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Federal Court of Australia |
Last Updated: 1 March 2001
HAMOD v STATE OF NEW SOUTH WALES [2001] FCA 157
PRACTICE AND PROCEDURE - motion to strike-out whole of amended statement of claim and to strike-out parts of amended Application - whether whole of claim consisting of 500 pages so prolix as justify strike-out on that basis alone - in any event, inappropriateness of causes of action based on ss 45D, 45DB and 52 of Trade Practice Act and adequacy of pleading common law actions for malicious prosecution, false imprisonment, "intentional" torts and trespass to person, goods, and land - whether any matters complained of were outside the State traditional government purposes - operation of s 2B of Trade Practices Act - limitation of time operating by virtue of s 82 of Trade Practices Act - issue of common legal representation of applicants where first applicant appears in person and is the majority shareholder in second applicant and second applicant appears by counsel - security for costs to be provided by second applicant.
Trade Practices Act 1974 (Cth) ss 2B, 45D, 45DB, 52, 82(2)
Fair Trading Act 1987 (NSW) ss 3(1), 42, 68.
Acts Interpretation Act 1901 (Cth) s 22(1)(a)
Banque Commerciale S.A. v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 referred to.
Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 referred to.
Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 applied.
Corrections Corporation of Australia Pty Ltd v Commonwealth of Australia [2000] FCA 1280 applied.
Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 referred to.
Blacker v National Australia Bank Ltd [2000] FCA 681 referred to
Karedis v Antoniou (1985) 59 FCR 35 referred to.
Western Australia v Bond Corporation Holdings Ltd (French J, 6 April 1992, unreported) applied.
Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (Beaumont J, 13 September 1994, unreported) applied.
Coshott v Kam Tou Mak (Wilcox J, 3 March 1998, unreported) applied.
Scott v Beneficial Finance Corporation (Burchett J, 14 December 1995, unreported) applied.
Wardley v Western Australia [1992] HCA 55; (1992) 175 CLR 514 applied.
Nixon v Phillip Morris (Australia) Ltd [1999] FCA 1107; (1999) 95 FCR 453 applied.
Jobbins v Capel Court Ltd (1989) 25 FCR 225 referred to
Cartledge v E Jopling & Sons [1963] AC 758 referred to.
MGICA v Kenny & Good Pty Ltd (1996) 140 ALR 313 referred to.
Wood v Wood (1997) 149 ALR 301 referred to.
Hamod v New South Wales [2000] FCA 1100 referred to.
Lewis v Daily Telegraph Ltd (No 2) [1964] 2 QB 601 referred to.
Gould & Portes Pty Ltd v Housing Commission [1974] VR 102 referred to.
SCI Operations Pty Ltd v Australian Paper Manufacturers Ltd (1983) 51 ALR 365 referred to.
Carnie v Esanda Finance Corporation Ltd (1996) 38 NSWLR 465 referred to.
Waters v P.C. Henderson (Aust) Pty Ltd (NSWCA, 6 July 1994, unreported) referred to.
Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [1999] FCA 536; (1999) 92 FCR 451 referred to.
Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 referred to.
ANTHONY HAMOD & ANOR v STATE OF NEW SOUTH WALES & ANOR
CONTI J
SYDNEY
28 FEBRUARY 2001
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
1. The Amended Statement of Claim of the Applicants filed herein on 27 October 2000 be struck-out.
2. The Applicants to have leave to replead in lieu a Further Amended Statement of Claim, the same to be filed and served within forty-two days from the date hereof.
3. The Applicants to have leave to amend the Amended Application, the same to be filed and served within forty-two days from the date hereof.
4. The Applicants to have liberty to apply for an extension of time for filing and serving a Further Amended Statement of Claim and a Further Amended Application on three business days' notice.
5. The Second Respondent's Application for security for costs and the costs of each of the Respondents of the present Applications for Strike-Out of the Amended Statement of Claim and Amended Application be reserved until after service of the Further Amended Statement of Claim.
6. Liberty be granted to any party to apply on three days' notice at any time.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
JUDGE: |
CONTI J |
DATE: |
28 FEBRUARY 2001 |
PLACE: |
SYDNEY |
1 The First Respondent (`the State") and the Second Respondent ("Australian UBS" or "UBS") have applied, pursuant to Order 11 Rule 16, for orders that the amended statement of claim ("S/C") filed herein on 27 October 2000 be struck out in whole or in part, upon the basis that no reasonable causes of action have been respectively disclosed. Additionally Australian UBS have applied for dismissal of the proceedings pursuant to Order 20 Rule 2. The State does not oppose, but Australian UBS does oppose, the grant of leave to the Applicants to replead, in the event that I rule in favour of their respective motions. The S/C comprises some five hundred pages divided into seven segments or head paragraphs, and is not indexed. Altogether there are 1533 paragraphs in the S/C. The task of gaining comprehension of the content of the S/C is not a simple one.
2 The First Applicant Mr Hamod, to whom I shall refer as "Hamod" for brevity and for no intended discourtesy, has represented himself in person in the proceedings before me. He has verified the S/C by an affidavit filed in the proceedings. The Second Applicant ("Investments") is a company incorporated in the State of Victoria on 20 December 1980, having presently two directors and a modest paid-up capital of 102 shares of $1.00 each. Investments was represented before me by Counsel instructed by a firm of Solicitors. Hamod is one of the directors of Investments, and is presently the major shareholder thereof. At the time of the events complained of, it appears that he was a minority shareholder. A registered floating charge was created on 20 October 1985 over the whole of the undertaking and assets of Investments in favour of the Commonwealth Development Bank of Australia, and appears to remain undischarged, at least in the records of the Australian Securities and Investment Commission, but I have been informed that no moneys remain secured thereunder.
3 The S/C propounds a very substantial claim for billions of dollars by way of unliquidated damages allegedly sustained by each of the Applicants by way of economic losses. Substantial claims for damages for personal injury both physical and mental are also advanced by Hamod. The S/C seeks to establish the jurisdiction of this court upon the footing of statutory causes of action for contravention of ss 45D, 45 DB and 52 of the Trade Practices Act 1974 (Cth) and for s 42 of the Fair Trading Act 1987 (NSW). Causes of action at common law are propounded for conspiracy, false imprisonment, breach of duty of care and trespass to the person, to premises and to goods. The original statement of claim was filed in court on 19 June 2000.
4 To assemble a reasonably adequate summary of the facts and circumstances pleaded in the S/C as allegedly giving rise to these causes of action presents a formidable task, because of the immensity of their detail and complexity as set out in the S/C. The S/C presents no resemblance in structure or content to the pleading of causes of action in accordance with the rules of court or of recognised practice. The authors of the S/C have obviously failed to undertake the essential task, first of determining what are the essential elements of each cause of action intended to be invoked, and thereafter determining such facts and circumstances as are material to establishing such elements. Instead the S/C has pleaded a massive narrative of facts and circumstances, sometimes out of chronological sequence, without assigning thereto in terms the respective legal significances which might be said to flow therefrom. The S/C is quintessentially a prolix pleading of literally a massive amount of material, mainly of a narrative nature which the pleader has not generally speaking related to the causes of actions propounded. Moreover the addition of Investments as an Applicant has thus far been justified by the pleading, in that Investments' locus standi to sue for the massive damages separately claimed by it is yet to be articulated and thereupon related to the various massive sums claimed. Mr Hamod himself is the author of most of the S/C, and has received only relatively minor professional assistance in relation to isolated parts of the pleading. He is not a qualified lawyer but an engineer, and if he is to continue to pursue his grievances and that of Investments against the present Respondents, a legally qualified person must necessarily be retained to articulate a new statement of claim in accordance with established principles of pleading only such facts and circumstances as are necessary to establish the essential components of the causes of action which may be open to each Applicant to pursue. Understandably Hamod would seek to place the whole of his unfortunate complex story from 1994 onwards before the court in advance of a final hearing of the proceedings, but he must come to the understanding that if the S/C is pursued without radical transformation, the prospect of the proceedings ever reaching the stage of a final court hearing on the merits will remain remote. The account provided in relation to most of the S/C narrative, particularly that relating to his events prior to incarceration in January 1995, is surplusage and immaterial in the technical sense to the causes of action propounded. Much of the S/C is directed to establishing that the platinum certificate was authentic, but Hamod does not appreciate that to do so is not an essential element for him to establish in the causes of action for instance of false imprisonment which he has thus far pleaded, and if he seeks to establish such authenticity, a separate cause of action would need to be framed, though to do so would greatly lengthen the duration of the proceedings, in my opinion otherwise than in Hamod's best interests. Generally as to the amended statement of claim which the Applicants will need to assemble as a result of the outcome of the Respondents' strike-out applications presently before me, I would refer the Applicants to the following often cited dicta of Mason CJ and Gaudron J in Banque Commerciale S.A. v Akhil Holding Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286:
"The function of pleadings is to state with sufficient clarity the case that must be met... In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision."
Mr Hamod indicated to me, in the course of his address, to the effect that he recognised his limitations to adequately re-draft the pleading of what he accepts to be a massive, if not unprecedented, case in damages, and that he would "get somebody else" to undertake the necessary re-drafting exercise (transcript p90), after I had pointed out to him that the S/C was far too prolix as a whole to be viable in its present form. Nevertheless it is appropriate that I endeavour to provide some insight into the content of this massive statement of claim, in order to afford some appreciation of the rulings which are subsequently made, including the ruling as to the grant of leave to re-plead which Australian UBS for its part opposes, but which I propose to make. The story told in the S/C is astonishing if not also distressing, and it is apparent from the Local Court judgment in favour of Hamod later referred to that an innocent man may well have been grievously harmed in various ways, albeit not attracting the many billions of dollars of overstated and misconceived economic losses, and particularly, the losses of economic opportunities which even on their face are seemingly far fetched at least for the most part. Otherwise the inherent likelihood is that the present proceedings may never reach the stage of a final hearing, because of the inestimable delay of likely countless interlocutory proceedings, and the enormity of the time it will take for obtaining the reports of qualified independent experts concerning the ramifications of each of the numerous heads of damage particularly concerning losses of business opportunities. I observe that Investments claims for instance about $1 billion dollars for "Loss of recovery of debt from P.T. Galaxy Trust Indonesia" relating to commissions and expenses denied by the Applicants' inability to sell the platinum certificate. Implicitly in that regard, so it appears, the Applicants must assume the existence of some issue estoppel in their favour arising out of the Local Court criminal proceedings in which Hamod was unfortunately so long engaged. This represents just one of so many ingredients in the S/C, in relation to which the Applicants need the stern warnings of informed legal advice as to the sensible limits of the legal process that he may be able to secure.
5 The point of commencement of the S/C narrative is that Hamod founded an engineering and construction business in Victoria in about the year 1980 which, by the time of the events giving rise to this litigation, had grown substantially in size, and had established overseas trading connections. Hamod caused to be incorporated several companies containing the word "Hamock", including Investments. These business operations had so prospered by the mid-eighties that his companies were said to be employing in Australia 300 personnel in the engineering and construction businesses, and deriving an average gross income in the order of $7 million.
