Skelton v Foggo

[2021] NSWSC 1228

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Skelton v Foggo [2021] NSWSC 1228

Hearing dates:

13 September 2021

Date of orders:

28 September 2021

Decision date:

28 September 2021

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

The court orders:

(1) The plaintiff’s statement of claim filed 17 March 2021 is dismissed as against the first defendant.

(2) The plaintiff is to pay the first defendant’s costs.

(3) The matter to be listed for a directions hearing before the Registrar at 10.00am on 19 October 2021.

Catchwords:

CIVIL PROCEDURE — Summary dismissal — No reasonable cause of action — Abuse of Process — Expiry of limitation period — Pleadings — Striking out — No reasonable cause of action — Tendency to cause prejudice, embarrassment or delay — Abuse of Process

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 67

Evidence Act1995 (NSW), s 91

Limitation Act 1969 (NSW), ss 11,14, 51 and 52

Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28, 14.6, 14.7 and 14.8

Cases Cited:

BanqueCommerciale SA En Liquidation v Akhill Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279

Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937

Dey v Victorian Railway Commissioners (1949) 78 CLR 62

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435

Preston v Star City Pty Ltd [1999] NSWSC 1273

Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514

Webster v Lampard(1993) 177 CLR 598

Wickstead v Browne (1992) 30 NSWLR 1

Williams v Spautz (1992) 174 CLR 509

Category:

Procedural rulings

Parties:

Brett Skelton (Plaintiff)
Robert Foggo (First Defendant)
Alistair Henskens (Second Defendant)
Michael Evers (Third Defendant)
Carl Terpstra (Fourth Defendant)
Nicholas Coren (Fifth Defendant)
Robert Harris (Sixth Defendant)

Representation:

Counsel:
Mr G. Ng (First Defendant)

Solicitors:
Simon Lusk, YPOL Lawyers (First Defendant)

File Number(s):

2021/75684

Publication restriction:

Nil

Judgment

1. HER HONOUR: This matter involves a notice of motion seeking dismissal of proceedings.

2. By Notice of Motion filed 29 July 2021, the first defendant seeks:

1. the summary dismissal of these proceedings; or

2. the striking out of the Statement of Claim filed 17 March 2021 ("the SOC"); or

3. a permanent stay in respect of these proceedings.

3. The plaintiff in this matter is Mr Brett Skelton. The first defendant is Mr Robert Foggo, solicitor, who acted on behalf of the plaintiff in relation to proceedings in the Common Law Division of this Court and in the Court of Appeal. The second defendant is Alistair Henskens, solicitor, the third defendant is Michael Evers, solicitor, the fourth defendant is Carl Terpstra, the fifth defendant is Nicholas Coren and the sixth defendant is Robert Harris.

4. The plaintiff was self-represented. Mr G. Ng of Counsel appeared for the first defendant.

5. As the plaintiff was unrepresented I have carefully read the statement of claim and the documents he has submitted and I have taken them into account. The first defendant relied upon a Court book.

Background

6. Pursuant to s 91 of the Evidence Act1995 (NSW) evidence of a decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding, hence I am providing a broad overview of the reasons for judgment in Skelton v The Nominal Defendant and Ors (file 519 of 1983 at Newcastle) (“the common law proceedings”) and the Court of Appeal decision in Cassell v Skelton (1990) 11 MVR 133 (“Cassell”).

7. On 20 April 1988, Enderby J (the primary judge) in the common law proceedings handed down his reasons for judgment. There was a substantive dispute as to whether the plaintiff was the driver or the passenger at the time of the motor vehicle accident. The nominal defendant was the first defendant as it was alleged that an unidentified vehicle ran the motor vehicle in which the plaintiff was a passenger off the road, causing the accident or alternatively that one cause of the accident was negligent driving. The nominal defendant cross claimed against the Urban Transport Authority. The plaintiff then joined the Urban Transport Authority as third defendant on the basis that the unidentified vehicle was a bus. Mr Cassell was the second defendant who was alleged to be the negligent driver of the motor vehicle. The primary judge made a finding that Mr Cassell was the driver of the motor vehicle, the plaintiff was the passenger and Mr Cassell was negligent. The plaintiff was 19 years old at the time of the accident, and 24 at the time of the trial.

8. The plaintiff was seriously physically injured in this accident. He suffered a severe head injury, neck fracture and fractures to his C4, C5 and C6 vertebrae. Surprisingly it was said that he suffered no neurological defects. One of the worst features of the plaintiff’s condition, apart from the injuries to his foot, leg and neck is that he developed epilepsy as a result of the accident. He has some limited earning capacity. The primary judge assessed that he had lost approximately 50% of his earning capacity.

9. On 20 April 1988, judgment was entered that the second defendant (“the driver”) pay to the plaintiff the sum of $347,453.00 and his costs of this action including such costs as the plaintiff is ordered to pay the third defendant. The plaintiff was ordered to pay the third defendant (Urban Transit Authority of NSW’s) costs.

