Sullivan v Krepp

Case [2020] SASC 97

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

SULLIVAN v KREPP

[2020] SASC 97

Judgment of The Honourable Justice Peek

11 June 2020

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - STRIKING OUT - PROCEDURAL MATTERS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION OF DOCUMENTS - GROUNDS FOR RESISTING PRODUCTION - PRIVILEGE - TENDENCY TO INCRIMINATE AND EXPOSURE TO PENALTY

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - PARTICULAR PLEADINGS - DEFENCE

Appeal against a Supreme Court Master’s dismissal of interlocutory applications.

The plaintiff (Sullivan) was convicted of a criminal offence and incarcerated during which time the defendant (Krepp) assisted Sullivan by storing his personal property and finalising the settlement of a property he owned in New South Wales.

Upon release, Krepp did not return the property or the proceeds of the property settlement. Sullivan reported the matter to police in South Australia, New South Wales and Victoria but no criminal charges were laid. Sullivan later commenced this action.

Krepp filed a bare denial defence. Later, when represented, consent orders were agreed to, inter alia, obliging Krepp to file a second defence and to make disclosure. Shortly thereafter, an interlocutory application was filed by Krepp’s solicitors seeking that the consent orders be vacated and the matter be stayed. Alternatively, Krepp sought that paragraphs 14, 15, 19 and 26 of the statement of claim be struck out.

At the hearing before the Master, Krepp sought a stay of proceedings and indicated that he wished to claim privilege against self-incrimination and be excused from the usual rules relating to procedure and disclosure. The application was dismissed.

On appeal, Ground 1 related to the refusal to strike out/or order further particulars of the pleas of fraud. Ground 2 related to the refusal to excuse the defendant from filing a further defence and/or from making further and better disclosure until the close of the plaintiff’s case.

Held, dismissing the appeal:

1.      As to Ground 1:

(a) An appellate court should only interfere with an exercise of judicial discretion in pre-trial interlocutory applications in instances of plain error: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, discussed. House v The King (1936) 55 CLR 499, considered.

(b) The Court will only order further particulars where the pleadings do not give fair notice of the plaintiff’s case and the order is necessary to avoid substantial prejudice to the party in whose favour the order is sought. By dint of r 102(5), the same obligations apply to applications for further particulars and to applications to strike out an opponent’s pleading: Supreme Court Civil Rules (2013) r 102; referred to. Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, discussed.

2.      As to Ground 2; in civil non-penalty proceedings, a defendant wishing to invoke the privilege…

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AGLC
Sullivan v Krepp [2020] SASC 97
Case
[2020] SASC 97
Decision Date

CaseChat Overview and Summary

The appeal concerns a civil claim initiated by Mr Sullivan against Mr Krepp, seeking to recover money and personal property that Mr Sullivan claims was misappropriated by Mr Krepp. The case was heard in the Supreme Court of South Australia, where the Master dismissed Mr Krepp's application for the proceedings to be stayed and denied his request for further particulars from Mr Sullivan. Mr Krepp appealed these decisions. The central legal issues in the appeal were whether the Master erred in refusing to grant a stay of the proceedings and in denying Mr Krepp's request for further particulars from Mr Sullivan.

The Master found that the Statement of Claim sufficiently notified Mr Krepp of Mr Sullivan's claims, and that Mr Krepp would not suffer substantial prejudice if further particulars were not provided. The Master reasoned that Mr Krepp was already aware of the allegations against him, and that any failure by Mr Sullivan to prove his case at trial would not be due to a lack of particularity in the Statement of Claim. Regarding the request for further particulars, the Master concluded that Mr Sullivan's Statement of Claim provided adequate notice of the claims against Mr Krepp, and that any prejudice to Mr Krepp would only arise if Mr Sullivan failed to prove his case at trial.

The appeal court upheld the Master's decisions, agreeing that there was no error in the Master's exercise of discretion. The court emphasised the reluctance of appellate courts to interfere with interlocutory procedural decisions unless there is a clear error of principle that results in substantial injustice. The court found that Mr Krepp had not demonstrated such an error, and that the Master's decisions were consistent with the applicable legal principles.

