Davis Samuel Pty Ltd v Commonwealth of Australia
[2016] ACTCA 22
•30 June 2016
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Davis Samuel Pty Ltd v Commonwealth of Australia |
Citation: | [2016] ACTCA 22 |
Hearing Date: | 11 April 2016 |
DecisionDate: | 30 June 2016 |
Before: | Burns J |
Decision: | See [154]-[155]. |
Catchwords: | PRACTICE AND PROCEDURE – application by respondent to the appeal – show cause why appeal should not be dismissed for want of prosecution – failure of the appellants to settle appeal index after twelve months – no evidence of impecuniosity – no evidence ancillary proceedings have expended appellants’ time and resources – interests of justice – appeal struck out for want of prosecution. |
Legislation Cited: | Corporations Act 2001 (Cth) ss 459E, 471A Court Procedures Act2004 (ACT) s 5A Uniform Civil Procedure Rules (NSW) rr 12.7, 51.1(3) |
Cases Cited: | Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 Aon Risk Services Australian Ltd v Australian National University (2009) 239 CLR 175 Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894 |
Parties: | Commonwealth of Australia (First Applicant) TNG Ltd (Second Applicant) Davis Samuel Pty Ltd (First Respondent) CTC Resources NL (Second Respondent) Peter Michael Cain (Third Respondent) Bisoya Pty Ltd (Fourth Respondent) Tresmonay Pty Ltd (Sixth Respondent) Peter Clark (Seventh Respondent) Allan Paul Endresz (Eighth Respondent) William Arthur Forge (Tenth Respondent) Dawn Endresz (Eleventh Respondent) Joy Beverley Endresz (Twelfth Respondent) |
Representation: | Counsel Mr J Hogan-Doran (First Applicant) Mr D Shillington (Second Applicant) No Appearance (First Respondent) No Appearance (Second Respondent) Mr A Kuklik (Third and Seventh Respondent) No Appearance (Fourth Respondent) No Appearance (Sixth Respondent) Self-represented (Eighth Respondent, also appeared for Ninth, Eleventh and Twelfth Respondents with leave) Self-represented (Tenth Respondent) |
| Solicitors Australian Government Solicitor (First Applicant) Snedden Hall & Gallop (Second Applicant) No Appearance (First Respondent) No Appearance (Second Respondent) Irongroup Lawyers (Third and Seventh Respondent) No Appearance (Fourth Respondent) No Appearance (Sixth Respondent) Self-represented (Eighth Respondent, also appeared for Ninth, Eleventh and Twelfth Respondents with leave) Self-represented (Tenth Respondent) | |
File Number: | ACTCA 67 of 2014 |
Decision under appeal: | Court: ACT Supreme Court Before: Refshauge J Date of Decision: 1 August 2013; 21 November 2014 Case Title: Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No 7); Commonwealth of Australia Pty Ltd & Ors (No 8) Citation: [2013] ACTSC 146; [2014] ACTSC 312 |
BURNS J:
The Commonwealth of Australia, the first respondent to the appeal, has brought an application dated 26 November 2016 that the appellants show cause why the appeal should not be dismissed for want of prosecution. On 18 December 2015, TNG Ltd, the second respondent to the appeal, also brought an application that the appellants show cause why the appeal should not be dismissed for want of prosecution. For convenience, I will continue to refer to the parties as the appellants, the first respondent and second respondent. Whilst I acknowledge that each of the appellants has a separate appeal, for convenience I will refer to “the appeal”.
The first respondent articulated the following grounds on which the order sought should be granted:
(a)the appellants failed to comply with r 5430 of the Court Procedures Rules 2006 (ACT) (the CPR) during a period of three months after the day the requirement to comply arose;
(b)the appellants failed to comply with a Direction of the Deputy Registrar made on 25 September 2015 to file and serve any application in the appeal by 26 October 2015; and
(c)the appellants failed to comply with a Direction of the Deputy Registrar made on 5 November 2015 to file and serve any application in the appeal by 19 November 2015.
The application by the second respondent did not articulate grounds for the application, but similar arguments were advanced by the second respondent on the hearing of the application to those advanced by the first respondent.
Appearances by the appellants
The Notice of Appeal was filed on behalf of each of the appellants by Irongroup Lawyers on 23 December 2014. Irongroup Lawyers therefore became the lawyers on the record for each of the appellants. On 17 March 2015, the tenth appellant, William Arthur Forge, filed a notice that he was no longer represented by Irongroup Lawyers, and that he now represented himself. On the same day, the eighth appellant, Allan Paul Endresz, filed a similar notice. On 18 November 2015, in response to a direction by the Deputy Registrar, the seventh appellant, Peter Clark filed a notice of appointment of solicitor nominating Mr Peter Cain of Irongroup Lawyers as his representative.
At the hearing of the present application on 11 April 2016, Mr Kuklik of counsel announced his appearance on behalf of Mr Cain and Mr Clark only. Mr Forge announced that he was appearing for himself. Mr Allan Endresz also announced that he was appearing for himself, and sought leave to appear for Jozsef Endresz, Dawn Endresz and Joy Beverley Endresz. In order to progress the application, leave was granted. I can only assume that Irongroup Lawyers were not instructed by Mr Forge, Mr Allan Endresz or those whose interests Mr Endresz represented, to represent them in the present application. Until formal documentation to the contrary is filed, I will regard Irongroup Lawyers as the solicitors on the record for the appellants except Mr Forge and Mr Allan Endresz.
Before I deal with the present applications, it is useful, first, to set out the background and procedural history of the matter.
Background
In 1998, David Muir was an employee of a company, Callform Pty Ltd (Callform). This company was contracted by the Department of Finance and Administration (the Department) to assist in the administration accounts holding funds connected with the operation and closure of certain government businesses. During Mr Muir’s contract with the Department, he improperly transferred a sum of $6 million from the Commonwealth to CTC Resources (the April Funds) and a sum of $2.725 million from the Commonwealth to the Davis Samuel Partnership (the September Funds). Those funds were then paid directly or indirectly to a large number of the defendants in the matter below, and those defendants who were not paid those funds were involved in the transactions whereby those funds were paid to the others. In 1999, the first respondent by originating application sought to have those payments recovered from the appellants. The hearing commenced before Refshauge J on 10 June 2008, and occupied 39 hearing days. From the dates between the originating application being filed and the hearing, the first respondent was granted leave to amend their Statement of Claim on six occasions to incorporate all the appellants and causes of actions which the judgment of Refshauge J was ultimately founded upon.
On 1 August 2013, Refshauge J handed down his Honour’s judgment on liability: Commonwealth of Australia v Davis Samuel Pty Ltd and Ors (No 7) [2013] ACTSC 146 (liability judgment). On 21 November 2014, Refshauge J handed down his Honour’s judgment on final orders: Commonwealth of Australia v Davis Samuel Pty Ltd and Ors (No 8) [2014] ACTSC 312 (final orders judgment). I also note that his Honour’s judgment was in relation to twenty-nine defendants and one third party. This judgment will focus solely on those defendants who are now appellants on the file ACTCA 67 of 2014. The corporate appellants in this matter did not appear at the hearing of the applications and I was informed by the first respondent that an order had been made winding up those companies, and that liquidators have been appointed. I note that no notice discontinuing their involvement in the present appeal has been filed with the court, and the first respondent indicated that they formally seek an order dismissing their appeal for want of prosecution. I ordered that the fifth respondent be removed as a party to the appeal in a judgment I handed down on 14 July 2015: Davis Samuel Pty Ltd & Ors v Commonwealth of Australia & Anor [2015] ACTCA 30.
I will now set out some of the key findings in the liability judgment. I note in doing so, I have relied on the summary of judgment prepared by the first respondent filed on 24 March 2016, which was filed pursuant to a direction of Murrell CJ on 9 March 2016 that the first respondent file an agreed summary of judgment. As no objection to that document was taken at the hearing of the applications by any other party, I will rely on that document in summarising the key findings in the liability judgment. However, I note that this is in no way an exhaustive list. I will, for convenience, include relevant paragraph numbers from the reasons of Refshauge J.
Fiduciary Duties
By reason of Mr Muir and Callform’s position and knowledge, and the vulnerability of the Commonwealth, they had a fiduciary relationship with the Commonwealth and owed fiduciary duties as set out at [323(2)] – [323(5)]. The transactions in relation to the April Funds and the September Funds effected by Mr Muir amounted to breaches of his and Callform’s fiduciary duties to the Commonwealth: see [394] and [458] respectively.
Mr Allan Endresz, Mr Jozsef Endresz, Ms Dawn Endresz, Mr Forge and Mr Cain were aware that Mr Muir and Callform were, in arranging for the payment of the April Funds to CTC Resources, breaching the fiduciary duties they owed to the Commonwealth: see [1010].
Mr Allan Endresz, Mr Cain, Mr Jozsef Endresz, Ms Dawn Endresz and Mr Forge knew that Mr Muir and Callform were breaching their fiduciary duties to the Commonwealth by causing the September Funds to be paid from the Commonwealth to the Davis Samuel Partnership: see [1330].
In the proceedings below the appellants submitted, as a defence to any breach of fiduciary duties, that there was a contract between the Commonwealth and CTC Resources. In support of that defence, they submitted that acceptance by the Australian Securities and Investment Commission (ASIC) of a Notification of Allotment of shares in CTC Resources constitutes affirmation by the Commonwealth of the allotment of preference shares. The trial judge found that there was no reference in the Notice of Allotment of shares that the Commonwealth was the allottee, and as such, no basis for suggesting that ASIC (as the Commonwealth) could have somehow affirmed the contract which the appellants alleged formed the basis of the allotment: see [1478]-[1480], [1494]-[1495].
The appellants also submitted that there was a contract between CTC Resources, Davis Samuel Pty Ltd (Davis Samuel) and the Commonwealth. The trial judge rejected this submission and found there was no contract: see [1500] and [1505].
The trial judge rejected a submission that Mr Muir, as an agent for the Commonwealth, had ostensible authority to bind the Commonwealth: see [1547].
The trial judge also found that there was no substance in the defence that the April and September Funds were authorised because they were paid from a Special Account under s 21 of the Financial Management and Accountability Act 1997 (Cth) as part of the “Commercial Activities Fund”: see [1654].
The appellants were found to be either knowing accessories or knowing recipients in respect of the April Funds and September Funds transactions so far as they were involved in any of the transactions referred to in the liability judgment: see [1666]. His Honour then concluded that this meant that so far as funds were received by the appellants, they received them as constructive trustees for which they were liable to account to the Commonwealth: see [1667]. In so far as the appellants were knowing accessories, they were personally liable to provide compensation for the Commonwealth’s loss arising from the breach of fiduciary duties by Mr Muir and Callform: see [1668].
Breach of Confidence
The Commonwealth’s claim that Mr Muir and, through him as a servant or agent, Callform, breached a duty of confidence that they owed to the Commonwealth in respect of certain information, was not made out: see [1677].
Mistake
The April payment and September payment were each made under operative or fundamental mistakes and, accordingly, are liable to be set aside or declared void: see [1726].
