Stephens v Lewis No. Scciv-02-936

STEPHENS v LEWIS
[2003] SASC 207
Civil

PERRY J. The plaintiff, Terry Stephens, sues the defendant, Ivan Peter Lewis, for damages for breach of contract, misrepresentation and other related causes of action arising out of transactions which took place between the parties towards the end of 2001 and in early 2002.
Mr Lewis is a member of the Parliament of South Australia and the Speaker of the House of Assembly.
Mr Stephens asserts that the transactions were directed principally to dealings with two items of property, namely shares in Goldus Pty Ltd (“Goldus”), a company controlled by Mr Lewis, and a quantity of about 200 eighteenth and nineteenth century antique colt pistols (“the weapons”), said to have been owed at the relevant time by Mr Stephens.
Mr Lewis seeks various interlocutory orders. They are:
1.By a notice for specific directions filed on 4 March 2003, that there be a “stay of the proceedings herein against the defendant”.
2.By interlocutory application filed on 20 December 2002:
(a)that three paragraphs of the statement of claim be struck out on the ground that Mr Stephens has no capacity to bring them and that there is “no reasonable cause of action … with respect to such claims”; and
(b)that various paragraphs of the statement of claim be struck out on the ground that they are “scandalous, frivolous or vexatious and are otherwise an abuse of process”.
I heard both applications together.
In order to understand the issues involved in the applications it is necessary to refer to the history of the proceedings and some matters of background.
History of the proceedings
The proceedings were instituted by the filing of a writ in the Supreme Court of Victoria at Melbourne on 21 May 2002. The writ was issued by Mr Stephens acting on his own behalf. In it he describes his claim as follows:
“Ten Million Dollars ($10,000,000.00) for the guns that the defendant took from the plaintiff’s home of which the defendant claimed were valued at ten’s of millions of dollars.
On or around the middle of December 2001 at number 5 Cameron Street Kapunda South Australia.
Nine Million Dollars ($9,000,000.00) for loss of income and profits that were lost due to the defendant’s actions.”
By a summons filed on 5 July 2002 Mr Lewis sought an order pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987 that the proceedings be transferred to this Court.
By order made on 10 July 2002, a Judge of the Supreme Court of Victoria made an order in terms of Mr Lewis’ application.
After the proceedings had been transmitted to this Court in accordance with that order, by an application filed on 24 July 2002, Mr Stephens, still acting on his own behalf, sought an order for judgment in default, or alternatively an order that Mr Lewis file a defence to his claim.
That application was supported by an affidavit sworn by him on 18 July 2002 which centred on the alleged removal by Mr Lewis of the weapons on 19 December 2001, and his alleged failure to deal with them in accordance with what Mr Stephens alleges was the agreement between him and Mr Lewis. He alleged that pursuant to the agreement, Mr Lewis undertook to help sell the weapons so as to generate funds by which Mr Stephens, or a company which he controlled, might proceed with the transaction involving Goldus.
To the affidavit are annexed a number of statements of various alleged witnesses and other documents.
By order of a judge made on 2 August 2002, Mr Stephens’ application was adjourned, and he was ordered to file and serve an amended statement of claim. This was because the statement of claim which had been transmitted with the file from the Supreme Court of Victoria was not in a form which accorded with the Rules of Court.
Various other steps which it is unnecessary for me to detail, were then taken in the action. Eventually Mr Stephens engaged a firm of solicitors, von Doussas, who filed an amended statement of claim on 18 October 2002.
An amended defence was filed on behalf of Mr Lewis on 9 December 2002.
Subsequently, Mr Lewis filed a number of affidavits in support of the two applications which are now before me.
By order dated 19 February 2003, I ordered that Mr Lewis’ applications be listed for hearing in April, and that both parties be at liberty to file such further affidavit or affidavits as they might be advised for or in opposition to the applications.
No affidavits were filed by Mr Stephens in accordance with that direction. In the result, Mr Lewis’ applications stand to be disposed of by reference to the affidavits filed by Mr Lewis, together with the affidavit of Mr Stephens sworn on 18 July 2002, and an affidavit filed on behalf of the Commissioner of Police, to which I will in due course refer.
The applications came on for hearing before me on 2 April 2003. Both parties were represented by counsel.
