Skelton v Foggo (No 2)

1. [1]

   An application is brought by way of notice of motion by Michael Evers, seeking a dismissal of the proceedings brought against him. The plaintiff in those proceedings is Brett Skelton, who is also the respondent to this motion. It is convenient for the purpose of this judgment to refer to the parties by reference to their positions in the substantive proceedings. The motion seeks the following orders:

2. [2]

   The application for summary dismissal is brought in the context of a statement of claim that is inexpertly drafted, makes very serious and wide-ranging allegations with no meaningful particularisation of their foundation, and descends into belligerence. So much was observed by Harrison AsJ in dismissing the proceedings against the first defendant: Skelton v Foggo [2021] NSWSC 1228. It is not possible to understand the contentions sought to be raised in the statement of claim without some understanding of the background to its filing and the plaintiff’s attempts to explain his grievances in oral submissions.

The background leading to the filing of the statement of claim

1. [3]

   It is apparent that things have not gone well for the plaintiff. He represented himself on this application. Whilst he was doing the best he could, he struggled with the process. However, of some assistance is the fact that in May 2011, a solicitor compiled detailed observations as part of a brief to counsel setting out the plaintiff’s relevant history and grievances which the plaintiff attached to his statement of claim. The plaintiff at the hearing relied upon that account of his history together with numerous documents which apparently formed part of the brief. The following is taken from those observations and documents.

2. [4]

   In 1982, the plaintiff suffered severe injuries in a motor vehicle accident. He brought proceedings against a Mr Cassell, who he alleged was the driver, seeking damages with respect to his injuries. On 20 April 1988, Enderby J gave judgment in favour of the plaintiff in the amount of $347,453 (although the Court of Appeal notes the judgment sum as $351,303). The Court of Appeal dismissed an appeal brought by the defendant on the issue of liability in February 1990: Cassell v Skelton (1990) 11 MVR 133. The plaintiff, in those proceedings, was represented by a Mr Robert Foggo, a partner at the firm of Baker Love and Geddes. Mr Foggo was named as the first defendant in the substantive proceedings.

3. [5]

   Having secured an award of damages, the plaintiff was referred by the first defendant to a financial advisor. As a result of some (arguably ill-advised) dissipation of funds, but primarily through the failure of investments, the plaintiff lost something over $200,000 within two years. It appears that the plaintiff takes issue with his capacity to make decisions with respect to these investments.

4. [6]

   As a result of these losses, the plaintiff approached a different solicitor, a Mr Henskens of Bilbie Whitford and Dan through whom the plaintiff instituted proceedings in the Federal Court against the former financial adviser. According to the plaintiff, about one week before his claim was to be heard in the Federal Court, his solicitor changed firms, becoming an employee of Baker Love, formerly Baker, Love and Geddes, where Mr Foggo (the first defendant) remained a partner. The matter was set down for a five-day hearing commencing on 6 March 1995. The plaintiff claims that on attending that day, he was shocked to learn that the senior counsel that had been briefed was not in attendance. The plaintiff claims he was told that he had a 20 to 30% chance of success. The plaintiff said he was pressured to accept a settlement of $60,000, being told that if he did not accept the settlement, he would have to represent himself at the hearing. The settlement represented a small fraction of the claim that had been brought. The plaintiff appears to have a grievance with respect to the absence of a “trustee or some other like agency”. His concerns as to the conduct of this litigation are compounded by Mr Henskens’ change of firms to that of the first defendant, particularly in circumstances where he believes the first defendant’s firm should have been joined as a defendant in the Federal Court proceedings given its role in referring the plaintiff to the financial adviser and (possibly) not informing that adviser of the limitations suffered by the plaintiff with respect to his capacity. Mr Henskens is the second defendant in these proceedings.

5. [7]

   The plaintiff apparently consulted a Mr Nick Dan from Bilbie Dan in 2003 and was advised that he had no prospect of recovering any monies. Mr Dan is not named as a defendant. Additionally, between 1999 and 2008, the plaintiff contacted the ICAC, the New South Wales Ombudsman and the Office of the Legal Services Commissioner. The 2011 brief to counsel records that the plaintiff’s “attempts to obtain justice had all failed … he was not able to express the nature of his issues clearly, because he did not understand them, and he was going to the wrong places, repeatedly”. He obtained possession of his file from Baker Love (formerly, Baker Love and Geddes) in late 2006 as a result of intervention by the Office of the Legal Services Commissioner.

