Case: Spalla v St George Motor Finance Ltd (No 5) [2004] FCA 1262
Outcome: referred to
On 28 September 2004, French J struck out the applicants' further amended statement of claim but gave liberty to file and serve, by 21 October 2004, a substituted application and statement of claim: see Spalla v St George Motor Finance Ltd (No 5) [2004] FCA 1262 (" Spalla (No 5) "). His Honour also ordered that the applicants pay the respondents' costs of their respective motions. Amongst other things, his Honour held that many of the allegations in the further amended statement of claim involved allegations of fact that contradicted the factual findings made by Finkelstein J in proceeding V 74 of 1999. In these respects, the further amended statement of claim could not stand "against the res judicata estoppel and the issue estoppels generated by the judgment in the first proceedings": see Spalla (No 5) at [4]-[5] and [44]. 46 The primary proceeding was originally fixed for trial beginning on 19 July 2004. As a result of the various strike-out motions, that date was vacated and the matter was re-listed for hearing in February 2005. On 13 October 2004, HWL advised Mr Spalla (by a letter, which was also copied to Mr Rambaldi) that they would terminate their retainer with Mr Spalla if the February 2005 hearing date were vacated for any reason. Amongst other things, the letter said, "[w]hilst we regret having to take this position, we simply cannot afford the ongoing burden of the case and the impact it is having on the firm overall". 47 Some days later, on 19 October 2004, HWL wrote to Mr Spalla that: "In line with our obligation to keep you apprised of the costs incurred thus far, we advise that as at 18 October 2004 the total time recorded on this matter is $620,519.50 of which $80,000.00 has been paid leaving an unpaid work in progress of $540,519.50. This does not include any uplifting fee which was outlined in our costs agreement." HWL copied this letter to Mr Rambaldi. 48 Also on 19 October 2004, Mr Beck sent Mr Bowman a facsimile on Deloittes' letterhead. In this facsimile, Mr Beck referred, amongst other things, to the order for costs that French J had made on 28 September 2004 against the applicants and in favour of the Deloitte parties. He stated that his solicitors had informed him that the Deloitte parties' costs were about $50,000 on a party and party basis and that the Deloitte parties sought these costs from ILF "in its capacity as a non-party". He also wrote that if "the matter proceeds and Irlmond is unsuccessful, we will look to ILF for its entire costs of the matter and we reserve all our rights to seek those costs from ILF, not only on a party and party basis but on an indemnity basis". 49 The next day, on 20 October 2004, Mr Beck sent a facsimile to Mr Rambaldi in similar terms to that sent to Mr Bowman. Mr Beck again referred to the order for costs that French J had made in favour of the Deloitte parties and to the Deloitte parties' solicitors' estimate of the amount of these costs. He wrote that the Deloitte parties sought these costs from Mr Rambaldi personally and added that, should the matter proceed and Irlmond fail, the Deloitte parties "will look to you personally for [their] entire costs of the matter ... not only on a party and party basis but on an indemnity basis". 50 Pursuant to French J's orders of 28 September 2004, a third further amended application and a third further amended statement of claim were filed in the primary proceeding on 19 October 2004. This statement of claim named Mr Spalla, Mr Still and Irlmond as the first, second and third applicants. No other applicants were named. The first to fifth and seventh and eighth respondents were the same as those in the present proceeding. The sixth respondent was the Australian Securities and Investments Commission ("ASIC"). 51 By the third further amended statement of claim, Irlmond brought numerous claims against the St George parties and the Deloitte parties arising out of the receivership of Irlmond. Against the St George parties, Irlmond claimed breach of mortgagee's duties, conversion and contravention of s 52 of the Trade Practices Act 1974 (Cth). Against the Deloitte parties, Irlmond claimed breach of receiver's duties and conversion and sought restitution of the receiver's fees. Irlmond claimed restitution of the sum of $1.3 million together with other payments against St George Motor Wholesale. 52 Also by the third further amended statement of claim, Mr Spalla and Mr Still brought claims against Messrs Beck and Home for malicious prosecution and injurious falsehood. Mr Spalla and Mr Still also brought a claim for malicious prosecution against ASIC.