Zhang v State of New South Wales; Liao v State of New South Wales
[2012] NSWSC 606
•06 June 2012
Supreme Court
New South Wales
Medium Neutral Citation: Zhang v State of New South Wales; Liao v State of New South Wales [2012] NSWSC 606 Hearing dates: 23 April 2012 Decision date: 06 June 2012 Jurisdiction: Common Law Before: Schmidt J Decision: 1. The defendant's motions are dismissed.
2. Unless the parties approach within 14 days to be heard on the question of costs, the Court's order will be that the defendant should pay the plaintiffs' costs of the motions.
Catchwords: PROCEDURE - notices of motions - whether claims, in whole or in part, statute barred - limitation question to be determined - pleadings - claims in respect of personal injury - operation of s 13 of the Limitation Act 1969 - discretions under s 65(2)(c) of Civil Procedure Act 2005 - malicious prosecution claims - claims within the limitation period - motions dismissed - costs Legislation Cited: Civil Liability Act 2002
Civil Procedure Act 2005
Crown Proceedings Act 1988
Law Reform (Vicarious Liability) Act 1983
Legal Profession Act 2004
Olympic Co-Ordination Authority Dissolution Act 2002
Limitation Act 1969
Uniform Civil Procedure Rules 2005Cases Cited: A v The State of New South Wales [2007] HCA 10; (2007) 230 CLR 500
Commonwealth v Verwayen [1990] HCA 39; 170 CLR 394
Hillebrand v Penrith Council [2000] NSWSC 1058
Landini v State of New South Wales [2008] NSWSC 1280
Little v Law Institute of Victoria (No 3) [1990] VR 257
New South Wales v Steven Charles Radford [2010] NSWCA 276
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Rodger v De Gelder [2011] NSWCA 97
Savile v Roberts (1698) 1 Ld Raym 347; (1698) 91 ER 1147
State of New South Wales v Williamson [2011] NSWCA 183
Wardley Australia Ltd v Western Australia ("Rothwells Loan case")[1992] HCA 55; (1992) 175 CLR 514
Zhang v State of New South Wales [2012] NSWSC 327Category: Procedural and other rulings Parties: Matter Number 2005/269552
Mames Zhao Ming Zhang (Plaintiff)
State of New South Wales (Defendant)Matter Number 2006/267005
Shao Qiang Liao (Plaintiff)
State of New South Wales (Defendant)Representation: Counsel:
Mr R McKeand SC with Mr J Clifton (Plaintiffs)
Mr M Windsor SC (Defendant)
Solicitors:
Raymond Lee & Co (Plaintiffs)
IV Knight, Crown Solicitor (Defendant)
File Number(s): 2005/269552 2006/267005 Publication restriction: None
Judgment
Mr Liao was arrested on 1 December 1999 at Sydney International Airport. He was taken to Maroubra Police Station and charged with one count of dishonestly obtaining for himself and another a financial advantage of $72,500; and one count of dishonestly obtaining for himself and another a financial advantage of $145,000. The charges were withdrawn by the Director of Public Prosecutions on 16 October 2000. He commenced his proceedings on 2 August 2006.
Mr Zhang was also arrested and charged with similar offences on 27 March 2000. Those charges were also withdrawn on 16 October 2000. His proceedings were commenced earlier, on 6 December 2005.
The two proceedings have been travelling together procedurally. They have had a rather tortured history. By their original statements of claim, the plaintiffs sought damages, including aggravated and exemplary damages, for wrongful arrest, false imprisonment and malicious prosecution. Their statements of claim have been repeatedly amended, but the plaintffs have not formally pursued all amendments foreshadowed. In May 2010, Davies J granted leave to proceed on an amended statement of claim. By consent, a further amended statement of claim was filed on 30 July 2010 in each case. In May 2011, the question of the limitation issue was raised before Davies J, with a request that it be dealt with at the hearing.
