Epicastle Pty Ltd & Lewis v Hardy

[1992] QCA 160

IN THE COURT OF APPEAL	[1992] QCA 160
SUPREME COURT OF QUEENSLAND

C.A. No. 2624 of 1985.

Brisbane

Before Fitzgerald P.
McPherson J.A.
Demack J.

BETWEEN:

EPICASTLE PTY LTD

(First Plaintiff) Respondent

- and -

SHANE GEORGE LEWIS

(Second Plaintiff) Respondent

AND:

PETER WILLIAM HARDY (a bankrupt)

(First Defendant)

- and -

THE OFFICIAL TRUSTEE IN BANKRUPTCY
as the Trustee of the property of
PETER WILLIAM HARDY (a bankrupt)

(Second Defendant) Respondent

Consolidated with Writ 3764 of 1985

BETWEEN:

ROCKDEL PTY LTD

(Plaintiff) Appellant

AND:

SHANE GEORGE LEWIS

(Defendant) Respondent

JUDGMENT - THE COURT

Delivered the Twenty-Fifth day of June 1992

MINUTE OF ORDER
Appeal allowed. Vary order made on 27 June 1991 by inserting after the word "is", and before the
word "null", in the paragraph numbered 3 in that order the words "as between the parties to action no.
2624 of 1985".
CATCHWORDS
PRACTICE - PARTIES TO ACTIONS - Order made for consolidation of actions with 1 common party
- Whether true consolidation - whether definition in 2nd action bound by consent order in 1st action

- whether defendant consented to terms of order - whether actions treated as separate by parties.

Counsel: Dutney Q.C. for the appellant

McHugh for the respondents Epicastle Pty Ltd and Lewis Egan for the respondent

The Official Receiver

Solicitors:	R G Kilner & Black N R Barbi Morris Fletcher & Cross
Hearing date:	17 June 1992

IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND

C.A. No. 2624 of 1985.

Brisbane

Before	Fitzgerald P. McPherson J.A. Demack J.
BETWEEN:

EPICASTLE PTY LTD

(First Plaintiff) Respondent

- and -

SHANE GEORGE LEWIS

(Second Plaintiff) Respondent

AND:

PETER WILLIAM HARDY (a bankrupt)

(First Defendant)

- and -

THE OFFICIAL TRUSTEE IN BANKRUPTCY
as the Trustee of the property of
PETER WILLIAM HARDY (a bankrupt)

(Second Defendant) Respondent

Consolidated with Writ 3764 of 1985

BETWEEN:

ROCKDEL PTY LTD

(Plaintiff) Appellant

AND:

SHANE GEORGE LEWIS

(Defendant) Respondent

JUDGMENT - THE COURT

Delivered the twenty-fifth day of June 1992

This appeal involves two actions in the Supreme Court. In the first of them, which

is no. 2624 of 1985, Epicastle Pty Ltd and Shane George Lewis are the plaintiffs.
Originally the only defendant in the action was Hardy; but when he became bankrupt the

Official Trustee was added as co-defendant. In the second action no. 3764 of 1985 the

plaintiff is Rockdel Pty Ltd and the defendant is Shane George Lewis.

According to the statement of claim delivered in the second action, the material

facts are that Lewis was registered proprietor of a lot in a building units plan. He executed

a bill of mortgage over that lot, which was registered on 22 April 1985 as no. H566200.

The bill of mortgage was in favour of Peter William Hardy, who in July 1985 executed and

delivered to Rockdel Pty Ltd an instrument transferring his interest as mortgagee. It was

lodged at the Titles Office, but before it was registered Lewis lodged a caveat preventing

its registration.

In both his defence in the second action and his statement of claim in the first, Lewis

alleged fraud on the part of Hardy in procuring execution of the bill of mortgage H566200

that was later registered in his favour. According to these allegations, Hardy was Lewis’s

solicitor and induced Lewis to execute the bill of mortgage by false assertions about its

intended effect, and then fraudulently filled in his own name as mortgagee.

After pleadings had been delivered, various interlocutory steps were taken in the

actions. Then in August 1990 there were discussions between representatives of the

plaintiffs and of the defendants in the first action with a view to settlement of that action. It

was agreed that a form of consent order should be prepared and placed before a Judge

and that his approval to the compromise should be obtained in accordance with the

provisions of the Bankruptcy Act 1966. In due course the matter came before Moynihan

J in Chambers on 27 June 1991, when his Honour made the order that is the subject of this

appeal. Disregarding recitals and other matters with which it deals, the order made on that

occasion declared the bill of mortgage H566200 to be "null, void and of no effect" as being

"a sham procured by the fraud" of the first defendant Hardy. The order went on to direct that the second defendant (who was the Official Trustee) execute documents and do things

necessary to effect a release of that bill of mortgage. It also ordered that the first action

(No. 2624 of 1985) be adjourned to the settlement list; that there be no order as to the

costs of that action; and that Lewis as second plaintiff in that action be given liberty to

apply.

The form of the order of 27 June 1991 presents some problems which it is not

necessary to investigate on this occasion. Its relevance for present purposes is that when,

shortly after the order had been made on 27 June 1991, the second action no. 3764 of

1985 came to trial before Byrne J in the Supreme Court, counsel for Lewis applied for

leave to amend the defence in the action so as to plead the order as an answer to the claim

of the plaintiff Rockdel in that action. Trial of the action now stands adjourned pending this

appeal, which Rockdel has brought against the order made by Moynihan J.

