Lashansky v Bruvecchis Pty Ltd [2005] FCAFC 64 (26 April 2005)

Last Updated: 27 April 2005

FEDERAL COURT OF AUSTRALIA

Lashansky v Bruvecchis Pty Ltd [2005] FCAFC 64

PRACTICE AND PROCEDURE – appeal – incompetent appeal – leave to appeal – whether orders striking out statement of claim interlocutory – whether orders dismissing claim for failing to disclose a reasonable cause of action interlocutory – factors relevant to granting leave to appeal – reasons at first instance not attended with sufficient doubt – no injustice to appellant in refusing leave – appeal dismissed.


Federal Court of Australia Act 1976 (Cth), s 24(1A)
Trade Practices Act 1974 (Cth), ss 52, 82, 87


Federal Court Rules, O 52 r 22, O 20 r 2, O 52 r 18


Hunt v Allied Bakeries Ltd [1956] 3 All ER 513 cited
Tampion v Anderson (1974) 48 ALJR 11 cited
Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 cited
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564 applied
In the matter of an appeal by Gaye Alexandra Mary Luck [2003] HCA 70 followed
Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 applied
Niemann v Electronic Industries Ltd [1978] VR 431 applied











ROBERT JAMES LASHANSKY v BRUVECCHIS PTY LTD (ACN 054 177 427) AND JOSEPH BRUNI

WAD 169 of 2004




MADGWICK, LANDER AND CRENNAN JJ
26 APRIL 2005
MELBOURNE (HEARD IN PERTH)

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD169 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ROBERT JAMES LASHANSKY APPELLANT
AND:	BRUVECCHIS PTY LTD (ACN 054 177 427) FIRST RESPONDENT JOSEPH BRUNI SECOND RESPONDENT
JUDGES:	MADGWICK, LANDER AND CRENNAN JJ
DATE OF ORDER:	26 APRIL 2005
WHERE MADE:	MELBOURNE (HEARD IN PERTH)

THE COURT ORDERS THAT:

1. Leave to appeal from the orders made by French J on 29 June 2004 be refused.
2. The appellant to pay the respondents’ costs of the application for leave to appeal and the purported appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD169 OF 2004

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	ROBERT JAMES LASHANSKY APPELLANT
AND:	BRUVECCHIS PTY LTD (ACN 054 177 427) FIRST RESPONDENT JOSEPH BRUNI SECOND RESPONDENT

JUDGES:	MADGWICK, LANDER AND CRENNAN JJ
DATE:	26 APRIL 2005
PLACE:	MELBOURNE (HEARD IN PERTH)

REASONS FOR JUDGMENT

THE COURT:

1 On 29 June 2004 in these proceedings French J made the following orders:

‘1. The statement of claim be struck out.

2. The application be dismissed.

3. The applicant pay the respondents’ costs of the application.’

2 On 20 July 2004 the appellant purported to file a notice of appeal seeking orders setting aside the orders made by French J or, alternatively, that the appellant be granted leave to amend the application and statement of claim upon such terms as the Court might impose, and that the matter be remitted to a single judge for a further directions hearing. A consequential order for costs was also sought in that notice of appeal. For consistency and ease of reference, we shall continue to refer to Mr Lashanksy as the appellant. The ‘alternative’ order sought could not be made unless the first order was made. The second order sought is not, as is claimed, an alternative to the first order. It is consequential upon the first order. This matter should therefore be approached upon the basis that the appellant seeks to set aside all orders made by French J.

3 Pursuant to O 52 r 22(3), the respondents filed a notice of contention contending that the ‘judgment’ of French J should be affirmed on the further ground that the appellant’s claim is statute barred.

4 The appellant commenced these proceedings on 21 April 2004 by filing an application and statement of claim seeking relief pursuant to s 82 and s 87 of the Trade Practices Act 1974 (Cth) (the Act).

5 On 26 May 2004 the respondents filed a notice of motion seeking orders that the statement of claim be struck out and the action be dismissed under O 20 r 2 of the Federal Court Rules on the grounds that:

‘1.1 no reasonable cause of action is disclosed;

1.2 the proceeding is frivolous and vexatious;

1.3 the proceeding is an abuse of the process of the Court.’

6 We need not at this stage refer to the statement of claim in detail except to observe that the conduct complained of, which is said to have given rise to ‘the cause of action’ pleaded, occurred between early 1997 and June 1999. It is not clear when the damage is alleged to have occurred.

7 The respondents’ application was clearly interlocutory but, more importantly, the orders made by French J were interlocutory.

8 In Hunt v Allied Bakeries Ltd [1956] 3 All ER 513 at 514, Lord Evershed MR said:

‘After consulting with the Chief Registrar and looking at the cases, and also after consultation with my colleagues, I am left in no doubt at all that, rightly or wrongly, orders dismissing actions -- either because they are frivolous and vexatious, or on the ground of disclosure of no reasonable cause of action -- have for a very long time been treated as interlocutory.’

9 The Judicial Committee of the Privy Council approved Lord Evershed’s dicta in Tampion v Anderson (1974) 48 ALJR 11, a case where the applicant was seeking leave to appeal from a decision of the Supreme Court of Victoria staying an action on the ground that the action was frivolous, vexatious and an abuse of process.

10 After referring to the difficulty of defining ‘final’ and ‘interlocutory’ orders, Lord Kilbrandon, speaking for the Board, said at 12:

‘As far as the present problem is concerned, namely, whether an order staying an action on the ground that it is frivolous, vexatious, and an abuse of process, the cases, and accordingly the practice book, leave no room for doubt. There is a consistent line of authority to the effect that such an order is an interlocutory judgment. It is not necessary to go further back than In re Page (supra), in which Cozens-Hardy M.R. stated that at that date it was the established practice to treat an appeal against a "frivolous and vexatious" order as interlocutory, and cited, additionally, the decision of Chitty J. in Price v Phillips (1894), 11 T.L.R. 86, as having been given to the same effect. The matter is really put beyond doubt by the case of Hunt v. Allied Bakeries Ltd., [1956] 1 W.L.R. 1326, in the Court of Appeal, which, by s. 68(2) of the Judicature Act, 1925, is declared to be the final authority in England in this matter. In that case Lord Evershed M.R. said at p. 1328, "After consulting with the Chief Registrar and looking at the case(s), and also after consultation with my colleagues, I am left in no doubt at all that, rightly or wrongly, orders dismissing actions--either because they are frivolous and vexatious, or on the ground of disclosure of no reasonable cause of action--have for a very long time been treated as interlocutory." In Salter Rex & Co. v. Ghosh (supra) Lord Denning M.R. at p. 601 said of such orders, "Every such order is regarded as interlocutory", and quoted Hunt v. Allied Bakeries Ltd. (supra).

Before leaving the English cases, their Lordships will notice an argument to the effect that the reason for the classification of such orders as interlocutory was primarily to cut down what used to be an inconveniently long time during which a final judgment was appealable, and cessante ratione legis, cessat lex ipsa. The reason, however, may still have power in the case of appeals from overseas to the Privy Council, where geography itself may impose serious delay, the effects of which it is in the public interest to minimize.’