Ultra Vires Payment
The trial judge found that the April Funds and September Funds payments were payments ultra vires the Commonwealth, and the Commonwealth could recover the payments made from the persons to whom they were paid: see [1763].
Claim under the Trade practices Act 1974 (Cth)
By reason of their involvement in inducing the April Funds and September Funds payments, CTC Resources and Davis Samuel were found to be liable to the Commonwealth for breaches of s 52 of the Trade Practices Act 1974 (Cth): see [1777].
The Commonwealth’s claims against TNG
I will not recount the Commonwealth’s claim against TNG in any great detail. To summarise, the September Funds were used by Davis Samuel to acquire as trustee for the Hallmark Unit Trust, units in which were held by Kamanga, Quancorp and Callform (corporate defendants in the matter below), shares in TNG Ltd and then to appoint Mr Forge, Mr Muir and Mr Clark to TNG’s board of directors. They then determined in October 1998 that TNG acquire, at a distinct overprice, from CTC Resources shares and options in Kanowna Lights NL which had been acquired using the April Funds, and to retain Davis Samuel as corporate advisors (the October Resolutions): see [1331]-[1361].
As TNG appealed against the findings that were made in favour of the Commonwealth on file ACTCA 65 of 2014, I will not recite them in any more detail.
Claim by TNG against the appellants and third party
After the trial judge considered the October Resolutions, their effect, the circumstances and context in which they were passed and the transactions which gave effect to them, the trial judge found at [2165] that:
(a)Mr Muir, Mr Forge and Mr Clark breached their fiduciary duties to TNG by passing the October Resolutions and implementing them to the extent they did;
(b)Mr Allan Endresz and Mr Cain both knew that Mr Muir, Mr Forge and Mr Clark were breaching their fiduciary duties to TNG by passing the October Resolutions and implementing them to the extent that they did, and they assisted them in doing so; and
(c)Mr Jozsef Endresz and Ms Dawn Endresz knowingly assisted Mr Muir, Mr Forge and Mr Clark to breach their fiduciary duties to TNG. Mr Jozsef Endresz assisted Mr Muir, Mr Forge and Mr Clark to breach their fiduciary duties by causing Kamanga to sell options in respect of Kanowna Lights NL shares at a gross overvalue to TNG.
The defence pleaded by the appellants was, that there was no election by TNG to rescind an agreement to “unwind” the October Resolutions and their implementation, such that equity would not intervene, failed: see [2197]-[2199].
The appellants also pleaded estoppel in their defence to TNG’s claims. This was rejected by the trial judge: see [2201] – [2266].
Counter-claim by the appellants against the Commonwealth
The appellants made a counter claim against the Commonwealth for $4.3 billion in the below proceedings on a number of bases:
(a)Breach of contract in relation to the April Funds transaction: The trial judge found there was no contract between CTC Resources and the Commonwealth, and even if there was, there was no breach of contract: see [2234] and [2243].
(b)Breach of contract in relation to the September Funds transaction: The trial judge referred to essentially the same reasons as those in relation to the April Funds Transaction for finding that there was no contract: see [2260].
(c)Negligence: The trial judge found that the counter-claimants’ pleading did not give rise to a cause of action in negligence as there was no duty of care defined or identified: see [2275]. The trial judge also found that an inspection of the financial affairs of CTC Resources and Davis Samuel demonstrated that they suffered no loss: see [2283].
(d)Trade Practices Act: There was no conduct by the Commonwealth that was misleading and deceptive: see [2310] and [2314].
(e)No evidence of quantum: the appellants did not lead evidence as to the quantum of their claim: see [2283]-[2291] and [2310].
Final Orders Judgment
I will now refer to the remedies which were given to the Commonwealth and TNG, as I have already noted, these were set out in the final orders judgment.
Each of the appellants were ordered to pay equitable compensation to the Commonwealth in the amount of the unrecovered April Funds and the unrecovered September Funds, which they received or for which they were liable. This was in addition to interest on those amounts from the date received and as remain unrecovered from time to time. Each of the appellants were also ordered to transfer to the Commonwealth real and personal property, acquired by the appellants using traceable funds.
The trial judge did not make any additional orders under s 87 of the Trade Practices Act1974 (Cth) nor any additional order as a remedy for the ultra vires payment. The entitlement to recover the money was found to be assumed within the judgment for equitable compensation: see for example: [324] and [390]. I will not detail the specific amounts that each appellant was ordered to pay by the trial judge, however, I note them.
In relation to TNG’s claims, Mr Cain, Mr Allan Endresz, Mr Jozsef Endresz, Mr Forge and Ms Dawn Endresz were ordered to pay equitable compensation and to indemnify TNG for the amounts TNG has to pay the Commonwealth for breaches of fiduciary duty by Mr Forge, Mr Muir and Mr Clark. Mr Clark was also ordered to pay TNG equitable compensation with interest.
I also note the outcome of the Commonwealth’s claim for equitable compensation against TNG, without here reciting it.
Provision was also made to avoid double recovery with the maximum the Commonwealth is entitled to recover being the unrecovered principal April Funds and September Funds and interest, and costs.
I also note that minor corrections in favour of the appellants were made under the slip rule by the trial judge in the Commonwealth of Australia v Davis Samuel Pty Ltd and Ors (No 9) [2015] ACTSC 127.
On 23 December 2014, two days after the final orders judgment was delivered, the appellants filed a Notice of Appeal. The Notice of Appeal set out 88 grounds, which appear to challenge each significant finding of fact, or legal ruling, made by the trial judge. In the material the appellants relied upon for the purposes of this application is a draft Amended Notice of Appeal. This Amended Notice is set out differently to the current Notice of Appeal, with many of the facts challenged by the appellants being removed from the Notice itself but then restored in an annexure to the draft Amended Notice.
I will now turn to the chronology of events from the date the Notice of Appeal was filed to the hearing of the present applications.
Chronology of Events
In referring to the chronology of events that have taken place I have been assisted by the chronology that was filed on 24 March 2016 by the first respondent. I note that this was filed also pursuant to an order by Murrell CJ on 9 March 2016 that an agreed chronology be filed by the first respondent. As no objection has been taken by any other party, I will rely on that document. I also refer to the records of proceedings that are part of the court file.
Following the Notice of Appeal being filed on 23 December 2014, the Full Court of the Federal Court set aside sequestrian orders made against Mr Allan Endresz, Mr Jozsef Endresz, Ms Dawn Endresz and Mr Forge on their undertaking to diligently prosecute the present appeal on 19 February 2015: Endresz v Australian Securities and Investments Commission (No 2) [2015] FCR 334.
On 19 February 2015, the matter first went before the Deputy Registrar to settle the appeal index. On that occasion, the Deputy Registrar noted Mr Cain, who is the third appellant in the present proceedings, mentioned the matter on behalf of all the other appellants. On that occasion, Mr Cain sought a three month adjournment to prepare the appeal index, as preparing the draft index within a month “could not be achieved”. It was indicated to him by the Deputy Registrar that three months for the preparation of an appeal index was “too long”. Additionally, on this occasion Mr Cain indicated that a number of the appellants that were natural persons were “fighting off” bankruptcy proceedings and that a number of the appellants that were corporations had recently been served with statutory demands. Mr Cain indicated that those separate proceedings were requiring a substantial investment of time from the appellants. Also on this date the first respondent foreshadowed an application for security for costs. The appeal index listing was adjourned for one month, until 19 March 2015.
On 18 March 2015, the first draft of the appeal book index was provided by Mr Cain. A copy of this appears as an annexure to the affidavit of Luke Akele sworn on 26 November 2015, a lawyer for the first respondent.
On 19 March 2015, the second appointment to settle the appeal index was before the Deputy Registrar. The matter was adjourned to 9 April 2015.
On 27 March 2015, Davis Samuel, Bisoya Pty Ltd (Bisoya) and Tresmonay Pty Ltd (Tresmonay) were wound up by Registrar Wall of the Federal Court of Australia. I have before me the affidavit of Zita Rowling on behalf of the first respondent dated 24 March 2016. This affidavit contains as an annexure copies of extracts of the records of the ASIC in respect of the corporate appellants (besides the fifth appellant), which show that a liquidator has been appointed in each case. I also note that on 17 February 2016 CTC Resources was also wound up and a liquidator was appointed.
On 8 April 2015, a second draft of the appeal book index was provided by the appellants. This again appears in an annexure to the affidavit of Luke Akele.
On 9 April 2015, a third appointment to settle the appeal index was again before the Deputy Registrar. At this stage, an application by the first respondent for security for costs had been filed and it was noted that it would be docketed to a judge. The appointment to settle the appeal index was adjourned to 14 May 2015.
On 15 April 2015, the first respondent’s application for security for costs was made returnable before me. On that occasion I set the application down for hearing on 2 June 2015.
On 14 May 2015, the appointment to settle the appeal index was before the Deputy Registrar. On that occasion the Deputy Registrar noted that the draft index required extensive work. The appointment to settle the appeal index was adjourned to 9 July 2015.
On 2 June 2015, the application for security of costs came on for hearing before me and I reserved my decision.
On 9 July 2016, the appointment to settle the appeal index was again before the Deputy Registrar. On that occasion, the appellants made a late request to appear via telephone link, as this request was unable to be accommodated in time, they did not appear. The appointment to settle the appeal index was adjourned to 20 August 2015, with Registry to notify the appellants of this date.
On 14 July 2015, I handed down my judgment in relation to the first respondent’s application for security for costs, refusing that application and removing the fifth appellant as a party to the proceedings.
On 20 August 2015, the matter was again before the Deputy Registrar to settle the appeal index and was adjourned to 29 September 2015. Mr Cain appeared by telephone link and mentioned for the corporate appellants, noting that the first, fourth and sixth appellants were in liquidation. Mr Forge appeared for himself by telephone link and Mr Allan Andresz appeared by telephone link for himself and his parents, who are the ninth and eleventh appellants with leave. On this occasion, the Deputy Registrar noted that the appellants were unable to progress the draft appeal book index due to ongoing issues and outstanding matters:
(a)the Federal Court proceedings, which were a challenge to the corporate appellants’ liquidation, could result in the “resurrection” of two of the corporate appellants; and
(b)the trial judge, according to the appellants, was yet to finalise a number of outstanding interlocutory applications.
It was noted by the Deputy Registrar that it was the first respondent’s view that the outstanding interlocutory applications that the appellants said were yet to be finalised by the trial judge had formed part of the substantive judgment. The first respondent was also of the view that the current grounds of appeal were “too vague” and that the first respondent was unable to determine what needs to be put before the Court of Appeal until the grounds of appeal were clarified. The Deputy Registrar noted on this occasion to the appellants that the Notice of Appeal can be amended without leave up until the point the index is settled.