The matters were listed for hearing in August 2011. On 3 August, Hall J vacated the hearing in circumstances where further amendment of the pleadings was foreshadowed, together with the need to lead further evidence. In his judgment, Hall J noted a question raised by the defendant as to the need for an extension of time to be granted the plaintiffs under the Limitation Act 1969, amongst other interlocutory matters which needed to be attended to (see ? at [40]). The matter was allocated to Davies J for further case management.
Again, by consent, Davies J made further orders in March 2012, giving the plaintiffs leave to proceed on a third amended statement of claim. The defendant did not then press any Limitation Act issue. By those pleadings the plaintiffs seek damages, including aggravated and exemplary damages, for wrongful arrest, false imprisonment, malicious prosecution and unlawful interference in contractual relations.
Recently, Grove J dealt with four notices of motion, two pursued by the plaintiffs and two by the defendants (see Zhang v State of New South Wales [2012] NSWSC 327). The orders which his Honour made included an order staying certain aspects of the plaintiffs' claims; to require the plaintiffs to pay the defendant's costs thrown away by reason of the amendment of the further amended statement of claim; and to strike out one paragraph of the defendant's defences. The defendant then sought to address the limitation issue, but its motions did not raise that point, with the result that his Honour required the defendant to pursue that issue by separate motion, if it was to be pressed.
Later, by motions filed in both proceedings in March 2012, the defendant sought orders dismissing the proceedings under Rule 13.4 of the Uniform Civil Procedure Rules 2005, or in the alternative, orders striking out the third amended statement of claim under Rule 14.28. These Rules provide:
"13.4 Frivolous and vexatious proceedings
(cf SCR Part 13, rule 5; DCR Part 11A, rule 3; LCR Part 10A, rule 3)
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
14.28 Circumstances in which court may strike out pleadings
(cf SCR Part 15, rule 26; DCR Part 9, rule 17; LCR Part 8, rule 3)
(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading:
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c) is otherwise an abuse of the process of the court.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1)."
The defendant relied on the approach which Austen J took in Hillebrand v Penrith Council [2000] NSWSC 1058, where his Honour concluded that orders were available to be made under Rule 13.4 if it could be established that a cause of action is clearly statute barred. The plaintiffs initially resisted the limitation point being dealt with on an interlocutory basis; raised questions of estoppel; and whether the defendant had waived any limitation point.
Finally, after having reserved, but having given the parties leave to consider whether the limitation defence had been waived by the defendant, the plaintiffs accepted that there had been no waiver and that it was consistent with the overriding purpose specified in s 56 of the Civil Procedure Act 2005, that the limitation point now be determined. In Mr Liao's case, it was then also announced that he abandoned claims 1,4,5 and 6 of his third further amended statement of claim
The parties' cases
The defendant's case was that the plaintiffs' claims, in whole or in part, are statute barred. This was an issue raised in the defence filed in each case. It is now common ground that it ought to be decided prior to the hearing, notwithstanding that in Wardley Australia Ltd v Western Australia ("Rothwells Loan case") [1992] HCA 55; (1992) 175 CLR 514 the view taken by the High Court was that limitation defences ought not, as a general rule, to be decided on an interlocutory basis (see at [31]).
The plaintiffs' case initially was that in the circumstances here arising, there should be no departure from the approach in Wardley; that as a matter of discretion, the application ought not to be entertained at this stage of the proceedings, barring a change in circumstances which had not occurred; given the defendant's earlier consent to the plaintiffs proceeding on their amended pleadings, a question of issue of estoppel arose, at least at this interlocutory point of the proceedings (see Commonwealth v Verwayen [1990] HCA 39; 170 CLR 394 recently discussed in Rodger v De Gelder [2011] NSWCA 97); and that in any event, their claims are not statute barred.
The parties were at issue over the relevant history of the proceedings. They were given leave to file further evidence and submissions in this regard. In written submissions of 24 May 2012, the plaintiffs altered their position, as I have explained.