11 The Privy Council then turned its attention to the Australian authorities and noted that none dealt specifically with orders staying proceedings on the grounds that the action was frivolous, vexatious or an abuse of process. It concluded, however, that the English authorities ‘have been accepted as correctly representing the law of Victoria’.

12 In Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 at 440, Taylor J referred to the English authorities which decided that striking out a plaintiff’s statement of claim was interlocutory, apparently with approval.

13 In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564 at [43], the Full Court of the Federal Court was concerned with appeals from orders of a single judge striking out paragraphs of a statement of claim but giving leave to file a further statement of claim and orders made later giving leave to file an amended statement of claim.

14 French J (with whom Beaumont and Finkelstein JJ agreed) discussed the Australian authorities which deal with the distinction between final and interlocutory orders (Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 and Hall v Nominal Defendant) and where leave to appeal might be more readily granted from an interlocutory order, and said:

‘If a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory. However leave will usually be granted in such a case if there is any doubt about the decision at first instance -- Little v Victoria [1998] 4 VR 596 at 598-600 and 601 (Callaway JA, Buchanan JA agreeing).’

15 In the matter of an appeal by Gaye Alexandra Mary Luck [2003] HCA 70, three Justices of the High Court (McHugh ACJ, Gummow and Heydon JJ) considered a purported appeal by Ms Luck from an order made by Gleeson CJ refusing Ms Luck leave to issue a writ of summons and statement of claim that had been the subject of a direction made by Callinan J pursuant to O 58 r 4(3) of the High Court Rules. The question arose whether Gleeson CJ’s order was final or interlocutory. The Court concluded that it was an interlocutory order. In doing so, the Court referred with approval to the dicta of Lord Evershed MR in Hunt v Allied Bakeries Ltd and the decision of the Judicial Committee of the Privy Council in Tampion v Anderson which the Court said were consistent with Australian authority. The Court said at [9]:

‘Given the long established English rule, the decision in Tampion and our decisions in Pye, Hall, Carr and Bienstein, we see no valid reason for departing from the rule laid down in Tampion. An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action.’

16 The authorities in the highest courts in both Australia and England are to the same effect - an order dismissing an action because it does not disclose a reasonable cause of action is interlocutory.

17 The orders made by French J on 29 June 2004 were interlocutory and, in those circumstances, no appeal lies except by way of leave: s 24(1A) Federal Court of Australia Act 1976 (Cth).

18 The appellant did not seek leave to appeal either from French J or from this Court.

19 In our opinion, the appeal is incompetent.

20 No objection was taken by the respondents to the competency of the appeal. Indeed, on the hearing of the appeal the respondents invited the Court to treat the notice of appeal as an application for leave to appeal but to dismiss the application upon the ground that there were no prospects that any appeal could ever succeed. In our opinion, the failure of the respondent to object to the competency of the appeal is only a matter relevant to costs and not to whether this Court should proceed to hear an incompetent appeal: O 52 r 18(3).

21 However, in view of the respondents’ concession the Court treated the notice of appeal as an application for leave to appeal and conducted the hearing on the basis that if leave were given it would also hear the appeal. Orders were made to that effect.

22 The matters to be considered on an application for leave to appeal were referred to in Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397, a decision of the Full Court of this Court which followed a decision of the Full Court of the Supreme Court of Victoria in Niemann v Electronic Industries Ltd [1978] VR 431 as ‘an appropriate litmus test for the general run of cases in which leave to appeal from an interlocutory decision is sought’: (at 399). The considerations identified by the Full Courts were whether:

(1) in all the circumstances the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and
(2) substantial injustice would result if leave were refused supposing the decision to be wrong.

23 We agree with French J that the statement of claim (the first statement of claim) which was before him did not disclose a cause of action.

24 The appellant’s claim is for damages for misleading and deceptive conduct pursuant to s 52 of the Act.

25 The appellant was, at the relevant time, admitted to practise as a solicitor in the State of Western Australia. However, at the time French J made those orders the appellant had been suspended from practice.

26 In the first statement of claim the appellant pleaded that in early 1997 the first respondent, through the second respondent, retained him to advise them in relation to a dispute in which they were involved with Lyrical Holdings Pty Ltd, the landlord of the Colonnade Shopping Centre and Realmark Pty Ltd, the managing agent of that shopping centre.

27 He pleaded that he investigated the dispute and concluded that the first respondent and several other tenants had valid claims against Lyrical Holdings Pty Ltd and Realmark Pty Ltd under the Act.

28 The pleading refers to meetings which the second respondent apparently attended and at which ‘decisions’ were made. It is pleaded that ‘it was eventually decided by a number of potential litigants that the litigation would proceed as a joint action in a single combined writ in the Federal Court’: paragraph 9. It is further pleaded:

‘[T]hat the Trade Practices litigation would be conducted on the basis that it would aimed [sic] at setting a strong precedent for the enforcement of tenants [sic] rights and with an emphasis on giving substance to a decision of the Federal Court in Victoria in the case of Jaldiver v Nelumbo Pty Ltd.’

29 Further, it is pleaded that it was agreed at the meetings ‘that the litigation would proceed with the interest of group, as opposed to the interests of individual tenant members of the group afforded paramountcy’: paragraph 14.

30 The persons who made the representations are not identified in the pleadings. The representations relied upon are not precisely identified. The only representation made by the second respondent that is pleaded which is identified with any particularity is contained in paragraph 15:

‘In order to give effect to the decisions arrived at the meetings referred to in paragraph 9 and 10 above that the Second Respondent together with a certain Conrad Tye who operated 2 tenancies at the Colonnade Shopping Centre namely Temptations Café and Mr Samurai Subiaco, represented to the Applicant and the other potential litigants that they would assist any tenant suffering hardship.’

31 It is pleaded in paragraph 4 that the representations made by the second respondent ‘were made by him within the scope of his actual or apparent authority as a Director of the First Respondent ...’. No particulars are given.

32 Paragraph 16 provides:

‘During December 1997, Conrad Tye was obliged to settle his two claims in the Colonnade litigation when he received offers which in all likelihood were better than he was likely to receive after a Trial in the Colonnade Matter.’

33 There is no complaint in the statement of claim that Conrad Tye thereby acted contrary to the representation which he was said to have made in paragraph 15.

34 It is pleaded that the representations were false (paragraph 17) and that neither respondent ‘assisted various tenants who were experiencing severe financial hardship’.

35 The representation relied upon is almost meaningless. The representation, neither expressly nor by implication, identifies the potential litigants who were to benefit by the representation. Nor does the representation, either expressly or by implication, identify how those tenants would be assisted and what type of hardship would give rise to a right to assistance.