6. [8]

   The plaintiff attended the third defendant (who is the applicant on the motion) in 2003. In 2005, the third defendant briefed Mr XXX of senior counsel to provide advice (as senior counsel is not a party to these proceedings, I will anonymise his name as XXX in line with Harrison AsJ’s approach in Skelton v Foggo). The third defendant tendered that advice, dated 2 September 2005, on this application. Senior counsel in that advice, observed, “I gather I am asked to advise whether, in a historical sense, there is any evidence to suggest that the client was incapable of providing instructions to his solicitors during the motor vehicle damages claim and later during the claim for financial loss”. Senior counsel noted that a medical report provided by Dr D L Brash, dated 10 September 2003, suggested that the plaintiff’s injury would “be severe enough to impair his ability to make an informed decision about how to use his money”. Dr Brash noted, however, that this area was not his speciality and he recommended more detailed testing and examination be undertaken. Senior counsel continued:

7. [9]

   The observations in the brief to counsel prepared in 2011 indicate that the third defendant:

8. [10]

   In oral submissions, the plaintiff articulated his complaints against the third defendant as being that the third defendant lied to senior counsel, that he acted despite the existence of a conflict of interest, and that he failed to appoint a trustee.

9. [11]

   The assertion of lying, as I understand it, relates to the suggestion that through the third defendant’s actions, senior counsel was misinformed as to the plaintiff’s capacity. Central to this was the failure to provide senior counsel with the decision of Enderby J. As I understand it, the plaintiff contends that, while senior counsel concluded that the substance of the judgment with respect to the plaintiff’s capacity was sufficiently apparent from the reasons of the Court of Appeal, a different view would inevitably have been formed had the judgment been provided.

10. [12]

    The existence of a conflict of interest is based on the plaintiff’s belief that the third defendant was in the employ of the first defendant’s firm. Exhibit 10 on this motion is a copy of a notice indicating that the third defendant’s firm was relocating to new premises at 12 Church Street, Newcastle from 27 April 2004. Baker Love Solicitors, in its various manifestations, has apparently operated from 6-12 Church Street for many years.

11. [13]

    The complaint with respect to the failure to appoint a trustee relates, as I understand it, to the complaint that the third defendant should have appreciated the limitations under which the plaintiff was acting and not taken instructions in the absence of a person tasked with protecting the plaintiff’s interests.

12. [14]

    A chronology of relevant events was set out in the observations to counsel. The relevant portion of it, which was extracted by Harrison AsJ in Skelton v Foggo, is reproduced below:

13. [15]

    The proceedings against the first defendant were dismissed in September 2021: Skelton v Foggo.

The statement of claim

1. [16]

   As observed above, understanding the statement of claim is not without its difficulties. The claim is made for $20 million. It makes a complaint as to the role of the second defendant in the first defendant’s office and states that “[b]y the time of the first defendant’s disastrous discharge of his duty of care the plaintiff had been prescribed nine thousand (9000) sedatives for his severe brain damage yet trustees were never involved”. It is necessary to set out, at length, parts of the statement of claim. While the majority of the complaints are directed to the first defendant and, to a lesser extent, the second defendant, the complaints against the third defendant can only be understood in the context of the preceding complaints. The statement of claim, as presently relevant, states:

2. [17]

   The complaints articulated at the hearing of this motion can, with a sympathetic reading and an understanding of the background, be found in the above paragraphs. At par 13, the statement of claim asserts that “[t]he first and third defendants as Boss and NEW employee in an obvious conflict of interest chose to pervert Senior Counsel [XXX’s] request for better evidence into an unequivocally negative Merit Advice” (emphasis in original). This appears to be directed to the allegation that the third defendant misled senior counsel by failing to provide the first instance judgment. A conflict of interest is asserted as the motive. A similar complaint with respect to this asserted conflict of interest is made at par 11.

3. [18]

   Paragraph 19 of the statement appears to be a contention that the third defendant acted in conjunction with the first defendant rather than in the plaintiff’s best interests. The reference to the failure to act with regard to sexual assaults appears to be unconnected with other parts of the document and to relate to an asserted failure to commence proceedings, or perhaps to advise with respect to potential proceedings in relation to allegations of historic sexual assault.

