New South Wales Supreme Court CITATION : McGuirk v The University of New South Wales [2010] NSWSC 1471 HEARING DATE(S) : 23 June 2010 JUDGMENT DATE : 17 December 2010 JUDGMENT OF : Johnson J at 1 1. The following parts of the First Amended Statement of Claim filed by the Plaintiff on 14 April 2010 are struck out pursuant to Part 14 Rule 28 Uniform Civil Procedure Rules 2005: DECISION : (i) the entirety of the conspiracy claim contained in paragraphs 36-48; (ii) the entirety of the misfeasance in public office claim contained in paragraphs 49-71. 2. The Plaintiff is to pay 50% of the Defendants' costs of the application. CATCHWORDS : PRACTICE AND PROCEDURE - strike-out application - claims for conspiracy and misfeasance in public office - whether reasonable cause of action disclosed - claims struck out - balance of strike-out application on pleading grounds - application refused Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (NSW) LEGISLATION CITED : Protected Disclosures Act 1994 Administrative Decisions (Judicial Review) Act 1977 (Cth) Uniform Civil Procedure Rules 2005 CATEGORY : Procedural and other rulings McGuirk v The University of New South Wales [2009] NSWSC 1424 Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2008] NSWCA 206; 73 NSWLR 653 O'Brien v Dawson [1942] HCA 8; 66 CLR 18 McKellar v Container Terminal Management Services Limited (1999) 165 ALR 409 R v ICR Haulage Limited [1944] 1 KB 551 CASES CITED : D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 Leerdam v Noori [2009] NSWCA 90; 255 ALR 553 Cannon v Tahche [2002] 5 VR 317 Whitehead v Griffith University [2002] QSC 153; (2003) 1 QdR 220 Griffith University v Tang [2005] HCA 7; 221 CLR 99 Beach Petroleum NL v Johnson [1993] FCA 283; 115 ALR 411 PARTIES : Gerard Michael McGuirk (Plaintiff) The University of New South Wales (Defendant) FILE NUMBER(S) : SC 2008/289246 COUNSEL : Mr GM McGuirk (Plaintiff in person) DR AS Bell SC; Mr M Izzo (Defendant) SOLICITORS : Plaintiff in Person Sparke Helmore (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Johnson J 17 December 2010 2008/289246 Gerard Michael McGuirk v The University of New South Wales JUDGMENT 1 JOHNSON J: By Notice of Motion filed 6 May 2010, the Defendant, the University of New South Wales, applies under Part 14 Rule 28 Uniform Civil Procedure Rules 2005 that parts of the First Amended Statement of Claim ("FASC") filed by the Plaintiff, Gerard Michael McGuirk, on 14 April 2010 be struck out. 2 The background to the present application may be found in my judgment of 17 December 2009: McGuirk v The University of New South Wales [2009] NSWSC 1424. In that judgment, I refused the Plaintiff leave to file his then proposed Amended Statement of Claim, but granted him leave to replead claims for breach of contract, breaches of the Trade Practices Act 1974 (Cth), breaches of the Fair Trading Act 1987 (NSW), common law deceit, misfeasance in public office and conspiracy by way of an Amended Statement of Claim to be filed and served by 17 February 2010. I extended the period for filing of the Amended Statement of Claim and the Plaintiff filed such a pleading on 14 April 2010. Applicable Legal Principles 3 At [21] to [35] of my judgment of 17 December 2009, I set out a number of principles concerning pleadings. At the present hearing, the parties invited me to apply the principles there stated in resolution of the present controversy. 4 Dr Bell SC, who appeared with Mr Izzo for the Defendant, drew the Courts attention as well to the statement of principles concerning pleadings in the judgment of Ipp JA in Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2008] NSWCA 206; 73 NSWLR 653 at 707-714 [412]-[443]. The Challenged Parts of the First Amended Statement of Claim 5 The Defendant contends that the following parts of the Plaintiff's FASC should be struck out: (a) paragraphs 14, 16 and 34 of the Breach of Contract claim, and the particulars to paragraphs 4, 8, 9, 11, 25 and 31 of the Breach of Contract claim; (b) the entirety of the Conspiracy Claim being paragraphs 36-48; (c) the entirety of the Misfeasance in Public Office claim, being paragraphs 49-71; (d) the entirety of the Trade Practices Act 1974 (Cth) claim, being paragraphs 72-100; (e) the entirety of the Fair Trading Act 1987 (NSW) claim, being paragraph 101; and (f) the entirety of the Common Law Deceit claim, being paragraphs 102-109. 6 I shall address in turn these challenged parts of the FASC. 7 Put broadly, the Defendant accepts that the Plaintiff may advance a claim for breach of contract and that, although a strong attack is made on the pleading with respect to the claim under the Trade Practices Act 1974 (Cth), it may be that the Court could form the view that the Plaintiff should have an opportunity to replead that claim. With respect to the remaining pleaded causes of action, the Defendant submits that the claims in conspiracy, misfeasance in public office and common law deceit are fundamentally flawed and should be struck out, without the Plaintiff having further leave to replead those claims. 