Carantinos & Anor v Magafas

[2009] HCATrans 57

[2009] HCATrans 057

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S546 of 2008

B e t w e e n -

PETER CARANTINOS

First Applicant

FOTINI CARANTINOS

Second Applicant

and

ANTHONY MAGAFAS

First Respondent

PAC-COM PTY LIMITED

Second Respondent

ARTESIAN PTY LIMITED

Third Respondent

ATHENA TOURIKI

Fourth Respondent

GREGORY GAV

Fifth Respondent

Application for special leave to appeal

HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 19 MARCH 2009, AT 9.48 AM

Copyright in the High Court of Australia

__________________

MR T.A. ALEXIS, SC:   If your Honour pleases, I appear for the first and second respondents who are the applicants on the summons.  (instructed by Rockliffs)

MR J.C. KELLY, SC:   If it please your Honour, I appear for the second applicant for special leave, Mrs Carantinos, who is the second respondent on the summons to strike out.  (instructed by P J Ellis)

MR K.J. MUNRO:   If it please the Court, I appear for the first applicant out of courtesy to the Court.  I do not have instructions from Mr Carantinos.  I think the proper party is the trustee in bankruptcy.  (instructed by Munro Lawyers)

MR N. PAPPAS:   If it please the Court, I appear for the fifth respondent who has filed a submitting appearance in this matter.  I have been instructed to observe today and to support the applicant to the extent possible.  (instructed by Nicholas G Pappas & Company)

HIS HONOUR:   The application for striking out?

MR PAPPAS:   .....case to be struck out.

HIS HONOUR:   That rather negates your submitting appearance.

MR PAPPAS:   It does.

HIS HONOUR:   If you are supporting it, you might have to pay some costs if the application fails.

MR PAPPAS:   We understand that.

HIS HONOUR:   Right.  I should note that, as this has already been foreshadowed, to some extent the fourth and fifth respondents have filed appearances submitting to any order that the Court may make save as to costs.  There is no appearance for the third respondent.  Is anyone expecting an appearance from the third respondent?

MR KELLY:   No, your Honour

HIS HONOUR:   There is evidence that the third respondent has been served.  The matter, I think, can proceed in the absence of the third respondent.  So far as the summons seeks expedition, the Court could hear the special leave application in Sydney on 1 May 2009.  Does that circumstance alter your application of the first order in the summons?

MR ALEXIS:   It does not negate it, your Honour.  We are very grateful for your Honour indicating 1 May, but we would still wish to proceed with the primary argument on the liability of the application for special leave being struck out. 

HIS HONOUR:   You rely on an affidavit of Anthony Magafas which was filed on 11 March and another one filed on 18 March?

MR ALEXIS:   Yes, your Honour, although that affidavit goes largely to the reasons for expedition, the reading of the majority of which is probably largely negated by what your Honour has indicated as to the date for the hearing of the special leave application if I fail on the primary strike‑out point.  It may assist, your Honour, if I identify in a very summary way by way of opening the two points that we wish to make.

HIS HONOUR:   Can I just ask an even more preliminary point.  What enactment do you rely on to give a single Justice of the High Court power to set aside a special leave application which has been filed and the parties to which have largely complied with the relevant time limits?  What section of what Act or what provision of what rule?

MR ALEXIS:   Your Honour, that is a matter that I have not addressed my  mind to, your Honour, if I may say candidly to your Honour. 

HIS HONOUR:   Do you know of any statute or rule, Mr Pappas, which justifies order 1 of the summons?

MR PAPPAS:   I cannot assist, your Honour.

HIS HONOUR:   Do you know of any, Mr Kelly?

MR KELLY:   We would say there is no such thing, your Honour, and that the very nature of special leave would preclude it.

MR ALEXIS:   Your Honour, the reason I say that is because, having received the benefit of some written submissions on this summons matter, there was no jurisdiction point taken.  There was a point with respect to the respective application of section 58(3) of the Bankruptcy Act and a question of whether or not leave was necessary to bring the application to strike the matter out.

HIS HONOUR:   But courts have to be satisfied of their powers.

