Carey v Freehills

Case [2014] FCA 788

FEDERAL COURT OF AUSTRALIA

Carey v Freehills [2014] FCA 788

Citation: Carey v Freehills [2014] FCA 788
Appeal from: Carey v Freehills [2013] FCA 954
Parties: NORMAN PHILLIP CAREY and others named in the attached schedule v FREEHILLS
File number: VID 1350 of 2013
Judge: WHITE J
Date of judgment: 31 July 2014
Catchwords: PRACTICE AND PROCEDURE – application to set aside dismissal of appeal – appeal dismissed for want of prosecution and failure to comply with direction of the Court – principles relevant to power to set aside dismissal – whether adequate explanation provided for procedural defaults – utility in setting aside dismissal
Legislation: Federal Court Rules 2011 (Cth) rr 1.61, 17.01, 36.03, 36.09, 36.53, 36.74
Federal Court of Australia Act 1976 (Cth) ss 25, 37M, 37N, 56
Cases cited:

Billinudgel Pastoral Co Pty Ltd v Westpac Banking Corporation (Unreported, Federal Court of Australia, Cooper J, 27 March 1998)
Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins and Sells [1999] 3 VR 863
Cosdean Investments Pty Ltd v Football Federation Australia Ltd (No 3) [2007] FCA 766
Dye v Commonwealth Securities Ltd [2012] FCA 992
Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWSC 18
Microbio Resources Inc v Betatene Ltd (Unreported, Federal Court of Australia, Black CJ, Sheppard and Einfeld JJ, 8 October 1993)
Pannu v Minister for Immigration and Citizenship (No 2) [2013] FCA 1406
SZCOZ v Minister for Immigration and Citizenship [2007] FCA 641
SZCZF v Minister for Immigration and Citizenship [2009] FCA 208

SZISM v Minister for Immigration and Citizenship [2007] FCAFC 61; (2007) 158 FCR 292

Date of hearing: 15 May 2014
Place: Adelaide
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 73
Counsel for the Appellants: Mr A Schlicht
Solicitor for the Appellants: Metaxas & Hager
Counsel for the Respondent: Mr D A Klempfner
Solicitor for the Respondent: Colin Biggers & Paisley Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1350 of 2013
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

NORMAN PHILLIP CAREY and others named in the attached schedule
Appellants
AND:

FREEHILLS
Respondent

JUDGE:

WHITE J

DATE OF ORDER:

31 JULY 2014

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.The appellants’ application of 7 May 2014 be dismissed.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1350 of 2013
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

NORMAN PHILLIP CAREY and others named in the attached schedule
Appellants
AND:

FREEHILLS
Respondent

JUDGE:

WHITE J

DATE:

31 JULY 2014

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

  1. On 20 September 2013, Kenny J dismissed the appellants’ cross-claim against Freehills: Carey v Freehills [2013] FCA 954; (2013) 303 ALR 445. The appellants lodged an appeal against that dismissal on 13 December 2013.

  2. On 28 April 2014, North J ordered that the appeal be dismissed: Carey v Freehills [2014] FCA 451. However, at the…

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AGLC
Carey v Freehills [2014] FCA 788
Case
[2014] FCA 788
Decision Date

CaseChat Overview and Summary

The matter of Carey v Freehills came before the court in an application to set aside the dismissal of an appeal. The first appellant, Mr Carey, and 25 members of the Westpoint Group, originally filed a cross-claim for damages against the solicitors, Freehills (now Herbert Smith Freehills), on the grounds of alleged negligence, breaches of retainer, and misleading or deceptive conduct. The original claim was dismissed, and an appeal was subsequently filed. However, the appellants failed to comply with procedural directives, leading to the dismissal of the appeal.

The legal issues before the court included whether the appellants had provided an adequate explanation for their procedural defaults and whether there was any utility in setting aside the dismissal of the appeal. The court considered whether the appellants had demonstrated a reasonably arguable case that would be prejudiced by the inability to pursue the appeal. Additionally, the court had to assess the potential prejudice to Freehills if the dismissal were to be set aside and weigh this against the overarching purpose of the Federal Court Act.