The relief sought in these proceedings

1. [19]

   The third defendant’s primary application is for the proceedings against him to be dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Failing this, the third defendant seeks that the statement of claim be struck out pursuant to r 14.28 of the UCPR. Finally, failing this, the third defendant seeks an order that the proceedings be stayed as an abuse of process. It is convenient to deal with the applications in the order in which they are pleaded.

The application for summary dismissal

1. [20]

   The third defendant relied on r 13.4 of the UCPR which provides as follows:

2. [21]

   On the hearing of the motion, the third defendant indicated he relied on r 13.4(1)(b). The contention initially advanced was that no reasonable cause of action was disclosed as the terms of the pleadings are so vague and extravagant in its rhetorical flourishes that it fails to precisely identify the wrongdoing. During the hearing, however, the third defendant modified his position to contend that no reasonable cause of action was disclosed because the proceedings were statute barred. To the extent that r 13.4(1)(a) was relied on, it was on the basis that, there being no reasonable cause of action due to the expiry of relevant limitation periods, the proceedings could properly be characterised as vexatious. This approach, in essence, conceded that, limitation periods aside, the statement of claim seeks to raise some form of actionable conduct on the part of the third defendant, albeit that substantial amendment may be required to make such conduct clear.

3. [22]

   The third defendant’s contention requires attention to be given to the principles generally applying to the summary dismissal of proceedings, the operation of the limitation period and the operation of the principles with respect to summary dismissals in that context. A helpful summary of the principles to be applied to determine whether to dismiss proceedings can be found in the reasons of Ward J (as the President then was) in McDonald v Grech; Bank of Western Australia Ltd v McDonald [2012] NSWSC 717 at [26]-[37].

4. [23]

   In Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, Gaudron, McHugh, Gummow and Hayne JJ said at [57]:

5. [24]

   To similar effect, see also Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [46]; Spencer v The Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [24].

6. [25]

   The question raised is “whether the claims in question are so obviously untenable or groundless that there is ‘a high degree of certainty’ that they will fail if allowed to go to trial; and whether this is one of the ‘clearest of cases’ in which the court may accordingly intervene to prevent the claims being litigated”: Shaw v State of New South Wales [2012] NSWCA 102 at [32] (Barrett JA), applying General Steel Industries Inc at 128-129 (Barwick CJ). The power to dismiss a claim summarily should be exercised with the utmost caution: General Steel Industries Inc; see also Webster v Lampard (1993) 177 CLR 598 at 602-603; [1993] HCA 57; Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 at 942.

7. [26]

   The general principle to be applied is that stated in Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 533; [1992] HCA 55. That is, it is “undesirable that limitation questions … should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases”. (See also Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1; [1991] FCA 41; Kingsley Corporation Pty Ltd v Australian and New Zealand Banking Group (No 2) (Supreme Court (NSW), 15 October 1997, unrep); McDonald v Grech at [36].)

8. [27]

   Having regard to the way in which the third defendant sought to demonstrate the lack of a reasonable cause of action, that is, on the basis that any relevant limitation period has expired, there is a need for the Court to determine what the potential causes of action are, in order to ascertain whether a limitation period applies, and, if so, whether it has expired. While it is not for the Court to advise a plaintiff as to what his or her causes of action may be, in circumstances here, where the applicant for summary dismissal effectively concedes the pleading of an action but relies on the expiry of a limitation period, that contention can only be determined by identifying the potential causes of actions.

9. [28]

   The third defendant submitted that limitation periods were relevant in two respects. Firstly, insofar as the third defendant is said to have acted in some actionable way when engaged in the period from 2003 to 2005, it related to his failure to take appropriate action with respect to the conduct of the plaintiff’s lawyers in the litigation in the Federal Court concluded in March 1995, and, perhaps relatedly, with respect to the initial proceedings. The third defendant makes the point that, by the time the third defendant was approached, any action in relation to the conduct of the most recent proceedings in the Federal Court was in relation to events well in the past (and, on his argument, out of time). The argument is, that being the case, there was no action then available to the plaintiff, and consequently the present proceedings do not disclose any reasonable cause of action. Secondly, it is submitted that any act or failure to act on the part of the third defendant now complained of was, most recently, in 2005. That being the case, it is submitted that any cause of action arising from such act or failure to act is also statute barred.

