Victorian Legal Services Commissioner v Beling
[2020] VCC 1010
•14 July 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-03745
| FIONA RUTH MCLEAY AS VICTORIAN LEGAL SERVICES COMISSIONER | Plaintiff |
| v | |
| JOEL LORENSZ BELING | Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | On the papers | |
DATE OF RULING: | 14 July 2020 | |
CASE MAY BE CITED AS: | Victorian Legal Services Commissioner v Beling | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1010 | |
REASONS FOR RULING
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Legislation Cited: Civil Procedure Act 2010 (Vic); County Court General Civil Procedure Rules 2018 (Vic); Legal Profession Act 2004 (Vic)
Cases Cited:Charles Lloyd Property Group Pty Ltd v Buchanan [2013] VSC 148; Commonwealth Bank of Australia v Doggett & Ors [2014] VSC 423; Davy v Garrett(1878) 7 Ch D 473; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228; Gunns Ltd v Marr [2005] VSC 251; JBS Southern Australia Pty Ltd v Westcity Group Holdings Pty Ltd [2011] VSC 476; Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27; McKay v National Bank of Australia Limited [1998] 4 VR 677; Milfoil Pty Ltd v Commonwealth Bank of Australia Ltd [2017] VSCA 256; Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1;
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M.G. McNamara | White Cleland |
| For the Defendant | The defendant filed submissions on his own behalf. |
HIS HONOUR:
Introduction
1 By summons filed 13 March 2020, Fiona Ruth McLeay as the Victorian Legal Services Commissioner (“the Commissioner”), seeks summary judgment on her claim and the defendant’s counterclaim. Alternatively, the Commissioner seeks an order that the defence and counterclaim be struck out.
2 Mr Joel Beling (“Beling”), also by summons filed 13 March 2020, seeks summary judgment against the Commissioner on his defence and counterclaim, or alternatively orders striking out all or part of the statement of claim.
Background and history of proceedings
3 Between about August 2012 and January 2013, Beling acted for Tracie and Peter Hanna in a proceeding brought against them by the ANZ Bank in the Federal Circuit Court. After termination of Beling’s retainer, Mr and Mrs Hanna made a complaint to the Commissioner about Beling’s conduct and the costs which he claimed from them. The Commissioner commenced an investigation.
4 On 17 November 2014, Beling began a proceeding against the Commissioner in the Supreme Court of Victoria (“the Supreme Court proceeding”) seeking orders in the nature of mandamus and prohibition.
5 On 23 December 2014, the Commissioner decided under section 4.4.13 of the Legal Profession Act 2004 that she was satisfied that there was a reasonable likelihood of Beling being found guilty of professional misconduct. The Commissioner was thereby obliged to apply to VCAT for an order in relation to Beling and, accordingly, commence proceedings in VCAT (“the VCAT proceeding”).
6 On 16 April 2016, Derham AsJ upheld the Commissioner’s application for summary determination of the Supreme Court proceeding. His Honour rejected Beling’s application for leave to discontinue the proceeding.
7 On 12 July 2017, VCAT found Beling guilty of professional misconduct.
8 On 27 September 2017, VCAT ordered that Beling pay a fine of $10,000 and some of the Commissioner’s costs of the proceeding in VCAT. VCAT ordered that the fine be deducted from the amount payable as costs.
9 The parties engaged in correspondence and negotiations in relation to the costs orders. In May 2018, the Commissioner sent Beling a draft bill of costs in relation to the Supreme Court proceedings in an amount of about $46,000 and a draft bill in relation to the VCAT proceeding in the sum of about $252,000. Although the combined costs, including the costs of producing the taxable bills exceeded $318,000, the Commissioner offered to settle the costs claim for $237,767.15, payable by monthly instalments of $10,000 until the debt was paid.
10 Beling responded by claiming that he was under financial duress and needed time to consider the proposal and to obtain legal advice. The Commissioner agreed to give Beling a further period of 21 days from 17 May 2018 to do those things.
