New South Wales Supreme Court CITATION : Johnston v Australia and New Zealand Banking Group Ltd; Johnston v Richardson [2003] NSWSC 454 HEARING DATE(S) : 30 April & 1 May 2003 JUDGMENT DATE : 4 June 2003 JURISDICTION: Common Law Division JUDGMENT OF : Davies AJ DECISION : Statement of Claim struck out. CATCHWORDS : Practice - pleading - whether statement of claim should be struck out - whether pleading disclosed reasonable cause of action - whether pleading had tendency to cause prejudice or embarrasment in the proceeding - whether particulars should be pleaded - whether abuse of process LEGISLATION CITED : Supreme Court Rules, Pt 15 r 7 Banque Commerciale S.A. (En Liquidation) v Akhil Holdings Limited (1990) 169 CLR 279 Brambles Holdings Ltd v Carey (1976) 15 SASR 270 Expo International Pty Ltd v Chant [1979] 2 NSWLR 820 CASES CITED : Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563 Lawrance v Norreys (1890) 15 App Cas 210 Middleton v O'Neill (1943) 43 SR(NSW) 178 Wallingford v Mutual Society (1880) 5 App Cas 685 Williams v Spautz (1992) 174 CLR 509 20553/00 Daryl Lindsay Johnston (Plaintiff) Australia and New Zealand Banking Group Ltd (First Defendant) John Edward Star (Second Defendant) Stuart Karim Ariff (Third Defendant) PARTIES : 20040/02 Daryl Lindsay Johnston (Plaintiff) David Ross Richardson (First Defendant) Michelle Esther Harpur (Second Defendant) Ronald John White (Third Defendant) John Trevor Mitchell (Fourth Defendant) FILE NUMBER(S) : SC 20553/00; 20040/02 AT McInnes QC (Plaintiff) COUNSEL : JE Thompson / CD Wood (First Defendant in 20553/00 and First, Second, Third & Fourth Defendants in 20040/02) DL Williams (Second and Third Defendants in 20553/00) SOLICITORS : Weatherly & Bartram (Plaintff) Coudert Brothers (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DAVIES AJ 4 JUNE 2003 20553/00 - DARYL LINDSAY JOHNSTON v ANZ BANKING GROUP LTD & ORS 20040/02 - DARYL LINDSAY JOHNSTON v DAVID ROSS RICHARDSON & ORS JUDGMENT 1 HIS HONOUR: In proceedings R400026/99, now numbered 20553/00 after transferring from the Albury Registry to Sydney, the plaintiff, Daryl Lindsay Johnston, sues the Australia and New Zealand Banking Group Limited ("the ANZ"), John Edward Star ("Mr Star") and Stuart Karim Ariff ("Mr Ariff"). Mr Star was the receiver of a grazing enterprise, "Lilydale", and had been appointed by the ANZ, a secured creditor. Mr Ariff was an employee of Mr Star. In proceedings No. 20040/02, Mr Johnston sues David Ross Richardson, Michelle Esther Harpur and Ronald John White, who were partners in Norton Smith & Co solicitors, and also John Trevor Mitchell, an employee of that firm. Norton Smith & Co are solicitors for ANZ. They have also, in the past, acted as solicitors for Mr Star and Mr Ariff. Introduction 2 On 16 August 1996, the ANZ had instituted proceedings in this Court, No. 3089/96, seeking various orders, including an order that Mr Johnston vacate Lilydale. On 12 September 1996, Mr Star commenced Supreme Court proceedings No. 3338/96, seeking orders for the removal of caveats against the property, which Mr Johnston had lodged. After abandoning an application for leave to cross-claim in proceedings No. 3338/96, Mr Johnston, on 15 November 1996, instituted proceedings No. 4031/96, in which he sought, inter alia, an order that the ANZ and Mr Star be restrained from proceeding with proposed auction sales. That order was not made. The auction of the plant, equipment and movables proceeded on 21 November 1996 and the auction of the property itself proceeded on 11 December 1996. The property was passed in at the auction but was subsequently sold. 3 In proceedings No. 50141/99, three companies with which Mr Johnston was associated sought, inter alia, an order that an account be taken of moneys received and disbursed by the ANZ and declarations that the ANZ and Mr Star had adopted a course of conduct to deprive the companies of income and to depreciate assets upon the sales. They sought, alternatively, damages for negligence in the management and the sale of assets, including Lilydale. On 26 April 2001, Hunter J ordered that those proceedings be stayed pending satisfaction of the companies' obligations to pay costs in proceedings No. 1706/98, a proceeding in which the companies and Mr Johnston's mother had joined in suing ANZ and Mr Star but which was discontinued, in part because of Mrs Johnson's state of health. 4 No proceedings between the parties, other than the present two proceedings, are now active. 5 In proceedings No. 20553/00 (previously R4000R6/99) the first statement of claim, dated 16 November 1999, sought damages for malicious prosecution and abuse of process. The prosecution had been instituted by police officers alleging that Mr Johnston had trespassed on Lilydale. The defence to the prosecution was successful and the charge or charges dismissed. The abuse of process allegation arose from the fact that Mr Star and Mr Ariff had sought and obtained AVO orders under Part 15A of the Crimes Act 1990 against Mr Johnston. The statement of claim of 16 November 1999 had the advantage of being expressed with brevity and with at least a degree of clarity for it concentrated upon malicious prosecution and abuse of process. The statement of claim contained the principal allegations which have been repeated in subsequent statements of claim with more words and greater complexity. 6 In the first statement of claim, Mr Johnston alleged that he went to Lilydale in 1996 to collect a notice under s 57(2)(b) of the Real Property Act 1900 that had been served upon one of his companies, Hurworth Nominees Pty Ltd, by the ANZ. It was alleged that the ANZ and Mr Star lodged complaints to the Police that Mr Johnston was guilty of entering enclosed lands without permission. It was alleged that the Police did not intend to take any action on the complaints until the ANZ by its solicitors, Norton Smith & Co, sent a letter to the Police on 5 November 1996, making accusations or implications that were unfounded, misleading and untrue. It was said that Mr Star and Mr Ariff, on their own behalf and at the request of the ANZ, obtained ex parte interim AVOs against Mr Johnston and that the orders were obtained by false evidence given to the Local Court by Mr Star and Mr Ariff. It was alleged, although under particulars of damage, that the information supplied to the Police was supplied with an ulterior motive, namely to prevent the plaintiff observing the negligent mismanagement of properties, including Lilydale. 