The Court of Appeal’s decision

10. Mr Cassell appealed the primary judge’s decision in CA 256 of 1988 with the plaintiff named as the first respondent. On 30 January 1990 the appeal was heard. On 2 February 1990, in Cassell, the Court of Appeal (per Mahoney, Meagher JJA and Hope AJA) dismissed Mr Cassell’s appeal and provided written reasons for its decision.

The function of pleadings

11. The statement of claim in these current proceedings pleads some very serious, unsubstantiated and wide ranging allegations. As the Senior Counsel named in the statement of claim is not a party to the proceedings I have anonymised his name by way of XXX.

12. As I understand it, the gravamen of the plaintiff’s complaint is that his former solicitor should have had a tutor appointed to conduct his legal proceedings on his behalf and his verdict monies should have been managed by the Public Trustee. As neither of these events occurred, he pleads that all but $80,000 of the verdict monies vanished shortly after their receipt.

The pleading in the statement of claim

13. By statement of claim filed 17 March 2021, the plaintiff claims damages in the sum of $20,000,000.00. He relevantly pleads against the first defendant as follows:

“1)   THE TRIAL JUDGE'S UNAMBIGUOUS FINDINGS SUPPRESSED BY ALL DEFENDANTS

The Judgement opens over five (5) years after the plaintiffs M.V.A. with His Honour's first of no less than twenty (20) salient Comments that are all specifically regard the plaintiff's severe brain injury /sedation and lack of future employment prospects... *Trial Judge; 'THERE HAD BEEN BRAIN DAMAGE THERE SEEMS LITTLE DOUBT ABOUT THAT.' page two.

2)   ALL SENIOR COUNSEL LIED TO BY THE FIRST DEFENDANT'S NEW/CONFLICTED EMPLOYEES

Which is easily gleaned from Senior Counsel XXX request for The Judgement from the third defendant. **Senior Counsel XXX Request was never met by the third defendant. N.B. The first defendant had already employed the third defendant into the second conflict of interest. *The third defendant suppressed his evidence precisely like the second defendant had done from the exact same office OWNED BY the first defendant. ie. The Office that the plaintiff's Court Award did vanish from. *S.C. XXX believes that the second defendant had been employed from the first defendant's office.

3)   THE NEUROSURGEON MADE THE DATUM PERFECTLY CLEAR

'MODERATELY DISABLED AS A RESULT OF his HEAD INJURY.' unquote Neurosurgeon/Dr Bookallil whom drilled the bi lateral frontal burr holes in the plaintiff's SKULL whilst the plaintiff laid in the two (2) month COMA caused by his M.V.A. *Yet the first defendant took instruction from the plaintiff without a trustee.

…

7)   WHAT THE TRIAL JUDGE NOTED AT-THE-OUTSET

The first defendant began taking instruction from the teenage plaintiff without a trustee involved and only a matter of DAYS after the plaintiff had regained consciousness. *Grooming the plaintiff for a further seven (7) years/ignoring what became apparent to His Honour AS SOON AS The Trial Judge had met the plaintiff.

8)   INSURANCE SALESMAN AS SUCH A CLIENT'S TRUSTEE

Clearly the plaintiff needed a trustee to protect his best interests, ie. NOT an INSURANCE SALESMAN whom the first defendant clearly premeditated and arranged to invest the plaintiffs Court Award imprudently.

(9)   THE SECOND DEFENDANT’S EVIDENCE INDEED A PROBLEM FOR THE FIRST DEFENDANT

The second defendant's evidence established that the first defendant's purported expert was in fact an insurance salesman and had been an insurance salesman for the TWELVE (12) YEARS PRIOR TO the first defendant's discharge of his duty of care.**Perhaps being the first defendant's impetus to stymie Justice.

...

11)   FAILURE TO DEFEND EVIDENCE ENABLED BY REPEATED FAILURE TO INVOLVE TRUSTEES

The second defendant failed to defend his evidence after the first defendant employed him into the first conflict of interest necessary to keep the first defendant's conduct out of The Court's View to date. *Without Trustees the first defendant turned the third and the fourth defendants into glove puppets too

12)   ALL SENIOR COUNSEL LIED TO BY OMISSION OF THE JUDGEMENT

[Senior Counsel’s] request for The Judgement indicates that He has been lied to by the first defendant's new employee at that material time the third defendant. The third defendant's conflict of interest as the first defendant's new employee and the plaintiffs constructive trustee saw Senior Counsel XXX lied to.

13)   EVIDENCE TAMPERING SANCTIONED

The first and third defendants as Boss and NEW Employee in an obvious conflict of interest chose to pervert Senior Counsel XXX request for better evidence into an unequivocally negative Merit Advice. * Which due to the absence of a trustee and of said defendant's scruples The Court has sanctioned unjustly.

14)   OUTRAGEOUS (SNOWBALLING) MISFORTUNE PREMEDITATED BY THE FIRST DEFENDANT

The plaintiff's Court Award could have purchased outright three (3) above average houses at the time of the first defendant's/constructive trustee's discharge of his duty of care. *The plaintiff still RENTS Shelter. With ample contingency applied in 2021 the plaintiff would OWN his home with $1200-$1500/Wk Income.

