In three rulings relating to group proceedings issued under Part 4 of the Supreme Court Act Forrest J considered an application to regularise proceedings and an application to dismiss on the basis of an abuse of process in Matthews v SPI Electricity Pty Ltd Ruling Nos 1 and,  Cohen v State of Victoria & Ors (No 2) and in Matthews v SPI Electricity Pty Ltd Ruling Nos 2 an application for summary judgment and to strike out aspects of the statement of claim.

Facts

The claim in Matthews arose out of the Black Saturday bush fires.  The firm Oldham Naidoo (“Naidoo”) issued proceedings in the name of a Mr Keane for damages against SPI amongst others. Naidoo did not have instructions from Mr Keanne to issue the proceedings in his name.  Keane asked Naidoo to remove him as a plaintiff, something that did not happen for another year.  Matthews then replaced Keane as representative plaintiff.  After Maurice Blackburn took over conduct of the proceeding it brought Naidoo’s actions to the attention of the court and applied to regularise the proceedings.  The defendants resisted the application and sought variously to strike out the claim and obtain summary judgment.

In Cohen Naidoo issued a group proceeding in Dr Cohen’s name without his knowledge.  Naidoo sought but failed to find a person to be substituted for Cohen.  There had been a substantial history of amendments to the statement of claim. The court considered the application to strike out the proceeding as an abuse of process.

Ruling nos 1 

Lack of authority in a solicitor issuing a proceeding – does it render it a nullity

In opposing the application to regularise the proceeding SPI submitted that the irregularity, issuing a proceeding without authority of the named plaintiff, rendered it a nullity and that it was  incapable of cure by subsequent action or order of the court [40]. His Honour rejected this submission ([42]) stating, at [65]:

the established line of authority to the effect that a proceeding issued by a solicitor without the authority of a plaintiff be regarded, to use the terminology eschewed by the High Court, as neither “void” nor a “nullity“

He found that the defect could be cured if ratified by the purported plaintiff [66].  The fact that a Part 4A proceeding is commenced irregularly does not make it invalid or void from the commencement [73]. At [77] – [78], he rejected the submission that absent the existence of the principal/agent relationship between Keanne and Naidoo the proceeding should be treated as a nullity.  Agency is not essential to the act of ratification. At [79] his Honour stressed that the object of Part 4A was to permit one person in a group proceedings to have a group’s rights determined in a single proceeding. It was not the object of the legislation to render nugatory a group’s right because of the solicitor’s failure.

Is it possible for Matthews or Keane to ratify the institution of the proceedings

It was not necessary for the person ratifying the issue of proceedings being the plaintiff at the time of ratification ([87] – [88]). Keane had been removed as a plaintiff prior to the act of ratification.  His Honour referred to English authority which found that a nominal plaintiff could ratify a proceeding issued without its authority provided it was lawful to do so ([89] & [95]).

Should the proceeding be dismissed or stayed is an abuse of process (also the decision in Cohen)

SPI argued that even if the preceding was capable of ratification it remained an abuse of process in all the circumstances. The prejudice to the defendants included the calculation of interest in the event that the plaintiff was successful. Forrest J found that that it was open to the court to dismiss the claim is an abuse under section 33ZF.   He cited the principles enunciated by the High Court in Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd where the Court said, inter alia:

It is clear, however, that abuse of process extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment

In claiming an abuse  SPI  relied on:

• the conduct of the solicitors ([102] & [104])
• the plaintiff and the group members have a remedy in the event that the claim is dismissed ([105])
• there was detriment the SPI regarding entitlement to interest([106])

It was not in the interests of justice to dismiss the claim at this point in time ([111]). His Honour made the point that the conduct of the solicitors is a matter for the court on another occasion and that of the Legal Services Commissioner (see [114] generally).  That said His Honour was not prepared to permit the plaintiffs to benefit from the original solicitors “contumelious actions” in precipitously issuing proceedings (see 119 – 129).To that end the plaintiff’s entitlement to interest would only commence on the 23 July 2010, the date of substitution.

Unlike the outcome in Ruling 1 Forrest J dismissed the proceeding in Cohen as an abuse of process.  He referred to the principles set out in Ruling 1 (see [34]) and distinguished the facts there with those in Cohen.  One important difference was that in Cohen there was no actual or putative plaintiff.  Another was that the uniformly substandard manner in which the proceeding was conducted by the plaintiff’s legal representatives. The specific reasons for acceding to the application are:

• the issuing and maintenance of this claim in Dr Cohen’s name was a patent abuse of process. He did not retain any solicitor to act on his behalf [43].
• Cohen had not sought to ratify the proceeding. It remained an unauthorised proceeding [44].
• there was no-one prepared to take on the role of representative plaintiff  and no discrete claim was issued by any group member prior to the expiry of the limitation period [45]
• Naidoo who issued the proceeding without authority was unable to procure a plaintiff prepared to take on the task [46]
• absent a litigation funder or a deep-pocketed lawyer who would carry the costs of the group, there is little or no prospect of finding a willing plaintiff  [47].
• even with appropriate notice there it was unlikely that someone would take on the role of representative plaintiff [48].
  