On 31 August 2015, the Commonwealth sent a letter to the appellants detailing the issues with the appeal index. This letter was an annexure to the affidavit of Luke Akele. Some of the issues which were brought to the appellants’ attention in relation to the draft appeal book index of 8 April 2015 were that:
(a)all exhibits had been omitted;
(b)pleadings that were amended had been included;
(c)published judgments and material (under the heading “Other”) that was not before the trial judge was included;
(d)“other” material included unidentified transcripts, transcripts of proceedings subsequent to the decision appealed from, published decisions, submissions and unidentified judgments of the New South Wales Supreme Court, none of which was evidence before the trial judge; and
(e)it was unclear to the first respondent whether the reasons, transcript or case summary as required by r 5430 of the CPR had been filed, or whether any corrections to the transcript were proposed.
On 24 September 2015, the Deputy Registrar noted that the same issues as those raised on 20 August 2015 were raised on this date. On this date, the appellants foreshadowed that an application would be made to have the orders of the trial judge declared null and void, amongst other things. The Deputy Registrar directed that any such application was to be filed by 22 October 2015. The Deputy Registrar also noted that the appeal index cannot be advanced until those issues had all been addressed and adjourned the appointment to settle the appeal index to 5 November 2015.
On 5 November 2015, the appointment to settle the appeal index was adjourned to 26 November 2015 by the Deputy Registrar. Also on this occasion the Deputy Registrar directed that Mr Cain file and serve a notice of representation in relation to Mr Clark within seven days. The Deputy Registrar also directed that the appellants were to file and serve any application within 14 days, being 19 November 2015.
On 26 November 2016, the Deputy Registrar adjourned the appointment to settle the appeal index to 11 February 2016. On this occasion, the Deputy Registrar directed that the appellants file and serve any application in proceeding within fourteen days, and any amended Notice of Appeal within twenty-one days.
On 26 November 2016, the first respondent also filed its application that the appellants show cause why the appeal should not be dismissed for want of prosecution. This application was made returnable before Murrell CJ on 16 December 2015. On this occasion Murrell CJ made a number of orders and directions, including that:
(a)the Appeal be listed in the May 2016 Court of Appeal sittings;
(b)any application and/or amendment to the Notice of Appeal relating to the matter must be filed by 4 pm on 29 February 2016. Her Honour noted that any failing of the appellants to comply with this order may result in the Court declining to entertain the matter due to the delay in prosecuting the appeal; and
(c)the appellants were to file any application, or, if more appropriate, amend the Notice of Appeal to incorporate a further ground that addressed the appellants’ complaint that the trial judge lacked jurisdiction to determine many of the causes of action that he purported to determine. Any application or any amendment to the Notice of Appeal in relation to that issue was to be filed no later than 4 pm on Monday, 29 February 2016.
On 11 February 2016, the Deputy Registrar adjourned the appointment to settle the appeal index to 3 March 2016. On that occasion, the appeal was set down for hearing on 11 May 2016.
On 17 February 2016, the second appellant was ordered to be wound up in insolvency: Commonwealth of Australia v CTC Resources NL [2016] FCA 112.
On 29 February 2016, the appellants filed an application in proceedings on file SC 75 of 1999 to set aside the judgment of the trial judge and have the orders declared as void.
On 3 March 2016, the matter came back before the Deputy Registrar. On that occasion, the Deputy Registrar noted that the application to show cause was listed for 11 April 2016 and that as a result of the appellants’ application on file SC 75 of 1999, the hearing of the appeal could not go before the Court of Appeal.
On 9 March 2016, the matter was listed before Murrell CJ for a directions hearing. Murrell CJ made orders and directions in relation to both the application on file SC 75 of 1999 and the present applications to show cause. Her Honour also formally vacated the Court of Appeal date of 11 May 2016.
On 17 March 2016, the appointment to settle the appeal index was vacated by consent. This would have been the twelfth appointment to settle the appeal index.
On 11 April 2016, the application to show cause came on for hearing before me and I reserved my decision. On that date, I also listed the application on file SC 75 of 1999 before the trial judge for 11 May 2016.
The relevant principles
The present application is brought pursuant to r 5603 of the CPR. This rule provides that the Court of Appeal may on an application by a respondent to the appeal to show cause why the appeal should not be dismissed for want of prosecution, order than an appeal be dismissed for want of prosecution (r 5603(3)(a), or it may set a time for the doing of a thing that is required to be done (r 5603(3)(b)). Where the Court of Appeal dismisses an appeal for want of prosecution it may confirm the order appealed from. Where it sets a time for the doing of a thing or things to be done in relation to the appeal, it may also make self-executing orders to the effect that the appeal will stand dismissed if the thing is not done within the time allowed. The respondents rely upon the provisions of r 5603(2), which provides:
(2)This rule applied if an appellant–
(a)has not done anything required to be done under these rules during a period of 3 months after the day the requirement arises; or
(b)otherwise has not prosecuted the appellant’s appeal with appropriate effort during a period of 3 months after the day the last step in the proceedings was taken.
It is convenient to also set out the provisions of the CPR which specify the requirement to be fulfilled by the appellants prior to setting the appeal index:
5430Appeals to Court of Appeal—filing of things before settlement of appeal papers
(1)Before the date set for settling the appeal papers, the appellant must—
(a)get and file the reasons for the order or the summing up of the judicial officer of the court who gave the order appealed from, certified by the judicial officer’s associate; and
(b)get and file a copy of the transcript of the proceeding in which the order was made, corrected in accordance with subrules (2) and (3) and, if corrected, certified by the registrar; and
(c)prepare and file a 1-paragraph (about 250 words) summary (the case summary) of—
(i) the proceeding in which the order appealed from was made; and
(ii) the order appealed from; and
(iii) the grounds relied on in support of the appeal.
(2)If the appellant gets a copy of the transcript of the proceeding, the appellant must—
(a)correct any errors in it; and
(b)give a list of the corrections to each respondent; and
(c)give each respondent a reasonable time to examine the transcript and corrections.
(3)If the parties disagree on the accuracy of any part of the transcript, or cannot agree on a correction, the disagreement must be submitted to the judicial officer of the court who gave the order appealed from, or to the registrar, for directions.
(4)The appellant must serve a copy of the case summary on each respondent not later than 3 days before the date set for settling the appeal papers.
5431Appeals to Court of Appeal—draft index of appeal papers
(1)Before the date set for settling the appeal papers, the appellant must prepare and file a draft index of the appeal papers.
(2)The appellant must serve a copy of the draft index on each respondent not later than 3 days before the date set for settling the appeal papers.
Regard must also be had to the provisions of s 5A of the Court Procedures Act 2004 (ACT)
5AMain purpose of civil procedure provisions
(1)The main purpose of the civil procedure provisions is to facilitate the just resolution of disputes—
(a)according to law; and
(b)as quickly, inexpensively and efficiently as possible.
(2)Without limiting subsection (1), the main purpose includes the following objectives:
(a)the just resolution of the real issues in civil proceedings;
(b)the efficient use of court resources, including administrative resources;
(c)the efficient disposal of a court’s overall caseload;
(d)the timely disposal of civil proceedings;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3)The civil procedure provisions must be interpreted and applied, and any power or duty imposed by them (including the power to make rules) must be exercised or carried out, in the way that best promotes the main purpose.
(4)The parties to a civil proceeding must help the court to achieve the objectives.
(5)In this section:
civil procedure provisions means—
(a)the rules made under section 7, in their application to civil proceedings; and
(b)any provision of this Act in relation to the practice and procedure of a court in civil proceedings.
court includes a tribunal that is a prescribed tribunal under section 6.
In NSW, r 12.7 of the Uniform Civil Procedures Rules (NSW) (UCPR) allows the court to dismiss proceedings or strike out a defence, where a party is not prosecuting the proceedings, or its defence, with “due dispatch”. The rule applies to matters in the NSW Court of Appeal by virtue of r 51.1(3). In Hobbs v Australian Securities and Investment Commission [2013] NSWCA 432, the appellant (Hobbs) failed to comply with a number of procedural requirements found in the UCPR in prosecuting his appeal. From time to time he produced medical certificates or reports in order to explain his failures. The respondent (ASIC), filed a notice of motion seeking an order striking out the proceeding under r 12.7. The application to strike out was made some eight months after Hobbs filed his notice of intention to appeal, and approximately six months after he filed his Notice of Appeal (which was filed ouside of the proscribed time). In dismissing the appeal pursuant to r 12.7(1) Barrett JA said at [52] – [54]:
In seeking an order of dismissal for want of prosecution or want of due despatch, ASIC relies directly on r 12.7(1) of the Uniform Civil Procedure Rules. There is authority for the proposition that, when there has been no hearing on the merits, a court should be reluctant to make such an order unless there has been intentional and contumelious default on the part of the moving party or inordinate or inexcusable delay giving rise to a substantial risk that a fair trial would not be possible: Birkett v James [1978] AC 297 at 318. But, as Basten JA pointed out in State of New South Wales v Plaintiff A [2012] NSWCA 248 at [17], the stringency of that principle has been diminished by the enactment of ss 56 to 60 of the Civil Procedure Act 2005. It is therefore necessary to have regard to the “overriding purpose” referred to in s 56, being “to facilitate the just, quick and cheap resolution of the real issues in the proceedings.” The need to pay particular attention to that overriding purpose is pronounced in a case such as the present where the essence of the application before the court is delay as such.
In this case, there has been clear and substantial delay by Mr Hobbs. In addition, he has shown himself to be unable to come sufficiently to grips with the issues and requirements at hand to enable him to formulate expeditiously - or at all - three essential elements: a coherent statement of the basis on which he contends that the first instance decision is erroneous; detailed propositions of fact and law by which he seeks to make good each aspect of that contention; and documents in conformity with the rules of court by which all necessary material will be put before this Court. Furthermore, the evidence put before the court by ASIC clearly warrants inferences, first, that Mr Hobbs will be quite unable to assemble and produce such documents without the assistance of lawyers and, second, that he will not be retaining the services of any lawyers able to undertake the task.
As a result, the conclusion must be that the delay will be ongoing and indefinite and that there can be no expectation that Mr Hobbs will ever prosecute an appeal in the required manner. In addition, I am satisfied, on the material before me, that ASIC has suffered prejudice by reason of the need to contend with Mr Hobbs’ ongoing and ineffectual attempts to prosecute proceedings in this Court and that it will continue to be so prejudiced if Mr Hobbs continues on the path upon which he has embarked being, in my assessment, a path that will never lead to the orderly and coherent presentation of an appeal in accordance with the applicable rules and procedures.
The principles guiding the exercise of the inherent jurisdiction to dismiss an appeal for want of prosecution were considered by the Western Australian Court of Appeal in Roddan v Gwilliam & Anor [2005] WASCA 209, when the Court said, at [17] – [18]:
The principles in this area are similar to those which apply in the case of the court's inherent jurisdiction to dismiss an action for want of prosecution: Muto v Faul [1980] VR 26 (Full Court); Roddan v R [2005] WASCA 87, per Malcolm CJ at [41], per McLure J at [49].
