FEDERAL COURT OF AUSTRALIA

Wijayaweera v St Gobain Abrasives Ltd (No 2) [2012] FCA 98

THE COURT ORDERS THAT:

1.    The statement of claim and the affidavits sworn by the applicant be sealed on the Court file and not be disclosed to any person without further order of the Court.

2.    The application is dismissed.

3.    The applicant pay the first, second and fourth respondent’s costs of and incidental to the application fixed in the sum of $4,000.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1    The history of the proceeding was described earlier today in the reasons for judgment in relation to the applicant’s unsuccessful application for leave to file an amended statement of claim and the unsuccessful application for an adjournment of the substantive hearing: see Wijayaweera v St Gobain Abrasives Ltd [2012] FCA 97.

2    As noted in those earlier reasons for judgment, the applicant filed a statement of claim on 12 September 2011 which described the basis of the action in the following terms:

[T]he violation of Corporations Act 2001, specifically sections 180 to s184 of the Act , among other sections of the Act by the 4 directors in the application at various times from February 2006 to date, and the vicarious liability of [SGA] from the actions of the directors there from.

3    The balance of the pleading raised serious allegations against the directors and other persons and entities not the subject of the claim. The serious allegations included fraud, defamation and illegal conduct. None of the allegations were particularised or substantiated.

4    The applicant seeks damages of $5 million from the first respondent (SGA) and $750,000 from each of the second, fourth, and fifth respondents (Towner, Leinhart and Hobbs respectively). In these reasons for decision, SGA, Towner and Leinhart are collectively referred to as the respondents.

5    The claim was never served on Hobbs. The claim against Hobbs (the fifth respondent) is therefore dismissed. The remaining respondents submitted that the statement of claim was incomprehensible, vexatious, embarrassing and should be struck out in accordance with r 16.21(1) of the Federal Court Rules 2011 (Cth) (the Rules).

THE AFFIDAVITS FILED BY THE APPLICANT

6    Between 10 and 25 January 2012, the applicant filed 21 affidavits. Each was sworn by the applicant. They were dated 10, 11, 12, 13 (three affidavits), 16, 18, 19 (two affidavits), 20, 23 (nine affidavits) and 25 January 2012. Copies of at least some of the sworn affidavits were not provided to the respondents. The 22nd affidavit was an affidavit sworn by the applicant and filed in this Court on 21 November 2011.

7    The respondents submitted that the affidavits are inadmissible. I agree. The contents of the affidavits are substantially irrelevant. They contain serious allegations which are largely hearsay and unsubstantiated. The material is scandalous and vexatious. The affidavits, taken at their highest, that is by reference to the material that is admissible, do not support the allegations in the statement of claim.

8    Mr Murphy, Counsel for the respondents, sought an order that the affidavits and the statement of claim be removed from the Court file. I reject that application. The affidavits and the statement of claim will be sealed on the Court file and not be disclosed to any person without further order of the Court.

NO CASE SUBMISSION

9    Unsurprisingly, the respondents submitted that the Court should entertain a no case submission and dismiss the proceeding without the respondents being required to elect to call no evidence on the basis that the applicant’s evidence could not sustain a finding against SGA, Towner or Leinhart.

10    The principles are well established. In Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54, at 68-69, Perry J said:

[I]t seems to me that there are primarily four situations in which a submission of no case to answer may be made. They are:

1.    Where no reference at all to the evidence is required.

2.    Where a reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action.

3.    Where it is argued that on a consideration of the evidence adduced by the plaintiff taken at its highest from the plaintiff’s point of view, the evidence could not support the causes of action pleaded.

4.    The situation where it is contended that although there is some evidence to support the plaintiff’s claim, it is so weak and unreliable that it should be dismissed without calling upon the defendant.

...

As to category 1, this should normally be argued on the pleadings, preferably before the trial commences. No question of election arises in that situation. Likewise, consideration of a submission of no case to answer in category 2 should not involve an election.

As to categories 3 and 4, these situations should normally be met by the application of what I have referred to as the general rule that counsel should be called upon to elect.

See also Tru Floor Service Pty Ltd v Jenkins (No 2) (2006) 232 ALR 532 at [24] and Protean (Holdings) Ltd (rec and mgr apptd) v American Home Insurance Co [1985] VR 187 at 215.

11    The present case involves, at the very least, categories 1 and 2. Given the length of the hearing (less than one day), the serious and unsubstantiated nature of the allegations, the saving of Court time and expense and the fatal flaws in the applicant’s pleaded claim, the respondents will not be required to elect: see also Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 9 and Tru Floor at [28]-[29].

TASK FOR JUDGE ON A NO CASE SUBMISSION

12    The task for the judge is no different from that which has to be performed by a judge who has heard all the evidence in the ordinary way and has to give final judgment. It is necessary to make findings of fact after assessing the quality of the evidence: Tru Floor at [36]-[40] and the authorities cited.

ANALYSIS

13    As noted earlier, the allegations in the statement of claim are serious and unsubstantiated. The basis of the action is said to be the violation of the Corporations Act 2001 (Cth) (the Corporations Act), specifically ss 180 to 184, among other sections of the Corporations Act and other causes of action allegedly raised or purported to be raised by the applicant’s statement of claim: see [2] above. There is no admissible evidence to support any of the pleaded allegations. The application by the applicant is hopeless and must fail. In the circumstances, the application should be dismissed.

14    The applicant should also pay the respondents’ costs of and incidental to the application. The respondents sought their costs on an indemnity basis pursuant to r 40.02(a) of the Rules and sought that those costs be fixed in the sum of $6,000. Given the history of this matter and the serious legal difficulties with the applicant’s claim, I will order that the applicant pay the first, second and fourth respondent’s costs fixed in the sum of $4,000. I have taken the $6,000 sought by the respondents on an indemnity basis and applied the usual one third discount in order to do justice between the parties.

ORDERS

15    For those reasons, the orders of the Court are as follows:

1.    The statement of claim and the affidavits sworn by the applicant be sealed on the court file and not be disclosed to any person without further order of the Court.

2.    The application is dismissed.

3.    The applicant pay the first, second and fourth respondent’s costs of and incidental to the application fixed in the sum of $4,000.

Associate:

Dated:    15 February 2012