Spalla v St George Motor Finance Ltd (No 6)

The case of Spalla v St George Motor Finance Ltd (No 6) involves the plaintiffs, Spalla and Still, bringing a claim against the respondents for malicious prosecution and injurious falsehood, among other causes of action. The case was heard in the Federal Court of Australia, where the jurisdiction was contested based on the nature of the claims and the relevant statutory provisions. The court was required to determine whether the causes of action fell within the Federal Court’s jurisdiction under the Corporations Act 2001 and the Judiciary Act 1903.

The court considered whether the cause of action for malicious prosecution arose under a law of the Commonwealth, thus bringing it within the Federal Court’s jurisdiction. The court also needed to assess if the injurious falsehood claim was sufficiently connected to the malicious prosecution claim to fall within the accrued jurisdiction of the Federal Court. The central issue was whether ASIC had made reasonable inquiries into the allegations against Spalla and Still, and whether the court had the jurisdiction to hear the matter.

The court concluded that the cause of action for malicious prosecution did indeed arise under a law of the Commonwealth and was within the jurisdiction of the Federal Court. The injurious falsehood claim was also deemed to be sufficiently connected to the malicious prosecution claim to fall within the court’s jurisdiction. Consequently, the court struck out all other causes of action that did not meet the jurisdictional criteria. The plaintiffs were granted leave to reframe their statement of claim to include only the permissible causes of action.

The final orders of the court mandated the striking out of specific paragraphs and causes of action from the plaintiffs' statement of claim. The plaintiffs were permitted to file a substituted statement of claim limited to the disposition of the proceeds of the sale of the business of Essendon Mitsubishi and the causes of action for malicious prosecution and injurious falsehood. Additionally, the plaintiffs were ordered to pay the respondents' costs associated with the motions and any consequential amendments to the defences.