The limitation question should be determined
The protracted procedural history of the matter and the plaintiffs' concessions should, in my view, result in an acceptance that the limitation point should be determined at this stage of the proceedings, consistently with the requirements of the Civil Procedure Act 2005, which oblige the Court to act in accordance with the dictates of justice (s 58(1)), seeking always to facilitate the overriding purpose of the legislation, the just, quick and cheap resolution of the real issues in the proceedings (s 56). Indeed, given the procedural history of the matter and the repeated amendment of the plaintiff's pleadings by consent, it seems to me that the limitation point is one which the parties should have taken steps to resolve earlier. In the circumstances of this case, that would have saved considerable time and costs.
In its submissions the defendant pointed to a motion filed in June 2011 check by, in which an application for leave to amend the statements of claim was sought, as well as orders under s 60C of the Limitation Act, for extension of the limitation period, to the extent necessary. That motion was never pressed and after the hearing before Hall J was adjourned, the defendant later consented to the amendment of the statements of claim. The position which the parties had earlier taken before Davies J was, however, clearly that the limitation question was in issue and had to be determined. In the circumstances, the adjournment of the hearing before Hall J because of the plaintiffs' need to further amend their pleadings, cannot give rise to an issue estoppel
It follows, however, that justice demands that the limitation issue be determined now.
The pleadings
It is necessary to consider the pleadings, in resolving the issues lying between the parties. It was common ground at the hearing before me, that by their third amended statement of claim the plaintiffs each sued the defendant only in tort and not in contract.
While the current pleadings raise four separate claims, Mr Zhang's original statement of claim pursued only false imprisonment and malicious prosecution. This was a relatively simple pleading. It referred to various events, including Mr Liao's arrest in December 1999 and Mr Zhang's arrest on 27 March 2000. It alleged false imprisonment from 27 to 30 March 2000, caused by the Sydney Organising Committee for the Olympic Games ('SOCOG') and that SOCOG was instrumental in causing his arrest and the laying of charges against him; and that it did so maliciously. The loss and damage claimed was injury to feelings, mental distress and anxiety, injury to reputation, losses resulting from his inability to meet contractual obligations; and losses resulting from his inability to operate a hotel in China.
Mr Liao's original statement of claim pursued wrongful arrest/false imprisonment and malicious prosecution. Damages, including aggravated and exemplary damages, were also sought. As well as referring to factual matters relied on, reference was made to the Law Reform (Vicarious Liability) Act 1983 and to the Crown Proceedings Act 1988, under which it was claimed that the defendant was vicariously liable for the conduct of various police officers. Reference was also made to the Treasurer of the State of New South Wales being made the successor in title to the liabilities of the Sydney Organising Committee for the Olympic Games ('SOCOG') by s 6(4) of the Olympic Co-ordination Authority Dissolution Act 2002 and that thereby, the defendant was liable to be sued for the Treasurer's liabilities.
Mr Liao's statement of claim pleaded his wrongful arrest and false imprisonment on 1 December 1999, in respect of charges not withdrawn by the Director of Public Prosecutions until 16 October 2000. Various losses and damages were claimed, including damages in respect of mental distress and anxiety, injury to feelings and reputation, as well as financial damages.
The third amended statements of claim are differently structured. In their opening particulars, amongst other things reference is made to the plaintiffs' arrest in respect of charges withdrawn on 16 October 2000. The relief claimed is:
"1 Damages, including aggravated and exemplary damages, for wrongful arrest and false imprisonment.
2 Damages, including aggravated and exemplary damages, for malicious prosecution.
3 Damages, including aggravated and exemplary damages, for unlawful interference in contractual relations.
4 Interest
5 Costs."
Mr Liao's malicious prosecution claims relate to his arrest on 1 December 1999. Particulars are given. The particulars given of the damages pursued, include damages for injury to reputation, deprivation of liberty and loss of dignity. The injury to reputation and loss of dignity are claimed to have been increased by matters which include the plaintiff's loss of face in China. Damages for any mental distress and anxiety and injury to feelings are not pursued check. Specific particulars are also given in relation to each of the six specific claims advanced in tort.