The plaintiff opposed the making of any of the orders sought.
After hearing argument, I reserved my decision.
The case pleaded in the Statement of Claim.
Mr Stephens alleges that he was a director and substantial shareholder of Arrowlea Pty Ltd (“Arrowlea”), and that Mr Lewis was a director and substantial shareholder of Goldus.
He further alleges that on 26 November 2001, he executed a contract for the sale and purchase of the land and the improvements on it including a residence, together with all furnishings, antiques etc, being the land known as 5 Cameron Street, Kapunda (“the Kapunda residence”). The Kapunda residence was formerly owned by the disgraced magistrate, Mr Peter Liddy. Mr Stephens alleges that chattels which were part of the contract of sale included the weapons.
Mr Stephens further alleges that a meeting took place between him and Mr Lewis at the Kapunda residence on the evening of 19 December 2001. During the meeting Mr Lewis is alleged to have said that both he and Goldus were short of cash and that they each needed of the order of $500,000.
Mr Lewis is alleged to have offered to transfer or arrange for the allotment of a total of 3.7 million Goldus shares to Arrowlea. This would result in Arrowlea owning 75 per cent of the issued shares of Goldus.
The consideration to be paid by Mr Stephens or his company for the transfer or allotment of the shares was $1 million.
When Mr Stephens said that he would have to sell some of the “antiques” in the Kapunda residence in order to raise so much money, Mr Lewis is alleged to have said that he would assist Mr Stephens to sell them quickly. To that end, he would arrange for the relevant permits to be issued through the Minister for Police. Mr Stephens’ identity would be kept “secret”, given his admitted criminal record.
Mr Lewis is alleged to have said that he guaranteed that he would be able to sell the weapons within a month and that they would sell “very quickly” and bring “many millions of dollars” if sold internationally.
It is alleged that Mr Lewis there and then rang his accountant and wrote out the terms of the “agreement”, or at least part of the terms (part is alleged to have been oral).
The written document provided for the purchase by Arrowlea of the issued shares or the shares to be allotted in Goldus and for the payment by Mr Stephens of $680,000 to Goldus and $475,000 to Mr Lewis’ creditors. It is alleged that this document, together with the oral terms, in all described as a “preliminary agreement”, would be replaced by a formal agreement to be drawn up by the defendant’s solicitor “save and except that the oral terms would not be reduced to writing”.
Mr Stephens further alleges that to the extent that the terms were oral, they were to the effect that Mr Lewis would sell Mr Stephens’ weapons within the month and that Mr Stephens would use the proceeds of the sale to carry out his obligations “and or Arrowlea under the terms of the preliminary agreement and any replacement thereof” (par 7.15).
Mr Stephens alleges that the written portion of the preliminary agreement was executed by him and Mr Lewis and witnessed by Mr Stephens’ wife.
Mr Stephens asserts (par 7.17) that “following the entering into of the preliminary agreement and pursuant thereto the plaintiff delivered possession of the weapons to the defendant, and the two of them carried the weapons (which were contained in four boxes) to the defendant’s car, and placed them in the trunk thereof”.
Mr Stephens goes on to allege that at about 8.30 am on the next day, that is, 20 December 2001, he and Mr Lewis met again at the Kapunda residence and that Mr Lewis then handed to Mr Stephens a number of documents, including three copies of the contract providing for the sale of the Goldus shares, described as the “draft final contract”, together with share transfer forms and a prospectus of the financial position of Goldus.
Mr Stephens alleges (par 9.1) that on reading the draft final contract he said that he wanted some changes to be made. Mr Lewis is said to have phoned his solicitor and said that he agreed to amend the draft final contract as requested by Mr Stephens, and that his solicitor would make the relevant changes to the draft final contract.
It is alleged that the representations said to have been made by Mr Lewis as to the need by him and Goldus to raise cash; that the weapons would sell very quickly and bring “many millions of dollars”; that the plaintiff would be unable to get a license to export, possess or sell the weapons because of Mr Stephens’ criminal record; that he (Mr Lewis) could arrange for the issue of the relevant permits; that he could guarantee to sell the weapons within a month; that he would have to sell the weapons quickly or he would be in trouble; that he would not let Mr Stephens down; and that his solicitor would make the relevant changes to the draft final contract, were representations in reliance of which Mr Stephens executed the preliminary agreement and the draft final contract and delivered up possession of the weapons to Mr Lewis (par 10).
