Anthony Gilbert Martin, Sue Dolores Martin and Individual Homes Pty Ltd v Commonwealth Bank of Australia [1994] ACTSC 64 (23 June 1994)

SUPREME COURT OF THE ACT

ANTHONY GILBERT MARTIN, SUE DOLORES MARTIN and INDIVIDUAL HOMES PTY LTD v.
COMMONWEALTH BANK OF AUSTRALIA
No. SC72 of 1994
Number of pages - 9
Practice and procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ

CATCHWORDS

Practice and procedure - striking out statement of claim - whether frivolous or vexatious - whether statement of claim discloses reasonable cause of action - O.23 r.28, O.29 r.4.

Practice and procedure - application for summary judgment by defendant - not available unless issues of fact and law make plaintiffs' case hopeless - not available where issues cannot be identified.

Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91

HEARING

CANBERRA, 10 June 1994
23:6:1994

Mr A.G. Martin appeared in person for the Plaintiffs.

Counsel for the Defendant: Mr. I. Nicol

Solicitors for the Defendant: Blake Dawson Waldron

ORDER

The Court Orders That:
1. The further amended statement of claim be struck out.
2. The respondent plaintiffs, Anthony Gilbert Martin and Sue Dolores Martin, pay the costs of the applicant defendant on a party and party basis.

DECISION

MILES CJ This is an application under O.17 r.1 for summary judgment for the defendant, alternatively for an order striking out the plaintiffs' claim under O.23 r.28 or under O.29 r.4 on the ground that the plaintiffs' claim is frivolous or vexatious or discloses no reasonable cause of action.

2. In determining the application it is essential to ensure that the plaintiffs are not barred from seeking redress based upon an arguable case. In other words, the defendant will not be granted relief if the plaintiffs' claim has some chance of success.

3. A claim is frivolous which is not intended to be taken seriously, or, perhaps, when no reasonable person would take it seriously. Having heard Mr. Martin, the first plaintiff, argue the case on behalf of himself and the second plaintiff, his wife, I have no doubt that Mr. Martin intends the claim to be taken seriously. I also think that the reasonable bystander would take it seriously.

4. A claim is vexatious when it is not genuine or where it is motivated by a desire to waste time or run up costs or otherwise harass or annoy. Possibly a claim is vexatious also when on objective assessment it is so hopeless that it is likely to have the effect of annoying or harassing the defendant.

5. In the present case I am not satisfied that the claim is brought in order to waste time, to run up costs or to harass or to annoy. The case is not so advanced that the Court is able to determine whether the defendant has a good defence on the merits within O.17 r.1, and the defendant is not entitled to judgment on that ground.

6. The history of the case is of relevance, but only the more important steps in that history need be mentioned.

7. On 10 February 1994 the plaintiffs commenced the present proceedings by writ. The writ was issued by the first and second plaintiffs in person and purported to be issued also by the third plaintiff in person, although the third plaintiff is a company. A statement of claim was indorsed on the writ (the indorsement). The indorsement contained 14 paragraphs and sought relief by way of a declaration that the defendant has no caveat or interest in certain land at Kambah, damages (of several kinds), interest and costs. The indorsement was a special indorsement within O.4 r.5. Accordingly, no further statement of claim was to be delivered without leave of the Court: O.24 r.24(2).

8. An appearance was entered on 21 February 1994. On 7 March 1994, the defendant issued a notice of motion to strike out the statement of claim and sought other relief, including an order for security for costs. On 8 March 1994 the plaintiffs issued a notice of motion claiming various forms of interlocutory relief. The plaintiffs' motion was dismissed on 11 March 1994, costs to be the defendant's costs in the case.

9. On 14 March 1994 the Registrar ordered that the proceedings be struck out with costs on a party and party basis, with leave to file an amended statement of claim. The Registrar also ordered that the application for security for costs be listed before me. The plaintiffs appealed against the Registrar's order striking out the statement of claim and the defendant filed a cross-appeal against the Registrar's order as to costs.

