Supreme Court New South Wales Medium Neutral Citation: Samrani v Dagher (No 2) [2017] NSWSC 110 Hearing dates: 17 February 2017 Decision date: 17 February 2017 Jurisdiction: Equity Before: Stevenson J Decision: Leave to file proposed further amended statement of claim refused; plaintiff to pay defendants' costs specified as a gross sum; proceedings to be dismissed if those costs not paid by 9 March 2017 Catchwords: PRACTICE AND PROCEDURE – pleadings – proceedings on foot for two years without plaintiff's pleadings being finalised – sixth iteration of proposed pleading – pleading still deficient; COSTS – specification of costs at a gross sum – proceedings to be dismissed if those costs not paid within time ordered; TORTS – whether cause of action can be assigned Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Kovarfi v BMT & Associates Pty Limited [2012] NSWSC 1101 National Mutual Property Services (Australia) Pty Limited v Citibank Savings Limited (1995) 132 ALR 514 Poulton v The Commonwealth (1953) 89 CLR 540 Rickard Constructions v Rickard Hails Moretti [2004] NSWSC 1041 Category: Procedural and other rulings Parties: Mark Samrani (Plaintiff) Andre Dagher (First Defendant) Terry Makhlouf (Second Defendant) Christian Makhlouf Pty Ltd (Third Defendant) Representation: Counsel: L Teoh (Plaintiff) J Darvall (Defendants) Solicitors: Boutros Lawyers (Plaintiff) Harrington Lawyers Pty Limited (First Defendant) Macree Law (Second and Third Defendants) File Number(s): SC 2015/50302 EX TEMPORE Judgment (REVISED) 1. These proceeding were commenced by statement of claim filed on 17 February 2015: two years ago today. And yet, the form of the plaintiff's pleading is still not resolved. 2. I am now dealing with what I understand to be the fifth and sixth iterations of the proposed pleading. 3. On 5 April 2016, the then second and third defendants (now the proposed first and second defendants) filed a notice of motion seeking to have the then current pleading struck out. 4. On 28 June 2016, White J struck out that pleading and granted the plaintiff leave to re-plead. His Honour ordered that the plaintiff pay the costs thrown away by the proposed amendment and the costs of the defendants' notice of motion. 5. On 15 November 2016, the plaintiff filed a notice of motion seeking leave to file a further amended statement of claim. That is the motion which is before me now. 6. Shortly after the notice of motion was filed on 15 November 2016, a proposed further amended statement of claim was circulated. 7. That document had numerous deficiencies which I drew to the attention of Mr Teoh, who appears for the plaintiff, when that matter was before me in the Applications List on 10 February 2017. 8. On that occasion, I ordered that the plaintiff pay the defendants' costs of the plaintiff's notice of motion of 15 November 2016 to date and ordered that those costs, and the costs the subject of White J's order, be specified as a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). I will return to the question of costs shortly. 9. On 10 February 2015, I also gave the plaintiff what I then described as being his "last chance" to get his pleading in order and directed that any form of proposed further amended statement of claim be circulated by 15 February 2017. That was done. 10. Today, I have heard argument about the form of that document and the form of a further proposed amendment that Mr Teoh handed up during the course of the day. 11. In my opinion, the proposed pleading is still seriously deficient. 12. The background of the matter is that a company called Phoenix Fuel Pty Ltd was the lessee of a service station owned by No Onekn Pty Ltd. I will call that company "the Owner". 13. The plaintiff, Mr Samrani, was at one stage a director of Phoenix. Phoenix has now been deregistered. 14. The lease of the service station contained a provision giving Phoenix the right of first refusal to buy the property should the Owner choose to sell it. 15. The proposed pleading alleges that on 20 February 2012, and in breach of its obligations to Phoenix, the Owner sold the property to one of the defendants. The pleading also alleges that each of the defendants induced that breach of contract. 16. The pleading further alleges that on 22 February 2012, (that is two days after the Owner is said to have sold the property to one of the defendants) Phoenix assigned its "right of first refusal under the Phoenix contract" to the plaintiff. 17. The plaintiff does not purport to bring any action against the Owner for beach of that alleged right. The Owner is not a party to the proceedings. 18. Rather, the plaintiff seeks damages from the defendants, seemingly for the tort of inducing the alleged breach of contract between Phoenix and the Owner. 19. This is by no means clear from the pleading. 20. For example, in the final paragraph of the pleading, the plaintiff claims damages flowing from "that breach" (not specified, but evidently that of the Owner), "as a result of the Sale Agreement" (an expression which does not appear to be defined in the pleading) and by reason of "breach of contract caused by that sale agreement". No claim for damages is made, in terms, for damage said to arise from any tort of inducing breach of contract. 21. In any event, the plaintiff does not allege that Phoenix assigned to him the right to bring any cause of action available to it against the defendants for inducing breach of the contract between it and the Owner. 