In the statement of claim Mr Stephens alleges that one or more of the various representations to which I have just referred amounted to misleading and deceptive conduct within the meaning of s 56 of the Fair Trading Act (SA) 1987 (“the Fair Trading Act”) or s 52 of the Trade Practice Act (Cth) 1974 (“the Trade Practices Act”). In so far as any representations were with respect to future matters, Mr Stephens relies on s 54 of the Fair Trading Act. He relies further on s 4 of the Misrepresentations Act (SA) 1972, and in the alternative asserts that the representations were actionable at common law or in equity (par 14) or made negligently (par 17).
In the statement of claim (par 19), Mr Stephens alleges that Mr Lewis’ alleged failure to sell the weapons, or alternatively, if he has sold them, his retention of the proceeds, is in breach of the preliminary agreement and/or the draft final agreement.
In the prayer for relief, Mr Stephens claims damages for breach of contract, for negligence, and pursuant to s 82 of the Trade Practices Act (Cth), or damages pursuant to s 7 of the Misrepresentation Act (SA). He further claims a declaration that Mr Lewis engaged in conduct which contravened either s 52 or s 53 of the Trade Practices Act, and an order that Mr Lewis deliver up the weapons.
As I have said, the interlocutory application filed on 20 December 2002 seeks an order striking out three paragraphs of the statement of claim, on the basis that those paragraphs include claims as to which there is “no reasonable cause of action”. Having regard to the content of those three paragraphs of the statement of claim, it is not at all clear to me just what that part of the application targets. Be that as it may, the assertion that a pleading does not disclose a reasonable cause of action ordinarily relates to the pleading as a whole. At all events such an attack on a pleading falls to be resolved by the terms of the pleading itself. Extrinsic evidence would not normally be admissible.
But as I have said, a number of affidavits have been filed on behalf of Mr Lewis. They may be relevant to the assertion that Mr Stephens has no “capacity” to bring the claims said to be made in those three paragraphs of the statement of claim, and they may also be relevant to the assertion that a number of paragraphs of the statement of claim are scandalous, frivolous or vexatious, or otherwise an abuse of process.
Mr Lewis also relies on the material in those affidavits and in the other affidavits filed to support the application for a stay of the proceedings.
I turn therefore to the affidavits.
The Affidavit Evidence
Mr Lewis swore two affidavits, one on 25 March 2003 and the other on 27 March 2003.
In the earlier affidavit Mr Lewis challenges a number of aspects of the dealings between him and Mr Stephens, as alleged in the statement of claim.
He denies that his first two meetings with Mr Stephens were on 19 and 20 December 2001. He exhibits to his affidavit a diary sheet which indicates he had an evening commitment in Adelaide on 19 December 2001. He suggests that in practical terms, this would have precluded his attendance at Kapunda in the circumstances suggested by Mr Stephens. His assertions as to his whereabouts on the evening of 19 December 2001 are corroborated by an affidavit of John Abbott who deposes to having met Mr Lewis that night at a meeting held in Adelaide, which he says Mr Lewis left at about 10.15 pm.
Furthermore, Mr Lewis asserts that he could not possibly have had his solicitor prepare and provide a contract for the sale of shares of Goldus as alleged in par 8 of the amended statement of claim overnight, before 20 December 2001.
He maintains that his first contact with Mr Stephens was on 29 December 2001, and that he met him at Kapunda on that day. He says that he first attended upon his solicitor John Santich on 5 January 2002 in relation to the proposed terms of an agreement with respect to the sale of shares from Goldus to Arrowlea. He asserts that Mr Santich prepared various drafts of such an agreement between 5 and 16 January 2002, the final version of which was signed by Mr Lewis and Mr Stephens on about 24 January 2002.
Mr Lewis dismisses the allegations made by Mr Stephens to the effect that Mr Lewis agreed to sell the weapons on Mr Stephens’ behalf, as fabrications. He further asserts that the allegations have been made “with the intention of causing embarrassment to me in my position as an independent member of Parliament and Speaker of the House of Assembly”.