Mr Zhang's third amended statement of claim is similarly structured. He pursues claims for false imprisonment after his arrest on 27 March, 2000. The malicious prosecution claims relate to his arrest and charging that day. The interference with contractual relations claim relates to steps taken in September 1999 and subsequently, which resulted in the purported termination of the agreement on which his sub-agency rested, in November and acceptance of its repudiation in December. Particulars of damage claimed include injury to reputation, deprivation of liberty, loss of dignity, losses related to Mr Zhang's inability to operate a hotel on China, losses resulting to his inability to meet other contracts; various legal costs and expenses; increased injury to reputation and loss of dignity, by reason of widespread press coverage, failure by the defendant to apologise, loss of face in China and compliance with bail conditions. Injury to feelings, mental distress and anxiety are not pursued.
The defendant's case was that the original statements of claim pursued damages for personal injury, which were brought out of time, given the 3 year limitation period provided by s18A of the Limitation Act. The later alteration in the nature of the claims advanced, by the amended pleadings, did not cure this difficulty. The Civil Procedure Act did not assist the plaintiffs in the circumstances, because the proceedings had not been commenced before the limitation period expired.
The limitation period - claims in respect of personal injury
Under the Limitation Act different limitations periods apply, depending on the nature of the claim made. The general limitation period is provided by s 14, which provides:
"14 General
(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:
(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,
(b) a cause of action founded on tort, including a cause of action for damages for breach of statutory duty,
(c) a cause of action to enforce a recognizance,
(d) a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
(2) This section does not apply to:
(a) a cause of action to which section 19 applies, or
(b) a cause of action for contribution to which section 26 applies.
(3) For the purposes of paragraph (d) of subsection (1), enactment includes not only an enactment of New South Wales but also an enactment of the Imperial Parliament, an enactment of another State of the Commonwealth, an enactment of the Commonwealth, an enactment of a Territory of the Commonwealth and an enactment of any other country."
The provisions of s 18A must also be considered. It provides:
"18A Personal injury
(1) This section applies to a cause of action, founded on negligence, nuisance or breach of duty, for damages for personal injury, but does not apply to:
(a) a cause of action arising under the Compensation to Relatives Act 1897, or
(b) a cause of action that accrued before 1 September 1990, or
(c) a cause of action to which Division 6 applies.
Note. Division 6 provides for the limitation period for non-motor accident actions for death or personal injury resulting from an incident that occurs on or after the commencement of that Division.
(2) An action on a cause of action to which this section applies is not maintainable if brought after the expiration of a limitation period of 3 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims."
'Action and 'breach of duty are defined in s 11 as:
"Action includes any proceeding in a court.
Breach of duty, when used in relation to a cause of action for damages for personal injury, extends to the breach of any duty (whether arising by statute, contract or otherwise) and includes trespass to the person."
The original statements of claim pursued allegations of false imprisonment. As discussed by Sackville J in State of New South Wales v Steven Charles Radford [2010] NSWCA 276 at [78], false imprisonment is one category of trespass to the person. Not all injuries which result from such a trespass, will, of necessity, result in personal injury. In this case the damages originally pursued, included damages for mental distress and anxiety, injury to feelings and reputation, as well as various financial losses. The current pleadings seek to recover damages for injury to reputation, deprivation of liberty and loss of dignity, as well as financial losses. The injury to reputation and loss of dignity which the plaintiffs now claim they suffered, are claimed to have been increased by matters which include the plaintiff's loss of face in China.
That being so, it is apparent that while the plaintiffs' original claims included claims in respect of damages for personal injury, they also pursued other types of damage. 'Personal injury' is defined in s 11 to include:
'any disease and any impairment of the physical or mental condition of a person."
In State of New South Wales v Steven Charles Radford, Sackville AJA concluded at [116]:
"116 In the 5th ASC, the respondent alleges that he suffered emotional upset, anxiety, distress and humiliation by virtue of the alleged assault (and the unlawful imprisonment). His claim, in my opinion, is for damages for impairment of his mental condition. Each of the consequences he alleges flowed from the assault can readily be described as an impairment of the respondent's mental condition. His claim is therefore for damages for personal injury."