7 On 6 April 2001, Master Harrison struck out the statement of claim, partly because the statement of claim did not particularise, in as much detail as possible, the allegedly untrue allegations and did not properly plead or provide particulars in relation to whether the defendants had acted without "reasonable or proper cause". In relation to abuse of process, the Master said at para [36]:- "36. … However the plaintiff must plead and prove that the defendant has initiated and continued a legal process in order to obtain an advantage beyond the ambit of the legal remedy procured. The plaintiff's pleadings, specifically the particulars, are deficient in this regard." 8 The Master gave leave to replead. A subsequent statement of claim was dated 1 May 2001. This Amended Statement of Claim was lengthier and somewhat reordered but, in substance, gave no more information about or precision to Mr Johnston's claims than the first. On 17 July 2001, Master Malpass, on the application of the ANZ, struck out those parts of the Amended Statement of Claim as related to the ANZ Bank. Leave was given to file a further amended statement of claim. Master Malpass said, inter alia:- "13. The Amended Statement of Claim does not comply with the rules of court (inter alia Pt 15 r 7). It seems to me to have numerous pleading deficiencies. 14. By way of general comment a number of observations may be made. It is a confusing document. There are pleading inconsistencies and lack of precision. It is embarrassing in a pleading sense. 15. A function of a pleading is to define and narrow the real issues. It seems to me that this pleading has the effect of throwing up a multiplicity of false and/or irrelevant issues. Further, it fails to plead all of the elements of the causes of action sought to be alleged and/or the real questions to be determined in deciding the proceedings." 9 An appeal brought by Mr Johnston against that decision came before Ireland AJ. On 19 December 2001, his Honour dismissed the appeal and granted leave to file a further amended statement of claim within 21 days. 10 Ireland AJ made a very careful analysis of the Statement of Claim. His Honour agreed with the approach taken by the Masters. His Honour pointed out that receivers and managers are not ordinarily agents of the person who appoints them: see Expo International Pty Ltd v Chant [1979] 2 NSWLR 820. His Honour said that, if there were facts which demonstrated that Mr Star and Mr Ariff acted as agents for the ANZ, those facts were material facts and should be pleaded. His Honour then turned specific attention to the letter of 5 November 1996, which Mr Mitchell, as employee of Norton Smith & Co, had written to the Police. His Honour considered each of the particulars given as to why statements made in this letter were unfounded, misleading or untrue. His Honour considered that all the grounds of attack upon the letter were misconceived. His Honour held that, in so far as the statement of claim relied upon the contents of that letter, the pleading disclosed no reasonable cause of action. His Honour struck it out pursuant to Pt 15 r 26(a) of the Supreme Court Rules. His Honour dismissed the appeal but gave Mr Johnston leave to file a further amended statement of claim within 28 days. 11 This present motion is concerned with the Further Amended Statement of Claim dated 16 January 2002. The motion to strike out the statement of claim is brought by all defendants. Mr J E Thomson QC and Mr Chris Wood of counsel appeared for ANZ, Mr D L Williams of counsel appeared for Mr Star and Mr Ariff and Mr A T McInnes QC appeared for Mr Johnston. Mr Thomson and Mr McInnes were the two counsel appearing in the earlier strike out motions. Confusing Allegations 12 The Further Amended Statement of Claim is lengthier than its predecessors and more complex. It repeats with amendment the essential elements of the first statement of claim. However, whatever attributes of clarity and brevity there were in the first statement of claim, they are not seen in the present. The statement of claim does not define and delineate clear issues so that the parties are aware of the questions to be litigated and so that the trial judge may rule upon questions as to admissibility of evidence. 13 Mr McInnes, in his submissions, emphasised that Pt 15 r 7 of the Supreme Court Rules provides that a pleading shall contain and contain only a statement in a summary form of the material facts on which the party relies, but not the evidence by which those facts are to be proved. Mr McInnes contended that, if particulars were required, they could be requested and that evidence ought not to be referred to. In putting this submission however, Mr McInnes ignored the considered remarks of Master Harrison, Master Malpass and Ireland AJ. 14 Pleadings should define the material facts so that the issues are clear and the parties will understand to what questions they must direct their evidence. The present statement of claim has become so abstruse that I gain the impression that it may be the intention of Mr Johnston's counsel at the trial to present unstructured evidence, such as that which appears in the many affidavits of Mr Johnston, so as to present the case of a person who was evicted from his property by a major bank and its receiver and to ask the jury to infer that institutionalised malice was directed by the ANZ and its receiver against Mr Johnston. I have used the word "institutionalised" for there is still no clear statement of fact in the statement of claim which points to any particular officer of the ANZ who had any malice or ill-will towards Mr Johnston. 