N.B. The plaintiff has never received as much as The Minimum Wage due to the first defendant's conduct.

15)   ALTERNATIVE TO AN INSURANCE SALESMAN AS TRUSTEE

Based upon the fact that clearly the first defendant /first constructive trustee is not averse to taking risks the first defendant could've placed 20% on ten (10) Rental Properties and still had enough of the plaintiff's Court Award left to address his crippled client's TRANSPORT NEED that is still a problem for the plaintiff.

In 2021 the plaintiff would own his home and a reliable car with $4000/Wk Income (OWNED in 2004!) and with a further ten (10) Rental Properties half paid off. *As constructive trustee the first defendant reduced his client /the plaintiff to $24 per fortnight of his invalid pension for the entirety of the emasculated plaintiffs marriage and reproductive years...PLANNED Children LOST TO IMPOSED Poverty! Which also excluded the plaintiff from his only child's childhood causing irreparable damage to his child.

16)   IRREPLACABLE TIME LOST / OPPORTUNITIES MISSED / LOSSES COMPOUNDED

At the time of the first defendant's discharge of his duty of care Mortgages were at over twelve percent (12%) *BUT houses and credit were virtually being given away.

N.B. The first defendant failed to secure just ONE of those houses as SHELTER for his disabled client.

The plaintiffs losses only compounded because the first defendant had the plaintiff long locked into subsistence when House Prices and Rents had doubled overnight and increased 500% since then.

…

18)   FIRST DEFENDANT PREMEDITATED PLACING PLAINTIFF IN PERMANENT LOCKDOWN TO DATE

The necessary restrictions upon daily living that the Coronavirus has imposed are for all practicable purposes the same restrictions endured by the plaintiff every day since the first defendant's disastrous discharge of his duty of care. N.B. The plaintiff has been housebound to date since his M.V.A. Housebound moreso by the poverty imposed by the first defendant than by the plaintiff's injuries.

19)   COMPLICITY

The plaintiff's physical and mental suffering was only made much worse by the first defendant's perversions of the course of Justice that the second third and fourth defendants were only too ready to be party to. *N.B. Also the first second and third defendants failed to act regard the plaintiff's sexual assaults.

20)   THE COURT TAKEN FOR THE BEST OF FOOLS

…

**lt would indeed be foolish to believe this to be an isolated case in the first defendant's practice of Law.

We all but salivate at the mere speculation of every vowel syllable consonant and grammatical inflexion of The Judgement relevant to each defendant's/constructive trustee's conduct being explored in Court.”

Other evidence

14. There is a 24 page Observations to Counsel / Legal Aid (“Observations”) dated 19 May 2020 and written by Carl Terpstra, solicitor, (the fourth defendant) attached to the plaintiff’s statement of claim. The Observations record at page 9 that the plaintiff was troubled by the circumstances (similar to those outlined in the plaintiff’s statement of claim) or outcome of his claim and remained troubled, so he sought legal advice the best he could. Firstly he sought advice from Mr Foggo of Baker Love Lawyers (“FBL”) and was advised that he had no prospects of recovering his money. The plaintiff continued to be troubled by these circumstances, and consulted Nick Dan from Bilbie Dan in 2003.

15. The resulting advice was that the plaintiff had no prospects of recovering the money. The plaintiff sought to obtain justice between 1999 and 2008, by contacting the Independent Commission Against Corruption (“ICAC”), the NSW Ombudsman and the Office of the Legal Services Commissioner (“OLSC”). The plaintiff’s attempts to obtain justice had all failed, as was apparent by the replies he received. He was not able to express the nature of his issues clearly, because he did not understand them, and he was going to the wrong place, repeatedly.

16. Other legal advisers have held his file, but the file did not make it into the plaintiff’s own hands until he sought to involve the OLSC in order to secure its release to him. Baker Love were ordered to disgorge his file by the OLSC.

17. Upon the file’s eventual repatriation to the plaintiff’s care and control, it became evident that it was in a state of bad disarray and incompleteness, and contained other client’s documents. The plaintiff attempted to impose order on the disorganised conglomeration of documents he was handed by sorting them into folders, but many of the documents were in partial form only. It also appears that significant correspondence tending to support the plaintiff’s claim was not present. The file was initially presented to the fourth defendant in approximately 50 separate paper folders, which were in no discernible order, other than being roughly grouped into documents of similar types or subject matters. The file had to be, as best as possible, examined and reconstructed over many hours from the many document fragments returned to the plaintiff. Notwithstanding the file’s state of incompleteness, there is a clear enough picture to form a view on whether or not certain actions have or have not been taken.