The Court recently had occasion to review the principles to guide the exercise of the discretion in relation to the dismissal of an action for want of prosecution in Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93. At [99], [100] and [103], Steytler P and Owen JA said:
The general principles identified in … [Birkett v James [1978] AC 297 and Lewandowski v Lovell (1994) 11 WAR 124] include consideration of these points:
(a)whether any default has been intentional and contumelious, for example, disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or
(b)whether there has been inordinate and inexcusable delay on the part of the plaintiff or his or her lawyers, and, if so
(c)whether such delay:
(i)will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action; or
(ii) is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.
But as with so many areas in the law, it is one thing to identify general principles and another properly to apply them. It should always be borne in mind that the power to dismiss for want of prosecution calls for the exercise of discretion. It is a discretion that must be exercised judicially but is otherwise open. It exists to serve the ends of justice. Caution should therefore be employed so that these general principles are not elevated to the level of a 'test' or a 'rule'. They are more appropriately to be seen as guidelines indicating some of the matters to which the court should have regard in exercising the discretion. The court's discretion to dismiss an action for want of prosecution is not fettered by any absolute or inflexible rules. There are however five matters to be considered which will usually be relevant to the court's decision to exercise the discretion:
• the length of the delay;
• the explanation for the delay;
• the hardship to the plaintiff if the action is dismissed and the cause of the action left statute-barred;
• the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay; and
• the conduct of the defendant in the litigation.
Ulowski v Miller [1968] SASR 277 at 280 (FC); Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998.
…
In our view it is inappropriate to take the considerations identified in Birkett or the five matters mentioned in Ulowski and use them as a check list to be ticked off one after the other. They are all things to which the court should have regard and they will usually be persuasive. But the absence of one or more of them from the credit or debit side of the check list process will not necessarily determine the result. It will always be necessary for the court to stand back and ask: what does justice, in all the notions or senses of it that are relevant, require in the circumstances of this case?
See also per Roberts-Smith JA, at [161]–[166].
The relevant principles were examined at length by Penfold J in Commonwealth of Australia v Australasian Correctional Services Pty Ltd [2013] ACTSC 37 at [36] – [41]:
The parties agreed that the matters to be considered in deciding whether to exercise the power to strike out for want of prosecution were as set out in Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433 (13 May 2011) by Ward J, who noted first at [498] that:
It has been held that the principles the court applies are the same whether it acts under the rules or the inherent jurisdiction. (citations omitted)
Her Honour went on:
499. The power to dismiss an action for want of prosecution is not confined by rigid guidelines. Although delay is the threshold circumstance that potentially enlivens the discretion to dismiss an action, delay is a relative concept and the significance of any delay must depend on the particular circumstances of the case involved.
500. The proposition that the power to dismiss an action for want of prosecution should be exercised only where the plaintiff’s default has been intentional and contumelious or where there has been inordinate and inexcusable delay giving rise either to a substantial risk that a fair trial would not be possible, or to a risk of serious prejudice to the defendant has been rejected as unduly restrictive of the true scope of the power.
501. The ultimate question (keeping in mind the overriding purposes mandated by ss 56–59 of the Civil Procedure Act) is whether, balancing the prejudice to the respective parties by making or not making an order dismissing the proceedings, justice demands that the action be dismissed. (citations omitted)
Sections 56–59 of the Civil Procedure Act 2005 (NSW) cover similar ground to r 21 of the Court Procedures Rules 2006 (ACT), although the NSW provisions are more detailed and appear to impose more specific obligations on parties.
Ward J went on to identify the specific matters to be considered in deciding whether justice demands that an action be dismissed:
502. Simpson J in [Hoser v Hatcher [1999] NSWSC 527] at [21]–[30], with whose analysis Levine J agreed in Gill v Eatts [1999] NSWSC 1056 at [61] said this of the balancing exercise to be undertaken on such an application:
(2.) the discretion should be exercised only in a clear case where it is manifestly warranted; per Kirby P; as is generally the case with discretionary decisions, each case depends upon its own facts. Rigid formulae should not be applied to the exercise of the discretion; (citations omitted)
(3.) any explanation offered by the plaintiff for the delay in proceeding must be considered; (citations omitted)
(4.) personal blamelessness on the part of a plaintiff (as distinct from any tardiness or other fault on the part of his/her/its legal representative) is relevant. (citations omitted)
(5.) a defendant who takes no steps to secure progress in the proceedings, or to activate an apparently inactive plaintiff or who stands by in the hope that the passage of time will ensure the quiet death of the proceedings or that the longer delay will strengthen the case for striking out, runs the risk that that very behaviour will operate to his/her/its disadvantage. A defendant has two choices: to attempt to prod the plaintiff into action, or to stand by, doing nothing, trusting that time will bring about the slow death of the action. Either choice represents something of a gamble, dependent upon future events that the defendant is unable with any degree of confidence to predict. If the defendant opts for the former course, of prodding the plaintiff into action, it may succeed in doing so, precluding an application to strike out. On the other hand, if the plaintiff remains inert, the defendant’s case for striking out strengthens with passing time. If the defendant chooses the latter option and takes no action, the plaintiff may take no further steps, or may take no further steps until such irremediable prejudice is caused to the defendant that the application to strike out will succeed; if, however, some other event galvanises the plaintiff into action the defendant, having done nothing to progress the matter, can hardly be heard to complain of the plaintiff’s earlier inactivity; (citations omitted)
(6.) delay between the date the cause of action arose and the commencement of the proceedings may be a relevant factor. But in my view, this circumstance must be treated with some caution. The weight that can be accorded to that delay is limited. Where an action is commenced within the period provided for by an applicable statute of limitations, it would not ordinarily be appropriate to take that period into account. However, if a plaintiff has delayed significantly in the commencement of the proceedings, and that delay is followed by further lethargy in the advancement of the proceedings, the effect of the initial (but permissible) delay is compounded. The real question is not the length of the delay, but the impact that delay has upon the defendant’s capacity properly to defend the plaintiff’s claim. That will be a question of fact in each case. While there may be some prejudice presumed by reason of the passage of time, much will depend upon the nature of the proceedings, and the identification of the issues involved in the litigation. Where, for example, at the close of pleadings it can be seen that there are disputed questions of fact dependent upon the oral evidence of witnesses, or their recollections, the prejudice will plainly be greater than in cases that depend essentially upon the application of legal principle to largely undisputed facts, or upon disputed questions of fact that will be resolved by reference to documentary or other objective evidence not likely to be affected by the effluxion of time; (citations omitted)
(7) the onus lies on the defendant to establish any prejudice upon which reliance is placed. The disappearance or death of witnesses, the fading of their recollections, or the destruction of records, are some obvious examples of the kind of prejudice that might arise;
(8) prejudice to a defendant caused by delay has to be balanced against prejudice to a plaintiff deprived of an otherwise valid claim; delay in the commencement of proceedings by a plaintiff is sometimes taken as evidence contra-indicating prejudice to the plaintiff in the sense that he/she/it has evinced no interest in his/her/its own case. Such an inference may be contra indicated by explanatory evidence; in this regard the plaintiff’s personal responsibility for the delay is an important factor as is any explanation provided for the delay; (citations omitted)
(9) what the defendant has (or has not) done by way of preparation for trial may be a factor. This is a distinct question from that concerning any steps taken (or not taken) by the defendant in prompting the plaintiff to action. A defendant who has not interviewed witnesses, taken statements or collected documents, after being served with the claim, has a less meritorious complaint about the effect of prejudice caused or presumed by reason of delay; (citations omitted)
(10) the plaintiff’s prospects of success is a relevant factor. If it appears that the prospects are minimal, the discretion is more likely to be exercised in favour of the defendant. Conversely, where the plaintiff’s case is strong (absent the kind of prejudice to the defendant to which I have referred) it is less likely that justice will be done by striking the action out; (citations omitted)
(11) the exercise of the discretion to strike out should not incorporate any element of punishing a tardy plaintiff, or of excluding one who may appear to have some unworthy characteristics. The ultimate aim of a court is the attainment of justice. To adapt the words of the High Court in [Queensland v J L Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146], discretions such as that presently invoked ought not to be used to supplant the overall aim of the attainment of justice. (other citations omitted)
503. Applying those principles to the case at hand, I accept that rigid formulae should not be applied and the discretion should be exercised only in a clear case (a conclusion that can only be reached having regard to the other factors to which reference is there made). (emphasis in original)
The summary quoted by Ward J identifies both factual issues that may be relevant, and principles to be applied, in exercising the strike-out power.
An earlier consolidation of relevant matters was referred to in the ACT case of Caterina Raso v Mark Ronald Bayliss [2005] ACTSC 94 (Raso), in which Gray J, considering a case in which the plaintiffs had taken no steps for 14 years after bringing their action, said at [18]:
In Tyler v Custom Credit Corp Ltd [2000] QCA 178, before the Full Court of Queensland, Atkinson J (with whom McMurdo P and McPherson JA agreed) set out a helpful list of matters to be considered (at [2]). These include:
(1) How long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced;
(2) How long ago the litigation was commenced or causes of action were added;
(3) What prospects the plaintiff has of success in the action;
(4) Whether or not there has been disobedience of Court orders or directions;
(5) Whether or not the litigation has been characterised by periods of delay;
(6) Whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant;
(7) Whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff’s impecuniosity;
(8) Whether the litigation between the parties would be concluded by striking out [in this case, dismissing] of the plaintiff’s claim;
(9) How far the litigation has progressed;
(10) Whether or not the delay has been caused by the plaintiff’s lawyers being dilatory …;
(11) Whether there is a satisfactory explanation for the delay; and
(12) Whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial. [Footnotes omitted]
These matters show the wide ambit of matters that the court is to consider in the exercise of its discretion.
See also Snaidero v Crampton & O’Sullivan [2014] ACTSC 262, and Blunden v Commonwealth of Australia [2014] ACTSC 123.
The evidence for the respondents
The first respondent relied upon the following evidence in support of the application:
(a)an affidavit of Luke David Akele sworn on 26 November 2015, together with exhibits;
(b)an affidavit of Zita Maree Rowling sworn 15 March 2016; and
(c)a further affidavit of Zita Maree Rowling sworn 5 April 2016.
These affidavits, and their exhibits, are comprehensive so I will attempt to summarise the matters they raise.
The second respondent relied upon an affidavit of William Charles sworn on 18 December 2015. The contents of this affidavit simply states:
I am instructed that the second respondent supports the application of the first respondent – the Commonwealth of Australia, filed on 26 November 2015. I am further instructed that the second respondent relies on the evidence contained in the affidavit of Luke David Akele in his affidavit sworn 26 November 2015.
At the hearing of the applications Mr Shillington who appeared for the second respondent submitted that the second respondent’s position is to adopt the submissions of the first respondent. No further evidence was led by the second respondent, so I will now turn to that of the first respondent.
