FEDERAL COURT OF AUSTRALIA Dart v Norwich Union [2000] FCA 1362 PRACTICE & PROCEDURE – strike out application – where statement of claim pleads substantially similar causes of action to that struck out in earlier Supreme Court proceedings – where it nevertheless appears that a possible cause of action, which may come within Federal jurisdiction, could be pleaded if the applicants given leave to replead – whether strike out application should be allowed Federal Court Rules O 9 r 7, 0 11 r 16 Trade Practices Act 1974 IVA, V, VI SYDNEY RONALD DART & ORS v NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295) & ORS Q 67 of 2000 SPENDER J BRISBANE 19 SEPTEMBER 2000 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 67 OF 2000 BETWEEN: SYDNEY RONALD DART FIRST APPLICANT SHIRLEY NORMA DART SECOND APPLICANT FREDERICK WILLIAM DART THIRD APPLICANT AND: NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295) FIRST RESPONDENT VYNOTAS PTY LTD (ACN 007 093 601) SECOND RESPONDENT JONES LANG LASSALLE (QLD) PTY LTD (ACN 010 411 140) THIRD RESPONDENT ROBERTS, LEU & NORTH (A FIRM) FOURTH RESPONDENT JUDGE: SPENDER J DATE OF ORDER: 19 SEPTEMBER 2000 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The amended statement of claim filed by the applicants on 28 August 2000 be struck out. 2. The applicants have leave to replead by filing a further amended statement of claim within 21 days of today. 3. The respondents on the motion pay the costs of and incidental to the motion of the applicants on the motion (respondents 1 and 2), to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 67 OF 2000 BETWEEN: SYDNEY RONALD DART FIRST APPLICANT SHIRLEY NORMA DART SECOND APPLICANT FREDERICK WILLIAM DART THIRD APPLICANT AND: NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295) FIRST RESPONDENT VYNOTAS PTY LTD (ACN 007 093 601) SECOND RESPONDENT JONES LANG LASSALLE (QLD) PTY LTD (ACN 010 411 140) THIRD RESPONDENT ROBERTS, LEU & NORTH (A FIRM) FOURTH RESPONDENT JUDGE: SPENDER J DATE: 19 SEPTEMBER 2000 PLACE: BRISBANE REASONS FOR JUDGMENT 1 This is a notice of motion filed on 6 September by Norwich Union Life Australia Limited, the first respondent, and Vynotas Proprietary Limited, the second respondent. They seek orders pursuant to O 9 r 7 of the Federal Court Rules that the originating process herein be set aside. Alternatively, they seek orders pursuant to O 11 r 16 that the statement of claim be struck out as disclosing no reasonable cause of action or as having a tendency to cause prejudice, embarrassment and/or delay in the proceedings, or as constituting an abuse of process of the Court. 2 In a further alternative, the first and second respondents seek an order pursuant to O 20 r 2, that the proceedings be stayed and/or dismissed on the basis that no reasonable cause of action is disclosed or that the proceeding is frivolous and/or vexatious or that the proceeding is an abuse of process of the Court. The notice of motion also seeks costs. The present notice of motion is part of a long saga of litigation involving Mr Sydney Ronald Dart, his wife and son, and a company called Mystic Crystals Franchises Australia Pty Ltd (the company). 3 The initiating application in the Federal Court was bought pursuant to Parts IVA, V and VI of the Trade Practices Act 1974 and includes claims purportedly based on unconscionability, trespass and estoppel. It seeks approximately $7.48 million under various heads of damage, as well as exemplary damages and costs. 4 The respondents include the owner of the property leased to the company, in a shopping centre called The Willows near Townsville, as well as the solicitors for the owner of the property, and the property consultant involved. 5 The personal applicants have filed an amended application and an amended 42 page statement of claim alleging, inter alia, that various fraudulent misrepresentations, largely about the volume of shoppers in The Willows, led to the leasing of the shop premises. The business experienced trading difficulties and loss as a result of the misrepresentations. Eventually, it is said, the applicants were dispossessed of the premises in which the business was conducted and, as a consequence, suffered loss and damage. 6 Mr Dart appears for himself and represents his wife and son in these proceedings. Because "pro bono" representation is not ordinarily available in actions where damages for personal loss are claimed, Mr Dart is labouring under the difficulty of being without legal assistance in the formulation of the applicants' claims and the prosecution of the proceedings. That has had the unfortunate consequence that it is very difficult to understand the statement of claim as particularising any specific course of action. 7 I can say, as a general conclusion, that the present statement of claim confuses rather than informs as to what possible courses of action may arise for Mr Dart and his family out of the operation of the business at The Willows shopping centre. In particular, there seems to be a misconception that somehow the personal applicants themselves have claims as a result of misrepresentations which led to the company executing a lease in respect of the shop from which the business was conducted. 8 Each of the natural applicants claims that they are: "A natural person entitled to share in the proceeds and profits from business activities of the company and the retail business by lawful family agreement …", and that as a consequence they are entitled to claim loss and damage. The fact is that there has been a melding in the statement of claim of the rights and interests of the company with those claimed by parties who were associated with the company, either as shareholders or as related to persons who were shareholders and directors. 9 There have been two Supreme Court proceedings closely connected with the events which are the subject of these Federal Court proceedings: proceedings No. 780 of 1998, which commenced on 23 October 1998 in the Supreme Court at Townsville; and proceedings No. 369 of 1999, which commenced on 12 May 1999, also in Townsville. 10 In the first proceeding, the only plaintiff was the company, which is now in the process of being wound up pursuant to orders of Cullinane J on 21 July 1999. On 11 March 1999 Muir J refused the company leave to join the natural plaintiffs or various additional proposed defendants to those proceedings, and ordered that they be stayed until the company provided $40,000 by way of security for costs of the defendants. That security has not been paid. Subsequently, the company purported to file and serve an amended statement of claim joining the three natural plaintiffs, who are the applicants in these Federal Court proceedings. 