Endresz v Commonwealth of Australia
[2020] ACTCA 48
•16 October 2020
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Endresz v Commonwealth of Australia |
Citation: | [2020] ACTCA 48 |
Hearing Date: | 9 October 2020 |
DecisionDate: | 16 October 2020 |
Before: | Murrell CJ |
Decision: | Application refused. |
Catchwords: | APPEAL – APPLICATION FOR LEAVE TO APPEAL – Application for leave to appeal out of time – Whether dismissal for want of prosecution was interlocutory or final decision – Whether proposed appeal competent |
Legislation Cited: | Supreme Court Act 1933 (ACT) ss 37E, 37J, 37O Court Procedures Rules 2006 (ACT) rr 1619, 1620, 5405, 5603, 5604 |
Cases Cited: | Akierman Holdings Pty Ltd v Akerman (No 2) [2020] NSWSC 970 Amaca Pty Ltd v Hannell (No 2) [2011] WASCA 232; 42 WAR 224 Wallersteiner v Moir (No 2) [1975] QB 373 |
Parties: | Joy Beverley Endresz (Applicant) Commonwealth of Australia (First Respondent) TNG Limited (Second Respondent) Official Trustee in Bankruptcy as Trustee for the Bankrupt Estate of Allan Paul Endresz (Third Respondent) |
Representation: | Counsel P Dunning QC (Applicant) J Hogan-Doran SC (First Respondent) No appearance (Second Respondent) No appearance (Third Respondent) |
| Solicitors Cornwalls (Applicant) Australian Government Solicitor (First Respondent) No appearance (Second Respondent) No appearance (Third Respondent) | |
File Number(s): | ACTCA 36 of 2020 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Refshauge J Date of Decision: 21 November 2014 Case Title: Commonwealth of Australia v Davis Samuel Pty Ltd (No 8) Citation: [2014] ACTSC 312 |
| Court/Tribunal: ACT Supreme Court Before: Refshauge J Date of Decision: 27 May 2015 Case Title: Commonwealth of Australia v Davis Samuel Pty Ltd (No 9) Citation: [2015] ACTSC 127 | |
| Court/Tribunal: ACT Supreme Court Before: Refshauge J Date of Decision: 11 May 2016 Case Title: Commonwealth of Australia v Davis Samuel Pty Ltd (No 10) Citation: [2016] ACTSC 364 |
MURRELL CJ:
The application
Mrs Endresz seeks leave to appeal out of time against orders made by Refshauge J (the primary judge) on 21 November 2014 (as subsequently amended on 27 May 2015 and 11 May 2016): Commonwealth of Australia v Davis Samuel Pty Ltd (No 8) [2014] ACTSC 312; Commonwealth of Australia v Davis Samuel Pty Ltd (No 9) [2015] ACTSC 127; 296 FLR 62; Commonwealth of Australia v Davis Samuel Pty Ltd (No 10) [2016] ACTSC 364.
The Court Procedures Rules2006 (ACT) (CPR) provide that a notice of appeal is to be filed within 28 days after the day the order appealed from was made or within such further time as the Court allows: r 5405(1)(b). At any time and for special reasons, the Court of Appeal (constituted by a single judge) may give leave to file a notice of appeal: r 5405(2) CPR.
Mrs Endresz was one of 29 defendants in proceedings brought by the Commonwealth (SC 75 of 1999). The group of defendants included Mr Allan Paul Endresz (Mrs Endresz’s husband) and Mr Peter Michael Cain, an experienced legal practitioner.
The Commonwealth claimed that, in 1998, in the context of the privatisation and closure of business units within a Commonwealth department and the payment out of funds, there had been breaches of fiduciary duty and that the associated funds were held on trust.