15 The Further Amended Statement of Claim has added to the original claims irrelevancies which only cloud the issues as to malicious prosecution and abuse of process. For example, paragraph 7 now reads:- "7. On or about 6 June 1996, the Plaintiff was locked out of the registered office of Hurworth Nominees Pty Ltd and the homestead at 'Lilydale', without the aid of a Court order by the First Defendant and refused re-entry for any purpose. PARTICULARS (a) The First Defendant on or about 31 May 1996, invited the Plaintiff to meet with a senior officer of the First Defendant. Whilst the Plaintiff was in Melbourne meeting with the senior officer on 6 June 1996, the First Defendant instructed its agents to arrange a break-in to the 'Lilydale homestead and change the locks. (b) The Plaintiff was then a tenant of the 'Lilydale' homestead. (c) Security guards were engaged and instructed by the First Defendant's agent, the Third Defendant to deny the Plaintiff access to the registered office and the homestead for any purpose (d) On and after 7 June 1996, the First Defendant denied the Plaintiff access to 'Lilydale' and treated him as a trespasser. " 16 The opening words of that paragraph were in the first statement of claim but not the particulars. In my view, the events described are extraneous to the allegations of malicious prosecution and abuse of process and would serve only to suggest unwarranted oppression of Mr Johnston. 17 The statement of claim makes no claim based upon the alleged lockout on 6 June 1996. Moreover, the lockout became a matter of past history, when, on 19 August 1996, Bryson J ordered that Mr Johnston vacate Lilydale and that he be restrained from retaking possession. The proceedings claim damages for abuse of process and malicious prosecution. The proceedings, the subject of the claim of abuse of process, were not commenced until December 1997 and January 1998 and were commenced then after Mr Johnston had visited the homes of Mr Star and of Mr Ariff. The prosecution was not instituted until late in 1996 and charged two occasions of trespass in October 1996. Mr Johnston's excuse for entering Lilydale on those occasions was that he was seeking a s 57(2)(b) notice which had been served in October 1996. The content of paragraph 7 inevitably distracts attention from the claims of abuse of process and of malicious prosecution, which are the only claims in respect of which relief is sought. 18 There are other matters throughout the Further Amended Statement of Claim which suggest the same result. For example, in paragraph 16, which alleges that the letter of 5 November 1996 made accusations and implications which were unfounded, untrue and misleading, there are particulars which contain the following:- "(c) On 19 August 1996, His Honour Justice Bryson found in favour of the First Plaintiff and made orders that the Plaintiff vacate the 'Lilydale' property, effective 20 August 1996 and that he be restrained from re-taking possession and interfering with the First Defendant's rights pursuant to its securities ." "(g) The letter alleged that the Plaintiff was not entitled to enter the property, which was untrue. " 19 Allegations such as these would simply raise the whole issue as to the receiver's right to exclude Mr Johnston from the property, the subject of the ANZ's charge. That should not be an issue in these proceedings. It was an issue in proceedings No. 3089/96, in which Bryson J made orders requiring Mr Johnston to vacate the property. 20 Bryson J ordered that Mr Johnston vacate the property and that he be restrained from interfering with the rights granted by the securities over the property. The prosecution for trespass was not dismissed because of doubt about that position but because Mr Johnston put forward the defence that he was Chief Executive Officer of Hurworth Nominees Pty Ltd and that he entered the property to obtain access to a document, a notice under s 57(2)(b) of the Real Property Act which had been served upon Hurworth Nominees Pty Ltd at that address. That was a claim which was made with some prominence in the first statement of claim filed in the proceedings. In the present Further Amended Statement of Claim, there are ill-stated allegations that the appointment of the receiver and the taking of possession by the receiver was malicious or unlawful, that Mr Johnston was a tenant of the property, that Mr Johnston entered the property for the purpose of obtaining access to the s 57(2)(b) notice and that Mr Johnston was entitled to inspect the property to ensure that the receiver was not acting in an improper manner. I am now using words of my own, but those are claims which Mr McInnes has in mind to pursue under the present Further Amended Statement of Claim. In my opinion, if claims of that nature were to be pursued, they would have to be stated with a great deal more clarity and precision than presently is the case. 21 Without referring to all the passages in the Further Amended Statement of Claim which fall within this category, I observe that the additions which have been made to the statement of claim tend to distract and confuse rather than to clarify what are the real issues in the proceedings. Particulars of Agency 22 The present statement of claim still fails to grapple in an appropriate way with the point made by Ireland AJ that a receiver is not ordinarily an agent of the party that appointed him. The Further Amended Statement of Claim seeks to overcome this point by expressly alleging agency. Paragraph 6 provides:- "6. The Third Defendant was an employee of the Second Defendant. The Second and Third Defendants were appointed the First Defendant's agents and from time to time on they took instructions from the First Defendant. PARTICULARS The Second and Third Defendants were appointed agents of the First Defendant on or about 6 June 1996 and they acted as the First Defendant's agents in relation to the management and control of 'Lilydale' until 14 February 1997. " 23 However, no particulars are given of the allegation of agency. Mr McInnes pointed out that there has not yet been discovery or return of subpoenas. Mr McInnes referred to some evidence, for example, a letter of 15 November 1996 from Norton Smith & Co solicitors to Mr Johnston, in which an offer to settle a number of proceedings was made. In that letter, Norton Smith & Co expressed themselves to be acting on behalf of the ANZ, Mr Star and Mr Ariff. However, that fact does not justify the making of the allegation made in paragraph 6. 