Citation: Johnston v ANZ Banking Group Ltd & Ors [2004] NSWSC 1250
Court: Supreme Court of New South Wales (Common Law Division)
Date: 22 December 2004
Judge: Hoeben J
Background
The plaintiff was a director and secretary of a group of farming companies that held a property near Corowa, New South Wales. Following defaults under a mortgage deed, the bank appointed a receiver and manager over the companies in May 1996. After a series of disputes about possession, the plaintiff was charged under the Inclosed Lands Protection Act 1901 (NSW) with remaining on and entering the property without consent on two occasions in October 1996. Both charges were dismissed after seven days of hearing in 1998.
The plaintiff then commenced proceedings against the bank, the receiver, and the receiver's associate, alleging malicious prosecution arising from those two charges. The claim had a troubled procedural history: three previous versions of the statement of claim had been struck out by Masters and Judges of the Court, with the most recent strike-out by Davies AJ in June 2003 made without leave to replead.
The plaintiff sought leave to rely on a fourth version of the pleading, described as the second further amended statement of claim (SFASC). All three defendants opposed that application.
Legal Issues
- Whether the SFASC adequately pleaded that the defendants had instigated or were responsible for the prosecution brought by police.
- Whether the SFASC sufficiently pleaded the element of agency, particularly in relation to the conduct of the second and third defendants.
- Whether the SFASC properly pleaded an absence of reasonable and probable cause for the prosecution.
- Whether the SFASC adequately pleaded malice, including motive attributable to the defendants.
- Whether leave should be granted to file the SFASC, or whether the action should be dismissed entirely.
Decision
Hoeben J refused leave to file the SFASC, concluding it was so fundamentally defective that it would inevitably be struck out by the defendants. The court found the document suffered from significant pleading deficiencies as well as two essential failures that could not be cured by further amendment.
On the question of instigation, the court found the pleading did not adequately establish that the defendants had set the police prosecution in motion. The charges were brought by police, and the SFASC did not properly plead facts capable of demonstrating that the defendants had instigated or were legally responsible for that prosecution, a necessary element of the tort of malicious prosecution.
The court also found the pleading failed on the element of absence of reasonable and probable cause. Given the history of the matter, including the interlocutory orders made by Bryson J in August 1996 requiring the plaintiff to vacate the property, the court considered there was a significant obstacle to establishing that those who reported the plaintiff's presence at the property lacked reasonable and probable cause to do so.
Because the defects were substantive rather than merely formal, Hoeben J concluded the action could not succeed and that it would be unjust to the defendants (particularly the individuals) to leave it on foot. Applying the approach endorsed in Holding v Jennings [1979] VR 289, his Honour dismissed the action outright rather than simply refusing leave to replead.
Orders Made
- The plaintiff's application for leave to file the second further amended statement of claim was refused.
- The action was dismissed.
- The question of costs was reserved, with the parties granted liberty to restore the matter to the list on seven days' notice to deal with the defendants' costs motion and the costs of the present application.
Key Takeaways
- A claim in malicious prosecution requires adequate pleading of instigation: the plaintiff must plead facts showing the defendant set the prosecution in motion, not merely that the defendant was connected to events preceding it.
- Where a prosecution is brought by police rather than directly by the defendant, the pleading must specifically address how the defendant's conduct amounted to instigation or procurement of that prosecution.
- The Supreme Court confirmed that where a pleading fails on substantive elements incapable of correction by further amendment, the appropriate order is dismissal of the action rather than a mere strike-out that leaves the proceedings on foot.
- By the time of this application, the plaintiff had filed and had struck out three prior versions of the statement of claim; the court's willingness to dismiss outright reflected the accumulated prejudice to the defendants, including the individual defendants, of repeated failed pleadings.
- Existing court orders bearing directly on a plaintiff's rights in respect of the relevant property will be material to whether absence of reasonable and probable cause can be properly pleaded.
Legislation and Cases Referenced
Legislation
- Crimes Act 1900 (NSW)
- Inclosed Lands Protection Act 1901 (NSW)
- Farm Debt Mediation Act 1994 (NSW)
- Real Property Act 1900 (NSW)
- Supreme Court Rules
Cases
- Holding v Jennings (1979) VR 289
- Glinski v McIver [1962] AC 726
- Hermiman v Smith [1938] AC 305
- Hicks v Faulkner (1878) 8 QBD 167
- Commonwealth Life Assurance Society Limited v Brain (1935) 53 CLR 343
- Davis v Gell (1924) 35 CLR 275
- Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563
- Director of Public Prosecutions v Wille & Ors (1999) 47 NSWLR 255
- Darcey v Pre-Term Foundation Clinic (1983) 2 NSWLR 497
- Expo International Pty Limited v Chant [1979] 2 NSWLR 820
- Brambles Holdings Limited v Carey (1976) 15 SASR 270
- Commercial Union Assurance Co of NZ Ltd v Lamont [1989] 3 NZLR 187
- Geneva Finance v Cook (1992) 7 ACSR 415
- Minkley v Munro (1986) 8 PSR 3975
- Morris v Darby (1936) 53 WN(NSW) 136
- Pandit Gaya Pashad Tewari v Sardar Bhagat Singh (1908) 24 TLR 884
- Watters v Pacific Delivery Service Ltd (1963) 42 DLR 661