The affidavit of Mr Akele gives a chronology of attendances before the Deputy Registrar of the Court to settle the appeal index:
Date Appearances Directions/outcome 19 February 2015
Coram: Dep Reg KeneallyMr P M Cain for Appellants (by telephone)
Ms Z M Rowling for First Respondent
No appearance for Second Respondent1. Adjourned to 3pm on 19 March 2015
2. Liberty to apply on 7 days’ notice19 March 2015
Coram: Dep Reg MuthurajahMr Allan Endresz and Mr William Forge for the Appellants (by telephone)
(No facilities to enable Mr Cain to appear by telephone)
Ms Z M Rowling for First Respondent
Mr Painter as agent for Second Respondent1. Adjourned to 2.15 pm on 9 April 2015 with apologies to Mr Cain
3. (sic) Liberty to apply on 3 days’ notice9 April 2015
Coram: Dep Reg MuthurajahMr Allan Endresz and Mr William Forge for themselves (by telephone)
Mr P M Cain for all Appellants save Mr Allan Endresz and Mr William Forge (by telephone)
Ms Z M Rowling for First Respondent
Mr W Andrews as agent for Second Respondent1. Adjourned to 2.15 pm on 14 May 2015 to be docketed before a judge to hear Commonwealth’s application for security for costs. 15 April 2015
Coram: Burns JMr Allan Endresz (by telephone) for himself
Mr William Forge for himself (by telephone)
Mr P M Cain (by telephone) for all other Appellants
Ms Z M Rowling for First Respondent
Mr W Andrews for Second Respondent1. The interlocutory application filed by the Commonwealth be listed for hearing at 10 am on 2 June 2015 for 3 hours.
2. The Applicant file and serve any affidavits on which they rely within 21 days.
3. The Respondents to file and serve any evidence on which they rely within 35 days.
4. Affidavits in reply to be filed and served within 42 days.14 May 2015
Coram: Dep Reg KeneallyNo appearance for any Appellant
Ms Z M Rowling for First Respondent
Mr W Andrews for Second Respondent1. Adjourned to 2.30 pm on 9 July 2015. 2 June 2015
Coram: Burns JMr J Hogan-Doran instructed by Ms Z M Rowling AGS for the Commonwealth:
Mr Alexander Kuklik of Counsel for the 4th Appellant and 6th Appellant (Peter Cain and CTC Resources)
8th Appellant (Allan Endresz): in person, (leave to appear for the 9th, 11th and 12th Appellants, Jozsef, Dawn and Joy Beverley Endresz was refused)
10th Appellant (W Forge): in personJudgment reserved 9 July 2015
Coram: Dep Reg Keneally(No telephone facility for Mr Cain to appear)
No other appearance for Appellants
Mr L Akele for First Respondent
Mr W Andrews as agent for Second Respondent1. Adjourned to 2.30 pm on 20 August 2015. 14 July 2015
Coram: Burns JMs Z M Rowling for First Respondent
Mr W Andrews as agent for Second Respondent1. The Commonwealth’s Application for security for costs is refused.
2. The fifth Appellant be removed as a party to the appeal.
3. Costs of the application to remove the fifth Appellant are to be paid by Irongroup Lawyers Pty Ltd and Peter Cain
4. Leave for Mr Allan Endresz to appear on behalf of the 9th, 11th and 12th Appellants refused.
5. Costs reserved.20 August 2015
Coram: Dep Reg KeneallyMr P M Cain (by telephone) for himself and the corporate
Appellants
Mr Allan Endresz (by telephone) for himself, and with leave, for Dawn Endresz, Jozsef Endresz and Joy Endresz
Mr William Forge for himself
Ms Z M Rowling for First Respondent
Mr W Andrews as agent for Second Respondent1. Adjourned to 3 pm on 24 September 2015 and the Court notes the parties are likely to be contacted before that date by the Court with a listing before a judge for directions. 24 September 2015
Coram: Dep Reg KeneallyMr P M Cain (by telephone) for himself and the corporate Appellants
Mr Allan Endresz (by telephone) for himself, and Joy Endresz
Mr Jozsef Endresz (by telephone) for herself
Mrs Dawn Endresz (by telephone) for herself
Mr William Forge (by telephone) for himself
Mr Akele for First Respondent
Mr W Andrews for Second Respondent1. Any application by the Appellants to be filed and served by 22 October 2015.
2. The matter be listed for directions on 5 November 2015 at 2.30pm.
3. The parties have liberty to relist.5 November 2015
Coram: Dep Reg KeneallyMr P M Cain (be telephone) for himself, the corporate defendants and Peter Clarke (sic).
Mr Allan Endresz (by telephone) for himself, Joy Endresz, and his parents Jozsef and Dawn Endresz
Mr William Forge (by telephone) for himself
Ms Z M Rowling for First Respondent
Mr W Andrews for Second Respondent1. Mr Cain file and serve a notice of representation of
Mr Clarke (sic) within 7 days.
2. The Appellants file and serve any application within 14 days (that is by 19 November).
3. The proceedings be relisted before Deputy Registrar Keneally on 26 November 2015 at 2.30pm.
Mr Akele deposed to the appellants having failed to comply with r 5431 of the CPR before the first date for settling of the appeal papers on 19 February 2015, and that despite having delivered two draft indices of appeal papers on 18 March and 8 April 2015, the appellants had not yet provided a draft index in a form able to be settled. Rule 5431 requires an appellant to file and serve a draft index of the appeal papers before the date set for settling the appeal papers.
Exhibited to the affidavit of Mr Akele is a letter from Ms Rowling of the Australian Government Solicitor dated 31 August 2015 to Mr Cain, Mr Allan Endresz and Mr Forge. In that letter she referred to the appointment with the Deputy Registrar to settle the draft index of the appeal held on 20 August 2015. In the letter, the Commonwealth complained of the delay in the appeal occasioned by the appellants’ failure to prepare the appeal in accordance with the rules, and reminded the appellants of the existence of r 5603, providing for dismissal of an appeal for want of prosecution. Ms Rowling complained that neither of the draft indices of appeal papers submitted by the appellants were in a form able to be settled. She further complained that a number of grounds pleaded in the Notice of Appeal were incomprehensible or lacked necessary particulars. Ms Rowling continued:
As we understand the submissions made to the Registrar on 20 August 2015, the appellants oppose advancing this appeal pending:
a. the determination of applications by Mr Peter Cain to review decisions of Registrar Wall in the Federal Court of Australia winding-up Davis Samuel Pty Ltd and Tresmonay Pty Ltd, listed for hearing before Justice Farrell in the Federal Court of Australia on 14 October 2015; and
b. determination by Justice Refshauge of the interlocutory application(s) on behalf of Mrs Dawn Endresz in respect of the John Court property.
The Commonwealth’s position is that neither issue should delay preparation of this appeal.
Ms Rowling noted in the letter that Mr Cain had indicated that the appellants were considering amending the grounds of appeal, and indicated that this should be done promptly.
Mr Cain replied by letter dated 18 September 2015, complaining that his work “in preparing legal submissions and consequent attempts to refine the draft index have been difficult because of the numerous proceedings brought on” by the first respondent. Mr Cain went on to refer to bankruptcy proceedings that had been commenced against the eighth, ninth, tenth and eleventh appellants:
ASIC proceedings
It is difficult, if not impossible, to produce a draft Index when confronted with the questions that face the appellants. We now know that the eighth, ninth, tenth, and eleventh appellants will be able to continue their appeal but that conclusion was thwarted by the actions of your agent (ASIC) in attempting to prevent them from doing so. The Full Federal Court confirmed our view that your attempts to intimidate the appellants in these proceedings was unjust.
I interpolate at this point to observe that the proceedings commenced by ASIC were described, without objection by the appellants, in the affidavit of Ms Rowling sworn on 15 March 2016, in the following terms:
11.On 21 February 2014, on petitions filed by the Australian Securities and Investments Commission (ASIC) sequestration orders were made against the Eighth Appellant, Allan Paul Endresz, the Ninth Appellant, Jozsef Endresz, the Tenth Appellant, William Arthur Forge and the Eleventh Appellant, Dawn Endresz by Pagone J in the Federal Court of Australia. ASIC’s petitions relied upon acts of bankruptcy founded on non-compliance with bankruptcy notices issued on 23 December 2011 founded on judgment debts in favour of ASIC against each debtor in separate NSW proceedings. Exhibited and marked F are copies of the Judgments in the Local Court of New South Wales on which ASIC’s bankruptcy notices relied.
12.On 19 February 2015, the Full Court of the Federal Court of Australia, in proceedings No VID483 – 486 of 2014, allowed appeals against those sequestrations orders and orders were made by Edmonds, Gordon and Beach JJ including:
12.1Upon the appellant undertaking to the Court that he will prosecute the appeal proceedings in the ACT Supreme Court No. ACTCA 67 of 2014 with all due expedition, the hearing of the respondent’s creditor’s petition be adjourned sine die pending the outcome of such appeal proceedings or until further order of Pagone J.
12.2Pursuant to s 52(5) of the Bankruptcy Act 1966 (Cth), the period at the expiration of which the petition will lapse will be 24 months from the date of the presentation of the petition being until 20 February 2016.
13.Exhibit (sic) and marked G are copies of the said Orders which I caused to be taken from the Commonwealth Courts Portal and the Reasons for Judgment of the Full Court published on 13 March 2015. At paragraph 7 of the said Reasons for Judgment, the Court stated:
7.Accordingly, we ordered that the sequestration orders be set aside. We further ordered that the further hearing of ASIC’s creditor’s petitions be adjourned sine die, subject to undertakings given by each appellant to prosecute any appeal with due expedition in relation to the ACT proceeding. Those undertakings were given to the Court on 19 February 2015. We also extended the expiration of the creditor’s petitions to 20 February 2016 pursuant to s 52(5) of the Bankruptcy Act 1966 (Cth) (the Act). The matter was otherwise stood over pending the publication of these reasons, including on the issue of costs.
In his letter Mr Cain went on to complain that the primary judge had failed to make rulings with respect to some interlocutory applications, which were to be appeal points. He then went on to assert that “the many legal issues” that the Commonwealth had “forced upon the appellants” in 2015 had caused the appellants to review “the Supreme Court Rules”, and they had concluded that the judgment and orders of Refshauge J were “a nullity” as while the Statement of Claim was amended on a number of occasions during the proceedings before Refshauge J, the Originating Application had not been amended, and continued to assert a debt claim. Mr Cain concluded his letter by asserting that if he was correct “then the whole proceedings are a nullity and so there is no need to continue with the Index to the Appeal Book.”
Ms Rowling replied to Mr Cain’s letter in an email dated 18 September 2015. She noted that the appellants had known since 9 February 2015 (sic - presumably 19 February 2015) that the eighth, ninth, tenth and eleventh appellants, would be able to continue with their appeal. Ms Rowling asserted that the other issues were discrete issues, which should not hold up preparations of the appeal. Finally, she effectively invited the appellants to amend the Notice of Appeal to plead the nullity issue.