Damages for injury to reputation do not involve a claim of impairment of a person's mental condition. Nor do claims concerned with deprivation of liberty and loss of dignity. These are all injuries which do not appear to fall within the definition of 'personal injury' in s 11 of the Limitation Act, not being claims of 'impairment' of the plaintiff's 'mental condition'. This conclusion is supported by the views which Campbell JA, (with whom and agreed) reached in State of New South Wales v Williamson [2011] NSWCA 183. There, his Honour explained why a cause of action in respect of the tort of false imprisonment was not a claim for "personal injury damages ".
What there arose for consideration was the question of whether there had been a claim for 'personal injury damages' made, having in mind the definition of that term in s 337 of the Legal ProfessionAct 2004. Section 337 provides that the term has the same meaning as the definition in Part 2 of the Civil Liability Act 2002. In s 5 of that Act, 'personal injury' is defined at (b) as 'impairment of a person's physical or mental condition. In s 11 'injury' is defined to mean 'personal injury' and again in (b) is defined to include 'impairment of a person's physical or mental condition'.
Campbell JA explained at [61] - [62]:
"61 Thus, damages recovered for false imprisonment can compensate for the fact that one has been deprived of liberty, and suffered a loss of dignity and hurt feelings. In their ordinary meaning, loss of dignity and hurt feelings can overlap. However the focus of loss of dignity is on how the plaintiff appears in the eyes of others as a result of being subjected to the false imprisonment, while the focus of injured feelings is on the plaintiff's subjective reaction to the false imprisonment.
62 At least when the hurt feelings do not amount to a psychological condition, the fact of deprivation of liberty, loss of dignity and hurt feelings do not result in an award of damages for "personal injury" as ordinarily understood: State of New South Wales v Ibbett [2005] NSWCA 445; (2005) 65 NSWLR 168 at [21] per Spigelman CJ. The particulars to the Respondent's claim showed that he sought compensatory damages for deprivation of liberty, humiliation, loss of dignity and injured feelings. While the claim was for injured feelings "including psychological trauma" , the claim for injured feelings was not limited to psychological trauma. "
Campbell JA also went on to explain why claims for aggravated and exemplary damages not relating to psychological injury, would also not fall within the definition of personal injury damages.
It follows, in my view, that the plaintiffs' original claims for damages for mental distress and anxiety, may be accepted as having been claims of damages for impairment of their mental condition and thus claims for damages for personal injury, as Sackville AJA discussed in Radford. What is now claimed in respect of injury to reputation, deprivation of liberty and loss of dignity, are not such claims. It should also not be overlooked that from the outset, the plaintiff claimed damages in respect of injury to reputation and financial losses, which were clearly not damages for personal injury.
Even so, it was the defendant's case that having brought a claim out of time, because some of the damages pursued were damages for personal injuries and thus subject to the three year limitation periods provided by s 18A of the Limitation Act, the whole of the plaintiffs' claims were out of time. Further, that the later amendments to their pleadings, which had the result that the plaintiffs no longer pursued damages for personal injuries, could not be saved by the exercise of the discretions granted the Court under the Civil Procedure Act. The proceedings were still time barred.
The operation of s 13 of the Limitation Act 1969
This claim rested on s 13 of the Limitation Act which provides:
"13 More than one bar
Where, under each of two or more provisions of this Part, an action is not maintainable if brought after a specified time, the action is not maintainable if brought after the earlier or earliest of those times"
'Action' is defined in s 11 to include 'any proceeding in a court'. What the statutory definition adds to the ordinary meaning of the word, is not entirely clear, given for example the definition of the word in the Macquarie Online Dictionary as including 'a proceeding instituted by one party against another'. In the Oxford Australian Law Dictionary Online it is defined as:
"(1) An umbrella term for legal proceedings (suit, lawsuit, cause of action; cause; legal action) brought by any party before the courts for adjudication or seeking a legal remedy. A solicitor's letter of demand usually threatens unspecified 'legal action' if the addressee fails to comply with the demand. Every cause of action is subject to a limitation period which begins when the right of action accrues. See also cause; cause of action; action in personam; action in rem. (2) Specifically a formal civil proceeding commenced by a writ of summons, but also or in any other manner the rules prescribe: Re Fawsitt; Galland v Burton (1885) 30 Ch D 231. See also pleadings, discovery, interrogatories, trial."