36 In respect of this representation, French J said at [13]:

‘The level of that assistance was not pleaded either expressly or by implication. There is no allegation that the assistance promised would be sufficient to enable the litigation to be undertaken either by reason of that assistance or in conjunction with assistance from other sources. Absent any pleading as to a promised level of assistance, it is difficult to see what erroneous belief it could have induced in the mind of any promisee. In any event, it is pleaded only as a promise which was broken. It is well established that the making of a promise which is subsequently broken is not of itself misleading or deceptive conduct. It is necessary to assert some implied representation such as a representation of a capacity or intention to perform the promise which is shown to be false. Where it is asserted that the promise conveys an implication of reasonable grounds for making it, e.g. on the basis of capacity and/or linked with present intention, then s 51A places the onus of establishing reasonable grounds upon the promisor. There is, however, no suggestion in this case that the pleader is seeking to rely upon any implied representation that there were such grounds.’

37 The only representation relied upon is simply not actionable. It is too vague to induce any party, much less the appellant, to believe that the first respondent would give any financial assistance to the tenants. If the representation were capable of being understood to mean that the first respondent would pay the account to which we have referred and did not, that is not a matter of which the appellant can complain. He did not pay the account. He suffered no loss or damage in that regard.

38 The representation is clearly incapable of supporting any claim that the first respondent could not settle the litigation in which it was involved on terms that suited the first respondent.

39 Even if it did, in our opinion, it could not support a claim for damages on the part of the appellant.

40 The first statement of claim asserts that the second respondent did not pay an account submitted by a forensic accountant. There is no plea that discloses a representation by either respondent that either of them would pay that account. The statement of claim asserts that the second respondent refused to pay the account because of his own financial hardship. It is not pleaded that the second respondent could pay the account. Indeed, it is asserted that the second respondent told the appellant that all his available monies were on loan to another party but if the appellant could recover the monies the second respondent would loan the monies to the appellant. But, in any event, the appellant did not suffer any loss or damage by reason of the ‘failure’ of the respondents to pay this account. The account was paid by another tenant. The plea takes the appellant nowhere.

41 Next, it is pleaded that the litigation was settled because the second respondent elected to pursue settlement negotiations. It is pleaded in paragraphs 29 and 30 of the first statement of claim:

‘29. On the eve of the Trial in the Colonnade litigation which was set down to commence for 28 days during June 1999, and despite an offer from the director of Zeroz Pty Ltd, Mr Sam Novatscov, to allow an asset controlled by him, namely the Peninsula Tavern in Maylands to be used as security for the cost of the litigation and despite the Second Respondent becoming aware of the contents of document 1220 during the process of inspection of the discovered documentation of the Second Respondent in the Colonnade litigation, Realmark Pty Ltd’s discovery, which tended to prove conclusively that the Second Respondent, had been lied to during the course of the fit-out of the First Respondent’s tenancy and in the face of vehement objections of the Applicant elected to pursue settlement negotiations which eventually led to the settlement of the Colonnade litigation with conditions of extreme confidentiality attached which defeated the entire public interest purpose of the litigation.

30. Several of the Colonnade litigants were vehemently opposed to the settlement referred to in paragraph 29 above but for various logistical reasons and on the basis of the fact the tenants had previously agreed that the entire group would follow the majority decision, the Colonnade litigation was terminated.’

42 The pleas do not make sense and that would be enough reason to strike those paragraphs out. But, in any event, there is no apparent relationship between the representation pleaded in paragraph 15 and those pleas. As we noted earlier at [27] and [28], there are pleas that ‘decisions’ were made and agreements reached. However, there is no plea that the respondents represented that they would abide by the decisions or agreements whatever the circumstances. It may be that it was intended to assert that the second respondent caused the litigation to settle by withdrawing financial support but that is not clear. If that is the claim, in our opinion, it is not actionable.

43 But there is a more fundamental problem. The appellant claims that he suffered damage. He was not a tenant but the tenants’ lawyer. He pleads:

‘31. During the course of the Colonnade litigation and duly induced by the belief that he was engaged in the pursuit of litigation with a strong public interest component, the Applicant turned down several lucrative offers of work including shopping centre litigation in Victoria offered to the Applicant through the Victorian counterpart to the WA Retailers Association and the Applicant has thereby lost severable [sic] valuable alternative commercial opportunities.

32. At the instance and request of the Second Respondent, the Applicant undertook substantial additional legal work including comprehensive work involving other tenants of the Colonnade Shopping Centre, including Gregory Roberts Marketplace who were not part of the litigation that was proceeding in the Federal Court.

33. Furthermore the Applicant was induced into undertaking a far higher degree of responsibility for is [sic] clients’ welfare and including undertaking apart from the Financial Aspects a considerable amount of additional research and legal work including liaison with Parliamentarians, Members of the Press.

34. The making of the representations pleaded at paragraphs [sic] 15 and the breaching by the First Respondent and/or the Second Respondent of the agreements to pursue the Colonnade litigation with a view to setting a strong precedent for the enforcement of tenants rights as is set out in paragraph 13 above and instead electing to settle the matter on the basis of strict confidentiality constituted misleading and deceptive conduct within the meaning of that term in the Trade Practices Act 1974 (CTH) which has caused the Applicant to suffer loss and damage including the opportunity of pursuing alternative more commercially lucrative opportunities that were available to him.

PARTICULARS OF LOSS AND DAMAGE

A. Full particulars of loss and damage will be filed separately.

B. During November and December 1999 the Defendants in the Colonnade litigation elected not to pay to the Applicant’s Colonnade Clients a payment due by them pursuant to the settlement arrived at in June 1999 which necessitated the Applicant spending approximately 3 weeks in an eventually successful endeavour to obtain the payment in question.

AND THE APPLICANT CLAIMS as follows:

a) Damages under s.82 of the Trade Practices Act;
b) other orders pursuant to s87 of the Trade Practices Act;
c) costs.’

44 It is clear from these paragraphs, especially paragraph 29, that the litigation which the appellant was conducting on behalf of the second respondent and other tenants settled on the eve of trial.

45 If the appellant were entitled to rely on any representation made by the second respondent on behalf of the first respondent, which we do not accept, the appellant could have suffered no damage except, perhaps, the loss of fees which would follow from the settlement.

46 Clearly, however, that is not his case. The case pleaded in paragraph 31 is that, because of this litigation, the appellant ‘turned down several lucrative offers of work ... in Victoria’.

47 There is no relationship between the alleged conduct on the part of the respondents and any loss on the part of the appellant.

48 Undoubtedly, French J was right to strike out the first statement of claim.

49 This Court would not grant leave to appeal if it thought that there were no prospects of the appellant’s proposed appeal succeeding. The application for leave to appeal against paragraph 1 of French J’s orders made on 29 June 2004 must be dismissed.

50 However, as can be observed, his Honour went further. He also dismissed the application itself.

51 In that regard, French J said:

‘20 Mr Lashansky then said he could replead the statement of claim. But nothing in what followed that assertion to the Court indicated that Mr Lashansky had in mind any repleading that would raise a viable cause of action. He seemed to suggest that if Mr Bruni did have the financial capacity to honour his promise at the time it was made (assuming a relevant implied representation) his circumstances had changed subsequently and that by his silence in that respect he had engaged in misleading or deceptive conduct.

