Plaintiffs Opposes Striking Out of their Statement of Claim

Rafailidis v Camden Council [2021] NSWSC 1087 (27 August 2021)

The plaintiffs applied to the defendant for development approval to enable the plaintiffs to construct a new dwelling on the land. However, after the new dwelling was completed by the plaintiffs on the land, they failed to demolish the existing structure as required by the defendant. The defendant then instituted proceedings with the Land and Environment Court against them in the Land and Environment Court and the plaintiffs filed a statement of claim seeking declarations that each of the Land and Environment Court judgments was procured by fraud. 

Facts:

The plaintiffs’ land initially had an old dwelling on it.  The plaintiffs applied to the defendant for development approval to enable the plaintiffs to construct a new dwelling on the land.  The plaintiffs allege that the defendant’s officers took the view that it would be necessary for the plaintiffs to demolish and remove the existing structure on the land after they had completed the construction of their new dwelling.  The development approval issued by the defendant to the plaintiffs contained a condition to that effect. 

After the new dwelling was completed by the plaintiffs on the land, they failed to demolish the existing structure.  The defendant then instituted proceedings against them in the Land and Environment Court seeking that the plaintiffs be punished for contempt for failing to comply with earlier orders.  On 17 March 2020, the plaintiffs, Koula Rafailidis and Efrem Rafailidis, commenced proceedings against the defendant, Camden Council, by filing a statement of claim.

Plaintiffs allege that they were both owners of the land, but the statement of claim is drawn in a manner that frequently refers to Mrs Rafailidis as the sole plaintiff, and there is an inconsistent use of the singular and plural in references to the plaintiffs.  The statement of claim was 150 pages long and comprised obscure allegations, was repetitive and generally did not comply with the applicable rules of pleading.  The defendant sought for the statement of claim to be struck out, and for an order that the plaintiffs pay the defendant’s costs of the motion and of the proceedings.  The plaintiffs seek declarations that each of the Land and Environment Court judgments was procured by fraud on the part of the defendant, as well as orders from this Court setting aside those judgments as well as the orders made for the plaintiffs to pay the defendant's costs. 

The plaintiffs do not accept that an order should be made that their statement of claim be struck out.  The plaintiffs served on the defendant an amended statement of claim, deleting a number of the claims contained in the original statement of claim, and they have generally reduced the complexity of the pleading, particularly by limiting the complexity of the particulars given.  The plaintiffs assert that if the Court finds that the pleading is defective in accordance with the rules of pleading, the Court should give the plaintiffs leave to amend the statement of claim in accordance with the proposed amended statement of claim.

Issue:

Whether or not the plaintiffs' statement of claim should be struck out. 

Applicable law:

Civil Procedure Act 2005 (NSW) - provides that the court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. 
Crimes Act 1900 (NSW) - one of the the bases of the defendant for alleging that the statement of claim was an abuse of process. 
Environmental Planning and Assessment Act 1979 (NSW) - one of the the bases of the defendant for alleging that the statement of claim was an abuse of process. 
Independent Commission Against Corruption Act 1988 (NSW) - one of the the bases of the defendant for alleging that the statement of claim was an abuse of process. 
Local Government Act 1993 (NSW) - one of the the bases of the defendant for alleging that the statement of claim was an abuse of process. 
Uniform Civil Procedure Rules 2005 (NSW) r 14.14 - specifies that, if a plaintiff wishes to mount a case alleging fraud against the defendant, the statement of claim must plead fraud specifically. 

Camden Council v Rafailidis (No 3) [2012] NSWLEC 217 -  related to an application by the defendant for orders punishing the plaintiffs for contempt of court in failing to comply with earlier orders.
Camden Council v Rafailidis (No 4) [2014] NSWLEC 22 - where the defendant relied upon the letter of the plaintiff which contained the agreement of the plaintiff to demolish after the proposed new dwelling was completed, and the defendant relied upon the development consent which contained the condition to demolish.
Camden Council v Rafailidis (No 5) [2014] NSWLEC 85 - where the defendant relied upon the Masterton Homes letter agreeing to demolish. 
Camden Council v Rafailidis [2012] NSWLEC 51 - where the defendant prosecuted the plaintiff for failure to demolish and in seeking the demolition of the existing structure.
Rafailidis v Camden Council [2015] NSWCA 185 - where the plaintiffs succeeded on an appeal to the Court of Appeal in respect of the contempt application. 
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 - Kirby P (Hope and Samuels JJA agreeing) said (at 538-539): “As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires."

Analysis:

While the current statement of claim contains 34 prayers for relief, including a substantial number of applications for declarations concerning the effect of orders of the Land and Environment Court and specific aspects of alleged wrongful conduct by the defendant and its officers, the proposed amended statement of claim contains seven prayers for relief.  Six of those prayers seek that the Land Environment Court judgments should be set aside on the ground that they were procured by fraud.  The proposed amended statement of claim is much more concise and comprehensible than the original one.  The plaintiffs plead that they knew of the alleged fraudulent conduct of the defendant, but they unsuccessfully attempted to rely upon that fraud claim in the Land and Environment Court proceedings heard by Lloyd AJ. 

The proposed amended statement of claim does not contain any allegations of fact capable of establishing that Mr McIntyre’s conduct was motivated by the objectives asserted by the plaintiffs.  These claims are no more than a series of bare allegations.  The plaintiffs' claim that the defendant conducted the proceedings in the Land and Environment Court fraudulently is not a claim that the conduct of the proceedings was fraudulent, but is a claim that the defendant proceeded by "not revealing to the Court" that the conduct of its officers in dealing with the plaintiffs was fraudulent.  Throughout the proposed amended statement of claim, where the plaintiffs make their many allegations of fraud against the defendant's officers, those allegations are stated in the form of bare assertions.

Conclusion

The Court orders that the plaintiffs’ statement of claim be struck out, that the plaintiffs’ application for leave to file the proposed amended statement of claim be dismissed and that the proceedings be dismissed. It would involve an abuse of process to permit the plaintiffs to continue to prosecute the current proceedings against the defendant. The Court further orders that the plaintiffs pay the defendant’s costs of its notice of motion filed on 28 August 2020 and that the plaintiffs pay the defendant’s costs of the proceedings not otherwise the subject of any costs order.