6 In early 1994, the principal of a Jordanian company (Aziz of Haya Trading), being a person already known to Hamod, retained Hamod to locate in Australia a Victorian businessman (O'Dowd) to obtain an offer for the sale of certain bearer certificates for gold and platinum, and to forward the offer to an Italian merchant banker associate of Aziz (Enimi). The value of such certificates was said to be in the order of billions of Australia dollars, and to be owned by an Asian government. As a result of ensuing meetings between Hamod and O'Dowd, a commission arrangement relating to the sale of the certificates was entered into in favour of Hamod or Investments equal to one half percent (0.5%) of the value of the certificates involved.
7 As a result of subsequent communications between Hamod and Enimi, Hamod became assured by Enimi that the certificates were authentic, and Hamod at Enimi's request sought to establish from a Swiss corporation bearing the mark UBS, presumably directly or indirectly a parent of the Second Respondent UBS, a documentary basis for authenticity of validity (I shall hereafter refer to the Swiss corporation as Swiss UBS). The asserted need to do so emanated from information given to Hamod by Enimi that according to Swiss UBS, the certificates were owned by a Trust for the Army of the Republic of Indonesia. The initial account given in the S/C as to Hamod's instructions from Enimi becomes somewhat confusing, because the interest of Swiss UBS in relation to the certificate was then said to be held in its capacity as representative of a Swiss Trust (Alfima), and Swiss UBS was concerned as to O'Dowd's authority to enter into transactions of sale in relation to the certificates. In any event, the Alfima Trust submitted an expression or expressions of interest, by communication apparently to O'Dowd on Hamod's part.
8 The S/C thereafter proceeds to recount a substantial amount of detail, much of which does not reflect ultimate materiality to the essence of the Applicant's pleaded causes of action against UBS. It may be that in the context of an ultimate presentation of evidence in the Applicants' cases made pursuant to the pleading only of material facts in relation to viably framed causes of action against UBS as Second Respondent, it will be of evidentiary value for some of such substantial detail to be presented to the court, if of course that task can be managed in legally admissible form. The present difficulty confronting Hamod is that he understandably lacks the degree of legal skill and comprehension to be able to distinguish between the pleading of evidence and the pleading of only such facts as are necessary and material to demonstrate viable causes of action according to law. He has informed the court that he has attempted to present his own case mainly without legal assistance, because of some unhappy experiences to which he was subjected in the course of the criminal proceedings to which I will later refer and which are at the heart of the experiences to which he claims to have been subjected. But of course there are material differences between legal capacity for defending criminal proceedings, and legal qualification for the formulation and establishment of complex causes of action for substantial economic loss, particularly (as here) loss in the form of denial of opportunity to derive financial gains, and in addition lengthy affidavits as to evidence including verification of documents, if the presentation of evidence is to proceed in that form rather than by way of viva voce evidence. The same observations apply of course in relation to the case being propounded by Investments.
9 Continuing then as briefly as can be managed with an outline of the complex narrative set out in the S/C, Hamod next recounts an initial meeting with a Mr Cvahte, the Chairman of Bogden AG ("Bogden"), in Zurich, at which he received assurances of Bogden's capacity to purchase the certificates and, more relevantly, of Bogden's conviction as to the authenticity thereof, following upon an exercise of due diligence which Bogden claimed to have undertaken. Arrangements were then made for O'Dowd to visit Cvahte in Zurich. By this time, Cvahte had been in communication with Swiss UBS. In the upshot, O'Dowd arrived in Zurich and met with Hamod, Cvahte and Cvaht's assistant Nuspl, and O'Dowd produced the following certificates for their perusal and copying:
(a) Decision Certificate of International Metal Deposit B.L.D.
Guarantee of Certificate No. 27098-NC-707
Date of Issue: October 21, 1985
Amount: 4,200.00 Kgs of A.U. (gold)
Issue by: Central Bank of Stockholm.
(b) Decision Certificate of International Deposit of Platinum
Certificate of Guarantee No. 91140781-B.L. 7098
Transaction date: August 20, 1981
Amount: 2,500,500 Kgs Platinum
Issued by: Bank D.A.L. Seoul.
Seoul International Bank.
(c) Decision Certificate of International Metal Deposit B.L.D.
Guarantee of Certificate No. 4404 c.h. 27009
Date of transaction: October 21, 1978
Amount: 4,590,000 Kgs of Platinum
Issued by: Union Bank of Switzerland.
Nuspl informed Hamod, in the absence of O'Dowd, that he had seen the certificates previously in Jakarta Indonesia in the presence of a Dr Damanick, said to be the Chairman of PT Galaxy Trust Indonesia, a trust estate for the Army of Indonesia. Nuspl claimed to Hamod to have been acting in the capacity of a mandated agent for Deutsche Bank, but perhaps he was referring in that regard to Bogden.
10 Apparently in the upshot, O'Dowd at Nuspl's invitation deposited the Certificates in Bogden's "strong safe", and copies thereof were made, certified and apparently distributed inter alia to Hamod. Thereafter the parties met with a Zurich lawyer Dr Freyer, who was instructed to prepare contracts for sale in relation to the certificates. Freyer is said to have thereafter independently enquired about, and subsequently vouched for, the authenticity of the certificates.
11 It appears that Bogden was some kind of intermediary party, and not a purported principal, because the next thing to occur was the journey of Hamod, O'Dowd, Cvahte and Nuspl to London in early June 1994 to meet with Dr Alike, the vice-president of Metropolitan Mortgage Company of the United States ("Metropolitan Mortgage"), Dr Alike having apparently expressed an interest of Metropolitan Mortgage in buying the certificates from Bogden. O'Dowd informed Alike and Cvahte that "the Seller", whoever it was supposed to be (apparently the PT Galaxy Trust), was offering a 50% discount, presumably by reference to the face value of the precious metals respectively the subject of the certificates, for a "speedy settlement". Alike is said to have confirmed the authenticity and validity of the certificates, presumably face to face with Hamod. Certain documentation was thereupon put in hand, and Alike allegedly informed O'Dowd that Hamod was to be described in the documentation in terms of "Mandate for the Sellers", and Cvahte and Nuspl were to be described therein as "Mandate for the Buyers", and that provision was to be set out in the documentation as to payment of commission to such "mandates". Ultimately, contracts for the sale of the three Certificates were prepared and produced, and Alike said (presumably to Hamod) that he would send the same to the Metropolitan Mortgage for approval.
12 The S/C thereafter records in some detail the terms and conditions of the contracts of sale ultimately prepared, including payment of a deposit of US$50 million (whether in each contract for each metal classification or for the contracts taken together is unclear), and the balance of purchase money by twelve equal instalments. Involved in the transaction(s) was Tone Chai Investments Limited, but in what capacity and for what function is not entirely clear. Alike asked for proof of ownership, somewhat inconsistently with what I have recorded in [11] above as to previous confirmation of authenticity. Paragraph 5.2.208 of the S/C then reads as follows:
"During the same meeting, Mr O'Dowd admitted owing money to the Applicants and offered to deposit one of the abovementioned certificates with the First Applicant for security for money owing to the Applicants and for commission and additional advances for expenses. The First Applicant accepted the Certificate (the subject of these proceedings) as security for money owing to the Applicants and agreed to continue to advance additional funds and intermediary services to Mr O'Dowd and Sellers of the certificate."
The expenses of Hamod and Investments appear to have related to their involvement up to that time. The certificate which O'Dowd gave to Hamod at this meeting was the original of the Certificate for 4,950,000 Kgs of platinum, to which I shall hereafter refer to as the "platinum certificate", and other associated documents, as security for moneys owing by O'Dowd and "the Sellers of the Certificates" to Hamod and Investments, being moneys by way of fees, expenses and commission. O'Dowd is claimed to have provided written authority to Hamod to sell the platinum certificate on behalf of Hamod and Investments, and to recover all moneys owing to Hamod and Investments by O'Dowd for expenses etc already incurred. O'Dowd's authority to so hypothecate the platinum certificate on behalf of the beneficial owner PT Galaxy Trust (see [11] above) is unclear.
13 It then appears that another prospective purchaser emerged in the form of the Khater Group "in the Royal Manotel in Geneva", said to have been already a buyer of similar certificates on behalf of certain central banks in Europe and the Middle East. Enquiries were made by Khater concerning the authenticity and validity of the certificates described in [9] above. On 12 June 1994, Khater informed O'Dowd in Hamod's presence that the certificates "were invested in a Trust initiated by the late President Sokarno of the Republic of Indonesia" for the benefit of the Army of the Republic of Indonesia, and that Sokarno had left a testamentary instrument at the Swiss UBS, which will stipulated that that Doctors Damanick and Kalim as trustees for the Trust were to be signatories to the disposal of the certificates. In the result, so it appears somewhat unclearly, the Khater Group was substituted as the buyer of the certificates. Subsequently Dr Khater is said to have stated, presumably to Mr Hamod, that the certificates were authentic and valid.
14 Metropolitan Mortgage thereafter intervened, and is claimed to have threatened to block the sale of the three certificates to the Khater Group. The Khater Group is said to have withheld payment of funds pending Swiss UBS giving an undertaking to transfer titles for the certificates to a purchaser of the certificates. Further disputations arose when Enimi (see [6] above) re-entered the picture on behalf of the Alfima Trust (see [7] above), with a view to the Trust blocking any sale of the certificates other than to itself. In the midst of all of this confusion involving competing buyers, Mr Hamod is said to have collected the three certificates referred to in [9] above at O'Dowd's request, and deposited the same in the safe of the Royal Manotel Hotel. By this time it was disclosed that Khater was in fact representing the Central Bank of Morocco, and Hamod was asked by O'Dowd to negotiate the sale of the certificates in consultation with that Bank. Hamod claims to have then become aware that Swiss UBS was representing the Central Bank of Morocco.
15 Other prospective buyers for the certificates are said to have continued to emerge, and the picture painted by the S/C becomes even more complex. Thus a person by name of Kurian emerged as a prospective buyer of the certificates on behalf of the Manis Group of companies, being an acquisition apparently to be financed by Swiss UBS. Then a Mr Allemann, said to be chairman of the Alfima Trust, emerged to enforce its alleged buying entitlements, and Hamod and Enimi met with him. Allemann made statements to Hamod about the requirement of senior managers of Swiss UBS for "... commission to facilitate the process of the authentication and validation of the platinum certificate and the transaction for the sale of that certificate". Events became so attenuated that Enimi kept Hamod and O'Dowd virtually as prisoners in a Milan Hotel without access to outside communication until local Italian Police became involved. Subsequently Swiss Police in Geneva apparently intervened, because O'Dowd's disappearance was reported to Interpol, and Hamod was detained in custody, but thereafter he was released and asked to leave Switzerland. Hamod returned to Australia, claiming to be out of pocket by this time for in excess of $150,000 and to be owed in excess of $1 million for fees.
16 After his return to Australia, O'Dowd communicated with Hamod and informed him that ten certificates of the nature already referred to had been sold to Metropolitan Mortgage, and further that $3million would be deposited within forty-eight hours into Hamod's bank account in part payment of commission. Presumably one of such ten certificates was the platinum certificate. Such deposit was not made, for the reason stated by O'Dowd that representatives of the International Monetary Fund of the World Bank would dictate the amount of commission payable. Subsequently Enimi informed Hamod that O'Dowd was in fact trying to avoid paying commissions to "mandates and intermediaries", including Hamod, and that Enimi was depending upon Hamod to collect commissions due for instance to the Enimi Group.