In reaching its decision, the court concluded that the appellants had not provided a satisfactory explanation for their lack of diligence in prosecuting the appeal and for their procedural defaults. The court found no utility in setting aside the dismissal in relation to the corporate appellants, and Mr Carey had not demonstrated a reasonably arguable case that would be prejudiced by an inability to pursue the appeal. Consequently, the application to set aside the dismissal of the appeal was dismissed.

The court ordered that the appellants' application of 7 May 2014 be dismissed. The parties were to be heard regarding the costs associated with the application.

Orders

Orders of the court

1. The appellants’ application of 7 May 2014 be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The circumstances of the case are unusual. I consider that the application should be refused. My reasons for that conclusion follow.Background The first appellant is Mr Carey. He founded a group of companies known as the Westpoint Group, and, at relevant times, controlled their activities. In the proceedings at first instance, each of the 26 appellants, being Mr Carey and 25 members of the Westpoint Group, claimed, by way of cross-claim, damages from the solicitors, Freehills (now Herbert Smith Freehills), in respect of alleged negligence, breaches of retainer and misleading or deceptive conduct. As indicated, the appellants’ cross-claim for damages wholly failed. On 13 December 2013, the appellants filed an appeal against the dismissal of their claim. That was outside the 21 day period fixed by r 36.03 of the Federal Court Rules 2011 (Cth) (FCR), but Freehills consented to an extension of time for the commencement of the appeal. On 4 February 2014, Marshall J made an order that the appeal be heard in the Full Court sittings to be held in May. In accordance with the usual practice, Marshall J also made orders with respect to the time of filing outlines of submissions and for the filing of Part C of the appeal book. Later, on 13 March 2014, the National Appeals Registrar of this Court advised the parties that the appeal would be heard in Melbourne on 15 and 16 May 2014. By an application filed on 19 February 2014, Freehills sought an order securing their costs on the appeal. That application was heard on 1 April 2014. Marshall J gave his decision that same day (Carey v Freehills [2014] FCA 325) and made orders that:1.On or before 17 April 2014, the appellants give security for the respondent’s costs of the appeal in the sum of $148,000 in a form acceptable to the Victoria District Registrar of the Court.2.Failing compliance with order 1, the appeal is stayed, subject to further order. The appellants did not provide any security for costs as required by the order of Marshall J. The effect of the order of Marshall J was that the further pursuit of the appeal was then stayed. The last day for the provision of the security ordered by Marshall J was 17 April 2014. That was the Thursday before the four day Easter break. On Tuesday, 22 April 2014, that is, the Tuesday immediately following the Easter break, Freehills filed an interlocutory application seeking the dismissal of the appeal in its entirety; alternatively, the dismissal of the appeal brought by each of the corporate appellants; and alternatively again, the dismissal of the appeal brought by those appellants who were said to have been deregistered. That application was served on the appellants the same day. On the following day, namely, Wednesday, 23 April 2014, the appellants were informed that the application would be heard by North J on Monday, 28 April 2014 at 10.15am. The appellants’ solicitors sought to have that hearing vacated on the ground that the appellants had insufficient time to prepare for the hearing. Amongst other things, they pointed out that the public holiday on Anzac Day (25 April) meant that they had, in effect, only a little over one working day for preparation and that r 17.01(2) of the FCR entitled them to at least three days between service of the interlocutory application and the hearing. Having regard to r 1.61(3), those three days were not to include the three days of the Anzac Day long weekend. North J refused to vacate administratively the hearing scheduled for 28 April.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

However, I note again that the Court is not presently sitting on appeal to review the decision of North J. The decision instead is whether the power to set aside the order of dismissal should be made. For the reasons already indicated, that involves different considerations.Conclusion I am not persuaded that the order for dismissal of the appeal should be set aside. The appellants have not provided a satisfactory explanation for their want of diligence in prosecuting the appeal and for their procedural defaults. There is no utility in any event in the setting aside of the dismissal in relation to the corporate appellants. Mr Carey has not sought to demonstrate that he has a reasonably arguable case on the appeal such that he will be prejudiced by an inability to pursue it. There will be prejudice caused to Freehills if the dismissal is set aside and it is appropriate for the Court to have regard to the overarching purpose to which ss 34M and 34N of the FCA Act refer. Accordingly, the appellants’ application of 7 May 2014 is dismissed. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.