the date of delivery of these reasons.
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