The fundamental question is whether Rockdel is bound by the order made on 27

June 1991; and whether, if it is not bound, the order should be varied so as to make its

effect plain beyond argument.

In support of his contention that Rockdel is bound by the order, Mr McHugh of

counsel for the respondents Epicastle and Lewis based his submissions on two grounds.

He said that Rockdel was a party to the action in which the order was made; and, that

counsel for Rockdel had appeared at the hearing at which the order was made on 27 June

1991 and had refrained from opposing it.

Rockdel was not a party to the first action No. 2624 of 1985. It was nevertheless

submitted that the order in question was made not only in that action but also in the second

action no. 3764 of 1985, to which Rockdel was a party. This was said to be apparent from

the heading to the order, which consists of the title to the first action, followed by the words

"Consolidated with writ 3764 of 1985" and then the title to the second action. On appeal we were provided with a copy of an order made by Carter J on 10 December 1986. It

recites hearing counsel for the plaintiffs in each of the actions, and proceeds to order that

the two actions nos. 2624 of 1985 and 3764 of 1985 be consolidated.

There are some obvious difficulties in treating this order of 10 December 1986 as

bringing about consolidation, in the true sense, of the two actions: see Cameron v. McBain

[1948] V.L.R. 245; Bolwell Fibreglass Pty Ltd v. Foley [1984] V.R. 97, 100. Those

difficulties are compounded by the fact that, although in each of the two actions there are

quite different plaintiffs with interests that are directly opposed, the order purports to give

carriage of the consolidated proceedings to the plaintiffs in the first action.

In the circumstances disclosed in the present case, it is scarcely possible to regard

the order of 10 December 1986 as more than a direction that the two actions be heard

together, which is another but more limited purpose which an order for "consolidation" is

sometimes designed to achieve: see Young V. Young [1954] Q.W.N. 27. What tends to

confirm that it was to be a consolidation only in this limited respect is that there were

additional and distinct issues in the first action in which only the plaintiff Epicastle, and not

Rockdel, was interested; and also that the parties themselves plainly viewed the order in

this limited way. In the end what is decisive against a wider view of its effect is that the

order made by Moynihan J on 27 June 1991 expressly directed adjournment to the

settlement list only of the first action no. 2624 of 1985 to proceed to trial in the ordinary way.

After the order had been made on 27 June 1991, Lewis actively participated in the second

action no. 3764 of 1985, treating it as separate from the first both by appearing to defend

it at the trial before Byrne J and by applying to amend his defence at that hearing.

It is therefore not possible to regard Rockdel as bound by the order made on 27

June 1991 simply because the second action, to which Rockdel was a party, had

previously been consolidated with the first action in which that order was made. From there Mr McHugh turned his attention to the conduct of counsel for Rockdel when the order was

made by Moynihan J on 27 June 1991. On that occasion Rockdel was represented by Mr

Ponder of counsel. His appearance at that hearing is explained by the fact that solicitors

for Rockdel had been served with a copy of the summons together with the draft order that

was sought. It does not follow that Rockdel would be bound by the order simply by

appearing at the hearing at which the order was made. Indeed, it was only Hardy and the

Official Trustee, and not Rockdel, who were named as respondents to the summons.

Although Mr Ponder’s appearance before Moynihan J is recited in the order itself, it is not

suggested that he consented on behalf of Rockdel to the order being made. The order is

stated to have been made by consent only of Epicastle and Lewis and the Official Trustee.

In fact, it is common ground that what Mr Ponder said to his Honour was that his client was

not a party to the action in respect of which the order was being made, and did not consent

to the order, but did not or could not oppose it.

It is quite impossible to extract from what was said at the hearing that Rockdel by

its counsel agreed to the order made on that occasion; or that it so conducted itself as to

lead the others who were present to believe that it was consenting to be bound by that

order. That would be quite contrary to what was said by Mr Ponder. We were pressed with

the submission that prior to the hearing there had been consultation among counsel for the

parties, in which certain provisions had, in deference to Mr Ponder’s wishes, been omitted

from the draft order in its original form. The suggestion was made that in some way this

meant that Rockdel by its counsel had agreed to compromise its claim in action no. 3764

of 1985 on the terms of the orders to be made in action no. 2624 of 1985. Even if it were

possible to find that an agreement of compromise had been made - and we are very far

from thinking that it was - it is plain that Mr Ponder, in announcing as he did at the hearing

that he did not consent to the order being made, could only be considered as repudiating that agreement. In that event, the only course open to the other parties would have been

to insist that the order be stated to be made with the consent of all parties represented by

counsel before the Chamber Judge. Instead of doing that, they kept silent and so

acquiesced in what Mr Ponder said. They cannot now be heard to say that the order was

made with the consent of Rockdel by its counsel, or that Rockdel is bound by the order that

was made on that occasion.

In these circumstances it might be enough simply to dismiss the appeal leaving

these reasons as a sufficient intimation that the order made on 27 June 1991 does not bind

Rockdel as plaintiff in action no. 3764 of 1985. However, it was agreed by all parties that,

in the event of our reaching that conclusion, the order appealed from should be varied so

as to make it clear that it applied only as between the parties to the first action.

Accordingly, the appeal will be allowed to the extent of varying the order made on 27 June

1991 by inserting after the word "is", and before the word "null", in the third-last line of the

paragraph numbered 3 in that order the words "as between the parties to action no. 2624

of 1985".

The respondent Lewis is ordered to pay the costs of and incidental to this appeal

of the appellant Rockdel Pty Ltd. and the respondent The Official Trustee in Bankruptcy.