24 There are other allegations which suffer from the same vice. Paragraph 9 commences, "The First Defendant [ANZ] by its servants and agents and the other Defendants made repeated untrue complaints to the Police". Paragraph 22 alleges, in relation to the apprehended violence orders, that Mr Star acted "on his own behalf and in concert with and for the benefit of the First Defendant [ANZ]" and paragraph 23 alleges in relation to the apprehended violence orders that Mr Ariff acted "on his own behalf and at the behest of the First [ANZ] and Second Defendants". 25 Ireland AJ took the view that, if claims were to be made against the ANZ, the statement of claim should make it clear on what basis those claims were made. I agree with his Honour. In this case, serious allegations are made. In relation to both the criminal prosecution and the AVOs, it is alleged that there was improper purpose. It is alleged that criminal prosecutions were instituted with malice. It is alleged that the AVOs were initiated by false evidence which was known to be untrue. These are serious allegations of the type in respect of which particulars ought to be given. Malice 26 The principles of pleading in relation to fraud are sufficiently analogous to the causes of action with which we are concerned to be generally applicable. Fraud must be pleaded specifically and with particularity: see Banque Commerciale S.A. (En Liquidation) v Akhil Holdings Limited (1990) 169 CLR 279 at 285; Wallingford v Mutual Society (1880) 5 App Cas 685 at 701 and Middleton v O'Neill (1943) 43 SR(NSW) 178 at 184. In Lawrance v Norreys (1890) 15 App Cas 210 at 221, Lord Watson said:- "In my opinion, a plaintiff who desires to avail himself of the provisions of sect. 26 is not released from the ordinary rule of pleading applicable to cases of fraud, which was thus expressed by Earl Selborne in Wallingford v Mutual Society [(1880)] 5 App. Cas. [685 at] 697: 'General allegations, however strong may be the words in which they are stated, are insufficient to amount to an averment of fraud of which any Court ought to take notice.' It is not a sufficient compliance with the rule to state facts and circumstances which merely imply that the defendant, or some one for whose action he is responsible, did commit a fraud of some kind. There must be a probable, if not necessary, connection between the fraud averred and the injurious consequences which the plaintiff attributes to it; and if that connection is not sufficiently apparent from the particulars stated, it cannot be supplied by general averments. Facts and circumstances must in that case be set forth, and in every genuine claim are capable of being stated, leading to a reasonable inference that the fraud and the injuries complained of stood to each other in the relation to cause and effect." 27 In particular, the allegations against the ANZ are of such generality that they breach the rule that, where states of mind are attributed to a company, particulars of relevant persons within the company must be given so that the company can turn its defence to the state of mind of those persons. In Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563, Brennan, Deane, Gaudron and McHugh JJ, cited at pp 582-3, the following remarks of Bright J in Brambles Holdings Ltd v Carey (1976) 15 SASR 270 at 279:- "Always, when beliefs or opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company. This process is often necessary in cases in which companies are charged with offences such as conspiracy to defraud." 28 If it is alleged that the ANZ acted with malice or with an improper purpose or procured false evidence with a view to harming Mr Johnston, particulars should be given of the acts or circumstances that constitute that conduct. If particulars are not given, a jury could be asked to infer malice and improper purpose from the fact that the criminal prosecution was dismissed and from evidence given by Mr Johnston that he was not a violent man and did not threaten either Mr Star or Mr Ariff. If the case proceeded in that way, it might be difficult for the ANZ to rebut it, for no particulars of relevant conduct by an officer of the bank would have been given. 29 This lack of particulars is emphasised by the fact that the statement of claim is shy in relating allegations of malice with acts done. The untrue statements to the Police, which were said to lead to the prosecution, are alleged to have been made by Mr Bernard Star (not the second defendant), by Mr Ariff, by Ms Annie White, and by Mr Daryl Floyd. What the Further Amended Statement of Claim does not state, or not state clearly, is that Mr Bernard Star, Mr Ariff, Ms White and Mr Floyd were acting maliciously when making untrue statements to the Police. It is not alleged that particular individuals acted untruthfully and maliciously. Rather a general allegation is made in paragraph 19 that, "The Defendant's [sic] action outlined in paragraphs (9), (14), (16) and (18) were malicious acts intended to result in the prosecution of the Plaintiff ". 