17 In mid September 1994, O'Dowd rang Hamod and demanded the return of the original platinum certificate, and threatened Hamod with imprisonment if he did not do so. Similar threats were made to Mrs Hamod, and Hamod's business associate Balding, who was a director of Investments. By this time Hamod was working on projects for Investments, including the export of engineering services industrial plants and equipment, sugar and other commodities in the Middle East. Hamod continued to hold the platinum certificate as security for his commission and unpaid expenses allegedly due and unpaid.
18 Apparently during his absence overseas, Hamod had been made bankrupt. According to a finding of the Local Court Judgment already mentioned in [5] above, such bankruptcy related to a disputed sum of "$6000 odd". A certain Mr Wall had been involved in the sugar export transactions being undertaken between Investments and the Aron Group of Iran. Wall was also associated in some way with a firm of solicitors. By reason of such prior association, Hamod retained the firm of solicitors with which Wall was associated to secure the annulment or discharge of Hamod's bankruptcy, and to represent Investments in the recovery of moneys owing under certain trading contracts, and in relation to certain long standing litigation involving Westpac as an adversary. For some unexplained reason, such bankruptcy had not been annulled at the time of the Local Court Judgment of 3 April 1998 (see page 8 thereof). Hamod subsequently alleges in relation to Wall as follows (para 6.1.20 of the S/C):
"At the time, Mr Wall made false representations and misleading statements (sic) to the First Applicant and concealed the following facts:(a) That Mr Wall was not a solicitor or a commercial lawyer and or a merchant banker.
(b) That Mr Wall was an agent for the Respondents and set out to collect the original of the certificates from the First Applicant for ulterior motives.
(c) That Mr Wall knew Mr O'Dowd and Mr Wall and Mr Malcolm Troy were former partners in a financial brokerage firm and were dealing with Mr O'Dowd and Mr Nuspl of Germany on the sale of certificates.
(d) That Mr Nuspl from Germany introduced Mr Wall to Mr O'Dowd.
(e) That Mr Wall entered into an agreement with the disgraced former Superintendent of Police Mr Robert Lysaught to collect the certificate from the First Applicant for a fee of $3.0 million and to arrest and imprison the First Applicant on alleged fraud.
(f) That Mr Wall approached Mr Balding to arrange the initial contacts with the First Applicant allegedly for the sale of sugar to the Second Applicant."
The brief allegation in paragraph 6.1.20(b) to the effect that "... Mr Wall was an agent for the Respondents..." is to my present perception a critically important matter which the Applicants would seem to have to prove if either is to succeed in relation to at least some of the causes of action against Australian UBS, but of course proof of the existence of an agency relationship is not achieved by merely making an assertion to such effect. There is no doubt that Hamod for his part authorised Wall to make investigations and undertake consultations on Hamod's and/or Investments' part, and it is an enigmatic situation (to say the least) for Wall to have been in truth involved with UBS in terms radically adverse to Hamod's interests. What appears in paragraph 6.1.20(e) above purports to explain the genesis of the events which led to Hamod's arrest and imprisonment later in the narrative of the S/C.
19 Hamod is said by the S/C to have retained Wall to make enquiries of UBS (presumably Swiss UBS and not the Australian UBS joined as the Second Respondent in the proceedings) as to the authenticity and validity of the platinum certificate, which Hamod produced to Wall to enable Wall to make a copy for the purposes of making such enquiries. Wall explained to him that it was a bearer certificate, the implications of which Hamod had apparently not appreciated, with obvious consequences as to the need for depositing the same in safe custody. Wall said to Hamod that he would make enquiries of the Australian UBS about the authenticity and validity of the platinum certificate, saying that the cost of such inquiries would not be charged by Wall to Hamod, because he, Wall, was a friend of the Managing Director of the Australian UBS, and that "his company was an agent in Australia for Metropolitan Mortgage" (the S/C does not make clear to what "his company" was referring). Subsequently Wall informed Hamod inter alia that he had made enquiries from Metropolitan Mortgage and UBS, and that UBS had confirmed the authenticity and validity of the platinum certificate, and that the Metropolitan Mortgage had purchased "the other nine certificates from Mr O'Dowd and the Sellers". I should interpolate to mention perhaps the obvious, namely that Wall's assertion to Hamod as to what such enquires revealed as just stated would not be evidence as against UBS. Subsequently again on 17 October 1994, Hamod claims to have told Mr Wall that "the Applicants wanted to proceed with legal proceedings for recovery of money owing and for registration of a caveat on the certificate at the UBS."
20 At about this time, Hamod got in touch with Nowra Police concerning threats said to have been made to himself and his daughter by O'Dowd and Clarke. Hamod and his family lived in Nowra. Hamod claims to have put the Nowra Police in the picture concerning O'Dowd and the certificates. Nowra Police took an incomplete statement from Hamod and told him that an official statement from Nowra Police would be referred to the Federal Police and to the State Police Fraud Enforcement Agency. Subsequently Nowra Police informed Hamod that the Agency did not have the resources to investigate his complaints or to prosecute O'Dowd and Clarke.
21 On 26 October 1994, Wall faxed to Hamod proposals whereby Wall would act as agent for Hamod for the sale of the platinum certificate for a commission of US$300 million; the fax further indicated, on my reading of para 6.1.80(c) of the S/C, that he Wall had previously confirmed with Australian UBS the authenticity and validity of the platinum certificate, and that the Australian UBS had agreed "to handle" the sale of the platinum certificate on behalf of the Applicants (ie Hamod and Investments). I interpolate to point out such an assignment would have involved an agency on Wall's part in favour of Hamod and/or Investments, and not in favour of UBS (see [18-19] above). In a later telephone conversation on that day, Wall informed Hamod that Australian UBS was inviting Hamod to deposit with Australian UBS the platinum certificate, and that Hamod could thereafter draw down funds against it, or alternatively, Australian UBS would sell the certificate on behalf of Hamod. In the same conversation, Wall is claimed to have allegedly made the statement to Hamod that "... the proposed commission of $400 million was to be divided equally between him and his business associates including senior managers of [Australian UBS] and the mandates for the Buyer". Wall asked Hamod to accept and implement such proposals, but Hamod declined to do so.
22 From about the end of October 1994, the Australian Federal Police commenced dialogue with Hamod, initially in the context of Hamod's complaints about threats of O'Dowd and Clarke to harm Hamod's family. Clarke informed Hamod that the "Sellers" of the certificates had terminated O'Dowd's services, and had engaged Clarke to negotiate the settlement of costs and commissions owing to Hamod, and in that context a representative of "the Asian Government" had supposedly offered $100 million for such settlement. In response Hamod claimed that $400 million was owing and not just $100 million. Then Clarke said that the Asian Government would negotiate with "UBS" for the cancellation of the platinum certificate in his possession, or would offer a 50% discount to any buyer of the certificate who would settle within 90 days. The following assertion is next made in para 6.1.122 of the S/C:
"At the time, Mr Wall made false and misleading representations to the Applicants and concealed from the Applicants that he was directed by the Respondents to engage the First Applicant in telephone discussions in agreements to maliciously prosecute the Applicants and collect the certificate from the Applicants."
Whether there exists an evidentiary basis in the Local Court proceedings (referred to in this Judgment) as to such alleged duplicity on Wall's part is unclear.
23 During November 1994, Investments' business prospects were said to have been advanced by its entry into valuable trade agreements with the Aron Group to import dry fruits and nuts from Iran into Europe, South East Asia, Japan, Canada and Australia, and by its further entry into joint venture agreements and trade agreements for the process and packaging of commodities for export to Iran, such agreements being asserted to have enormous profit potential. At about this time, that is to say, late November 1994, Hamod engaged two solicitors, namely Messrs Lees and Cooper, to act for him, though for precisely what purpose does not seem to be indicated. Wall was pressing Hamod for an exclusive agency for the sale of the platinum certificate, saying that he would facilitate the sale of the platinum certificate through Australian UBS to an unnamed buyer. Hamod maintained to Clarke that he held a proprietary interest as mortgagee or licensee in possession of the platinum certificate, and that it was on such basis that he provided Wall with a copy thereof together with the following additional documents:
(i) Copy of O'Dowd's appointment of Mr Hamod as agent for the sale of the platinum certificate.
(ii) Copy of power of attorney from Damanick as chairman of PT Galaxy Trust Indonesia to O'Dowd for the sale of the certificates including the platinum certificate.
(iii) Copy of power of attorney from Damanick in his capacity as such chairman for the sale of the platinum certificate and of O'Dowd's transfer of such power of attorney to Hamod.
(iv) O'Dowd's authority for Hamod to hold possession of and negotiate the sale of the platinum certificate.
(v) Damanick's letter to Khater "for the endorsement of the sale of the platinum certificate at fifty percent discount", and containing Damanick's guarantee that the said certificate was genuine and valid.
(vi) Copy of the platinum certificate.
By about this time, Wall introduced to Hamod one Barry Page, apparently as an associate of Wall who would work with Wall in relation to the disposal of the platinum certificate.
24 Hamod then makes the following assertion in paras 6.1.79 and 6.1.180 of the S/C:
"According to written statements from managers of [Australian UBS] given to the police in 1995 and annexed correspondence, on the 6 of December 1994, at approximately 2:00pm, Mr Wall and Mr Page met the managing director of the Second Respondent and discussed a plan to interfere in the trading of the Applicants and collect the certificate from the First Applicant for ulterior motives.""According to written statements given to the police and to correspondence and evidence given in court, the managing director of [Australian UBS] engaged Mr Phillip Muhlabeur a senior manager of [Australian UBS] to devise a plan for collection of the certificate from Mr Hamod."
The subsequent paras 6.1.181 to 6.1.182 of the S/C elaborate further upon the content of additional statements and annexed correspondence shortly to be referred to, which purport to implicate Wall, Page, a man named Ludowici (said to be an executive director of the Australian UBS), and Muhlabeur, and also Rene Schicker of Swiss UBS, in strategies for collection of the original certificate from Hamod. The description of a body of further correspondence involving Muhlabeur, Schicker, Ludowici and Wall, relating to obtaining the platinum certificate with police support, presumably State Police, is additionally referred to in this context.
25 From this point in time, the S/C provides approximately sixty pages of narrative through to para 6.1.388, on the subject of complex negotiations and discussions preceding Hamod's arrest in Sydney by State Police in the latter part of January 1995. The S/C refers to further communications involving Schinker, Ludowici, Wall and himself. In broad summary, the S/C in such sixty pages pleads the existence of a secret strategy, asserted to have emanated from UBS offices both in Switzerland and in Australia, to dispossess Mr Hamod of the platinum certificate in the context of and facilitated by Hamod being charged by the State Police with criminal offences and taken into custody. Such offences were to be criminally pleaded by way of false misrepresentations on Hamod's part as to the genuine nature of the platinum certificate, being misrepresentations made to obtain a financial advantage. Potentially significant aspects of these sixty pages of the S/C include reference to Hamod's appointment of Mr Adelman in early January 1995 to manage the proposed sale of the platinum certificate, Adelman's proposal to Hamod to give first option to a Professor Bernard to sell such certificate in the Middle East, negotiations conducted by Wall to sell such certificate to "UBS", which is claimed by Hamod to have been acting for a European bank, the writing of a "partly sanitised" letter of 5 January 1995 from Australian UBS to Wall containing a number of questions about the proposed sale of the certificate, Hamod's agreement with Wall to sell the platinum certificate to Australian UBS in the context of the threat of Australian UBS to "block" the sale of such certificate elsewhere, the secret transmission of documents provided by Hamod to Wall direct to the Fraud Enforcement Agency, and the making of arrangements on behalf of Hamod and Investments for the deposit of the platinum certificate on 20 January 1995 with the National Australia Bank's Office in George Street Sydney.