8 Dr Bell SC submitted that, if the Plaintiff's claim was permitted to go ahead in its current form, a protracted hearing will result, and that this is an appropriate case for the Court to exercise the strike-out power to control the litigation so that only those parts of the Plaintiff's claim which are viable may be advanced. 9 As the Defendant's primary challenge on this application is to the claims in conspiracy, misfeasance in public office and common law deceit, I shall consider submissions with respect to those causes of action before moving to the remaining parts of the claim. The Conspiracy Claim 10 There are two separate conspiracy claims: (a) a claim that officers of the Defendant combined with a view to terminating the Plaintiff's employment relationship between 2001 and 2002 (paragraphs 36-42, FASC); and (b) a claim that officers of the Defendant combined between 2003 and 2005 to prevent allegations made by the Plaintiff in criminal proceedings for breaches of the Protected Disclosures Act 1994 being properly determined in a court of law (paragraphs 43-48, FASC). 11 The primary submission of the Defendant with respect to the first conspiracy claim (referred to at [10](a) above) is that it discloses no reasonable cause of action. The Defendant submits that this claim is fundamentally misconceived, with the essential allegation being that officers of the Defendant combined with a view to terminating the Plaintiff's employment by unlawful means. It was noted that the only person who could terminate the Plaintiff's employment was the Defendant and that, in doing so, the Defendant necessarily acted through the agency of its officers and employees. 12 The Defendant submitted that a decision taken by a corporate entity to terminate a person's employment may be taken jointly by one or more officers and employees, and that it may involve input being received from other officers or employees. It was submitted, however, that such a circumstance does not render each officer or employee a conspirator for the purposes of this tort. A conspiracy could only be alleged in the present case if it was contended that some person external to the Defendant combined with it with a view to terminating the Plaintiff's contract. That is not the claim made by the Plaintiff in the FASC. 13 In support of this argument, the Defendant relies upon the decision of the High Court of Australia in O'Brien v Dawson [1942] HCA 8; 66 CLR 18. There it was held that where a company, acting through the agency of its directors, breaches a contract, the company's directors are not liable in conspiracy unless they act outside the scope of their authority (Starke J at 32; McTiernan J at 34). 14 In response, the Plaintiff relies upon the decision of Weinberg J in McKellar v Container Terminal Management Services Limited (1999) 165 ALR 409. The Defendant submits that the decision of Weinberg J is not inconsistent with that of the High Court in O'Brien v Dawson. Weinberg J, at [155] and following, makes it clear that the conspiracy alleged in that case was not one involving employees of the Commonwealth alone. Rather, the allegation was that Commonwealth employees were party to a conspiracy involving several other persons, and that the Commonwealth was vicariously liable for their conduct. The Defendant notes that Weinberg J (at [201]), does suggest that there can be a criminal conspiracy between a company and its directors, but submits that the case on which he relies (R v ICR Haulage Limited [1944] 1 KB 551) does not support that proposition. Rather, it establishes only that a company is directly liable for the criminal acts of its directors which are imputed to it. In any event, the Defendant submits that, with respect to civil conspiracy, the decision of the High Court in O'Brien v Dawson must prevail. 15 The Plaintiff relies as well upon the decision of von Doussa J in Beach Petroleum NL v Johnson [1993] FCA 283; 115 ALR 411 in support of his pleaded claim in conspiracy. The Defendant submits that the conspiracy claim in Beach Petroleum NL v Johnson involved a claim that directors of the company were acting without the authority of the company. That position may be contrasted with the pleaded claim here. 16 I have considered the submissions made with respect to this part of the present application. I accept the Defendant's submission that the Plaintiff's claim involves an allegation of a conspiracy confined to the Defendant and its own officers. There is no allegation that the alleged conspiracy extended to some person external to the Defendant, who is said to have combined with the Defendant (or its officers) with a view to terminating the Plaintiff's contract. 