The primary judge found that funds held on trust for the Commonwealth (the first respondent) and TNG Limited (the second respondent and twenty-seventh defendant in the primary proceedings) were traceable to Mrs Endresz and her husband and had been expended on improvements to their property, Haven Hill: Commonwealth of Australia v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; 282 FLR 1; Commonwealth of Australia v Davis Samuel Pty Ltd (No 8) [2014] ACTSC 312. Mr and Mrs Endresz had been joint tenants of the property since 1995. Mrs Endresz had received funds as an “innocent volunteer”. In relation to her husband, the position was otherwise.
On 21 November 2014, the primary judge made orders against Mrs Endresz granting charges over Haven Hill in favour of the Commonwealth and TNG Limited. The sum of the charges included a component for interest assessed in accordance with the CPR. Subsequently, the charge in favour of TNG Limited was assigned to the Commonwealth.
In summary, Mrs Endresz proposes to argue on appeal that the trial judge erred in ordering:
(a)that an equitable charge be placed over Haven Hill, because his Honour did not find that traceable proceeds of funds expended on improving Haven Hill had actually increased the value of that property, a matter that must be proved before a property is charged;
(b)that an equitable charge be placed over Haven Hill, because Mrs Endresz was an innocent volunteer; and
(c)that the amount of the equitable charge include pre-judgment and post-judgment interest; as the traced funds earned no interest, none should have been included.
The issues on the application are:
(a)Whether, in the context that an earlier appeal was struck out, the proposed appeal is competent; and
(b)If so, whether the Court should exercise its discretion to grant the application for leave to appeal.
History of proceedings
On 27 January 2001, the Commonwealth filed a sixth further amended statement of claim in the primary proceedings.
The proceedings were heard between June and October 2008. During the trial, Mrs Endresz and her husband represented themselves.
On 1 August 2013, the primary judge delivered judgment on the issue of liability.
On 6 December 2013, there was a hearing on final orders. On 21 November 2014, the primary judge delivered judgment on final orders, ordering an equitable charge over Haven Hill.
On 23 December 2014, 12 defendants, including Mrs Endresz, filed appeals. During the appeal, Mrs Endresz represented herself, but her case was put by Mr Cain.
On 19 February 2015, when the matter first came before the Deputy Registrar to settle the appeal index, Mr Cain mentioned the matter on behalf of all appellants.
Following numerous further appearances, in November 2015, the Commonwealth applied for the appellant to show cause as to why the appeal should not be dismissed for want of prosecution.
In December 2015, I ordered that the appeal be listed in the May 2016 Court of Appeal sittings and made associated orders.
By February 2016, the appeal index had not yet been settled.
On 29 February 2016, Mrs Endresz and the other appellants filed an application in the primary proceedings to set aside the judgment and have the orders declared void. On 11 May 2016, the primary judge heard the application and reserved his decision.
On 11 April 2016, Burns J heard the application to show cause as to why the appeal should not be dismissed and reserved his decision. The decision Davis Samuel Pty Ltd v Commonwealth of Australia [2016] ACTCA 22 was given on 30 June 2016, when his Honour ordered at [154]:
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.
In doing so, his Honour observed at [135]:
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.
On the strike out application, the parties did not address the prospects of success of the appeal and Burns J treated that consideration as neutral: at [149]. At [150], his Honour said:
In the absence of some assessment of the appellants’ prospects of success on their appeal it is difficult to determine to what extent they will 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.
At [152], his Honour said:
The deliberate failure of the appellants to comply with the CPR and Court directions, together with their deliberate tactic of delay of these proceedings constitute an abuse of the process of this Court. The interests of justice require that the respondents be released from the burden of future uncertainty and cost manifest in the continuation of this appeal.
On 8 July 2016, the 12 parties who were the appellants on the appeal (including Mrs Endresz) applied for a remedy ex debito justitiae, asserting that they had been an abuse of process in the proceedings before Refshauge J and before Burns J. The application was filed by Mr Endresz on behalf of all applicants.
