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IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY CRISPIN J Appeal against Interlocutory Judgment of the Master - nature of the appeal. Statement of Claim - purported amendment - whether leave required - paragraphs struck out - fresh claims statute barred - other allegations irrelevant and/or embarrassing. Trade Practices Act 1974 (Cth) Fair Trading Act 1992 (ACT) Supreme Court Act 1933 Weldon v Neil [1887] 19 QB 394 Rothwells Ltd (In Liquidation) v Entity Group Ltd and Ors (1990) 101 FLR 460 at 462 Protonotarios v Zapasnik (unreported, SCACT, 5 March 1992) Quirk v Bawden (1992) 107 FLR 455 at 456 I n The Matter of an Application by Milos Milosevic (unreported, SCACT, 13 September 1996) Anutech Pty Ltd v Latent Energy Systems Pty Ltd (unreported, SCACT, 3 February 1997) House v The King [1936] HCA 40; (1936) 55 CLR 499 Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 CANBERRA, 16 April 1998 (hearing), 12 June 1998 (decision) #DATE 12:6:1998 Mr A G Martin appearing for himself. Counsel for the Defendant: Mr R J Weber Instructing Solicitors: Abbot Tout Harper & Blain THE COURT ORDERS THAT: 1. The appeal against the judgment of the Master given on 14 November 1997 is dismissed. CRISPIN J 1. This is an appeal by the plaintiff against decisions of the Master striking out extensive portions of a document purporting to be an Amended Statement of and dismissing the plaintiff's application for summary judgment. 2. The proceedings have apparently been permitted to languish for long periods punctuated by brief episodes of activity. The original Statement of Claim was filed on behalf of Individual Homes Pty Ltd on 1 August 1988. It pleaded, in relatively succinct terms, an action for breach of duty by the defendant in relation to the exercise of its power of sale in relation to certain home units which had been constructed by the plaintiff and mortgaged to the defendant. It was alleged that on or about 27 July 1988 the defendant, in the exercise of that power of sale, had agreed to sell the units for the sum of $825,000 but that the market value was in excess of $1,400,000. The particulars of breach also included allegations relating to the marketing and advertising of the units for sale, in the maintenance of the units whilst the defendant was a mortgagee in possession and management of the tenancies. Orders were sought restraining completion of the sale and setting aside the agreement. There was also a claim for damages. 3. The Statement of Claim, filed only a few days after the agreement in question, heralded a flurry of activity. A Notice of Motion was filed on the same day seeking to restrain the defendant from entering into a contract for sale of the units and a number of affidavits were filed during the next few days. The motion was heard by Miles CJ on 5 August 1988 but dismissed. An appearance was entered on 10 August 1988 and a defence was filed later that month. The pace then slowed though further and better particulars of the claim were apparently provided in November and a further Notice of Motion was subsequently filed. 4. On 27 June 1989 Gallop J ordered the plaintiff to give security for costs in the sum of $21,750 and stayed the action pending the provision of that security. The Master found that no such security was ever provided. Indeed, no further steps were apparently taken in relation to the matter for several years. 5. However, interest in the matter was apparently rekindled and on 18 September 1992, Miles CJ gave the present plaintiff leave to appear on behalf of Individual Homes Pty Ltd and to be added as a second plaintiff. Despite this promising intervention several further years were then allowed to lapse before any further step was taken. 6. On 21 March 1997 the Master gave Individual Homes Pty Ltd leave to withdraw from the proceedings and on 18 April 1997 the Master heard an application to dismiss the proceedings for want of prosecution. He dismissed the action by the company but declined to dismiss the action by the present plaintiff. 7. The defendant subsequently wrote to the plaintiff suggesting that it might be appropriate for him to amend paragraph 10 of the Statement of Claim in order to reflect any assignment of the rights of Individual Homes Pty Ltd which he contended entitled him to maintain the action on his own behalf. The letter stated that the defendant would consent to the Statement of Claim being amended for that purpose. 