10. [29]

    The third defendant submitted that the plaintiff had neither pleaded facts, nor led evidence capable of supporting the conclusion that the plaintiff was, during the time of the alleged events, that is, from 1995 or from 2005, under a disability within the meaning of s 52 of the Limitation Act 1969 (NSW), so as to suspend the running of the limitation period. There may be merit in this submission. It was, however, premised on an assumption that a relevant limitation period necessarily applied. No attempt was made to provide a foundation for that assumption.

11. [30]

    The plaintiff’s complaint with respect to the conduct of his lawyers in 1995 might be characterised as negligence, in that there was a breach of a relevant duty of care, or possibly a breach of contract, based on a retainer or any implied agreements between the plaintiff and his then lawyers. This is similarly the case in relation to the plaintiff’s complaint as to the conduct of the third defendant in failing to take action when instructed by the plaintiff in the period between 2003 and 2005. Subject to s 52 of the Limitation Act, a limitation period of 6 years applies to such claims: Limitation Act, s 14.

12. [31]

    Section 52 of the Limitation Act, in essence, provides for the suspension of the relevant limitation period, during any period the person is under a disability. That expression is defined, relevantly for present purposes, in s 11(3) of the Act as follows:

13. [32]

    This provision was recently considered in Binetter v Binetter [2022] NSWCA 169 where Basten AJA (with whom White and Mitchelmore JJA agreed) observed at [10]-[12] that there are three elements to that limb of the definition of being “under a disability” which are material. First, there must be a disease or impairment of the person’s physical or mental condition. Secondly, that impairment must operate for a continuous period of at least 28 days so as to render the person incapable of, or substantially impeded in, the management of their affairs. In relation to the third element his Honour noted that it is not sufficient that any period of incapacity or substantial impediment relate to the person’s ability to look after themselves or to manage their affairs generally. The incapacity or substantial impediment must “relate to the management of [the person’s] affairs ‘in relation to’ the cause of action ‘in respect of’ the limitation period [for which the question arises]”. In this regard, the test for capacity is task-specific: see Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 as discussed in Binetter v Binetter.

14. [33]

    In the present matter, the initial accident would doubtless have prompted the obtaining of advice and the subsequent legal action and says little as to the difficulties under which the plaintiff was then labouring. However, following the appeal and the failed investments, it appears that any impediment suffered by the plaintiff did not prevent him from bringing the action in the Federal Court. Similarly, it is plain that the plaintiff was able to instruct the fourth defendant and assist in the preparation of the brief of evidence compiled in 2011. Finally, the plaintiff was able to bring the present proceedings. There is nothing in the materials that suggests that the plaintiff’s condition has fluctuated. Indeed, the plaintiff stressed at the hearing that he had suffered brain damage as a result of the motor vehicle accident and that this has continued to have a deleterious effect upon him. In these circumstances, it is, presently, difficult to see how the plaintiff could mount any serious challenge to the expiry of the limitation periods for causes of action in tort or contract.

15. [34]

    It is not, however, clear that the plaintiff is limited to the causes of action referred to above. There are particular relationships that are accepted to be fiduciary relationships. This includes the solicitor and client relationship: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97; [1984] HCA 64 (Mason J). Even though there is a legislative regime which governs the legal profession and supervises professional conduct, it does not necessarily follow that the legislation limits the equitable remedies available for abuses of the solicitor’s fiduciary duties: see Maguire v Makaronis (1997) 188 CLR 449 at 463-467; [1997] HCA 23; see also Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 at [185]-[207].

16. [35]

    It is generally accepted that fiduciaries owe two types of duties: a duty to avoid a conflict of interest and a duty not to profit from the fiduciary position. Sometimes, courts describe the duty of fiduciaries more generally as a duty of undivided loyalty: Maguire v Makaronis. The conflict of duty and duty rule and the conflict of duty and interest rule can both be seen as manifestations of the overriding duty of undivided loyalty: Beach Petroleum NL at [201].

17. [36]

    The duty to avoid a conflict of interest has the result that a fiduciary must not enter into engagements which give rise, or which might give rise, to a conflict between the fiduciary’s personal interest and his or her duty to the principal: Chan v Zacharia (1984) 154 CLR 178 at 198; [1984] HCA 36 (Deane J).

