Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Wagtail Yarns v The Isis Shire Council

 

[2006] QSC 310

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Wagtail Yarns & Another v The Isis Shire Council [2006] QSC 310

PARTIES:

WAGTAIL YARNS (A FIRM)
(first plaintiff)
KEVIN AND ELIZABETH SCARLETT AND GAYLENE KINGSTON
(second plaintiff)
v
THE COUNCIL OF THE SHIRE OF ISIS
(defendant)

FILE NO/S:

BS 7177 of 2005

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane 

DELIVERED ON:

25 October 2006

DELIVERED AT:

Brisbane

HEARING DATE:

25 September 2006

JUDGE:

Lyons J

ORDER:

(1)Pursuant to Rule 376(4) of the UCPR the plaintiffs have leave to amend in terms of the third further amended statement of claim filed 25 August 2006.

(2)The defendant’s applications filed 14 July 2006 and 5 September 2006 are dismissed.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – PLEADING – STATEMENT OF CLAIM – whether leave should be granted to amend to include a further cause of action – whether the Statement of Claim should be struck out as failing to disclose a cause of action

Uniform Civil Procedure Rules, Rule 171, Rule 376(4)

Acrow (Automation) Ltd v Rex Chainbelt Inc [1971] 3 All ER 1175

Butler v Simmonds Crowley and Galvin[1999] QCA 475

Deepcliffe v Gold Coast City Council[2001] QCA 342

Dey v Victorian Railways Commissioners (1949) 78 CLR 62

Ditfort v Brown(1990) 19 NSWLR 49

Dyson v Attorney-General [1911] 1 KB 140

Film Financial Consultants v Becker Group Ltd[2006] NSWSC 319

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Laferla v Birdon Sands Pty Ltd(2005) ATR 81

Northern Territory of Australia v Mengel(1995) 185 CLR 307

Ronex Properties Ltd v John Lang Construction Ltd [1983] 1 QB 398

Sanders v Snell(1998) 196 CLR 329

The Beach Club Port Douglas Pty Ltd v Page[2005] QCA 475

Williams v Spautz(1992) 174 CLR 509

White Industries (Qld) Pty Ltd v Flower and Hart(1999) 87FCR 134

Wyatt v Palmer [1899] 2 QB 106

COUNSEL:

AJ Greinke for the first and second plaintiffs

D Atkinson for the defendant

SOLICITORS:

Cranston McEachern for the first and second plaintiffs

Barry & Nilsson for the defendant

LYONS J.