8. On 22 September 1997 the plaintiff responded by lodging at the Registry a document which purported to be an amended Statement of Claim. This documents consisted of 112 paragraphs and adverted to additional causes of action including claims for breaches of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1992 (ACT) , personal injuries to the plaintiff and members of his family and defamation of the plaintiff, his wife and Individual Homes Pty Ltd. The document did not contain any endorsement of the kind required by Order 32 Rule 10 specifying the date of any order pursuant to which the amendment was made or the rule otherwise authorising such amendment. More importantly, since the pleadings had closed, the plaintiff needed leave to make any such amendment and that leave had not been granted. Furthermore, whilst the defendant had indicated that it would consent to an amendment for the limited purpose of pleading an assignment of the rights of Individual Homes Pty Ltd to the present plaintiff, it did not consent to the the plaintiff having carte blanche to amend the Statement of Claim in any manner he saw fit. 9. In these circumstances, the appellant had no right to amend the Statement of Claim in the manner set out in the document described "Amended Statement of Claim". Consequently, whilst that document may have been accepted in the Registry and served upon the defendant it did not validly effect any amendment to the Statement of Claim. The filing of a further pleading of this nature in these circumstances amounted, in my view, to an abuse of process and the defendant was entitled to have it struck out ex debito justitiae. 10. In fact, the defendant filed a Notice of Motion seeking to have struck out only those portions of the document which involved purported amendments beyond those to which it was willing to consent. The paragraphs so challenged were set out in a schedule and during the course of the proceedings the Master granted the defendant leave to add further paragraphs to that schedule. The Master ultimately struck out paragraphs numbered 2-3, 11-14, 18, 20, 24, 26, 28-32, 34-45, 50-66, 70-78, 80-103, that part of paragraph 104 consisting of the phrase "and/or the plaintiff and/or the Martins" and subparagraph (a), that part of paragraph 105 consisting of the phrase "and/or the Martins", and paragraphs 106-112. 11. Whilst the extempore judgment did not recount the Master's reasons in great detail, he clearly adopted the principle in Weldon v Neil [1887] 19 QB 394 that leave should not be given to allow a plaintiff to amend his statement of claim in order to introduce claims that would otherwise be statute barred. The causes of action which the document sought to introduce fell into this category. He also held that other allegations were irrelevant to the original claim or otherwise embarrassing. 12. The plaintiff's application for summary judgment was dismissed on the basis that extensive portions of the Amended Statement of Claim had been struck out and it was appropriate to permit the defendant time to file a defence to the remainder. 13. Appeals from decisions of the Master are governed by section 9 of the Supreme Court Act 1933 which is in the following terms: "(1) For the purposes of the exercise of jurisdiction conferred on the Master by Rules of Court, this Act has effect, subject to this section, as if the court consisted of the Judges and the Master. (2) A person who is dissatisfied with the judgment of a Master made in the exercise of jurisdiction conferred by Rules of Court may appeal, as prescribed by the Rules of Court: (a) in the case of an interlocutory judgment - to the Court constituted by a single Judge; and (b) in the case of any other judgment - to the Full Court. (3) On an appeal under subsection (2), the Court: (a) shall have regard to the evidence given in the proceedings out of which the appeal arose; and (b) has power; (i) to draw inferences of facts; and (ii) in its discretion, to receive further evidence, . . . (4) On an appeal under subsection (2), the Court may affirm, vary or set aside the judgment of the Master and may make such order as in all the circumstances it considers just." 14. The nature of an appeal from the interlocutory judgment of the Master has previously been considered by this Court. In my view, it is clear that such an appeal is an appeal by way of re-hearing rather than an appeal stricto sensu or an appeal by way of a hearing de novo: Rothwells Ltd (In Liquidation) v Entity Group Ltd and Ors (1990) 101 FLR 460 at 462; Protonotarios v Zapasnik (unreported, SCACT, 5 March 1992); Quirk v Bawden (1992) 107 FLR 455 at 456; I n The Matter of an Application by Milos Milosevic (unreported, SCACT, 13 September 1996); Anutech Pty Ltd v Latent Energy Systems Pty Ltd (unreported, SCACT, 3 February 1997). It is true in Rothwells Ltd (In Liquidation) v Entity Group Ltd and Ors Higgins J, at 462, expressed the view that the principles concerning appeals from discretionary judgments as stated in House v The King [1936] HCA 40; (1936) 55 CLR 499; Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 and Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 have no application to an appeal of that kind. However, a