Mohareb v Jankulovski [2012] NSWSC 487

Supreme Court New South Wales

Medium Neutral Citation: Mohareb v Jankulovski [2012] NSWSC 487 Hearing dates: 4 May 2012 Decision date: 04 May 2012 Before: Harrison J Decision: 1. The amended statement of claim filed on 27 March 2012 is struck out. 2. Grant leave to the plaintiff to file a further amended statement of claim within 28 days if so advised. 3. Order the plaintiff to pay the defendants' costs of the motion. 4. Grant liberty to apply in respect of the period of 28 days referred to in order 2. Catchwords: PROCEDURE - UCPR 13.4 and 14.28 - application for summary dismissal and strike out - amended statement of claim struck out - leave to plaintiff to file a further amended statement Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rules Category: Interlocutory applications Parties: Nader Mohareb (Plaintiff) Emil Jankulovski (First Defendant) Emil & Sons Pty Ltd (Second Defendant) Representation: Counsel: M Dulhunty (First and Second Defendants) File Number(s): 2012/68684

Judgment 1HIS HONOUR: The first defendant seeks an order for summary dismissal of the proceedings against him pursuant to UCPR 13.4. The first and second defendants together seek orders that the amended statement of claim filed on 27 March 2012 be struck out in whole or alternatively in part pursuant to UCPR14.28. 2The amended statement of claim has uncontroversially been prepared without the benefit of legal advice and is in an idiosyncratic form. There are three paragraphs under the heading 'Pleadings and Particulars'. The defendants' application is directed to those paragraphs as both the manifestation of the plaintiff's claim which the first defendant seeks summarily to have dismissed as well as the pleadings which each of the defendants contends is amenable to strike out under the rules to which I have referred. It is convenient for present purposes for those reasons to recite verbatim the three paragraphs of the amended statement of claim that are the subject of this application. They are as follows: "1. I Nader Mohareb of [address supplied] am a practising structural engineer. I am a chartered professional member of Engineers Australia (previously Institution of Engineers Australia) and a member of the College of Structural Engineers. I am listed on the National Professional Engineers' Register (NPER) -- please refer to attached copies of certificates of registration... 2. My first reason for initiating this claim is that on or around 23 February 2012 Mr Emil Jankulovski of Inducta Engineering sent a letter to my clients, Sonenco Apartments and Saabcorp in which he made defamatory statements about my person -- please refer to attached copy of Mr Jankulovski's letter... 3. My second reason for initiating this claim is on or around the same date stated above, Mr Jakulovsi [sic] refused to honour his/Inducta Engineering's obligation to provide technical support for the appropriate structural engineering software owned by himself and Inducta Engineering and to which I hold a user's licence. This constitutes a breach of contract on the part of the defendants." 3The attachments setting forth Mr Mohareb's qualifications, as far as I am aware, are uncontroversial and it is unnecessary to refer to them for present purposes. 4The letter, which is attachment 2, however, is at the heart of at least one portion of these proceedings, being what appears to be a claim formulated in defamation. The letter would appear to be the publication relied upon by the plaintiff for the purposes of that aspect of his claim. The letter is dated 23 February 2012 and, omitting formal parts, is in the following relevant terms: "We are a software company which developed and support structural design software for re-enforced concrete building. We have become aware that one of our software users, Mr Nader Mohareb, is involved in the structural design as an engineer of the building at 36-46 Cowper Street, Parramatta. While assisting him in the software usage we had to communicate with him and discuss some issues related to the building design. We are very concerned about the ability of Mr Nader Mohareb to perform the design of the building. We strongly recommend that his design is checked by another structural engineer experienced in this type of design." 5The letter is signed by Emil Jankulovski who is described as a director of and for Inducta Engineering. 6The defence filed on 23 March 2012 was apparently prepared in response to the original statement of claim. The document contains significant detail and material of what would appear to be the underlying relationship and dispute between the plaintiff and each of the defendants. That fact, on the plaintiff's contention, acquires a significance in the current application to which I will shortly refer. In support of that application the defendants and the plaintiff have filed a considerable amount of evidence. Much of it descends in excruciating detail into the history of the commercial relationship, and otherwise, between the parties. It is to some considerable extent largely beside the point of the present application and the plaintiff's response to it. Some insight into the nature of the dispute can be gleaned, however, from the form of the relief claimed in the amended statement of claim. 7The relief claimed by the plaintiff, in my opinion, reliably informs the present debate. He seeks an order that this Court restrain the defendants "from any further defamation" and also an apology for writing the letter to which I have referred. He seeks another order that the defendants retract in writing "the defamatory statements made in [the letter]". 8Apart from the terms of the letter, the plaintiff also complains that an interruption to the business relationship between him and the defendants is worthy of the grant of relief by this Court. To that end, the plaintiff also seeks an order that the defendants "resume their obligation to provide [him] with technical support in relation to their appropriate engineering design software which the plaintiff has a licence to use and hence an entitlement to technical support". 