History

  1. The second plaintiffs are members of a partnership which trades as the first plaintiff.[1] For some time prior to May 1999, Wagtail Yarns carried on the business of cultivating angora goats, and spinning and knitting mohair yarn from a property at Childers which was subject to the provisions of the Town Planning Scheme for the Shire of Isis gazetted on 11 October 1980.  The property was zoned Rural A. 
  1. On 26 May 1999, the Council of the Shire brought an application in the Planning and Environment Court seeking declarations in relation to the use by the plaintiffs of the land. The first declaration sought was that the carrying on of the spinning and knitting of mohair on land zoned Rural A was a use which, in the absence of a development approval, was an unlawful use. The second declaration sought was that the installation and use of mohair spinning and knitting machinery at the property were an unlawful use. The third declaration sought was that the spinning and knitting of mohair constitutes either light or medium industry under the scheme and is an unlawful use on land zoned Rural A. Declarations were also sought that the sale of products from the farm meant it was a shop and that this was also an unlawful use.
  1. In early May 1999 the plaintiffs ceased using the property for the spinning and knitting of mohair yarn due to the defendant’s threatened legal proceedings.
  1. The matter was heard on 9 July 1999 before his Hon McLauchlan DCJ who reserved his decision. On 23 July 1999, whilst a decision was pending, an amendment was made to the Town Planning Scheme and published in the Government Gazette. The effect of the amendment on the submission of the plaintiffs was that the spinning and knitting of mohair yarn on the property became a permitted use or, with some alterations to the premises, capable of being made lawful.
  1. The Council did not inform the Planning and Environment Court of the gazettal of the amendment. His Honour delivered judgment on 2 September 1999 and indicated he was prepared to make the declarations sought by the Council that the activities were an unlawful use under the Town Planning Scheme.
  1. The first and second plaintiffs became aware on 21 February 2000 of the amendments to the Scheme and informed the Court. The matter was brought back before his Honour in September 2000 by which time the Council had amended the declarations it sought and now sought a declaration that if the business was not a rural based home business, then it was unlawful.
  1. On 14 September 2000 the Court revisited its earlier decision and dismissed the application.
  1. On 2 July 2003 the plaintiffs claimed damages in this Court arising out of the interference with the plaintiffs’ trade and business due to an unlawful act of misfeasance in public office and claimed damages of $4,288,662.00. Essentially the plaintiffs pleaded that the defendant represented to the Court that the use of the property was unlawful and the Scheme remained unamended and until the rehearing in February 2000 the defendant did not inform the Court that the amendment had been adopted and come into force.
  1. An amended Statement of Claim was filed on 9 December 2003 claiming $4,365,268 and a further amended Statement of Claim was filed on 30 November 2005. On 4 May 2006 the defendant filed an application to strike out the Statement of Claim or part thereof returnable on 2 June 2006. On 2 June 2006, there was a consent order before White J whereby the parties agreed:
  1. to strike out the claim;
  1. that the plaintiffs file and serve a Statement of Claim by 30 June 2006, and that any application to strike out the further pleading be filed and served by 14 July 2006.
  1. The plaintiffs filed and served the Second Further Amended Statement of Claim on 30 June 2006. In essence the plaintiffs allege that:
  1. On 23 July 1999 the amendment was published in the Government Gazette;[2]
  1. as a result of the amendment the use was a permitted use;[3]
  1. the defendant knew of the amendment and its effect;[4]
  1. the defendant nevertheless maintained its proceedings on the basis of the unamended scheme after 23 July 1999 without informing the Court of the amendment and its effect;[5]
  1. the defendant intended thereby to cause harm to the plaintiffs;[6]
  1. the plaintiffs suffered loss as a consequence of the defendant’s conduct.[7]

The plaintiffs claim damages from the unlawful interference with the plaintiff’s business in the sum of $4,365,268.00 and interest thereon. 

  1. On 25 August 2006, the plaintiffs filed and served a third further amended Statement of Claim whereby they sought to claim further, or in the alternative, damages for abuse of process in the sum of $4,365,268.00 together with interest.
  1. The defendant filed an application on 14 July 2006 and an amended application on 5 September 2006 and seeks the following orders:

“(a)the whole of the second further amended Statement of Claim be struck out on the grounds that it discloses no reasonable cause of action, is frivolous or vexatious, and is an abuse of the process of the court, pursuant to Rule 171 of the UCPR;

  1. that the amendment purportedly made to the third further amended statement of claim contained in paragraph 23A filed on 28 August 2006:

a.be set aside;

b.be declared to be ineffectual;

pursuant to Rule 371 of the UCPR;

  1. alternatively that the amendment purportedly made to the third further amended statement of claim contained in paragraph 23A filed on 28 August 2006 be disallowed pursuant to Rule 379 and/or Rule 376 of the UCPR;
  1. the plaintiffs pay the defendant’s cost of the application to be assessed, and if the whole of the second further amended Statement of Claim is struck out, of the action, to be assessed;
  1. any other orders the court deems meet.”
  1. The plaintiffs filed an application on 6 September 2006 for the following orders:

“(a)Pursuant to Rule 376(4) of the UCPR the plaintiffs have leave to amend in terms of the third further amended statement of claim filed 25th August 2006.