• the risk of there being, in a real sense, an infringement on the rights of any group member was very low [49].
  
• given the history of the proceeding to date and the issues that are likely to be raised, the prosecution of the claim would be “tortuous and lengthy and inevitably, the claim will be subject to further applications, which would result in the group being reduced in description or divided into sub-groups.” There was a risk that the claim would be “decertified” as a group proceeding and not conform with the requirements of s 33C [50].
• the case without a representative plaintiff had “vexed” the defendants for over two years – with numerous amendments to the statement of claim and interlocutory applications. There was no genuine prospect of it being prosecuted adequately in the future [51].

Ruling nos 2

Summary judgment

The State of Victoria, a defendant, applied for summary judgment relating to those allegations that Victorian police officers breached their statutory and common law duties. The allegations related to a failure to warn residents were exposed to the fire ([4]).  Forrest J reviewed principles relating to strike out at [15] – [22], in particular Rule 23.01, the High Court’s decision in Spencer v the Commonwealth and section 63 of the Civil Procedure Act. He found that the civil procedure legislation intended a less stringent test to be applied in determining summary judgement application.  At [22] he identified the relevant principles as being:

1. If a court determines that a particular cause of action is hopeless or bound to fail, then it should be dismissed;
2. A court may also dismiss a claim where it determines that it has no real prospect of success in the sense that such prospects are fanciful rather than realistic;
3. The less complex the issue in a case then the easier it is for a court to take the view that such a proceeding is capable of being determined on summary judgment; and
4. Whatever the test to be applied, the power to order summary dismissal of a claim must be exercised with care. This is particularly so where a case may involve issues of contested fact, or where its consequences may affect a large number of persons.

Statutory duty & common law breaches alleged against police officers

Forrest J reviewed  the police powers and duties at common law and under the Civil Procedure and the Police Regulations Acts ([28] – [37]) and the operation of Emergency Management Act and the relevant plan.  In that context he found that Victorian police officers did not owe a statutory duty to those who suffered personal injuries because the legislation did not impose an obligation on the police officers nor did the legislature intend to confer a private right upon individuals which would then entitle that person to sue for non-compliance ([68]).  It was question of statutory construction, the exercise of which he undertook at [70] – [87].

His Honour found there was a basis to allege a common law duty owed by the police. He relied upon the High Court authority of Sutherland shire Council v Heyman, Pyrenees Shire Council v Day and Crimmins v Stevedoring industry Finance Committee (see [104] ff).  The starting point in determining the existence of a common law duty was the statutory provisions which set out the powers of the authority or the person in question ([109]). That exercise  was not to be done in isolation, with his Honour quoting Gummow and French in the very recent High Court decision of Kuhl v Zürich Finance Services Australia Ltd at [114]:

“..in determining a duty of care, its scope and content “those questions are determined by considering reasonable foreseeability and the ‘salient features’ of the relationship between the plaintiff and the defendant”.

His Honour found the question of control as of critical significance in the imposition of a duty of care ([118]). In that context he found that the matters alleged in the pleadings could only be fleshed out at trial. Issues such as prior inspection of the area and the properties were also relevant regarding imposition of the duty ([119] – [120]).  The other matters which militated against summary dismissal were:

• that police officers exercise common law functions as well as their statutory powers and the exercise of those powers may point to a duty of care as well as opposing competing considerations (such as public policy, inconsistent obligations) are matters that can only be determined after the whole of the circumstances of the case can be determined [121] – [124].
• section 64 of the Civil Procedure Act which permits a case to proceed to trial even if there is no real prospect of success [126].  He found the nature of this case was such that full hearing on the merits is appropriate.

Issues

The Court made clear that the precipitate action in issuing proceeding sowed some of the seeds of the problems facing the plaintiff in both Matthews and Cohen.  Those problems included obtaining satisfactory plaintiffs and drafting statements of claim to the appropriate standards.  In Matthews the plaintiff was substantially successful in maintaining the proceeding and the core of its claim.  In Cohen the defects proved fatal.

The Matthews Ruling 1 and 2 Forrest J undertook a very useful analysis of Part 4 of the Supreme Court Act and its interrelationship with the Civil Procedure Act.  He continued, from other decisions commencing late last year, to consider the operation of the Civil Procedure Act.  In Matthews Ruling 2 he analysed sections 63 – 64 , relating to summary judgement applications.  Ultimately his Honour maintained the traditional caution of the judiciary in considering a summary judgment application, particularly involving determination of contested facts.