Davidovic v Vesuvius Australia Pty Ltd (No 2)

[2016] NSWSC 1679

Supreme Court

New South Wales

Medium Neutral Citation:	Davidovic v Vesuvius Australia Pty Ltd (No 2) [2016] NSWSC 1679
Hearing dates:	25 November 2016
Decision date:	25 November 2016
Jurisdiction:	Equity
Before:	Stevenson J
Decision:	Notice of motion filed on 25 October 2016 by Damjan Zugic dismissed with costs
Catchwords:	PRACTICE AND PROCEDURE – proceedings stayed by earlier order pending payment to defendant of outstanding costs – application by alleged assignee of plaintiff’s cause of action to be substituted as plaintiff without first paying those costs – whether such application competent while stay subsists
Legislation Cited:	Bankruptcy Act 1966 (Cth) Civil Procedure Act 2005 (NSW)
Cases Cited:	Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066 Minister of Foreign Affairs Trade and Industry v Vehicles and Supplies Ltd [1991] 1 WLR 550
Category:	Procedural and other rulings
Parties:	Velibor (Boris) Davidovic (Plaintiff) Damjan Zugic (Interested Party/Applicant) Vesuvius Australia Pty Ltd (First Defendant/Respondent) Verekers Lawyers (Second Defendant)
Representation:	Counsel: J R Young (Interested Party/Applicant) P Russell (First Defendant/Respondent)   Solicitors: James Legal (Interested Party/Applicant) Pikes & Verekers Lawyers (First Defendant/Respondent)
File Number(s):	SC 2013/385037

Judgment

1. The background to these proceedings is set out in the judgment of Darke J of 7 August 2014: Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066.

2. These reasons assume familiarity with that judgment.

3. His Honour made the following orders (“the Orders”):

“(1)   Subject to the condition that the plaintiff undertake to the Court to forthwith take appropriate steps to ensure that all who have an interest in what has been assigned under the Deed of Assignment are made party to the proceedings, grant leave to the plaintiff to file an amended Statement of Claim in the form of the amended Statement of Claim that is annexed to the affidavit sworn by the plaintiff on 28 May 2014, save for the deletion of the second defendant as a party (and any appropriate amendments consequential upon such deletion), and the deletion of paragraphs 55 and 56;

(2) The proceedings are stayed pursuant to s 67 of the Civil Procedure Act 2005 (NSW) until the defendant, Vesuvius Australia Pty Ltd, is paid the sum of $95,728.75, being the costs the subject of the four certificates of determination sent on 4 April 2014 in the sums of $82,633.35, $11,401.40, $1,020.25 and $673.75; …”.

4. Thus, his Honour granted conditional leave to the plaintiff to amend the statement of claim and ordered that the proceedings be stayed until the $95,728.75 (“the Sum”) was paid.

5. The condition upon which leave was granted was not met. The Sum has not been paid. No application has been made to vary the Orders. The proceedings thus remain stayed.

6. The plaintiff is now bankrupt and has, evidently, left Australia permanently.

7. In December 2015, the defendant caused there to be served on the plaintiff’s trustee in bankruptcy a notice under s 60 of the Bankruptcy Act 1966 (Cth). There was no response to that notice and the official trustee is therefore deemed to have abandoned the proceedings.

8. Nothing occurred in the proceedings after 7 August 2014 until 26 August 2016, when the defendant filed a notice of motion seeking to have the proceedings dismissed.

9. On 27 September 2016, the plaintiff’s grandson, Mr Damjan Zugic, filed a notice of motion seeking an order that he be substituted as plaintiff in these proceedings and seeking leave to file an amended statement of claim in the form attached to the notice of motion. Mr Zugic claims to be an assignee of the cause of action in the proceedings.

10. That application came on before Darke J as Duty Judge on 11 October 2016.

11. His Honour ordered that:

1. Mr Zugic’s notice of motion of 27 September 2016 be struck out and removed from the court file; and

2. Mr Zugic be granted leave to file a notice of motion “for the uplifting of the stay ordered on 7 August 2014”.

12. I have been informed that his Honour did not give reasons for making those orders but that his Honour ordered that Mr Zugic’s notice of motion of 27 September 2016 be struck out because of the existence of the stay the subject of the Orders.

13. On 25 October 2016, Mr Zugic filed a notice of motion seeking the following orders:

“1.    Upon the undertaking of Damjan Zugic to pay to the defendant the sum of $95,728.75 the stay imposed by Darke J on 7 August 2014 is discharged.

2.   Upon the granting of Order 1 above, the Court grant an order that Damjan Zugic of XXX be substituted as plaintiff in these proceedings.

3.   Further upon the making of order 1 above leave be granted to Damjan Zugic to file an Amended Statement of Claim dated 25 October 2016.

4.   The plaintiff pay the defendant's costs of this motion and costs thrown away by the amendment as agreed or assessed.

5.   A declaration that order 1 made by Darke J on 7 August 2014 shall be deemed to be complied with by Damjan Zugic filing the Amended Statement of Claims under Order 3 above.”

14. That notice of motion came on before me today in the Applications List.

15. Argument before me today proceeded upon the basis that prayer one should read:

“Upon the payment by Damjan Zugic to the defendant of the sum of $95,728.75 plus interest the stay imposed by Darke J on 7 August 2014 is discharged.”

16. I am prepared to accept that, by making the second order to which I have referred on 11 October 2016, Darke J should be taken to have varied the Orders so far as necessary to enable Mr Zugic to bring a motion to discharge the stay, albeit subject to Mr Zugic actually paying the $95,728.75. In fact, any such variation was not necessary as the effect of the Orders is that if and when the $95,728.75 is paid to the defendant (no matter by whom) the stay is lifted; without the need for any application or further order.

17. Nonetheless, I do not read Darke J’s order as varying the Orders, and uplifting the stay, to enable Mr Zugic to bring an application to be substituted as plaintiff. That is clear from the first order his Honour made on 11 October 2016.

18. To the extent that Mr Zugic’s notice of motion seeks to do so, it is in my opinion misconceived and incompetent.

19. The proceedings are stayed and, unless, Darke J’s order is varied, will remain stayed so long as the $95,728.75 is not paid to the defendant.

20. That means that no steps (including an application to be substituted as plaintiff) can be taken in the proceedings while the stay subsists: that is, unless and until that sum is paid (or the order is varied): see for example Minister of Foreign Affairs Trade and Industry v Vehicles and Supplies Ltd [1991] 1 WLR 550 at 556.

21. No application has been made to vary the Orders. I do not see Mr Zugic’s notice of motion as constituting expressly, or impliedly, such an application.

22. Mr Young, who appeared for Mr Zugic, submitted that:

“Mr Zugic is not taking any step contrary to the stay, rather he is seeking to have the stay lifted so that he can be substituted as the plaintiff. The real dictates of justice require that the question of his entitlement to be substituted should be determined at the same time as whether the stay will be lifted. To take a different view would not be in accordance with the dictates of justice.”

23. I do not agree.

24. While the stay is in force, Mr Zugic is not entitled to have any application to be substituted as plaintiff determined.

25. If Mr Zugic pays the $95,728.75 (and, I would add, interest on that sum) the stay will be lifted.

26. He can then be substituted as plaintiff.

27. I order that Mr Zugic’s notice of motion of 25 October 2016 be dismissed with costs.

28. In order to give Mr Zugic a short opportunity to consider what steps he wishes to take, I will stand the defendant’s notice of motion of 26 August 2016 over to the Applications List on 2 December 2016.

29. If the stay then remains in place, I will dismiss the proceedings.

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