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Supreme Court 9 December 1999

Sourian v State of NSW

[1999] NSWSC 1173

Public order & justice offences
MALICIOUS PROSECUTION CONSPIRACY SUPREME COURT RULES PT33 R6 PT13 R5

Citation: Sourian v State of NSW [1999] NSWSC 1173
Court: Supreme Court of New South Wales (Common Law Division)
Date: 9 December 1999
Judge(s): James J

Background

The plaintiffs in these two related proceedings were Mr Jake Sourian and his parents, Mr and Mrs Magarditch. The family had operated a Caltex service station business through a company called Magic Australia Pty Limited at Chatswood. Following a fire at the premises in February 1988, Mr Sourian was charged with six offences, including arson, insurance fraud, and conspiracy to assault a witness. Caltex subsequently terminated the franchise, and the insurer avoided the insurance policy on grounds of fraudulent non-disclosure.

All criminal charges against Mr Sourian were ultimately dismissed or acquitted. He and his parents then commenced civil proceedings against five defendants: the State of New South Wales (representing the police), a loss assessor (Mr Egan), the insurer (VACC), Caltex, and ANZ Bank. The claims included malicious prosecution and conspiracy.

Master Harrison had dismissed both sets of proceedings entirely. James J heard appeals from those decisions, with Mr Sourian appearing for himself and, by leave of the Court, for his parents.

  • Whether the malicious prosecution claims against the State and the loss assessor should be summarily dismissed under the Supreme Court Rules
  • Whether the conspiracy claims were properly pleaded and capable of surviving summary dismissal
  • Whether leave should be granted to join additional parties (ANZ and Magic) and to amend the pleadings
  • Whether the Sourian proceedings and the Magarditch proceedings should be consolidated
  • Whether the claims by Mr and Mrs Magarditch and Magic could be maintained on the facts as pleaded

Decision

James J allowed the appeal in the Sourian proceedings in part. While Master Harrison had dismissed the Sourian proceedings entirely, the appellate judge found that certain malicious prosecution claims had sufficient substance to proceed. Specifically, Mr Sourian's malicious prosecution claims against the State (in respect of all six charged offences) and against the loss assessor (in respect of two of the six offences) were permitted to continue.

All other claims in the Sourian proceedings were summarily dismissed. The conspiracy allegations were rejected on multiple grounds: the overt acts alleged were incapable of establishing the conspiracy pleaded, the proper plaintiff for any such claim would have been Magic rather than Mr Sourian personally, and the alleged conspiracy involved making statements to prosecution authorities, which is protected by immunity from civil suit (except through a malicious prosecution claim).

The appeal in the Magarditch proceedings was dismissed in full. The Court found no viable claims by Mr and Mrs Magarditch that could survive summary dismissal, and Magic's position as a corporate plaintiff was not advanced, in part because Mr Sourian could not appear for the company.

The Court struck out the existing pleading and granted Mr Sourian leave to file a further amended statement of claim, confined to the surviving malicious prosecution claims, to be filed by 25 February 2000.

Orders Made

Sourian Proceedings (020124/95):
- Appeal against dismissal of the plaintiff's notice of motion of 29 June 1998: dismissed
- Appeal against the Master's order dismissing the proceedings generally: allowed
- Proceedings summarily dismissed, except for malicious prosecution claims against the State (all six charged offences) and against the loss assessor (offences (ii) and (v))
- Second further amended statement of claim struck out
- Leave granted to file a further amended statement of claim limited to the surviving malicious prosecution claims, by 25 February 2000
- Costs reserved

Magarditch Proceedings (020125/95):
- Appeal dismissed
- Appellants ordered to pay respondents' costs of the appeal

Key Takeaways

  • Malicious prosecution claims arising from criminal charges that were subsequently dismissed or acquitted can survive summary dismissal where there is a sufficient factual basis to support a reasonable cause of action, even where other claims fail entirely.
  • A conspiracy claim alleging the provision of false information to prosecution authorities will ordinarily be defeated by the principle of witness immunity from civil suit, with malicious prosecution remaining the appropriate cause of action in such circumstances.
  • Where the proper plaintiff for a conspiracy or business loss claim is a corporation, a claim brought by individuals personally will generally not succeed, and the corporation must bring its own action.
  • In dismissing the Magarditch appeal, the Court confirmed that the inability of a lay person to represent a corporate party is a significant procedural obstacle, as Mr Sourian was permitted to appear for his parents but not for Magic Australia.
  • Summary dismissal under the Supreme Court Rules does not preclude a court from preserving viable causes of action within the same proceedings, rather than dismissing the entire claim, and granting leave to replead those surviving claims.

Legislation and Cases Referenced

Legislation:
- Supreme Court Rules, Pt 33 r 6 (amendment of pleadings)
- Supreme Court Rules, Pt 13 r 5 (summary dismissal)
- Crimes Act 1900 (NSW), ss 195(b), 178BB
- Petroleum Retail Marketing Franchise Act 1980 (Cth), s 16(3)

Cases: No specific cases were identified in the provided text of the judgment.