In his affidavit sworn on 26 November 2015, Mr Akele said:
17.In summary, the problems with the draft indices of appeal which prevent them being settled include but are not limited to the following:
17.1 the second draft index of the appeal papers:
17.1.1 omits all exhibits
17.1.2.includes pleadings that were amended and therefore were not before the trial judge
17.1.3.includes published judgments together with material under the heading ‘Other’ that was not before the trial judge including an unidentified transcript, transcript of proceedings subsequent to the decision appealed from, published decisions, submissions and unidentified judgments of the NSW Supreme Court
17.2.many of the Appellants’ present 88 grounds of appeal are so vague that it is not possible to identify which of the materials before the trial judge will be necessary for the appeal and therefore for inclusion in the appeal books.
18.Since the draft index provided on 8 April 2015, the Appellants have not provided any further draft of the index.
Mr Akele was not required for cross-examination.
The second affidavit relied upon by the first respondent was one sworn by Ms Rowling on 15 March 2016. Ms Rowling set out the status of the corporate appellants:
(a)the first appellant (Davis Samuel) was ordered to be wound up on 27 March 2015;
(b)the second appellant (CTC Resources) was orders to be wound up on 16 February 2016;
(c)the fourth appellant (Bisoya Pty Lty) was ordered to be wound up on 27 March 2015; and
(d)the sixth appellant (Tresmonay Pty Ltd) was ordered to be wound up on 27 March 2015.
As I have already noted, I ordered that the fifth appellant (Winton Oil & Gas NL) be removed as a party to the appeal on 14 July 2015: Davis Samuel Pty Ltd & Ors v Commonwealth of Australia & Anor [2015] ACTCA 30.
Ms Rowling deposed to service of the present application on the appellants on 3 December 2015, together with a copy of the affidavit of Luke Akele sworn 26 November 2015. She then refered to the appellants’ undertaking given before the Federal Court in February 2015 to prosecute the present appeal expeditiously, based upon which the Federal Court set aside the sequestration orders made against the eighth, ninth, tenth and eleventh appellants. Ms Rowling then stated that from 16 December 2015 until the date she swore her affidavit the appellants had filed no application in the appeal, and had not filed an Amended Notice of Appeal.
Ms Rowling deposed to the following steps having been taken by the first respondent based on the orders of Refshauge J made on 21 November 2014:
Section C: The Commonwealth received payment in full of the judgment debt and post-judgment interest owed by the Twenty-Seventh Defendant, TNG Ltd and subsequently entered into a settlement agreement with TNG Ltd resolving TNG’s appeal (No ACTCA 65 of 2014) and the costs orders made against TNG in these proceedings.
Each of Davis Samuel Pty Ltd, CTC Resources NL, Bisoya Pty Ltd and Tresmonay Pty Ltd were ordered to be wound up on application by the Commonwealth, relying on failures of each company to pay the debts ordered against them at Section C.
No moneys (in addition to moneys paid out of court or from the sale of assets the subject of the orders of 21 November 2014 have been recovered from the individual defendants in respect of the judgment debts.
Section D – Having Hill: The Commonwealth made application to correct the amounts of the charges stated in Sections D and K of the Final Orders. Amended Orders were issued on 27 May 2015. Since that date, the Commonwealth has taken an assignment of the charge in favour of the Twenty-Seventh Defendant, TNG Ltd, orders at D.3(ii) and maintained the caveats over that property lodged by itself and TNG Ltd. In order to enforce the charges, it will be necessary to obtain Orders appointing a Trustee for Sale and requiring Allan Paul Endresz and Joy Beverley Endresz to vacate the property to permit sale.
Section E – Stamp Collection: The stamp collection was sold at auction on 2 May 2015 for $8,690.
Section F – Toyota Sedan: The Toyota Sedan was sold at auction on 18 March 2015 for $300.
Section G – John Court Property: The Commonwealth has taken steps to register its ownership of the John Court Property. That registration has been delayed pending correction (under the slip rule) of the real property description of John Court as it appears in the Final Orders. The Commonwealth made an application for that correction on 2 December 2015 and awaits his Honour’s further decision.
Section H – Standley Street Property: The Commonwealth has registered its title to the Stanley Street Property. The Commonwealth has engaged a real estate agent to sell the property, after undertaking cleaning and rubbish removal. The property will be advertised for sale later this week.
Section I – Moneys paid to the Court: The Commonwealth received the moneys paid into Court.
Section J – The Pinnacles Project: The Commonwealth has received no benefit from the Orders at Section J.
Section K: The Pine Avenue Property: The Commonwealth has taken an assignment of the charge in favour of the Twenty-Seventh Defendant, TNG Ltd, ordered at K.3(ii) and maintained the caveats over that property lodged by itself and TNG Ltd. The liquidator of the registered proprietor, the seventeenth defendant Quancorp Pty Ltd has notified the Commonwealth that he will be making an application for judicial directions in respect of the sale of the Pine Avenue Property, in which resides the former wife of Peter Michael Cain (Anne Christine Cain).
Ms Rowling’s second affidavit was sworn on 5 April 2016. In it, she replied to matters raised in the affidavit of Mr Cain (the third appellant) sworn 1 April 2016. It is convenient to consider the contents of Ms Rowling’s second affidavit after I refer to the affidavit filed by Mr Cain. I will note now, however, that Ms Rowling was not required for cross-examination on her affidavits.
The evidence for the appellants
The third and seventh appellants (Peter Michael Cain and Peter Clark respectively) relied upon an affidavit sworn by Mr Cain on 1 April 2016 and two further affidavits sworn by him on 8 April 2016.
In his affidavit sworn 1 April 2016, Mr Cain sets out a history of proceedings arising out of the transactions surrounding the transfer of the April Funds and the September Funds. He deposed that the original hearing date in September and October 2001 was vacated because of anticipated criminal proceedings against Mr Muir, and a number of other defendants to the proceedings below, as well as anticipated civil penalty proceedings to be commenced by ASIC. The proceedings did not recommence, at this time before Refshauge J, until 10 June 2008, and then continued until 3 October 2008. Judgment was delivered by Refshauge J on 1 August 2013. Mr Cain said that since judgment was handed down the first respondent and/or ASIC have commenced a number of proceedings “against some or all of the appellants” including bankruptcy proceedings against Mr Allan Endresz, Mr Jozsef Endresz, Mr Forge, and Ms Dawn Endresz (the eighth, ninth, tenth and eleventh appellants respectively) which resulted in sequestration orders being made against those appellants by Pagone J on 29 July 2014. On 19 February 2015, the Full Court of the Federal Court overturned the decision of Pagone J, set aside the sequestrations orders and adjourned the further hearing of the creditors’ petitions sine die: Endresz v Australia Securities and Investment Commission (No 2) [2015] FCR 334. Subsequently, on 15 December 2015, the first respondent commenced bankruptcy proceedings against Mr Cain, but these were adjourned until 16 June 2016.
Mr Cain deposed to the fact that a number of the corporate defendants in the proceedings below have now been wound up on the application of the first respondent. He also referred briefly to the Commonwealth’s application for security for costs heard by me last year (Davis Samuel Pty Ltd & Ors v Commonwealth of Australian & Anor [2015] ACTCA 30), and a number of applications made by the Commonwealth to amend the judgment of Refshauge J under the slip rule and to enforce consent orders.
Mr Cain then says that from the commencement of the appeal and up until 2016 he, with some assistance from Mr Allan Endresz, had been responsible for the “commencement and preparation” of the present appeal proceedings. He deposes to having “limited financial resources” to undertake the preparation of the appeal. In addition, he said, he (together with his sister) had operated Irongroup Lawyers, resulting in the need to split his time between work at Irongroup Lawyers, and preparation of the present appeal. He also reported being told by Mr Allan Endresz that he also divided his time between work and preparation of the present appeal.
Mr Cain then deposed to having expended funds in the winding up proceedings, and the security for costs proceedings. He deposed to being told by Mr Allan Endresz that he, Mr Allan Endresz, had funded and conducted the responses to the bankruptcy proceedings initiated by ASIC against himself and other appellants. Mr Cain said that added cost and time was also occasioned by the present strike-out application.
Mr Cain then said that he has now been able to gather from Mr Allan Endresz and the other appellants sufficient funds to “engage counsel to assist with the preparation of the appeal.” He said that in about December 2015 he “started to discuss” with counsel what would be required to prepare these proceedings for hearing, and on or about 8 February 2016 he “formally” engaged Messrs Kuklik and Kalyk to assist with the preparation of the appeal. He went on to say that counsel’s fees on the “various interlocutory proceedings” have been paid, and he now has sufficient funds in trust to engage counsel to assist him:
(a)with amending the notice of appeal;
(b)by appearing at the show cause application hearing;
(c)with constructing the index to the appeal book and in compiling the appeal book; and
(d)with drafting submissions for the appeal.
Mr Cain then apologised for the delays in these proceedings to date, relying on the matter referred to above by way of explanation for the delay, and stating that as counsel has now been engaged he expects these proceedings will be conducted “in a more focused and efficient manner.”
In the first affidavit sworn by Mr Cain on 8 April 2016, he annexed a draft Amended Notice of Appeal. He also referred to his lack of experience in litigation as a lawyer. While the affidavit annexed Annexures A and B to the draft Amended Notice of Appeal, it failed to annex the draft Amended Notice itself. This was corrected in the second affidavit sworn by Mr Cain on 8 April 2016.
Mr Cain was cross-examined on his affidavits. He agreed that he is a director of the company that owns the practice of Irongroup Lawyers, and as such is a principal of that firm. The other director, his sister, is not a lawyer. He agreed that he prepared the Notice of Appeal, with two or three hours assistance from senior counsel. He said when preparing to file the Notice of Appeal, he took no steps to familiarise himself with the rules governing the conduct of appeals in the ACT Supreme Court.
Mr Cain agreed that he prepared, without assistance from counsel, the first draft appeal book index in early 2015. In preparing it he had “some guidance from the ACT website about that and a discussion with a person in court about that.” Mr Cain agreed that he prepared a second draft of the index in April 2015. He agreed that no further draft had been provided to the first respondent since that time.
The evidence established that on 20 August 2015 the matter came before the Deputy Registrar with all of the natural appellants either present or participating via telephone. The proceedings were further adjourned to 24 September 2015. On 31 August 2015 the Australian Government Solicitor, on behalf of the first respondent, wrote to Mr Cain, saying:
2.The Commonwealth objects to further delay of this appeal. The primary judgment was delivered on 1 August 2013, more than two years ago. The hearing on final orders was completed on 6 December 2013 and final orders made on 21 November 2014.
3.The appeal has been on foot since December 2014 but the appellants have not advanced their preparation of it since delivery of the first draft index in February 2015 for the first appointment to settle the appeal papers on 19 February 2015. The second draft index was delivered on 8 April 2015, for the appointment before the Registrar on 9 April 2015. The Commonwealth’s application for security for costs was heard on 2 June 2015, and the decision was published on 14 July 2015.
4.We remind you of Rule 5603 (which provides for dismissal of appeals for want of prosecution where the appellant has failed to prosecute appropriately for 3 months) and Mr Allan Endresz, his parents and Mr William Forge of their undertakings given to the Full Court of the Federal Court of Australia to prosecute this appeal with due diligence.