18. [37]

    In the present case, at the heart of the plaintiff’s complaint is that the second defendant, when acting for him in 1995, was affected by a conflict between his duty to his client (the plaintiff) and to his employer (the first defendant, who was instrumental in the plaintiff investing his money with Mr Svanberg). This raises at least the possibility of an action in equity in relation to the proceedings in 1995.

19. [38]

    In relation to actions available with respect to the conduct of the third defendant in 2003 to 2005, the plaintiff also asserts in his statement of claim that there was a conflict between the respective interests of the third defendant and the plaintiff. In par 13 of the statement of claim, set out above, the plaintiff complains that the “first and third defendants as Boss and NEW Employee in an obvious conflict of interest chose to pervert Senior Counsel XXX request for better evidence into an unequivocally negative Merit Advice”. The foundation for this claim may be doubtful. As I understand it, it is based on the evidence that the third defendant, in April 2004, moved his practice into premises occupied by the first defendant. The plaintiff appears to draw an inference from this that the third defendant was, at that time, employed by, or in some formal sense, engaged in the first defendant’s practice (leading to, essentially, the same conflict relied on in the case against the second defendant). Ultimately, however, in circumstances where the third defendant relies only on the expiry of any relevant limitation period to assert the absence of a reasonable cause of action, it is not appropriate to form a concluded view as to whether the plaintiff’s claim, that the third defendant was affected by a conflict, has a foundation. Additionally, while the simple fact that the third defendant was operating from the same business premises as the first defendant would not be sufficient, I do not know what evidence may become available as to any business relationship between the two, especially in circumstances where evidence favourable to the plaintiff’s claims may become available in the course of the proceedings. While it seems, perhaps, unlikely, that an employer and employee relationship or some other relationship giving rise to a conflict of interest will be established, I would not, at this stage of the proceedings, exercise my discretion to dismiss the plaintiff’s claim on this basis.

20. [39]

    A claim by the plaintiff for equitable relief for breach of a fiduciary duty is not, at least directly, affected by a limitation period. Equity may, however, refuse relief if an analogy can be drawn between the relief sought and a legal claim barred by a limitation statute: Motor Terms Co Pty Ltd v Liberty Insurance Ltd (in liq) (1967) 116 CLR 177 at 184; [1967] HCA 9.

21. [40]

    In order to dismiss a claim based on the application of a limitation period “by analogy”, sufficiently close similarity between the equitable rights and legal rights in question is required. This does not require a minute comparison between the claim in equity and the claim that is similar and said to be statute barred, although differences in the elements of the respective causes of action must be relevant, and possibly significant: see Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136; [2007] SASC 285 at [948]-[952] and the cases cited therein. In the absence of some sound analogy, a cause of action for equitable relief for breach of fiduciary duty is not subject to any period of limitation: Gerard Cassegrain & Co Pty Ltd v Cassegrain [2011] NSWSC 1156 at [229] (Barrett J). Once sufficient similarity is found, the court must then consider whether, in all the circumstances, it is just to apply the analogy: Trevorrow v State of South Australia (No 5) at [959].

22. [41]

    It may well be that, having regard to the above, a limitation period applies with respect to any equitable cause of action suggested to originate in 1995 or with respect to any equitable cause of action based on events in 2003 to 2005. I am not, however, persuaded to the view that this is “the clearest of cases”, such that this limitation question should be determined at an interlocutory stage. I would not, therefore, exercise my discretion to dismiss the proceedings against the third defendant on the basis that the operation of limitation periods has the effect that there is no reasonable cause of action. This being the basis on which the third defendant sought dismissal of the proceedings pursuant to r 13.4 of the UCPR, it follows that the application to dismiss the proceedings pursuant to this rule should be refused.