Mr Lewis refers to a “statement of fact and further particulars” dated 19 June 2002, which was apparently a document filed in the Supreme Court of Victoria. In the statement Mr Stephens alleges that the weapons were taken on 15 December 2001 rather than on 19 December 2001, as is now alleged in the statement of claim in this Court.
Mr Lewis also refers to the affidavit of Mr Stephens sworn on 18 July 2002 filed in this Court with its various exhibits. I will deal with that affidavit in due course.
Mr Lewis cites correspondence from Mr Stephens to Mr Van Dissel, Mr Lewis’ former solicitor, demanding security for costs and making extravagant assertions as to Mr Stephens’ prospects of success in the action.
By a letter dated 2 December 2002, von Doussas on behalf of Mr Stephens, put to Mr Lewis’ solicitors an open offer to accept $650,000 inclusive of costs and interest. The letter includes a suggestion (which obviously has not proved true) that Mr Lewis would be retiring from “public life” within a matter of weeks, and that he would be likely to receive a lump sum payment of between $1.3 and $1.5 million by way of a superannuation payout.
Also exhibited to Mr Lewis’ first affidavit is correspondence passing between solicitors for the parties in the course of which Mr Lewis demands, pursuant to SCR 59.02, that Mr Stephens’ solicitors make available for inspection, or alternatively provide copies of, various documents, including the prospectus referred to in par 7.2 of the statement of claim, the so called preliminary agreement referred to in par 7.14 and the draft final contract referred to in par 8.
It appears that none of the documents have been produced. Mr Lewis states that he believes that the documents do not exist.
In his second affidavit, Mr Lewis exhibits copies of transcripts of two programs shown on television Channel 7 during the course of its evening Current Affairs program, the first in March 2002 and the second on about 21 May 2002.
In the transcript of the first program, Mr Stephens is recorded as having said, after a voiceover posed the question, “What does Terry Stephens want”:
“If he is prepared to be a man, step down as Speaker, resign from Parliament, and re-stand for the seat of Hammond in a general election in the seat of Hammond, a bi-election I think they call it, then I’ll have a bit more respect for him, and I’ll ease off, otherwise, I am not going to stop until Peter Lewis be’s (sic) a man and stands up for himself and what he has done. You could call that blackmail call it what you bloody like, I’m not going to stop.”
The transcript relating to the second of the programs includes the following passage (I assume that the text in brackets is transcript of statements in the form of a voiceover or by the interviewer).
“14:30 (Stephens) I will take his shirt off his back, I will take his underwear. I will strip that man down to the bare for the rest of his life.
{If you were thinking the Peter Lewis, Guns and Money saga had died down … well clearly no-one has told convicted armed robber and fraudster Terry Stephens.}
30:32 (Stephens) For the first time in my life I am doing something honest and legal and legitimate.
{While the police anti-corruption squad continues to investigate … today Stephen brought the South Australian Speaker a step closer to court by attempting to launch a 19 million dollar law suit in the Melbourne Supreme Court.}
5:07 (Stephens) I’m suing Peter for $10 million for the weapons that he took of mine and failed to return, and I’m suing for nine million dollars which is the estimated losses that I made through the actions that he made in collapsing Arrowlea.
6.:02 A lot of people in South Australia think this isn’t about justice, this is about a vendetta that you have against Peter Lewis”
27:15 It’s personal and he can look at me on yout (sic) TV show whenever you show this, and take it clearly from me, Peter Lewsi (sic) I will destroy you.”
In an affidavit sworn by Bruce McAusland Miller, who identifies himself as a retired certified practising accountant, Mr Miller states that while in practice he had extensive dealings with Mr Lewis’ business interests. He says that “on or about 30 December 2001 or in early January 2002” he was asked to prepare information with respect to a proposed sale of Goldus shares to Arrowlea.
He commenced work on this task in early January 2002 and continued until 15 January 2002. During this period, on 11 January 2002, he discussed what he describes as “the proposed contract between Goldus and Arrowlea” with Mr Lewis’ solicitor John Santich, who he understood prepared the contract. He sent relevant material to Mr Santich with respect to the transaction following the discussion on 11 January 2002.
With respect to the allegation in par 7.14 of the statement of claim that Mr Lewis rang his accountant on the evening of 19 December 2001, Mr Miller denies that he received any telephone call from Mr Lewis at that time and he reiterates that he was not given any instructions with respect to the matter until late December 2001 or early January 2002.
