Di Benedetto v Chelliah - [2019] TASSC 33

[2019] TASSC 33

COURT: SUPREME COURT OF TASMANIA

CITATION: Di Benedetto v Chelliah [2019] TASSC 33

PARTIES:  DI BENEDETTO, Anthony
  DI BENEDETTO, Dino
  L'AQUILA OF AUSTRALASIA PTY LTD
  v
  CHELLIAH, Satchithananthan

FILE NO:  FCA 991/2019
DELIVERED ON:  16 August 2019
DELIVERED AT:  Hobart
HEARING DATES:  30 July, 8 August 2019
JUDGMENT OF:  Blow CJ

CATCHWORDS:

Appeal and New Trial – Appeal – Practice and procedure – Tasmania – Time for appeal – Extension of time – No realistic prospect of success.

Aust Dig Appeal and New Trial [387]

REPRESENTATION:

Counsel:
             Second Appellant:  In person
             Other Appellants:  No appearances
             Respondent:  T Barrett
Solicitors:
             Respondent:  Tierney Law

Judgment Number: [2019] TASSC 33
Number of paragraphs: 27

Serial No 33/2019
File No CCA 991/2019

ANTHONY DI BENEDETTO, DINO DI BENEDETTO,
L'AQUILA OF AUSTRALASIA PTY LTD
v SATCHITHANANTHAN CHELLIAH

REASONS FOR JUDGMENT BLOW CJ

16 August 2019

On 8 August 2019 I dismissed an application for an extension of time for the institution of a Full Court appeal. I also ordered one of the appellants, Dino Di Benedetto, to pay the costs of the respondent of and incidental to that application, on an indemnity basis. These are my reasons for making those orders.
The proceedings arose out of a dispute about a property in Goulburn Street, West Hobart. On the basis of unchallenged affidavit evidence in the proceedings at first instance, the history of the relevant transactions and dealings can be summarised as follows:
·     In the beginning, the registered proprietor of the property was the appellant Dino Di Benedetto.
·     By a transfer dated 19 April 2002, he transferred that property to the respondent, Satchithananthan Chelliah.
·     By a mortgage bearing the same date, the respondent mortgaged the property to Dalvey Pty Ltd. At that time the sole director of that company was a man named Alan David Gray, also known as Alan David Forsyth. He was then acting as Dino Di Benedetto's accountant.
·     In March 2003 the respondent took steps to refinance the property. He executed a new mortgage in favour of Australia and New Zealand Banking Group Limited. A discharge of the earlier mortgage was executed under the common seal of Dalvey Pty Ltd. There was a settlement at which a representative of the ANZ Bank handed over a cheque to a representative of Dalvey, and that person handed that company's discharge of mortgage to the bank's representative.
·     Before the discharge of mortgage was registered, a transfer of the same mortgage was purportedly executed under the common seal of Dalvey. The transferees were the appellants Anthony Di Benedetto and Dino Di Benedetto. Anthony is the son of Dino. That transfer of mortgage was registered on 26 March 2003.
·     On 28 March 2003, the ANZ Bank lodged for registration the discharge of the Dalvey mortgage and its mortgage from the respondent. Because of the registration of the transfer of mortgage, it was unable to register the discharge of the Dalvey mortgage, and was unable to register its mortgage as a first mortgage. It eventually got its mortgage registered as a second mortgage.
·     On 11 November 2003, a caveat by L'Aquila Australasia Pty Ltd was registered on the title to the property. That caveat was signed on behalf of that company by Dino Di Benedetto as a director and by Anthony Di Benedetto as a manager. It said that the company was claiming an estate or interest in fee simple by virtue of an agreement dated 19 April 2002. It said nothing about the nature or extent of the estate or interest that was claimed or the identity of the parties to the agreement.
