Shalhoub v Buchanan [2002] NSWSC 622

New South Wales Supreme Court

CITATION : Shalhoub v Buchanan [2002] NSWSC 622 FILE NUMBER(S) : SC 20145/02 HEARING DATE(S) : 9 July 2002 JUDGMENT DATE : 12 July 2002

Neville John Shalhoub - 1st Plaintiff PARTIES : Lorna Rose Shalhoub - 2nd Plaintiff John Buchanan - Defendant JUDGMENT OF : Simpson J

COUNSEL : E. White - Plaintiff S. Wheelhouse - Defendant SOLICITORS : Ormsby Flower - Plaintiff Tress Cocks and Maddox - Defendant CATCHWORDS : defamation - causes of action - misfeasance in public office - negligence - Fair Trading Act 1987 - misleading and deceptive conduct Fair Trading Act 1987 LEGISLATION CITED : Environmental Planning and Assessment Act 1979 Local Government Act 1993 Trade Practices Act 1974 (Cth) Northern Territory of Australia v Mengel (1995) 185 CLR 307 CASES CITED : General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Perre v Apand Pty Ltd [1999] HCA 36; 198 CLR 180 Caparo Industries Plc v Dickman [1990] 2 AC 605 DECISION : Refer paragraph 38

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION list

SIMPSON J

12 July 2002

20145/02 Neville John SHALHOUB & Anor v John BUCHANAN

JUDGMENT 1 HER HONOUR: By notice of motion filed on 10 May 2002 the defendant, John Buchanan, seeks orders effectively terminating proceedings commenced by the plaintiffs, Neville John Shalhoub and Lorna Rose Shalhoub, in a statement of claim filed on 12 April 2002. That statement of claim was filed pursuant to orders made by me on 2 November 2001 requiring the plaintiffs to plead the causes of action contained therein separately from a claim in defamation, contained in statement of claim number 19213 of 1993. The basis for the defendant's application is that the current pleading discloses no reasonable cause of action. He seeks, in the alternative, an order pursuant to SCR Part 15 Rule 26(1)(a) that the statement of claim be struck out, or an order pursuant to SCR Part 13 Rule 5(1)(a) that the proceedings be stayed or dismissed. 2 In the statement of claim the plaintiffs plead three causes of action, each said to arise essentially out of a single incident. The causes of action pleaded by the plaintiffs are misfeasance in public office, negligence, and misleading and deceptive conduct within the provisions of s41 of the Fair Trading Act 1987. 3 The statement of claim contains many assertions of fact, and, in order to convey the issues, it is convenient to set out something of the history which is encapsulated in the document. Although what follows will be in the form of statements of fact, it is to be borne in mind that I am doing no more than reproducing the allegations of fact contained in the statement of claim. There is nothing in these reasons which purports or should be interpreted as a finding of fact. For the purpose of the present application it is necessary to assume that the plaintiffs will be in a position to prove the facts they assert. 4 In paragraph 1 of the statement of claim the plaintiffs allege that the defendant held public office at all material times as an alderman of the Randwick City Council ("the Council"), and between 24 September 1991 and 28 September 1992, as Mayor of the Council. In paragraph 2 they assert that at all material times they were the proprietors of land and premises at 65-67 Coogee Bay Road, Coogee. 5 The plaintiffs' land is situated within the City of Randwick of which the Council is the consent authority for the purposes of the Environmental Planning and Assessment Act 1979. 6 In January 1990 the plaintiffs submitted a Development Application to the Council for the construction of a six-storey residential building on their land. Thereafter the application was considered at various meetings of Council or Council Committees. Certain resolutions favourable to the plaintiffs' application were passed by Council at meetings during 1990. As these resolutions were passed, rescission motions were put by the defendant and another alderman. The rescission motions were unsuccessful. 7 On 17 June 1991 the plaintiffs (via their architect) submitted a Development Application seeking consent to the demolition of an existing building on the land and the erection in its place of a six-storey residential building. (Why a second application was necessary does not appear from the pleadings). On 20 August 1991 the Council consented to the Development Application. The motion for rescission was moved and was supported by the defendant. It was unsuccessful. Subsequently the defendant gave notice of a further motion of rescission but was advised by the Council that it could not be dealt with. 8 Shortly after these events the plaintiffs decided to offer their land for sale by public auction. An auction took place on 21 September 1991. The defendant attended the auction, in possession of a camera, and took photographs, or pretended to take photographs, of people at the auction. 9 In paragraph 14(B) of the statement of claim the plaintiffs allege that, at the auction, and after the bidding had ceased, the defendant made two relevant representations in respect of their land. The first was that the development consent "was liable to be rescinded"; the second that the development consent "was going to be rescinded". In particulars subscribed to paragraph 14(B) the plaintiffs assert that the representations were made orally to "a female" (unnamed in the statement of claim) at the auction, after the conclusion of bidding, and in the hearing of a person identified as Jack Atallah, who had been one of the bidders. It may here be noted that, although it does not appear to be specified in the statement of claim, it was common ground that the bidding at the auction did not reach the reserve price and the property was passed in. It is part of the plaintiffs' case that, in the ordinary course, post auction negotiations between bidders and the plaintiffs would have taken place, but that, by reason of the representation said to have been made by the defendant, those who had previously been bidders withdrew and took no further part. It is implied in the statement of claim that bidding had reached $1.65 million but that, after the defendant's representations, the potential purchasers evaporated and, on 18 May 1992, the plaintiffs sold their land for $1.125 million. 10 The plaintiffs allege that, even after the auction, and two days after becoming Mayor, the defendant continued his efforts to have the development consent rescinded. 11 It is now necessary to consider the manner in which the plaintiffs plead each of the causes of action, and the bases on which the defendant submits that no reasonable cause of action is disclosed.