Mr Miller further denies that he “worked on” a document which would answer the description of the “draft final contract” referred to in pars 8 and 9 of the amended statement of claim.
A solicitor, Mr Santich, deposes in his affidavit to having carried out work from time to time for Mr Lewis, with respect to “various transactions relating to gold mining companies of which he was principal”. He recalls dealings with Mr Lewis with respect to the transaction between him and Mr Stephens. He states that he received a visit from Mr Lewis on the evening of 5 January 2002, when he was instructed by Mr Lewis to prepare an agreement recording terms and conditions of a proposed sale of Goldus shares to Arrowlea. He states that following telephone conversations between him, Mr Stephens and Mr Lewis over the succeeding week or so, by about 15 January 2002, he had prepared what he describes as a “second draft” of an agreement.

He does not say when he prepared the first draft, or what became of that.
Mr Santich states that on about 15 January 2003 he was instructed by Mr Lewis that the agreement would proceed in the terms of the second draft, after confirming the position with Mr Stephens. On or about 16 or 17 January 2002 he prepared a final version of the agreement which he sent to Mr Lewis with a covering letter and account. At the same time he sent a letter to Arrowlea marked for the attention of Mr Stephens. He exhibits to his affidavit a copy of the letters and of the agreement in its final form.
Mr Santich states that on or about 23 January 2002 he received instructions from Mr Lewis to prepare a second agreement between Mr Lewis and Arrowlea with respect to the purchase of shares in another company in which Mr Lewis had an interest, namely Mawson Gold Pty Ltd (“Mawson Gold”).
With reference to the amended statement of claim, Mr Santich denies that he could have prepared any documents which might have been handed by Mr Lewis to Mr Stephens on 20 December 2001, given that on his account of the matter he did not receive instructions with respect to any aspect of the transaction until 5 January 2002 and did not commence work until that date. Furthermore, he denies any discussion between him and Mr Lewis on or about 20 December 2001.
I will now refer to the contents of two other affidavits. Strictly, they were not filed for or in opposition to the applications which are now before me.
The first of them is an affidavit filed on 26 February 2003 sworn by Detective Sergeant Gary Ankor of the South Australian Police. That affidavit was filed by the Crown Solicitor with respect to an application by Mr Stephens for non-party discovery against the Commissioner of Police.
Mr Howells of counsel for Mr Lewis referred to the affidavit and certain exhibits to it during the course of his submissions, without objection by counsel for Mr Stephens. In those circumstances, I think it proper to take its contents into account in determining the applications.
The other affidavit to which I will refer is an affidavit of Mr Stephens filed on 24 July 2002. That affidavit was filed in support of an application for judgment in default against Mr Lewis. The affidavit canvasses a number of matters to do with the merits of the action, which would not be relevant to an application for a judgment in default. Be that as it may, Mr Stephens’ affidavit is referred to in the affidavit of Mr Lewis filed on 26 March 2003. In that affidavit he asserts that Mr Stephens’ affidavit, amongst other documents, goes to demonstrate a lack of bona fides on Mr Stephens’ part.
Mr Lewis’ affidavit sworn on 25 March 2003 refers to an affidavit filed by Mr Stephens in the Supreme Court of Victoria on 10 July 2002, together with exhibits TNS1 to TNS10 inclusive.
There was an affidavit of Mr Stephens filed in the Victorian Supreme Court on that day. That affidavit is on the file as transmitted to this Court, but no such exhibits were included. When I drew the attention of Mr Lewis’ solicitors to that fact, they delivered to my chambers a copy of the ten exhibits referred to in their client’s affidavit. The exhibits do not add anything of significance for present purposes, to the material otherwise before me.
Detective Sergeant Ankor exhibits to his affidavit a copy of a complaint against Mr Stephens alleging that on 5 March 2002 at Adelaide and other places, he made a representation to a member of the police force which was false and such as would reasonably call for investigation by the police, contrary to s 62(1) of the Summary Offences Act 1953.
The copy of the complaint which is exhibited is unsigned by the complainant and is not witnessed. But I assume that those formalities have been attended to, having regard to the fact that Mr Ankor deposes to the fact that the complaint “has been laid” and furthermore that a warrant exists for the arrest of Mr Stephens upon that complaint. A copy of the warrant for Mr Stephens’ apprehension is also exhibited, as is a copy of a document entitled “Police Apprehension Report”.
