White v Geerlings

[2014] NSWDC 381

District Court

New South Wales

Medium Neutral Citation:	White v Geerlings [2014] NSWDC 381
Hearing dates:	10 November 2014
Date of orders:	10 November 2014
Decision date:	10 November 2014
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)   The statement of claim is struck out as against the third and fourth defendants pursuant to Part 14.28 of the Uniform Civil Procedure Rules 2005. (2)   Plaintiffs to pay the third and fourth defendants’ costs of the proceedings.
Catchwords:	PROCEDURE - application to dismiss proceedings – frivolous and vexatious – strike out pleadings – application to amend – repeated applications – no reasonable cause of action disclosed – causes prejudice, embarrassment and delay
Legislation Cited:	Uniform Civil Procedure Rules 2005, r 13.4, r 14.28, r 36.16
Category:	Procedural and other rulings
Parties:	Gary Kenneth White trading as Leading Edge Telecoms (first plaintiff) Patricia Kathleen White trading as Leading Edge Telecoms (second plaintiff) Deborah Lea Geerlings (first defendant) Darcy William Ledger (second defendant) Focal Accounting & Taxation Services (third defendant) Michael James Gallagher (fourth defendant)
Representation:	Counsel: Mr T J Hancock (fourth defendant)   Solicitors: P J Carey Solicitor (plaintiffs) J P Miskell & Associates (fourth defendant)
File Number(s):	2012/380164
Publication restriction:	None

Judgment

1. Gary White and Patricia White trading as Leading Edge Telecoms sue Deborah Geerlings, Darcy Ledger, Focal Accounting & Taxation Services ("Focal") and Michael Gallagher in relation to alleged defective accounting services.

2. Ms Geerlings and Mr Ledger have in each case been declared bankrupt and the proceedings against them have accordingly been stayed.

3. Mr Gallagher is the owner of Focal, a business name, so he is effectively the sole remaining defendant. Mr Gallagher has applied to have these proceedings dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 or, alternatively, struck out pursuant to 14.28 of the Rules.

4. On the three previous occasions before me, Mr White sought leave to amend the statement of claim. On each occasion the proposed amended claim was defective and on the last occasion I dismissed the application to amend and stood over Mr Gallagher's application.

5. The orders also allow the plaintiffs to apply again for leave to file an amended statement of claim on condition of serving a proposed pleading on Mr Gallagher by 30 October 2014. Mr White appeared in person today. He said that he was unsuccessful in contacting his solicitor on Thursday, 6 November, or today. Thus, no explanation for his solicitor's absence could be given. Mr White had no papers and made no application for an adjournment. The matter was called outside court but there was no further appearance. Mr White did not seek leave to act for Mrs White.

6. Mr White's solicitor had previously conceded in earlier amendment applications that the existing statement of claim was defective. This defective statement of claim is now the subject of the application by Mr Gallagher. In view of the uncertainty surrounding Mr White's self-representation, or more particularly the absence of his solicitor, I gave him an opportunity to identify his complaint to see if, notwithstanding the defective pleading, there may be something of substance in his claim.

7. Mr White first complained that Ms Geerlings had lodged unauthorised business activity statements ("BAS") on his behalf. He then accepted that he had authorised Ms Geerlings to lodge the BAS but complained that they were incorrect. He asserted that Mr Gallagher was responsible because the BAS were lodged through Mr Gallagher's tax portal. However, Mr White asserted that his damages - the failure to secure a Telstra shop business - did not arise from the incorrect BAS but from the failure to lodge his income tax returns. He said that Mr Gallagher was responsible for Ms Geerlings' asserted failure to lodge his tax returns because Mr Gallagher's portal had been used to lodge the unauthorised and incorrect BAS. Mr White used the example that he was an electrician and he was responsible for any apprentice working for him. I asked him if he thought he would remain responsible for the apprentice after the apprentice had ceased work for him and he asserted that he would not so long as he could prove the apprentice was no longer in his employ.

8. Mr White then asserted that he was not satisfied that Ms Geerlings was not in the employ of Mr Gallagher at the time of her alleged defaults and this is why Mr Gallagher remained responsible. Accordingly, Mr and Mrs White's claim, as asserted by Mr White, is dependent upon Ms Geerlings being in Mr Gallagher's employ at the time of the failure to lodge the tax returns in 2011. However, in earlier draft versions of the amended statement of claim, it was conceded that Ms Geerlings left the employ of Mr Gallagher in about April or May of 2009. Mr White's solicitor had conceded that matter in earlier applications.

9. I was also referred to a statutory declaration by Ms Geerlings asserting that she was no longer employed by Focal in May 2009 and that Mr White was aware of this. Mr White's awareness was contested by him. Ms Geerlings' assertion of Mr White’s awareness was not a matter that I am able to accept on this application and it has played no role in the decision I have made. There was also evidence of Ms Geerlings being employed by a different accountant in 2009.

10. I am not persuaded that there is any merit in Mr White's claim. That matter, however, is only relevant to whether I should give Mr and Mrs White a fifth opportunity to re-plead properly their claim. The claim presently pleaded does not identify a cause of action against Mr Gallagher. In my view, no reasonable cause of action is disclosed and the current pleading has a tendency to cause prejudice, embarrassment, and delay to the proceedings and I think it should be struck out under r 14.28.

11. I do not propose to give Mr and Mrs White a further or fifth opportunity to re-plead their claim, particularly because Mr White is still within time to commence proceedings if he is so minded, because of the previous defaults in complying with orders for the service of a properly pleaded and amended statement of claim and the previous unsuccessful attempts to obtain leave to file such a claim.

12. A limitation period for any new claim could not expire before March 2015, six years after March 2009 when Focal was allegedly retained at a time when Ms Geerlings worked for it. The limitation period probably would not expire until 2017, six years after the alleged breach. Thus, dismissal of the claim would not preclude a further claim. In any event, I do not propose to dismiss the proceedings but rather to strike out the existing statement of claim. The filing of any further statement of claim would require leave. It would remain open to Mr White to seek leave to file a further statement of claim were he able to explain the previous delay and plead a cause of action that did not suffer from the deficiencies of his previous pleading.

13. I also note that under r 36.16 Mr and Mrs White have two weeks to make an application to set aside these orders which may be an option to them in the event that their solicitor's absence was due to circumstances beyond their control and that those circumstances explain the previous failure to serve a properly pleaded amended statement of claim.

14. Accordingly, the orders of the Court are:

1. The statement of claim is struck out as against the third and fourth defendants pursuant to Part 14.28 of the Uniform Civil Procedure Rules 2005.

2. Plaintiffs to pay the third and fourth defendants’ costs of the proceedings.

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Decision last updated: 19 May 2016