18. The chronology attached to the observations relevantly records as follows:

1988	Mr. Skelton’s mother Nola leaves XXX North Lambton (“the North Lambton property”) due to remarriage to Patrick XXXX (“Patrick”), where they cohabitate in Patrick’s home at XXX Shortland.
1988	Mr Skelton begins to pay rent and rates for the property at the North Lambton property, which he rents from his mother who owns the property. Mr Skelton pays approximately $100 a fortnight in rent only.
February 1990	The Supreme Court of New South Wales Court of Appeal upholds primary decision and award.
February 1990	Robert Foggo and Baker Love fail to make arrangements for the financial affairs of Mr. Skelton, knowing that he has brain damage.
1990	Mr. Skelton is persuaded by his mother that he should contribute towards the repair and improvement of the property owned by her, and Mr Skelton expends approximately $20,000 in repairs and improvements on the North Lambton property. The property which he expended money on for his mother was later sold to him at a higher price than it would otherwise have been worth due to Mr. Skelton’s expenditure on the improvements.
1990	Mr. Skelton gives his mother $10,000 cash cheque because she asked him if he could send her and her partner on an overseas holiday.
1990	Mr. Skelton gives his sister $10,000, of which she eventually repaid $4,000 about 14 years later, without interest. Mr. Skelton accepted this without legal or financial advice.
1991	Mr. Skelton is persuaded that he should pay for his mother’s gall bladder operation, which he does at a cost of $3,000.
1991	Mr. Skelton’s principal compensation monies continue to be dissipated by way of annuity and poor performance of the investments he was advised to make (property trusts). Mr. Skelton is reassured by Mr. Svanberg (“the financial adviser”) that there is nothing to worry about.
February / March 1992	Mr. Skelton attends Mr. Svanberg’s office after having received further documents showing continuing losses. Mr. Skelton attends Mr. Svanberg’s office unannounced to find the office vacant.
March / April 1992	Mr. Skelton purchases an investment property at XXX Wallsend, for $120,000 with $56,000 of the recovered money, and the balance being provided by a loan from Newcastle Permanent.
1992	Mr. Skelton’s compensation monies are all but exhausted; he commences receiving what is now the Disability Support Pension at the full rate.
20 June 1992	Mr. Skelton approaches Alister Henskens from Bilbie Whitford Dan, who is appraised of Mr. Skelton’s circumstances, and ultimately advises an action in the Federal Court against the financial adviser and his employer Godfrey Weston Pty Ltd, with losses estimated to range from approximately $200,000 - $300,000. No action taken or advice against Robert Foggo & Baker Love, for failure to take steps to appoint a trustee or financial manager for Mr. Skelton.
…	…
6 March 1995	Federal Court Hearing date. Refer to Mr. Skelton’s statement / affidavit. Mr. Skelton pressured and placed under duress by Mr. Henskens to accept sum of $60,000 of his $200,000 - $300,000 claim, or else he could run the matter himself.

19. While the plaintiff alleges that he was a minor at the time of the accident, this is incorrect. He was 19 years of age. He was 24 years of age when the proceedings were heard by the primary Judge.

20. In so far as the plaintiff’s solicitor’s file of the common law appeal proceedings are concerned, on 5 July 2021, Baker Love Lawyers advised the first defendant’s solicitors:

"1. The firm does not retain a file in connection with the matter. We conducted a thorough search and endeavoured to ascertain the whereabouts of the file through the standard processes regarding physical and electronic file storage and management. We have searched the firms' databases, conducted a physical search at the firm and at the off-site storage facilities ... [T]he firm destroys documents after the 7 year mandated period (Regulation 14.2 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW)).

2. It is difficult to provide an approximation of when the file was destroyed, given the significant time period which has elapsed. We would conservatively estimate that the file was destroyed more than ten (10) years ago given the firm's archiving and file management procedures. Please note that this is merely an approximated estimate given the thirty (30) years (plus) since the firm acted in this matter,"

21. While the plaintiff’s solicitor’s file was no longer in Baker Love Lawyer’s possession, it was not destroyed. Some of it was produced to the plaintiff in 2016 as referred to earlier in this judgment.

22. The Observations then refer to the financial advisers.

The “financial advisers”

23. This information is patchy. In 1995 Mr Henskens, solicitor, of Bilbie Whtiford and Dan (“HBWD”) took action on behalf of the plaintiff against the financial advisors in the Federal Court. About a week before the hearing of the claim, Mr. Henskens left to work at the firm Baker Love (“HBL”) taking the matter with him.

24. It is recorded on page 8 of the Observations that on the morning of the hearing of the Federal Court matter, which was set down for a 5 day hearing commencing 6 March 1995, the plaintiff was shocked on his arrival to be told by HBL that Mr. XXX Q.C was not present, and was no longer involved.

25. The plaintiff was further advised that the matter had a 20-30% chance of success and that if he wanted to press on, HBL would cease to act for him and he could run the matter for himself. After further discussion, HBL enquired about offers of settlement, the highest of which was $60,000. The plaintiff recounts that HBL stated to him that if he did not accept the $60,000 settlement offered by his opponents, he would have to represent himself at the hearing and HBL would dump him then and there. On that basis the matter settled.