11 On 17 May 2018, Alexandra Freeman (“Freeman”), senior investigator and solicitor in the discipline and suitability team employed by the Commissioner, sent Beling a letter on behalf of the Commissioner in which she said to him, inter alia, that:
· Beling had raised concerns about the authenticity of his file throughout the VCAT proceeding and the Tribunal did not accept his allegations;
· the appeal periods for both the VCAT proceeding and the Supreme Court proceeding had now passed;
· VCAT ordered that the amount of the costs ordered to be paid were to be determined by the Costs Court in default of agreement. Beling was under no obligation to sign the deed of settlement (“the Deed”);
· the Commissioner was willing to provide an extension of 21 days for Beling to consider the documents and seek legal advice;
· the Commissioner rejected Beling's assertion that she was putting him under financial pressure. The Commissioner was merely pursuing her costs in accordance with the orders made in the VCAT proceeding and the Supreme Court proceeding. The Commissioner encouraged Beling to seek the assistance and advice he required;
· the Commissioner was not seeking from Beling at the time the costs she had incurred in having the bills of costs drawn by Grace Cost Consultants; and
· Freeman enclosed with her letter to Beling copies of all invoices received from Ms Kate Anderson of counsel and Mr Howell (expert witness) in relation to the VCAT proceeding and invoices received from Ms Lucy Kirwan of counsel in relation to the Supreme Court proceeding.
12 In a series of emails and/or letters in late May and June 2018, Beling claimed that the costs debt was unjustifiable and unreasonable and that if the Commissioner sought to claim all the costs, she was attempting to obtain a financial advantage by using the threat of costs to cause him economic duress. Freeman responded to Beling by email on 6 June 2018. She informed him that by reason of his stated position, the Commissioner inferred he was unwilling to pay the costs. Accordingly, from the Commissioner’s perspective, the negotiations regarding the costs reductions were finished and the Commissioner would proceed to seek payment of the costs in full.
13 By email later the same day, Beling denied he was unable to pay the costs, and said that he had signed the Deed providing for the payment of the $237,767.15 by monthly instalments of $10,000. Shortly after, Beling sent the Commissioner another email where he drew attention to the Commissioner’s offer of 17 May, being open for 21 days and said that he had signed and returned the Deed within that period.
14 Freeman received the signed Deed from Beling on 12 June 2018. Under the terms of the Deed, Beling agreed to pay the Commissioner the sum of $237,767.15 by 23 monthly instalments of $10,000 dollars, commencing on 1 July 2018, with a final payment of $7,767.15 to be paid on or before 1 June 2020.
15 Beling made payments of $10,000 on each of 27 June, 27 July and 20 August 2018. Beling made no other payments leaving an outstanding balance of $207,767.15. In his defence and counterclaim, Beling sought to recover those payments, together with the fine of $10,000 imposed upon him by VCAT.
16 On 27 September 2018, shortly before the next monthly payment was due, Beling sent an email to the Commissioner with a series of allegations including: he had no intention to create legal relations with the Commissioner; he signed the Deed because the Commissioner's office placed him under economic duress; there was illegality and lack of good faith attaching to the performance of the Deed – in particular the falsification and forgery of his file; the Deed was illegal on public policy grounds because it involved a fraud on the Tribunal; it was a contract prejudicial to the interests of justice; and it was a contract which promoted corruption in public life.
17 The Commissioner took issue with Beling in her responding email and detailed why she disagreed with his allegations and complaints.
18 After further correspondence between the parties in December 2018, the Commissioner’s solicitor by letter dated 18 July 2019 made demand on Beling for the sum of $207,767.15 due under the Deed. When Beling made no payments and disputed liability, the Commissioner commenced this proceeding by writ on 13 August 2019.
19 By his defence and counterclaim dated 26 November 2019, Beling opposed the claim against him and made allegations against the Commissioner.
20 In March 2020, each party filed a summons seeking summary judgment.
21 By application filed in April 2020, Beling sought leave out of time to appeal the decision and orders of Derham AsJ made in the Supreme Court proceeding in 2016. The Supreme Court has listed the application for leave to be heard on 13 November 2020.