17 I do not consider that McKeller v Container Terminal Management Services Limited and Beach Petroleum NL v Johnson assist the Plaintiff. O'Brien v Dawson supports the Defendant's submission that there cannot be a conspiracy where directors of a company are acting within authority, so that their actions are attributable to the company. There is no combination unless an outside person is involved in the conspiracy. 18 I accept the Defendant's submission that, as a matter of law, the Plaintiff's pleaded claim in this respect does not allege a civil conspiracy known to the law. I propose to strike out that part of the FASC. 19 With respect to the second conspiracy claim (referred to at [10](b) above), the Defendant submits that this claim is fundamentally misconceived as well. The claim is that officers of the Defendant combined to prevent the determination by a court of law of the Plaintiff's allegations that, in terminating his contract, Professors Niland, Ingleson, Layton and Whittred, and Mr Morris breached the Protected Disclosures Act 1994. In substance, what is alleged is that the Defendant injured the Plaintiff by engaging the Crown Solicitor to defend the prosecutions which the Plaintiff had brought. 20 The Defendant submits that, once again, the relevant conduct (arranging the defence of the proceedings) is that of the University. That conduct was necessarily carried out through the agency of, and with input from, particular officers and employees. The Defendant submits that that fact alone cannot amount to a conspiracy. Once again, the Defendant submitted, significantly, that there was no allegation that any external body or person (such as the Crown Solicitor) was a party to any conspiracy. The only persons against whom that charge is levelled are Ms Kirby, Professor Ingleson, Professor Whittred, Mr Morris, Professor Hume and "other officers or employees of the Defendant" (paragraph 43, Particular 6, FASC). 21 The Plaintiff relied upon submissions made concerning the first conspiracy claim in support of this leg of the claim. 22 Once again, resolution of this part of the application involves consideration of O'Brien v Dawson and its application to this part of the FASC. In my view, the principles enunciated in O'Brien v Dawson apply equally to the second conspiracy claim advanced by the Plaintiff in the FASC. Once again, there is no allegation of a conspiracy involving an external participant. In my view, this is fatal to the claim and it ought be struck out. 23 The Defendant seeks to strike out this part of the FASC on other grounds as well. It is contended that the bringing of this claim is an abuse of process because the Plaintiff seeks to relitigate the controversy quelled by the dismissal of the criminal proceedings. Reliance is placed upon the decision of the High Court in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 at 17-18 [34]-[35], invoking the principle of finality in litigation. I am not persuaded that this part of the FASC should be struck out as an abuse of process on this ground. The criminal proceedings were effectively discontinued without a hearing on the merits. I am not persuaded that this aspect of the pleaded claim constitutes an abuse of process. 24 Other bases were relied upon by the Defendant to strike out this part of the FASC upon the basis that they were embarrassing. Having regard to my primary finding which will see the striking out of this part of the FASC upon the basis that no reasonable cause of action is disclosed, it is not necessary to consider these secondary challenges based upon pleading grounds. 25 The Defendant submitted that the Plaintiff ought not be granted leave to replead the claim in conspiracy. Given the fundamental problem with the pleading and the history of this litigation, I do not propose to grant the Plaintiff leave to replead the conspiracy claim. Misfeasance in Public Office 26 There are two separate claims for misfeasance in public office: (a) a claim that the Defendant or its officers committed the tort by terminating the Plaintiff's employment in 2002 (paragraphs 50-62, FASC); and (b) a claim that the Defendant or its officers committed the tort in December 2003, by instructing the Crown Solicitor to defend criminal proceedings brought by the Plaintiff for alleged breaches of the Protected Disclosures Act 1994 (paragraphs 63-71, FASC). 27 The primary basis upon which the Defendant seeks to strike out these parts of the FASC is that no reasonable cause of action is disclosed. With respect to the first claim ([26](a) above), the Defendant notes that the essence of the claim is that the Defendant, or alternatively, Professor Ingleson, or alternatively, Professor Whittred, acted unlawfully in making a decision, or giving a direction, to terminate the Plaintiff's employment on or around 18 January 2002 (paragraph 54, 56-58, FASC). The Defendant submits that the flaw in each of these alternative formulations is that none of the persons identified was relevantly exercising a public power. 