26 The S/C then purports to intrude into the complex narrative of events thus far summarised by me, by assigning the following significance to the 220 pages of material thus far outlined above, commencing from page 221 of the S/C. I do not purport to have fully summarised the content of all such preceding material up to this point, but only to have provided some insight of the complex background circumstances to the averment of the first causes of action, which commences with the intrusion of paras 6.2 and 6.3 into the S/C. Para 6.2 avers against both Respondents as follows:
"6.2 The Respondents conspired to act and acted in concert in certain negotiations with the Applicants in relation to the certificate."
Such theme as to conspiracy is then inexplicably interrupted by para 6.3, which contains in the succeeding paras 6.3.1 to 6.3.18 eight particulars of allegedly misleading and deceptive conduct, extending over the following ten pages and introduced as follows:
"6.3 The Second Respondent engaged in deceptive and misleading conduct contrary to section 52 of the Trade Practices Act. Particulars of the alleged breach of section 52 of the Trade Practices Act are set out herein as follows:."
27 The convenient course is to describe or outline the conspiracy particulars and then return to the misleading and deceptive conduct particulars. Such conspiracy particulars are contained in paras 7.1 to 7.1.89, and extend over about thirty-three pages. Para 7 shortly introduces the same as follows:
"On 20 of January 1995, the Respondents acting in concert engaged in conduct towards the Applicants,"
and thereafter ensues a lengthy description of the circumstances leading to Hamod being taken into police custody on 20 January 1995. Such narrative is summarised briefly below, the source of some of the information for the same comprising statements tendered at the committal proceedings:
(i) Detectives Day, Riddell, Wright and Biaggi attended at Australian UBS' offices in Sydney and met with Muhlbauer, Teh and Wall, apparently early in the morning of 20 January 1995. Teh was apparently associated with Wall in a business context.
(ii) After travelling from Nowra, Hamod met with Investments' director Balding, the solicitor Lees, and Messrs Lymberg, Done, Titcombe and Teres, at the office of Advance Bank in Liverpool; Lymberg and Teres, as well as Balding, were directors of Investments. Investments conducted accounts with that Bank; Balding in his capacity as managing director of Investments asked Titcombe (the Bank's regional manager) whether the Bank would accept a draft for $250 million for deposit into Investments' account. After disagreement between the parties as to whether any proceeds of sale of the platinum certificate would be entirely the entitlement of Investments, Hamod asserted his lien over the platinum certificate and stated that he would not allow any deposit to be received by Investments for the sale thereof without the consent of the (unnamed) Asian Government. A copy of the certificate was made and left with the Advance Bank. The parties (or at least most of them) then departed to Sydney for a meeting at the National Australian Bank fixed for 11.00am on that day.
(iii) Upon arrival at the National Bank, Balding said that there had been a change of plans and that there was to be a meeting with Wall in a coffee shop, and that the meeting at the Bank had been deferred until 3.00pm. The parties then met with Wall and Teh outside the appointed coffee shop. Wall was wearing listening devices which were being monitored by Detective Day and other members of the Joint Technical Support Group. Videos were also taken by Police of persons engaged in discussion. Three years later, Hamod claims to have established that the Police interfered with both the video tapes and the transcripts made from the recordings of the listening devices on this day, after the Police had first denied taking video tapes at all.
(iv) Subsequently, the Hamod and Investments party left the coffee shop and arrived at the office in Sydney of UBS, presumably both occupied and operated by Australian UBS rather than Swiss UBS, and was met by Muhlbauer of UBS. A meeting then occurred in the boardroom of UBS, from which meeting Lymberg and Teres were excluded on suspicious grounds; a hidden video camera had been already installed by the Police, and Wall continued to wear his listening device.
(v) Muhlbauer then made false and misleading statements concerning Detective Biaggi, after he entered the boardroom, to the effect that he was a representative of UBS and a proposed buyer of the platinum certificate. Thereafter Hamod inquired of Muhlbauer as to whether Hamod's offer of 2 January 1995 had been received from Wall, which Muhlbauer confirmed, whereupon Hamod handed over the original platinum certificate to Muhlbauer. Hamod proceeded to outline his position in relation to the certificate, which he said was confined to his lien for "fees, costs and commission and commission from the sale of other certificates". Presumably the "other certificates" were references to those acquired by Metropolitan Mortgage (see [16] above). According to para 7.1.52 of the S/C, what next occurred was as follows:
"[Hamod] added and told Mr Muhlbauer that the Applicants would not accept one ($1.00) dollar for deposit and would not even discuss deposit before the proposed Buyer completed their due diligence and issue a letter for expression of interest in the certificate. The Applicants were obliged to obtain an expression of interest and obtain the consent of PT Galaxy Trust Indonesia before they want to proceed with the proposed sale of the certificate."
(vi) The parties re-assembled after lunch in a conference room at the National Australia Bank; again the discussions of the meeting were secretly recorded without the knowledge of Hamod, and presumably of all other directors of Investments, and again, the S/C records that Hamod responded in the negative to the offer of Muhlbauer to pay a deposit, Hamod saying that all he wanted was "... a letter of expression of interest in the certificate to obtain the consent of the last holder and the Asian Government for the proposed sale" (para 7.1.79). Muhlbauer and undercover Detective Biaggi then left the room and Detectives Day and Riddle immediately entered the room and arrested Hamod, and in so doing twisted his arm behind his back. Hamod was then taken into custody, as were the [other] directors of Investments.
28 Returning to para 6.3 of the S/C, extracted in [26] above, the first set of particulars of the misleading and deceptive conduct alleged to have been engaged in by Australian UBS are stated confusingly in terms of only a common law duty of care as follows:
"6.3.1 The [Applicants] further allege that [UBS] owed them a duty of care."
And thereafter are set out six particulars of the following formulations of such duty:
(i) To have conducted proper and thorough investigations of the facts alleged by Wall and Page concerning each Applicant and the platinum certificate and the demand of up-front fees for the sale of the certificate.
(ii) To have advised each Applicant that the certificate was a fake or forgery, if that was the case.
(iii) To have refrained from making false statements and misleading representations as to its intent to purchase the certificate.
(iv) To have informed each Applicant that Wall and Page and Utilis Australia Pty Limited were agents for UBS and working under instructions to make false and misleading representations and to lure the Applicants to the UBS premises.
(v) To have refrained from making false statements and misleading representations to the Police officers.
(vi) To have informed the Applicants of the truth about the authenticity and validity of the certificate and of UBS' intention of taking control and possession thereof.
The duties formulated in (iii) and (iv) above are misconceived, being more apposite to causes of action in fraud, or contravention of s 52 of the Trade Practices Act 1974 (Cth) or of s 42 of the Fair Trading Act 1987 (NSW) (see [30] below). Furthermore, in the circumstances in the present context and elsewhere pleaded, such duty of care in negligence could hardly have been owed by UBS to either of the Applicants in the circumstances of the arms length commercial relationship which was being purportedly generated. Whether or not in the very unusual circumstances here involved, the Applicants really have in mind redress for an unusual but no necessarily novel species of intentional tortious conduct, rather than the traditional tort of negligence, is unclear: see J.G. Fleming, The Law of Torts (9th ed) LBC 1998 at 41 and F.A. Trindade and P. Cane The Law of Torts in Australia (3rd ed) Oxford University Press 1999 at 75-78. Para 6.3.2 alleges breaches of tortious duties of care, and paras 6.3.3 and 6.3.4 respectively plead that were it not for such breaches, Hamod would not have been arrested and no Police prosecution of him would have taken place, nor would the [other] directors of Investments have been arrested, and no interrogations and prosecution would have taken place of any of them, and the prosecution would have been brought to an end by 20 January 1995, that is to say, later in the same day during which Hamod had travelled from Nowra to Sydney to meet with Australian UBS.
29 Hamod and Investments additionally or alternatively allege against the State by para 6.3.6 of the S/C a duty to disclose to them that:
"(a) One or more of the police officers received a complaint from [UBS] about the Applicants' proposed sale of a forge (sic) or fake certificate if that was the case;(b) One or more of the police officers inform (sic) the Applicants of aforesaid complaints and advises (sic) them that the certificate was forged or fake if that was the case."
Presumably these duties are intended by the Applicants to be tortious in character.
30 The S/C next proceeds to aver that by reason of the ensuing silence in effect of Australian UBS and the concealment of information which Australian UBS had in its possession, being a concealment of information from the Applicants, the State engaged in deceptive conduct and made false and misleading representations to the Applicants, and that such conduct occurred in trade and commerce which was misleading and deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth) or of s 42 of the Fair Trading Act 1987 (NSW): see paras 6.3.7 and 6.3.8 of the S/C. Leaving aside the time limitation obstacles later referred to, I am unable to understand how the actions of UBS in establishing circumstances of entrapment of Hamod and Investments' directors could rightly be described as conduct undertaken in trade or commerce.
31 Thereafter the S/C diverts into averments to the effect that on instructions from UBS and from "one or more of aforesaid police officers", Wall as agent for UBS, and Muhlbauer as an executive officer of UBS, engaged in deceptive conduct and made false and misleading representations to Hamod and representatives of Investments, and seven instances are given, commencing from the time of Wall's representations in telephone conversations on 10 December 1994 with Hamod and another representative of Investments as to the authenticity and validity of the platinum certificate, followed by Wall's conduct in relation to the Applicants undertaken at the behest of Police officers, and further followed by Muhlbauer's conduct which I have already summarised. Other instances of deceptive conduct and the making of false and misleading representations, concerning the events of December 1994 and January 1995 to which I have already referred, being events involving the undercover policeman Biaggi, Wall and Ludowici, are then set out (see para 6.3.9 to 6.3.11 of the S/C). Losses and expenses are said to have been incurred by reason of cancellation of arrangements for the sale of "the legalised holding" of the platinum certificate, and the loss of the opportunity to recover fees and commissions owing to the order of $1 billion (para 6.3.12 of S/C). Similar and somewhat repetitive claims are advanced in paras 6.3.13 to 6.3.18 of the S/C.
32 Para 7.2 of the S/C, commencing at page 263 and continuing to page 346, contains 223 paragraphs numbered from 7.2.1 to 7.2.223. The same contains a narrative of what happened to Hamod from the time of his being taken into custody on 20 January 1995 and when bail was then fixed by a Magistrate on the submission of the Police in the sum of $25 million, thenceforth until 24 August 1995, when he was finally released on the bail of one surety for $5,000.00 and another surety of $500.00.
33 One of the three initial charges brought against him was framed to the following effect, according to para 7.2.5 of the S/C:
"Between October 1994 and the 20 of January 1995 somewhere between Sydney and Nowra on the South Coast of New South Wales, [the First Applicant] made false and misleading representations with intent to defraud 66 billions..."