22. I am prepared to assume, for today's purposes, that such a cause of action is assignable. However, that is a matter about which judicial minds have differed: see Poulton v The Commonwealth (1953) 89 CLR 540 at [602] (Williams, Webb and Kitto JJ); Kovarfi v BMT & Associates Pty Limited [2012] NSWSC 1101 at [55] to [56] (McCallum J); cf National Mutual Property Services (Australia) Pty Limited v Citibank Savings Limited (1995) 132 ALR 514 at [539]–[540] (Lindgren J); Rickard Constructions v Rickard Hails Moretti [2004] NSWSC 1041 at [42]–[61] (McDougall J). It would not be appropriate for me to endeavour to resolve that issue on a pleading application. 23. The proposed further amended statement of claim also makes allegations of misleading or deceptive conduct. That pleading is confused and confusing. It alleges at par 56 that representations were made by the defendant in the following circumstances which are said to be "misleading and [sic] deceptive". 24. First, the misleading representations are said to have been made in the "Lease Discussions pleaded in par 26". However, there is no allegation in that paragraph (or anywhere else in the proposed pleading that I can see) of any representations made in the "Lease Discussions". 25. Second, it is alleged that representations were made "as part of the drafting of the deed agreement and its conduct in participating in the drafting of the deed" pleaded in specified paragraphs. But I am unable to relate that allegation to anything pleaded earlier. 26. Finally, it is alleged that representations were made "to [the Commonwealth Bank of Australia] as pleaded in par 49". Evidently, CBA was the plaintiff's banker. The claim in par 49 is that the defendants represented to CBA that one of the defendants intended to lease the property from the plaintiff in the event that the Owner sold the property to him. 27. The loss claimed as a result of the alleged misleading or deceptive conduct is said to be that the plaintiff "was not able to secure a loan from CBA and accordingly was not able to purchase the property from" the Owner. 28. The plaintiff alleges that the agreement between the Owner and Phoenix was that Phoenix (not the plaintiff) would be given a right of first refusal to buy the property. The damage alleged to have been suffered by the plaintiff was the decision of the Owner to sell to one of the defendants instead. The pleading does not explain the connection between this alleged damage and any ability of the plaintiff to obtain a loan from the CBA. That aspect of the pleading is hopelessly deficient and cannot be allowed to go forward. 29. I referred earlier to the order I made in relation to costs on 10 February 2017. 30. I have now received submissions about what the gross sum costs order should be up to and including 10 February 2017. 31. As to the costs ordered by White J, the actual costs of the defendants were in the order of $85,000. 32. A bill of costs prepared by a costs consultant, Pattison and Hardman, specified some $47,000 as being the recoverable amount of those costs. That bill of costs has not been formally assessed. However, it is comprehensive and appears reasonable. In those circumstances, I accept the submissions made by Mr Darvall, who appears for the defendants, that a gross sum costs order of around 90 per cent of that amount is appropriate: say $42,500 (around half of the actual fees incurred). 33. As to the costs of the notice of motion of 15 November 2016 to 10 February 2017, the actual costs of the defendants (including counsel's fees) are in the order of $21,000. I think it reasonable to assume that they will be assessed at a rate along the line of the costs the subject of White J's order (around 50 per cent). An amount in the order of $10,500 results. 34. Therefore, I am prepared to specify the costs of the defendants to 10 February 2017 as a sum of $42,500 and $10,500, namely, $53,000. 35. I also propose to make an order that the plaintiff pay the defendants' costs incurred since 15 February 2017 and to specify those costs as a gross sum. 36. Mr Darvall informed me that the actual costs incurred by the defendants since 10 February 2017 are in the order of $14,500. I am prepared to specify those costs at $7,000. 37. Accordingly, I make the following orders: 1. The total amount of costs that I specify under s 98(4)(c) of the Civil Procedure Act for the defendants' costs of the argument before White J and of the plaintiff's motion of 17 November 2016 to date is $60,000. 2. Order that the plaintiff pay the defendants those costs by 5pm on 9 March 2017. 3. Note that if those costs are not paid by then, I propose to dismiss proceedings. 4. Stand the matter over before me in the Applications List on 10 March 2017. 5. If the costs that I have specified are paid within the time that I have said and if the plaintiff proposes to propound any further further amended statement of claim, which contains within it a claim that the plaintiff is entitled to bring proceedings against the defendants for inducing a breach of the contract between Phoenix Pty Ltd and No Onekn Pty Ltd, the plaintiff should serve and send by email to my Associate by 5pm on 8 March 2017 the form of such further pleading and an affidavit setting out the evidence upon which the plaintiff relies to support the proposition that he has any such entitlement. ********** Amendments 21 February 2017 - Coversheet title amended 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. Decision last updated: 21 February 2017