Details of the alleged offence the subject of the complaint, make it clear that it relates to what will no doubt be alleged to be false claims by Mr Stephens that Mr Lewis has wrongfully taken the weapons the subject of these proceedings.
Detective Sergeant Ankor’s affidavit and the documents exhibited to it indicate that there are a further two current arrest warrants in existence against Mr Stephens for failing to appear in court over fraud matters in New South Wales and Western Australia. Furthermore, it is said that Mr Stephens is wanted for questioning over an alleged $500,000 fraud committed in South Australia.
In a section of the police apprehension report dealing with objections which might be raised to the grant of bail, there is a reference to the fact that Mr Stephens has prior convictions, including convictions for escaping lawful custody in 1975, armed robbery in 1982, and 23 prior convictions for fraud.
None of the assertions in Detective Sergeant Ankor’s affidavit have been challenged by Mr Stephens.
As for Mr Stephens’ affidavit, in it he asserts that Mr Lewis took from his home on 19 December 2001 “200 colt revolvers eighteenth and nineteenth century”, all said to be in “mint working condition”. He asserts that the weapons were taken on the understanding that Mr Lewis was to sell them and return the funds to Mr Stephens “ … so as a deal could be completed for the purchase of 76 per cent of the defendant’s company [Goldus Pty Ltd]”. He goes on to assert that Mr Lewis failed to return the weapons or the money. He makes other assertions which echo the allegations in the amended statement of claim.
In his affidavit Mr Stephens asserts that Mr Lewis was seen taking the weapons between 11.00 pm and midnight on 19 December 2001 by Michael and Maureen Stephenson.
Amongst the exhibits to Mr Stephens’ affidavit is what purports to be a joint “statement of facts” said to have been signed by Michael and Maureen Stephenson. In the joint statement they assert that they saw “four boxes full of guns” which appeared to be colt revolvers and “pistols of some sort” in a room at the Kapunda residence on the day before a meeting took place between Mr Stephens and Mr Lewis.
They further assert that on the night in question, between 11.00 pm and 11.30 pm, while they were sitting on the back veranda, they saw Mr Lewis and Mr Stephens carry out the same four boxes to Mr Lewis’ car where they were put into the boot. Subsequently they saw Mr Lewis leave.
Also exhibited to Mr Stephens’ affidavit is what purports to be a copy of a letter said to have been signed by Mr Lewis to Mr Robert Brokenshire, then Minister for Police, dated 31 December 2001.
In the letter Mr Lewis seeks Mr Brokenshire’s assistance to “arrange permits and determine the procedures necessary” to assist in the sale of what is described in the letter as “a substantial number of extremely valuable items which include sidearms carried by men of great significance in world history”. The sidearms are described as being both swords and firearms. In the letter it is asserted that “some items are worth millions of dollars”. The letter includes the following statement:
“As I pointed out to you it is important for us to act quickly, exercising the greatest possible discretion so that the phobic, idiot fringe who become hysterical at the mention of anything remotely related to firearms or other sidearms used for protection, cannot get themselves involved and cause a fury which will make a mess for us.”
Later the letter continues:
“I accept your assurance that you will act quickly and I trust you to keep the information confidential, telling only those who need to know. We need to arrange permits and determine the procedures necessary to deal with the matter with the greatest possible discretion with as swift as possible expedition.”
A separate exhibit to the affidavit takes the form of a copy of the minute from the “Chief of Staff” to the Minister for Police dated 4 January 2002. The Chief of Staff is identified as “Rob Young”. He asserts that there is no authority to agree to Mr Lewis’ request “to grant any type of firearms permit to the as yet unmentioned third party that Mr Lewis claims to represent”. He states that he has substantiated this position in conference with both Crown Law and the Firearms Branch of SA Police.
Conclusions
(a) The application to strike out paragraphs 10, 15 and 19 of the statement of claim
This part of Mr Lewis’ application seeks an order striking out the abovementioned paragraphs of the statement of claim on the grounds “that to the extent those paragraphs include claims made on behalf of Arrowlea, the plaintiff has no capacity to bring such a claim and there is no reasonable cause of action by the plaintiff with respect to such claims”.
