De Lutis v Rolfe
[2023] VSCA 323
•18 December 2023
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2021 0108 |
| PAUL DE LUTIS | Applicant |
| v | |
| JAMES ROLFE | Respondent |
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| JUDGES: | KENNEDY JA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | Determined on the papers |
| DATE OF JUDGMENT: | 18 December 2023 |
| MEDIUM NEUTRAL CITATION: | [2023] VSCA 323 |
| JUDGMENT APPEALED FROM: | Rolfe v De Lutis (County Court of Victoria, Judge Macnamara, 3 September 2021) |
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PRACTICE AND PROCEDURE – Application for leave to appeal decision of County Court to dismiss summons seeking summary judgment – Application for leave to appeal adjourned pending lifting of stay of County Court proceeding – No subsequent substantive steps taken in relation to application for leave to appeal – County Court proceeding later dismissed for want of prosecution – Applicant accepts that application for leave to appeal should be dismissed – Application for leave to appeal dismissed for want of prosecution.
Supreme Court (General Civil Procedure) Rules 2015, r 64.46(1)(d).
Efektiv Pty Ltd v Madgwicks (a firm) [2022] VSCA 72, referred to.
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| Counsel | |||
| Applicant: | No attendance | ||
| Respondent: | No attendance | ||
Solicitors | |||
| Applicant: | BSP Lawyers | ||
| Respondent: | T F Grundy Lawyer | ||
KENNEDY JA:
The application for leave to appeal in this case seeks to challenge a decision of a County Court judge that the defendant’s[1] application for summary judgment should be dismissed and that the plaintiff be granted leave to file and serve an amended statement of claim. The judge also granted a stay of the proceeding until such time as the plaintiff’s former trustees in bankruptcy had assigned the causes of action to the plaintiff which he sought to rely upon (‘stay order’).
[1]I will use the terms plaintiff and defendant in these reasons, to describe the respondent and applicant, respectively.
On 11 August 2022, this Court, by consent, ordered that the defendant’s application for leave to appeal be adjourned to a date to be fixed pending the lifting of the stay order. However, no assignment ever took place and no substantive steps have been taken in relation to this application since August 2022. The County Court has also now made an order (on 17 August 2023) dismissing the (County Court) proceeding.
In the circumstances, the Registrar has referred the application for leave to appeal to me to determine whether an order should be made that the proceeding be dismissed for want of prosecution. The defendant consents to the making of such an order.
For reasons expressed below, I have determined that the application will be dismissed for want of prosecution.
Background prior to issue of this application
The plaintiff was the director of James Rolfe Transport (Vic) Pty Ltd (‘JRT’) which operated a shipping container business at certain premises in Yarraville (‘the premises’). JRT leased the premises from Glodale Pty Ltd (‘Glodale’), another company of which the plaintiff was a director.
Following Glodale’s default on a loan from Investec Bank Australia Ltd (‘Investec’),[2] Investec, (as mortgagee in possession) sold the premises by auction to Jeans Team Pty Ltd (‘Jeans’) on 20 March 2003. The defendant is a director of Jeans.
[2]The loan was secured by, amongst other things, a mortgage of the premises, a fixed and floating charge over the assets of JRT and a personal guarantee given by the plaintiff.
The plaintiff alleges that certain personal items of his (including valuable cars, car parts and some personal belongings) which were kept in shipping containers at the premises were misappropriated between the date of auction (20 March 2003) and the date of settlement (19 May 2003).
The plaintiff was declared bankrupt on 25 September 2003 and was discharged from bankruptcy in November 2006. He was again declared bankrupt on 10 February 2015 and was discharged from bankruptcy on 5 March 2018. Two different sets of trustees in bankruptcy were appointed to deal with the plaintiff’s estate in bankruptcy.
In 2009, the plaintiff commenced a proceeding in the County Court against Investec in respect of the alleged misappropriation founded on negligence, breach of contract and detinue (‘first County Court proceeding’). His claim was dismissed and a subsequent appeal was also dismissed on 13 March 2014.
On 8 February 2021, the plaintiff commenced another proceeding again the defendant in his capacity as director of Jeans, claiming that he had misappropriated the personal items (‘second County Court proceeding’).
On 12 May 2021, the defendant filed a summons seeking summary judgment in the second County Court proceeding. In particular he claimed that the plaintiff ought to be estopped from instituting the proceeding on the basis of the principles in Port of Melbourne Authority v Anshun Pty Ltd.[3] He also contended that the plaintiff should not be given leave to file an amended statement of claim (as he sought to do).