The only charge which survived, and which was ultimately dismissed by the Magistrate Ms Horler LCM on 3 April 1998 for reasons recorded in a reserved judgment, was as follows:
"...that between 13/10/94 and 20/1/95 the defendant with intent to obtain for himself and others a financial advantage... made a statement to wit that a certificate of guarantee for 4590 tones of platinum issued by the Union Bank of Switzerland was genuine and that he had authenticated that certificate with UBS bank officers in Geneva, which statements he knew to be false or misleading to a material particular and which were made with reckless disregard as to whether they were true or false or misleading."
In dismissing the charge, the Magistrate made an order for costs in favour of Hamod, and in the upshot such costs were adjudged in the sum of $98,489.00, and were duly paid by the State.
34 It is convenient at this point to extract below most of the important findings of the Downing Centre Local Court whilst nevertheless stressing that the same cannot be relied upon by the Applicants by way of issue estoppel, and therefore be unnecessary for further establishment in the present proceedings:
"Although a document in several languages with spelling mistakes may look absurd, and although the quantities of metal and potential huge sums of monies which are implied may seem absurd or improbable, the vast body of documentation adduced by the defence in its exhibits, suggest that there was every reason for Mr Hamod to form the view that Ex3 was genuine and that it represented an underlying transaction between the former President Sukarno of Indonesia and the Swiss Bank UBS. (Ex3 being what is referred to in this judgment as the "platinum certificate").
... (f) Mr Hamod also gave lengthy, repeated and consistent accounts in each case of how over months in Europe he had slowly learned from various buyer representatives the history of these certificates, how they had variously informally checked them out through UBS connections, in one case met with Dr Edison Damanik, how the final authentication process would be done bank to bank and would take a long time, how irregular it was that the certificates should have been removed from the central bank repository whence they came, that it was dangerous to be carrying them and for O'Dowd to be showing them indiscriminately.
(g) Hamod also said he was introduced at a meeting by Kurian to various persons one of whom at least he was given to understand to have been an advisor to Kurian and a retired secretary of UBS, and another an IMF official also advising on the transaction.
(h) Mr Hamod also gave the same history of the document at the UBS meeting on 20/1/95 when he knew UBS officers were present.
Nowhere is it implied, and there is nothing in the formidable body of corroborating documentation adduced by the defence, which could lead to any suggestion that there is no underlying transaction of obligation involving UBS and Sukarno, nor any suggestion that the paper itself is a forgery.
... Finally, on the issue of belief and knowledge, I ask myself why O'Dowd and Clark would threaten Hamod and his family's safety, revoke his mandate and threaten criminal proceedings for "theft and unlawful possession of the aforementioned certificate against yourself and any other person who you may have lodged this certificate with" (ExD60 dated 30/9/94) if the certificate were a fake, and why Hamod would take ExD61 (his statement) and Ex3 in to Nowra Police if he believed he was in possession of a forged or false document.
... In any case, as I have indicated, I consider Mr Hamod's belief to genuinely held, his investigations, in the context, more than adequate.
I am satisfied that Mr Hamod never believed the document to be false, but to the contrary, that his belief that it was genuine was reasonably held and that he was not reckless, in making that statement to Mr Wall and possibly also to Mr Teh, as to whether it was true, false or misleading, either at the 14 October meeting or at any other time including 20 January 1995.
... Since the defence case was so lengthy and detailed, the defendant's good character put squarely in issue and his credibility attacked by the prosecution, it would be inappropriate if I conclude without mentioning a few points.
* I accept that Mr Hamod is a person of good character, an honest man, and a meticulous businessman.
* I do not consider he has put any "spin" as the prosecution has suggested, on anything.
... * I accept that Mr Hamod is an engineer whose companies operated a large engineering concern in Melbourne for at least 15 years until 1993: that at the time of his arrest he was involved in litigation with BHP and Westpac over substantial sums" that his purpose in travelling overseas for the Hamod Group in April 1994 was primarily in connection with various Iranian trade projects which he, on behalf of his companies, had begun to work on following a Jan 1994 trip to Jordan and Lebanon: and that the involvement with the certificates was of secondary importance and had begun with a desire to effect a favour for a very important Iranian contact in hope of future business.
* I accept that Hamock Investments commenced a substantial Iranian/ Australian co-venture involving the import/export of commodities to Iran from via Australia, and that a joint investment of $8.5m in a nut and fruit processing factory and distribution plant was on the cards, that substantial letters of credit in $US to save converting to and from $A, and not, as suggested by the prosecution, to receive any up front payment from the platinum transaction.
* I accept that Mr Hamod returned from Switzerland, although formally deported, under his own steam, business class (ExD56).
* I accept that he was made bankrupt in his absence overseas for a disputed $6000 odd and is applying to have that bankruptcy annulled.
* I accept that Mr Hamod made extensive personal investigations into the genuineness of the certificate and of the people and organisations offering it for sale, into the methodology of selling it and into the genuineness of the proposed buyer mandates, even though his role was merely that of introducing potential buyers to O'Dowd and not as a signatory to any buy/sell agreement.
* Finally I agree that Mr Hamod is prolix, ie talks too much, and also that his demeanour in the witness box was at times combative and almost always far from concise. On the other hand, I note that none of the allegations raised either by the s 178BB charge in its final form, or by the defunct s 300 charge, WAS ever put to him in the very lengthy ROI. Moreover, not only was his invitation to provide every possible further assistance not taken up, but his documents essential to corroborate what he was saying, having been withheld from him in the interview, were taken from him into police custody and not returned for 2½ years. And then he spent 8 months in custody on remand.
* In that situation, one would expect any defendant believing himself to be innocent, to seek to dot every "i" and cross every "t". As well as display some emotion."
35 Returning then to my summary of the content of the S/C in the sequence in which events have been pleaded therein, paras 7.2.6 to 7.2.8 of the S/C aver the continuing refusal of the State to release files and documents of the Applicants to enable Hamod to prepare for the giving of evidence and the presentation of his defence at the committal proceedings. According to para 7.2.4 of the S/C, Police officers had seized many files and documents in the possession of Hamod, and substantially dissembled the nature and quantity thereof in their custody for a considerable time, to the prejudice of Hamod in the preparation of his defence. Even after completion of the Prosecution's evidence by early July 1997, Hamod claims (with a measure of support from the Magistrate's judgment) that the State continued to withhold key documents for Hamod, and thus effectively from the Local Court, whilst nevertheless falsely maintaining that all documents requested by Hamod had been handed over. For instance, one key document constituting a contract entered into between Dr Khater and O'Dowd, and another comprising Khater's due diligence, authentication and validation of the platinum certificate, were said to have been withheld by the Prosecution and not released until January 1998 (paras 7.2.29 and 7.2.10) (see in that regard one of the Magistrate's findings in [34] above). In March 1998, more than two years after Hamod's arrest, the Prosecution amended what remained of the surviving criminal charge, the amendment being related to Hamod's alleged production of the original platinum certificate at the meeting at the National Bank on 20 January 1995. After Hamod denied that allegation in the witness box, a material aspect of the surviving charge was withdrawn by the Prosecution (para 7.2.11 and 7.2.12). What thereafter appears from paras 7.2.12 to 7.2.83 of the S/C is potentially material to the cause of action for malicious prosecution and to damages, but needs to be truncated, and substituted by relatively brief particulars, in order to avoid future legitimate criticisms of prolixity. That which is next set out from paras 7.2.84 to 7.2.91 would appear to relate only to damages, and would be better scheduled by way of particulars in more abbreviated form. I should interpolate at this point that the Applicants must fully appreciate in their own interests the enormity of the time and cost which will be involved in establishing these extravagant claims for damages by way of loss of opportunity, and the conservative approach that a court will be obliged in principle to adopt in relation to damages claims for loss of opportunity, as a close study of the judgments of the High Court in Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 duly require. My preliminary reading of the same leads me to the preliminary conclusion that the same are largely unrealistic and well beyond the reasonable limits of the doctrine as to damages for loss of opportunity. Moreover most of the larger sums claimed are attributable to Investments and not Hamod, and the contribution of causes of action to Investments will be much more difficult than in the case of Hamod personally. It was of course Hamod personally who suffered the deprivation of liberty, and it is unclear as to the measure of his control of Investments in relation to which he was apparently a minority shareholder for some material time beyond January 1995. Paras 7.2.92, 7.2.93 and 7.2.99 are perhaps closer to the edge in the Applicants' favour of what may be legitimately particularised in connection with the malicious prosecution cause of action, whilst paras 7.2.94 to 7.2.98 and 7.2.100, though potentially material to damages, would be better consigned to the status of particulars for that purpose. I feel obliged to make the observation generally that the Applicants would do well to obtain and heed legal advice on the viability of at least the substantial portion of the heads of claim for economic loss, which do not appear to me to be for the most part significantly compelling, particularly in terms of quantification, and which heads of claim, if pressed by the Applicants to the limit, will tend to stand in the way of the Applicants obtaining a court hearing within a reasonable time or even at all, by reason of the enormity of expense and delay in definition and substantiation according to applicable rules of evidence and procedure. What has been observed and indicated above may serve as a guide to the Applicants as to how the remainder of para 7.2 of the S/C should be substantially reduced in size and content in order to keep the S/C within reasonably manageable bounds and in a form and structure in which it may be feasibly capable of going to trial.
36 By way of further illustration of the points already made as to prolixity of claims, paras 7.2.161 to 7.2.174, for at least the most part, travel well beyond what is appropriate for legitimate pleading of material events, and the same applies to most of the remainder of para 7.2, except for isolated sub-paragraphs that fit into the kind of categories I have already referred to, such as paras 7.2.209, 7.2.212, 7.2.214 and 7.2.218 to 7.2.223, which in any event, at least for brevity of presentation, would be more appropriately formulated as particulars of material averments of ingredients of causes of action, rather than "stand alone" averments in the body of the S/C. In summary, para. 7.2 of the S/C demonstrates a fundamental misunderstanding of pleading of the viable causes of action purportedly here intended, and instead indulges in a proliferation of facts immaterial to the essential elements of any of the causes of action purportedly pleaded. The Applicants should take heed of the disqualifying expression of Order 11 Rule 16(b), when they come to repleading their respective causes of action, namely:
"... has a tendency to cause prejudice, embarrassment or delay in the proceedings."
37 Para 7.3 relates to allegations of trespass on the part of Police officers in relation to files and records of the Applicant. There are ninety-nine paragraphs thereof pleaded. Para 3 is introduced as follows:
"The First Respondent attended the property of the Applicants without proper authority and seized property and possessions belonging to the Applicants without proper authority."
There is here involved a further exemplification of the pleading defect of the tendency to prejudice etc identified in the abovementioned Order 11 Rule 16(b). This further prolix segment of the S/C needs to be carefully thought through before being reproduced, even in a form which otherwise satisfies the rules of pleading. It is the kind of material which will tend to seriously prejudice the obtaining of a final hearing of the proceedings within a foreseeable point in time.
38 Para 7.4 pleads material directed to the case against the State for malicious prosecution, and is introduced as follows:
"The First Respondent unsuccessfully prosecuted the First Applicant by committal hearing commenced in March 1997 and completed on the 3 of April 1998 and in circumstances where such prosecution was malicious."