10. On 29 April 1994 I dismissed the appeal and cross-appeal and gave the plaintiffs leave to file an amended indorsement in court out of time. (The order would have been expressed more appropriately in terms of an amendment statement of claim). In view of a pending application by the defendant to wind up the third plaintiff, I adjourned the application for security for costs and other outstanding matters to 6 May.

11. On 4 May 1994 I made an order in matter No. SC 150 of 1993 that the third plaintiff be wound up under the Corporations Law and I appointed a liquidator for that purpose. I also ordered that proceedings in matter No. SC 150 of 1993 be stayed for 21 days. The purpose of the stay was to enable Mr. Martin, the present first plaintiff, who had been granted leave to appear on behalf of the company, the present third plaintiff, to carry out his stated intention of appealing against the order winding up. I also withdrew Mr. Martin's leave to appear on behalf of the company in the winding up proceedings.

12. On the same day, 4 May 1994, the present application to strike out the statement of claim and for an order for security for costs was mentioned and it was adjourned to 3 June 1994. On the latter date it was further adjourned to 10 June 1994.

13. At the adjourned hearing on 10 June 1994, the first plaintiff, Mr. Martin, appeared for himself. The second plaintiff also appeared but presented no submissions. Mr. Martin made no application to appear for the company, the third plaintiff in the present application. I refused leave to Mr. Martin to appear for the company in a further application sought to be made in the winding up, the winding-up order having been stayed in the meantime by the Federal Court.

14. A further amended indorsement in the form of a statement of claim was filed by leave on 10 June 1994. The present application has become an application to strike out that further amended statement of claim. It is not necessary to set out the whole of the further amended statement of claim. It may be summarised as follows.

15. The plaintiffs made applications for loans to the defendant "on a continuing basis since 1979 to 15 January 1993". The loans sought were "in respect of" a property at Kambah ("the family home"), 12 houses also at Kambah ("solar village") and a farm at Tarago, New South Wales ("the farm"). The loans applied for were of various kinds, referred to as housing loans, commercial loans, rural loans, foreign currency loans and consolidation loans. Some applications were granted and others refused.

16. Para.4 makes a claim for damages arising from "negligent misrepresentation". The misrepresentation relied on is alleged to have been made in June 1980 and was to the effect that a mortgage with the Commonwealth Development Bank would be more beneficial to the plaintiffs than a "regulated housing mortgage" with the defendant on the family home. It is alleged that the representation was made in order to induce the first and second plaintiffs to enter into the mortgage, number 361742 registered on 22 June 1981, and that as a result the first and second plaintiffs suffered loss.

17. Para 5 (read liberally) makes a claim for damages for representations made in September 1981 that the plaintiffs were to sign a further mortgage No. 381889 for the same advance as that referred to in para.2 (presumably meaning para.4). It is alleged that the defendant induced the third plaintiff, acting on such representation, to execute the mortgage. It is alleged that "the loss" was a result of negligence, breach of "the mortgage agreement", breach of trust and breach of good faith (or any of these). Although there is no direct allegation of loss, it is probably implied.

18. Para.6 makes a further claim for damages for breach of agreement between the company and the Bank on 2 February 1984 "in respect of a mortgage on the family home to be used as security for a proposed bank guarantee of $40,000 to the National Capital Development Commission, by registering or purporting to register, a mortgage on the family home". There is in addition or in the alternative a claim "for using or threatening to use, in breach of the agreement, the said mortgage as security for the payment of debts".

19. Para.7 makes an alternative (alternative presumably to para.6) claim for damages for representations relied upon by the plaintiffs that "the mortgage would not be used as security or otherwise acted upon in the event that the said bank guarantee to the NCDC was not subsequently taken up or called upon", and that that representation was intended to induce and did induce the company to execute "the mortgage". Whether the mortgage referred to in this paragraph (and in para.6) is mortgage No. 381889 referred to in para.5, or some other mortgage, is not apparent.