21 Nothing that Mr Lashanksy said could escape the fundamental difficulty that the nature of the promise attributed to Mr Bruni could not, as a matter of logic or any proper implication, involve a commitment to any particular level of financial assistance much less whatever minimum level would be necessary to sustain the litigation. In my opinion, having regard to the statement of claim and what Mr Lashansky has said about his intentions in respect of repleading, the action has no prospect of success. In my opinion, the respondents should not be exposed to the further cost and inconvenience that would inevitably arise if I were to permit Mr Lashansky to replead. I propose therefore to dismiss the application with costs.’

52 It was pointed out to the applicant, during the hearing of this application, that he had not attempted to put before the Court any proposed amended application or proposed amended statement of claim to demonstrate to this Court that French J’s exercise of discretion in refusing to allow the appellant to further amend his application or the existing statement of claim miscarried.

53 He claimed that he thought he was precluded from presenting a further amended application or further amended statement of claim by reason of an order made by Nicholson J during a directions hearing when settling the appeal books.

54 He said that he sought a direction from Nicholson J, which was opposed by the respondents’ solicitor, that he file and serve, and include in the appeal book, an amended application and an amended statement of claim. He said his application was refused.

55 Whether the applicant is right or wrong about the proceedings before Nicholson J does not now matter.

56 At the conclusion of the oral hearing this Court made further orders:

‘3. Conditionally upon compliance with paragraph 4 hereof, the applicant will be given leave to file within 14 days the proposed amended application and statement of claim upon which he would rely if the Full Court should disturb the primary judge’s refusal to permit him to plead.

4. On account of the cost of today thrown away by the applicant’s inability to indicate how he would replead his case had he been given leave to do so by the primary judge, the applicant is to lodge with the District Registrar within 14 days a bank cheque in the amount of $3,500 payable to this Court which is to be held by the Registrar pending further order of the Court.’

57 The applicant filed a proposed amended application and a proposed amended statement of claim within 14 days and otherwise complied with the orders of the Court.

58 On 2 December 2004 the Court made further orders:

‘1. The respondents file and serve any further outline of submissions in opposition to the appeal by 17 December 2004.

2. The appellant file and serve any further outline of submissions in response by 21 January 2005.

3. The respondents file any outline of submissions in reply by 4 February 2005.

4. Unless the Full Court otherwise directs after considering the further written submissions, the Full Court determine the appeal upon the written submissions and the oral submissions made on 8 November 2004.’

59 The parties filed their respective contentions although the applicant’s further outline of submissions was filed very late. However, nothing turns on that. More importantly, the applicant purported to file an affidavit of some 20 pages together with exhibits of some further 75 pages ‘in support of an extension of time to comply with directions and for leave to make further amendments to the minute of proposed substituted statement of claim and/or for leave to have the hearing of this matter relisted for oral argument’.

60 No direction or permission had been given to the applicant.

61 We propose to disregard that affidavit which is not relevant in considering whether French J erred in the exercise of his discretion to refuse to permit the applicant to file an amended application or an amended statement of claim.

62 The proposed amended application seeks the following relief:

‘1. The Appellant claims against the First and Second Respondent the matters appearing in the accompanying Statement of Claim alleging a breach or breaches of s51AA and s52 of the Trade Practices Act 1974 (CTH) further and alternatively for a breach of fiduciary duty, and further and alternatively for misrepresentation at Common Law and claims relief as follows:-

a) damages pursuant to s82 of the Trade Practices Act 1974 (CTH) ("the Act");

b) other orders pursuant to s87 of the Act;

c) equitable compensation;

d) damages at Common Law;

e) costs;

f) further and/or alternative relief.

2. The Appellant does not claim interlocutory relief.’

63 It can be seen that the claim against both respondents is for breaches of the Act, breaches of fiduciary duty and misrepresentation at common law. There is no claim in fraud.

64 The proposed amended statement of claim is a document of some 36 pages and consists of 113 paragraphs.

65 French J’s order to strike out the application could not be said to be in error if the proposed statement of claim does not disclose a reasonable cause of action or if the pleading or material parts of the pleadings would, if allowed to be filed, be liable to be struck out. We therefore turn to examine the proposed statement of claim.

66 As previously described, the appellant was, at the relevant time, a solicitor admitted to practice in Western Australia by the Supreme Court of Western Australia. The first respondent was a tenant at the Colonnades Shopping Centre between November 1995 and December 1997. The first respondent operated a bakery and café business under the name and style of ‘Il Granino’.

67 The first respondent accepted a surrender of its lease at that shopping centre in December 1997. The first respondent’s landlord was Lyrical Holdings Pty Ltd.

68 The appellant has pleaded that during September 1997 he received instructions on behalf of seven tenants (the Colonnade litigants) to institute litigation in this Court against the landlord, Lyrical Holdings Pty Ltd, and the landlord’s joint leasing agents, Realmark Pty Ltd and Chesterton International (WA) Pty Ltd, for breaches of the Act.

69 The appellant has given particulars of that retainer.

70 It is pleaded that the first respondent, through the agency of the second respondent, who is a director of the first respondent, retained the appellant with regard to a tenancy dispute with Lyrical Holdings Pty Ltd and Realmark Pty Ltd. It is pleaded that at that time the appellant was acting for another tenant of that shopping centre, Zeroz Pty Ltd, which is a company, as a later plea shows, controlled by Sam Novatscov.

71 It is pleaded that, after some months of investigation, the appellant concluded that the first respondent and several other tenants of the shopping centre had valid claims under the Act against the landlord and its leasing agents.

72 It is pleaded that meetings were held amongst prospective litigants for the purpose of proceeding under a representative class action pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth).

73 In paragraph 14 it is pleaded:

‘14. Various meetings of prospective litigants in the Trade Practices litigation were held at the offices of the Applicant’s then employer Halperin Fleming & Meertens and at the Colonnade Shopping Centre itself and in the offices of the Applicant’s newly opened practice in West Perth with a view to informing the prospective litigants of their rights and to ascertain their interests in instituting a class action lawsuit for alleged breaches of the Trade Practices Act in the Federal Court.’

74 However, it is claimed in paragraph 15 that counsel advised a representative action would not be permitted and ‘it was decided that the Trade Practices litigation would be conducted on the basis that there would be a single combined application instituted in the Federal Court’.

75 It was recognised, so it is pleaded, that if the matter had to proceed in the form of an application including all parties, several of the prospective litigants could not fund the action nor could they withstand an adverse order for costs: paragraph 16 of the statement of claim.

76 It is pleaded:

‘17. During the course of the discussions referred to in paragraph 14 above, it was proposed to the prospective Colonnade Shopping Centre litigants that the nature of the Trade Practices litigation should not be directed solely at the enforcement of individual rights but that the nature of the misrepresentations made to the tenants made what had occurred at the Colonnade an ideal illustration for litigation to be conducted on a public interest basis with emphasis being placed on:-...’