[3][1981] 147 CLR 589, 602–3 (Gibbs CJ, Mason and Aickin JJ); [1981] HCA 45.
On 3 September 2021, the judge determined that the summary judgment application should be dismissed and granted the plaintiff leave to file an amended statement of claim.[4] He also made an order that the second County Court proceeding be ‘stayed until such time as the plaintiff’s former trustees in bankruptcy have assigned to the plaintiff the causes of action pleaded by the plaintiff in this proceeding’.
[4]Rolfe v De Lutis (County Court of Victoria, Judge Macnamara, 3 September 2021).
Proceedings in this Court
On 1 October 2021, the defendant filed an application for leave to appeal in this Court from the judge’s decision of 3 September 2021. The defendant alleges that the County Court was in error in dismissing the summary judgment application and in not determining that the second County Court proceeding was an abuse of process. The defendant also contends that the plaintiff should not have been granted leave to file an amended statement of claim.
On 2 November 2021, the plaintiff filed a written case in response to the defendant’s application for leave to appeal.
On 22 February 2022, a leave application book was filed by the defendant.
The parties were then notified that the application for leave to appeal and if leave is granted, the appeal, was listed before this Court on 12 August 2022.
On 9 August 2022, at the request of this Court, the Registry Lawyer sent an email to the parties in the following terms:
Dear Practitioners,
We note that by order 2 of the orders made by Judge Macnamara on 3 September 2021 that the proceeding has been ‘stayed until such time as the plaintiff’s former trustees in bankruptcy have assigned to the plaintiff the causes of action pleaded by the plaintiff in this proceeding’. The Court has not been informed whether the assignment has taken place and whether the stay should be lifted.
In these circumstances the Court has asked me to raise with the parties the desirability of proceeding with the application for leave to appeal on Friday. The parties should be ready to deal with this issue on Friday morning.
In response, on 9 August 2022, the defendant emailed the Registry Lawyer, advising that he considered that his application for leave to appeal should be adjourned to a date to be fixed after the stay order had been lifted. The defendant also stated that, if required, he would be in a position to support this stance at the hearing fixed for 12 August 2022.
On 10 August 2022, the plaintiff sent an email to the Registry Lawyer in which he initially advised, inter alia, that he had not sought to procure the assignment of the causes of action pleaded by him in the proceeding from his former trustees in bankruptcy because he considered that such action would be rendered nugatory if the appeal was successful. However he later advised (on 11 August 2022) that he agreed that the hearing should be adjourned until the stay order was lifted. He also provided executed proposed consent orders so that the matter could be adjourned.
On 11 August 2022, this Court then made orders that the application for leave to appeal be adjourned to a date to be fixed on the application of either party, with costs reserved.
After 11 August 2022, no substantive steps were taken in relation to the application. Rather:
•on 22 December 2022, the Registry Lawyer emailed the parties and enquired whether the stay order had been lifted and whether the causes of action had been assigned to the plaintiff by his former trustees in bankruptcy;
•on 31 January 2023, the plaintiff sent an email to the Registry Lawyer advising that the stay order had not been lifted and that he was expecting a ‘substantive response’ by the end of January 2023;
•on 3 March 2023, the Registry Lawyer emailed the parties seeking an update;
•on 17 March 2023, the plaintiff advised the Registry Lawyer that there had not been an assignment and that the delay was due to the trustees requiring additional funds. Further, that he had submitted a funding proposal to the trustees and was hoping to get a response from the trustees by the end of March 2023. He indicated that he would provide a further update;
•no further update was provided by the plaintiff;
•on 8 August 2023, the Registry Lawyer sent another email to the parties. In her email, the Registry Lawyer set out the history of the proceeding, and noted that no further update has been received by the plaintiff since 17 March 2023 and neither party has taken any substantive step in relation to the leave to appeal application. She observed that r 64.46(1) of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’) gave the Court power to dismiss the proceeding for want of prosecution, and that the Court also had inherent jurisdiction to do so. She requested that, if either party objected to the proceeding being dismissed, then that party should respond by 29 August 2023;
•on 17 August 2023, the defendant advised that the County Court had made orders on 15 August 2023 which dismissed the second County Court proceeding ‘for want of prosecution.’[5] The County Court also made an order that the plaintiff pay the defendant’s costs of the proceeding; and
•the defendant also agreed that the application for leave to appeal should be dismissed.
[5]The orders also included an order that, solely for the purpose of hearing and determining the defendant’s application, the stay order be lifted.
The Court has not received any response from the plaintiff in respect of the email sent on 8 August 2023.