Containing as it does 194 paragraphs, para 7.4 is plainly prolix. As in the case of what has preceded para 7.4, this segment of the S/C is replete with allegations of an evidentiary nature, rather than facts material to sustaining the elements of a cause or causes of action, and has the clear tendency to prejudice and cause delay to the hearing of the proceedings. It requires severe pruning to averments confined to conduct material to the causes of action involved. It contains one material piece of history which might appear in a more appropriate segment, namely the dismissal by Judge Flannery of certain allegations relating to Custom Credit in 1973. The delays of the Prosecution in proceeding with Hamod's prosecution in 1995 and 1996 are material to the cause of action for malicious prosecution, but once again the averments of the S/C are far too prolix, and could be readily framed with brevity and by way of particulars to such cause of action. Paras 7.4.79 and 7.4.80 refer to the final release by the Prosecution to the Applicants of their computers and documents, which probably would be better placed within the context of para 7.3. Other averments would be more appropriately placed in the context of the cause of action for malicious prosecution (see for instance para 7.4.85 and para 7.4.168). Certain matters of historical interest, but of no other relevance, have been included in the S/C (for example para 7.4.194). As in the case of the S/C generally, most of the material in para 7.4 should be excised or located briefly elsewhere by way of particulars of material facts to causes of action to be retained. I appreciate that the courts are not as adamant as in earlier years of requiring particulars of principal averments to be so characterised, rather than as material paragraphs of the pleading. But the objective of particulars in complex claims is to aid the desirable adoption of as much simplicity as possible for the purpose of distinguishing discrete causes of action. The Applicants must appreciate that a statement of claim is not a vehicle for the carriage of every conceivable piece of information concerning the extraordinary events of 1994 to 1996.
39 Para 7.5 commences with the general averment "The First Respondent acted negligently and breached statutory duties owed to the Applicants". The alleged statutory duties have been and will be separately addressed. The pleading of negligence must set out the material facts said to give rise to a duty or duties of care, and the facts and circumstances said to constitute breach of each such duty or duties, and the damages flowing therefrom. Very considerable care and skill in pleading is here required, if the cause of action is to stand.
40 In making the observations which I have made up until this point in the judgment, I do emphasise that the length, structure and content of the S/C is such that there is an overwhelming necessity for the Applicants to revert to first principles of the rules of pleading, and thereby produce a relatively short and simple statement of material averments, with provision for particular which can be added at subsequent times where appropriate prior to trial. To do so will advance the interest of the Applicants in obtaining an early trial, without involvement in prohibitive cost. Conversely, it is the natural justice entitlement of the Respondents to know with some precise the case which they have to meet, and that accordingly there must only be pleaded factual circumstances constituting material elements of viable causes of action, with particularity of all such material elements appropriately scheduled where required according principles of pleading as well as rules of court. The written submissions of UBS contained in paragraphs 34 (headed "pleading evidence") and 37 (headed "Irrelevant pleading") bring out numerous examples of the defective aspects of the S/C to which I have been referring. The Applicants will do themselves no service in relation to the causes of action conceivably open to them, by producing a pleading of their claims otherwise than entirely by means of the skill of a qualified practitioner. Moreover Hamod should seek advice as to whether, and if so on what basis, Investments for its part can remain at all as an Applicant in the proceedings. At the present time, no viable basis is pleaded to establish that legal duties were owed by either the State or UBS to Investments. The fact that directors of Investments were arrested etc would normally be a matter for complaint at law by such persons individually, and in any event, they were all released from custody on the same day as their arrest and therefore did not undergo the restrictions on personal liberty sustained by Hamod. As to any trading opportunities lost to Investments by reason of Hamod's incarceration, I repeat that during that period, Hamod was apparently only a minority shareholder, and Hamod had a relatively large board of directors apparently comprising Hamod's business colleagues. Consequently the S/C fails to explain adequately why it was that Investments lost the opportunity of brining off the large transactions referred to in para 8.6.4 of the S/C. In summary, before re-pleading takes place, very careful thought and expertise needs to be given by Hamod's legal advisors to the viability in law of each one of the Applicants' present plethora of causes of action and claims for damages before the Applicants embark upon what might well be a futile and costly course of maintaining Investments as an Applicant in the proceedings. Notwithstanding the general observations already made, having the consequence of requiring the pleading of the S/C to be commenced afresh, I will now address the specific grounds advanced by the State and UBS respectively for strike-out of the S/C, as it is of critical importance that the Applicants address the same if the Applicants are going to proceed with their present claims, as well as address the general observations I have already made, when the Applicants take up the task of re-pleading the S/C in a viable and effective way.
The State's Submissions
Causes of action said to arise under ss 45D, 45DB and 52 of the Trade Practices Act 1974 (Cth) ("the Act")
41 I agree that no causes of action arise against the State under the above sections of the Trade Practices Act, for the following reasons:
(i) Prior to the enactment of s 2B of the Act, which took effect on and from 21 July 1996, the Act had no application upon its true interpretation to the activities of the State when undertaken solely for traditional government purposes, and in any event the State was not a "person" for the purposes of s 22(1)(a) of the Acts Interpretation Act 1901 (Cth): Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at 349. Such traditional government purposes would clearly enough include conduct in the nature of police and corrective services, and the prosecution of alleged offenders.
(ii) The provisions of s 2B of the Act binding the States on and from 21 July 1996 to compliance with Part IV of the Act (which contains the abovementioned ss 45D and 45DB, though not s 52 which is located within Part V), operates only in "so far as the Crown carries on a business..."; the conduct of police and corrective services cannot be characterised as carrying on a business. Thus in Corrections Corporation of Australia Pty Ltd v Commonwealth of Australia [2000] FCA 1280, Finkelstein J said at [14] that "It seems to me to be clear beyond argument that operation of a detention centre is not a trading or commercial activity of the executive branch".
(iii) In any event as to the s 52 cause of action, there was no engagement by the State in trade or commerce, as one of the ingredients of the Section stipulates.
The State also relies upon the time limitation submissions of Australian UBS, which I have addressed in [51] below.
Cause of action for breach of s 42 of the Fair Trading Act 1987 (NSW)
42 In para. 6.3.8 of the S/C, there is comprised the twin allegations of contravention of s 52 of the Trade Practices Act (Cth) and of s 42 of the Fair Trading Act 1987 (NSW), by way of the Police recruiting Wall to engage in deceptive conduct in trade or commerce, or in conduct likely to mislead or deceive. I have already addressed in [41] the State's submission concerning unavailability to the Applicants for relief against the State upon the basis of s 52 of the Commonwealth legislation. The same conclusion must follow in relation to s 42 of the Fair Trading Act, because of the provisions of s 3(1) of the State legislation, which also impose the element of carrying on a business in the following terms:
"This Act binds the Crown in right of the State in so far as the Crown in right of the State carries on business, whether directly or by an authority of the State."
The State also points out that for the purposes of the causes of action for misleading and deceptive conduct, although para 6.3.12 pleads reliance by the Applicants upon the representations of the State, such representations have not been identified by reference to any paragraphs or sub-paragraphs of the S/C, or at all.
Cause of action for conspiracy
43 After the pleading of 388 paragraphs of paragraph 6, the S/C pleads a purported cause of action in conspiracy in the following bare terms:
"6.2 The Respondents conspired to act and acted in concert in certain negotiations with the Applicants in relation to the certificate."
The State submits that the same "is not an adequate pleading of the tort of conspiracy, if that is what is sought to be alleged". Certainly the S/C does not assign in terms to particular facts and circumstances otherwise pleaded any tortious conduct in the nature of conspiracy. Any re-pleading of the cause of action in conspiracy would do well to take account of what appears in J.G. Fleming's The Law of Torts, supra at 771-7, and F.A. Trindade and P. Cane's The Law of Torts in Australia, supra at 227-334. As I would understand the purpose of the S/C to be in this regard, the Applicants are asserting a conspiracy between the two Respondents to do an unlawful act, or to use unlawful means to attain their object, and in either case to cause injury to the Applicants' respective financial and/or proprietary interests, and in addition to the Applicants' capacity to carry on their respective business activities. However there is an absence of pleading by way of identification of material facts establishing either of those two fundamental elements.
Cause of action for false imprisonment
44 The State next refers to the purported incorporation, within the framework of the cause of action for false imprisonment contained in para 6.3.15, a further cause of action for false and misleading representations reading as follows:
"6.3.15 Further, or in the alternative one or more of aforesaid police officers relied on the false and misleading representations of [Australian UBS] and unlawfully arrested [Hamod] and the directors of [Hamock] and falsely imprisoned [Hamod] on allegations of the charges that were without substance or foundation and which [the State] knew that the allegations were not true."
The State contends that such pleading framework is bad for duplicity of causes of action, and such contention is plainly correct. Moreover the purported plea of this cause of action of false imprisonment is inadequately framed. It should be entirely self-contained with all necessary elements pleaded: see J.G. Fleming, The Law of Torts, supra at pages 33-37, where the author incidentally distinguishes the cause of action for false imprisonment from that of malicious prosecution, and F.A. Trindade and P. Cane, The Law of Torts in Australia, supra at 50-62. The inclusion of reference to "false arrest" would better be placed within the framework of the cause of action for trespass (to the person).
45 Concerning para 7 of the S/C, the State makes the discrete submission that the same cannot stand for the following reasons in relation to the alleged causes of action identifiable therein:
(i) The paragraph appears to roll-up averments of causes of action for false imprisonment, trespass to persons premises and goods, malicious prosecution, and breaches of duty of care or of inchoate duties generally, without distilling the critical elements of each as separate causes of action, and without identifying the facts and circumstances needed to be asserted to reflect the critical elements of each of such causes of actions. I observe that F.A. Trindade and P. Cane, The Law of Torts in Australia, supra at 87 make the following observation concerning malicious prosecution, which needs to be taken into account in the re-pleading of causes of action which must be undertaken:
"Malice covers not only spite or ill-will, but also any motive other than a desire to bring a criminal to justice. If the plaintiff in attempting to prove malice is basing the case on evidence that the defendant was influenced by some other motive than by bringing the plaintiff to justice, then the plaintiff must show that that other motive was an improper motive if the plaintiff is to succeed in proving malice."
(ii) As to false imprisonment, it may be borne in mind that although the same is a species of trespass, it need not involve the use of actual force or direct physical contact: J.A. Fleming, The Law of Torts, supra at 34).
(iii) Moreover in the case of damages flowing from or claimed by such differing causes of action, there needs to be distinguished in the S/C what particular heads of loss are intended to be assigned to whichever one or more of such causes of actions.
(iv) As to breaches of duties of care specifically, there needs to be pleaded the reasons why the same should be imputed to the State and by reference to what specific facts and circumstances, as well as a description of each of the circumstances or kind of circumstances breached.
