Macquarie Infrastructure Group & anor v Agsten [2009] NSWSC 58

New South Wales Supreme Court

CITATION : Macquarie Infrastructure Group & anor v Agsten [2009] NSWSC 58

HEARING DATE(S) : 16 February 2009

JUDGMENT DATE : 19 February 2009

JURISDICTION : Common Law

JUDGMENT OF : Grove J

DECISION : Statement of Claim struck out

CATCHWORDS : PLEADING - Statement of Claim - Multiple deficiencies - Insufficient identification of justiciable claim to order repleading

CATEGORY : Procedural and other rulings

PARTIES : Macquarie Infrastructure Group and John Hughes - Applicants Felicity Agsten - Respondent

FILE NUMBER(S) : SC 2008/20487

COUNSEL : A S Bell SC - Applicants In person - Respondent

SOLICITORS : Mallesons - Applicants In person - Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MICHAEL GROVE J

19 February 2009

2008/20487 MACQUARIE INFRASTRUCTURE GROUP & JOHN HUGHES v FELICITY AGSTEN

JUDGMENT 1 HIS HONOUR: Before the Court is a motion to strike out the plaintiff's statement of claim pursuant to either UCPR 13.4 or UCPR 14.28. The defendant applicants were represented by Mr Bell SC and the plaintiff respondent appeared in person. The initiating statement of claim seeking to originate proceedings was also filed by herself. 2 The document is prolix and the nature of any cause or causes of action relied upon are obscure to the point of being unidentifiable. The gravamen of the respondent's complaints need to be gleaned from two documents annexed to the purported pleading, the first of which has an initial heading "Details of Application" and the second of which is on a letterhead of the respondent and marked "Annexure A". I shall refer to these respectively as "the details document" and "annexure A". 3 The details document ends with a schedule of claimed amounts of money the total of which is $79,200,000. 4 Nothing in the document enables an extraction of how any of the ingredient amounts constituting that significant total represent tortious or contractual breaches for which the defendants would be liable to compensate the plaintiff. Neither am I able to identify any claim outside the law of tort or contract which would found a cause of action. The details document recounts a variety of criticisms which the plaintiff makes of the conduct of the first defendant corporation in its accounting, asset valuation, dividend distribution and aspects of financial management. 5 Annexure A does not attempt to formulate a pleading. It is in the form of a lengthy essay with topics addressed under various headings. It commences with a statement that the plaintiff "owned and traded the company's stapled securities" but was disappointed as a result of policies adopted of which she disapproved. One statement was that "I initially invested $154,000 in MIG securities which I later sold because of the company's policy concerning the reporting of asset revaluations". I could not detect mention of what was obtained on sale but part of the claim seems to be based upon hypothetical profits which the plaintiff expected to earn. 6 Another claim, which again does not identify what cause of action is vested in the plaintiff personally, is for "2% of loss in market capitalization which has occurred between 2007 and 2008 as a result of continuing with the classification in spite of advice to the contrary." The advice is apparently that which the plaintiff herself tendered to the company in a constant stream of correspondence which she directed to it. The claim states "This amounts to 2% of $1.40 for an average of $2,390,254,000 securities. $66,927,000 plus gst." 7 Another claim is for time spent (by the plaintiff) "working out the cause of the discrepancy" in certain accounts. The plaintiff calculates her time at $650 per hour. 8 These observations suffice to indicate the tenor of the document and its deficiencies as a pleading are self evident. 9 It might be noted that it appears in a letter dated 9 November 2007 from the plaintiff to the Chief Executive Officer of the first defendant that she stated: "I am a shareholder of MIG – I own twenty shares. Prior to that I held some warrants which is (sic) sold when the company's security price started to decline." 10 A repeated theme of correspondence emanating from the plaintiff to officers of the defendant company and to the second defendant, who had become Chief Executive Officer of the first defendant was an offer by the plaintiff to provide services as a consultant to the first defendant exercising her claimed capacities in corporate strategy and management. Her letterhead refers to some tertiary qualifications. It is confirmatory of apparent misconceptions which lie behind the commencement of this litigation that in response to correspondence from the solicitor for the defendants which stated that it was plainly an inappropriate use of court proceedings to seek to promote an objective of being engaged as a paid consultant, the plaintiff responded: "To use court proceedings in the pursuit of my objectives for a paid consultancy is not inappropriate, considering that the company published in its Annual Report 2007 a statement such as 'the use of fair value accounting sometimes produces large positive results in the income statement because the increases in asset value are recorded as profits'." 