28 With respect to the second claim ([26](b) above), the Defendant observes that it arises out of the alleged conduct of Ms Kirby and/or Mr Mullen or, alternatively, the Defendant, in giving instructions to the Crown Solicitor to defend criminal proceedings brought by the Plaintiff against five officers, or former officers, of the Defendant (paragraphs 64-65, FASC). Once again, the Defendant submits that the claim is flawed because there is no relevant public power or duty which Ms Kirby, Mr Mullen or the Defendant exercised in giving those instructions. 29 The Defendant submits that the exercise of a power or, at the very least, a duty of a public nature is an essential element of the tort of misfeasance in public office: Leerdam v Noori [2009] NSWCA 90; 255 ALR 553 at 554-556 [2]-[19], 574-575 [100]-[105]; Cannon v Tahche [2002] 5 VR 317 at [53]. 30 The Defendant submits that the only conduct alleged against the Defendant, and Professors Ingleson and Whittred, relates to their participation in a decision to terminate the Plaintiff's employment. Such a decision constituted the exercise of a power vested in the Defendant pursuant to a purely private relationship - the contractual relationship between employer and employee - and does not involve the exercise of any public power that may be attached to the office of the persons making the relevant decision. The Defendant submits that this is so, irrespective of the fact that the relevant decision makers might be said to have been employed for public purposes, or to have been paid from public funds: Leerdam v Noori at 556 [16], 563 [56]. 31 The Defendant relies as well upon the decision of Chesterman J in Whitehead v Griffith University [2002] QSC 153; (2003) 1 QdR 220 at 225 [15], where his Honour held that disciplinary decisions taken by a Vice Chancellor, in connection with the investigation of allegations of misconduct by a member of the university staff, involved the exercise of contractual, rather than public, power and for that reason, was not amenable to judicial review. The Defendant relies as well upon the decision of the High Court in Griffith University v Tang [2005] HCA 7; 221 CLR 99 at 128-129 [81]-[82], where a majority of the High Court indicated that where a statute confers on the university the power to employ staff, decisions taken by the university in the course of exercising that power, such as decisions to enter into or vary an employment contract, are not given legal effect by that statute so as to be decisions made "under an enactment" for the purposes of the Administrative Decisions (Judicial Review) Act 1977 (Cth). Their binding power derived not from the enactment, but rather from the contractual relationship between the parties. 32 With respect to the second claim for misfeasance in public office, the Defendant relies again upon Leerdam v Noori and Cannon v Tahche. The Defendant submits that , so far as Ms Kirby and Mr Mullen are concerned, they are alleged in the particulars (to paragraph 63, FASC) to be solicitors employed by the Defendant. As such, their functions necessarily included the defence of proceedings brought against the Defendant or its officers. The Defendant submits that any decision to instruct the Crown Solicitor to undertake such a defence, was nothing more than a discretionary means of performing that function, and was not in itself an exercise of a public power or duty. 33 So far as allegations against the Defendant itself are concerned, the Defendant notes that the Plaintiff does not identify what power or duty the Defendant is supposed to have exercised. Paragraph 65, FASC contains the relevant allegations and cites, in its particulars, the particulars given in paragraph 56, FASC. Those particulars refer to a series of public functions said to be vested in the Defendant. The Defendant submits, relying upon the abovementioned authorities, that the exercise of a public function is insufficient to establish liability for the tort of misfeasance in public office, and that there must be some public power or public duty attached to the function in question. No such power or duty is pleaded here. 34 The Plaintiff seeks to resist these submissions by pointing to the description of Professor Ingleson as the Protected Disclosures Co-Ordinator, in support of an argument that there is an allegation that public power is being exercised in determining not to renew his employment. 35 The Defendant submits, in response, that the Protected Disclosures Act 1994 does not provide for such a position and that, in any event, the decision not to renew the employment of an employee does not involve the exercise of any power that might be conferred upon a public official by the Protected Disclosures Act 1994. That Act protects an employee from suffering prejudice in employment in reprisal for making a protected disclosure, but the Defendant submits that it is different to conferring a power to do something. 