contrary view was expressed by Hogan AJ I n The Matter of an Application by Milos Milosevic at 5 and Gallop J in Anutech Pty Ltd v Latent Energy Systems Pty Ltd at 5. It is clear that the jurisdiction of the Master is not delegated from a Judge; it is the jurisdiction of the Court itself. There is nothing in the terms of section 9 to suggest that any appeal from the Master should be different in character from other appeals by way of re-hearing or that the normal principles governing appeals from discretionary judgment should not apply. Nor is there anything to suggest that such principles do not extend to appeals from discretionary judgments of the Master. Section 9 distinguishes between appeals from interlocutory judgments and appeals from other judgments only in providing that the former may be heard by the Court constituted by a single judge whilst the latter must be heard by the Full Court. The section provides no support for any suggestion that different principles should be applied. Accordingly, I accept that the principles referred to in House v The King do apply to appeals of this kind. 15. There was some disagreement between the parties as to the basis upon which the proceedings before the Master had been determined. Mr Weber, who appeared for the defendant, maintained that the motion had been argued on the basis that the challenged portions of the "Amended Statement of Claim" should be struck out unless the plaintiff could demonstrate that leave should be granted for the Statement of Claim to be amended in those terms. Hence, the proceedings "were in reality a vehicle pursuant to which the capacity of the plaintiff to obtain leave to amend the Statement of Claim in those matters in respect of which the defendant did not consent was litigated". He submitted that, technically, leave to amend in terms of the residual document, was still required but conceded that the decision of the Master should be taken to involve an implied leave to amend the Statement of Claim in accordance with the remaining terms of the document. 16. In answer to this contention the plaintiff, who appeared in person, contended, the Master had determined this issue when it was raised at the start of the hearing before him, ruling "that if leave was required the said leave was given before proceeding on hearing the strike out application". Despite these competing contentions, no transcript of the proceedings prior to the Master's judgment was tendered. There is no reference in the Master's judgment to any order granting the plaintiff leave to make the amendments set out in the 'Amended Statement of Claim'. In my view it would have been inappropriate for such leave to have been given prior to argument as to the nature of the amendments. Furthermore, the reference to the principle in Weldon v Neil suggests that, in essence, the Master was refusing the plaintiff leave to amend by the inclusion of the disputed paragraphs. 17. The plaintiff also maintained that leave was not necessary since, he maintained, the pleadings had not been closed. He submitted that the document entitled Amended Statement of Claim was "the first and only pleading of the current plaintiff". Of course, that document was dated 22 September 1997 and if it were to be regarded as an original pleading then all of the causes of action pleaded would be statute barred. However, it is clear that the document reflects an attempt to amend the original Statement of Claim issued in 1988. The pleadings have long since closed and there is no doubt that leave was required. 18. The plaintiff also relied upon Order 23 Rule 27 which provides that no technical objection shall be raised to any pleading on the ground of any alleged want of form. Whilst that rule might provide some comfort for the plaintiff if the only objection was that the relevant notation had been omitted from the document, it does not enable a party to amend pleadings without leave. 19. Similarly, he relied upon section 60 of the Supreme Court Act . That section is in the following terms: "(1) No proceedings in the Court shall be invalidated by any formal defect or by any irregularity, unless the Court is of opinion that substantial injustice has been caused thereby and that the injustice cannot be remedied by an order of the Court. (2) The Court may make an order declaring that any proceeding is valid notwithstanding any such defect or irregularity." 20. In the present case, of course, the issue is not whether the proceedings are valid but whether the ambit of those proceedings may be extended by a party who seeks to amend his pleadings other than in accordance with the Rules of Court. 