9An alternative claim for the payment of $15,000 to source equivalent software elsewhere is also claimed. There are other claims for damages including that the defendants compensate the plaintiff "for the time and expenditure required to make a full transition from the Inducta software to the alternative and equivalent engineering software". That claim is estimated to be $25,000. A further sum of $60,000 is claimed in respect of the defamation. 10The first defendant seeks an order summarily dismissing the claim against him. That claim is based principally, if not entirely, upon the proposition that he was at all times an officer of the second defendant, which is the sole corporate entity that had any dealings with the plaintiff. He contends further that the letter written by him was written in the course of his duties as a director of the company. In those circumstances, the first defendant contends that he is not personally liable, and could never have incurred a personal liability, to the plaintiff in the circumstances. 11I indicated during the course of argument that that application for relief was in one sense premature having regard to the defendants' joint claim to have the statement of claim, or parts of it, struck out. This is for the reason that, in the circumstances as I see them, the defendants' claim pursuant to UCPR 14.28 is indefensible. 12Paragraph 1 of the amended statement of claim does no more and no less than recite the plaintiff's professional qualifications. It is unexceptionable in its terms but does not advance in any relevant sense the plaintiff's claim for damages for breach of contract, if that is what is alleged, or for defamation. The second paragraph in terms does no more than to refer to the publication, which conveniently is attached to the statement of claim. The document that is alleged to have been published speaks for itself but the statement of claim contains no details of any imputations that are said to arise from it. 13The third paragraph of the statement of claim pleads an obligation on the part of the second defendant to provide technical support for the appropriate structural engineering software referred to and alleges that a breach of contract for failing to do so has occurred. The contract is not otherwise particularised. The terms of it are not set forth and to the extent that the plaintiff has advised me today that he relies upon implied terms, these terms are not specified. Nor are the circumstances from which they are said to arise or to be implied set forth. 14As I earlier noted, at the heart of the plaintiff's response to the defendants' application for the statement of claim to be struck out is his contention that when the defence is read it becomes apparent, from the terms of the document, that the defendants well know and understand precisely what are the claims that he makes against them and that in the circumstances it cannot be said that they are under any misunderstanding or misapprehension about what these proceedings are about. 15Indeed, as noted earlier in this application, the defence contains a considerable amount of material of a factual nature inappropriately included in a pleading which, whilst arguably relevant to the ultimate disposition of the dispute between the parties, would not ordinarily be found in a defence. For example, the defence contains quoted conversations or statements made by the plaintiff in relation to the project about which the letter of 23 February 2012 would appear to have been written. A relatively clear, if one-sided, picture of the dispute between the parties emerges from a reading of that document. The plaintiff contends that this fact is inimical to the defendants' application in the circumstances. 16The properly pleaded response to the amended statement of claim really only starts at paragraph 16 and not before. Be that as it may, the defence admits that the letter was sent and pleads that it was written by the first defendant on behalf of the second defendant and not otherwise and raises defences of honest opinion and fair comment, qualified privilege and contextual justification. It is a little difficult at one level to understand precisely to what extent it was possible or prudent for the draughtsman of the defence to respond to the amended statement of claim at that level of detail in the absence of any particularised imputations upon which the plaintiff proposes to rely. 17Paragraph 19 of the defence certainly contains a contention that paragraph 3 of the "pleadings and particulars" does not provide any facts or circumstances to ground any cause of action in defamation or in any other maintainable cause of action against either of the defendants. It somewhat curiously contains a further contention that the pleadings are embarrassing and should be struck out. From paragraph 21 on in the defence, there are allegations effectively denying any obligation on the part of the first defendant to provide technical support to the plaintiff or, alternatively, that the second defendant provided all the technical support that it was required to provide to the plaintiff in any event. Paragraph 24 of the defence contends that there is no maintainable cause of action against the first defendant and that all of the plaintiff's claims against him should be dismissed. The first defendant further contends that the plaintiff's claim against him is frivolous and vexatious and seeks an order for the payment of costs. 18Finally, for reasons that I do not understand, the defence (which is not a cross-claim) seeks relief on the part of the first and second defendants, that the plaintiff's claim against each of them be dismissed together with an accompanying order for costs. 