The letter went on to assert that a number of grounds of appeal were inadequate, providing particulars of such to Mr Cain, and that the draft index to the Appeal Papers was incomplete and not compliant with the CPR. The letter referred Mr Cain to r 5430.
In cross-examination Mr Cain accepted that the criticisms of the draft index made in the letter of 31 August 2015 were valid. Mr Cain was then questioned about his compliance with r 5430:
MR KUKLIK: Well, the appeal will run no matter what one - - -
HER HONOUR: How? As I understand it, you’re still at the point of a draft index.
MR KUKLIK: Yes, your Honour. So - - -
HER HONOUR: 11 months in or however – when was the - - -
MR KUKLIK: December.
HER HONOUR: Yes.
MR KUKLIK: Yes, your Honour, and we’re up to the second draft index, I believe, and, yes, it could have gone faster certainly, but - - -
HER HONOUR: Well, how long do you think it’s going to take?
MR KUKLIK: Well, I anticipate – well, I can’t be certain, but I would anticipate that the draft index will be finalised certainly before the end of the year and then, therefore, the consequent directions will be made about the remaining conduct – the preparation of the books and the setting of a date. Whether that happens - how far into next year that happens, I cannot say. Part of that will be .....court timetable, part will be what further steps the defendants need to take, but I would say this. That the index will be settled ideally with some funding so that it could be settled by counsel or someone to refine it further as has been recognised and, if not, then as is and then the proceedings will have to go forward one way or another.
Certainly the Court of Appeal won’t continue allowing it to languish, I anticipate. Ideally, the process could be expedited by the review of the notice and the preparation of the material and then a hearing date could be achieved shortly. Certainly, if finances and assistance for a - for that kind of preparation is unavailable, then certainly the Court of Appeal will seek to have the index settled and the books prepared and the matter set down anyway. It’s a matter of the quality of the presentation rather than - - -
Ms Rowling further observed that in his affidavit sworn on 21 December 2015 and filed in the CTC Resources winding up proceedings, Mr Cain said:
5.In paragraph 10 of my previous affidavit, I indicated that I was seeking instructions to obtain funding for the finalisation of the notice of appeal. Two counsel have now been briefed to finalise the notice of appeal.
6.In paragraphs 12 – 13 of my previous affidavit, I indicated that I was in the process of obtaining oral advice from Mr Ray Finkelstein QC in relation to an application to set aside the Judgment in the ACT Proceedings. I have since provided one set of documents to Mr Finkelstein QC and obtained preliminary advice on that application. I anticipate a further set of materials will be provided to Mr Finkelstein QC in due course.
An outline of submissions prepared by Mr M Kalyk, as counsel for CTC Resources, and dated 3 February 2016, was filed in the CTC Resources winding up proceedings. Ms Rowling referred to paragraph 24 and 52 of those submissions:
24.The appellants have now briefed counsel to settle the notice of appeal. ...The appellants are confident that they will meet the deadline for the notice of appeal on 29 February 2016 and be in a position to argue the appeal in May 2016.
52.While proceedings have not progressed rapidly to date, they’re progressing now. The appellants have briefed counsel to settle the notice of appeal by 29 February 2016 and the hearing of the appeal is to be listed in the May 2016 sitting of the ACT Court of Appeal. ...The appellants’ briefing of counsel and the indication from the ACT Court of Appeal that the appeal may be dismissed if not finalised within that time provides a strong reason to expect that the appellants will comply. Further, it provides the fall-back position that there is a likelihood that proceedings will be dismissed by April 2016 if they do not comply (i.e. after the hearing of the Commonwealth’s show cause application).
Ms Rowling also deposed to service of a Notice to Produce on CTC Resources seeking production of copies of all “retainers or costs agreements in respect of the two counsel briefed to finalise the notice of appeal, as referred to in paragraph 5 of the affidavit of Mr Cain sworn 21 December 2015” (see [121] above). At the hearing of the CTC Resources proceedings on 5 February 2016, the Commonwealth called for the documents under the notice to produce. Mr Kalyk, for CTC Resources advised that “there’s nothing to produce.” I note that in cross-examination in the present proceedings, Mr Cain confirmed that written briefs had not been provided to counsel, and that they were briefed by telephone.
Finally, Ms Rowling set out the assistance that had been provided to the appellants in the proceedings below:
60.I was responsible for the care and conduct of the hearing of the proceedings at first instance and instructed Mr Slattery QC (as he then was) and Mr Hogan Doran. During the course of the hearing, the appellants were unrepresented and much assistance was provided by the Commonwealth to them, and to the Court, to organise and present both the Commonwealth’s case and the unrepresented defendant’s cases. By way of example;
60.1.Each document in the proceeding bore a unique identifying number applied by the Commonwealth. The Court Book (18 Volumes including indexing) and Tender Bundle (ultimately comprising some 27 volumes including indexing) were indexed by volume, by document number and by date and delivered in both soft and hard copies. Subsequent additions to the Court Book and Tender Bundles were compiled by the Commonwealth, indexed comprehensively and delivered in soft and hard copies.
60.2.In addition to the Court Book and Tender Bundles, the Commonwealth compiled various summaries and analyses to assist the understanding of the case including for example flow charts, separate bundles of annotated bank statements showing the flow of funds, a volume of corporate records, a summary of remaining assets traceable to the April and September Funds transactions.
60.3.Comprehensive Opening and Closing submissions were delivered to the defendants that identified, by document number and Court Book or Tender Bundle number, the evidence relied upon by the Commonwealth. By way of example, at Tabs 26, 27 and 28 respectively are copies of the Commonwealth’s Opening submissions on the activities of CTC and Davis Samuel and closing submissions in respect of Mr Allan Endresz and Mr Cain. The Commonwealth’s opening submissions comprised some 450 pages and closing and reply submissions, more than 200 pages.
60.4.The Commonwealth received more than 5,000 pages of documents produced by Allan Endresz on the 2nd day of the hearing, and electronically processed those documents, applying indentifying numbering, naming the documents and indexing them and returning them to Mr Endresz and the Court during the first weeks of the hearing. Further documents produced by the defendants were also uplifted by the Commonwealth and processed similarly.
60.5.During the hearing at first instance and on 8 September 2008, Mr Allan Endresz indicated he held some of the transcript of the hearing and sought a copy of the transcript from 26 August 2008 (T2418, 2419 Tab 29). Pursuant to his Honour’s direction, the Commonwealth subsequently delivered the electronic transcript of the proceedings from 26 August 2008, to the defendants after purchase by the Commonwealth and TNG Ltd, and at no cost to the defendants.
60.6.To facilitate the defendants’ cross-examination of witness Gary Smith, giving evidence by telephone from Kosovo, the Commonwealth arranged an electronic bundle of documents identified by the defendants as those they wished to cross-examine him on, to be delivered to Mr Smith and the defendants[.]
60.7.His Honour’s Associate made available to the parties, before the conclusion of the hearing, her records of the exhibits and materials marked for identification for cross-checking as to accuracy.
61. To the best of my knowledge and belief, the appellants had made available to them comprehensive records of the hearing in 2008, including the transcript and exhibit list, Court Book and Tender Bundles with various indices, as well as comprehensive submissions and aides memoir delivered on behalf of the Commonwealth.
Consideration
I am satisfied that the appellants have failed to comply with r 5430 of the CPR by failing, before the date for settling the appeal papers, to:
(a)get and file the reasons for the orders of Refshauge J (r 5430(1)(a));
(b)get and file a copy of the transcript of the proceedings before Refshauge J (r 5430(1)(b); and
(c)prepare and file a summary of the proceedings before Refshauge J the orders appealed from and the grounds relied on in support of the appeal (r 5430(1)(c).
I am satisfied that the first date for settling the appeal papers was 19 February 2015. The failure of the appellants to comply with the requirement of r 5430 continued beyond three months after that date; indeed, it continued until the hearing of these applications in April this year. The requirement of r 5603(2), concerning the power of the Court to strike out these proceedings, is therefore satisfied.
I am also satisfied that the appellants failed to comply with the direction given by the Deputy Registrar on 24 September 2015 that they file any application in proceeding SC 75 of 1999 seeking to have the judgment of Refshauge J set aside as a nullity by 22 October 2015. Such an application was not filed until 29 February 2015, after the present application had been filed by the respondents.
I am further satisfied that the appellants, not having filed the application foreshadowed on 24 September 2015 by 22 October 2015, were further directed by the Deputy Registrar on 5 November 2015 to file any such application by 19 November 2015. The appellants did not comply with this direction.
I am satisfied that grounds exist which would entitle me to exercise my discretion to strike out this appeal for want of prosecution. This issue is whether, bearing in mind any explanation for the appellants’ failures, it is appropriate to do so.
The explanations proffered by the appellants for their failure to progress this appeal are:
(a)the ancillary proceedings have taken up their time and resources;
(b)impecuniosity; and
(c)the complexity of the proceedings before Refshauge J and his judgment and reasons.
They also submit that the respondents have suffered no prejudice as a consequence of any failure by the appellants to comply with the CPR and Court directions.
The evidence presented by the appellants was deficient in a number of respects. The seventh, eighth, ninth, tenth, eleventh and twelfth appellants presented no evidence separate to that presented by Mr Cain. There was no evidence of the financial positions of these appellants, except to the extent that Mr Cain is his affidavit of 1 April 2016 deposed that he had “limited resources” and that he had been told by “Allan” (presumably Mr Allan Endresz, the eighth appellant) that “he also has limited resources.” To say that Mr Cain and Mr Allan Endresz have limited resources, is to say nothing useful. Undoubtedly, Croesus could have honestly said as much. With regard to Mr Cain, he presented no evidence to enable the Court to independently assess his financial position; no tax records or bank records were produced for either Mr Cain or Irongroup Lawyers. The statements made by Mr Cain in his affidavit were calculated to obscure rather than reveal his financial position. The failure of the other appellants to adduce evidence of their financial positions is unexplained. This situation can only be described as extraordinary, given the appellants' reliance on alleged impecuniosity as a reason for their non-compliance with orders and general delay in preparing their appeal. The only inference that can rationally be drawn is that this deficiency is deliberate.
When addressing the first respondent’s application for security for costs in June last year I made a limited finding that the appellants were “impecunious to the extent that they will be unable to meet the judgment debts arising from the decision” of Refshauge J. I was not, at that time, called upon to assess the appellants’ financial positions beyond that finding. That finding cannot be interpreted as a finding that the appellants, or any of them, were not in a financial position to properly and efficiently prepare the appeal. The position of the appellants at that time was to the contrary. In an affidavit sworn by Mr Cain on 29 May 2015 and read in the application, Mr Cain said:
7. I will have sufficient funds to prepare for the appeal to the stage of the hearing.
9.In relation to the hearing, I have been told by Mr Endresz, the Eighth Appellant, and believe, that:
(a)he is currently in the process of arranging funding for the hearing of the appeal through the sale of property and a project which involves intellectual property;
(b)he proposes to provide the balance of funds for the hearing of the appeal on behalf of all appellants; and
(c)he estimates that by the time the appeal is heard and determined, assuming the appeal is not determined before December 2015, that he will have access to sufficient funds to pay for the hearing and sufficient funds to meet a costs order in favour of the First Respondent, if that becomes necessary. Mr Endresz has told me that he is aware that Ms Zita Rowlings (sic) estimates that the First Respondent’s costs of this appeal to be approximately $270,000.