21. It is clear, in my view, that the plaintiff required leave to amend the Statement of Claim and that leave had not been given prior to the hearing before the Master to which this appeal relates. The plaintiff may have not been aware of the need for that leave and it may have been preferable for the proceedings to have been adjourned to enable him to file an appropriate notice of motion and, more importantly, any affidavits that may have been relevant to the issue of whether leave should be granted. However, no point has been taken about that issue and the challenges which the defendant made to the proposed amendments did not raise discretionary considerations of a kind likely to be influenced by evidence as to facts other than those, such as the dates of the pleadings, which are part of the record. 22. The plaintiff did not rely upon any irregularity in the manner in which the proceedings before the Master were conducted but maintained that the "Amended Statement of Claim" was a valid pleading which should have been allowed to stand without any paragraphs being struck out. He also maintained that he had been entitled to summary judgment. 23. The Notice of Appeal did not contain any grounds but Mr Weber took no point about its deficiency and the plaintiff was permitted to make an extensive and discursive address as to the grounds upon which he relied. When it became apparent that the matter could not be completed in the one day allocated for it I suggested that both sides proceed by way of written submissions. Furthermore, since the plaintiff was unrepresented and some legal issues were raised by the appeal it seemed preferable for Mr Weber to file his submissions first, and for the plaintiff to then prepare his submissions in the knowledge of the legal issues that he might have to address. The parties consented to proceed in this manner. However, at the end of the plaintiff's written submissions he indicated that he wished to make further submissions orally. Given the manner in which the proceedings had been conducted and the fact that he had already had an opportunity to develop his arguments both orally and in writing I declined to reopen the matter for that purpose. 24. Having regard to the view which I have formed of the paragraphs which the Master struck out, it is immaterial whether the Master did so on the basis of refusing the plaintiff leave to amend in those terms or whether having given leave to amend in blanket form he struck them out of a then subsisting pleading. In either event they were unsustainable. 25. Paragraph 2 is irrelevant. 26. Paragraph 3 asserts that the plaintiff sues not only on his own behalf but that of his wife and children. Whilst it may be possible for those people to be joined in the same action as the plaintiffs pursuant to Order 19 rule 1, rule 10 enables a person to sue on behalf of other interested persons only where "there are numerous persons having the same interest in the same cause or matter". In my view, the plaintiff, his wife and their two children do not satisfy the description "numerous persons". Furthermore, the order made by Miles CJ on 18 September 1992 that the plaintiff be joined as a party to the proceedings did not authorise him to sue in a representative capacity for the other members of his family. If it is to be contended that the plaintiff's wife and children are necessary parties because the right to maintain the initial claim against the defendant has been assigned to them as well as the plaintiff, then it is open for them to apply to be joined as plaintiffs. Of course, any such application would have to be determined on its merits. However, the plaintiff cannot incorporate them in the proceedings by the simple expedient of purporting to sue on their behalf as well as his own. 27. Paragraph 11 asserts that at the time of the winding up order of Individual Homes Pty Ltd "the Martins" were a substantial creditor. That statement is not relevant to any cause of action pleaded. 28. Paragraphs 12 and 13 refer to earlier pleadings. They are not relevant. 29. Paragraph 14 asserts that on 17 August 1992 Individual Homes Pty Ltd assigned its rights over "Solar Village" to the plaintiff. It is apparent from the terms of paragraph 21 that "Solar Village" was the name given to the home units which were mortgaged to the defendant and sold pursuant to its power of sale. The plaintiff presumably alleges some form of assignment sufficient to enable him to maintain the action for damages initially brought by the company. However, paragraph 16 asserts that on 31 December 1992 "Individual Homes Pty Ltd and the plaintiff's rights over Solar Village were assigned in writing to the Martins". If the rights of Individual Homes Pty Ltd had previously been assigned to the plaintiff then the company had no continuing rights of the Village which were so assignable in December 1992. Of course, it is possible that paragraph 16 is intended to convey the allegation that the plaintiff conveyed to himself and his family jointly rights over Solar Village which had previously