  1. The plaintiff pay the defendants’ costs of and incidental to this application to be assessed on the standard basis.”

Unlawful interference with business

  1. The defendants seek to have the second further Statement of Claim struck out essentially on the basis that it does not disclose a cause of action. The plaintiffs in their submissions claim that they have a cause of action for unlawful interference with their business and claim damages of $4,365,268.00.
  1. The plaintiffs accept that this tort is embryonic or emerging in Australia, however they submit that the current state of the authorities establish that the tort is recognised but has not been made out on the facts in the cases which have been argued to date. In particular the plaintiffs in their submissions place reliance on the recent decisions of Film Financial Consultants Ltd v Becker Group Ltd and Anor,[8] where Rothman J stated that “If such a tort exists, and for present purposes I assume that to be the case”; and Argo Pty Ltd v Attorney General,[9] where Blow J stated that “Such a tort has received limited recognition by single judges in Australia”.  In this decision Blow J further  stated that “…in Sanders v Snell the High Court left open the question whether such a tort should be recognised in Australia”.  The plaintiffs accordingly submit that there is authority that the tort exists and that the High Court did not reject the existence of the tort in Sanders v Snell,[10] but rather had failed to embrace its incorporation into the law of torts.
  1. In those jurisdictions where the tort has been recognised, it is well established that there must be interference by an unlawful means. As the High Court stated in Northern Territory of Australia v Mengel,[11] the tort even if it did exist, would not extend to all unlawful acts.  McMurdo P in the Deepcliffe v Gold Coast City Council[12] decision considered that if the tort was recognised in Australia, the nature of the unlawful act would be confined:[13]

“Accepting for present purposes that the tort is recognised in Australia, it seems to me that three relevant principles emerge from these passages.  First, any tort of interference with business by unlawful means requires the doing of an unlawful act in the sense that the act is forbidden by law; such an act is not an act which is unauthorised only in the sense that it is ultra vires and void.  Second, the tort requires an intentional act calculated in the ordinary course to cause harm.  Third, the tort is not made out where the actions complained of are done in the exercise of public office affecting public not private interests so that any actionable tort will be by way of the tort of misfeasance in public office, or, in appropriate cases, negligence.”

  1. In their second amended Statement of Claim, the plaintiffs plead that the failure of the Shire Council to inform the Court of the amendment of the scheme was unlawful because this failure amounts to contempt of the Court. In this regard the plaintiff relies on the decision of Acrow (Automation) Ltd v Rex Chainbelt Inc[14] where the Court held that contempt of court was a sufficiently unlawful act to invoke the tort.  The plaintiffs plead a deliberate act of contempt on the part of the Council is a deliberate misleading of the court. 
  1. In the decision in Ditfort v Brown,[15] where a solicitor was charged with contempt for failing to point out to the court that a party had given a false answer, the court noted that:

“In order to make good the charge of contempt, as it has been formulated, the claimant must prove that when Miss Wild made a nil return to the subpoena directed to the Department of Foreign Affairs, the opponent either knew that her response was false or had no honest belief that it was true; and with this in mind in one state or the other, failed to intervene in the business of the court in some manner which was left unspecified.  That inaction, in those circumstances, was it is said a breach of the opponent’s duty to the court and it was that breach which constituted the contempt.  It is an abuse of the court’s process amounting to contempt to ‘deceive the court either by falsehood or by the suppression of facts…’: Borrie and Low, The Law of Contempt (1973) at 250.  In Linwood v Andrews & Moore (1988) 58 LT 612, a barrister was imprisoned for contempt for having been party to a reading to the court of a false affidavit and, in R v Weisz: Ex parte Hector MacDonald [1951]2KB 611, a solicitor was held guilty of contempt for having disguised the true nature of an action by means of a fictitious endorsement.”

  1. The plaintiffs therefore submit that in the present case each of the elements of the tort of unlawful interference with trade or business have been pleaded, namely the deliberate use of unlawful means; interference with the claimant’s trade or business interests; intention to injure; and resulting loss.
  1. The essential question to be answered in relation to the defendant’s application for a strike out of the pleadings pursuant to Rule 171 of the UCPR is whether the pleadings disclose a cause of action. The tort of interference with business by unlawful means is recognised in the United Kingdom and is committed when a person deliberately interferes with the trade or business of another by unlawful means.[16]  The English authorities were discussed by the Queensland Court of Appeal in the decision of Deepcliffe v Gold Coast City Council [17] where it was noted that the tort required as an essential element that the unlawful means used were directed at the plaintiff.  In the decision McMurdo P stated:[18]

“It is also noteworthy that the tort does not seem to have been successfully established in Australia since the High Court’s failure to embrace its incorporation into the law of torts in this country in Sanders v Snell.