MR ALEXIS:   Of course, your Honour, I accept entirely what your Honour says and I regret, your Honour, that it is not a matter that I have looked at and I apologise not doing ‑ ‑ ‑

HIS HONOUR:   Let us assume there is power, why should it be exercised, in view of the fact that Mr Kelly’s client and your clients could not be described as belonging to meek of the earth?  If your application succeeds, Mr Kelly is highly likely to seek leave from three Justices of the Court to appeal against the grant of order 1 of the summons in who knows how many months.  That will be determined.  Mr Kelly may succeed.  If he succeeds, then the special leave application will have to proceed somewhere towards the end of the year.  Is it not simpler to have the special leave application determined on 1 May?

MR ALEXIS:   Is it simpler?  Perhaps so.  But, your Honour, the Court having convened to deal with this application and because the special leave point articulated and to be advanced on behalf of Mrs Carantinos, on any view, must be described as hopeless.

HIS HONOUR:   Just one moment.  A conventional view of special leave applications is that you have to demonstrate some interesting point of law or controversy among the Supreme Courts of the States or Territories or between them and the Federal Court or perhaps some constitutional question, but it is enough, is it not, that there be an error, an arguable error?

MR ALEXIS:   Your Honour, if the application was based on ‑ ‑ ‑

HIS HONOUR:   To disbelieve a policeman who thought that the car was on the right‑hand side of the road when it was on the left‑hand side of the road in a case involving a quadriplegic is not an interesting question except for the quadriplegic, but it can attract a grant of special leave.

MR ALEXIS:   Yes, I appreciate what your Honour says, and if that was the basis upon which we were moving to strike out the application, then I would accept some prima facie difficulty.

HIS HONOUR:   But you do accept in your written submissions that were filed on 26 February 2009 that order 9(a) of the Court of Appeal does impact on the interests of Mr Kelly’s client.  You say it does not raise any question of principle and you say it does involve an exercise of discretion informed by the particular facts of the case and you say it was correct and not attended by any sufficient doubt, but those are not reasons to halt an application in limine, are they?

MR ALEXIS:   Your Honour, what your Honour has referred to, what might be said to be the supplementary reasons why leave to appeal would not be granted in this case, the primary matter advanced in our argument is that no order or declaration or, indeed, any judgment was made against Mrs Carantinos either in the proceedings before Justice Einstein, who was the trial judge, or, indeed, by the Court of Appeal.  So there is just no basis, we would respectfully submit, to bring an application for special leave to appeal when there is no order made against her.

HIS HONOUR:   But if that order is set aside, Mrs Carantinos’ interests would have been advanced.  She has standing to try and get that order set aside.

MR ALEXIS:   If your Honour is referring to order 9(a) of the Court of Appeal, that is an order which does not involve, potentially, Mrs Carantinos at all.

HIS HONOUR:   That is not what the written submissions say.

MR ALEXIS:   The written submissions, with respect, put the primary position that no order or judgment was made against Mrs Carantinos to warrant any application for special leave at all.  Alternatively, if order 9(a) is said to have some effect on her, and we respectfully submit that it does not at all because it is only directed to Mr Carantinos’ position, then we advance the other matters which go to a discretionary decision, a matter based on facts and raising no general question.  But the primary position is, and this is made plain when one looks at the orders of the Court of Appeal, that no order was made against Mrs Carantinos.  To that extent she was successful in the Court of Appeal.

HIS HONOUR:   Mr Alexis, the Court spends a lot of time every month examining 12 special leave applications, plus a lot of other time examining matters that are disposed of on the papers and, as a result of those considerations, it then hears argument on the 12, or whatever number it is, special leave applications.  If your present application were to be treated as a sound working model for future use, apart from those other activities, single Justices would be spending quite a lot of time examining the sort of question we are now debating.  The structure of the rules does not contemplate that as a sound tactic.  In fact, arguably, it does not contemplate it as even a tactic within the power of a single Justice to consider.  Your points may be very powerful but they are accommodated by getting ready for 1 May and debating the matter on 1 May.

