Workers Compensation Nominal Insurer v Khaled Zoud

[2015] NSWSC 476

Supreme Court

New South Wales

Medium Neutral Citation:	Workers Compensation Nominal Insurer v Khaled Zoud [2015] NSWSC 476
Hearing dates:	23 April 2015
Date of orders:	28 April 2015
Decision date:	28 April 2015
Jurisdiction:	Common Law
Before:	Wilson J
Decision:	(1) The Notice of Motion filed on 24 March 2015 is dismissed. (2) Costs on the ordinary basis in favour of the plaintiff. (3) Defendant to file his defence within 14 days from today, 28 April 2015. (4) Matter stood over for a directions hearing to 20 May 2015.
Catchwords:	PRACTICE AND PROCEDURE – Notice of Motion – request for further particulars of the Statement of Claim before a Defence is filed – whether pleadings sufficient to enable defendant to identify the case he has to meet - allegation of fraud – distinction between pleadings and evidence – Notice of Motion dismissed
Legislation Cited:	Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005 Workplace Injury Management and Workers Compensation Act 1998
Cases Cited:	Banque Commerciale SA (In Liq.) v Akhill Holdings Ltd (1990) 169 CLR 279 J Earle Hermann Ltd v Ferry (1915) 32 WN (NSW) 31 Middleton v O’Neill (1943) 43 SR(NSW) 178 Minister Administering the Crown Lands (Consolidation) Act And Western Lands Act and Ors v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201 Philliponi v Leithead (1958) 59 SR(NSW) 352; 76 WN(NSW) 150 Re Dependable Upholstery Ltd [1936] 3 All ER 741 Sims v Wran [1984] 1 NSWLR 317 Wallingford v Mutual Society (1880) 5 App Cas 685
Category:	Procedural and other rulings
Parties:	Workers Compensation Nominal Insurer (Plaintiff) Khaled Zoud (Defendant)
Representation:	Counsel: Mr RR Stitt QC with Mr MJ Walsh and Ms HM Mann (Plaintiff) Mr Alexis SC (Defendant) Solicitors: Victoria Lyn Sarfaty Legal Services (Plaintiff) Dibbs Barker Lawyers (Defendant)
File Number(s):	2014/370552

Judgment

1. On 17 December 2014 the plaintiff, Workers Compensation Nominal Insurer, filed a Statement of Claim against Khaled Zoud, the defendant.

2. The Statement of Claim asserts fraudulent conduct on the part of the defendant, and seeks relief of payment of damages in the amount of $923,572.85, together with the payment of interest and costs. The claim includes some 43 pages of information by way of pleadings and particulars.

3. The defendant is a medical practitioner and registered dentist within the meaning of s.59 of the Workers Compensation Act 1987, and a registered oral and maxillofacial surgeon who is recognised by Medicare Australia as a provider of specialist medical services. The plaintiff’s claim against Dr Zoud in brief is that, in the course of providing medical treatment to Mr Kim Chhoeu [“the worker”] subsequent to a workplace injury suffered by that individual, the defendant fraudulently claimed $923,572.85 from the nominal insurer, such sum representing the amount by which the defendant is asserted to have falsely charged the nominal insurer in payment for medical treatment said to be given to Mr Chhoeu in 2008 and 2009.

4. The plaintiff alleges deceit by the defendant in his claims for payment for the medical treatment of Mr Chhoeu, arising from five separate invoices rendered to the nominal insurer.

5. By Notice of Motion [“NOM”] filed in this Court on 24 March 2015 the defendant seeks further and better particulars in accordance with correspondence sent by the defendant’s legal representative to the plaintiff’s legal representative on 20 February 2015.

6. A second order originally sought by the defendant in the NOM, for copies of various documents, is not now pressed, as all extant documents requested by the defendant on 4 February 2015 have been served upon the defendant by the plaintiff.

7. The defendant additionally seeks the costs of the motion.

8. The plaintiff resists the making of the order sought, contending that the Statement of Claim, supplemented as it has been by the provision of a large volume of documentary evidence, provides adequate particulars for the defendant to make his defence. The plaintiff submits that what the defendant is in fact seeking is evidence, rather than particulars.

The History of the Matter

9. On 18 December 2008 the worker suffered an injury at his place of employment and during the course of that employment, giving rise to an entitlement for workers compensation and payment by the employer of medical costs necessary to treat the injury, pursuant to the Workplace Injury Management and Workers Compensation Act 1998.

10. The employer made a claim for indemnity pursuant to a workers compensation insurance policy to QBE, the scheme agent.

11. On 18 December 2008, and subsequently, Dr Zoud provided treatment to the worker for his workplace injuries.

12. On 24 December 2008 the defendant sent a letter to the scheme agent outlining the proposed treatment to be given to the worker and quoting an amount payable for the treatment.

13. The plaintiff contends that the representations of fact made therein by the defendant were false.

14. Further treatment followed, with further representations of fact made by the defendant which the plaintiff claims were false, and which led to the overpayment of moneys by the plaintiff to the defendant. The plaintiff pleads payments made to the defendant on 13 February 2009, 12 May 2009, 13 August 2009, 15 and 17 December 2009, and 6 March 2010 as excessive, and induced by deceit.