Damages for causes of action arising under Trade Practices Act and Fair Trading Act
46 Irrespective of the submissions made in [41] above, the State contends for the three year time barring of the damages claims made by the Applicants pursuant to s 82 of the Trade Practices Act 1974 (Cth), and presumably pursuant also to s 68 of the Fair Trading Act 1987 (NSW), and the State refers in particular to Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 at 246 and Blacker v National Australia Bank Ltd [2000] FCA 681 at [191-196]. To those authorities I would add reference to Karedis v Antoniou (1985) 59 FCR 35, where there is further illustration of the circumstances where causes of action for economic loss under statutory limitations crystallise in certain commercial contexts. In short, these authorities establish that no loss is sustained for time limitation restrictions, unless and until the existence of some relevant loss is ascertained, or has become reasonably ascertainable by the applicant for relief. Since I have ruled in [41] above against the viability of the causes of action against the State pursuant to the Trade Practices and Fair Trading statutory provisions already discussed, these issues of time limitation no longer arise, but if that were not the case, it would seem to be difficult indeed for the Applicants to make good the proposition that the damages claimed for contravention of these provisions of the Trade Practices Act and the Fair Trading Act were not barred by the time of institution of the subject proceedings on 19 June 2000 [3]. That is because the occurrence of loss and damage to both Applicants as claimed by each of them would clearly have been ascertained and known prior to that time, that is to say, from about the time of Hamod's arrest in January 1995
UBS Submissions
The threshold submission of UBS
47 UBS seeks the strike-out of the S/C generally, so far as concerns UBS as Second Respondent, pursuant to Order 11 Rule 16, upon the basis that the S/C is a prolix document consisting of 1533 paragraphs or sub-paragraphs, and further that it fails to plead the integers of suggested causes of action, fails to plead material facts, pleads a host of immaterial facts and also pleads matters evidence, and further that it is not possible to identify any "blue lining" which could save the document from entire strike-out. As I have already recorded [4], that submission concerning the prolixity of the S/C is sound, but in the particular circumstances of the proceedings at their present stage, (the relevant Application of the Respondents now before me constituting their initial strike-out application), and having regard to the gravity of the matters alleged against Australian UBS, the same having been verified by an affidavit of Hamod, I do not accede to the UBS application for refusal of leave to replead. I observe that the Butterworths Practice Note 40, 180.1 contains the following:
"Leave to amend, however, may not be given if what may be described as the basic refining process of amendment and further amendment has already gone on long enough: Western Australia v Bond Corporation Holdings Ltd (Fed C of A, French J, WAG 115, 116 and 118 of 1990, 6 April 1992, unreported). But ordinarily when a pleading is struck out as embarrassing then, unless the court's process is being abused by a futile attempt to plead an arguable cause of action properly, it is appropriate that leave be given to re-plead, at least on the first such occasion, to formulate a fresh claim in accordance with the proper rules and practice of pleading: Allstate Life Insurance Co v Australia New Zealand Banking Group Ltd (Fed C of A, Beaumont J, G523 of 1991, 13 September 1994, unreported). Leave to amend was allowed in Coshott v Kam Tou Mak (Fed C of A, Wilcox J, NG779 of 1997, 3 March 1998, unreported) even though `heroic surgery' was required because the statement of claim needed to be totally rewritten: although the applicants had stubbornly maintained an untenable pleading, it was not a case of repeated failure diligently to prosecute the case. Adopting a broad approach, leave should be given to replead a statement of claim if such statement of claim does raise a substantial case which is certainly not one the court is satisfied will not succeed: Scott v Beneficial Finance Corporation (Fed C of A Burchett J, NG699 of 1993, 14 December 1995 unreported)."
As already indicated, there has not taken place the hearing of any prior strike-out application on the part of UBS (or the State for that matter), and Hamod has signified his willingness to retain legal assistance to recast the whole of the S/C. Moreover I am not presently persuaded that the proceedings brought against Australian UBS, however much inadequately framed at present, are frivolous or vexatious, or an abuse of the court's processes, as Australian UBS has submitted in support of its additional application for dismissal pursuant to Order 20 Rule 2. Australian UBS has provided the court with what I would describe as a mere hearsay glimpse into the defensive position it would presumably take if the present proceedings are ever to reach a final hearing: I refer in that regard to a record of interview of Rene Schicker, an officer of Swiss UBS, made in Zurich Switzerland on 19 March 1996, and a statement made by Philip Stephen Ludowici, an executive director of Australian UBS, on 7 March 1995 for the New South Wales Police, both of which are attached to an affidavit of an employee of the Solicitors for Australian UBS. However there is also in evidence before me the objective facts, first that criminal charges were unsuccessfully prosecuted against Hamod, concluding as they did with the findings of the Downing Centre Local Court largely reproduced at [34] above, and secondly, that Australian UBS appears to have lent not insignificant assistance to the Police in relation to the arrest and detention of Hamod and of the Investments directors (so far as circumstances relating to Investments can be rendered relevant), and subsequently to the Police prosecution proceedings, for reasons which remain essentially unexplained. Incidentally I have assumed that the charges (if any) laid against Investments' directors after their arrest were withdrawn, a factor which requires ultimate clarification. Moreover the Applicants would be concerned to establish the nature of the relationship relevantly between Nicholas Wall and Australian or even Swiss UBS. Whilst the S/C presently fails to plead any relevant relationship or connection between Wall and UBS, that there did exist a relationship of some kind in presently unexplained contexts is apparent from the Magistrate's judgment, and I ask myself why Wall and Australian UBS apparently formed a mutual relationship when it was apparently Hamod who introduced them in the first place in the context of Wall's retainer by Hamod (as to which see [11] above). Doubtless the answer to that question will later emerge.
48 In addition to the threshold observations above made in relation to the UBS submissions, I should make specific observations and record further findings concerning the Australian UBS submissions, which, as in the case of the State's submissions, were framed with considerable care and skill.
49 Thus Australian UBS next has submitted that the amended application, as distinct from the S/C, is so ambiguously framed in terms of the order sought in paragraph 18 thereof as to confine the claims of the Applicants for damages as against Australian UBS to breaches of the Trade Practices Act. Obviously such confinement would not have been the Applicants' intention, and the order presently sought in para 18 of the amended application needs correction. To the extent that leave is required for such purpose, I would grant such leave. I should take the opportunity to add that the amended application is nevertheless cluttered with purported declaratory orders sought, the terms of which demonstrate a fundamental misunderstanding of the nature and purpose of declaratory relief, namely to obtain binding court rulings as to the rights or obligations of a party, particularly for instance in circumstances of uncertainty of meaning of statutes or contracts, but not, as here exemplified, as to matters of evidence which an applicant in litigation would seek to prove as steps in establishing its case for instance for quantification of damages. I do not think that any of the declarations sought in the Amended Application are otherwise than misconceived and unnecessary for the Applicants' respective cases. Moreover no pleaded causes of action exist to attract the orders sought in paras 15 and 16 of the amended application.
Causes of action said to arise under ss 45D, 45DB and 52 of the Trade Practices Act 1974 (Cth) ("the Act").
50 The complaints here made relate partly to inadequacy of framework and of clarity of expression, and partly to failure to plead material facts. Specifically as to misleading and deceptive conduct (s 52), UBS' complaints are particularised with precision, in thirteen paragraphs of UBS written submissions, and it is not necessary to expand this already lengthy judgment by incorporating the same. If sufficies to say that the person who undertakes the task of re-pleading the Applicants' causes of action must fully take into account what is set out in those thirteen paragraphs of the UBS's submissions. In summary as to the framing of any effective s 52 submission, the Applicants must specify with precision:
(i) the conduct complained of, the persons who engaged in the conduct and in what representative capacity, and when and where the same occurred;
(ii) the facts and circumstances which establish that such conduct complained of occurred in trade and commerce;
(iii) the basis for the contention that the conduct was misleading or deceptive, or was likely to mislead or deceive;
(iv) the loss and damage occasioned by such misleading or deceptive conduct.
Subject to what the Applicants may be able to re-frame in terms of (i), (ii) and (iii) above, I should observe that I am presently unable to relate the broad spectrum of damages attributed by the S/C to the consequences of misleading and deceptive behaviour to the conduct of either Respondent. Such damages seem to me to arise out of, or be initially referrable to, the traumatic events to which Hamod and Investments' directors were exposed on and immediately after 20 January 1995, and perhaps what may well be presently unknown circumstances preceding that time. If the conduct of Australian UBS (and the State for that matter) could be characterised as misleading and deceptive from some point in time prior to 20 January 1995 (ie the date of Hamod's arrest), and leaving aside the issue as to whether any such conduct occurred in trade or commerce, what truly initiated the infliction of loss or damage to Hamod and Investments, at least in the first place, were the traumatic events of arrest and gaoling of Hamod and the Investments directors on that day, and not for instance any aspect of the preparation and planning therefore on the part of the State and UBS prior to that day which was apparently dissembled from Hamod and the Investments directors.
51 Australian UBS contends that in any event, the cause of action for contravention of s 52 is barred by limitation of the time for commencement of the subject proceedings. The original Application was filed on 19 June 2000. The period of three years stipulated by s 82(2) for commencement of proceedings under the Trade Practices Act accrues when loss or damage is first suffered or becomes reasonably ascertainable (see [46] above), which is normally a question of fact to be determined in the circumstances of each case. I say "normally", because the courts have adopted the position that it is undesirable to strike out a claim on limitation of time grounds at an interlocutory stage, except in the clearest of cases: Wardley Australia v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 533. The circumstances here involved are however sufficiently clear as to when the loss or damage was first suffered or became reasonably ascertainable, in relation to each of the statutory causes of action, namely the time of occurrence of the circumstances involving the arrest of Hamod and of Investments' directors, and Hamod's immediate imprisonment. I agree with the submission of UBS that the decision of this court in Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 95 FCR 453 (see especially 475-6) needs to be read in the context of personal injury occurring prior to the discovery of the injury, or the hypothetical discovery thereof if reasonable steps had been taken (see in that regard the adoption by the Full Court in Jobbins v Capel Court Ltd (1989) 25 FCR 225 at 229 of Cartledge v E. Jopling & Sons [1963] AC 758). I should note, however, that Jobbins appears to no longer be considered good law: see MGICA v Kenny & Good Pty Ltd (1996) 140 ALR 313 at 377 per Lindgren J and Wood v Wood (1997) 149 ALR 301 at 306 per Tamberlin J. The decision of The House of Lords has also been criticised by Wilcox J in Nixon v Phillip Morris, supra at 475-6.
52 Specifically as to s 45D in any event, Australian UBS rightly points out that paras 7.6, 7.7 and 7.8 of the S/C pleaded contraventions on the basis of the current section, and not the prior wording which applied until 1 January 1997, when Act No. 60 of 1996 took effect, and a similar submission is made by UBS in relation to s 45DB, which did not take effect prior to 1 January 1997. Also as to s 45D, there can be no contravention on UBS's part, because the State cannot be a second (etc) "person" for the purposes of that section (see [41(i)] above). Moreover para 7.9 of the S/C concerning s 45DB refers to the export of services, whereas the operation of s 45DB only deals with goods, and in any event, no material facts are pleaded as to what conduct of Australian UBS constituted "hindering", "preventing etc". Moreover sub-paragraphs 7.9.1 to 7.9.7 deal only with "effect", and not conduct.