The only written agreement between Mr Lewis and Mr Stephens and their respective companies so far produced is the undated agreement apparently signed by the parties, very likely some time in January 2002, that agreement having been drawn up by Mr Santich, Mr Lewis’ solicitor.
In that agreement Mr Stephens is no more than a guarantor of the obligations undertaken by Arrowlea as purchaser.
As guarantor he would not have any standing to bring an action for damages for any alleged breach of the agreement by Mr Lewis or by Goldus.
But the three paragraphs the target of this part of the application plead simply that the various representations alleged to have been made by Mr Lewis induced Mr Stephens to execute what is described as the “preliminary agreement” and the “draft final contract” and to deliver up possession of the weapons to Mr Lewis. In the case of par 19 the allegation is that Mr Lewis was in breach of “the preliminary agreement and/or draft final agreement” in failing to sell the weapons or in selling them and keeping the proceeds.
What this part of Mr Lewis’ application fails to take into account is that in the statement of claim it is alleged that the preliminary agreement and the draft final contract were partly written and partly oral. The allegations to that effect appear in par 7.14.
Earlier, in par 7.9 it is asserted that Mr Lewis indicated that it would be necessary to keep Mr Stephens’ identity secret in order to arrange the “relevant permits” through the Minister for Police.
Paragraph 7.15 alleges that the oral terms included terms that Mr Lewis would sell the plaintiff’s weapons within the month and use the proceeds of sale to carry out the obligations of Mr Stephens and/or Arrowlea under the “written terms of the preliminary agreement and any replacement thereof”.
In par 7.14(d) it is alleged that it was agreed that the preliminary agreement would be replaced by a formal agreement containing substantially the same terms “save and except that the oral terms would not be reduced to writing” (emphasis added).
In so far as Mr Stephens claims to have personally owned the weapons, clearly he would have capacity to bring a claim based on the allegations in paragraphs 15 and 19, the breach alleged in par 19 clearly being a breach of the alleged oral terms of the preliminary agreement and draft final contract.
Furthermore, the pleaded particulars are sufficient to identify a possible cause of action, that is breach of the oral terms which it is asserted were part of the two alleged agreements.
This part of Mr Lewis’ attack must therefore fail.
(b) That a number of paragraphs of the statement of claim be struck out on the ground that they are “scandalous, frivolous or vexatious and otherwise an abuse of process of the Court”
This attack focuses on some 13 paragraphs of the statement of claim.[1]
[1] They are paragraphs 7.13, 7.14, 7.15, 7.16, 7.17, 7.18, 7.19, 8, 9, 10, 12.1, 15.1 and 19.
Put shortly, these paragraphs contain the detail of the allegations relating to the alleged dealings with the weapons. As I have explained, in essence these allegations are that Mr Lewis agreed to assist with obtaining the necessary licences and all permits to export the weapons; that he guaranteed that he would be able to sell them within a month; that the oral agreement as to the weapons would not be included in the written contract; that the proceeds of sale would be made available to Mr Stephens in order that he might carry out his obligations and that of his company Arrowlea with respect to the transaction for the purchase of Goldus shares; that the weapons were taken away by Mr Lewis in his car and that he has failed to sell them, or if he has, to account for the proceeds. There were also allegations as to the alleged execution by the parties of the preliminary agreement and the draft final contract.
Mr Lewis’ case on this aspect of his application appears to be based on assertions of Mr Stephens’ bad character; the denials in the affidavits of Mr Miller and Mr Santich of their involvement in the transaction at the times which Mr Stephens suggests; the evidence of Mr Lewis’ movements at the time of the alleged first meeting at the Kapunda residence; Mr Lewis’ emphatic denials of ever having the weapons in his possession nor even having seen them; discrepancies in the various statements made by Mr Stephens as to the dates of his dealings with Mr Lewis; Mr Stephens’ failure to produce the contractual documents which he refers to in the statement of claim; and the statements made by Mr Stephens in the course of the two television programs screened on Channel 7.
I accept that the evidence of Mr Stephens’ criminal record and previous bad character impacts heavily upon his credit.
But I do not think that it would be right to accede to an application to strike out a claim or part of it on these grounds simply on the basis of a view which the Court might reach as to the credit of the plaintiff.