The term 'cause of action' is not defined in the Limitation Act or in the Civil Procedure Act. Brennan J discussed the imprecision of the meaning of that term in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. It includes 'a right which has been infringed', or 'the substance of an action as distinct from its form' or 'the facts which support a right to judgment' (see at [15] to [18]). In the context of the Limitation Act, it appears to me that the term is used in the sense of 'a right which has been infringed'. Thus, by s 14, a 6 year limitation period is imposed on the pursuit of an action in respect of a cause of action, that is in respect of a right which it is claimed has been infringed. In the case of a tort, that limitation period generally commences to run from the time that the infringement results in damage.
The same set of facts may, of course, give rise to more than one cause of action. The Uniform Procedure Rules permit more than one cause of action to be pursued in the same proceedings (see Rule 6.18). Such situations are also expressly dealt with in the Civil Procedure Act, which provides relevantly in s 64 and s 65:
"64 Amendment of documents generally
(cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)
(1) At any stage of proceedings, the court may order:
(a) that any document in the proceedings be amended, or
(b) that leave be granted to a party to amend any document in the proceedings.
(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.
(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.
(4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.
(5) This section does not apply to the amendment of a judgment, order or certificate
65 Amendment of originating process after expiry of limitation period
(cf SCR Part 20, rule 4; DCR Part 17, rule 4)
(1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings.
(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as:
(a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or
(b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or
(c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.
(3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced.
(4) This section does not limit the powers of the court under section 64.
(5) This section has effect despite anything to the contrary in the Limitation Act 1969."
In Radford, Sackville AJA explained at [62]:
"62 Section 65(2)(c) of the CP Act can be invoked by a plaintiff who wishes to add a new cause of action after the expiration of the relevant limitation period, provided the cause of action arises from the same or substantially the same facts as those giving rise to an existing cause of action and claim for relief. In the present case, there is no dispute that the pleaded cause of action in false imprisonment is a "new" cause of action. There is a dispute as to whether the cause of action in false imprisonment arises out of the substantially same facts as the cause of action in assault. But even if it does, s 65(2)(c) of the CP Act does not entitle the respondent to add the new cause of action to his statement of claim. The respondent still requires the leave of the Court to amend pursuant to s 64(2) of the CP Act."
The defendant's case was that the effect of s 13 of the Limitation Act was that having brought the proceedings out of time, because in the original statement of claim some of the relief pursued related to damages for personal injuries, to which the 3 year limitation period specified by s 18A applied, that limitation period applied to the entirety of the proceedings, which were, accordingly, time barred when they were commenced. That was a fatal difficulty, which could not be cured, even by an amendment of the pleadings by leave of the Court granted under s 65 of the Civil Procedure Act, so that it was only claims which were not time barred which were pursued in the proceedings.
I am satisfied that this submission may not be accepted. Even accepting the defendant's construction of s 13, the defendant's approach overlooks the discretion given the Court by s 64(2), to permit amendments 'correcting any defect or error in the proceedings and avoiding multiplicity of proceedings'. It would be an absurd outcome, if the result of an error in the pursuit of one claim which was time barred, in the same proceedings in which other claims which were not time barred were pursued, was that the entirety of the proceedings had to be dismissed. That would not preclude fresh proceedings being brought in relation to the claims which had not been time barred. It seems to me that it is precisely for such situations that the discretion granted in s 64(2) was enacted.
