32 Domain Pty Ltd v Hazell-Wright (No. 2)

[2019] VCC 793

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-18-03401

32 DOMAIN PTY LTD (ACN 163 035 603)	Plaintiff
V
CLARE HAZELL-WRIGHT	Defendant

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JUDGE:	HER HONOUR JUDGE A RYAN
WHERE HELD:	Melbourne
DATE OF HEARING:	31 May 2019
DATE OF RULING:	6 June 2019
CASE MAY BE CITED AS:	32 Domain Pty Ltd v Hazell-Wright (No. 2)
MEDIUM NEUTRAL CITATION:	[2019] VCC 793

RULING
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Subject:  PRACTICE AND PROCEDURE

Catchwords:             Oral application by the defendant asking the court to revisit reasons for ruling made on a pleading summons – whether proper basis for application – form of orders giving leave to replead and costs orders – whether stay should be ordered pending appeal         

Legislation Cited:     County Court Civil Procedure Rules 2008

Cases Cited:Australian Super Developments Pty Ltd v David Wellesley Marriner & Ors (No. 2) [2015] VSC 315; Henderson v Amadio Pty Ltd (No. 3) (1996) 65 FCR 66; Holmark Constructions Pty Ltd v Tsoukaris and Another (1986) 12 NSWLR 181; Joskovitz v Bonnick (1964) VR 654; Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232; Talston Pty Ltd v Daisley [2004] VSC 23;

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Mr I Wright	Mr C E Shaw	SBA Law
For the Defendant	Mr T North QC with Dr E Kelly	Nicholes Family Lawyers

HER HONOUR:

1       On 13 May 2019, I delivered reasons for ruling in respect of a pleading summons brought by the defendant filed on 15 February 2019.

2       The parties were asked to consult and endeavour to reach agreement on the form of orders to be made in accordance with the reasons.  If agreement could not be reached, the parties were directed to file and serve written submissions regarding the consequential orders to be made, including costs. The parties were unable to agree.

3       The plaintiff filed a submission on 16 May 2019, which attached competing minutes of proposed orders sought by the parties.  The defendant filed a written submission dated 17 May 2019, together with an affidavit from Catherine Kearsley Giles, solicitor for the defendant, sworn 17 May 2019.

4       A number of issues were raised in the written submissions regarding the orders to be made, including the form of the order in respect of the repleading of an amended defence, the appropriate order as to costs, and a stay pending a foreshadowed appeal.  In light of the matters raised, I listed the matter for hearing on 31 May 2019. 

5       Senior Counsel for the defendant made an oral application on 31 May 2019 asking the Court to revisit the reasons for ruling. This application was made without notice to the other side. It was not mentioned in the written submissions filed by the defendant. The Court was not referred to any authorities by the defendant in support of the application. The oral application was made in circumstances where the pleading summons had already been heard and reasons for ruling delivered.

Application to revisit reasons

6       Senior counsel for the defendant submitted that as the Court had not yet made final orders, it was open for his client to make an application for the reasons for ruling to be revisited.  Although counsel referred to an application for the Court to “revisit” its reasons, the application properly understood was an application by the defendant to re-open its case on the pleading summons. In support of this argument, counsel relied principally upon Exhibit “CKG-1” to Ms Giles’ affidavit, being a Notice to Admit dated 9 May 2019.

7       The Notice to Admit dated 9 May 2019 attaches two documents. The first is a prenuptial agreement between the defendant and her former husband, Mr Wright, dated 19 December 2005 described as a “Binding Financial Agreement”. The second document is a letter from  Mr Wright to the defendant dated 19 April 2016 in which he asks the defendant to vacate the apartment (the subject matter of this proceeding), within 90 days. In the statement of claim, the plaintiff pleads the defendant occupied the apartment without the plaintiff’s licence or authority from 20 July 2016 until 14 November 2017. 

8       The basis of the submission was to the effect that various statements made by the plaintiff’s counsel during on the hearing on 20 February 2019 were inconsistent with the Notice to Admit served by the plaintiff’s solicitors on 9 May 2019. Consequently, it was said that the statements made by counsel for the plaintiff on 20 February 2019 had led the Court into error. When questioned, senior counsel for the defendant said he did not contend the alleged erroneous submissions on behalf of the plaintiff were made deliberately but were inadvertent. The gist of the defendant’s submission was that the plaintiff’s counsel should not have argued, having regard to the Notice to Admit served after the hearing, that:

(i)        the Harman undertaking did not apply because this proceeding and the Family Court were not sufficiently similar;

(ii)       Mr Wright was not a proper party to the trespass action.