36 I accept the legal analysis contained in the Defendant's submissions concerning these issues. The allegations contained in the FASC, as part of the claims for misfeasance in public office, do not include a necessary legal element of such a claim, namely the public nature of the relevant act. I am satisfied that these parts of the FASC should be struck out upon the principal basis that no reasonable cause of action is disclosed. I see no good purpose in allowing the Plaintiff a further opportunity to plead a claim by way of this cause of action. I will not allow him leave to replead a claim for misfeasance in public office. 37 The Defendant relied as well upon other grounds, including pleading grounds, in support of the argument that the pleaded claims for misfeasance in public office should be struck out. Having regard to my findings on the principal issues, it is not necessary to determine each of the subsidiary grounds. The Claim for Common Law Deceit 38 The Defendant submits that the common law deceit claim (paragraphs 102-109, FASC) should be struck out for three reasons. 39 Firstly, it is submitted that no reasonable cause of action is disclosed. The claim alleges that the Defendant represented that the position which the Plaintiff had held would be advertised and filled in accordance with the Defendant's policies. It is alleged that this representation was false because, on 18 January 2002, the Defendant determined to terminate the Plaintiff's employment relationship. 40 The Defendant observes that in my earlier decision, McGuirk v University of New South Wales at [188], I accepted that there was no evident or necessary inconsistency between an intention to fill the Plaintiff's position in accordance with policy, and an intention not to re-employ the Plaintiff. 41 The Defendant's second and third grounds in support of the strike-out application assert that the pleadings are embarrassing in different respects. 42 I have considered the submissions of the parties. It is sufficient to record that I am not persuaded that the Court should make an order striking out those parts of the FASC upon the bases advanced by the Defendant. Breach of Contract Claim 43 The Defendant seeks to strike out parts of the breach of the contract claim upon various bases, including the contention that parts of the particulars are embarrassing. The Defendant does not seek to strike out the entirety of the beach of contract claim. 44 I do not propose to set out the particular challenges to the pleading. I have considered the submissions made in this regard. I am not persuaded that the parts of the breach of contract claim challenged by the Defendant ought be struck out and I decline to do so. Any areas of uncertainty may be met by a request for further particulars. The Trade Practices Act 1974 (Cth) Claim 45 The Defendant seeks the striking out of parts of the claim under the Trade Practices Act 1974 (Cth) upon various bases, including the contention that parts of the relevant pleadings and particulars are embarrassing. A further ground is that the pleading is deficient through lack of clarity, in ways which may mean that some or all of the loss which the Plaintiff asserts may be time-barred. 46 I have considered the submissions concerning these matters. I am not persuaded that any parts of the Plaintiff's claim under the Trade Practices Act 1974 (Cth) ought be struck out and I decline to make such an order. The Fair Trading Act 1987 Claim 47 Relying upon the submissions made in support of the strike-out application concerning parts of the claim under the Trade Practices Act 1974 (Cth), the Defendant seeks the striking out, upon similar bases, of parts of the Plaintiff's claim under the Fair Trading Act 1987. 48 I am not persuaded that a strike-out order ought be made in this respect. Conclusion 49 I am satisfied that the Plaintiff's claims for conspiracy and misfeasance in public office disclose no reasonable cause of action. Those parts of the FASC ought be struck out, without leave to replead being given. 50 I am not satisfied that the Plaintiff's claims for common law deceit and under the Trade Practices Act 1974 (Cth) and/or the Fair Trading Act 1987 ought be struck out, in whole or in part. Nor am I satisfied that the challenged parts of the breach of contract claim ought be struck out. 51 As the Defendant has succeeded upon some significant matters argued at the hearing of the strike-out application, but has failed on others, I consider that the appropriate order is that the Plaintiff pay 50% of the Defendant's costs of the Notice of Motion. 52 I make the following orders: (a) that the following parts of the First Amended Statement of Claim filed by the Plaintiff on 14 April 2010 be struck out pursuant to Part 14 Rule 28 Uniform Civil Procedure Rules 2005 : (i) the entirety of the conspiracy claim contained in paragraphs 36-48; (ii) the entirety of the misfeasance in public office claim contained in paragraphs 49-71. (b) the Plaintiff is to pay 50% of the costs of the Defendant with respect to the Notice of Motion filed on 6 May 2010. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.