20. Para. 8 states that "the plaintiffs' claim is for damages arising from the defendant obtaining a priority for $45,000 from its associated company, the Commonwealth Bank of Australia, and purporting to register or obtain a fourth mortgage against the family home on or about the 9th of September 1983, even though the said bank guarantee was never called upon". It is alleged that this conduct of the defendant is "contrary to a duty owed to the plaintiffs and contrary to the agreement or representations referred to in paragraphs 6 and 7". Para.9 states that "the plaintiffs' claim is for damages" arising from certain conduct on the part of the Bank. The conduct is identified as "purporting ..... to have registered a third mortgage on the family home based upon a mortgage document signed the 2nd of February 1984 as a result of the agreement referred to in paragraph 6".

21. Paras.10 to 13, 15 to 17, 19, 232 and 24 make claims for damages for negligence, breach of a mortgage agreement, breach of trust, breach of good faith, or any of these. They may be further summarised as follows:
10. Damage from Bank registering a caveat on family home on 21 May 1987.

11. Damage from Bank registering a caveat on the family home in January
1993.
12. Loss of use of equity in family home and consequential loss arising
from conduct of Bank alleged in paras. 4 to 11.
13. Damage to company from Bank preventing discharge of rural loan
290800209233 prior to 30 January 1989.
15. Damage from Bank divulging confidential information to a Mrs. Yee
Shan Shah between October 1988 and February 1989.
16. Damage from Bank for failing to sell the farm as requested in 1986,
1987 and 1988 in order to limit plaintiffs' liability to the Bank.
17. Damages for loss of use in equity in farm and consequential loss
arising from conduct of Bank alleged in paras. 10 to 14.
19. Damage from Bank for causing or participating in company's loss of
equity in Solar Village about 28 July 1988.
23. Damage from Bank for sending notices under Companies Act and Real
Property Act in 1987 and 1988 so as to prevent the company obtaining
finance to secure and protect its interest in Solar Village.
24. Damages for loss of use of equity in family home, farm and Solar
Village and consequential loss as previously alleged.

22. Para.14 makes a claim for damages for the Bank's breach of agreement made in July 1988 (further or alternatively in each subsequent month to February 1989) for settlement of all debts owed by the plaintiffs and "removal of all mortgages and caveats" by demanding further payments on a loan in respect of the farm.

23. Para.18 makes a claim on behalf of the company for the "loss of Solar Village" by the Bank's breach of an agreement made between December 1983 and September 1984 to provide the company with a commercial loan of $500,000.

24. Para.20 claims damages for negligent dissemination since July 1992 of false or misleading reports that the plaintiffs were bankrupt or insolvent.

25. Para.21 claims damages for company for the Bank's negligent obstruction of the company's claim for damages against NRMA Insurance Limited in matter No. SC 1006 of 1988.

26. Para.22 claims damages for the company for loss of good will from the conduct of the Bank relied upon in paras.14 to 21.

27. Para.25 claims damages for the company for loss of reputation and good will as a land developer from the conduct of the Bank relied upon in paras.4 to 24.

28. Paras.26 and 27 claim damages for the first and second plaintiffs respectively for personal injuries negligently caused by the Bank's conduct relied upon in paras.4 to 25.

29. Paras.28 to 32 claim damages for breach of the Trade Practices Act 1974 based on the allegations as follows:

Para.28: A duty not to act unconscionably under s.51AA and 51AB(1).
Para.29: Breach of duty and continuing loss.
Para.30: Breach of s.60 with continuing loss.
Para.31: Duty not to act in a deceptive or misleading way under s.52.
Para.32: Breach of s.52 with continuing loss.

30. Paras.33 to 37 make a claim for damages for breach of the Fair Trading Act 1993 (ACT) based on allegations as follows:

Para.33: Duty not to engage in misleading or deceptive conduct under
s.12.
Para.34: Breach of s.12 and continuing loss.
Para.35: Duty not to engage in unconscionable conduct under s.13.
Para.36: Breach of s.13 and continuing loss.
Para.37: Breach of s.26 and continuing loss.

31. In further summary, the further amended statement of claim contains a highly complex series of allegations against the Bank essentially for negligent misrepresentation, breach of contract, breach of trust arising out of the Bank's conduct concerning mortgages and loan transactions relating to the three properties under consideration.