been assigned to him by Individual Homes Pty Ltd. However this is unclear. It is also possible that the plaintiff meant to plead paragraphs 14 and 16 in the alternative but again, this is not clear. Nor, in my view, is the substance of the allegation clear. It seems clear from subsequent paragraphs that the plaintiff concedes that the sale of the units had been completed well before 1992 if that is so then the company had no rights over them to assign. In my view, the paragraph was rightly struck out. However, it remains open to the plaintiff to apply for leave to further amend the Statement of Claim in order to allege an assignment of the company's rights to maintain the action against the defendant. Indeed, as previously mentioned, the defendant indicated that it would consent to an amendment for that purpose. 30. Paragraphs 18, 20, 24 and 26 contain allegations which are not relevant to any apparent cause of action. 31. Paragraphs 28 and 29 assert that the terms and conditions incorporated in the mortgage were at variance with those contained in a letter of offer and that they were so incorporated "to disposess Individual Homes Pty Ltd of Solar Village". As an apparent consequence, it is alleged in paragraph 30 that the mortgage is null and void. These paragraphs do not, in my view, adequately articulate any cause of action. Any claim that the mortgage was void would be inconsistent with the cause of action pleaded in the original claim and, since the mortgage was discharged nearly 10 years ago, any fresh claim for damages would be statute barred. 32. Paragraphs 31 and 32 allege that a personal guarantee apparently given by the plaintiff and his wife was void. Both contentions seem irrelevant to any cause of action. 33. Paragraphs 34 to 37 refer to statements about future interest payments to be made by the defendant in 1985 and 1987 and an assertion that the defendant unsuccessfully attempted to take possession of the units in late 1985. Again, these allegations appear to be irrelevant to any cause of action. 34. Paragraphs 38 and 39 assert that on 6 August 1986 the plaintiff suffered a serious heart attack "brought on by the unconscionable conduct of the defendant" and subsequently developed serious health problems. The unconscionable conduct is not particularised and no other facts which might support a claim for personal injury are alleged. Furthermore, the heart attack is said to have occurred almost 12 years ago and any claim for its causation would now be statute barred. 35. Paragraphs 40 to 45 and 50 to 60 contain numerous assertions which do not seem to form part of any recognisable cause of action. They are at best irrelevant and at worst embarrassing. 36. Paragraph 61 contains assertions about the quality of the units and their contents. It also alleges that furnishings and fittings contained in six of the units were not the subject of any mortgage to the defendant but that they were not returned to Individual Homes Pty Ltd and no credit of their value was given. It is not clear whether this was intended to plead an action in conversion but any such cause of action would now be statute barred. 37. Paragraph 62 alleges interference with the sale and management of the units by Individual Homes Pty prior to the defendant entering into possession. It does not adequately plead any cause of action and even if it did the claim would now be statute barred. 38. Paragraphs 63, 64 and 65 contain allegations which may be intended to give rise to a fresh cause of action or may be intended to simply provide more detailed particulars of the allegations contained in sub-paragraphs 10(b) or (c) of the original Statement of Claim. Any fresh cause of action would be statute barred. The paragraphs are embarrassing and in my view were rightly struck out. 39. Paragraphs 66, 70 to 78 and 80 to 83 contain various assertions in relation to a company named Jundery Pty Ltd. In essence, it is alleged that the directors and secretary of the company were agents of the defendant, that the units were purchased by Jundery Pty Ltd following a sham public auction, that each of the units were transferred by the defendant to individual purchasers via a sham transfer through Jundery Pty Ltd and that the defendant thereby made a profit of about $300,000. It is clear that the plaintiff alleges that the defendant was guilty of a breach of its duty as mortgagee exercising a power of sale but unclear as to what other causes of action may be relied upon. If there is evidence to support these allegations it may prove to be of relevance to the existing claim for breach of duty. However, prima facie, any further cause or causes of action would now be statute barred. The paragraphs are in my view embarrassing. 40. Paragraphs 84 to 90 refer to various steps taken in relation to the proceedings. They are not relevant to any cause of action. 