A number of particulars followed.

77 There is no assertion in paragraph 17 that any agreement was entered into, only that there was a course of discussions of the kind mentioned.

78 One of the proposed litigants was apparently a Ms Kanokwon Ratanasanobon: paragraph 18. It was pleaded that she had a case of overwhelming strength.

79 In paragraph 19 it is pleaded:

‘19. During the course of the meetings referred to in paragraph 14 above, it was agreed by the prospective Colonnade litigants that to the greatest extent possible those litigants who had the cases which had been identified as the stronger would reject in the interests of group unity and in order not to expose those parties who had weaker cases any otherwise reasonably good offer of settlement and especially any offer that might be made to Ms Kanokwon Ratanasanobon as the absence of Ms Kanokwon Ratanasanobon would substantially detract from the overall strength of the case.’

80 The appellant then pleads that it was agreed by the Colonnade litigants ‘and it was a term upon which the Applicant accepted instructions to act in the matter’ that to the greatest extent possible Colonnade litigants who had stronger cases would reject offers of settlement.

81 Next, it is pleaded, in paragraph 23 of the statement of claim, and again it is said to be a term upon which the applicant accepted instructions, that the applicant would need to engage the services of a large law firm in Western Australia.

82 It is pleaded in paragraph 24:

‘24. The Second Respondent was further well aware as a result of the meetings referred to in paragraph 14 above wherein the engagement of Jackson McDonald was discussed, that Jackson McDonald would in fact hold the Applicant and not the individual Colonnade litigants responsible for payment of their fees.’

83 Moreover, it is pleaded in paragraph 25:

‘25. The Second Respondent was further well aware as a result of the meetings referred to in paragraph 14 above wherein the logistics of the proposed Colonnade litigation was discussed that the Applicant would also be obliged to engage the services of a forensic accountant and an expert valuer who would in turn look to the Applicant rather than each individual litigant for payment of their fees.’

84 In paragraph 28 of the statement of claim it is pleaded:

‘28. Accordingly it was agreed by the tenants during the course of the meetings referred to in paragraph 14 above that the Colonnade litigation would proceed with:-

a) the interests of the group afforded paramountcy as opposed to the interests of the individuals with those litigants with stronger cases and a better financial outlook subordinating their interests to that of the Group;

b) the tenants who were in a position to afford the litigation namely Mr Conrad Tye of the Temptations Café and Mr Samurai-Subiaco, and the Second Respondent who would assist any tenant suffering hardship;

c) the litigation would be aimed at ensuring as far as possible a significant public interest benefit.’

85 It is pleaded that the appellant opened his own practice as a barrister and solicitor at the suggestion of the director of Zeroz Pty Ltd, Mr Novatscov, and a discussion occurred in which the possibility of Zeroz joining the envisaged Trade Practices litigation was reconsidered.

86 It is pleaded that a final meeting which was not attended by the appellant was held at the Peninsula Tavern, which was owned by Zeroz Pty Ltd.

87 The appellant has pleaded:

‘35. Shortly after the meeting held at the Peninsula Tavern, it was represented to the Applicant through Mr Sam Novatscov, that the outcome of the meeting was:-

a) that the Applicant would be retained by the remaining seven prospective Colonnade litigants including Zeroz Pty Ltd, as several other prospective litigants, although previously showing an interest, had elected not to proceed;

b) those litigants who had stronger cases would in so far as possible not accept any offers of settlement and expose those litigants with relatively weaker cases;

c) the financially stronger members of the group, Mr Conrad Tye and the Second Respondent would endeavour to assist the weaker members should the need arise;

d) Mr Sam Novatscov of Zeroz Pty Ltd would continue to assist the Applicant financially with the day to day running costs of his business should the Applicant become unduly financially pressed but would not assist individual litigants;

e) The litigation would be aimed as far as possible at achieving a victory for the enforcement of tenants’ rights and exposing wrongdoing;

f) The litigants would strive as far as possible to maintain a united front.’

88 It is to be observed that that representation was made by Mr Novatscov, the director of Zeroz Pty Ltd, but, apparently, out of the hearing of the second respondent.

89 However, it is pleaded in paragraph 36 of the statement of claim:

‘36. The representation as to financial assistance set out at paragraph 35c) bove as having been made by the Second Respondent and Mr Conrad Tye at the Peninsula Tavern meeting was made by them in the knowledge that it would be transmitted to the Applicant herein who would rely upon the representation being honoured.

PARTICULARS OF REPRESENTATION

A. The representation was oral and was made by Mr Conrad Tye and the Second Respondent within the scope of his authority on behalf of the First Respondent at a meeting held at the Peninsula Tavern during August 1997.’

90 It appears clear from that pleading that the allegation is that the representation complained of was made by two persons, Mr Tye who was unconnected with any of the parties to the litigation, and the second respondent.

91 In paragraph 4 of the statement of claim it is pleaded that ‘[t]he representations pleaded below as having been made by the Second Respondent were made by him within the scope of his actual or apparent authority of the First Respondent ...’.

92 However, the representation pleaded made by the second respondent was only that ‘the financially stronger members of the group, Mr Conrad Tye and the Second Respondent would endeavour to assist the weaker members should the need arise’.

93 There is a conflict between the plea in paragraph 36A, as particularised, and the plea in paragraph 35c). The representation in paragraph 35c) is that the second respondent would endeavour to assist the weaker members should the need arise, not that the first respondent would endeavour to give that assistance.

94 In those circumstances, the particular in paragraph 36A seems to be irrelevant.

95 In paragraph 36C the appellant seeks to plead an implied representation that ‘the parties’ would not undertake any actions that would render them incapable of honouring the representation until the conclusion of the litigation or that parties involvement in the litigation.

96 Paragraph 36C provides:

‘C. Insofar as the representation is as to a future matter, it contained an implied representation that it could be relied upon and that the parties making the representation would not undertake any actions that would render them incapable of honouring the representation until the conclusion of the litigation or that parties involvement in the litigation.’

97 Such a particular is inappropriate. If there were a representation of that kind, either express or implied, it should be pleaded as a representation, not as a particular of some other representation.

98 In paragraph 37 it is alleged that the appellant reduced the representation in paragraph 35c) to writing and distributed it by letter dated 28 August 1997 to all of the prospective Colonnade litigants.

99 It is asserted that Mr Conrad Tye and Mr Samurai-Subiaco maintained a facility to assist any Colonnade litigant who was beset by undue financial hardship. It is not obvious why Mr Samurai-Subiaco would have maintained such a facility having regard to the fact that he was not one of those who made the representations referred to in paragraph 35c). He is a party referred to in paragraph 28b) but not in the context of having made any representation of the kind pleaded in paragraph 35c).

100 It is pleaded that Mr Novatscov continued to assist the appellant financially, as pleaded in paragraph 35d).

101 It is pleaded that Mr Conrad Tye settled his claims but, although he tried, he was unable to settle the claims of the other litigants: paragraphs 44 and 45.