19The plaintiff appears before me today unrepresented. That does not mean that I have been unable to understand any case that he wishes to present on this application. Indeed, his singular and most significant point is that the application to strike out the pleadings is in effect disingenuous because of the detail contained in the defence. That proposition is entirely comprehensible and well-made. 20I am mindful in those circumstances that the power to strike out the pleadings because they disclose no reasonable cause of action should be exercised only in a plain and obvious case. In the case of the defamation aspect of the pleadings, despite the detail of the defence, the simple fact cannot be avoided that the statement of claim does not particularise defamatory imputations. The plaintiff contends that it is clear from the letter that was written and it becomes clear from correspondence and discussions contained in the affidavits filed in this application about it, that-in the vernacular-everybody knows what the plaintiff's case is. 21As superficially attractive as that argument may on one level appear to be, it does seem to me that having regard to the particularly technical rules relating to defamation enshrined in the rules of this Court and the Defamation Act 2005 as it applies to the plaintiff's cause of action, the amended statement of claim, to the extent that it pleads a cause of action in defamation at all, is wholly deficient. It is one thing to say that the defendants know or ought to perceive that the plaintiff's statement of claim seeks damages for defamation or some cognate formulation. It is quite another to say that the defendants ought to be put to the trouble and expense of defending the claim when the defamatory imputations have not been specified and for all I know may be the subject of considerable interlocutory dispute somewhere further down this litigious path. 22In relation to the claim in contract it might also be said, for the same reasons, that the material that has passed between the parties, including the very considerable body of material in all of the affidavits, makes it clear that the plaintiff is claiming that the software that he relied upon was difficult for him to utilise or to apply, which correspondingly required or obliged the defendants or one of them to give him such assistance as he needed from time to time to make it work. Once again, that contention is plainly made and easily understood. 23However, the defendants say in the context of this application that if they are to be liable to the plaintiff in damages for breach of contract they should be provided with the benefit of the terms of the contract, particularly the implied terms on which the plaintiff relies, in order that they can form an appropriate view about whether or not they agree with the existence of the terms or some of them or deny entirely that they arose as a matter of construction, or as a result of the particular commercial relationship between the parties. 24For all I know, the plaintiff may have a good cause of action for breach of contract and in defamation. The pleadings in their current form conspicuously fail to plead either cause of action in a way recognized by the rules. It does not seem to me that the defendants are out of court when they bring the present application simply because they have responded to the amended statement of claim by the filing of a detailed defence. They are not in my opinion thereby disentitled from asking this Court effectively to require the plaintiff to plead his cause of action in a proper way. Nor in the circumstances does it seem to me to be objectively onerous for the plaintiff to be required to do so. 25I note in passing that these proceedings are very young and the events that give rise to them occurred only months ago. The original statement of claim was filed with alacrity and amended in the same way and the defence was also put on with commendable promptness. This is not a case that has lingered in this list for months or years, where interlocutory disputes between the parties have delayed and frustrated its progress. In my view, at a relatively early stage in these proceedings, it avails both the administration of justice, having regard to the terms of s 56 of the Civil Procedure Act 2005 as well as the parties themselves, that the plaintiff's case should be pleaded in a proper form. 26It seems to me in the circumstances that it cannot be said that no cause of action exists and I would not be inclined summarily to dismiss even the claim against the first defendant as sought. I do, however, have little doubt that the amended statement of claim is not in proper form, is potentially if not actually embarrassing and it does not on its face appear to disclose a cause of action. 27I hasten to say that the terms of the statement of claim appear largely if not exclusively to be the result of the absence of legal assistance. I am not of the opinion that the amended statement of claim could be described as frivolous or vexatious. Nor does it appear to me to be an abuse of process beyond the application of that expression to its present formal inadequacies. 28In my opinion, the amended statement of claim should be struck out but the plaintiff should be granted leave as he may be advised to file a further amended statement of claim and should do so within 28 days. I would be inclined to grant leave to the plaintiff to apply on short-notice to extend that period if so required. 29The defendants seek the costs of the motion. The plaintiff responds by saying that although the defendants were successful to the extent that I ordered that the amended statement of claim be struck out, the first defendant was not successful in having the proceedings against him summarily dismissed. The plaintiff has asked in the circumstances that the costs be reserved. The ordinary rule is that costs follow the event. The rule does not carry with it the consequence that costs only follow the event if the "successful party" is "completely successful". It is sufficient for the purposes of that rule and the discretion that I must exercise in determining the question of costs, that a party seeking costs has been substantially successful in the claim joined on the application. 30For reasons that will be apparent from these reasons, in my opinion the first and second defendants have indeed been substantially successful and they have obtained an order that the amended statement of claim be struck out. The progress of these proceedings hereafter will significantly revolve around the consequences of that order. It seems to me that the ordinary rule should therefore apply and costs should follow the successful application that the defendants have made. 31Accordingly, my orders are as follows: 1. The amended statement of claim filed on 27 March 2012 is struck out. 2. Grant leave to the plaintiff to file a further amended statement of claim within 28 days if so advised. 3. Order the plaintiff to pay the defendants' costs of the motion. 4. Grant liberty to apply in respect of the period of 28 days referred to in order 2.