30 This point is important for, as I have said, the receiver was in possession of Lilydale and Bryson J had ordered Mr Johnston to vacate the property and not to interfere with the exercise of rights given by the security. The evidence filed in these proceedings makes it clear that Mr Johnston did enter the property from time to time and was seen in the vicinity of the property in activities that gave concern to the employees of Mr Star, who was the receiver. Mr Johnston's activities were the subject of complaints to the Police by Mr Bernard Star, Ms White and Mr Ariff, who were employees of Mr Star. The prosecution was based on their complaints and also, no doubt, upon statements which Mr Johnston himself made to the Police. It is difficult to understand how the claim of malicious prosecution could be expected to succeed unless the three employees themselves acted maliciously in making statements to the Police. Apprehended Violence Orders 31 I need not discuss the nature of an action for abuse of process. It was fully considered in Williams v Spautz (1992) 174 CLR 509. As was there pointed out, fraud is not necessary for improper purpose. It is said by Mr McInnes that the proceedings in which the AVOs were sought were an abuse of process, having been instituted for an improper purpose and on perjured evidence. The only evidence given was that contained in the two complaints. Mr Star made a complaint which stated, inter alia:- "John Edward Star … a person is in need of protection and fears the commission of a personal violence offence or conduct amounting to harassment, molestation, intimidation or stalking by … Daryl Lindsay Johns [t] on … Daryl Lindsay Johns [t] on has been in attendance at my home and intimidating me and my family contrary to my instructions and requests. Johns [t] on has or had a interest in entities of which I act as receiver." 32 Mr Ariff's complaint read, inter alia:- "Stuart Ariff … is a person in need of protection and fears the commission of a domestic/personal violence offence or conduct amounting to harassment, molestation, intimidation or stalking by … Daryl Lindsay Johns [t] on … The complainant is an employee of the Receiver & Manager and has been employed to wind up the defendant's financial affairs and sell his properties. This has in fact happened. The defendant has approached the complainant's home residence, despite being requested not to approach or contact the complainant other than at his work. During the course of the financial matters, the complainant had to use police for escorts, and fears for his safety at the hands of the defendant due to the previous behaviour and ongoing harassment of the defendant and seeks orders placing prohibitions and restrictions on the behaviour of the defendant …" 33 These complaints were made in December 1997 and January 1998. Interim AVOs were made on the basis of the complaints and these were continued. On 29 January 1999, the complaints were dismissed after undertakings were given by Mr Johnston not to approach and harass or come to the environs of the residences or workplace of the complainants or to contact the complainants other than through the complainants' solicitors. That undertaking was binding for two years. 34 It is not in dispute that Mr Star and Mr Ariff instituted the AVO proceedings after Mr Johnston had turned up at their respective homes, nor that there was a long history of litigation between Mr Star and Mr Johnston. Nor is it in dispute that Mr Star and Mr Ariff had earlier expressed some fear of Mr Johnston. For example, there is in evidence an affidavit of Gregory Arthur Petrie, a witness for Mr Johnston, that Mr Ariff had said to him, "Mr Johnson is possibly armed with a gun and treat him as being dangerous", that a Mr Floyd had said to him, "I am concerned about Mr. Johnston's violent tendencies which Mr. Ariff told me about" and that, "On 9 June 1996, I attended the property and was greeted by Mr. Star. He said, 'I have just been assaulted by Mr. Johnston who pulled me up at the letter box and reached through the window and had a swing at me.' Mr. Star instructed me to go and check around to make sure Mr. Johnston was not waiting for him.". 35 Although fraud is not required for improper purpose, the statement of claim is redolent with allegations of malicious behaviour, behaviour which included perjury. Yet, the facts pleaded to support those allegations are of the weakest kind. Thus, paragraph 26 which sets out the "Purpose of the Prosecutions" reads, inter alia:- "26. The Defendants' conduct in relation to both the Police prosecution and the Apprehended Violence Orders, as outlined above, was to prevent the Plaintiff from collecting evidence to support an action he had brought against the First and Second Defendants and from gaining knowledge in relation to the management of the business and the farming properties and about the circumstances that led to the appointment of the Second Defendant as Receiver and Manager. PARTICULARS (a) … (b) The Plaintiff was observing the wastage of monies on unwarranted expenses, the deterioration of the crops and the properties, the lack of repair to plant and machinery and the poor layout and presentation of plant and machinery for the clearing sale; (c) The Defendants were annoyed by the Plaintiff's activity of questioning the Defendants' employees and his site inspections observing what was happening in the Administrations, the running of the properties and the sales of the Companies' assets; (d) The untrue statements made to the Police and the letter written by Mr Mitchell were made with the sole purpose of preventing the Plaintiff from observing, what was happening in the Administrations, the running of the properties, the sales of the Companies' assets and the crops and machinery." 36 It is not reasonably arguable that a person who is in possession of a property on which a business is being liquidated is not entitled to refuse entry to any person who seeks to pry into the affairs of the liquidation or to seek Police assistance should that other person refuse to stay off the property. The receiver was entitled to keep Mr Johnston off the property, even if Mr Johnston wished to enter the property to observe what he regarded as negligence, misfeasance and waste. 