9       Counsel for the defendant developed this argument while referring to various passages in the reasons and then compared them with submissions made by the plaintiff.

10      In the final paragraph of the plaintiff’s submissions relied upon in the hearing on 20 February 2019, counsel for the defendant noted it was said that Mr Wright made no claim in the proceeding.  He then referred to the transcript at page 55, at lines 22 and following, through to transcript at page 57.  He then compared this with paragraphs 3-4 of the statement of claim.

11      It was said page 7 of the Notice to Admit was contrary to the assertion that Mr Wright is a non-party.  Page 7 sets out clause 11 of the Financial Agreement which sets out the assets of Mr Wright which will remain his in the event of a marital breakdown. The assets include real property owned by him and any of his companies, including any property to be acquired by any company of which Mr Wright is a director or shareholder after the date of execution of the agreement. The next clause, clause 12 is a similar provision describing the assets to remain the sole property of the defendant.  The intention of these clauses was no doubt, to identify which assets would remain with the parties to the marriage in the event of a split.

12      Clause 11 appears to be relied upon by the defendant as supporting an argument that Wright should be a party to the action in trespass. As noted in the earlier reasons, the corporate plaintiff is the owner of the apartment. Only it can bring a claim for loss of rent, not Mr Wright who is unable to sue for trespass. If he is to be made a party to a counterclaim, then the proposed pleading must properly set out the basis for his joinder. The form of the counterclaim put forward previously did not disclose a viable cause of action against him.

13      Reference was made to paragraph 39 of the reasons and it was then submitted that the plaintiff’s counsel was in error at page 55 of the transcript. It was said that there was an admission in paragraph 51 of Mr Wright’s affidavit of 26 May 2017.  The defendant also seeks to rely upon paragraph 62 of Mr Wright’s affidavit sworn 26 May 2017, which refers to discussions between the defendant and Mr Wright about giving a Notice to Vacate the apartment. All of these matters referred to by the defendant were relied upon to demonstrate a flaw in the way in which the Court went about its determination.  It was said that the plaintiff must rely upon the binding financial agreement. 

14      Given this, the defendant submitted the Court can recall and reflect upon its decision when it has not yet made final orders. 

15      In response, counsel for the plaintiff said there had been no notice given of these very serious allegations made against him.  The defendant’s case was, in effect, that he had misled the Court and as a consequence, the Court could revisit its reasons.  He noted further that such serious allegations needed a proper basis before they could be put.

16      Counsel for the plaintiff submitted there was no basis for the assertion that the plaintiff’s submissions had led the Court into error.  The last paragraph of the written submissions referred to, namely, that Mr Wright did not bring a claim, was entirely correct.  The plaintiff does not plead the financial agreement and does not seek to rely upon it.  Again, Mr Wright did not bring a claim in this proceeding.  Accordingly, there was no warrant to revisit the reasons and the service of the Notice to Admit after the hearing of the pleading summons did not interfere with the decision made by the Court.

17      Counsel for the plaintiff noted that the cases previously relied upon by the defendant of Northbuild and Spalla, were very different cases from the one before this court.  The service of a Notice to Admit could not possibly change that fact.  Nor, it was said, could it affect the estoppel issue, because this was a problem with the form of the pleading.  It was noted the Court had found that the estoppel plea could not be understood.  It was submitted the submission put by the defendant was entirely fanciful. The Court had not been misled and there was no reason for the reasons for ruling to be revisited. 

18      The defendant’s application proceeded before me on the basis of the adequacy or otherwise of the pleading that had been proffered by the defendant.  During the course of that application, counsel for the plaintiff noted that some of the documents sought to be relied upon appeared to be in breach of the Harman undertaking.  To counter that argument, counsel for the defendant submitted that the two proceedings were sufficiently similar such that the undertaking did not come into effect as there was no collateral purpose.  I found that the two proceedings were not sufficiently similar for the reasons set out in my earlier ruling.