26. The plaintiff says he was ambushed and pressured into the settlement, and has repeatedly stated that he is not aware of any legitimate or other reason why his financial advice claim, in the range of $120,000-$260,000, should have been compromised to the extent that the claim settled for $60,000. The only reference available of any kind to support a reason for a reduction in the amount sought by way of settlement appears in a letter from Bilbie Whitford & Dan, dated 23 February 1995, presumably authored by HBWD, which is vague in its terms, stating only: “identified problems with liability and damages..”, without going into further explanation. This is contradicted by other aspects of the letter.

27. In the plaintiff’s documents there is an advice by YYY of Counsel dated 2 September 2005. YYY was asked whether in a historical sense, there is any evidence to suggest that the plaintiff was incapable of providing instructions to his solicitors during the motor vehicle damages claim (the common law proceedings) and later during the claim for financial loss. After reviewing medical reports, Counsel wrote:

“There is no suggestion in the brief that the client’s mental state has changed in any significant way, either better or worse, since the time of the motor vehicle case.

In conclusion, there is firm medical evidence, as at June 2004, that the client has the capacity to instruct his lawyers. These is evidence, by inference, that he had such a capacity at the time of the motor vehicle damages claim and the later claim for financial loss. There is very little evidence to suggest incapacity apart from the opinion of Dr. Brash who admits it is outside his speciality and suggests later tests which, when conducted, prove the opposite.

In my view, from the material in the brief, the client had the capacity to instruct his lawyers during the earlier two cases.” [My emphasis]

28. It is noted in a letter by Michael Evers and Co Solicitors to YYY of Counsel dated 3 November 2005 that counsel’s advice had been discussed with the plaintiff and the plaintiff reluctantly accepted it based on the evidence in the brief.

29. In oral submissions, the plaintiff explained that he had been sexually abused as a young person and it was other solicitors who later made a claim for Victims Injury Compensation for which he received compensation.

Summary dismissal or strike out of proceedings

30. The first defendant relies on UCPR 13.4 and 14.28. They read:

13.4 Frivolous and vexatious proceedings

"(1)   If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings -

a)    the proceedings are frivolous or vexatious, or

b)    no reasonable cause of action is disclosed, or

c)    the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.

(2)   The court may receive evidence on the hearing of an application for an order under subrule (1),

14.28 Circumstances in which court may strike out pleadings

"(1)   The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading-

a)    discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

b)    has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

c)    is otherwise an abuse of the process of the court

(2) The court may receive evidence on the hearing of an application for an order under subrule (1)."

31. UCPR 14.28 enunciates grounds, upon which a defective pleading may be struck out. UCPR 13.4 focuses on the weakness of a party’s case rather than the defects of a pleading: Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937.

32. The present application needs to be approached upon the basis that a very clear case is required before summary dismissal is granted and that the power to make such an order should be sparingly employed: Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129; Webster v Lampard (1993) 177 CLR 598 at 602-603.

33. The test to be applied by a court when considering summary dismissal is clear. It has been variously expressed as a claim being “so obviously untenable that it cannot possibly succeed”, “manifestly groundless”, or “so manifestly faulty that it does not admit of argument”: General Steel Industries Inc v Cmr for Railways (NSW) (1964) 112 CLR 125 at 128-129. In Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91 Dixon J observed that before summary intervention can be justified, the case must be a very clear one and there must be no real question of fact or law to be determined.

34. By bringing an application for summary dismissal, the defendant undertakes the burden of establishing that there is no triable issue: Wickstead v Browne (1992) 30 NSWLR 1 at 11. The General Steel test remains the primary touchstone for such an application. The mere fact (if it be the case) that a plaintiff’s prospects of success might be characterised as slim would not be enough to strike out a pleading: Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 at 271; Preston v Star City Pty Ltd [1999] NSWSC 1273 (“Preston”) at [31].

35. The question for determination is whether a reasonable cause of action is disclosed, that is a cause of action which has some chance of success, or which could conceivably give the plaintiff a right to relief, or which, although weak, is properly debatable and has some apparent legitimate basis if the facts upon which it is alleged to be based are made good: Preston at [37].

36. The onus of satisfying the Court that there is an abuse of process lies upon the party asserting the abuse of process, and that onus is ‘a heavy one’: Williams v Spautz (1992) 174 CLR 509 at 529 (Mason CJ, Dawson, Toohey and McHugh JJ).

37. The first defendant also relies upon UCPR 14.6, 14.7 and 14.8, which relate to pleadings and provide:

14.6 Pleadings to be divided into paragraphs

If a pleading alleges or otherwise deals with several matters--

(a) the pleading must be divided into paragraphs, and

(b) each matter must, so far as convenient, be put in a separate paragraph, and

(c) the paragraphs must be numbered consecutively.

14.7 Pleadings to contain facts, not evidence

Subject to this Part, Part 6 and Part 15, a party's pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved.

14.8 Pleadings to be brief

A pleading must be as brief as the nature of the case allows.