On 22 July 2016, Elkaim J dismissed the application: Davis Samuel Pty Ltd v Commonwealth of Australia (No 2) [2016] ACTCA 26 (Davis Samuel 2). In doing so, his Honour observed that the applicants had proceeded on the basis that, when Burns J “confirmed” the orders of the primary judge, his Honour had endorsed the correctness of the primary judge’s decisions; consequently, the defect in the primary judge’s decision is also infected the decision of Burns J. At [25], Elkaim J stated:
In my view however the confirmation of the earlier judgments is no more than a statement that if the appeal has been dismissed, the judgments remain valid and in force. It is not a statement that Burns J considered argument on any complaints about the earlier judgments and then came to a considered decision that those judgments were correctly made. He has done no more than deal with the application to dismiss the appeal for want of prosecution.
Elkaim J concluded that success on the outstanding application before the primary judge would not be nullified by Burns J confirming the primary judge’s original orders: at [27].
Elkaim J dismissed the application on the bases that it was an abuse of process (because it raised the same matters as were the subject of the outstanding application before the primary judge), constituted an impermissible attempt to appeal from a single judge sitting as the Court of Appeal to a single judge, and because there was no evidence that Burns J had failed to observe due process.
On 13 January 2017, the primary judge dismissed the application that had been heard on 11 May 2016: Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; 316 FLR 159.
On 8 March 2019, Mr Endresz’s estate was sequestered. The Full Federal Court set aside the sequestration orders, but the estate was again sequestered on 27 August 2020. A final hearing is fixed to proceed later this month.
This application for leave to appeal was filed on 15 September 2020.
Is the proposed appeal competent?
The issue is whether the dismissal of the appeal by Burns J makes any new appeal incompetent because Mrs Endresz has already exercised her one right to appeal.
There is no inherent right of appeal on the merits. In this jurisdiction, a right is conferred by s 37E of the Supreme Court Act 1933 (ACT) (SCA), which provides:
37E Appellate jurisdiction
…
(2) The following matters may be brought before, and heard by, the Court of Appeal:
(a)appeals in relation to orders of the court (except orders of the registrar, the Full Court exercising appellate jurisdiction or the Court of Appeal itself);
…
(4) Also, an appeal may be brought against an interlocutory order of the court constituted by single judge, or the associate judge, only with leave of the Court of Appeal.
…
(Emphasis added)
Section 37O of the SCA provides:
37O Orders on appeal
(1)The Court of Appeal has the following powers in relation to the order appealed from:
(a)to confirm, reverse or amend the order;
…
Section 37J of the SCA provides:
37J Appeal court constituted by single judge
(1)The Court of Appeal may be constituted by a single judge for hearing and deciding any of the following matters (incidental matters) in relation to an appeal:
(a)leave or special leave to appeal;
(b)extension of time to institute an appeal;
…
(h)dismissal of an appeal or other proceeding for want of prosecution or for any other reason prescribed under the rules;
(i) dismissal of an appeal or other proceeding on the application of the appellant or other applicant;
…
(3)The rules may provide that the jurisdiction and powers of the Court of Appeal may be exercised by a single judge in particular kinds of proceedings.
Rule 5603(3) of the CPR deals with want of prosecution of an appeal to the Court of Appeal. It provides:
5603 Appeals to Court of Appeal—want of prosecution of appeal
(3)The Court of Appeal may—
(a)order that the appeal be dismissed for want of prosecution and confirm the order appealed from; or
…
Rule 5604 of the CPR states when the Court of Appeal may be constituted by a single judge under s 37J(1)(h) of the SCA. It provides:
5604 When the Court of Appeal may be constituted by single judge—Supreme Court Act 1933, s 37J(1)(h)
The Court of Appeal may be constituted by single judge in relation to hearing and deciding the dismissal of an appeal under this part for any of the following reasons:
(a) the appeal is incompetent;
…
(c) the appellant has failed to comply with any relevant rules of court or practice note;
(d) the appellant has failed to comply with the direction of the Court of Appeal;
…
There was an issue as to whether Burns J made interlocutory or final orders.
Mrs Endresz said that the orders were not final orders because there had been no “judgment on the merits”.