102 It is pleaded that the second respondent was thereafter left as a sole party in the litigation and ‘was thus the sole party left to provide support to indigent litigants’: paragraph 46 of the statement of claim.

103 The appellant asserts that he retained a forensic accountant who prepared a report, which the expert refused to sign, until he was paid the cost of the preparation of the report of $11,039.97. It is pleaded that the appellant sought payment of that amount from the second respondent who refused payment ‘on the grounds of alleged financial hardship’: paragraph 51 of the statement of claim.

104 It is asserted that the representation made by the second respondent that the account could not be paid because of financial hardship was false and misleading and deceptive within the meaning of s 52 or constituted unconscionable conduct within the meaning of s 51AA of the Act or, alternatively, was made fraudulently: paragraph 52 of the statement of claim.

105 In the particulars to paragraph 52 it is claimed that the second respondent and his wife had caused another company controlled by them to purchase a commercial property (the Morley commercial property) during March 1998 for the sum of $920,000.

106 It is pleaded in particulars 52B, 52C and 52D:

‘B. The purchase price of the Morley commercial property was met by Glenshore Holdings Pty Ltd only taking out a mortgage in the sum of $610,000 and a cash component of at least $310,000 was clearly at the disposal of the First and/or Second Respondent to honour the undertaking of financial support as set out in sub-paragraph 35c) above.

C. In the event of the First and/or Second Respondent being indigent as represented, (which the Applicant disputes), then the reason for the indigence is self-inflicted.

D. The First and/or Second Respondents or entities associated with them were actively engaged in re-establishing a wholesale muffin business and a new café in portions of the Morley commercial property and had more than adequate financial resources to have honoured the undertaking set out in sub-paragraph 35c) above.’

107 It seems, therefore, that the causes of action pleaded in paragraph 52 of the statement of claim, which we think are pleaded against both respondents (although that is questionable), are claims of misleading and deceptive conduct, unconscionable conduct and fraud, in the second respondent claiming on behalf of the first respondent that the first respondent was not in a position to pay for the cost of an expert’s report.

108 The first thing to observe is that the proposed amended application does not claim any cause of action in fraud, only causes of action under the Act and common law misrepresentation.

109 Next, there is no claim in contract in relation to the expert’s report. That would rather suggest that the appellant does not assert that it was part of the retainer of solicitor and client to obtain an expert’s report from a forensic accountant.

110 Further, there is no claim that the representation relied upon induced the appellant to act or not to act so as to cause the appellant loss.

111 In paragraph 53 it is pleaded:

‘In the event another litigant, Zeroz Pty Ltd, paid the account of Mr Joseph Lieberfreund in full on behalf of all of the Colonnade litigants, including the First Respondent.’

112 In any event, as the plea in paragraph 53 shows, whatever the first respondent’s conduct was, it did not give rise to any loss or damage on the part of the appellant.

113 In those circumstances, where the plea is based partly on a cause of action not raised on the proposed amended application and the conduct is not productive of any loss or damage, at least on the appellant’s part, the pleas are embarrassing and would have to be struck out even if the statement of claim were otherwise allowed to be filed.

114 Next, it is pleaded that the cost of the forensic accountant’s report was increased by the failure of the ‘First and Second respondents and his wife ... to sort through and collate their potentially discoverable documentation ... which had to be sorted by the Applicant and Mr Joseph Lieberfreund [the forensic accountant] and staff members ...’. It is also pleaded that the first respondent ‘in fact had a claim in excess of all of the other claims of the other Colonnade litigants combined’: paragraphs 54 to 56.

115 Those pleas would be struck out. They are not relevant to any cause of action.

116 Next, it is pleaded in paragraphs 57 and 58:

‘57. At the time of purchasing the Morley commercial property the Second Respondent would have been well aware that the cost of the litigation was going to far exceed the initial estimate of Counsel, Mr Neil Gentilli who had originally estimated that the litigation would last six months and cost approximately $100,000.

58. The Applicant had subsequently in his correspondence dated 28 August 1997 revised the estimate of costs for each individual litigant from a total cost of $100 000 to an estimate of at least $15,000 to $25,000 but even this estimate was clearly going to be exceeded in light of the behaviour of the defendants.’

117 The Morley commercial property, to which reference is made in paragraph 57, is the property which was apparently purchased by another company controlled by the second respondent and his wife in March 1998.

118 There are no particulars given of the second respondent’s knowledge which he is alleged to have had in paragraph 57.

119 Paragraph 58 is clearly embarrassing.

120 Next, the appellant claims a breach of fiduciary duty. The breach of fiduciary duty is pleaded in the following way:

‘59. In the premises of the foregoing and in particular the contents of paragraph 14 regarding the meetings that were held and the vulnerability of several of the Colonnade litigants as is set out at paragraph 16 above and in light of the nature of the proposed litigation as is set out at paragraphs 17 to 29 above, and in light of the outcome of the meeting held at the Peninsula Tavern as is set out at paragraph 35 above, the Applicant avers that the nature of the relationship between the Colonnade litigants and the First and/or Second Respondents is of a fiduciary nature.’

121 It is to be observed that the fiduciary duty is said to arise out of the meetings of prospective litigants and the vulnerability of some of those litigants, and ‘the outcome of the meeting held at the Peninsula Tavern as is set out at paragraph 35 above’.

122 Whether or not a fiduciary duty could ever arise in the circumstances pleaded does not need to be addressed because the fiduciary duty which is said to arise is a duty owed by the first and second respondents to the Colonnade litigants. There is no plea that the fiduciary duty is owed to the appellant. The Colonnade litigants are not parties to these proceedings.

123 However, the appellant attempts to address that matter in paragraph 60 in which it is pleaded:

‘60. In the premises of the foregoing and in particular the contents of paragraphs 24 to 27 above alleging the vulnerability of the Applicant to professional sanctions and other negative consequences should insufficient monies be forthcoming from the Colonnade litigants to meet the burden imposed upon the Applicant and in light of the nature of the proposed litigation as is set out at paragraphs 17 to 29 above, and in light of the outcome of the meeting held at the Peninsula Tavern as is set out at paragraph 35 above the Applicant avers that the nature of the relationship between the Applicant and the First and/or Second Respondents is of a fiduciary nature.’

124 The plea in paragraph 60 is somewhat novel. It cannot be doubted that a solicitor owes a fiduciary duty to the solicitor’s clients. However, in this case, the appellant claims that the clients owe a fiduciary duty to the solicitor. It is claimed that that duty arises because of the financial position of other clients of the solicitor and the representation made in paragraph 35c) that the second respondent would endeavour to assist the weaker members should the need arise.

125 There is no representation pleaded that the second respondent or, indeed, the first or second respondent, would endeavour to assist the appellant.