53 Finally and speaking generally as to the Trade Practices Act causes of action which have been propounded, it seems to me that such causes of action in the circumstances postulated by the S/C would be unlikely to qualify in terms of viability in any event, having regard to the nature of the events which happened in January 1995. Whilst I propose to grant leave to the Applicants to replead in relation to the causes of action generally outlined already against each Respondent, it is highly likely that the Applicants will encounter further strike-out applications in relation to any Trade Practice and Fair Trading statutory causes of action which might be reframed afresh, at least on time limitation grounds. The Applicants and their legal advisors should think very carefully before re-launching statutory causes of action of such kinds, particularly in the light of the findings made in relation to such statutory causes of action as presently framed. The characterisation of the grievances of the Applicants seem to me to be at best those relating to conduct by way of conspiracy, malicious prosecution, false imprisonment of Hamod (and so far as can be rendered relevant and applicable, if at all, to Investments' directors as well, bearing in mind that not those directors but only Hamod are suing), and trespass to person and property, rather than conduct in trade or commerce (in the statutory sense), or in the nature of or similar in character to secondary boycotts or boycotts effecting trade or commence. The Applicants should therefore think very carefully before venturing further, in all likelihood to no avail, in the prosecution of these existing statutory causes actions, which are not in any event sustainable against the State for reasons I have already given, and thereby conceivably prejudicing the viability, and yet increase the cost of conduct, of this already complex and expensive litigation, and which in any event would probably prolong the time when the proceedings might otherwise be able to be heard.
Conspiracy
54 As to the cause of action in conspiracy, which is alleged by para 6.2 of the S/C against both Australian UBS and the State, Australian UBS contends that there is an absence of pleading of facts material to such cause of action, whether by way of identification of circumstances already identified in the S/C or otherwise. The first two lines of para 7 of the S/C fall plainly short of pleading the ingredients of the tort of conspiracy, and the next following sub-paragraphs plainly fall short of satisfaction of the obligation to plead material facts in an effective and unambiguous way. That complaint is consistent with what I have already indicated in relation to the S/C generally in [38] above, and is similar to the State complaint discussed in [43] above. Australian UBS thus points out, as has the State, that the fundamental issues as to identification of an unlawful object, or of a lawful object to be achieved by unlawful means, have not been addressed by the S/C. UBS also points out that the amended application presently seeks no relief against UBS in respect of the tort of conspiracy. I would add however that the first two lines of para 7 of the S/C appear to refer to the tort of conspiracy by their use of the expression "acting in concert". The so-called details of this conduct exemplify further the prolixity and the pleading of immaterial facts which characterise the S/C, and of which I have earlier spoken generally.
False imprisonment, trespass to goods and negligence
55 Para 7.2 deals with the arrest and imprisonment of Hamod and the Investments directors, and is at best ambiguous in terms of attribution of such conduct to UBS, except possibly para 7.2.172 which suffers from the pleading shortcomings of the S/C generally, such as the pleading of immaterial facts rather than facts material to the intended cause of action, pleading of evidence by which any material facts would be supposedly established, and pleading of ambiguous matters generally. Para 7.3 relates to seizure of documents and property, presumably thereby constituting the tort of trespass to goods, but makes no explicit reference to UBS, much less in any satisfactory way according to principles of pleading. The same observation is made by UBS in relation to the averment of malicious prosecution by para 7.4, and of negligence or breach of the duty of care by para 7.5.
Damages including exemplary damages
56 As I have already pointed out, the S/C is characterised by damages claims against the State and UBS, which mainly comprise massive assertions of economic loss by reason of loss of opportunity. I have also referred to the problems confronting the Applicants in terms of damages said to have flowed from the alleged contravention of provisions of the Trade Practices Act (and Fair Trading Act), and I have further referred to the absence of pleading material facts giving rise to the damages allegedly flowing from the various tortious acts or omissions complained of. The S/C implicitly assumes that all of the many and complex species of loss and damage flow from each of the statutory contraventions as well as from each of the common law causes of actions, without giving discrete consideration as to whether such aggregation of all heads of damages to each and every cause of action can be justified in law. I have also earlier highlighted that the claims for damages for the most part involve substantial claims based on alleged loss of opportunities of the Applicants or either of them to undertake or complete trading transactions or opportunities, and I have drawn attention to the real possibility that the same might not satisfy the tests enunciated in Sellars v Adelaide Petroleum NL, supra at [35] above. It may well be that serious consideration should be given by Hamod to confinement of claims referrable to transactions or proposed transactions referrable and confined to Hamod's percentage shareholding in Investments as it was quantified at the material times, and to the omission of Investments as an Applicant altogether by reason of the juridical difficulties of attributing causes of action to Investments as distinct from Hamod. In all events as to the issues of damages, the Applicants should pay close regard to what appears in paragraphs 26 to 31 of the written submissions of UBS, each of which has substance (though I have already addressed earlier in this judgment paragraph 29 relating to damages purportedly sustained within s 82 of the Trade Practices Act). I would add that I agree with the UBS submission that there is an absence of pleading in the S/C of material facts which may be said to support the claims made for exemplary damages.
Common Representation
57 The Respondents each seek a stay of the proceedings until there is in place common representation for the Applicants. The representative situation presently before me is as described in [2] above. I agree with UBS that Gyles J of this court left open final decision-making on the issue (Hamod v New South Wales [2000] FCA 1100 para 13). The usual practice of the courts is to stay proceedings brought by two or more applicants until they have common representation: Lewis v Daily Telegraph Ltd (No. 2) [1964] 2 QB 601 at 619, 622 and 624; Goold & Portes Pty Ltd v Housing Commission [1974] VR 102; SCI Operations Pty Ltd v Australian Paper Manufacturers Ltd (1983) 51 ALR 365; Carnie v Esanda Finance Corporation Ltd (1996) 38 NSWLR 465 at 470. It is a rule which can only be waived in the most extreme circumstances, such as the existence of independent statutory responsibilities of applicants/plaintiffs.
58 Mr Hamod has explained that he seeks to represent himself because of difficulties encountered by him in the context of the Police prosecution. That reason is however plainly insufficient. In any event, Ms Keys of Counsel has been briefed on behalf of Investments in the present Applicants before me, and it is plainly in Mr Hamod's best interests for Counsel to represent both parties. I suspect that there may be financial difficulties confronting Mr Hamod in relation to ongoing representation, but he has not put on any evidence as yet as to his personal means or resources to fund the present litigation. It may well be that the issue of representation will evaporate if Mr Hamod comes to the conclusion, whether in the light of some preliminary observations I have made as to Investments' difficulties and prospects in the proceedings, or otherwise, that Investments should be discarded as an applicant from the proceedings because of legally conceptual difficulties in sustaining the causes of action propounded by it. Moreover there remains outstanding the application of the Respondents for an order for security for costs in relation to Investments alone, which will doubtless be pursued if Investments continues as an Applicant in the proceedings.
59 I have reached the decision in principle that an order as to common representation of the Applicants should be made, but in the light of the circumstance that the issue might become academic, I will refrain from making the order until Mr Hamod and Ms Keys have had the opportunity of considering the reasons for judgment on all of the issues which I have addressed.
Security for costs
60 An application has been made by UBS for an order for Investments to provide security for costs in the form of a bank guarantee for a very substantial sum, and for liberty to be granted to UBS to apply to the court to increase the same in the future. In principle, there is no justifiable basis for denying this application in principle, but I propose deferring decision-making on the subject until the next occasion when the proceedings come before the court, in case the issue may become academic by reason of Hamod coming to the conclusion that in all the circumstances, the most prudent course open to him is to proceed as the sole Applicant.
Costs
61 In terms of general principle, the Respondents are entitled to the costs of their respective Applications to strike-out the S/C, since such Applications have been substantially successful (Waters v P.C. Henderson (Aust) Pty Ltd (NSWCA, 6 July 1994, unreported, per Mahoney JA)). My reservation is that although it is said that these Applications were foreshadowed to the Applicants before being brought, there has not been tendered in evidence any correspondence setting out the nature and extent of the Respondents' complaints as to the pleading of the S/C. I will stand over judgment as to the costs of the Applications, pending delivery by the Applicants to my Chambers of all such correspondence. Whatever is provided to me should be of course copied to the Applicants.
Leave to Replead
62 I have referred in [1] above to the circumstance that the State does not oppose, but UBS does oppose, the grant of leave to replead. Alternatively, UBS submits that any grant of leave to replead should be made on the following terms:
"That if any relevant period of limitation unexpired at either 19 June 2000 (the date of filing the original application and statement of claim) or 30 October 2000 (the date of filing the amended statement of claim) has expired prior to the date of filing a further amended statement of claim, any new claim for relief or foundation in law for a claim for relief not arising out of the same facts or substantially the same facts as those pleaded in either:(a) the statement of claim to support claims for relief made in the application, or
(b) the amended statement of claim to support claims for relief made in the application,
takes effect only from the date of filing of the further amended statement of claim, to the end that the respondents may rely on defences that may arise as a result of the expiration of any relevant limitation period as if the proceedings in relation to those new matters had commenced on the date of filing of the further amended statement of claim."
It seems tome that this is a fair submission, since it does not seek to restrict the Applicants from amending even their existing statutory causes of action which I have found to be unsatisfactory. Nevertheless since I do not propose to make any ancillary orders until a further amended statement of claim has been produced, and if necessary debated, I should say no more on the subject for the time being. I should add that in the course of my judgment on the strike-out application itself, I have taken the opportunity to suggest ways and means in which Mr Hamod might consider truncating the numerous and complex claims the subject of the proceedings, and I think that in the interests ultimately of all parties concerned, he should be allowed adequate time to give full consideration to my reasons for judgment, otherwise than under a pressure of concern as to time conceivably running hereafter against him to his prejudice. That is not to say of course that Mr Hamod should not take full account of the reasons I have indicated as to why it is inherently likely that causes of action under the Trade Practices Act and Fair Trading Act are open to him, unless there exists some collateral circumstances which have not thus far been agitated in the S/C.
Conclusion
63 I am of the view that the Amended Statement of Claim of 27 October 2000 should be struck out, and that leave to re-plead by way of fresh statement of claim, and in addition to further amend the Amended Application, should be granted. I will direct that such further amended statement of claim be filed and served within forty-two days. I grant liberty to apply on three business days' notice for any additional period of extension, any such application to be supported by evidence on affidavit. I stand over the Second Respondent's application for security for costs, and the Respondents' applications for orders as to costs of the Application presently before me until a date to be fixed after the filing and service of any further amended statement of claim. In the event that Investments is to be retained as an Applicant in the proceedings, I will entertain an application for leave for Investments to be deemed to have commenced and carried on the proceedings otherwise than by a solicitor until M.R. Barber & Associates undertook that role shortly prior to 29 November 2000: see Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [1999] FCA 536; (1999) 92 FCR 451. In the event that no causes of action under the auspices of federal legislation are pursued by any such further amended statement of claim, I will entertain the application of any party to transfer or cross-vest the proceedings to the Supreme Court of New South Wales (as to which see Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219).
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. |
Associate:
Dated: 28 February 2001
Counsel for the First Applicant: |
In person |
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Counsel for the Second Applicant: |
Ms J Keys |
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Solicitor for the Second Applicant: |
Mr Barber & Associates |
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Counsel for the First Respondent: |
Mr R.P.L. Lancaster |
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Solicitor for the First Respondent: |
I.V. Knight - Crown Solicitor |
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Counsel for the Second Respondent: |
Mr M.R. Speakman |
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Solicitor for the Second Respondent: |
Allen Allen & Hemsley |
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Date of Hearing: |
30 November 2000 |
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Date of Judgment: |
28 February 2001 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2001/157.html