19      The fact that a Notice to Admit was served after the hearing of the summons attaching the financial agreement and a letter from Mr Wright asking the defendant to vacate the apartment does not cause me to change my view about the insufficient similarity of the two proceedings, such that the Harman undertaking is not applicable. I do not accept the argument put that the service of this Notice to Admit by the plaintiff’s solicitors after the hearing means that counsel for the plaintiff was not entitled to argue that the Harman undertaking did not apply because the two proceedings were not sufficiently related. Nor can it be said that the two documents attached to the Notice to Admit served after the event, lead to the inexorable conclusion that counsel for the plaintiff was not entitled to argue that Wright was not a necessary party to the trespass action. As I said before, Wright makes no claim in the proceeding and I was not persuaded on the form of the counterclaim submitted that the defendant had established an arguable cause of action against him.

20      I reject the submission put by the defendant that the Court was led into error by reason of the submissions made by counsel for the plaintiff on 20 February 2019.  I consider this submission to be entirely without any merit.

21      Further, I was not persuaded that the interests of justice are served by acceding to the defendant’s application in circumstances where a ruling has already been made. Findings were made on the evidence and submissions presented on 20 February 2019. Self-evidently, the defendant is not entitled to have a second opportunity to re-argue her case merely because she quibbles with the submissions put by the plaintiff. The case law reveals that an application to re-open can only made in a number of limited cases.[1] Where it is sought to reopen a case after reasons have been given, the task is even more difficult and the applicant needs to be able to show exceptional circumstances: Australian Super Developments Pty Ltd v David Wellesley Marriner & Ors (No. 2)[2]. I consider the unfounded criticisms made of the way in which the plaintiff’s counsel put forward his client’s case is not an exceptional circumstance which would warrant the application being re-opened.

[1]Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232 at [17]-[18]

[2][2015] VSC 315 at [70]

22      For all these reasons, I decline to revisit my reasons for ruling and the defendant’s oral application is refused.

Leave to replead

23      There was a dispute between the parties as to the form of order regarding the leave to replead the defence.  The defendant sought orders that:

(i)     “The defendant has leave to file an Amended Defence, in the form that appears in Exhibit SN-17 to the affidavit of Sally Nicholes filed on 15 February 2019 with the exception of paragraph 4(d).”

(ii)     “The defendant has leave to file and serve a Further Amended Defence with respect to any estoppel she seeks to plead.”

24      The minute of order proposed by the plaintiff was “Any further application by the defendant to file and serve an amended defence be filed and served by 4.00pm on 21 May 2019.”

25      The plaintiff opposed the order sought by the defendant and argued the appropriate form of the order was that the defendant have leave to replead.  The application which had been before the Court was for leave to be given to file the proposed amended defence and counterclaim, which was not provided. 

26      Given the defendant has now had three failed attempts to seek leave to amend a defence, the plaintiff submitted the appropriate order was that any further application by the defendant be filed and served within a short time, say within seven days.

27      In addition, the plaintiff noted that the order proposed by the defendant ignored aspects of the ruling relating to the findings concerning the Harman undertaking.   The Harman undertaking continued to apply to Mr Wright’s affidavit of 9 May 2016, and to his financial statement of 18 May 2016, both of which had been filed in the Family Court.  Large slabs of the proposed amended defence expressly relied upon their impugned material – see for example paragraphs 2(a)-(e), 2(f)-(u), 3(a)-(d), 3(j)(ii), 3(bb) and 3(cc)(ii).

28      Having regard to the history of the matter and also the matters raised by the plaintiff, particularly the offending material pleaded regarding the Harman undertaking, I am of the view the better course is to order that the defendant have leave to serve a proposed further amended defence. 

Order as to costs

29      As indicated in the reasons, my preliminary view was that costs should follow the event.  In the minutes of order filed on behalf of the defendant it was sought that there be no order as to costs and the proceeding otherwise be stayed pending the hearing of determination of the defendant’s application for leave to appeal (and in the event leave is granted, appeal) against the reasons made on 13 May 2019.

30      During the course of the oral hearing, senior counsel for the defendant argued that costs could be reserved. He submitted this on the basis that the plaintiff was a corporate trustee and the affidavit of Ms Giles revealed the apartment was up for sale. I do not regard these matters as being sufficient to depart from the usual rule that costs should follow the event.