MR ALEXIS:   I hear that, of course, your Honour.  The application has really been prompted by Mr Carantinos’ bankruptcy and a fair construction ‑ ‑ ‑

HIS HONOUR:   Just on that, Mr Carantinos, in effect, went bankrupt, speaking loosely, either just before or just after the special leave application was filed, is that not so?

MR ALEXIS:   Yes.

HIS HONOUR:   The question of when it should be heard became in controversy earlier this week.  Your application today is rather late from that point of view, is it not?

MR ALEXIS:   Your Honour, it has been prompted largely by two things, firstly, the bankruptcy, secondly, the absence of any reply submission being filed to our written submissions in respect of the leave application.

HIS HONOUR:   I am sorry to keep interrupting you, but you do raise new questions.  It is true Mr Kelly’s reply submissions were a little late, but your submissions were very, very late, were they not?

MR ALEXIS:   Your Honour, I do not debate that, your Honour.  There was clearly delay, but, importantly, the reply submission ‑ ‑ ‑

HIS HONOUR:   Let us be frank about it, though.  There were six or seven weeks delay, were there not?

MR ALEXIS:   Yes.

HIS HONOUR:   What is the significance of Mr Kelly being a week or so late?

MR ALEXIS:   Your Honour, it was filed after the summons to strike out the leave application was filed.  That is really the point we wish to make.

HIS HONOUR:   So what?

MR ALEXIS:   Your Honour, the summons was prompted also by that.  So there a number of factors, one of which was Mr Carantinos’ bankruptcy, secondly, the fact that the reply submissions filed ‑ ‑ ‑

HIS HONOUR:   Just one moment.  Your summons was filed on 11 March, I think.  Mr Kelly’s reply submissions were on the 12 ‑ ‑ ‑

MR ALEXIS:   Yes, and the reply submission was filed on 13 March.

HIS HONOUR:   On 13 March?

MR ALEXIS:   That is according to the stamp that I am looking at, your Honour.

HIS HONOUR:   In what respect does Mr Kelly’s conduct on 13 March impact upon your delay from 11 December?

MR ALEXIS:   It does not impact at all, your Honour, but it was a factor which informed the decision that was taken to file the summons to strike out the application.  At that point in time no reply submission had been received.

HIS HONOUR:   I see.  It was based on the proposition that because he had not filed a reply submission and therefore complied with the rules, the application should be dismissed?

MR ALEXIS:   It is more than that, your Honour.  It was the submissions that were advanced in our written submissions which impacted, and impacted very heavily, in our submission, on the credibility of this special leave application going forward, because primarily the application was all about the clean hands point which, in our submission, came to an end when Mr Carantinos was made a bankrupt on 11 December. 

The only residual matter that this application agitates relates to order 9(a).  I have debated with your Honour the implications of that and we respectfully submit that no relevant order was made against Mrs Carantinos, but that, on any view, could justify this application for special leave taking the time of this Court.  So, your Honour, at the time this summons was filed, we had received no response at all to the late submission put on behalf of Mr Magafas and Pac‑Com Pty Ltd.  So, your Honour, that is a relevant circumstance.

Your Honour, the fundamental point really is, why should this application for special leave to appeal occupy the time of the Court, albeit on 1 May, in circumstances where there is no relevant order which could be

said to be justification for the bringing of the application?  I mean, the application for special leave is really a complaint by Mrs Carantinos in relation to the extent to which her husband, in due course, has to provide an accounting in relation to the acquisition and sale of the subject property at Dulwich Hill, and nothing more.

HIS HONOUR:   Yes.  Anything else?

MR ALEXIS:   No, your Honour.

HIS HONOUR:   Mr Pappas, do you want to add anything?

MR PAPPAS:   No, your Honour.

HIS HONOUR:   I need not trouble you, Mr Kelly.

The background of the present application is extremely complex but most of the complexity is unimportant for present purposes.  On 11 December 2008 the applicants filed an application for special leave to appeal against a majority decision of the Court of Appeal of the Supreme Court of New South Wales which in part allowed an appeal from orders of Justice Einstein.  On 26 February 2009 the first and second respondents filed their summary of argument.  On 11 March those respondents filed a summons seeking that the application of the first and second applicants for special leave to appeal be struck out or, alternatively, the hearing be expedited.  I have indicated this morning that the Court is in a position to hear the matter on 1 May 2009 in Sydney.