  1. In Sanders v Snell[19] the High Court had determined that it was not necessary to decide in that particular case whether a tort of interference with trade or business interests by an unlawful act should be recognised in Australia.  It considered that whilst the tort was emerging in the UK, the element of unlawfulness was essential to the definition of the tort because otherwise conduct of the most unremarkable kind would be tortious. 
  1. Williams JA, in the Queensland Court of Appeal decision in Deepcliffe, considered the High Court’s decision in both Sanders v Snell[20] and Northern Territory of Australia v Mengel[21] and continued:[22]

“In the light of the reasoning of the High Court in those two authorities it is not for this Court, in my view, to hold that such a tort does exist in Australian law.”

His Honour later stated:[23]

“I am not satisfied that Australian law recognises a tort of interference with business by unlawful means, and I am also satisfied that it is not for this court to recognise the existence of such a tort for the first time.”

  1. The defendant accordingly submits that the pleadings should be struck out because the tort is not recognised in Queensland and that the state of law has not changed since the decision of Sanders v Snell.  The defendant further submits that the recent decisions of the New South Wales Supreme Court in Film Financial Consultants v Becker Group Ltd[24] and the Tasmanian Supreme Court in Argo Pty Ltd v Attorney General[25] whilst theoretically conceding that such a tort might develop, actually endorse the view that no such tort has as yet been recognised in Australia in appellate courts.
  1. The decision in Deepcliffe establishes that even if the tort were recognised then it would not extend to the conduct of public authorities of a public character.  In particular McMurdo P stated that:[26]

“It is significant that none of the cases where the emerging tort has been considered involved a public authority or the holder of public office but rather involved commercial business dealings or union activities.”

    It was further discussed by William JA in the following terms:[27]

“But even if there were such a tort, the necessary elements are not established by the findings in this case.  The reasoning in Sanders v Snell (especially at 344-6) strongly suggests that any such tort should be limited to conduct of a private, rather than a public, character; where conduct of a public character is involved, if any tort is established, it will be the tort of misfeasance in public office.  Here the impugned conduct (even that of the second respondent) is essentially conduct by a public official in the exercise of a power conferred by virtue of office.  If the reasoning in Sanders v Snell is correct then a tort of interference with business by unlawful means has not been established.”

  1. The plaintiffs submit that in this case the issue of the tort not extending to public authorities should not arise because it is not simply that a public authority is always exempt from the tort, but rather it has to be a case of a public authority exercising a public function for the exemption to arise. In this case the plaintiffs submit that the public authority was not exercising a public function because anyone can bring a complaint about unlawful use to the Planning and Environment Court, not just the Council.
  1. The established cases make it clear that the jurisdiction to strike out pleadings in a way which will summarily terminate the proceedings will be sparingly exercised.[28] It is not the role of the court in entertaining an application of this nature to enter into a complicated examination of matters that should reasonably be submitted for trial.[29] Moreover, where there is conceivably an arguable point of law the parties are entitled to have the matter submitted to trial to be properly heard and determined.[30] In particular the plaintiffs submit that this is an emerging area of law and therefore the pleadings should not be struck out but rather the matter should be left to be considered by the trial judge because otherwise the development of new areas of law would essentially be stultified.   I note that a similar argument was put to the Court of Appeal recently in The Beach Club Port Douglas Pty Ltd v Page[31] where McPherson JA, (with whom Chesterman J agreed), specifically rejected an argument that to strike out the claim would stultify the development of the law.  He stated:[32]

“What is a reasonable cause of action can be understood only by reference to the state of law as it exists now, and not at some indeterminable future time when it may have evolved in ways beyond present recognition.”

  1. If the Second Further Statement of Claim relied solely on facts which supported this cause of action only there may have been a stronger argument to strike out the pleadings; however the facts as pleaded as set out in paragraph 10 of these reasons do in fact set out all the material facts necessary to support the further cause of action pleaded in the amendments of 25 August 2006. To the extent that the facts as pleaded on 14 July 2006 actually form the basis of the cause of action of collateral abuse of process in any event I am not sure that leave is actually required as it conforms to the Consent Order of 2 June 2006. I will however consider the plaintiffs request for leave on the basis that the consent of the Court is required.