126 Although the categories of fiduciary relationship are not closed, as noted in Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41, the fiduciary relationship which is said to exist between the first and second respondents and the appellant does not fall within any accepted category. Nor does the relationship have the indicia necessary for, or indicative of, a fiduciary relationship. In our opinion, the fiduciary duty which is said to be owed by the first and second respondents to the appellant does not arise and that plea would need to be struck out.

127 In paragraph 61 an attempt is made by the appellant to particularise the duty owed. If the plea in paragraph 60 were struck out the particulars would also go. However, there are other reasons why the plea could not be sustained.

128 It is pleaded:

‘61. As part of the fiduciary relationship as is set out at paragraph 59 and paragraph 60 above, the First and/or Second Respondents are not permitted at law to depart from the representation as set out in sub-paragraph 35c) above of financial assistance to the weaker and vulnerable members of the Colonnade litigants should the need arise and by extension the Applicant who was reliant upon receiving regular payments to ensure the continuation of the Colonnade litigation.’

129 In our opinion, that was not the representation which was made on the pleading in paragraph 35c). The plea in paragraph 35c) is that the second respondent would endeavour to assist not, as is asserted sub silentio, underwrite the Colonnade litigants as alleged in paragraph 61. Moreover, there is nothing pleaded in paragraph 35c) that would allow it to be said that the representation extended to the appellant. In our opinion, paragraph 61 would be struck out.

130 In paragraph 63 the appellant seeks to further extend the scope of the fiduciary duty. It is pleaded:

‘63. Part of the scope of the fiduciary duty referred to in paragraph 59 and paragraph 60 above was that the First Respondent and/or alternatively the Second Respondent was not to permit the individual interests of the First and/or Second Respondent to come into conflict with the previous undertakings given by the Second Respondent to his fellow Colonnade litigants and by extension the Applicant herein.’

131 For the same reasons which we have offered in respect of paragraph 61, that paragraph could not stand.

132 In our opinion, the pleading does not allow a pleading of a fiduciary duty owed by the respondents to the appellant and, in those circumstances, any plea of any breach must be irrelevant. For those same reasons, the alleged breaches in paragraphs 64 and 65 would be struck out.

133 In paragraph 66 the appellant again attempts to extend the scope of the alleged fiduciary duty. It is pleaded:

‘66. Part of the scope of the fiduciary duty referred to in paragraph 59 and paragraph 60 above was that the First Respondent and/or alternatively the Second Respondent was the fact that the Second Respondent was required to make a full and frank disclosure prior to the First Respondent and/or the Second Respondent entering into any transaction wherein the interests of the First and/or Second Respondents would conflict with their undertaking to assist vulnerable members amongst the Colonnade litigants, and by extension the Applicant should the need arise undertaken as is set out at sub-paragraph 35c) above so as to obtain the informed consent of the vulnerable members of the Colonnade litigants, and by extension the Applicant to the transaction in question.’

134 There is nothing in any of the preceding paragraphs which would allow it to be said that the scope of the fiduciary duty is as alleged in that paragraph. That plea and the plea of the breach in paragraph 67 would also be struck out.

135 In paragraph 68 there is a plea which has been described as fraudulent concealment. It is pleaded:

‘68. Further and alternatively to paragraphs 52 and 59 to 67 above, the First Respondent and the Second Respondent elected to renege upon their previous undertakings as is set out in paragraph 35c) above without the Second Respondent informing his fellow litigants or the Applicant who was reliant upon the First Respondent and/or the Second Respondent honouring the representations prior to or upon entry into the litigation in light of the escalating cost of the litigation and the absence therefrom of Mr Conrad Tye and elected to fraudulently conceal the true financial position of the First Respondent and the Second Respondent so as to avoid honouring undertakings of financial assistance previously given by the Second Respondent to his fellow litigants.’

136 For the reasons previously given, that plea could not stand.

137 The appellant has pleaded that during 1998 the appellant’s own financial position deteriorated. He has given particulars of the circumstances in which that occurred.

138 In paragraph 70 he pleads that, notwithstanding that his financial position deteriorated, the first and second respondents did not assist paying any money towards payment of the outstanding accounts due by several of the Colonnade litigants.

139 When confronted, so it is pleaded in paragraph 71 of the proposed statement of claim, the second respondent, apparently, represented to the appellant that he could not assist because all of his available moneys were on loan to a third person who was also, at that time, a client of the appellant.

140 The appellant pleads that the second respondent further represented to the appellant that if the appellant were able to recover the outstanding moneys owed to the second respondent, the second respondent would agree to lend those moneys to the appellant for the purpose of funding the Colonnade litigation: paragraph 73 of the proposed statement of claim.

141 It is pleaded in paragraph 74 that the representation that all of the second respondent’s available moneys were on loan to the third party was false and misleading and in breach of s 52 and s 51AA of the Act or, alternatively, made fraudulently or as part of a fraudulent concealment on the part of the second respondent to conceal the fact that the first and second respondent had access to available funds and were in a position to meet their obligations previously undertaken. No particulars are given of the falsity of the representation.

142 Indeed, the pleas which follow rather suggest that the representation was in part true. In paragraphs 75 to 78 the appellant pleads that he attempted to recover the money from the third party referred to in the second respondent’s representations but, notwithstanding several requests, that third party would not repay the loan or any portion thereof.

143 In those circumstances, the plea in paragraph 74 is embarrassing and would be struck out.

144 The appellant pleads that because he could not recover the moneys owing by the third party to the second respondent, the appellant accepted an alternative offer from another former client for an advance of moneys. Apparently, so it is pleaded in paragraph 79, that other client loaned the appellant compensation moneys she had recovered on an interest free basis.

145 In our opinion, there is no causal relationship between the representations made by the second respondent, pleaded in paragraph 72 of the statement of claim, and the appellant obtaining a loan from another client.

146 Although it is claimed that the representation was false, no particulars of the falsity of the representation are given and, indeed, as already demonstrated, the appellant’s further pleas rather suggest that the representation was not false.

147 In any event, no causal relationship is pleaded so as to give rise to any claim for loss or damage in the appellant accepting a loan from another client for the purpose of conducting his practice.

148 Those pleas would have to be struck out.

149 The appellant refers to his parlous circumstances in paragraph 80:

‘80. In or during December 1998 the situation had deteriorated to the extent that the Applicant was obliged to send certain correspondence dated 9 December 1998 to all of the Colonnade litigants pointing out to the effect that if outstanding accounts in the Colonnade litigation were not paid the Applicant might not still be in business at the time of the trial in the Colonnade litigation.’

150 That plea has no relevance whatsoever to any of the pleas which preceded it. In our opinion, that plea would be struck out.

151 The next part of the proposed statement of claim is headed: ‘The Failure of the Public Purpose Aspect of the Litigation brought about by the conduct of the Second Respondent’.

152 It is pleaded that the second respondent brought the Colonnade litigation to ‘a premature end’.

153 The appellant has pleaded that, following upon the matter being set down for trial, a conference took place in his offices at which all of the Colonnade litigants, the experts and counsel were present.