37 That has been a continuing defect in the statements of claim. I have already mentioned that Master Harrison struck out the first statement of claim because it failed to demonstrate how the defendants had acted without "reasonable or proper cause". 38 In paragraph 26, which deals with the "Purpose of the Prosecutions", the Further Amended Statement of Claim makes this allegation:- "(e) The Apprehended Violence Orders taken out by the Second Defendant was for the sole purpose of preventing the Plaintiff from speaking to the Second Defendant in relation to monies owed to the Plaintiff as a former employee of the Companies and the Second and Third Defendants in relation to matters set out in (a) and (b) above, the circumstances of the Receiver's appointment, the lock-out of the Plaintiff from his place of residence and the true reasons for the Plaintiff's dismissal from his employment and to discourage the Plaintiff from contacting servants and agents of the First Plaintiff [sic] about the true circumstances that led to the First Plaintiff's [sic] allegation that the Companies had defaulted in their obligations to it. " 39 One can see that the improper purpose is expressed in such a way as to enable the incidents in which Mr Johnston attended at the private homes of Mr Star and Mr Ariff to be used as a platform for a whole series of claims commencing with the allegation that Mr Johnston's companies had not defaulted in their allegations to the ANZ and going through to the appointment of the receiver and the ejection of Mr Johnston from the property. That particular clause does not refer to negligence and misfeasance by the receiver but other clauses of paragraph 26 do and presumably Mr Johnston would wish to rely on those as well. 40 I am left with the impression that Mr Johnston seeks to raise under his claims in relation to the AVOs the substance of the claims that his three companies made in proceedings brought against the ANZ and Mr Star, proceedings No. 1706/98 and No. 50141/99, proceedings which were instituted but are now dormant. Letter 5 November 1996 41 I next turn to Mr Mitchell's letter of 5 November 1996. Ireland AJ struck out the allegations made with respect to this letter on the ground that there was no reasonable cause of action. Yet the allegations have been repeated, essentially to the same effect although in different terms. Mr Mitchell's letter was in the following terms:- "Dear Sir Daryl Lindsay Johnston We refer to our recent telephone conversation. We confirm that we act for Australia and New Zealand Banking Group Limited ('the Bank'). We also act for Mr John Star, the Receiver and Manager of Hurworth Nominees Pty Limited ('the Receiver'). We provide the following information in response to your request for information concerning whether Mr Johnston is entitled to enter the property known as 'Lilydale', Corowa, New South Wales ('the Property'):- 1. Hurworth Nominees Pty Limited is the registered proprietor of the Property. 2. Mr Johnston is the director of Hurworth Nominees Pty Limited. 3. Hurworth Nominees Pty Limited granted our client a registered mortgage over the Property on 28 July 1994. 4. Hurworth Nominees Pty [L]imited also granted our client a charge over all the assets and undertaking of Hurworth Nominees Pty Limited on 28 July 1994. 5. On 14 May 1996 the Bank appointed Mr John Star as Receiver and Manager of Hurworth Nominees Pty Limited under powers contained in the charge. 6. On 6 June 1996, the Bank entered into possession as mortgagee of the Property pursuant to the powers contained in the Bank's mortgage. The Bank took this action without the aid of a Court order as it was entitled to do under the terms of the Bank's mortgage. 7. On 15 August 1996 the Bank discovered that Mr Johnston had re-entered the Property, had re-entered the dwelling house situated on the Property and had changed the locks to the dwelling house. The following day the Bank brought an urgent application before the Supreme Court of New South Wales in proceedings number 3089 of 1996 seeking orders that Mr Johnston be ordered to leave the property and be restrained from attempting to retake possession of the Property. 8. The Bank's application came before His Honour Mr Justice Bryson in the Supreme Court of New South Wales on 19 August 1996. The Bank's application was successful. A copy of the judgment of Justice Bryson dated 19 August 1996 is enclosed. We also enclose a copy of the orders made by Justice Bryson dated 19 August 1996. 9. On 20 August 1996 Mr Johnston vacated the Property in compliance with the orders. 10. The orders dated 19 August 1996 still stand and have not been varied. 11. The Receiver (as opposed to the Bank) has subsequently had cause to bring separate proceedings in the Supreme Court of New South Wales against Mr Johnston seeking orders that Mr Johnston remove various Caveats which he had lodged on the title to a number of properties. Those proceedings are proceedings number 3338 of 1996. The Receiver's applications for the removal of Mr Johnston's Caveats have all been successful. 12. Proceedings number 3338 of 1996 came before the Court on Friday 1 November 1996 for the hearing of an application by Mr Johnston for leave to file a Cross-Claim against both the Bank and the Receiver in those proceedings. Mr Johnston's application came before His Honour Justice Santow. His Honour refused to grant Mr Johnston's leave to file the Cross Claim in its current form and Mr Johnston's application has been adjourned to 15 November 1996. 13. The fact that Mr Johnston has filed this application for leave to file a Cross Claim does not alter the fact that the Bank is in possession of the Property nor does it affect the validity or alter the effect of the orders made by Justice Bryson on 19 August 1996. 