Can I just interrupt to ask this, Mr Alexis.  Did your solicitors make an inquiry of the Registry as to when the matter could be heard without an order for expedition?

MR ALEXIS:   Before the summons was filed, your Honour?

HIS HONOUR:   Yes.

MR ALEXIS:   Could I just take some instructions?

HIS HONOUR:   Yes.

MR ALEXIS:   The answer to your Honour’s question is, yes, an inquiry was made and I am not sure if your Honour was able to hear the answer ‑ ‑ ‑

HIS HONOUR:   I could not actually.

MR ALEXIS:   - - - but Mr Rockliff was informed that there were potentially two special leave dates available, one being 1 May and the other being a later date, but that the Court could not consider the allocation of the date for hearing of the special leave application until the applicant’s reply submission had been filed.  Your Honour now appreciates the history of that.

HIS HONOUR:   Yes, thank you.

A significant point of present controversy between the parties, who have been in bitter disputation for some time, is whether the application for special leave to appeal was filed on 11 December 2008 before a sequestration order was made against the first applicant on that day and if not, what consequence this has.  An essential preliminary issue, however, is under what rule of law could order 1 in the summons be made?  There is no provision in rule 41 permitting a single Justice to strike out an otherwise properly instituted and pressed application for special leave to appeal. 

I should interpolate that the written submissions of all active parties have now been filed and served and subject to the position of the first applicant’s trustee in bankruptcy the matter is ready to be heard on 1 May.

There is a provision in rule 41 for deemed abandonment and provisions giving single Justices particular powers but no provision giving the power necessary to make order 1.  Rule 42 gives both the Registrar and single Justices various powers including a power in a single Justice to dismiss a proceeding for want of prosecution but, again, not a power of the kind necessary to make order 1 of the summons.  Rule 27.09 gives powers of summary disposition to single Justices but that only applies to proceedings in the original jurisdiction of the court.  In addition, rule 6.01 does not meet the case.  Rule 6.05 permits a Justice to order the removal from the file of an affidavit or other document which contains scandalous matter, but that has no application here, nor does rule 6.07.

The Judiciary Act 1903 (Cth) contains no relevant provision. It is true that section 21(1) provides that special leave applications may be heard and determined by a single Justice or by the Full Court, but the scheme of the High Court Rules is to the contrary and, in any event, section 21(1) says nothing about single Justices striking out special leave applications as distinct from hearing and determining them in the ordinary course.

I doubt that the silences are unintended.  If there is in truth power in a single Justice to strike out a properly constituted and pressed application for special leave to appeal, that might be thought to conform to what many would regard as an important principle:  that issues affecting the summary refusal of special leave to appeal should not be left to the hands of a single Justice.  They should be considered at least by two Justices where rule 41.10.5 and rule 41.11.1 apply or referred for consideration in the first instance to a panel of three Justices in cases where it has been decided to allow oral argument. 

Indeed, those rules of themselves are inconsistent with the proposition that there is power in a single Justice to strike out an application for special leave to appeal.  It is not, however, necessary to reach a conclusion about whether or not there is power to make order 1 in the summons.  Even if there were, it would, in my opinion, be a wrong exercise of the discretion to do so in this case, where Court is in a position to hear the special leave application in the near future. 

The hurdle which the respondents face in striking out the special leave application on a test analogous to that stated in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, which seems to be an appropriate analogue, is much higher than the hurdle they face in merely opposing the applicant’s application for special leave. If order 1 in the summons were made, the applicants would be entitled to seek leave to appeal against it to three Justices of the Court. The wastefulness of all this satellite litigation indicates that it should not have been embarked on.

Accordingly, I would propose to make the following orders.  I will read them out so that the observations of legal representatives present can be noted and they can be reconsidered if necessary.

1.That the hearing of the application for special leave to appeal be expedited to 1 May 2009 in Sydney.

2.Direct the second applicant to file seven copies of the application book and serve three copies of it on the first and second respondents on or before Monday, 30 March 2009.