On 4 September 2023, the Registry Lawyer sent an email to the parties informing them that the application would be referred to a judge (or judges) to determine whether the application for leave to appeal should be dismissed for want of prosecution.
Should the proceeding be dismissed for want of prosecution?
The Court has the power to dismiss a proceeding for want of prosecution under r 64.46(1)(d) of the Rules, or in the Court’s inherent jurisdiction.[6]
[6]See Sullivan v Greyfriars Pty Ltd [2015] VSCA 196, [21] (Whelan and McLeish JJA) in relation to the Court’s inherent jurisdiction.
Rule 64.46 relevantly provides:
(1)The Court of Appeal constituted by one or more Judges of Appeal may make an order dismissing an application, including for leave to appeal, or appeal for—
…
(d) want of prosecution.
(2) An order under paragraph (1) may be made—
(a) of the Court of Appeal’s own motion; or
(b) on the application of a party.
(3)If an application or appeal is dismissed pursuant to this Rule, the applicant or appellant shall pay each other party’s costs of the application or appeal on an indemnity basis, unless otherwise ordered by the Court of Appeal.
In Efektiv Pty Ltd v Madgwicks (a firm),[7] Beach JA said the following in the context of considering whether this Court should dismiss an application for leave to appeal for want of prosecution on its own motion:
Ordinarily, when one contemplates whether a proceeding should be dismissed for want of prosecution, one considers whether there have been intentional and contumelious failures to comply with court orders or specified time limits, or inordinate and inexcusable delay (giving rise to prejudice) on the part of the plaintiff/applicant.[8] The present case, however, is not of that kind. It is more akin to a case of the kind described by Johnson J in Udowenko and Ors v Chief Executive Officer & Board of Directors of St Georges Bank – a Division of Westpac Banking Corporation and Ors [No 2]:[9] namely, a proceeding that has, at best, barely moved to first base, let alone beyond it.[10] What is plain is that the parties (or those who are entitled to progress the proceeding) have no intention of taking any further step in the proceeding — the proceeding having been allowed to lie dormant for in excess of two years.[11]
[7][2022] VSCA 72 (‘Efektiv’).
[8]See generally Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229; Birkett v James [1978] AC 297; Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197; Bishopsgate Insurance Australia Ltd v Deloitte Haskins & Sells [1999] 3 VR 863.
[9][2011] NSWSC 1122, [115]–[124] (‘Udowenko’). See also Knorr v CSIRO [No 2] [2012] VSC 268, [44]; Knorr v CSIRO [No 3] [2012] VSC 529, [5], [29].
[10]Udowenko [2011] NSWSC 1122, [117].
[11]Efektiv [2022] VSCA 72, [17] (citations in original).
In this case it is plain that the parties have no intention of taking any further step in the proceeding. In particular, the applicant has no interest in pursuing the application. Thus:
(a)the application for leave to appeal has effectively been rendered nugatory by reason of the fact that the second County Court proceeding has been dismissed;
(b)the defendant accepts that the application should be dismissed in circumstances where he has achieved the result sought by his application (dismissal);
(c)although the plaintiff has not indicated his position to the Court he has not raised any objection, and it can reasonably be supposed that he would not have any objection; and
(d)the parties have not taken any substantive step in relation to the application since August 2022.
The proceeding will therefore be dismissed for want of prosecution.
Costs
The parties have not been expressly invited to make submissions about costs. However, pursuant to r 64.46(3), above, the defendant must pay the plaintiff’s costs of the application for an appeal unless ‘otherwise ordered’. This is because it would ordinarily follow that an applicant should bear the other party’s costs of a proceeding which is not prosecuted.
However, there are a number of factors which might suggest that the defendant should not pay the costs of the plaintiff in this particular case. As indicated already, the matter is not now to be prosecuted because of the dismissal of the second County Court proceeding. However, this proceeding was dismissed by reason of the plaintiff’s failure to prosecute — not by reason of any fault of the defendant. The delay in the prosecution of this application also appears to have been caused by factors outside the defendant’s control (by reason of the continued existence of the stay order).
In all the circumstances, an order will therefore be made that there be no order as to costs absent the receipt of any objection from the parties.
Conclusion
The order of the Court will be that, pursuant to r 64.46 of the Supreme Court (General Civil Procedure) Rules 2015, the defendant’s application for leave to appeal filed 9 August 2022 will be dismissed for want of prosecution.
The order will also record that the Court will make an order that there be no order as to costs, absent receipt of a written objection from any party on or before 4:00 pm on 29 January 2024.
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