11 The defendants in the first Supreme Court proceedings then made application to the Supreme Court that the amended statement of claim be struck out as an abuse of process. On 29 September 1999 de Jersey CJ ordered that the statement of claim be struck out and that all proceedings in that action be stayed until further order. The company appealed, out of time, the orders made by Muir J on 11 March 1999, and on 15 June 1999 the Court of Appeal extended the time to file and serve an appeal from Muir J's orders, but provided that if such appeal was filed the company provide $10,000 security for costs by 15 July 1999. No such security was provided within that time frame or at all. An application for special leave to appeal to the High Court from the orders of the Court of Appeal was dismissed by McHugh and Gummow JJ on 22 June 2000. 12 In the second Supreme Court proceedings the plaintiffs were the company and the three natural persons who are applicants here, and the four defendants were the same as the four respondents in these proceedings. The defendants sought that an amended statement of claim be struck out. On 29 September 1999, de Jersey CJ ordered that the proceedings be stayed insofar as they were proceedings of the company, that an amended statement of claim be struck out and that any further statement of claim on behalf of the natural applicants be filed within 28 days. 13 A further statement of claim was then filed within the time prescribed, and the first, second and fourth defendants sought that it be struck out. On 28 February 2000, de Jersey CJ ordered that statement of claim be struck out and the proceedings be struck out as against all defendants except the third. 14 The Supreme Court proceedings are now effectively at an end, except insofar as the second proceedings there have not been struck out as against the third defendant (who is the third respondent here). Mr Dart indicates, however, that a strike out application by the third defendant in that regard is listed in the Supreme Court at Townsville on 6 October 2000, and that the application will not be opposed, on the grounds that proceedings are on foot in this Court. 15 Apart from one possible cause of action which may have arisen out of events said to have occurred on 22 September 1997, the present statement of claim attempts to replicate the causes of action which were the subject of his Honour the Chief Justice's strike out order on 28 February this year in the second Supreme Court proceedings. The causes of action, apart from that one possible exception, are substantially similar to the causes of action which the plaintiffs in the second Supreme Court action sought to prosecute, and for the reasons which moved the Chief Justice to strike out the statement of claim based on those causes of action, it seems to me that the present statement of claim cannot be supported. In essence, any causes of action based on misrepresentation, and in particular misrepresentations concerning the concealment of the true foot traffic in the Willows Shopping Centre, are causes of action which the company may have had, but are not causes of action which the personal applicants have. 16 Nonetheless, it seems to me that there is a possible cause of action (which may or may not also have a federal aspect) which can be imperfectly gleaned from, in particular, paragraphs 77 to 101 and 127 of the present amended statement of claim. 17 In essence what is suggested is that on 22 September 1997 a new agreement was entered into on behalf of the first respondent and one or more of the three applicants concerning occupation of the shop in which the business was being conducted; that agreement extended to undertakings concerning arrears of rent; the applicants, or some of them, acquired possession of the shop premises; and in breach of that agreement and in contravention of s 51AC of the Trade Practices Act the third respondent, acting for the first and second respondent, trespassed on the shop premises, removed stock in trade, fixtures and fittings, destroyed the retail business that was the property of the applicants and converted by removal, damage, destruction and misappropriation shop fixtures and fittings, stock in trade, business records, goods and chattels that were the property of the applicants. 18 While there is a failure to particularise the damage which each applicant is claimed to have suffered, there seems to me to be a basis on which, given liberty to replead, a cause or causes of action associated with those events might be pleaded by the applicants. I therefore give the applicants leave to replead, within 21 days of today, a further amended statement of claim. That statement of claim should be approached as a fresh document, and it should be limited to the cause or causes of action that the personal applicants have, arising out of the claimed events of 22 September 1997 and later dealings. 19 On the question of costs of the motion, the applicants on the motion have been successful. I note that, upon an order that they have their costs of the motion, the operation of O 62 r 3(3) of the Federal Court Rules would mean that such costs could not be taxed until the conclusion of the proceedings. It seems to me that that is the order I should make. On the motion, therefore, I order that the applicants on the motion have their costs of and incidental to it, to be paid by the respondents on the motion, to be taxed if not agreed. 20 In respect of the other two motions before me today, filed by the third and fourth respondents, I am not satisfied at the moment that there has been any service in relation to them. I dismiss them with no order as to costs, because the amended statement of claim which has been challenged by the first and second respondents is set aside, and that is against all respondents. Each respondent will have to look at the fresh document to see whether they want to take any action in relation to it. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 22 September 2000 The First Applicant appeared for himself and for the Second and Third Applicants Counsel for 1st & 2nd Respondents: Mr Tony Moon Solicitor for 1st & 2nd Respondents: Connolly Suthers Counsel for 3rd Respondent: Mr Greg Sheahan Solicitor for 3rd Respondent: Flower & Hart Counsel for 4th Respondent: Mr Roger Traves Solicitor for 4th Respondent: Brian Bartley & Associates Date of Hearing: 19 September 2000 Date of Judgment: 19 September 2000