Order 3 will concern costs, so I will put that one on side for a moment.

4.The summons be otherwise dismissed.

Mr Pappas, do you have any problem with those orders?  You will presumably return to submitting mode from now on?

MR PAPPAS:   Certainly do, your Honour.

HIS HONOUR:   Yes, very well.  You do not want to be served with the books?

MR PAPPAS:   I do not, your Honour, and unless there is any debate about costs today, insofar as they affect my client, I having nothing further to say.

HIS HONOUR:   I think there will be a little debate about that shortly.  Mr Alexis, do you have any problem with orders 1, 2 and 4?

MR ALEXIS:   No, your Honour.

HIS HONOUR:   Mr Kelly?

MR KELLY:   No, your Honour.

HIS HONOUR:   You are content with them.  Mr Kelly, do you have any other application?

MR KELLY:   I have two applications.  One, would your Honour be minded to make an order removing Peter Carantinos as an applicant in the proceedings and joining Geoffrey McDonald, in his capacity as trustee of the bankrupt estate of Peter Carantinos, as another respondent.  As we understand the position, Mr McDonald has not made up his mind yet whether he is supporting or opposing but, as things stand, it would be awkward for there to be two applicants and two representatives, especially when one of them being a bankrupt no longer has the standing to bring the application in his own name.

HIS HONOUR:   You do not act for the first applicant?

MR KELLY:   I do not.

HIS HONOUR:   You are asking for an order affecting the first applicant, while we have someone here who does have some connection with ‑ ‑ ‑

MR KELLY:   I think that is right, yes, your Honour.

HIS HONOUR:   Do you press that application?

MR KELLY:   I do not press it.  I merely raise it not wanting any problem to emerge further down the track.  Secondly, I would ask for an order for costs against both the moving parties on the summons and against Mr Pappas’ client.

HIS HONOUR:   Yes.  Mr Munro, what do you say about Mr Kelly’s first application?  Just before you tell me that, could you just give me the precise order again, Mr Kelly? 

MR KELLY:   That Peter Carantinos be removed as an applicant in the proceedings.  That would simply be on the Cummings basis, your Honour, that he no longer has any property or standing.  And an order that Geoffrey McDonald, in his capacity as trustee of the bankrupt estate of Peter Carantinos, be added as a respondent.

HIS HONOUR:   Just one moment.  That Geoffrey McDonald, in his capacity as trustee of the bankrupt estate of Peter Carantinos, be added as an applicant or added as a what?

MR KELLY:   Be added as a party to the application for special leave and I think it would have to be as a respondent for the time being because, as I understand it, Mr McDonald has not made up his mind whether he wishes to go forward as an applicant or a respondent.  So he should in the meantime be parked, in my respectful submission, as a respondent so that he can come forward if he wishes.

HIS HONOUR:   Mr Munro, what do you say about that?

MR MUNRO:   Yes, your Honour, I support that proposition.

HIS HONOUR:   On that particular question, Mr Alexis, what is your position?

MR ALEXIS:   Your Honour, we do not oppose Mr Carantinos being removed as an applicant.  We do have difficulty with the joinder of Mr McDonald absent an application for that to occur by him or on his behalf.

HIS HONOUR:   Mr Kelly has made one and someone acting for Mr McDonald has supported it.

MR ALEXIS:   Your Honour, perhaps our learned friend could identify the basis of Mr McDonald being joined as a respondent to the special leave application.

HIS HONOUR:   If his wife’s application succeeds and the appeal succeeds, it will help Mr McDonald and, in the long run, it might help Mr Carantinos.

MR ALEXIS:   Your Honour, that is all we wish to say.

HIS HONOUR:   Very well.  Mr Pappas?  Yes.  Well, I indicate that that fifth order will be made in due course.  Why should Mr Kelly not have an order for the costs of the summons?