Nature of application
22 The court has two applications before it:
(a) the Commissioner’s summons filed 13 March 2020 seeks orders for summary judgment on her claim and the counterclaim pursuant to s 63 of the Civil Procedure Act 2010 (“the CPA”), alternatively that the defence and counterclaim be struck out pursuant to rule 23.02 of the County Court Civil Procedure Rules 2018 (“the Rules”); and
(b) Beling’s summons filed 13 March 2020 seeks orders for summary judgment on his defence and counterclaim and orders striking out all or part of the statement of claim. Beling seeks these orders pursuant to rule 22.16 and/or 23.01 of the Rules, sections 29, 61, 62 and 63 of the CPA, and the inherent and/or supervisory jurisdiction of the Court.
23 The following affidavits have been filed and served in relation to the applications:
(a) for the Commissioner, affidavit of Alexandra Claire Freeman made on 12 March 2020 (“Ms Freeman’s affidavit”) and exhibits “ACF-1” to “ACF-22” thereto; and
(b) affidavits made by Mr Beling on 11 March 2020 (“11 March affidavit”) and 25 March 2020 (“25 March affidavit”), to which there are voluminous exhibits of more than 2500 pages.
Legal principles for summary judgment and strike out
24 Each party relies, inter alia, upon section 63 of the CPA to obtain summary judgment. The CPA has introduced a different statutory test for the summary disposition of proceedings. In Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd, Dixon J summarised the applicable principles under the CPA as follows:[1]
[1](2011) 35 VR 1 at [18].
“(1) If a proceeding or defence, or any particular claim, cause of action or ground of defence (“claim”) is hopeless, untenable, bound to fail, or could not possibly succeed, then it ought be summarily dismissed. In other words, a claim which ought be dismissed under the old test will be dismissed under s 63 of the Civil Procedure Act;
(2) Section 63, however, is less stringent. It does not direct an inquiry into whether a certain and concluded determination could be made that the proceeding, or a claim, would necessarily fail. What is required is a practical judgment by the court as to whether a claim has more than a “fanciful” prospect of success;
(3) The court’s discretion whether to exercise the power of summary dismissal is very wide. Section 64 of the Civil Procedure Act expresses that the power is based in a consideration of the interests of justice. The Act provides direction in Pt 2.1.13. The discretion is to be exercised to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute between the parties. The court’s powers in furthering the overarching purpose are facilitated by having regard to the objects and matters set out in s 9 of the Act;
(4) The court may be satisfied, on an interlocutory application, that there is no real prospect of success in a civil proceeding but nevertheless consider the dispute to be of such a nature that only a full hearing on the merits is appropriate. Whether a full hearing on the merits is appropriate is a relevant discretionary consideration in the circumstances of each proceeding;
(5) The power to order summary dismissal is to be exercised with great care, as a trial upon evidence of issues raised is the well-settled approach to the determination of litigation. When proceeding on a summary application to assess the prospect of success, a judge ought to feel confident that an assessment can properly be made of whether the overarching purpose is facilitated on dismissal of the impugned claims;
(6) That argument directed to the issues relevant on the application, perhaps even extensive submissions, may be necessary to demonstrate that the case of the plaintiff has no real prospect of success is not ordinarily a relevant consideration.”
25 The applicable principles regarding summary determination were also reviewed in a number of subsequent decisions including JBS Southern Australia Pty Ltd v Westcity Group Holdings Pty Ltd[2] and Charles Lloyd Property Group Pty Ltd v Buchanan.[3] In order to settle potential differences of approach regarding the new law, the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[4] set out the definitive principles to apply where Warren CJ and Nettle JA said:[5]
[2][2011] VSC 476.
[3][2013] VSC 148.
[4](2013) 42 VR 27.
[5]Ibid at [35].
“Upon the present state of authority:
a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
b) the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
c) it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
26 In relation to the strike out claims, the Commissioner and Beling have relied upon different rules. The Commissioner relies upon rule 23.02 while Beling relies upon Rule 23.01.
27 The Commissioner’s objection is to the way in which the defence and counterclaim is pleaded. The Commissioner argues that there are problems with the form of the pleading and that it does not satisfy the court’s rules.