32. It is obvious that, assuming the plaintiffs' case is to proceed, a great deal of work will have to be done in order to get the statement of claim into a form which will be manageable and in order to identify the issues which the Court would be required to decide. However, these considerations are not necessarily sufficient to justify striking out or staying the plaintiffs' claim, or any part of it, at this stage.

33. Order 23 r.4 provides, inter alia, that every pleading shall contain, and contain only, a statement in summary form of the material facts on which the party pleading relies for its claim.

34. Order 23 r.6 provides, inter alia, that in all cases in which the party pleading relies on any misrepresentation , fraud, breach of trust, wilful default or undue influence, particulars (with dates and items if necessary) shall be stated in the pleading.

35. Mr. Nicol, for the Bank, submitted that the further amended statement of claim fails to disclose any cause of action or any claim in equity or under statute and fails to comply with the provisions of O.23 rules 4 and 6.

36. It would be unnecessarily tedious and time-consuming to discuss every paragraph from para.4 to para.37 inclusive of the further amended statement of claim. It is sufficient, in my view, to say that, having considered those paragraphs, the provisions of the rules, and the submissions made on behalf of the Bank and by Mr. Martin, that all paragraphs fail to comply with O.23 r.4. In none of those paragraphs, either singly or taken in combination with any other paragraph or group of paragraphs, is it possible to discern what material facts are relied upon in support of any recognizable cause of action. I use that term to include any claim in law, equity or under statute.

37. For instance, para.4 appears to be a claim for damages for negligent misrepresentation. If that is what it is in truth, then no facts are pleaded which, if assumed to be true, would establish the existence of a relevant duty of care owed by the Bank to the plaintiffs. No facts are pleaded to indicate how it might be that, in making the misrepresentation alleged, the Bank was "negligent", that is, in breach of its duty of care. No facts are pleaded to connect any suggested loss with any breach of duty of care.

38. Several of the paragraphs make claims for breach of trust, breach of good faith or wilful default, or a combination of these. None of those paragraphs complies with O.23 r.6. There is simply no attempt to state in the pleadings the particulars required. The failure to comply with O.23 r.6 could be cured by ordering the particulars to be supplied. However, the failure to plead material facts is, I think, more fundamental. If it were confined to some only of the claims made, that might be regarded as a technical omission only and the further amended statement of claim might be allowed to stand, either disregarding the offending paragraphs, or allowing the plaintiffs another opportunity to formulate their claims in a comprehensible and manageable way. But the lack of material facts to support the claims is so pervasive of the pleading as a whole that it would, in my view, be entirely unjust and against the interests of justice to allow it to stand. There is not only the question of the Court perhaps putting a beneficent construction on the pleading in order to assist the plaintiffs who lack legal representation. There is also the matter of the Bank being required to file a defence in answer to the further amended statement of claim. In its present form, the further amended statement of claim is so lacking in particulars and specificity that no defendant could be expected to plead to it in any way which would tender issues for the Court to decide.

39. I have experienced considerable difficulty in endeavouring to see whether or not the further amended statement of claim might not somewhere amongst its numerous allegations of wrongdoing on the part of the Bank and damage on the part of the plaintiffs disclose a sufficiently coherent set of facts which could constitute a recognizable cause of action. I have simply not been able to do so. Where facts are alleged they are insufficient to constitute such a recognizable claim. For instance, para.15 claims damages for the divulging of confidential information to a named person between specified dates. However, even if it were proved that whatever information it was supplied to that person between those dates and that the information was confidential, that does not give rise to any liability for damages in law, equity or under statute. There may be circumstances in which the divulging of confidential information, taken in conjunction with other facts, might give rise to liability, say, for breach of contract, or defamation, but for a plaintiff simply to allege that a defendant has divulged confidential information, is insufficient to entitle the plaintiff to bring the defendant to court to answer the claim, and insufficient to entitle the plaintiff to require the Court to adjudicate upon the claim.