In October 2015 the respondent, Mr Chelliah, instituted proceedings against the three parties who are now appellants – the son, the father and the caveator company. Amongst other things, he sought orders as to the deregistration of the transfer of mortgage, the removal of the caveat by L'Aquila, and the payment of damages.
Those proceedings were not defended. Dino Di Benedetto filed a notice of appearance, but the other appellants did not. No other documents were filed in the proceedings by any of them. Holt AsJ conducted a series of directions hearings. Dino Di Benedetto attended the last two, on 18 September 2018 and 31 October 2018, but otherwise the appellants were neither present nor represented by counsel.
Estcourt J conducted a hearing of the proceedings at first instance on 4 February 2019. Each of the appellants had been notified of that hearing, but none of them appeared, either personally or by counsel. The hearing proceeded ex parte. The evidence was presented in the form of affidavits in accordance with a pre-trial order made by Holt AsJ. The respondent relied upon affidavits sworn by himself, Mr Gray, an officer of the ANZ Bank, and an employee of his solicitors. Mr Gray's affidavit included evidence to the effect that the transfer of mortgage was a forgery. At the conclusion of the hearing, his Honour made the following orders:
"1That it is declared that the transfer of mortgage number C448121 was procured by fraud on the part of Anthony Di Benedetto and Dino Di Benedetto.
2That the transfer of mortgage number C448121 be removed from the register maintained under the Land Titles Act1980.
3That Anthony Di Benedetto and Dino Di Benedetto pay the applicant $19,684.03 by way of damages in respect of amounts paid by the applicant by way of bank charges to the ANZ Bank [sic] Limited.
4That pursuant to section 135(2) of the Land Titles Act 1980 that caveat number C510542 be removed from the register maintained under that Act.
5That the costs of the Applicant in respect of the proceedings insofar as they relate to the relief granted by orders 1, 2 and 3 hereof, be taxed on an indemnity basis as between the Applicant and Anthony Di Benedetto and Dino Di Benedetto and the costs so taxed be paid by them to the Applicant.
6That the costs of the Applicant in respect of the proceedings insofar as they relate to the relief granted by order 4 hereof, be taxed on an indemnity basis as between the Applicant and L'Aquila of Australasia Pty Ltd (ACN 009 585 013) and the costs so taxed be paid by them to the Applicant."
His Honour provided short written reasons for the orders that he made. He accepted the unchallenged evidence of Mr Gray that he had not executed the transfer of mortgage under the common seal of Dalvey. That is to say, he found that that instrument was a forgery. His assessment of damages was based on the affidavit of the bank officer. He ordered the removal of L'Aquila's caveat because it did not sufficiently describe the estate or interest claimed by that company.
On 8 February 2019 Dino Di Benedetto filed an interlocutory application, seeking an order that the judgment of Estcourt J be set aside. He was the only applicant named on that application. He also filed an affidavit in which he said that he had become unwell, had collapsed on the evening of 3 February 2019, and had completely overlooked the hearing on 4 February because of his unexpected ill health.
That interlocutory application indicated that rr 563 and 570 of the Supreme Court Rules 2000 were relied upon. Those rules read as follows:
"563 Setting aside judgment
(1) The Court or a judge may set aside a verdict, judgment or order if a party did not appear when the proceeding was called on for trial on application by that party.
(2) A verdict, judgment or order may be set aside on any appropriate terms.
(3) An application for an order must be made within 6 days after the proceeding is called on for trial.
...