The Commonwealth conceded that, insofar as Burns J dismissed the appeal for want of prosecution, the decision was interlocutory: Hart v Hall & Pickles Ltd (1969) 1 QB 405 (Hart) at 411; Monaveen Pty Ltd v ABB Service Pty Ltd [2007] WASCA 273 at [2].
However, the Commonwealth submitted that, insofar as Burns J confirmed the orders of the primary judge, his order was final; as an appeal is from orders, a confirmation of orders by the Court of Appeal (whether or not constituted by a single judge) was a final disposition of the appeal. The Commonwealth submitted that, properly construed, the SCA and the CPR provide only one statutory right of appeal from the same judgment or order; as Burns J had finally disposed of the appeal, there was no further right of appeal. The Commonwealth submitted that “judgment on the merits” was not essential to a finding that an order was a final order.
In some jurisdictions, it may be unusual for an order striking out an appeal for want of prosecution to be accompanied by an order confirming the original orders. In the ACT, there are two matters to note. First, both s 37J of the SCA and r 5603(3)(a) of the CPR refer to the “dismissal” of an appeal for want of prosecution. Second, the terms of r 5603(3)(a) of the CPR suggest that a dismissal for want of prosecution will usually be accompanied by an order confirming the orders the subject of the appeal. However, it remains in the discretion of the Court as to whether a dismissal is accompanied by a confirmatory order.
In James Hardie & Coy Pty Limited v Seltsam Pty Limited [1998] HCA 78; 196 CLR 53 (Hardie) at [40] and [122], the majority held that an order made by consent that dismissed the plaintiff’s action was a final order that brought the action to an end. At [123], Callinan J observed that, in Hart at 411, Lord Denning MR had referred both to the lack of a judgment on the merits and to the interlocutory and non-substantive nature of a dismissal for want of prosecution as creating no bar to a further action based on the same facts. This observation was made for the apparent purpose of supporting the proposition that “judgment on the merits” is not the sole test of whether an order is a final order.
In Bailey v Marinoff (1971) 125 CLR 529 (Bailey), the NSW Court of Appeal had ordered that, if the appellant failed to file and serve appeal books by a stated date, then the appeal was to “stand dismissed for want of prosecution”. The appeal books were filed but not served by the relevant date. The majority (Barwick CJ, Menzies, Owen and Walsh JJ, Gibbs J dissenting) held that the appeal stood dismissed and could not be revived. At 530, Barwick CJ said:
Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed.
In Eastman v The Queen [2008] FCAFC 62; 166 FCR 579 (Eastman) at [26], the Court opined that, in the circumstances that arose in Bailey, an available course may be to set aside the perfected order on the basis that it was interlocutory.
In Eastman, the question was whether the Court had power to reopen an appeal that had already been determined on the ground that the issue of whether Mr Eastman was unfit to plead at the time of trial had not been determined on the appeal. On the appeal, the issue of unfitness had not been raised expressly, but may have been raised impliedly. At [45], the Court affirmed that an intermediate appeal court, such as the Full Court in that case, has no power to reopen an appeal once it has been determined after a hearing on the merits and the order determining it has been perfected. The Court observed that the only possible exception to that principle is when the original appeal court denied the appellant procedural fairness or failed to deal with all the grounds of appeal that were argued, but at [46] concluded that there was probably no such exception to the principle.
It is possible that, after final orders have been made, there remains a remedy for denial of procedural fairness: Burrell v The Queen [2008] HCA 34; 238 CLR 218 at [26]; Davis Samuel 2. However, the issue does not arise for determination in these proceedings; on this application, there is no issue that Burns J denied procedural fairness
Applying Bailey, I conclude that a “judgment on the merits”, while usual, is not essential to a judgment being final rather than interlocutory. Consequently, when Burns J confirmed the orders made by the primary judge, his Honour finally disposed of the appeal.