14. Since being in possession of the Property since 6 June 1996, we have on behalf of the Bank informed Mr Johnston on several occasions that he is not entitled to re-enter the Property. In this regard, we enclose a copy of a letter from our office to the solicitors for Mr Johnston, Deluchi & Co, dated 30 July 1996. 15. We are instructed that neither the Bank nor the Receiver consented to Mr Johnston entering the Property on the weekend of 26/27 October 1996. 16. Mr Johnston disputes the Bank's appointment of the Receiver and the Bank's entitlement to possession of the Property. However, in our view, until Mr Johnston obtains an order from the Court overturning or varying the orders made by Justice Bryson on 19 August 1996, the Bank is entitled to remain in possession of the Property, the Bank is entitled to decide who is and who is not entitled to enter the Property, Mr Johnston is prevented from attempting to retake possession of the Property and Mr Johnston is prevented from interfering with the Bank exercising its rights under its mortgage and charge. Please let us know if you require any further information." 42 Like the earlier statement of claim, the Further Amended Statement of Claim makes this letter crucial to the allegation of malicious prosecution. Paragraph 20 specifically pleads, "[t]here would not have been any prosecution launched by the police, but for the police believing the information contained within Mr Mitchell's letter and the attachments." 43 It is not said by Mr McInnes that any statement made by Mr Mitchell in that letter was incorrect. In particular, Bryson J had, on 19 August 1996 made an order requiring Mr Johnston to vacate Lilydale and restraining him from entering the property or interfering with the exercise of any right of the ANZ in relation to its securities. That order was made in proceedings No. 3089/96, which were proceedings between the ANZ and Hurworth Nominees Pty Ltd and Mr Johnston, the last two as defendants. The orders of the Court read:- "1. Upon the plaintiff giving the usual undertaking as to damages, the defendants and each of them by themselves, their servants and agents vacate the Property referred to in paragraph 1 of the Summons taking with them their personal belongings and no other property and until further order of the Court be restrained from taking any step to retake possession of the Property. 2. Upon the plaintiff giving the usual undertaking as to damages, that until further order the defendants by themselves, their servants and agents be restrained from hindering, preventing or interfering with the exercise of any right of the Bank in relation to the securities identified in the Deed dated 28 March 1996." 44 What Mr McInnes alleges about Mr Mitchell's letter is that there were errors of omission. Mr McInnes submitted that the evidence, which Mr Mitchell had given in an affidavit read to Bryson J, was incorrect and should have been corrected. Mr McInnes did not allege that Mr Mitchell had given evidence which he knew to be untrue but rather that evidence had been given on information and belief and that Mr Mitchell ought to have informed the Police that he had subsequently ascertained that the substance of his evidence was wrong. 45 I will not set out Mr Mitchell's affidavit which appears to me to be unobjectionable. It was submitted by Mr McInnes that Mr Mitchell had later been informed by a report of Mr G A Petrie of facts inconsistent with his affidavit. There was a dispute as to whether or not Mr Mitchell received Mr Petrie's report but I am not now concerned with that. Reading Mr Petrie's report, I cannot conclude that the substance of Mr Mitchell's affidavit was incorrect. Mr Petrie's report of 14 August 1996 included the following:- "… I noticed that the window adjacent the outside kitchen door had been smashed. As I left I met Mr Lindsay Jounstone [sic] at the gate. … I rang Stuart Ariff and appraised him of the situation … Mr Ariff rang me and asked me to get somebody to Lilydale as all his caretakers had let him down. … Jason Hadson arrived at Lillydale [sic] at approx 8.30pm. … Jason … told Mr Johnstone [sic] he was there to look after the property over night, Mr Johnstone [sic] told Jason that there was no need for that because he was allowed back on the property. Mr Johnstone [sic] offered to show Jason the paperwork and he accepted. … Mr Johnstone [sic] informed Jason that he was expecting a photographer to arrive. … … Snr Const Muller advised myself that the papers were legal and he had checked with his superior, Sgt Smith, who informed me that without a copy of the eviction notice the police nor I could evict Mr Johnstone [sic] from the property." 46 I need not deal further with the report but there were many references with respect to Mr Johnston, Mr Johnston's brother-in-law, Mr Johnston's mother and Mr Johnston's wife. The report discloses that on Monday 19 August 1996, Mr Johnston entered the property at 11:15am and that at 12:00noon he approached Jason to inspect some pieces of corn found near the garden shed. Mr Johnston took two pieces of corn. Subsequently, at 4:33pm, Mr Johnston arrived with a private investigator. At 4:50pm, Mr Johnston and the investigator left the property after having taken photographs of the house. At 7:30pm, Mr Johnston and his mother departed with furniture. 