570     Absence of party at trial
(1) If, when the trial of a proceeding is called on —
(a)the plaintiff or applicant appears and a defendant or respondent does not appear, the plaintiff or applicant —
(i)    may prove the claim against that defendant or respondent; and
(ii)    is entitled to judgment dismissing any counterclaim or cross-application brought by that defendant or respondent; or
(b)a plaintiff or applicant does not appear, a defendant or respondent who does appear —
(i)     is entitled to judgment dismissing the proceeding insofar as it is brought by that plaintiff or applicant; and
(ii)     may prove any counterclaim or cross-application brought against that plaintiff or applicant; or
(c)no party appears, the proceeding may be struck out and wholly discontinued and no party is entitled to costs.

(2) On the application of a party who did not appear at trial made within 14 days after trial, the Court or a judge may set aside or vary any judgment, order or verdict obtained under subrule (1)."

The interlocutory application was heard by Estcourt J on 1 March 2019. Dino Di Benedetto represented himself. The other appellants were neither present nor represented. Mr Di Benedetto relied upon an affidavit sworn by him on 28 February 2019. That affidavit contained assertions to the following effect:
·     Mr Forsyth, as his then accountant, prepared the documents for the sale of the property to Mr Chelliah.
·     He instructed Mr Forsyth to prepare a mortgage from Mr Chelliah to L'Aquila.
·     He would not have agreed to the property being mortgaged to Dalvey.
·     At Mr Forsyth's instigation, he reluctantly signed a power of attorney in favour of him on 26 April 2002.
·     After returning from a trip to Italy in October 2002, he concluded that Mr Forsyth was trying to defraud him.
·     He went to the Land Titles Office on 28 February 2003. On that day he learned of the mortgage to Dalvey.
·     On 25 March 2003 he and his son went to see Mr Forsyth, who signed the transfer of mortgage and affixed the company seal of Dalvey.
Estcourt J decided not to set aside any of his orders and not to order a new hearing. He varied the first of his orders of 4 February 2019 to read, "It is declared that the transfer of mortgage number C448121 was attended by fraud." In substance, that change removed all suggestion as to who had acted fraudulently.
His Honour explained in the course of the hearing of the interlocutory application that he did not consider that the Di Benedettos could succeed at a new hearing because there was uncontradicted evidence that the mortgage debt owed to Dalvey had been paid in full by the ANZ Bank and that Dalvey had given the bank an executed discharge of its mortgage. That is to say, he did not order a new hearing because a new hearing would have been futile.
On 24 April 2019 Dino Di Benedetto filed a notice of appeal in respect of that second decision of Estcourt J – the decision of 1 March 2019 when he declined to order a new hearing. There has been no appeal in respect of the decision of 4 February 2019. Under r 659 of the Supreme Court Rules, the time limit for the institution of an appeal from the refusal of an application is 10 days from the date of the refusal. The notice of appeal was filed 54 days after the relevant refusal. When Mr Di Benedetto filed the notice of appeal, he also filed the application that came before me, seeking an extension of time for the institution of the appeal.
The application for the extension of time came before me on 30 July 2019. Dino Di Benedetto represented himself. The other appellants were neither present nor represented. Mr Di Benedetto told me that his new counsel was Mr Slipper, but that Mr Slipper was away. After some discussion as to the issues raised by the application, I adjourned it to 8 August 2019 at 10am. On that occasion all of the appellants were absent and unrepresented. Counsel for the respondent relied upon two affidavits sworn by another practitioner from his firm, Mr Buckley, which contained material as to the history of the litigation. I indicated that I would be taking into account the affidavit material that was before Estcourt J on 4 February 2019 in assessing the merits of the appeal.
The notice of appeal sets out three grounds of appeal that assert errors on the part of Estcourt J on 1 March 2019, as follows:
"1His Honour erred in fact and Law.
2His [sic] failed to give any and/or proper consideration as to the untoward relationship between the Respondent and Alan David Forsyth also known as Alan David Grey [sic] and/or the Honourable Duke of 'Äveron'.
3His Honour in exercising his judicial functions failed to observe the rules of natural justice."
Ground 1 does not identify any particular error or asserted error. Nothing said or written by Dino Di Benedetto has cast any light on the intended scope of ground 1.
As to ground 2, there is nothing in the affidavit material that gives the slightest suggestion of any untoward relationship between the respondent and Mr Grey. Mr Di Benedetto told me that he did not ever get paid for the sale of the property. He did not say that in either of his affidavits. I infer that he blames both Mr Gray and the respondent for not getting paid. However he has not adduced any evidence suggesting any wrongdoing on the part of the respondent, or even any evidence of not having been paid for the property.
Ground 3 asserts a failure to observe the rules of natural justice, but gives no particulars of the asserted failure. I infer that the appellants wish to argue that Estcourt J denied them justice by refusing to order a new hearing. I am unaware of any basis on which it might be suggested that he denied any of the appellants procedural fairness. Dino Di Benedetto was the sole applicant on 1 March. He was notified of the hearing. He had the opportunity to present affidavit evidence, and took that opportunity. He had the opportunity to appear personally or by counsel. He appeared without legal representation, was given the opportunity to make submissions, and made some. I infer that he sought to represent the interest of his son and L'Aquila, even though they were not parties to the interlocutory application. It seems to me that ground 3 relates to a grievance as to the rejection of the application for a new hearing, not a grievance as to how the hearing of that application was conducted.