38. I emphasise that primarily the function of pleadings is to state, with sufficient clarity, the case that has to be met by the defendant. In this way, pleadings serve to define the issues for decision and ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her: Banque Commerciale SA En Liquidation v Akhill Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286-287 and 302-3.

39. I shall start by dealing with the strike out and summary dismissal application followed by the application for permanent stay of proceedings if necessary.

The first defendant’s submissions as to the pleadings in the statement of claim (“SOC”)

40. It should be observed at the outset – without intending any disrespect to the plaintiff, who appears to have drafted it himself – that the SOC it is largely incomprehensible. It does not comply with the formal requirements for a pleading prescribed in UCPR 14.6 to 14.8, and on any view, fails to disclose a reasonable cause of action. To this may be added that in its presentation of assorted grievances against the defendants, the SOC contains material that is seemingly irrelevant to whatever claim is sought to be advanced by the plaintiff and that has a tendency to cause prejudice, embarrassment or delay in the proceedings.

41. The passage of time since the events these proceedings are concerned with has made a fair trial of at least the first defendant impossible, notwithstanding that the plaintiff, in delaying the commencement of these proceedings, might not have been delinquent in any respect. In those circumstances, the continuation of the litigation would involve an abuse of process, such that the grant of a permanent stay would be justified, whether pursuant to s 67 of the Civil Procedure Act 2005 (NSW) or in the exercise of the Court's inherent jurisdiction.

42. The SOC describes the first defendant on page 8 as the "owner" of "Baker Love Solicitors". That part of the SOC also states, "Mr Foggo failed to involve a trustee and consequently his client's Compensation VANISHED just DAYS after The Court had deposited it into the first defendant's/constructive trustee's TRUST Account."

43. Though it is not entirely clear given the manner of its drafting, the body of the SOC appears to be directed towards elaborating upon that allegation. Thus, following a recitation of remarks by the "Trial Judge" to the effect that the plaintiff was "not particularly worldly" and did not communicate "particularly well", the SOC states: "The first defendant arranged for such a citizen/client and their Court Award to be alone with INSURANCE SALESMAN Mr Svanberg and with Mr Svanberg's full access to the plaintiffs Court Award."

44. Close attention must be paid to what precisely is being complained of when it is said that the first defendant did not procure the involvement of a trustee. The plaintiff’s case is not that the funds paid to him as damages should have been transferred to, say, a professional trustee for management. It is not even clear on the face of the SOC that the funds were not so transferred. Rather, the SOC appears to emphasise the fact that after his accident, the plaintiff was in a two-month coma, and that shortly after he regained consciousness the first defendant began taking instructions from him. It is in this context that the first defendant is criticised for taking instructions "without a trustee involved", notwithstanding the absence of a plea that the plaintiff was incapable of giving instructions.

45. The first defendant is thus alleged to have acted in breach of some obligation by acting for a severely injured, but not incapacitated, client, without there also being a trustee appointed who could attend to the plaintiff’s best interests and through whom instructions could be conveyed to the first defendant. That being so, the case against the first defendant must be that he failed to consult with a trustee appointed to act in the plaintiff’s best interests when he arranged for Mr Svanberg to invest the plaintiff’s funds, even though, in the absence of a plea that the plaintiff lacked capacity, the reason why such a trustee was required is far from obvious.

46. The SOC then attempts to describe the loss resulting from such conduct (Reproduced earlier in the recitation of the plaintiff’s statement claim).

47. None of these statements explain the quantum of the plaintiff’s claim, namely, $20 million.

48. It should also be observed that the plaintiff’s apparently interchangeable use of the expressions "first defendant" and "constructive trustee" is unexplained. Nowhere in the SOC does the plaintiff plead facts capable of supporting a conclusion that the first defendant held any asset as constructive trustee in the plaintiff’s favour.

49. At page 8 of the SOC, in identifying the various defendants, the plaintiff relevantly states:

the fourth defendant "functioned as the plaintiffs tutor"; and

"the plaintiff approached NSW Trustee & Guardian for help but [the sixth defendant] kept the plaintiffs affairs under management and the plaintiff on $180/Wk for four years before releasing the plaintiff.”

50. It is by no means obvious that the plaintiff could have any basis for impugning the solicitor’s conduct in allegedly failing to involve a trustee in the management of the plaintiff’s affairs, including the damages paid to him, if he was represented by a tutor and assisted by the NSW Trustee and Guardian.

51. Compounding the difficulties outlined above is the fact that the SOC also contains allegations, apparently unrelated to what is asserted concerning the first defendant’s dealings with the monies received on account of the plaintiff’s award of damages.

52. It need only be said that these allegations prompt various questions. For example, what precisely are the conflicts of interest that infected the conduct of the first, second and third defendants? How is the defendant said to have misled senior counsel? What is meant by the references to "Senior Counsel XXX’s request for better evidence" and "an unequivocally negative Merit Advice"? How are the first to third defendants said to have failed to act in relation to sexual assaults visited upon the plaintiff? And how, if at all, is the first defendant alleged to have misled any court or otherwise taken it "for the best of fools"? The answers to these questions are not to be found in the SOC. Nor is their relevance or their connection to any broader claim against any of the defendants at all apparent.