Although as I have said, it must be accepted that Mr Stephens is of undoubted bad character and will obviously have serious problems in persuading a court to accept him as a witness of credit, the fact remains that some elements of his alleged dealings with Mr Lewis undoubtedly took place. There is no doubt that there were dealings between Mr Stephens and Mr Lewis which culminated in the execution by them of a written contract dealing with the acquisition of shares in Goldus, and a separate agreement dealing with share in Mawson Gold. That something passed between the parties to do with the weapons seems clearly enough to be established by reference to the documents evidencing the approach made by Mr Lewis to the Minister for Police, Mr Brokenshire, documents which have not been placed under challenge in the course of the hearing before me.
As for the joint statement of Michael and Maureen Stephenson, it is impossible to assess what credit is to be given to their assertions, short of having whatever evidence they might give tested in the witness box at a trial, should they be called as witnesses.
I must say that the item of evidence which has caused me most concern is the transcript of the two interviews on Channel 7. The statements made by Mr Stephens during the course of those interviews go a long way towards establishing an ulterior motive for the institution and prosecution of these proceedings. I have carefully considered whether or not that evidence considered in conjunction with the other arguments which have been put, might justify the conclusion that the proceedings are an abuse of process of the Court.
However, at the end of the day I have reached the view that on the whole of the evidence proffered in support of the applications, the case for striking out the proceedings, or for striking out the relevant allegations in the statement of claim, does not justify such a step.
The strike out application is based substantially on an attack on Mr Stephens’ credit.
It is true that the circumstances as disclosed in the various affidavits in many respects reflect badly on him. But a proper evaluation of his credit and the making of findings regarding the striking differences between the various accounts given in the material before me as to the transactions in question and their preliminaries, could only satisfactorily be undertaken at a trial, when the evidence of the parties and the witnesses can be properly tested.
In the circumstances, the application to strike out the paragraphs of the statement of claim which are the target of this part of Mr Lewis’ attack, must be dismissed.
(c) The application for a stay
I must say that I have some difficulty in identifying the precise grounds upon which the application for a stay is advanced.
The argument presented by Mr Howells pivots largely on the evidence sworn to by Detective Sergeant Ankor in his affidavit. Mr Howells suggested that the criminal proceedings which Mr Stephens faces, more particularly to do with the very subject matter of the action by Mr Stephens against Mr Lewis, should first be disposed of. He suggested also that it is unlikely that Mr Stephens will ever come to court to give evidence in pursuit of his claim against Mr Lewis, given the outstanding warrants for his arrest. This would almost certainly result in the dismissal of the claim.
Mr Howells also made reference to the fact that Mr Stephens has not so far paid $4,000 which he was ordered to pay to the Commissioner of Police towards the costs likely to be incurred by the Commissioner in answering a request for third party discovery of documents.
I am unable to accept those arguments.
The fact that there are unresolved criminal proceedings concerning the subject matter of the action in this Court is a matter which might deter the plaintiff Mr Stephens from bringing the proceedings on for trial, but I do not see how it is a matter which can avail Mr Lewis in his defence of the claim. If Mr Stephens wants to run the risk of matters emerging during the course of the civil proceedings which might have an adverse effect on any defence he might wish to raise as to the pending criminal proceedings, that is a matter of concern for him, rather than for Mr Lewis.
Whether or not Mr Stephens pays an amount of costs associated with securing third party discovery against the Commissioner of Police is a matter which, as between Mr Stephens and Mr Lewis, is strictly res inter alios acta, that is, a matter which does not concern Mr Lewis and is irrelevant to his defence of the claim.
One might speculate as to whether Mr Stephens will ever appear to prosecute his claim if it is brought on for trial. But I do not see that as a matter, whether on its own or in combination with the other matters urged in support of the application for a stay, which would justify acceding to the application.
The application for a stay must be dismissed.
In the result, both of Mr Lewis’ applications must be dismissed.
The best course to follow in this action is to bring it on for trial promptly.
I propose to make orders directed to that end.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1. They are paragraphs 7.13, 7.14, 7.15, 7.16, 7.17, 7.18, 7.19, 8, 9, 10, 12.1, 15.1 and 19.

[2003] SASC 207

4 July 2003