47 Mr Petrie's report generally supported Mr Mitchell's affidavit. Mr Mitchell was not called upon by the report to say to the Police anything other than that which he did say. Nor has Mr McInnes pointed to any other factor which imposed a duty on Mr Mitchell to include information other than the information he did include in his letter of 5 November 1996. Mr Mitchell's letter was precise and accurate and, so far as I can judge, entirely fair. 48 I agree with Ireland AJ that the allegation with respect to Mr Mitchell's letter raises no reasonable cause of action. Irrelevant Matters 49 I should finally mention in relation to the Further Amended Statement of Claim that it continually raises matters which go well beyond the scope of any claim for abuse of process in relation to the AVOs or of malicious prosecution in relation to the prosecution of trespass. For example, under particulars of damages, there is the following paragraph:- "(b) The Plaintiff was told by Mr Petrie a security guard, that he had been told by the Police that if the Plaintiff stepped one foot across the boundary line onto a Public Road which runs through 'Lilydale' the Police will come out and arrest him. Mr Petrie also said that proceedings for trespass and attempted 'breaking and entering' were being commenced. These remarks were intended to intimidate the Plaintiff and deter the Plaintiff from attending a clearing sale on 'Lilydale'. The Plaintiff had intended to collect evidence about the conduct of the clearing sale and the presentation of the items being put to auction but instead was embarrassed and humiliated by being forced to observe the clearing sale from a distance and in full view of persons well known to the Plaintiff, when they were entering and leaving the area of the clearing sale." 50 This paragraph challenges the receiver's right to exclude Mr Johnston from the property, notwithstanding that Bryson J had ordered that Mr Johnston evacuate Lilydale and not interfere with the liquidation. The paragraph also raises the allegation of waste and mismanagement by the receiver. Not only does the paragraph raise extraneous issues, but it does not relate to the two occasions which were the subject of the trespass prosecutions and in respect of which Mr Johnston was acquitted because, he said, he had entered the property to obtain the s 57(2)(b) notice which had been there served. Nor did it relate to the AVO proceedings which were initiated in late 1997 and early 1998 after Mr Johnston had approached Mr Star and Mr Ariff at their homes. 51 Under the heading, "Particulars of Aggravated and Exemplary Damage", there is the following paragraph:- "4. Further the purpose of the complaints to the Police and the prosecutions was to prevent the Plaintiff contacting people who had information regarding the management of the property, the sales of assets, details concerning the manner in which the Receiver was appointed, details concerning the dismissal of the Plaintiff's employment and details concerning the lock-out of the Plaintiff from his home and the registered office of Hurworth Nominees Pty Ltd and details concerning how an event of default by the Companies could be alleged ." 52 This paragraph similarly raises issues concerning the appointment of the receiver, the existence of a default under the securities, the receiver's right to possession of Lilydale, the receiver's management of the property, and so on. The paragraph does not turn its attention to the causes of action on which the claims for damages are based. 53 There is, indeed, an unhappy inconsistency between the contents of this paragraph and Mr Johnston's "lawful excuse", on which the dismissal of the prosecution was based, namely, to obtain the s 57(2)(b) notice which had been served on Hurworth Nominees Pty Ltd. Summary 54 It would not be a difficult task to plead the allegations of abuse of process and malicious prosecution correctly, if the allegations had any substance behind them. All that is required in such circumstances is a relatively straightforward statement of claim. However, there were always problems with Mr Johnston's statements of claim. One was that the ANZ was joined as a party yet no significant fact showing its relationship to the subject events was pleaded. Other problems were that facts demonstrating malice and improper purpose were not stated or not stated clearly. Another was that matters extraneous to the claims of malicious prosecution and abuse of process were raised in the statement of claim. 55 Since the first statement of claim, matters have become worse. The existence of a factual basis for the claims of malicious prosecution and abuse of process has not been clarified. Mere wordy allegations have been added as if they gave support for what, if it were a genuine claim, should have been the subject of a simple pleading. Extraneous events have been added and magnified. At the present time, the statement of claim presents as one pursuant to which the plaintiff wishes to litigate all those matters which have already been raised in the proceedings which are dormant: the existence of a default, the entitlement to appoint a receiver, Mr Johnston's entitlement to remain on the lands because there was no default, his entitlement to remain on the property as a tenant, the occurrence of negligence and misfeasance by the receiver and Mr Johnston's entitlement to enter upon the property to observe and restrain this. I am left with the impression that these matters are the real concern of the proceedings and that the allegations of abuse of process and malicious prosecution are simply a platform for their litigation. 56 In the end result, I am satisfied that the Further Amended Statement of Claim is an extremely confusing document which does not serve to define the material facts and the issues. I am of the view that the pleading must be struck out. If leave is sought to replead, that leave should not be granted unless the proposed statement of claim concentrates its attention upon the AVOs and the prosecution for trespass and discloses on its face a reasonably arguable cause of action. 57 The Further Amended Statement of Claim is struck out. The plaintiff should pay the costs of the motion to strike out. The balance of the notice of motion will be stood over before the Registrar. The application to have Mr Johnston declared a vexatious litigant should, in my view, be brought separately and not as part of an interlocutory motion in these proceedings. ********** Last Modified: 06/12/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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