Alternative relief sought – striking out of the statement of claim

1. [42]

   The third defendant sought, in the event that prayer one of his motion failed, an order that the statement of claim be struck out pursuant to r 14.28. Rule 14.28 provides as follows:

2. [43]

   The third defendant submitted that relief under the above rule was appropriate because the pleading disclosed “no reasonable cause of action”. While the expression “no reasonable cause of action” is the same as that used in r 13.4(1)(b), the third defendant submitted that failure under r 13.4(1)(b) would not necessarily result in failure under r 14.28(1)(a). I accept that submission. Rule 13.4 provides a power to dismiss the proceedings on the basis that “no reasonable cause of action is disclosed” in “relation to the proceedings generally or in relation to any claim for relief in the proceedings”. As can be seen, the focus there is on the foundation of any claim. By contrast, the issue raised by r 14.28 is whether “the pleading” discloses no reasonable cause of action: see also Eastmark Holdings Pty Ltd v Kabraji (2012) 91 ACSR 32; [2012] NSWSC 802 at [111]-[113]. Given the difference between the two rules, it was somewhat unhelpful that the third defendant’s written submissions dealt with them together.

3. [44]

   A useful summary of the principles in relation to the striking out of pleadings can be found in Clarke v State of New South Wales (No.4) [2015] NSWSC 1054 at [33]-[45] where Garling J said:

4. [45]

   The statement of claim in this matter fails to state the plaintiff’s case with sufficient clarity so as to enable the third defendant to meet it. Indeed, as discussed above, it is not possible to understand the statement of claim without regard to the evidence and submissions of the plaintiff. As such, the statement of claim fails to disclose a reasonable cause of action.

5. [46]

   Even if, contrary to the above, the pleading could be construed to disclose a cause of action, it is, nonetheless, liable to be struck out on the basis of its tendency to cause prejudice, embarrassment or delay in the proceedings: r 14.28(1)(b). Consistent with the observations of Garling J in the passage above, and emphasised by Johnson J in McGuirk v The University of New South Wales [2009] NSWSC 1424, “[a] pleading may be embarrassing even though it contains allegations of material facts sufficient to constitute a cause of action, if the material facts alleged are couched in expressions which leave difficulties or doubts about recognising or piecing together what is referred to” (McGuirk at [32]), “if allegations are made at such a level of generality that the defendant does not know in advance the case it has to meet” (McGuirk at [33]) or if the pleadings are non-compliant with the rules (McGuirk at [34]). Where there is a failure to comply with the technical requirements of the pleading rules, Johnson J notes that the appropriate order in many instances “may be to strike out the offending pleading, but grant leave to amend”: McGuirk at [34].

6. [47]

   The above observations are apposite to the present case. Even if the pleading disclosed a cause of action, it does not inform the third defendant of the case he has to meet. The pleading “as a whole would tend to embarrass the fair trial of the action”: McGuirk at [35].

7. [48]

   Having regard to the above, I am of the view that the statement of claim should be struck out.

8. [49]

   However, I am of the view that the plaintiff should be granted leave to amend the statement of claim, so that the plaintiff can properly plead his case in a way that complies with the requirements of the UCPR, and the third defendant is able to determine what case he is to meet. As noted by Kirby P (with whom Hope and Samuels JJA agreed) in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536G-537A:

9. [50]

   It is a matter for the plaintiff to determine whether, and how, to amend the pleadings. However, having regard to the importance of proper pleading for the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings, as set out in s 56 of the Civil Procedure Act 2005 (NSW), litigants may not be given repeated opportunities to put their pleadings into proper order: see Combe v Bank of Queensland [2011] NSWSC 1347 at [23]; McGuirk at [24]-[26].

The application for a stay

1. [51]

   The third defendant sought, as an alternative to the above orders, an order that the proceedings be permanently stayed as an abuse of process, relying on the High Court’s decision in Batistatos. Proceeding on the basis of the manner in which the motion is structured, it appears unnecessary to deal with this ground, as the third defendant has succeeded in obtaining an order with respect to which this order is pleaded in the alternative. However, although the application for a permanent stay of proceedings was pleaded as an alternative to the striking out of the statement of claim, a permanent stay would be a more favourable outcome to the third defendant than an order which would allow the plaintiff to replead his case. This is particularly so in the context of r 13.4(1)(c) of the UCPR, which provides that the Court may dismiss the proceedings, either generally or in relation to any claim for relief in the proceedings, on the basis “the proceedings are an abuse of the process of the court”. In the event that the proceedings are found to be an abuse, the preferable course would be that they be dismissed pursuant to r 13.4(1)(c) rather than simply stayed. It is quite unclear as to why this relief was not sought in preference to the relief under r 14.28.