In the proceedings before Estcourt J, the only evidence relied upon by Mr Di Benedetto that tended to contradict the respondent's case was the evidence that the transfer of mortgage was not forged. If the appellants had been granted a new trial, and had succeeded at that new trial on that issue alone, a finding that the document was not forged could not have been of any financial benefit to them.
There was uncontradicted evidence from the bank officer to the effect that "Mr Forsyth" wrote to the bank on 3 January 2003 advising that Dalvey required $172,599.83 to discharge the mortgage by 15 February 2003; that the bank paid the mortgage debt in full; and that the bank received a discharge of mortgage that was executed under the common seal of Dalvey by Mr Forsyth, who signed as that company's sole director. Affidavit evidence from Mr Forsyth and the respondent also supported the conclusion that the mortgage debt had been paid in full.
If, as asserted by the appellants, the transfer of the Dalvey mortgage to the Di Benedettos was not a forgery, it must have been a transfer of a mortgage in respect of which the mortgage debt had been paid in full. If so, the respondent was entitled to have the Dalvey mortgage discharged, and the bank was entitled to have its mortgage registered as a first mortgage. Section 89(1) of the Land Titles Act 1980 provides that "Whenever a registered mortgage ... is intended to be discharged wholly ... the registered mortgagee ... shall execute a discharge in an approved form." From the time of the settlement of the refinancing transaction, the Dalvey mortgage was "intended to be discharged".
Section 60(1) of the Land Titles Act provides as follows:
"(1) On the registration of a transfer of a registered mortgage ... the transferee shall become subject to and liable for the same requirements and liabilities to which he would have been subject and liable if named in that instrument originally as mortgagee ...".
Upon the registration of the transfer of mortgage on 26 March 2003, the Di Benedettos therefore became subject to the duty to execute a discharge of the mortgage in accordance with s 89(1). Since a mortgage constitutes a contract between the mortgagor and the mortgagee, they also became liable to all existing and future contractual liabilities to the mortgagor, the respondent, as if they had been the original mortgagees. Estcourt J appears to have awarded damages for fraud, on the basis that the registration of the transfer of mortgage was procured by fraud on the part of the Di Benedettos. If they did not act fraudulently, it does not follow that they were not liable for damages. In my view it is strongly arguable that the mortgage contained an implied contractual term to the effect that the mortgagee or mortgagees would, after payment in full of the mortgage debt, take all reasonable steps to facilitate the registration of a discharge of the mortgage. The affidavit of evidence as to the course of events after 26 March 2003 provides a very strong basis for an inference that the Di Benedettos did nothing to facilitate the discharge of the mortgage that had been transferred to them. On that basis, if it were established that the transfer of mortgage was not forged, there would be very strong reasons to conclude that the Di Benedettos were liable to the respondent for damages for breach of contract in respect of the amounts that he had had to pay the ANZ Bank in consequence of their failure to facilitate the registration of a discharge of the Dalvey mortgage. Since they did not plead to the respondent's statement of claim, they did not have the right to rely upon any limitation defence: Commonwealth v Verwayen (1990) 170 CLR 394 at 405.
Thus, whether the transfer of the mortgage was forged or not, there was little or no prospect, if the appeal were to proceed, and a new trial were to be ordered, of the Court holding that the respondent was not entitled to damages in respect of the expenses that he paid to the ANZ Bank as a result of there being no registrable discharge of the Dalvey mortgage. There was ample evidence before Estcourt J to justify his assessment of the amount payable by way of damages.
There was nothing in the notice of appeal, the affidavit material or the oral submissions to suggest that the caveat lodged by L'Aquila should not have been removed.
In summary, the transfer of mortgage related to a mortgage that had been paid off. A finding that that transfer was not a forgery was highly unlikely to have resulted in any benefit to the transferees. I concluded that there was no realistic prospect of any of the grounds of appeal succeeding and no reason to think that any unformulated amended or additional ground might succeed and result in a benefit to the appellants. I therefore decided not to grant an extension of time.
The notice of appeal and the interlocutory application seeking the extension of time were signed by Dino Di Benedetto alone. He is not a legal practitioner. Legal practitioners are authorised to sign documents on behalf of their clients by r 12 of the Supreme Court Rules, but non-lawyers are not permitted to sign court documents on behalf of others. There is simply no legislation authorising them to do so. The notice of appeal and the interlocutory application were irregular, in that Dino Di Benedetto purported to sign them on behalf of his son and L'Aquila. There is a further problem in relation to L'Aquila since companies are not permitted to be represented at hearings in this Court by individuals other than legal practitioners: Co-operative Property Developments of Australia Ltd v Mount [1980] Tas R 7. Further, the appeal is by three appellants, only one of whom was a party to the interlocutory application whose refusal is appealed from.

At the conclusion of the hearing on 8 August 2019, counsel for the respondent sought an order for costs on an indemnity basis. I declined to make any order against Anthony Di Benedetto or L'Aquila because of the irregularities as to their institution of the proceedings, but I made the order sought against Dino Di Benedetto. Indemnity costs orders "serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs": Hamod v State of New South Wales [2002] FCA 524, 188 ALR 659 at [20]; Zhao v T R & K R Shipton Pty Ltd [2017] TASFC 5 at [5]. Having regard to the virtual certainty that the appeal would be futile, and Dino Di Benedetto's conduct in taking no steps to defend the first instance proceedings prior to the hearing on 4 February 2019, and initiating clumsy defensive action only after the first instance proceedings had run their course, I considered that this was an appropriate case for him to be ordered to pay indemnity costs.