28 Rule 23.01 applies where a party contends that the other party’s claim or defence is so lacking in a factual and/or legal foundation that no amendment can save it. For this purpose, a party invoking Rule 23.01 can adduce evidence in support of its application whereas a party relying upon Rule 23.02 cannot do this and is limited to the terms of the pleading and documents referred to therein.
Beling’s application
29 I will deal first with Beling’s application.
30 The Commissioner makes a simple claim for breach of the Deed. There is no dispute that Beling signed the Deed, made three monthly instalment payments and then failed to pay the rest of the money owing under the Deed. Subject to the issues raised by Beling in his defence and counterclaim, the Commissioner’s case is established.
31 For this reason, there is no basis on which Beling could obtain summary dismissal of the Commissioner’s claim. The case put forward by the Commissioner does not have a merely fanciful chance of success. On the contrary, it has real prospects of success in circumstances where there is no serious contest about the critical facts and, as will be seen later, I am striking out the defence and counterclaim. Hence, Beling’s application under Rule 22.16 must fail.
32 Further, the pleading itself is not defective and none of it need be struck out. Moreover, by relying on Rule 23.01, Beling must establish that the Commissioner’s claim is so lacking in a factual and/or legal basis that no possible amendment can save the claim. Beling is unable to do this. Nor did Beling clearly articulate any issue he had with the form of the Commissioner’s pleading.
33 In my view, Beling cannot succeed in his applications against the Commissioner. At most, Beling might have available to him a point of defence[6] or a counterclaim which, if it gave rise to an entitlement to damages, could be set-off against the amount which would otherwise be payable to the Commissioner on her claim.
[6]Although I am dubious about those currently appearing in the defence.
Commissioner’s application
34 The Commissioner seeks to obtain final judgment against Beling, or alternatively, to strike out the defence and counterclaim. Pursuant to Rule 23.02 of the Rules, the Commissioner contended that the defence and counterclaim contained so much objectionable material that the court should not go through the pleading paragraph by paragraph to determine what might remain but should strike out the entire pleading.[7] Further, the Commissioner submitted that in respect of all matters concerning issues determined in earlier proceedings, the defence and counterclaim is manifestly hopeless and no leave to replead should be given in respect of those matters.
[7]Gunns Ltd v Marr [2005] VSC 251.
35 Because I consider that Beling should have another opportunity to put before the court a compliant pleading which sets out his defence and any counterclaim, it would be inappropriate to grant the Commissioner summary judgment at this time.
36 I accept that the current form of defence and counterclaim does not comply with the court’s rules about pleading. The defence and counterclaim is an idiosyncratic document which is lengthy, prolix and repetitive. More than 60 pages long and comprising about 240 paragraphs, much of it reads more like an affidavit than a pleading. This is a little surprising when Beling was a practising solicitor.
37 The defence and counterclaim is frivolous, vexatious and is apt to prejudice, embarrass or delay the fair trial of the proceeding. In my view, the defence and counterclaim pleads not just material facts but much additional material of an evidentiary nature. It asserts conclusions or opinions and parts of the material are confusing and not relevant. I am concerned that major aspects of Beling’s case relate to issues which have already been raised in the VCAT proceeding or the Supreme Court proceeding. To the extent that the defence and counterclaim raises questions already litigated between the parties, they cannot be litigated again.
38 I have referred above in general terms to some of the problems raised by Beling’s pleading. Although the problems should be apparent from reading the pleading, I provide some specific examples of the difficulties as follows:
(a) paragraphs [1], [12], [17], [34], [38], and [43-5] are irrelevant and/or appear to attack the decisions of VCAT and Derham AsJ;
(b) paragraphs [5-7] do not disclose any defence or claim and are misconceived in circumstances where the Commissioner was entitled to have the file costed;
(c) paragraphs [8-10], [15], [18-20], [25], [31-2], [36], [43], [52-7], [61], [68], [71] and [82] do not disclose a defence or claim. The Commissioner is not obliged to comply with requests or demands made by Beling. The Commissioner does not have to negotiate or meet with Beling or produce affidavits at his request. Nor is counsel acting on behalf of the Commissioner required to act in the way asserted by Beling;
(d) paragraphs [17-33] do not disclose a defence or claim and in my view are irrelevant and embarrassing;
(e) paragraphs [67], and [75-87] do not disclose a defence or claim. The Commissioner was entitled to approach the Costs Court to have the costs taxed. Further, the plea of unconscionability is defective;
(f) paragraphs [88-133] do not set out an arguable claim for breach of an implied term of good faith.