Curiously, in his affidavits relied upon in the present proceedings, Mr Cain makes no reference to this alleged arrangement with Mr Allan Endresz, and what transpired with respect to it. Mr Allan Endresz, of course, gave no evidence in either the application for security for costs or the present applications, so that he was not able to be cross-examined on these matters.
I am not satisfied that impecuniosity of the appellants explains their failure to comply with the CPR and directions given by the Court.
The evidence before me satisfies me that between the lodging of the appeal on 23 December 2014 and the hearing of the present applications on 11 April 2016 the appellants have done virtually nothing to advance their appeal. Two inadequate draft indices have been prepared, which have, rather than progressing the appeal, required the expenditure of time and money by the respondents to address. Public resources have been wasted because the Deputy Registrar has convened at least 11 directions hearings to settle the appeal index, with no success. A hearing date in May 2016 for the appeal to be heard by the Court of Appeal had to be vacated. A draft amended Notice of Appeal has been prepared, but that does little more than reorganise the existing grounds of appeal.
Another reason advanced by the appellants for their failures is the supposed pressure placed on their resources by the ancillary proceedings. Little, if any, work was in reality done in the ancillary proceedings to which Mr Cain has referred in his affidavit, and much of what was done was simply directed to delaying those proceedings. Much of the material filed in the individual ancillary proceedings was background to the proceedings below and was common to all proceedings, not requiring significant additional work. I am not satisfied that the ancillary proceedings explain the appellants’ failures.
It is fair to say that the proceedings before Refshauge J were long and complex. There were regrettable delays in bringing the proceedings to hearing, and in rendering judgment after the hearing. These regrettable delays, however, can have little relevance in explaining the appellants’ failures. The complexities of the proceedings before Refshauge J also do not explain these failures.
In cross-examination, Mr Cain said that preparation of the short summary of the judgment of Refshauge J required by the CPR would take “maybe a day.” The preparation of the appeal index is purely administrative, and would not be beyond the abilities of a litigant of average intelligence, let alone a principal of a law firm and other experienced people of business. The fact that the requirements for preparation of the appeal neglected by the appellants are not conceptually difficult or time consuming, and the lack of any acceptable explanation for the appellants’ failures, leads me to infer that the failure of the appellants to take steps to progress their appeal has been deliberate. I am satisfied that the delay in preparation of the appeal beyond the filing of the original Notice of Appeal is a manifestation of a conscious tactic of procrastination by the appellants. None of the appellants complained that the delay is the result of the failure of Irongroup Lawyers to carry out their instructions, so that this is not a case where the appellants may lay blame at the door of their lawyers.
In past times, the management of litigation was left to the parties. As Diplock LJ said in Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229, at 254, “The procedure of the English Courts is based upon the adversary system. The underlying principle of civil litigation is that the court takes no action in it of its own motion but only on the application of one or other of the parties to the litigation, the assumption being that each will be regardful of his own interest and take whatever procedural steps are necessary to advance his cause.” In past times, however, the public interest was not entirely overlooked; in Fitzpatrick v Batger & Co Ltd [1967] 2 All ER 657, Lord Denning MR said at 658, “Public policy demands that the business of the courts should be conducted with expedition.”
Whether the assumption referred to by Diplock LJ could, at some point in the past, have been safely made is debatable. In recent times, however, legislatures have intervened to make it clear that, whatever may have been the position in earlier times, the public interest in the efficient use of scarce public resources is to be given at least as must weight as other considerations. The main purpose of the civil procedure provisions set out in s 5A of the Court Procedures Act2004 (ACT) (which include those Rules governing appeal) is to facilitate the just resolution of disputes according to law, and as quickly, inexpensively and efficiently as possible. This main purpose includes objectives which give at least equal prominence to efficiency, timeliness and costs.
Delay and expense are twin evils besetting our system of civil justice. They are not entirely unconnected: delay begets expense. Sometime this relationship becomes the reason for delay. Mounting expense for a party to litigation, particularly when there is no early resolution of the litigation likely and where there is little or no prospect of recovering the costs generated by the proceedings, will place pressure on the party to attempt to compromise the matter, usually on terms beneficial to the other party. Delay can become a tactic by which a litigant may seek to affect the course and outcome of litigation. It may also, of course, sometimes simply be a mechanism for delaying a possible negative outcome. For whatever reason deliberate and unjustifiable delay is engaged in by a party, such delay threatens access to justice. Tolerance of such delay by courts threatens the credibility of the courts as bodies capable and willing to control their own processes so as to achieve timely, cost efficient, and just resolutions of disputes.
The appellants submitted that the overriding consideration in applications of this type is the interests of justice. It need hardly be said that the interests of justice encompass more than the interests of the appellants. The appellants were possessed of a right of appeal from the judgment of Refshauge J by virtue of the provisions of s 37E of the Supreme Court Act 1933 (ACT). As a statute-based right it is subject to and governed by those legislative requirements concerning the conduct of appeal. Compliance with these requirements is expected by this Court, not only because it is the will of the legislature, but also because non-compliance results in inefficient use of scarce court resources and has potential to work injustice on other litigants.
The appellants took appropriate advantage of their right of appeal, but since filing the original Notice of Appeal they have followed a conscious and deliberate course of unjustified procrastination. Their precise motive for doing so must remain a matter for speculation, but I am satisfied that the matters raised by Mr Cain in his affidavits do not explain or justify the delay.
It has been said that the discretion to strike out proceedings should only be exercised in a clear case. A clear case is not necessarily to be identified by reference to the period of delay alone. All relevant circumstances must be taken into account. I give significant weight to the circumstance that the appellants have deliberately sought to delay these proceedings. By doing so they have treated with contempt the requirements of the CPR, directions given by the Court and the right of appeal afforded to them by s 37E of the Supreme Court Act (ACT). They do not seek to blame their lawyers for their inactivity, so they must take personal responsibility.
The interests of justice in a particular case will depend upon the circumstances of the case. In Aon Risk Services Australian Ltd v Australian National University (2009) 239 CLR 175 (Aon), concerning an application in a slightly different context (to amend pleadings), the plurality of the High Court (Gummow, Hayne, Crennan, Kiefel and Bell JJ) referred with approval to statements made by Waller LJ in Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894, to the effect that statements made in earlier cases such as Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 that principles of case management should not ordinarily shut a party out from litigating an issue which is fairly arguable, did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Waller LJ said that where a party has had a sufficient opportunity to plead their case, it may be necessary for a court to make a decision which may produce a sense of injustice in that party, in order to do justice to the opponent and other litigants. The plurality of Aon then went on to say:
The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question.
The plurality approved of statements made by Toohey and Gaudron JJ in Sali v SPC Ltd (1993) 116 ALR 625 at 636 (Sali), to the effect that case management reflects “[t]he view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court’s lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard...”
The above comments in Aon and Sali were made in different contexts. Those in relation to Aon were made in the context of consideration of the principles relevant to amendment of pleadings, and those in relation to Sali were made in considering the court’s refusal for an application for an adjournment. However, they both state considerations equally applicable to the current applications. The delay caused by the appellants, egregious as it is, would not mandate dismissal of the proceedings if the Court could have any real confidence that the proceeding would be promptly prosecuted in the future. I regret to say I have no confidence that this would be the case. A warning by the Commonwealth that an application may be made to strike out the appeal did not spur the appellants to address the requirements for preparation of the appeal. The filing of the present applications similarly provoked no activity of significance. Whilst counsel has now been “briefed” (at least by some of the appellants) the exact nature of counsel’s retainer is not clear. An undertaking by the appellants to the Full Federal Court given on 19 February 2015 to prosecute these appeal with all due expedition has not been honoured. This weighs heavily against accepting the appellants’ assertions that this appeal will be properly conducted in the future.
The respondents have not pointed to any particular prejudice caused by the appellants’ failure to prosecute this appeal properly. That is a relevant consideration, but as I have said, the interests of the parties are not the only interests that must be considered. In any event, the prejudice upon which the appellants focused in their submissions was regarding the respondents’ ability to recover the judgment sums. They submitted that the first respondent has already “recovered all that it can, subject to the realisation of yet frozen assets” and as such any delay would not have caused prejudice to the Commonwealth. This approach is too narrow. So long as this appeal is on foot the respondents cannot move on, and must continue to expend funds and the time of their employees or officers in dealing with the appeal. In the case of the first respondent, public funds are being utilised (by way of the resources of the Australian Government Solicitor and otherwise) in addressing this appeal. It is very clear from the evidence that to date not insignificant public funds have thus been unnecessarily expended by reason of the appellants’ failures, and there is no reason to believe that this will not continue. There is no prospect of the respondents recovering this wasted expenditure if the appeal is unsuccessful.
Neither the appellants nor the respondents addressed the prospects of success of the appeal. For the purposes of the first respondent’s application for security for costs last year, I accepted that the appellants had at least some arguable grounds of appeal. I was not then in a position to assess the prospects of success on those grounds, and I am in no better position today. I will treat as neutral this consideration, that is, neither favouring nor militating against the orders sought by the respondents.
In the absence of some assessment of the appellants’ prospects of success on their appeal it is difficult to determine to what extent they may suffer hardship if their appeal is struck out. On the evidence it would appear likely that each of the appellants will be subject to bankruptcy proceedings and will in all probability lose valuable private assets, but that is a consequence of the judgment of Refshauge J. The only identifiable hardship the appellants will suffer if their appeal is struck out is the loss of the opportunity to conduct the appeal, in circumstances where the merits of the appeal are uncertain.
This is not a case, however, where to make the orders sought by the respondents would result in the appellants being completely deprived of an opportunity to present their cases, as is often the case where an application is made to strike out first instance proceedings for want of prosecution. Here, the appellants were heard by Refshauge J over 39 days in the proceedings below, and comprehensive reasons were delivered.
The deliberate failure of the appellants to comply with the CPR and Court directions, together with their deliberate tactic of delay of these proceedings constitutes an abuse of the process of this Court. The interests of justice requires that the respondents be released from the burden of future uncertainty and cost manifest in the continuation of this appeal.
It is, in any event, appropriate that the appeal by the corporate appellants now be struck out.
Orders
The appeal will be struck out for want of prosecution under r 5603 of the Court Procedures Rules 2006 (ACT), and the orders made by Refshauge J on 1 August 2013 and 21 November 2014, as amended by his Honour, are confirmed.
Unless a different order is sought within 14 days, I order that the appellants pay the respondents’ costs of the appeal, including the costs of the present applications, but excluding the costs of the application for security for costs.
| I certify that the preceding one hundred and fifty-five [155] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns. Associate: Date: 30 June 2016 |
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