2. [52]

   The onus of satisfying the Court that there is an abuse of process lies upon the party asserting the abuse of process, and that onus is “a heavy one”: Williams v Spautz (1992) 174 CLR 509 at 529; [1992] HCA 34. I would not, in this matter, exercise my discretion to dismiss the proceedings on the basis that they constitute an abuse of process, or otherwise stay the proceedings. I accept, as submitted by the third defendant, that many years have passed since the relevant events. I also accept that the third defendant is prejudiced by that delay including by the fact the third defendant’s file, as the result of the passage of time, is no longer available to the third defendant. The third defendant suffers the resultant difficulty that time has passed and he is unable to refresh his memory from that file. On the other hand, the plaintiff’s complaint appears, at least in a significant part, to relate to issues going to the relationship between the third defendant and the plaintiff’s earlier representative (formerly, the first defendant in these proceedings). While, as indicated above, there may ultimately be real issues with the merits of the plaintiff’s complaint in this regard, evidence of the nature of the professional relationship which existed at the time is not likely to be affected in the same way as evidence of the conduct of litigation in the distant past. I do not mean to suggest that the third defendant is not prejudiced by the delay. However, it is an issue which, to my mind, is less significantly affected by the passage of time than other more prosaic happenings in the context of an ongoing legal practice.

3. [53]

   To the extent that the plaintiff’s claim relies on any failures on the part of the first defendant, the onus will be on the plaintiff to prove such failures. The only issue raised on this motion with respect to that aspect of the proceeding was that the claim against the first defendant was statute barred by the time the plaintiff instructed the third defendant. While again, I accept that there is prejudice to the third defendant with respect to this aspect of the matter as a result of the delay, the nature of this issue is such that the impact of the delay is not as acute as it might otherwise be.

4. [54]

   For these reasons, I would not exercise my discretion to either stay the proceedings or dismiss them on the basis that they constitute an abuse of process.

Conclusion

1. [55]

   For the reasons given above, I have reached the view that, while the proceedings should not be dismissed or permanently stayed, the statement of claim does not comply with the rules and authorities with respect to pleadings and must be struck out.

2. [56]

   Should the plaintiff wish to progress his claim, he will need to produce a pleading which adequately pleads his claim in a way required by the rules and authorities. The current pleading falls short of the requirements by a significant margin. Further, this much should have been apparent to the plaintiff in September 2021 when Harrison AsJ handed down her decision in Skelton v Foggo. Despite this, no attempt has been made to replead the claim. In these circumstances, I am not of the view that the plaintiff should be left with the unfettered right to replead his case. Such an approach may lead to a further inadequate pleading which then places the onus on the third defendant to bring a motion seeking orders similar to those sought here. However, I am also not of the view that the plaintiff should be entirely shut out from bringing a case if he is able to properly plead it. In my view, the appropriate resolution is for the Court to make an order striking out the existing pleading and directing that, should the plaintiff wish to file an amended statement of claim, he can only do so by seeking the leave of the Court by a notice of motion in which he sets out the form of his proposed pleading, and should he think it appropriate for the success of that motion, to accompany it by an affidavit setting out the facts and matters upon which his application is based.

3. [57]

   I will fix a reasonable period to enable the plaintiff to replead his causes of action. In my view, six weeks is sufficient.

Costs

1. [58]

   The third defendant has succeeded in obtaining one of the two alternative orders sought in the notice of motion. The usual rule is that costs should follow the event: UCPR, r 42.1. Costs should follow the event and be awarded on the ordinary basis.

Orders

1. [59]

   I make the following orders:

   1. (1)

      Pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW), the plaintiff’s statement of claim filed on 17 March 2021 is struck out as against the third defendant.

   2. (2)

      The notice of motion filed by the third defendant on 22 March 2022 is otherwise dismissed.

   3. (3)

      If the plaintiff seeks to amend the statement of claim, the plaintiff is to file and serve a notice of motion on or before 8 November 2022 accompanied by the proposed version of his pleading and any affidavit that may be appropriate in support of his notice of motion.

   4. (4)

      Leave is granted for any such motion to be returnable before the Court on 22 November 2022.

   5. (5)

      The plaintiff is to pay the third defendant’s costs on the motion on the ordinary basis.

   6. (6)

      The proceedings are stood over for further directions before the Common Law Registrar at 9am on 22 November 2022.