In the result, the submission that the result of the plaintiffs having pursued some relief in the original statements of claim, which were time barred, that that the proceedings must now be dismissed, may not be accepted. With the defendant's consent, the pleadings were later amended, with the result that the plaintiffs no longer pursued claims in respect of personal injury. The Court had the discretion to permit such amendment pursuant to s 64(2). The power was to be exercised, having in mind the provisions of s 57, which includes management of the proceedings to ensure 'the just determination of the proceedings' (s 57(1)(a)) and in ordering the amendment of a document, acting in accordance with the dictates of justice (s 58(1)). Justice clearly demands that the plaintiffs be permitted to amend their pleadings to enable them to pursue claims which were not time barred, when the proceedings were commenced.
The Court also had the discretion under s 65(2)(c) to permit the plaintiffs to add claims.
The exercise of discretions under s 65(2)(c) the Civil Procedure Act
It follows that the defendant's submission that s65 does not assist the plaintiffs may not be accepted. The claim for damages in respect of injury to reputation or financial losses were not subject to a 3 year limitation period. Claims in respect of such damage had to be brought within 6 years. In that event, s 65(2) granted the Court the discretion, after the expiration of the limitation period, to permit the plaintiffs to amend their originating process, to add or substitute a new cause of action, so long as the Court was of the opinion that the new cause of action arose from the same, or substantially the same facts, as those giving rise to the existing claim for relief in the originating process.
The amendments to the pleadings were consented to at the time, but the defendant's case was that the additional claims pursued in the third statement of claim, did not arise out of such facts. The basis for that submission was not developed. It does not seem to me to be one which may be accepted, on proper consideration of the various factual allegations pursued in the original statements of claim and those pursued in the third amended statements of claim.
In the circumstances I am satisfied that the discretions available to be exercised under s 64 and s 65 were properly exercised in favour of the plaintiffs, as a matter of justice, consistently with the requirements of s 58 of the Civil Procedure Act. That the amendments were made by consent, accorded with the parties' own obligations under s 56. The amendments were pursued so as to ensure that the real issues lying between the parties are determined in these proceedings, albeit in Mr Liao's case, he has now accepted the force of certain of the submissions advanced against him by the defendant. It is in accordance with his obligations under s 56 that he has done so.
In so far as any necessary leave was not earlier granted, in respect of the amendments remaining in question, it should now be given.
Malicious prosecution
The defendant also advanced a case that the third amended statements of claim did not plead all of the elements of the tort of malicious prosecution. Nor did they seek to recover damages in respect of that tort. In particular they did not plead that any damages resulted from the withdrawal of the charges in October 2000; they were silent on the question of the termination of proceedings in favour of the plaintiffs; and sought damages accrued before such termination.
The elements of the tort are those discussed in A v The State of New South Wales [2007] HCA 10; (2007) 230 CLR 500, to be:
"[1] ... For a plaintiff to succeed in an action for damages for malicious prosecution the plaintiff must establish:
(1) that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant;
(2) that the proceedings terminated in favour of the plaintiff;
(3) that the defendant, in initiating or maintaining the proceedings acted maliciously; and
(4) that the defendant acted without reasonable and probable cause [1]."
The Rules require that a statement of claim explicitly state the material allegations of fact which support the claims advanced, in order that the matters in issue may be identified and that the defendant not be taken by surprise. Pleadings must, however, be read fairly and as a whole. In this case, the third amended statements of claim are pleaded by reference in the opening particulars to a number of matters which are relevant to various of the specific claims later advanced. That includes that the charges in question were in each case withdrawn in October 2000.
Claims are advanced in respect of malicious prosecution in respect of the police and in respect of SOCOG. The statements of claim are not silent on the question of the termination of the proceedings in favour of the plaintiffs. That is expressly pleaded. The other elements of the malicious prosecution claim advanced are particularised. Particulars are given of various factual allegations, said to establish that the charging and prosecution was in each case malicious and without reasonable and probable cause.
The statements of claim also deal with the damages pursued in respect of the various claims advanced, including in relation to the alleged malicious prosecution. Express reference is there made to the damages allegedly suffered as the result of the malicious prosecution earlier particularised.