154 It is asserted that at that meeting the experts agreed that they would defer payment of some of their fees until after the litigation was concluded, although Mr Lieberfreund said that he ‘require[d] payment for all future work including preparation for the trial and attendance at the trial’.

155 Counsel, who was a member of a firm of solicitors in Perth, however, told the meeting that his fees would be in the order of $280,000 and he required $140,000 to be paid in advance otherwise he would not appear: paragraph 86 of the proposed statement of claim.

156 It is pleaded:

‘87. It was patently clear that the majority of the remaining Colonnade litigants with the exception of the Second Respondent and Mr Sam Novatscov of Zeroz Pty Ltd could not afford to pay their pro-rata shares of the trial costs.’

157 No particulars are given of why those matters were ‘patently clear’.

158 It is asserted that Mr Novatscov and the second respondent agreed to each contribute $45,000 towards the $140,000 required by counsel and that the remainder would be raised amongst the four remaining litigants: paragraph 38 of the proposed statement of claim.

159 It is claimed in paragraph 89 of the proposed statement of claim that Mr Novatscov later offered security over his property in respect of the remainder of counsel’s debt.

160 Next, it is pleaded:

‘92. On 26 and 27 May 1999 a two-day mediation was held.

93. The Applicant was singularly unimpressed with the proceedings at the mediation conference and believed that the matter was best left to resolution before His Honour Justice Carr especially in light of the public purpose nature of the litigation and the overwhelming strength of the Applicant’s clients’ cases.

94. Notwithstanding this advice, the Second Respondent approached other Colonnade litigants directly and went behind the back of the Applicant and without reference to the Applicant and tabled a settlement proposal including a condition that the Colonnade litigants tender apologies to the Defendants and an insistence upon strict confidentiality and the destruction of discoverable documentation.

95. The Applicant shortly thereafter was presented with a fait accompli by the Second Respondent to the effect that the matter had been settled which the Applicant proceeded to reject as outrageous.

96. The Applicant attempted to rally certain remaining litigants including Mr Sam Novatscov, Mr Jon Haynes, and Ms Gilchrist and her mother Mrs Marjorie Gilchrist who the Applicant believed would be amenable to reversing their earlier decision to settle the matter.

97. The Applicant was not prepared to approach Ms Kanokwan Ratanasanobon as she had been given at the mediation the exact amount she had sought and she was at a substantial risk if the matter proceeded to trial.

98. Ms Kanokwan Ratanasanobon shortly thereafter of her own accord attended at the offices of the Applicant and informed him that unless satisfactory arrangements were put in place to ensure that Mr and Mrs Haynes’ interests were protected she would refuse to accept the settlement and elect to go to trial instead.

99. Upon receipt of advice by the Applicant from the daughter in law of Mr Sam Novatscov which was to the effect that Mr Sam Novatscov who had experienced a near fatal heart condition during 1998 had not fully recovered and that she was of the opinion that the added strain of litigation in light of the complications regarding the withdrawal of the First Respondent might precipitate, the Applicant was left with no alternative other than to terminate the litigation on the settlement terms fashioned by the Second Respondent.’ [Particulars not included.]

161 In our opinion, those pleas demonstrate the confusion apparent in this claim generally.

162 On the appellant’s own pleading, the first and second respondents did not at any time undertake not to settle their litigation, especially in circumstances where settlement was in their best interests.

163 Whilst the appellant might not have considered the settlement desirable, it was not his litigation that was to be settled. It was the first and second respondents. They were entitled to decide for themselves whether their litigation should proceed or whether they should settle on whatever terms were available to them. The other Colonnade litigants settled for reasons that suited them. In particular, on the appellant’s own case, Mr Novatscov settled because his health might be further compromised by the litigation continuing.

164 The appellant had to ‘terminate the litigation on the settlement terms fashioned by the Second Respondent’ if they were the respondents’ instructions and the instructions of the other litigants.

165 In our opinion, those pleas are embarrassing and would be struck out.

166 The appellant has pleaded in paragraph 100:

‘100. During the Colonnade litigation the Applicant in light of the fact that he was induced into believing that he was engaged in public interest litigation as is set out in sub-paragraph 35e) above that was aimed as far as possible at achieving a victory for the enforcement of tenants’ rights and exposing wrongdoing by the Colonnade Defendants devoted far more time and effort into the Colonnade matter than would otherwise have been the case in any other litigation.’

167 Thereafter, the appellant has given a number of particulars showing the amount of work that the appellant apparently did to prosecute the Colonnade litigation.

168 In our opinion, this plea further demonstrates the appellant’s confusion.

169 The appellant was retained by the first and second respondents and the other Colonnade litigants. From time to time they would be obliged to meet the appellant’s fees and disbursements under the terms of that retainer. They were not obliged to do any more. They were not obliged to continue to run litigation, which was not in their best interests, so as to assist the appellant. That plea would be struck out.

170 The further pleas in the statement of claim are of the same kind.

171 There is a continuing claim in the statement of claim that the appellant has suffered loss and damage by reason of the work that he undertook in respect of that litigation.

172 There is no claim anywhere in the statement of claim that the first and second respondents, or any other litigant for that matter, failed to pay the appellant the amount of his costs under their collective and separate retainers.

173 In those circumstances, the causes of action alleged in the statement of claim are misconceived.

174 If the statement of claim were allowed to be filed, for the reasons already given, it would be struck out as disclosing no reasonable cause of action.

175 The Court has given the appellant an opportunity to demonstrate that he could formulate a statement of claim which disclosed causes of action and establish thereby that French J was wrong to strike out his action.

176 In our opinion, the proposed amended statement of claim demonstrates that French J was right to conclude that the appellant could not file a statement of claim which disclosed a cause of action.

177 On the facts and circumstances which have been pleaded in the first statement of claim, and in the proposed amended statement of claim, it is clear that the appellant is unable to articulate any proper cause of action against the first or second respondents.

178 In general, a solicitor is not entitled to sue his or her client because that client settles litigation to suit the client rather than not settling it in order to suit the solicitor.

179 In all of the circumstances, because any appeal from French J’s orders would be bound to fail, then leave to appeal should be refused.

180 The respondents argued that the appellant’s claim was statute barred. A similar contention was put to French J. However, he found it unnecessary to decide upon that contention.

181 In our opinion, the first statement of claim is so hopelessly vague it is almost impossible to ascertain from what date time would run. In those circumstances, it would not be appropriate to address the respondents’ contention.

182 We propose the following orders:

1. That leave to appeal from the orders made by French J on 29 June 2004 be refused.
2. The appellant to pay the respondents’ costs of the application for leave to appeal and the purported appeal.

I certify that the preceding one hundred and eighty-two (182) numbered paragraphs are a true copy of the Reasons for Judgment herein of this Honourable Court.

Associate:

Dated: 26 April 2005

Counsel for the Appellant:	The Appellant appeared in person
Counsel for the Respondent:	C G Colvin SC
Solicitor for the Respondent:	Dean & Rowick
Date of Hearing:	8 November 2005
Date of Judgment:	26 April 2005