53. As should be apparent from the summary given above, the SOC does not answer the description of a coherent narrative of facts said to give rise to an entitlement to relief. It is instead a hyperbolic record of unconnected grievances, culminating in the statement, both meaningless and inappropriately belligerent, that "[we] all but salivate at the mere speculation of every vowel syllable consonant and grammatical inflexion of The Judgment relevant to each defendant's/constructive trustee's conduct being explored in Court." Given the contents of the SOC referred to above, it is difficult to avoid the conclusion that the plaintiff has, in a most cavalier fashion, advanced extremely serious allegations involving the misleading of the Court and callous indifference to sexual assault, even though these do not bear upon the relief that he seeks and do not appear to have any factual basis capable of being properly pleaded or particularised. On that basis alone, the SOC is amenable to being struck out.

54. In so far as the SOC pleads a claim concerning the manner in which funds paid by way of compensation to the plaintiff were dealt with, it discloses an immediate inconsistency. On the one hand, it is said that the financial advisor invested those funds imprudently. On the other, it is asserted, outside the body of the SOC but in the list of defendants, that those funds vanished within days of being deposited in the trust account associated with the first defendant’s legal practice, Needless to say, it is one thing to allege a failure to invest funds in a reasonable and prudent manner; it is quite another to allege that they were misappropriated almost immediately upon receipt.

55. Nonetheless, because the allegation contained in the body of the SOC involves the assertion that the funds were invested imprudently, that is the allegation winch should be taken to form the basis of the plaintiff’s claim for relief. The difficulty, however, is that that allegation is neither properly pleaded nor particularised. The SOC simply omits to state how the funds were in fact invested and why that fell short of being prudent.

56. Even if the financial advisor had displayed a want of prudence in investing the plaintiff’s funds, the SOC does not disclose why the first defendant should be held liable for that want of prudence. The closest that the SOC comes to doing so is in the assertion that the first defendant "failed to involve a trustee".

57. Implicit in that assertion is the notion that the first defendant should have arranged for a trustee to give instructions on the plaintiff’s behalf, even though there is no suggestion that the plaintiff lacked capacity to give instructions. However, taking instructions from an injured, but not incapacitated, client without the involvement of a trustee is not, on any view, an actionable wrong. And even if it were amenable to some form of criticism, how that is said to be linked to Mr. Svanberg's imprudent investing of the funds paid to the plaintiff by way of compensation is entirely obscure. Indeed, the SOC does not plead any allegation concerning the arrangements, if any, between Mr. Foggo and Mr. Svanberg, such that it is difficult to understand how any liability for Mr. Svanberg's imprudent investing decisions can be attributed to Mr. Foggo.

58. The SOC thus fails to disclose a reasonable cause of action, not merely because of defective pleading, but also because the case that the plaintiff seeks to advance proceeds upon a principle foreign to the law in this country, namely, that a solicitor, when acting for a severely injured, but not incapacitated, client, can only act for such a client through a trustee appointed to attend to that client's best interests.

59. Also, bearing in mind that the plaintiff is not suggesting that his damages award should have been transferred to a professional trustee for investment and management purposes, it must be asked, when the plaintiff speaks of a trustee, "A trustee in respect of what property?" It is trite to say that an express trust requires certainty of subject matter, but it is unclear on the plaintiff’s case what, if anything, the subject matter of the relevant trust might be. Any such trust would thus have failed. Accordingly, to speak, as the plaintiff does in the SOC, of a trustee as if he or she were no more than a personal representative obliged to act in the plaintiff’s best interests is a nonsense. This further highlights the extent to which the plaintiff seeks to advance a claim unknown to Australian law.

60. There is a further respect in which his case is doomed to fail. The judgment entered in favour of the plaintiff following his accident was presumably satisfied shortly after the dismissal of Mr. Cassell's appeal. The SOC asserts as much when it states that "[a]t the time of the first defendant's discharge of his duty of care Mortgages were at over twelve percent", the clear implication being that the funds in respect of which the first defendant was required to consult a trustee had been received at a time when interest rates were notoriously much higher than they presently are. The plaintiff is plainly referring to the early 1990s.

50. More importantly, the SOC suggests that this was when the plaintiff first suffered loss. As has already been observed, the plaintiff asserts that the funds "vanished" within days of being paid into the trust account of Mr. Foggo's practice. And in the body of the SOC, the plaintiff asserts that the funds received on his behalf should have been used to secure a home for him in the early 1990s when "houses and credit were virtually being given away", and that the failure to do so has, in the years since, amounted to a compounding loss "because the first defendant had the plaintiff long locked into subsistence when House Prices and Rents had doubled overnight and increased 500% since then".