39 Because of the size of the pleading, its discursive and repetitive nature and its various defects, I consider that the whole pleading should be struck out. However, given the serious nature of the claim and the significant consequences that will follow for Beling if the Commissioner succeeds in her claim, I consider that the ends of justice are best served by allowing Beling another opportunity to plead a defence and counterclaim which complies with the court’s rules. The impugned defence and counterclaim is the original pleading filed by Beling. But I note that the Registrar refused to accept a defence and counterclaim dated October 2019 pursuant to Rule 27.06(1). Then on 28 October 2019, Judicial Registrar Tran dismissed Beling’s application for an order that the Registrar accept the document for filing. While I consider that it is reasonable that Beling be given another chance to make good his defence and claim, I also think that, subject to exceptional circumstances, this should be his final opportunity to do so. If on the next occasion, Beling cannot produce a pleading which satisfies the Rules, it suggests that he does not have a valid defence and counterclaim.
40 Given my view that the defence and counterclaim should be struck out and that Beling should be permitted to replead, it is not strictly necessary to address in detail the matters raised in Beling’s current pleading. However, I will briefly state my views on some issues. Although my views are obiter and do not bind other judges, they might, apart from anything else, assist Beling in framing his amended document. If Beling were to plead defences or causes of action in his counterclaim which had no real chance of success but were more fanciful in nature, a court would probably strike them out because there is no utility in allowing futile amendments.
41 The defence and counterclaim raises a number of issues which can be grouped as follows:
(a) matters vitiating the Deed including economic duress; absence of intention to enter into legal relations; and unconscionable conduct;
(b) allegations that the Commissioner by waiver or estoppel surrendered her rights under the Deed; and
(c) allegations critical of aspects of the decisions by the Supreme Court and VCAT.
42 There were also other categories of complaint by Beling which the Commissioner addressed in her submissions including the alleged breach of an implied contractual term of good faith, breach of a statutory duty, deceit and negligence.
43 Because Beling alleged economic duress, he bears the obligation to prove the defence. This means that he must establish two things: first, that pressure was applied to him and that such pressure constituted one reason for him to enter into the transaction; and secondly, the pressure was illegitimate in the sense that it invalidated his consent.[8]
[8]Commonwealth Bank of Australia v Doggett & Ors [2014] VSC 423 at [199]-[220].
44 The second element is not satisfied merely by showing that a party was under commercial pressure to act. In business and the commercial arena, many acts are brought about by pressure to the extent where it can be said that a party had little choice but to act in a particular way. However, the pressure must be illegitimate or improper in the relevant legal sense. The threat to issue legal proceedings for a proper purpose cannot constitute illegitimate duress. Here, having obtained two costs orders in her favour, the Commissioner was entitled to pursue those costs if the settlement proposal was unacceptable to Beling.[9]
[9]McKay v National Bank of Australia Limited [1988] 4 VR 677 at [690].
45 In any case, I do not accept that Beling was subjected to economic duress. By his actions he accepted the Deed. After having the opportunity to consider the situation in the period subsequent to 17 May 2018 and to obtain legal advice, he signed and returned the Deed. Rather than complain about the Deed and raise allegations of duress, Beling insisted to the Commissioner that he signed and returned the Deed within time so the Commissioner could not revoke the settlement offer and pursue a higher sum.
46 Given the correspondence and course of dealing between the parties in negotiating the Deed and its ultimate signing by the parties, I do not accept that Beling had no intent to create a legal relationship with the Commissioner. Such a proposition defies an objective examination of the state of affairs between the parties.