11 The plaintiff went on to comment that: "Surely court proceedings are available to all members of a society when they think that they have a legitimate claim." 12 In the course of oral submissions the plaintiff suggested that it would be desirable to have something like "a round table conference" which again indicated a lack of appreciation of the nature of embarking upon litigation. 13 The exchange which I have mentioned concerning the use of proceedings as a vehicle for obtaining paid consultancy was raised in a letter by the defendant's solicitors to the plaintiff dated 25 November 2008. That letter indicated the inadequacy of the statement of claim (and associated documents) and forecast an application such as is now made to have the pleadings struck out. An open offer was made inviting the plaintiff to discontinue without penalty as to costs. The plaintiff declined the offer. 14 The multiple deficiencies in the pleading which purports to originate this action were summarized in that letter with considerable clarity. Noting that it was not intended to be exhaustive the solicitors drew the plaintiff's attention to the following: "1. Generally, the Statement of Claim is so unclear and imprecise in its identification of the material factual allegations which you advance as to deprive our clients of proper notice of the substance of your claims. 2. The Statement of Claim does not identify the facts necessary to establish any legal wrong on the part of our clients, or necessary to establish any claim for damages or other relief on your part. In particular: (a) The Statement of Claim is filled with rhetorical questions and the expression of your personal views as to the wisdom or otherwise of the Accounting Standards and business decisions made by our clients, which are not properly included in it. (b) The Statement of Claim does not identify any material facts which might support a conclusion that the affairs of any relevant entity are being conducted contrary to the interests of the members as a whole or in any oppressive manner, so as to support an order under s 233 of the Corporations Act. (c) The Statement of Claim does not identify, in any clear manner, the orders which you seek so as to regulate the conduct of any company's affairs in the future, or to restrain a person from engaging in any particular conduct or requiring a person to do any particular act, for the purposes of s 233 of the Corporations Act. (d) The Statement of Claim also does not identify any material facts which would establish a contravention of the provisions in Part 2H.5 of the Corporations Act to which you refer. (e) The Statement of Claim also articulates no proper basis for the suggested claim for personal trading losses; for damages as a result of the asset revaluation policy in the amount of $66.9 million; for loss of future profits in the amount of $4.337 million; for your claim for the amount of $540,000 said to be referrable to your inquiries into these matters, or for any other relief sought. The other actions identified in the Statement of Claim, including your requests that our clients undertake particular steps, or that the Court ask our clients to take particular steps, are not in a form in which relief which could properly be granted by the Court. (f) The Statement of Claim names John Hughes, the Chief Executive Officer of the Macquarie Infrastructure Group, as a defendant, but discloses no cause of action against him. 3. It is plainly also not an appropriate use of Court proceedings to seek to promote your objectives of being engaged as a paid consultant or website provider in relation to these matters, to which you refer in your letters dated 9 October 2007, 8 January 2008, 21 January 2008, 26 May 2008 and the attached outline of discussion and your further letter dated 13 October 2008. Our client invites you, by 5pm on 3 December 2008, to provide your written consent to a dismissal of the proceedings on the basis that each party pay its own costs of the proceedings. We respectfully suggest that you take independent advice in respect of this invitation. If you are not prepared to consent to a dismissal of the proceedings by that date, our clients will have no alternative other than to take steps to strike out the Statement of Claim and associated documents under Rules 13.4 and 14.28 of the Uniform Civil Procedure Rules, and will hold you liable for their costs incurred in doing so."