An appeal is a creature of statute. The SCA and the CPR provide no basis for an argument that an appellant can appeal more than once against the same orders. Section 37E(2)(a) of the SCA expressly states that there is no appeal to the Court of Appeal against an order of the Court of Appeal itself. The position is analogous to that in other Australian jurisdictions: see e.g. Amaca Pty Ltd v Hannell (No 2) [2011] WASCA 232; 42 WAR 224 at [27].
Alternatively, if the orders made by Burns J were interlocutory rather than final, what flows?
First, even if his Honour’s orders may be set aside on the basis that they are interlocutory orders, they stand until they are set aside. The status quo is that the appeal instituted in December 2014 stands dismissed and the Court of Appeal (as constituted by Burns J) has confirmed the orders of the primary judge.
Second, there may be no means of disturbing his Honour’s orders. Pursuant to s 37E(2)(a) of the SCA, there is no statutory appeal to the Court of Appeal against an interlocutory order of the Court of Appeal; the provision expressly excludes appeals against any order of the Court of Appeal. There is no mechanism under the SCA or the CPR permitting an appeal from a single judge of the Court of Appeal exercising the jurisdiction of the Court of Appeal under s 37J(1), other than by special leave to the High Court: Hussain v Ngep (No 2) [2015] ACTCA 42 at [10].
Even if the orders made by Burns J could be and were disturbed by the means suggested in Eastman at [26] and the original appeal could be reopened, that would not assist Mrs Endresz in the present proceedings, which seek to agitate a new appeal. The present application is not brought in the appeal proceedings that were before Burns J.
I conclude that the appeal is not competent and should be dismissed for that reason.
In the exercise of discretion, should the Court grant leave to appeal?
In any event, in the exercise of my discretion, I would not grant leave to appeal.
There is no formula for determining whether leave should be granted; application for leave should be determined by the court’s view of the demands of justice: R v Meyboom [2012] ACTCA 2; 256 FLR 450 at [57] (Meyboom). Matters relevant to the exercise of the discretion include: the length of the delay; whether there is an ‘acceptable explanation for the delay’; any prejudice to the respondent in defending the proceedings that is caused by the delay; and the merits of the proposed appeal: Meyboom at [51], citing Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 and Parker v The Queen [2002] FCAFC 133. Concerned Citizens of Canberra Inc v Chief Executive (Planning and Land Authority) [2015] ACTCA 56; 303 FLR 49 at [20]–[23] sets out a more extensive list of principles to consider in exercising the discretion.
Merits of the proposed appeal
Mrs Endresz relied heavily on an argument that the proposed appeal was meritorious.
Undoubtedly, the merits of a proposed appeal are important to a determination of whether leave to appeal should be granted.
Mrs Endresz cited Re Diplock [1948] Ch 465 as authority for the propositions that the trust funds could not be traced into her interest in Haven Hill because she was an innocent volunteer and the evidence did not establish that the funds had been expended to increase the value of Haven Hill. Further, the Commonwealth had been bound to prove those matters and should have drawn the issues to the attention of the primary judge but had failed to do so: D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 per McHugh J at [112].
The Commonwealth disputed the propositions of law advanced by Mrs Endresz and submitted that the evidence had established that trust funds had been expanded to improve the value of Haven Hill. The Commonwealth submitted that, regardless of whether it had drawn the issues to the attention of the primary judge, they had been raised in written submissions filed by Mr Cain, in which he referred to the cases of Re Diplock and Foskett v McKeown [2001] 1 AC 102 (Foskett), upon which Mrs Endresz relied to support the proposed grounds of appeal.
Even if the Commonwealth failed in its duty as a model litigant (and I am not persuaded that it did), I do not consider that, in the present circumstances, any such omission bolsters the merits of the proposed appeal grounds.
In relation to the third ground of appeal, Mrs Endresz submitted that, because the declaration of a charge is proprietary relief rather than monetary relief resulting in a judgment debt, interest cannot be assessed under the rules. Rules 1619 and 1620 of the CPR and Foskett at 127 were said to support this proposition.