47 Beling made allegations of waiver, estoppel and the like against the Commissioner in an effort to avoid the operation of the Deed. Because aspects of the defence and counterclaim are not very clear, it is uncertain whether Beling intended the waiver point to be that the Commissioner, intentionally and with full knowledge, abandoned her right to sue on the Deed by acting inconsistently with that right. Alternatively, Beling might have meant that the Commissioner made an election between inconsistent rights. The essence of the allegation is that the Commissioner lost her entitlement to claim the outstanding costs - even after engaging in substantial litigation, obtaining the costs orders in her favour, negotiating a compromise settlement regarding the amount and timing of payments, and Beling actually making the initial payments. From correspondence between the parties between about October and December 2018, it was apparent that the Commissioner wanted Beling to honour his obligations under the Deed. While the Commissioner took time to consider her options and waited until July 2019 to issue demands against Beling, in my opinion, Beling did not appear to identify any statement or conduct by the Commissioner (other than this delay) which constituted a waiver or estoppel adversely affecting the Commissioner’s entitlement to pursue Beling for his failure to perform his obligations under the Deed. Simply of itself the fact of delay would not constitute a waiver or estoppel.
48 As to Beling’s allegation that the Commissioner accepted his repudiation of the Deed in some way which prevented the Commissioner from suing him for breach of the Deed, I reject this contention. Beling relied upon what he called his repudiation letter dated 27 September 2018, sent about the time he was due to make the fourth monthly payment under the Deed. The fact that the Commissioner did not engage in further detailed correspondence, meetings or discussions with Beling about his allegations, and waited until August 2019 to issue formal proceedings against him, does not prevent or preclude the Commissioner from pursuing her rights under the Deed.
49 Beling’s reliance upon the doctrine of unconscionability is misplaced as things currently stand. As a major part of Beling’s complaint, his defence and counterclaim refers to his limited income of $700-820 per week, his mortgage in excess of $100,000 and the likelihood of him having to sell his residence. He also maintains that it would be contrary to public policy to allow the Commissioner to recover her costs having regard to how she or her delegates acted in connection with the referral to VCAT.
50 In my view, the allegation of unconscionable conduct against the Commissioner will not assist Beling. While the Commissioner was connected with the referral of Beling’s disciplinary matter to VCAT, the Commissioner was not directly responsible for the decisions which VCAT and the Supreme Court made about Beling and the litigation he commenced. Those bodies made orders adverse to Beling including the orders requiring that he pay the Commissioner’s costs or part thereof. For the Commissioner to successfully seek the benefit of a costs order and to enforce such an order does not constitute unconscionable behaviour.
51 The next category of Beling’s complaints concerns the hearings in VCAT and the Supreme Court. I consider that Beling’s complaints about such matters are not likely to impeach the Commissioner’s capacity or entitlement to sue for Beling’s breach of the Deed. The time for Beling to appeal the decisions made in the VCAT proceeding and the Supreme Court proceeding has expired. Unless and until Beling successfully appeals either decision, the decisions already made are final and binding. However, as noted earlier, Beling has an application for leave to appeal in the Supreme Court listed for hearing in November this year. It seems that much of what Beling complains about in his defence and counterclaim are issues which appear to have been raised in earlier proceedings. It is a long accepted tenet of the judicial system that once controversies have been heard and determined, they are not to be revisited other than in limited circumstances.[10] This approach is reflected, inter alia, in the legal doctrines of issue estoppel and res judicata. These doctrines prevent a party to a proceeding raising in a new proceeding against a party to the original proceeding a cause of action or issue which was finally decided in the original proceeding. Determining precisely what a case has “finally decided” is often not a simple exercise.[11]
[10]D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [34].
[11]See the discussion in the judgment of Santamaria JA (with whom Tate and Whelan JJA agreed) in Milfoil Pty Ltd v Commonwealth Bank of Australia Ltd [2017] VSCA 256 at [86] ff.
52 Beling contended that the Commissioner breached the implied contractual term of good faith. A number of Beling’s allegations concern matters separate from the Deed. For example, Beling complains at paragraph 89 of the defence and counterclaim about matters spelt out in paragraphs 178-221 of that pleading. These are alleged fraudulent misrepresentations made at varying times between 2014 and May 2018. Hence, these allegations all pre-date the Deed. Assuming it was open to Beling to argue the implied term point,[12] these allegations could not constitute breach of an implied term of the Deed.
