Stergiou and Nesco Finance Pty Ltd v Anz Banking Group Ltd [1995] ACTSC 45 (19 May 1995)

SUPREME COURT OF THE ACT

STERGIOU AND NESCO FINANCE PTY LTD v. ANZ BANKING GROUP LTD
No. SC569 of 1993
STERGIOU AND ANOR v. ANZ BANKING GROUP LTD
No. SC114 of 1994
Number of pages - 5
Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A HOGAN

CATCHWORDS

Practice and Procedure - Summary Judgment for defendant - Application out of time - Leave to bring application - Actions for breach of duty of confidentiality - Limitation Act defence - Postponement of bar - Fraud or deceit - Date on which plaintiffs first discovered fraud.

Limitation Act 1985 ss. 8, 11, 33.

HEARING

CANBERRA, 12 May 1995
19:5:1995

Counsel for the Plaintiff: Litigant in Person

Counsel for the Defendant: Mr R.J. Arthur

Instructing Solicitors: Greaves Wannan and Williams

by their Agents:
Messrs. Scott Sheils and Glover

ORDER

THE COURT ORDERS THAT:
1. Leave be granted to the defendant to apply for summary judgment.

2. Judgment be entered for the defendant.

3. The plaintiffs pay the defendant's costs of and incidental to the action. That order for costs includes the costs reserved on 7 October 1994 in SC 114 of 1994 and on 17 December 1993 in SC 569 of 1993.

DECISION

MASTER A HOGAN In each of these two actions the defendant seeks an order under O.17 r.1 that judgment be entered for the defendant. In each case the ground is that it is now apparent that the cause of action is statute barred.

2. In the first action, SC 569 of 1993, commenced by Writ of Summons on 6 September 1993, the firstnamed plaintiffs are Mr Stan Stergiou, Mrs Ekaterina Stergiou and Nectaria Stergiou, and the secondnamed plaintiff is Nesco Finance Pty Limited ("Nesco"). The Writ was issued by Mr Stan Stergiou as litigant in person. The Statement of Claim alleged that Stan Stergiou and Ekaterina Stergiou were directors of Nesco, and Nectaria Stergiou and John Stergiou were shareholders of Nesco. Why Nectaria Stergiou was named as a plaintiff and John Stergiou was not does not appear. The plaintiffs claimed damages arising out of the dishonour by the defendant Bank of trust account cheques drawn by Nesco in September and October of 1981 and April and May of 1982.

3. On 17 December 1993 leave was granted to Mr Stergiou to act for the plaintiffs. He has no legal qualifications, but was unable to persuade any solicitor to act for the plaintiffs. There is no doubt that in all the relevant transactions his has been the directing mind of Nesco, and he has been the agent of the other plaintiffs.

4. The defence filed by the defendant on 24 September 1993 pleaded, amongst other matters, that the action was not maintainable by reason of s.11 of the Limitation Act 1985.

5. By Notice of Motion filed on 10 December 1993 the defendant applied for summary judgment pursuant to O.17 r.1. The plaintiff applied for leave to amend the Statement of Claim, which was granted on 11 February 1994.

6. The amended Statement of Claim alleged that between July 1977 and July 1993 the defendant breached the duty of confidentiality which it owed to the plaintiffs by communicating to the National Australia Bank certain information about the plaintiffs' financial affairs, as a result of which the plaintiffs suffered loss and damage.

7. The amended defence, filed on 18 August 1994, also pleaded s.11 of the Limitation Act 1985.

8. It appears likely that the action is not properly constituted as to parties, and if this application does not succeed it will be necessary to give consideration to dismissing the firstnamed plaintiffs from the action, as their only connection with it is as directors or shareholders of Nesco.

9. In the second action, commenced by Writ on 28 February 1994, Mr and Mrs Stergiou are the plaintiffs. The Statement of Claim alleged that they operated a joint bank account with the defendant, and that the defendant communicated confidential information to what is now Westpac Bank, the National Australia Bank, and to Deloitt Haskin and Sells, accountant. It also alleged, in paragraphs 5 and 6, breaches of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1992 (ACT).

10. On 3 February 1995 an order was made that paragraphs 5 and 6 of the Statement of Claim be struck out, and leave was granted to amend the Statement of Claim. The amended Statement of Claim, filed on 15 March 1995, alleged an improper communication of confidential information and a breach of the Fair Trading Act 1992 s.12. The dates on which the wrongful communication of confidential information was alleged to have occurred were not set out in the pleading.

11. The amended defence in this action, filed on 28 April 1995, also alleged that the cause of action arose more than 6 years before the commencement of the proceedings.

12. In each case the Notice of Motion seeking an order for summary judgment was filed on 28 April 1995.

13. Since that date is more than 10 days after appearance, leave of the Court is required to make the application, pursuant to O.17 r.1

14. In the first action, the solicitor for the defendant deposed that, following a series of requests for particulars and answers supplying them, the defendant knew, by 1 December 1994, the dates on which the wrongful conduct of the defendant was alleged to have occurred, and when the alleged damage had arisen. Those dates were in 1981, 1982 and 1986. In my view, if it had been apparent at the time that those were the relevant dates, the plaintiffs would not have been permitted to amend the Statement of Claim in January 1994 to allege a period "between July 1977 and July 1993".

15. In the second action, the defendant had that knowledge by 16 March 1995. The dates on which the plaintiffs claimed to have been rejected as customers of Westpac, NAB and Deloitte were in 1980 and 1981.