Limitation Act and ultimate bar

62. The first defendant submitted that it follows that whatever cause of action the plaintiff is pleading accrued in or about 1990. To the extent that the cause of action is founded on tort, the result is that having regard to s 14(1)(b) of the Limitation Act 1969 (NSW), the limitation period for that cause of action has long since expired. The same result would obtain in respect of any claim involving of breach of some equitable duty, given that, as Meagher JA observed in Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435 at 456 [70]:

"in purely equitable proceedings, where there is a corresponding remedy at law in respect of the same matter and that remedy is the subject of a statutory bar, equity will apply the bar by analogy unless there exists a ground which justifies its not doing so because reliance by the defendant on the statute would in the circumstances be unconscionable."

63. It should also be observed that the plaintiff has neither pleaded facts nor led evidence capable of supporting the conclusion that he was, during much of the time since the accrual of his causes of action, under a disability within the meaning of s 52 of the Limitation Act. That is, he has not even demonstrated that it is arguable that he was, for a continuous period of twenty-eight days or upwards, incapable of, or substantially impeded in, the management of his affairs in relation to the relevant causes of action, by reason of, say, an impairment of his physical or mental condition: Limitation Act, s 11 (3). And in any event, there is every reason to think that those causes of action accrued more than 30 years, so as to engage the ultimate bar to any action imposed by s 51 of that statute.

64. In Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 533, a majority of the High Court remarked that it is "undesirable that limitation questions ... should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases". So much may be accepted. However, for the reasons outlined above, having regard to the period of time that has passed since the events the subject of the SOC, the Court can be comfortably satisfied that the plaintiff’s claims are statute-barred.

65. Given the various difficulties in the plaintiff’s case, there is no basis for thinking that the plaintiff would be able to reformulate his pleading in a manner that could establish the existence of any triable issue.

Resolution

66. The circumstances in which the plaintiff now finds himself in are sad. While the plaintiff says that he was a minor when the motor vehicle accident occurred, he was not. He was 19 years old. On my reading of the plaintiff’s statement of claim, he has pleaded that steps should have been taken to have the Public Trustee appointed to manage his settlement funds. However the difficulty with that allegation is that in 2005 Counsel advised that in his view from the material in the brief the plaintiff had the capacity to instruct his lawyers during the Common Law and Federal Court cases. On 3 November 2005, the solicitor then acting for the plaintiff recorded in his file note that Counsel’s opinion had been discussed with the plaintiff by his solicitor and he had reluctantly accepted Counsel’s advice. There is no evidence to the contrary that the plaintiff lacked the capacity to manage his verdict monies.

67. As recorded in the Observations, the plaintiff received a partial file as a result of seeking the assistance of the OLSC in September 2006. On the plaintiff’s pleading, the verdict monies vanished shortly after they were paid into the solicitor’s trust account. In 1988 the plaintiff’s case was heard in the common law division of this Court. In 1990 an appeal against the primary judge was dismissed. These proceedings are most likely statute barred given that 30 years has now elapsed since the cause of action accrued. Taking these circumstances into account, I have reluctantly come to the view that the plaintiff’s case as currently pleaded is hopeless.

68. As to whether I should exercise my discretion to permit the plaintiff to replead his statement of claim, I take into account that the plaintiff’s legal proceedings were finalised in 1990, some 30 years ago. From 2003, the plaintiff has sought advice from numerous solicitors from a number of government agencies. In 2011, Mr Terpstra, solicitor and the fourth defendant, provided very detailed Observations to Counsel and Legal Aid. While the plaintiff has been advised by Counsel in 2005 that he had the capacity to instruct his lawyers in the proceedings in this Court, there is no evidence to the contrary to suggest that the Public Trustee should have been appointed as plaintiff was unable to manage his funds. He did appoint a financial manager but there is no evidence as to how this came about. It is most likely that the plaintiff’s claims are now statute barred pursuant to s 14(1)(b) of the Limitations Act 1969 (NSW). Taking these factors into account, I would not exercise my discretion to allow the plaintiff another attempt to file a further statement of claim.

69. It is now unnecessary that I deal with the first defendant’s application for a permanent stay of proceedings.

70. The result is that the plaintiff’s statement of claim filed 17 March 2021 is dismissed as against the first defendant.

Costs

71. At the hearing, counsel for the first defendant sought that his costs be paid on an indemnity basis. Costs normally follow the event. To make an order for indemnity costs there needs to be a requisite degree of unreasonableness. I accept that the plaintiff has been deeply troubled by the events that occurred for thirty years. In these circumstances it is my view that the plaintiff has not demonstrated the requisite degree of unreasonableness. Hence the plaintiff is to pay the first defendant’s costs on an ordinary basis.

The court orders:

1. The plaintiff’s statement of claim filed 17 March 2021 is dismissed as against the first defendant.

2. The plaintiff is to pay the first defendant’s costs of the proceedings on an ordinary basis.

3. The matter to be listed for a directions hearing before the Registrar at 10.00am on 19 October 2021.

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Amendments

28 September 2021 - Order (3) added to coversheet.

Decision last updated: 28 September 2021