[12]There is a significant question about this because the Court of Appeal in Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228 doubted whether such a duty could be implied into commercial contracts. See Warren CJ at [2-4] Buchanan JA at [22-28] and Osborn AJA at [32].
53 Insofar as there are allegations of wrongdoing in connection with annexure AF-7 to the witness statement dated 5 August 2016 which Freeman filed in the VCAT proceeding, those matters were dealt with in that proceeding.[13]
[13]See the decision of Senior Member Smithers rejecting Beling’s authenticity argument at paragraph [35-58] of his judgement.
54 At a broader level, I note that Beling seeks to agitate issues relating to the exhibit even though the time has passed for an appeal and this is an inappropriate forum for such agitation.[14]
[14]See Beling’s affidavit sworn 25 March at paragraphs [4-6], [26-32], [66-78], [81-2], [92-7], [103], [115], [117-8], [120-2], [126-9],[132],[136],[139-145],[152],[163],[166],[174],[177],[191],[194],[197].
55 Another example of breach of good faith alleged by Beling is the Commissioner’s interference in the conduct of the proceedings regarding costs. This was VCAT litigation brought by Mr and Mrs Hanna. Beling did not explain precisely how alleged conduct by the Commissioner in legal proceedings brought by third parties could affect the legitimacy or enforceability of the Deed. In any case, I note that a deponent on behalf of the Commissioner swore that she did not interfere in the conduct of that litigation and believes that no other person did so on behalf of the Commissioner. To the extent that this complaint involves missing documents, emails from Mrs Hanna dated 26 and 27 July 2018 indicate that she could not find them.
56 In his submissions, counsel for the Commissioner advanced some additional arguments on how he interpreted other allegations amounting to a breach of duty of good faith. Suffice to say that I would be inclined to accept the submissions made at paragraphs 27-30 of the Commissioner’s outline of submissions dated 20 April 2020. The submissions made cogent points and nothing in Beling’s material successfully addressed them. However, I do not propose to engage with the detail of the arguments.
57 Beling raised allegations too of breach of statutory duty, namely obligations under the Legal Profession Act 2004. It was said that the Commissioner was to comply with common law obligations and those under the Legal Profession Uniform Law. The allegations of breach were set out at some length and appear to involve conduct in 2014 and 2016. A number of the allegations were raised in Beling’s final submissions to Senior Member Smithers in the VCAT proceeding while Derham AsJ rejected others in the Supreme Court. Other allegations referred again to AF-7 to the Freeman affidavit. The loss which Beling alleged appeared to originate in the adverse results which Beling suffered at VCAT.[15] As noted above Beling cannot launch in this proceeding collateral attacks on the earlier VCAT and Supreme Court litigation.
[15]See paragraph [177] of the defence and counterclaim referring to paragraphs [132-3].
58 Beling makes allegations of deceit against the Commissioner in the nature of a series of fraudulent misrepresentations. The Commissioner takes issue with the allegations. One particular allegation - that the Commissioner acted in such a way as to conceal from Beling grounds of complaint which he made - seems rather odd. I do not readily follow how the Commissioner’s conduct could have misled Beling about complaints which he himself initiated.
Conclusion
59 In short, I have decided that:
(a) Beling’s application against the Commissioner should be dismissed;
(b) rather than the Commissioner enter judgment against Beling, the defence and counterclaim should be struck out and Beling have leave to serve a proposed further amended defence and counterclaim by 4:00pm on 27 July 2020;
(c) the Commissioner must advise Beling by 4:00pm on 3 August 2020 if she consents to the filing of the proposed pleading;
(d) if the Commissioner objects, then Beling must apply by 4:00pm on 6 August 2020 for leave to file the proposed pleading.
60 I direct that by 4:00pm on 15 July 2020, the parties file orders giving effect to this ruling and also addressing the question of costs. If the parties cannot agree on the form of order, notwithstanding that they have consulted in good faith consistent with their obligations under the Civil Procedure Act 2010, they should each submit a proposed order and a written submission in support of the orders they seek. The submission must be limited to 3 pages and should use a minimum 12 point typeface with 40mm margins on either side of the page. Unless I consider an oral hearing via Zoom is needed, I will make the final order on the papers.
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