16. However, the solicitor alleges that the defendant did not know whether, at the time the plaintiffs' alleged causes of action arose, the plaintiffs were aware of the alleged wrongful conduct of the defendant.

17. That knowledge, it is said, came to the defendant's notice when, on or about 20 March 1995, the plaintiff provided the defendant with a copy of a document listed by the plaintiffs in the process of discovery. That document was a letter written by Mr Stergiou on behalf of Nesco in July 1984, addressed to Ms Dewhurst, an Assistant Manager of the defendant Bank, which made it clear, it is said, that he was then aware of all the wrongful actions of the defendant on which the plaintiffs rely in both actions.

18. In considering the question whether leave to bring the application at this stage should be granted, I think that the following considerations are relevant.

1. The defendant made a relatively prompt application for summary
judgment in the first action, which did not proceed when the
plaintiff was granted leave to amend the Statement of Claim.
2. The plaintiffs have at all times been aware that the defendant
intended to rely upon the Limitation Act defence.
3. If leave is granted and the application succeeds it will
determine the whole litigation.
4. There is no explanation given why the document discovered by the
plaintiff was not also discovered by the defendant, but it may be
assumed that if the defendant had in fact been aware of its
existence it would certainly have discovered it as soon as possible.
5. The defendant has, in the circumstances, given a satisfactory
explanation for not having made the application earlier.
6. The defendant has applied for leave with reasonable promptitude
after the facts relevant to the plaintiff's state of knowledge came
to the attention of its solicitor.

19. In those circumstances I grant leave to the defendant in each case to make the application for summary judgment.

20. In the Limitation Act 1985, "action" is defined in s.8(1) to include "any proceeding in a court", and "cause of action" means "the fact or combination of facts that give rise to a right to bring a civil proceeding".

21. Section 11 provides:

"(1) Subject to subsection (2), an action on any cause of action is
not maintainable if brought after the expiration of a limitation
period of 6 years running from the date on which the cause of action
first accrues to the plaintiff or to a person through whom he or she
claims.
(2) Subsection (1) does not apply to a cause of action in respect
of which another limitation period is provided by this Act."

22. The causes of action on which the plaintiffs rely in each case are not ones in respect of which another limitation period is provided by the Act (ss.12-29).

23. At first sight it would seem that a defence based on s.11 must succeed.

24. However, consideration was given by counsel for the defendant to the question whether the bar might have been postponed by the operation of s.33 of the Limitation Act 1985. That section is as follows, so far as is relevant:

"(1) Subject to this section, where -
(a) there is a cause of action based on fraud or deceit; or
(b) a fact relevant to a cause of action or the identity of a person
against whom a a cause of action lies is deliberately concealed,
the time which elapses after a limitation period fixed by or under
this Act for the cause of action commences to run and before the
date on which a person having (either solely or with other persons)
the cause of action first discovers, or may with reasonable
diligence discover, the fraud, deceit or concealment, as the case
may be, does not count in the reckoning of the limitation period for
an action on the cause of action by him or her or by a person
claiming through him or her against a person answerable for the
fraud, deceit or concealment.
(2) Subsection (1) has effect whether the limitation period for the
cause of action would, but for this section, expire before or after
the date mentioned in that subsection.
(3) Without derogating from the generality of subsection (1),
deliberate commission of a breach of duty in circumstances in which
it is unlikely to be discovered for some time amounts to deliberate
concealment of the facts involved in that breach of duty."

25. In neither case is the plaintiff's cause of action based on deceit, as that word is used in this section. Nor do the circumstances alleged by the plaintiffs include deliberate concealment of a fact relevant to a cause of action on which the plaintiffs rely, even within the extended meaning of subs.(3).

26. Although the word "fraud" is used in the equitable sense, I also think that an allegation of a breach of duty to keep information confidential does not amount to an allegation of fraud within the meaning of the section.

27. For those reasons I am of the opinion that section 33 has no operation in respect of any of the causes of action on which the plaintiffs rely.

28. If the plaintiffs proposed to rely on the provisions of s.33 it would be necessary in each case for a reply to be filed setting out the material facts alleged to bring the cases within the operation of that section.

29. But it is obvious that no matter how the reply is phrased, the letter from Mr Stergiou to the Bank and dated 12 July 1984 demonstrates that he had then discovered, or could with reasonable diligence have by then discovered, any fraud deceit or concealment on the part of the defendant on which the plaintiffs could rely.

30. Mr Stergiou, on behalf of the plaintiffs, did not contest the contentions of the defendant set out above.

31. His contention was that he was unable to bring the actions earlier, and within any limitation period, because he was for years going from solicitor to solicitor, who all refused to accept him as a client, or gave him wrong advice, such as that the actions could not succeed. Those allegations may very well be true. I have no reason to doubt them. But unfortunately for the plaintiffs they do not afford any ground for postponing or extending the limitation period. The defences based on the Limitation Act 1985 must succeed.

32. The Fair Trading Act 1992 was not in force at the time of the wrongful acts alleged, and it is not possible for relief to be granted under that legislation.

33. It is obvious that if these actions went to hearing they must inevitably fail. In the meantime the plaintiffs and the defendant would all have incurred great expense.

34. In each action

1. I grant leave to the defendant to apply for summary judgment.
2. I order that judgment be entered for the defendant.
3. I order the plaintiffs to pay the defendant's costs of and
incidental to the action.
That order for costs includes the costs reserved on 7 October
1994 in SC 114 of 1994 and on 17 December 1993 in SC 569 of
1993.