41. Paragraph 91 appears to allege defamation and/or injurious falsehood concerning Individual Homes Pty Ltd, the plaintiff and his wife. Quite apart from any difficulties about the plaintiff suing on behalf of the company or his wife, the allegations go back to December 1987 and would appear to be statute barred. In any event, the relevant facts are not pleaded with sufficient particularity. 42. Paragraphs 92, 93 and 94 contain allegations concerning the manner in which the plaintiff had previously conducted his business and alleges that his commercial viability and reputation had been destroyed by the defendant's actions. Again, these paragraphs do not contain any clearly articulated cause of action and any claim of the kind suggested would now be statute barred. 43. Paragraphs 95 to 98 contain allegations that the defendant's actions since 3 December 1984 have led to adverse consequences for Individual Homes Pty Ltd and/or the plaintiff and his family No cause of action pleaded in the original Statement of Claim related to the defendant's actions going back to 3 December 1984 and it is unclear what actions the plaintiff contends were responsible for the losses alleged. In any event, the paragraphs do not clearly articulate any fresh causes of action and even if they did any such claims would now be statute barred. 44. Paragraphs 99 to 103 contain allegations that the defendant's actions since 3 December 1984 have caused serious trauma and/or health problems to the plaintiff and his family. As previously mentioned the plaintiff is not entitled to sue on behalf of other members of his family. Furthermore, these paragraphs again fail to adequately plead any recognisable causes of action and, again, any such claims would appear to be statute barred. 45. Paragraph 104 substantially reproduces allegations contained in the original Statement of Claim but adds the words "and/or the plaintiff and/or the Martins" after the words "Individual Homes Pty Ltd" and the allegation that the duty of the defendant extended to not acting "in an unconscionable way, in a deceptive or misleading way or a way likely to be deceptive or to mislead". No cause of action has previously been pleaded which involves any alleged breach of duty to the plaintiff or members of his family. The paragraph contains no hint as to any facts and circumstances which might support the proposition that the defendant, as a mortgagee exercising a power of sale, owed a duty to them in addition to the mortgagor. Furthermore, any such claim would now be statute barred. Similarly, no cause of action based upon unconscionable, deceptive or misleading conduct has previously been pleaded and, at face value, any such claim would again be statute barred. 46. Paragraph 105 repeats the allegation that the defendant breached its duty not only to Individual Homes Pty Ltd but to the plaintiff and/or his family. Again, the factual basis for the assertion of such a duty is not pleaded. Neither is the nature of the breach. In any event, any fresh claim would now be statute barred. 47. Paragraphs 106 to 109 plead various causes of action based upon the Trades Practices Act 1974 (Cth) . Quite apart from any other difficulties that arise in relation to these paragraphs it is clear that any such cause of action has long been statute barred. 48. Paragraphs 110 to 112 allege somewhat similar causes of action under the Fair Trading Act 1992. The events in relation to which these causes of action are said to have arisen occurred prior to the enactment of this statute. 49. In short, I am not satisfied that the Master fell into error in refusing leave for the plaintiff to amend his Statement of Claim by inclusion of the paragraphs to which I have referred or by striking out those paragraphs. On the contrary, I am satisfied that the document was an entirely unsatisfactory pleading which would have given rise to significant potential for embarrassment and confusion. 50. Indeed, I am left with the firm impression that even when these paragraphs have been exercised the Amended Statement of Claim will still be a quite unsatisfactory pleading. It is at least implicit in the Master's judgment that leave has been given to amend in accordance with those paragraphs of the amended Statement of Claim which have not been struck out. However in my view it is appropriate that the matter be listed for further directions before the Master when the plaintiff has had the opportunity to consider his position. 51. The application for summary judgment was sought on the basis of the "Amended Statement of Claim" but at the time the application was filed leave had not been given for the Statement of Claim to be amended. Accordingly, the application was without legal foundation. 52. The appeal must be dismissed.
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