Relying on Foskett, the Commonwealth submitted that, where improvements to land have been made, it is unnecessary to prove an increase in value and a charge with interest is an appropriate remedy. Interest is awarded to reflect the presumed profit received by retaining the property over time: Wallersteiner v Moir (No 2) [1975] QB 373 at 397 (per Buckley LJ). Further, in their discretion, courts often apply rates of interest instead of mercantile rates: Bullhead Pty Ltd v Brickmakers Place Pty Ltd (in liq) [No 2] [2019] VSCA 7; 58 VR 129 at [53]; Akierman Holdings Pty Ltd v Akerman (No 2) [2020] NSWSC 970 at [217]–[222].
I am satisfied that each of the proposed grounds of appeal is, at least, arguable. If Mrs Endresz succeeded on the first or second proposed ground of appeal, her success would be a complete answer to the claim against her.
However, the subject matter of the grounds of appeal was raised in the primary proceedings (albeit that it may have become lost in the myriad of issues that were raised by the multiple defendants in the course of many years of litigation) and could have been raised and argued in the original appeal. However, the grounds were not among the extensive grounds advanced in support of the original appeal.
It is contrary to the efficient administration of justice that an appellant who has failed to raise an arguable ground in their first appeal is permitted to advance the ground in a second or subsequent appeal. This is particularly so if the litigant delayed the original appeal to the extent that the delay constituted an “abuse of process”.
Delay and the reasons for delay
The extent and reasons for the delay must be considered.
It is six years since the primary judge made final orders on 21 November 2014.
It is more than four years since Burns J dismissed the original appeal for want of prosecution.
Mrs Endresz advanced the following reasons for delay:
(a)She had no active role in the earlier proceedings.
(b)The Commonwealth has delayed in enforcement.
(c)The grounds of appeal were identified only recently.
Mrs Endresz may have played no active role in the primary proceedings or the appeal, relying upon her husband and Mr Cain to prosecute matters on her behalf. However, in the decade between when the primary proceedings were instituted and the appeal was dismissed by Burns J, there was ample opportunity for Mrs Endresz to develop an active interest in the proceedings and take charge of her own affairs.
It is the failure of Mrs Endresz to act that is relevant to the exercise of the discretion, not the failure of the Commonwealth to act. The delay in enforcement by the Commonwealth has been to the benefit of Mrs Endresz in that it has allowed her to remain in the property.
The fact that the grounds of appeal were “identified” only recently to Mrs Endresz’s current solicitor is of little moment. As mentioned, the principal matters that Mrs Endresz now seeks to advance as grounds of appeal were canvassed in written submissions filed by Mr Cain in the primary proceedings.
In short, the explanation for delay advanced by Mrs Endresz is wholly inadequate to explain the extraordinary delay, both since the primary proceedings were finalised and since the original appeal was dismissed by Burns J.
Other considerations
Mrs Endresz is willing and able to pay $50,000 into court by way of security for costs of the appeal.
However, this offer has limited attraction in the context that, pursuant to current costs orders, a huge sum is owed to the Commonwealth, and none has been paid. Mrs Endresz may well be the only one of the original defendants with assets. The Commonwealth says that the current costs liabilities exceed the net value of Haven Hill and that the costs of any appeal will only further deplete the assets of Mrs Endresz.
Other than as to costs, the Commonwealth identified no specific prejudice. However, as Burns J observed more than four years ago, the Commonwealth has a strong interest in being released from the burden of future uncertainty and costs.
Mrs Endresz submitted that, in late 2019, she was diagnosed with stage four terminal cancer and she may have only six to 18 months to live. She wishes to live at Haven Hill, her family home, for the remainder of her life, obtaining respite while she undertakes palliative chemotherapy. Her daughter and son-in-law have moved to Haven Hill to provide emotional and physical support to her.
While I am sympathetic to Mrs Endresz’s situation, I consider it to be of little relevance to the exercise of my discretion. It is more relevant to the enforcement proceedings.
Orders
The application is refused.
| I certify that the preceding seventy-eight [78] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell. Associate: Date: 16 October 2020 |
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