The Plaintiffs’ Application for Leave to Amend the Statement of Claim

  1. The plaintiffs have made an application for leave to amend the Statement of Claim pursuant to Rule 376(4) of the UCPR. The plaintiff submits that the substantive effect of the amendment is to add a further cause of action which is collateral abuse of process. The plaintiffs submit that the leave should be given to amend as the amendment is appropriate, and the new cause of action arises out of the same facts as the cause of action already pleaded.
  1. The new paragraph the plaintiff seeks to add is as follows:

“23AIn the premises at paragraphs 13, 14, 15, 16 and 23;

23 A.1 the predominant purpose of the defendant in bringing and continuing the Proceedings was to cause harm to the plaintiffs by interfering with the carrying on of the plaintiffs’ business conducted on the Property, and not for the protection of any legitimate interest of the defendant;

23A.2 the defendant brought the Proceedings, or alternatively from 29th June 1999 maintained the Proceedings, without reasonable cause;

23A.3 the defendant abused the process of the P&E Court by committing a contempt of court to achieve that purpose.”

  1. The tort of collateral abuse of process has been considered by the Federal Court in White Industries (Qld) Pty Ltd v Flower and Hart[33] where it was held that an abuse of process exists where proceedings are brought not to vindicate a legal right, but for some other purpose.  Collateral abuse of process was also recently considered by Angel J in Laferla v Birdon Sands Pty Ltd[34] where the nature of the tort was summarised as follows:[35]

“Collateral abuse of process occurs when the process of the court is put in motion or used for a purpose which in the eye of the law it is not intended to serve: Varawa v Howard Smith Co Ltd (1911) 13 CLR 35; Dowling v The Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509; Williams v Spautz (1992) 174 CLR 509.  The essence of the tort of collateral abuse of process is that the defendant has used some aspect of the machinery of the law to achieve a purpose which was entirely outside the ambit of the legal issues upon which the court has been asked to adjudicate.  The essence of the tort is the improper purpose of a party namely the institution or defence of proceedings to procure a result not within the scope of the process.  The test is whether the predominant purpose was an improper one.”

  1. Such a tort of collateral abuse of process has been recognised by the High Court in Williams v Spautz[36] which was discussed by the Queensland Court of Appeal in Butler v Simmonds Crowley and Galvin:[37]

“In order to succeed in an action for collateral abuse of process it is not necessary to allege or prove that the initial proceeding has terminated in favour of the plaintiff, or that there was no reasonable and probable cause for instituting the initial proceeding.  It is, however, essential for a plaintiff to show that the defendant instituted proceedings for a purpose or to effect an object beyond that which the legal process offered.  Such a purpose of the defendant in instituting the earlier proceedings is of crucial importance.  It is not sufficient to assert that the proceedings were instituted with an improper motive.  The ulterior objective needs to be identified, and it also needs to be able to be seen as the predominant purpose of those proceedings and as outweighing any legitimate purpose that they might otherwise have.  In Williams v. Spautz, Deane J and Gaudron J would have imposed additional requirements before a party could obtain an order staying a proceeding for abuse of process.  Deane J considered it necessary to show some improper act in the prosecution of the process.  Gaudron J observed:

‘there is no basis for characterizing a purpose as improper unless it involves a demand made without right or claim of right, or unless it entails some consequence which is unrelated to or is not proportionate with the right, interest or wrong asserted in the proceedings or by the process which is said to have been abused’.”