15. The Statement of Claim was filed, as noted, on 17 December 2014.

16. On 4 February 2015 the defendant’s solicitors sent a written request to the plaintiff’s representative for documents referred to in the pleadings.

17. On 11 February 2015 the defendant advised the plaintiff that a request for particulars was being drafted and would be served in the course of the following week.

18. On 20 February 2015 correspondence was in fact sent by the defendant’s solicitors to the plaintiff’s solicitors seeking further and better particulars. The list of the particulars sought was exhaustive, taking up nine A4 pages of the correspondence.

19. The plaintiff’s response of 4 March 2015 was in equal manner comprehensive, and dismissive. Over six A4 pages the plaintiff rejected the majority of the specific requests as no more than requests for evidence, and requests for discovery, and insisted that the Statement of Claim provided proper particulars which were sufficient to enable the defendant to understand the case against him and to plead his defence.

20. That contentious tone was taken up in the defendant’s response of 11 March 2015, in which issue was taken with the plaintiff’s characterisation of the defendant’s request, and the plaintiff was put on notice of the likelihood of a NOM being filed if particulars were not provided within a specified timeframe.

21. The request for particulars was not satisfied by the plaintiff, and the defendant filed his NOM as foreshadowed.

The Hearing of the Notice of Motion

22. The NOM came on for hearing before me on 23 April 2015. As the correspondence between the parties made seem likely, each maintained its earlier position. On the one hand, that the Statement of Claim was deficient and further particulars were essential to allow the defendant to understand the nature of the plaintiff’s case; and, on the other, that the Statement of Claim was more than adequate to put the defendant on notice of the case he faced, with the request for particulars being no more than a thinly disguised attempt to obtain evidence whilst the matter was still at the stage of pleadings.

23. Interestingly, both parties insisted that only its approach was consistent with the requirements of s.56 of the Civil Procedure Act 2005 for the facilitation of a “just, quick and cheap resolution of the real issues in the proceedings.” With such a start, one cannot but be a little pessimistic as to the likelihood of the latter two objectives of the Act being met.

24. The parties provided very helpful written submissions, supplemented by equally helpful oral submissions before the Court. Some parts of the documentary material relevant to the action were tendered by both parties, as Exhibits A and B; and Exhibits 1, 2, and 3. There was objection taken by the defendant to Ex. 3 on the basis of relevance and its admission was initially provisional. Having read the material in that exhibit I consider it to be relevant and admit it into evidence on the motion.

The Resolution of the Matter

25. Rule 15.1 of the Uniform Civil Procedure Rules 2005 (“UCPR”) provides that a pleading must give such particulars of a claim as are necessary to enable the opposite party to identify the case that the pleadings require to be met.

26. What may be necessary to meet that requirement is a matter dependent upon the circumstances of the individual case: Philliponi v Leithead (1958) 59 SR(NSW) 352; 76 WN(NSW) 150. To some extent, this may be a matter of opinion, since the distinction to be drawn between facts and evidence is not necessarily one which is always apparent: Re Dependable Upholstery Ltd [1936] 3 All ER 741. Certainly, it is a distinction somewhat harder to draw than r.14.7 UCPR implies.

27. Where, as here, a pleading makes assertions of fraud, UCPR r.15.3 requires the pleading to give particulars of the fraud on which the pleader relies. Since fraudulent conduct is conduct importing a particular state of mind, UCPR r15.4 also has relevance, the rule requiring that any pleading that alleges any condition of mind must give particulars of the facts relied upon.

28. Those requirements are to be met through the filter of UCPR r.14.8 which requires pleadings to be as brief as the nature of the case allows.

29. In Minister Administering the Crown Lands (Consolidation) Act And Western Lands Act and Ors v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201, the Court of Appeal (Kirby P, Meagher and Handley JJA) referred to the rule of strict pleading that applies where fraud is alleged, and noted (at 204)

This rule of strict pleading has long obtained in England. It is also the requirement of the Australian courts. Under the Rules of this Court, proceedings must be commenced by a statement of claim, amongst other cases, where "a claim made by a plaintiff is based on an allegation of fraud". See SCR Pt4 r2. This is a reflection of the seriousness with which such an allegation is conventionally taken. General allegations have frequently been held to be insufficient to amount to a proper averment of fraud. See eg Wallingford v Mutual Society (1880) 5 App Cas 685, 697. Relief has been refused where fraud is suggested but not specifically pleaded. See eg Webster v Power (1868) LR 2 PC 69. See also discussion in Davey v Garrett (1877) 7 Ch D 493, 489; J Earle Hermann Ltd v Ferry (1915) 32 WN (NSW) 31; Middleton v O'Neill and Others (1943) 43 SR (NSW) 178 and Ritter and Another v Northside Enterprises Pty Ltd (1975) 132 CLR 301.