MR ALEXIS:   Until your Honour announced that this special leave application could be listed on 1 May we were otherwise unaware of that, apart from the general indication from the Registry, so the application has nonetheless been justified because we have been given the benefit of an expedited hearing of the special leave application.  As I indicated to your Honour in my brief opening remarks, that while if not all of the evidential material on the application was directed to the question of expedition, if your Honour has had a chance to look at Mr Magafas’ affidavit your Honour will see that it started by the filing of the summons in the Equity Division on 8 May 2006 and then tracks the long and rather sorry history of the litigation between the parties since then.  That was all directed to expedition and we have, in my respectful submission, been successful in achieving a measure of success on the application.

HIS HONOUR:   Your experience may be more extensive than mine, but have you ever heard of an application for expedition failing in the High Court?

MR ALEXIS:   I think our research has found that, your Honour, yes.

HIS HONOUR:   I have never known it to be so.  Mr Kelly seems to think it is a possibility in view of some rather minatory remarks he made in his written submissions.  I appreciate the efforts of your solicitor and I am not disparaging them in any way, but once Mr Kelly’s written submissions in reply did come in, contact with the Registry, do you not think, would have revealed that 1 May would have been an available date without the need for prosecuting the matter further?

MR ALEXIS:   Your Honour, all I can say in response to that is that Mr Rockliff, who instructs me in this case, has been in regular contact with the Registrar of this Court with respect to the arrangements for the listing of this application and, as I understand it, at no time was it indicated after the submissions were filed that 1 May was a likely prospect.

HIS HONOUR:   Yes.  It is not the duty of the Registrar to go around offering people things.

MR ALEXIS:   I appreciate that, your Honour.

HIS HONOUR:   It is not Christmas.

MR ALEXIS:   But, your Honour, we are debating the utility of the application once the written submissions in reply were filed and, in my submission, until your Honour was good enough to indicate at the outset of the matter this morning that 1 May was available and the matter would be listed, which plainly enough raised a question as to whether or not one should continue with seeking the first prayer for relief in the summons, that was certainly not a certainty as far as my client was concerned and therefore the application was justified.  Your Honour, in our respectful submission, the costs of this application should be in the application for special leave.

HIS HONOUR:   Mr Pappas?

MR PAPPAS:   Very briefly, your Honour, I obviously echo Mr Alexis’ comments.  Mr Gav, the fifth respondent, is an innocent party in these proceedings.  He has been dragged along by these proceedings for some years now.  The affairs of Artesian, the third respondent, are frozen by these proceedings effectively.  The company cannot be wound up.  It was a special purpose vehicle for a particular property venture.  The only other submission I would make is that the parties would have been here contesting this application today regardless of whether I appeared and the same outcome would have eventuated and no unnecessary costs have been incurred.

HIS HONOUR:   Mr Fraser used to say there is no such thing as a free lunch and there is no such thing as a free trip to the Bar table from submitting respondents, or at least there often is not.

MR PAPPAS:   That is the position of my client, of course, but we would submit, respectfully, your Honour, that no unnecessary costs have been incurred today by virtue of my appearance.  I have nothing further.

HIS HONOUR:   Which was the respondent for whom you appear, Mr Pappas?  The fifth, was it?  Mr Kelly, that application you made was on behalf of the second applicant only obviously?

MR KELLY:   Yes, your Honour.

HIS HONOUR:   You are content that, in effect, there be no order as to costs so far as Mr Munro’s client is concerned?

MR KELLY:   Certainly, your Honour.

HIS HONOUR:   Yes, very well. 

I propose that the costs of the second applicant in the proceedings of the summons be paid by the first, second and fifth respondents.  I will read those orders again:

1.That the hearing of the application for special leave to appeal will be expedited to 1 May 2009 in Sydney.

2.Direct the second applicant to file seven copies of the application book and serve three copies of it on the first and second respondents on or before Monday, 30 March 2009.

3.The costs of the second applicant in the proceedings of the summons be paid by the first, second and fifth respondents.

4.The summons be otherwise dismissed.

5.That Peter Carantinos be removed as an applicant in the proceedings and that Geoffrey McDonald in his capacity as trustee of the bankrupt estate of Peter Carantinos be added as a respondent to the application for special leave.

If there is nothing further, the Court will adjourn.

AT 10.02 AM THE MATTER WAS ADJOURNED