40. Conversely, in this further amended statement of claim, where a cause of action is identified, the facts pleaded are simply not sufficient to show that the plaintiffs would be entitled to judgment on the cause of action identified. For instance, para.34 identifies a claim for breach of s.12 of the Fair Trading Act 1993 (ACT), but there is no statement of material facts from which it could be concluded that the Bank was guilty of misleading or deceptive conduct.

41. After due consideration, I conclude that the further amended statement of claim does not disclose any reasonable cause of action. That being so, I am of the further view that the further amended statement of claim should be struck out. I have given serious thought to whether the appropriate relief should be an order for summary judgment for the defendant. However, without having heard substantive argument on the question, I think that summary judgment for a defendant should be given only where the Court is appraised of some justiciable issue between the parties in which the plaintiffs' case is hopeless. The present claim is attended by so much confusion that it is not possible to approach it in that way.

42. As Dixon J, as he then was, pointed out in Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91, provisions like O.17 are the counterpart for defendants of provisions for summary judgment in favour of plaintiffs. They confer a power of summary judgment which should be reserved for exercise as to actions that are absolutely hopeless. His Honour continued, referring to the jurisdiction of the court to prevent abuse of process, but in terms which, in my view, apply to an application by a defendant for summary judgment:

"A case must be very clear indeed to justify the summary intervention of
the court to prevent a plaintiff submitting his case for determination
in the appointed manner by the court with or without a jury. The fact
that a transaction is intricate may not disentitle the court to examine
a cause of action alleged to grow out of it for the purpose of seeing
whether the proceeding amounts to an abuse of process or is vexatious.
But once it appears that there is a real question to be determined
whether of fact or law and that the rights of the parties depend upon
it, then it is not competent for the court to dismiss the action as
frivolous and vexatious and an abuse of process."

43. But these remarks assume that the plaintiff's alleged cause of action is examinable and that a real question to be decided whether of fact or law can be seen. The reference is not to a possible question which can be barely glimpsed. In the present case the claim is too confused for any real question to be observable or any cause of action or a justiciable claim to be examinable. The defendant is not entitled at this stage to judgment or any order in the nature of judgment which will put an end for all time the sorts of matters that the further amended statement of claim may raise.

44. Mr. Martin has submitted that if the Court is of the view that his pleading is not in order then he should be given the opportunity to furnish particulars. Indeed, he submits that the pleading is adequate and that any difficulty the Bank has in answering it can be addressed by particulars. He submits that the Bank has created difficulties for itself by simply neglecting to seek particulars or by deliberately refraining from seeking particulars. However, as I have already indicated, the further amended statement of claim has not advanced to the state when comprehensive particulars of an identifiable cause of action could be the subject of a request. Mr. Martin's submission really amounts to a demand that the Bank's solicitors assist him to formulate a proper statement of claim.

45. The Bank applies for costs on a solicitor and client basis. Had the plaintiffs been legally represented, I would have had little hesitation in making such an order, and indeed I would have considered ordering the costs to be paid by the plaintiffs' solicitor personally. No legal practitioner could have permitted the filing of the further amended statement of claim in his or her name. It would have been contemptuous of the Court and truly vexatious. However, I have to bear in mind that Mr. and Mrs. Martin are not legal practitioners. They appear to be utterly convinced of the justice of their cause. The further amended statement of claim is probably the best they have been able to do. At this stage I am not convinced that an order for costs other than the usual order should be made. However, they cannot continue to occupy the time of the Court and cause the Bank to devote the resources of its shareholders and customers to resist the claims they press against the Bank and which so far they have not managed to make appear other than utterly untenable.

46. As far as the company is concerned, whilst the winding-up order made on 4 May 1994 remains in existence, and regardless of any stay of that order, it is inappropriate that any order be made at all either in favour of the company or against the company. I must make it abundantly clear that Mr. Martin is not to file or attempt to file any documents in the ACT Supreme Court Registry purporting to do so on behalf of the company unless and until an order of the Court is made authorising him to do so.

47. The formal orders of the Court are as follows:

1. The further amended statement of claim is struck out.
2. The respondent plaintiffs, Anthony Gilbert Martin and Sue Dolores
Martin, are to pay the costs of the applicant defendant on a party and
party basis.