30. Fraud, where it is alleged, must be pleaded with specificity and precision to allow the defendant to understand the allegation and to ascertain precisely what must be negatived: Banque Commerciale SA (In Liq.) v Akhill Holdings Ltd (1990) 169 CLR 279; Middleton v O’Neill (1943) 43 SR(NSW) 178; Wallingford v Mutual Society (1880) 5 App Cas 685.

31. It is clear, however, from consideration of the Statement of Claim, that this is not a case where the plaintiff has done no more than raise a general allegation of fraud. It could not be said that,

No single material fact is condescended upon, in a manner which would enable any court to understand what it was that was alleged to be fraudulent: Wallingford v Mutual Society (1880) 5 App Cas 685 at 697.

32. The plaintiff’s Statement of Claim has clearly identified the specific quotes and invoices rendered by the defendant to the scheme agent which the plaintiff alleges to be fraudulent.

33. Although it is a somewhat shadowy one, the distinction between facts to be pleaded, and the evidence from which those facts are drawn and by which they are to be proven, must be borne in mind. Having considered the detailed pleadings filed by the plaintiff, I do not think it could be said that they are insufficient to make the defendant aware of the nature of the case he is called upon to meet, or that they are inadequate to guard the defendant from surprise: Sims v Wran [1984] 1 NSWLR 317 at 321. Nor do I think it could be said that the allegation of fraud is expressed only in a general or ambiguous way: J Earle Hermann Ltd v Ferry (1915) 32 WN (NSW) 31.

34. The request for particulars seeks a considerable amount of information, with much of the information sought being clearly evidentiary. Some of the request is in terms which have the flavour of a “pro forma” that has been adapted. For example, although the pleadings refer to specific conversations between the defendant and staff of the scheme agent by reference to names of persons involved, when the conversations took place, and the substance of the conversations, the request for particulars asks for precisely this information by requesting “the usual particulars of conversations”.

35. Even those requests which clearly have more substance, such as those which touch on paragraphs 35, 45, 56, 68, 78, 83, and 99 of the pleading, request information which goes beyond that which is needed to understand the nature of the plaintiff’s case, and to prepare a defence.

36. As the plaintiff suggested, the requests for particulars fall into five broad categories.

37. The first group may be categorised as requests for further details of the pleaded allegations. Paragraphs 10, 21(a) – 21(d) and 21 (f) – (g), 22(a) – 22(d), 23(a) – 23(c), 24(a), 25(a), 26(a) – 26(c), 26(e), 26(g), 27(a) – 27(b), 28(a) – 28(b), 29(a), 29(d) – 29(e), 30(a), and 30(b) of the request for particulars of 20 February 2015 fall into this category. The information sought by these paragraphs goes beyond a request for particulars, and seeks more extensive information about matters the subject of the pleadings. This is not the role of particulars.

38. The second group may be categorised as a request for detailed information concerning the quotations and invoices referred to in the pleadings, they being the quotations and invoices rendered by the defendant to the scheme agent relating to the surgical treatment to the worker. The request seeks details of each line item set out in the invoices.

39. The information sought goes beyond what must be provided by way of pleading; indeed, the request bears the character of a request for answers to interrogatories, rather than a soundly based request for particulars. It seems likely that this information will be provided at the point when evidence is disclosed; it cannot properly sought by a request for particulars in my view.

40. The third group of requests (paragraphs 12, 21(e), 22(g), 26(d), 26(f), 27(d), 28(c), 29(b) – (c), 29(f) – (g), 30(d)) relates to parts of the pleading where the plaintiff asserts incorrect methodology by the defendant relevant ultimately to fees charged. The request for particulars asks for identification of what the plaintiff would contend was the correct methodology. This goes beyond that which is necessary for the defendant to understand the case made against him and to respond to it.

41. Paragraph 13 of the request for particulars seeks further information as to the defendant’s state of mind and his knowledge of the invoices and quotes. Since the pleading makes clear the allegation of fraud relating to these documents, and the documents were created by the defendant, it is difficult to see what more the plaintiff can reasonably be asked to provide, without going into a full disclosure of its evidence.

42. The fifth and final category of requests is that which seeks copies of “peer opinion” on which the plaintiff relies (paragraphs 26(h), and 27(e) of the correspondence of 20 February 2015). This is a request for service of evidence, and cannot be regarded as a proper request for particulars.

43. Pleadings are not and are not intended to be a fulsome account of the pleader’s case and the evidence available to it. There is no requirement for the plaintiff to disclose its evidentiary material at this stage. Rather, the pleadings are intended to identify the nature of the case alleged by the pleader, and permit the defendant to make a defence to it.

44. The pleadings filed by the plaintiff are in my view an adequate statement of the plaintiff’s case and the allegations it makes against the defendant. They are sufficient to permit the defendant to understand the case alleged against him, and to make his defence.

45. Accordingly, the orders I make are these:

ORDERS

1. The Notice of Motion filed on 24 March 2015 is dismissed.

2. Costs on the ordinary basis in favour of the plaintiff.

3. Defendant to file his defence within 14 days from today, 28 April 2015.

4. Matter stood over for a directions hearing to 20 May 2015.

**********

Decision last updated: 28 April 2015