Orders

Orders of the court

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Background

Background to the litigation

In the judgment appealed from, Supreme Court Master, Judge Bochner (the Master), summarised the factual background as asserted by the plaintiff, Mr Sullivan (Sullivan) thus: 2. At some time prior to September 2007, the plaintiff was convicted of criminal offences. He remained on bail until a sentencing hearing in the District Court of South Australia on 11 September 2007. The plaintiff had, shortly before this date, sold a property, with settlement scheduled for 14 September 2007. Prior to the sentencing hearing, the defendant, who was a friend of the plaintiff, offered to assist the plaintiff by storing some personal belongings and assisting with the settlement of the contract of sale. The net proceeds of sale were expected to be around $300,000.3. On 11 September 2007, the plaintiff was sentenced to a period of imprisonment. He instructed the solicitor handling the sale of the property to pay the net proceeds (“the net proceeds”) into his bank account with the Commonwealth Bank of Australia (“CBA”). He gave the defendant access to his CBA account and asked him to pay any bills that came in during the period of his incarceration, from the net proceeds. The defendant also took custody of the plaintiff’s personal property, including a motor vehicle.4. The plaintiff was released from prison on 31 January 2013. He accessed his CBA account, to find that the net proceeds were not in his account. He contacted the CBA and was told that the security settings for his account had been changed on 14 September 2007, the date of settlement of the sale of the property. Further, the plaintiff’s items of personal property, including his motor vehicle have not been returned to him. The plaintiff has, on numerous occasions, requested the defendant to return the net proceeds and his personal property.5. It is the plaintiff’s case that the defendant removed the net proceeds from the CBA account without permission. He says that the defendant told him that he had invested the funds and they could not be released. No evidence of any investment has been provided by the defendant. As to the motor vehicle, the plaintiff says that the defendant sold it and kept the proceeds of sale. The defendant has pleaded no positive case in his defence.6. The plaintiff commenced this action in an attempt to recover his money and his personal property.The procedural background On 29 June 2018, Sullivan commenced this action against the defendant, Mr Krepp (Krepp) by filing a Summons (FDN 1) and Statement of Claim (FDN 2). On 7 November 2018, Sullivan filed an interlocutory application (FDN 3) seeking, inter alia, orders for presumptive service on Krepp which was supported by the affidavit of a process server, who had been unsuccessfully attempting for some time to effect service, and on 30 November 2018, the Master made orders in chambers for presumptive service to be effected. On 4 February 2019, Krepp filed a Notice of Address for Service (FDN 6) and a Defence (FDN 7). The defence was a bare denial, denying or not admitting the contents of the statement of claim but pleading no alternative basis of fact.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Inter alia, the defence tendered an affidavit sworn by Krepp on 23 January 2020 (FDN 18) wherein he deposed:3.I refer to the affidavit of my solicitor, Mr Mario Reshan Shavin Silva, affirmed and filed 25 October 2019.4.I acknowledge that I have already filed a Defence in these proceedings, but further say that:4.1 the Defence filed is a bare defence which broadly denies the claims made by the Plaintiff;4.2 I drafted the filed Defence before instructing solicitors in relation to this matter; and4.3 I was only advised of the consequences of filing a Defence in this matter after the listed mediation in this matter on 27 September 2019.5.If criminal proceedings are brought against me, I expect that they will relate to largely the same matters and circumstances which are alleged in the statement of claim in these proceedings.6.If I am now required to defend these proceedings by filing a detailed defence, I will be required to address the matters alleged against me by addressing the allegations in an amended detailed Defence in a manner that will interfere with my right to silence in the criminal prosecution that I am concerned is forthcoming. I do not wish to waive my right to silence.7.I am particularly concerned about waiving my right to silence in circumstances where the allegations of fraud made against me are vague and unparticularised and where I have not been provided with details of what the plaintiff has apparently reported to the police. I note that the email dated 7 February 2017 from Detective Senior Constable David Randle to the plaintiff (which forms part of the exhibit LMS-1 to the plaintiff’s affidavit sworn 6 January 2020) refers to an allegation that I “presented a fraudulent power of attorney” to the Commonwealth Bank in order to gain control of the plaintiff’s bank accounts. This allegation is said by Detective Randle to be based upon the information the plaintiff has provided him. I also note that this allegation is not made by the plaintiff in his Statement of Claim and that he alleges instead (in paragraph 19 (A) of the Statement of Claim) that “further particulars of the manner in which the defendant misappropriated the Proceeds will be provided after the completion of disclosure”.The Judgment of the Master At the hearing before the Master, the focus was squarely on the main application which was to stay the proceedings. Her Honour dismissed that application and the defendant does not appeal against that dismissal. However, it is important to note that her Honour’s approach to that primary issue, and the way in which she resolved it, form an important background to a consideration of the Grounds of appeal presently before me. Her Honour’s analysis of the authorities and facts relevant to the primary issue and her analysis of the correct approach to the resolution of that matter flowed through to the subsidiary matters the subject of the Grounds of appeal; they did not need to be restated by her Honour in the context of her subsequent consideration of those subsidiary matters.The Master’s resolution of the primary application for a stay

Ratio Decidendi

Legal Principle Established

As to the possibility of an order for further particulars, the Master held:41. Each of the provisos in R 102(3)(b) must be satisfied for further particulars to be ordered. It cannot be said that the statement of claim in this matter fails to give the defendant fair notice of the plaintiff’s case, nor that he will suffer substantial prejudice in the absence of further particulars. 42. I do not consider that the paragraphs complained of amount to an abuse of process, or that they prejudice the proper conduct of this action. In the event that the plaintiff fails to prove sufficient facts to allow the Court to draw the required inferences, he will not succeed at trial. The defendant is fully apprised of the plaintiff’s case.Consideration of Ground 1 of appeal I agree with the Master’s decision and reject Ground 1 of appeal. I would add only the following remarks. There are innumerable decisions in many jurisdictions concerning the striking out, and ordering of further particulars, of pleas of fraud; it is not suggested that this experienced Master was unaware of the correct principles or that her Honour proceeded by reference to other than those correct principles. Cases will always be factually different and it is the province of the judicial officer to apply the correct principles to the facts presented. An exercise of judicial discretion will be interfered with only by the application of the precepts adumbrated in such cases as House v The King.[12] Further, and importantly, we are here dealing with an exercise of discretion concerning pre-trial interlocutory procedural matters and the Courts have consistently stressed their reluctance to interfere with such decisions unless plain error can be clearly established. [12] (1936) 55 CLR 499. Thus, in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc, the plurality judgment of the High Court stated:[13]Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v. Electronic Industries Ltd.; on the other hand, De Mestre v. A. D. Hunter Pty. Ltd. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F. B. Gilbert (dec.): “… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”See also, Brambles Holdings Ltd. v. Trade Practices Commission; Dougherty v. Chandler. It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration. [Citations omitted][13] (1981) 148 CLR 170, 177.