  1. The plaintiffs submit that the two essential elements of the tort of collateral abuse of process have been correctly pleaded; namely that there is a predominant improper purpose and that damage has been caused to the plaintiffs. The plaintiffs also plead that whilst it is uncertain on the current authorities whether an overt act needs to be pleaded to establish the tort in the current case, there is in fact an overt act pleaded which is the contempt of court.
  1. The plaintiffs submit that leave should be given pursuant to Rule 376(4) of the UCPR as there is no prejudice to the defendant as they have already waived reliance on a limitation defence. This waiver they submit arose out of negotiations to settle the applications which were returnable on 2 June 2006 wherein the defendant expressly confirmed in writing that it would not rely on any limitation period defences other than those that were available to it at the commencement of legal proceedings. They submit therefore that the two requirements of the rule have been made out; firstly that the cause of action arises out of the same facts and secondly that there is no prejudice to the defendant.
  1. In the circumstances I am satisfied that the cause of action does in fact arise out of the same facts and given that no new facts have been pleaded there will be no prejudice to the defendant.
  1. Whilst there may be some substantial issues as to whether the facts as pleaded can be proved that is not a factor which I can take into account but is a matter which must be left for the trial.
  1. The second major difficulty is that on the basis of Butler v Simmonds Crowley and Galvin[38] the plaintiffs need to establish an improper act in the course of the process.  In this regard they rely on the fact that “the defendant abused the process of the Planning and Environment Court by committing a contempt of court to achieve that purpose” and relies on the same cases set out in relation to contempt to support this claim.    
  1. In the circumstance therefore I am not satisfied that this is an appropriate case to grant the defendant’s applications.
  1. The Orders are:

(1)Pursuant to Rule 376(4) of the UCPR the plaintiffs have leave to amend in terms of the third further amended statement of claim filed 25 August 2006.

(2)The defendant’s applications filed 14 July 2006 and 5 September 2006 are dismissed.

  1. I will hear Counsel for the parties’ submissions in relation to costs.

Footnotes

[1] For present purposes the first and second plaintiffs will be referred to jointly as “the plaintiffs”

[2] Doc 16 – Second Further Amended Statement of Claim at [13]

[3] Doc 16 – Second Further Amended Statement of Claim at [14]

[4] Doc 16 – Second Further Amended Statement of Claim at [13] and [14]

[5] Doc 16 – Second Further Amended Statement of Claim at [10], [15] and [16]

[6] Doc 16 – Second Further Amended Statement of Claim at [15] and [23]

[7] Doc 16 – Second Further Amended Statement of Claim at [17], [18] and [21]

[8] [2006] NSWSC 319 at para 80

[9] [2006] TASSC 22

[10] (1998) 196 CLR 329

[11] (1995) 185 CLR 307

[12] [2001] QCA 342

[13] [2001] QCA 342 at para 24

[14] [1971] 3 All ER 1175

[15] (1990) 19 NSWLR 49

[16] JT Strathford & Son Ltd v Lindley [1965]AC 269; Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106

[17] [2001] QCA 342

[18] Deepcliffe v Gold Coast City Council [2001] QCA 342 at para 25

[19] (1998) 196 CLR 329

[20] (1998) 196 CLR 329

[21] (1995) 185 CLR 307

[22] Deepcliffe v Gold Coast City Council [2001] QCA 342 at para 74

[23] [2001] QCA 342 at para 81

[24] [2006] NSWSC 319

[25] (No.4) [2006] TASSC 22

[26] Deepcliffe v Gold Coast City Council [2001] QCA 342 at para 25

[27] [2001] QCA 342 at para 75

[28]         Dey v Victorian Railways Commissioners (1949) 78 CLR 62, General Steel Industries Inc v    Commissioner for Railways (NSW) (1964) 112 CLR 125

[29] See Dyson v Attorney-General [1911] 1 KB 140 at 418-9 per Fletcher Moulton LJ

[30] See also Ronex Properties Ltd v John Lang Construction Ltd [1983] 1 QB 398 at 408 per Sir Sebag Shaw and Stephenson LJ; Wyatt v Palmer [1899] 2 QB 106 at 110 per Lindley MR

[31] [2005] QCA 475

[32] The Beach Club Port Douglas Pty Ltd v Page [2005] QCA 475 at para 23

[33] (1999) 87FCR 134

[34] (2005) ATR 81-786

[35] (2005) ATR 81-786 at para 122

[36] (1992) 174 CLR 509

[37] [1999] QCA 475 at [24]

[38] [1999] QCA 475

Close

Editorial Notes

  • Published Case Name:

    Wagtail Yarns & Another v The Isis Shire Council

  • Shortened Case Name:

    Wagtail Yarns v The Isis Shire Council

  • MNC:

    [2006] QSC 310

  • Court:

    QSC

  • Judge(s):

    Lyons J

  • Date:

    25 Oct 2006

Litigation History

No Litigation History

Appeal Status

No Status