31      The plaintiff did successfully oppose the defendant’s application for leave to file and serve the amended defence and counterclaim.  Having succeeded in that application, I am of the view the plaintiff is entitled to an order for its costs.

Stay pending appeal

32      The defendant made an application for a stay of any orders to be made on the basis that the defendant has provided instructions seeking to appeal the orders to be made and the reasons for ruling given on 13 May 2019.  The basis of the appeal, as stated, is the refusal of leave to file the proposed counterclaim to join Mr Wright as a defendant to the counterclaim and the findings made with respect to the Harman undertaking about the status of documents filed in the Family Court proceeding.

33      Senior counsel for the defendant referred to the need to avoid conflicting findings of fact and that it was desirable the claim and counterclaim, if leave be given on appeal, be heard together by the same judge. 

34      Senior counsel also referred to the decision of Henderson v Amadio Pty Ltd(No.3)[3] . Heerey J noted the fact that a party is a corporate trust, with no assets of its own and is dependent on its rights as trustee for indemnity from the trust, would normally operate in favour of a stay being granted.

[3](1996) 65 FCR 66, at 76

35      The plaintiff opposed any application for a stay and said the fact that the matter was on appeal did not provide a basis for a stay. The plaintiff wished to keep the trial date which is fixed for hearing on 10 July 2019.

36      The discretion under Rule 66.16 to stay execution of a judgment is a wide one.  The court is required to take into account all the circumstances of the case and is not bound by decisions on other sets of facts: Joskovitz v Bonnick[4].  The Court can order a stay on the ground of a stated intention of a party to appeal:  Holmark Constructions Pty Ltd v Tsoukaris and Another.[5]

[4](1964) VR 654 at 656

[5](1986) 12 NSWLR 181 at 182

37      In Talston Pty Ltd v Daisley,[6] Kaye J stated:

“Rule 66.16 of the Rules of the Supreme Court is general in its expression and simply states that the Court may stay execution of judgment. The authorities recognise that under that rule the Court has a wide discretion: see, for example, Joskovitz v. Bonnick. It is well recognised that the circumstances which relate to the issue of whether or not a stay should go must be matters relating to the enforcement of the order and must not be matters that go to the correctness of the order …”

[6][2004] VSC 23 at 10

38      In the circumstances of this case, I am persuaded by the argument that if leave is given on appeal in respect of the counterclaim sought to be relied upon by the defendant, the interests of justice dictate that both the claim and counterclaim should be heard together.  It would be undesirable to have potentially conflicting findings and it would avoid the need for two trials in which there may be common witnesses. Both claims should be determined by the same judge in one hearing, assuming the counterclaim proceeds.

39      I will grant a stay as sought by the defendant pending the hearing and determination of any appeal or until further order.  In the event that an appeal is not pursued or abandoned, then the plaintiff can seek an order the stay be lifted and the proceeding can continue in the usual way.

40      Leaving aside the question of any appeal, it is unlikely the pleadings will even be closed before 10 July 2019.  Given this, the reality is the matter will not be ready to proceed to trial on that date.  Accordingly, I will vacate the trial date now.

41      I will make the following orders:

(1)    By 4.00pm on 17 June 2019, the defendant has leave to file and serve a proposed further amended defence.

(2)    By 4.00pm on 20 June 2019, the plaintiff is to communicate its consent (or otherwise) to the defendant being granted leave to file the proposed further amended defence.

(3)    If consent is not provided under Order 2 above, the defendant may make an application for leave to amend by 28 June 2019.

(4)    The defendant’s summons filed on 15 February 2019 is otherwise dismissed.

(5)    The defendant pay the plaintiff’s costs of the application to be taxed on a standard basis in default of agreement.

(6)    The proceeding be stayed pending the hearing and determination of any application by the defendant for leave to appeal (and if leave is granted, the appeal) these orders or until further order.

(7)    The trial date of 10 July 2019 is vacated.

(8)    The matter is listed for an administrative mention on 8 July 2019.

(8)    Reserve liberty to the parties to apply by email to the Commercial Division Registry ([email protected]) for further directions upon giving reasonable notice to all other parties.