Damages may be recoverable for damage to a plaintiff's reputation, damage to the plaintiff's person (in particular, for deprivation of liberty) and damage to the plaintiff's property (see Savile v Roberts (1698) 1 Ld Raym 347 at 378; (1698) 91 ER 1147 at 1149-1150; Little v Law Institute of Victoria (No 3) [1990] VR 257 (Kaye and Beach JJ).) In Landini v State of New South Wales [2008] NSWSC 1280 it was observed at [482] - [484]:
"482 The foundation of the action in malicious prosecution lies in the abuse of the process of the system of justice by wrongfully setting the law in motion and it is designed to discourage the perversion of the machinery of justice for an improper purpose: Amin v Bannerjee [1947] AC 322.
483 The heads of damage which can be recovered include matters which do not arise out of what might be classified as personal injury, but they include injury to a person's reputation and the emotional upset, anxiety and distress caused by the commission of the tort: Houda v State of New South Wales [2005] NSWSC 1053 at [359]. As the Court also there observed, the cause of action on malicious prosecution arises out of injury to a person's civil rights and, in particular, the right not to be unlawfully arrested or wrongfully imprisoned or to be made the subject of a malicious prosecution.
484 The availability of aggravated and exemplary damages provides both a measure of compensation as well as an opportunity for registering the condemnation of the flagrant abuse of legal process."
That the damage claimed was suffered by the plaintiffs before the charges were withdrawn, does not seem to me to preclude pursuit of this tort. The tort is not complete until the charges in question are resolved in favour of the plaintiff. It is this event which will reveal that damages were suffered as the result of a tort. Were it otherwise, that is, if it was only damages suffered after the plaintiff had been vindicated, which were actionable, it is difficult to see that damages in respect of such a tort would ordinarily be recovered. What damage would be suffered after a plaintiff's position was vindicated by resolution of wrongly laid charges in his or her favour?
Mr Zhang
Given my conclusion that the plaintiffs do not pursue any claim for personal injury, the three year limitation period provided in s 18A of the Limitation Act does not apply to any of the four causes of action which Mr Zhang pursues in respect of false imprisonment, malicious prosecution or interference with contractual relations. The limitation period is that provided in s 14(1).
Mr Zhang was not arrested until 27 March 2000 and the charges laid against him were also withdrawn on 16 October 2000. His proceedings commenced in December 2005. The false imprisonment and malicious prosecution claims are within time.
As to the unlawful interference in contractual relations claims, the third amended statement of claim alleges that the purported termination of the relevant contract was by letter of 5 November 1999; that this amounted to a repudiation, which was accepted on 22 December, whereupon the contract was terminated, with the result that Mr Zhang's sub agency under the contract, could not be performed.
The defendant's case was that there might have been an earlier accrual of that cause of action, in September 1999, when steps were taken to bring the contract in question to an end. The defendant submitted that accordingly, Mr Zhang's interference in contractual relations claims were brought outside the 6 year period, given the commencement of the proceedings in December 2005 .
That submission may not be accepted. The case advanced is that the sub-agency on which his claim depended came to an end after 22 December 1999. The proceedings were commenced on 6 December 2005. They are within time.
Mr Liao
Mr Liao now only pursues the malicious prosecution claims. He was arrested in December 1999 and the charges were withdrawn on 16 October 2000. His proceedings were commenced on 2 August 2006. They, too, are within time.
Costs
The usual order is that costs follow the event. They should confer as to costs and whether any other orders are necessary to be made, given the developments in Mr Liao's case, in which event they have liberty to approach. Unless the parties approach within 14 days to be heard on the question of costs, the Court's order will be that the defendant should pay the plaintiffs' costs of the motions.
Orders
I make the following orders:
1. The defendant's motions are dismissed.
2. Unless the parties approach within 14 days to be heard on the question of costs, the Court's order will be that the defendant should pay the plaintiffs' costs of the motions.
**********
Decision last updated: 27 June 2012
2
11
8