Famel Pty Ltd v Burswood Management Ltd

[1988] FCA 610

Re: FAMEL PTY. LTD and STEVEN P.H. LUNN
And: BURSWOOD MANAGEMENT LIMITED; DALLAS REGINALD DEMPSTER; LIM KOK THAY,
WESTERN AUSTRALIAN TRUSTEES and RIDER HUNT & PARTNERS
No. WAG 121 of 1988
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Practice and Procedure - application for damages for misleading and deceptive conduct, fraud and breach of fiduciary duty - motion to strike out pleadings - direction to file outline of submissions - application to Full Court for leave to appeal from direction - motion for stay of directions pending hearing of application - application for leave and motion without merit - motion dismissed.

Federal Court Rules O.52 r.17; O.10 r.1

Supreme Court of Western Australia Practice Direction No. 1 of 1988

HEARING

PERTH

#DATE 20:10:1988

Counsel for the Applicant: Mr D. Stone

Solicitors for the Applicant: Northmore Hale Davy & Leake

Counsel for the First, Second and Third Respondents: Mr D. Bishop

Solicitors for the First, Second and Third Respondents: Robinson Cox

Counsel for the Fourth Respondent: Mr Mendelow

Solicitors for the Fourth Respondent: Parker & Parker

Counsel for the Fifth Respondent: Mr J. Ley

Solicitors for the Fifth Respondent: Freehill Hollingdale & Page

ORDER

On the first, second and third respondents' motion dated 18 October 1988:

1. The motion be dismissed. 2. The first, second and third respondents pay the costs of

the motion.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This action arises, it is said, out of the issue in 1985 of a prospectus inviting members of the public to subscribe for units in the Burswood Property Trust. According to the statement of claim, the issue of the prospectus was to raise $50,000,000 as a contribution to the capital requirement of $210,000,000 for the design, acquisition and establishment of the Burswood Resort complex embodying a casino, hotel, convention/cabaret centre, exhibition/sports/entertainment complex and a recreation centre.

1. The applicants, who evidently subscribed for and were allotted units and options in the Burswood Property Trust, say that they relied upon statements in the prospectus relating to construction costs of the project which were misleading and deceptive, were made fraudulently and in breach of the fiduciary duty owed to them by the first and fourth respondents. They claim various forms of relief cumulatively and in the alternative, including rescission of the contract of allotment, rectification of the register of the trust, repayment of the moneys subscribed with compound or simple interest, damages, exemplary damages and/or compensation. The applicants name as respondents, Burswood Management Limited; two directors, Messrs. Dempster and Thay; Western Australian Trustees Limited and the quantity surveyors, Rider Hunt & Partners.

2. The application was filed on 25 August 1988. When the first directions hearing came on, on 19 September, the respondents foreshadowed their intention to file motions seeking security for costs and for an order striking out the statement of claim. I then gave directions that they were to file any such motions with supporting affidavits, on or before 3 October. Affidavits in reply were to be filed by 10 October. Those motions were to be made returnable at a date and time to be fixed by the Registrar. In the event, they have been filed and allocated a hearing date on 25 October.

3. On the motion of the applicants' on 11 October, I directed that the first, second and third respondents do, on or before 18 October 1988, file and deliver an outline of their submissions in relation to the application to strike out the statement of claim and/or parts thereof, and that the applicants do, on or before 21 October, file and deliver an outline of their submissions in reply to that motion. The costs of the motion requiring the delivery of those outlines were to be in the strike out motion.

4. On 18 October, which was the date upon which they were required by the order to file and deliver an outline of their submissions, the first, second and third respondents filed a motion seeking leave to appeal to the Full Court from my interlocutory order given on 11 October and to which I have already referred. It was made returnable before the Full Court, although no date has been fixed for its hearing. On the same day they filed another motion seeking orders in the following terms:
   

"1. The time for service of this motion be abridged.

2. The hearing of the First, Second and Third Respondents' application for leave to appeal against the interlocutory order of Mr. Justice French given on 11 October 1988 at Perth be expedited.

3. The application referred to in paragraph 2 hereof be transferred from the Perth Registry to such other Registry of the Court as will permit its prompt hearing.

4. The said interlocutory judgment be stayed pending the hearing and determination of the said application for leave to appeal."

This motion was supported by an affidavit sworn by a solicitor employed by the firm acting for the first, second and third respondents. He referred to the history of proceedings that I have already outlined and summarised argument which had been put, in opposing the order for the filing of outlines. That summary was in the following terms:

"(a) the first, Second and Third Respondents' application to strike out the Statement of Claim was not unusual or extraordinary and that the circumstances did not warrant the cost of preparing and serving written submissions;

(b) the application to strike out should be dealt with in the normal adversarial manner which should not require the serving of written submissions prior to the hearing of the application."

The affidavit went on to indicate the grounds of the proposed appeal from my order which were:

"(a) the Court has no power to make the order made;

(b) alternatively if the Court has the power to make such an order, the making of such order constituted a wrong exercise of the discretion to do so."

And then at para. 9 says:

"9. The First, Second and Third Respondents do not wish

to delay the prosecution of this action and therefore wish to have the Notice of Motion for Leave to Appeal heard as soon as possible and seek to have it heard by the Full Court at any place at which the Court sits and at which it could be heard promptly."

In his submissions before me today in support of the motion, counsel said his clients were of the opinion that the issue involved was an important matter involving the practice and procedure of the court and that the decision to seek leave to appeal had not been taken lightly and only after counsel's advice. In substance, the stay order was sought on the basis that if it were not granted, the appeal would become moot. Neither the fourth nor the fifth respondents made any submissions on the matter. The motion was opposed by the applicants.

1. In making that opposition, Mr Stone, for the applicants, indicated that so far as the motion sought a stay, it was misconceived if it relied upon 0.52 r.17. If 0.52 r.17 is not applicable, and it may not be, given that there is no appeal but merely an application for leave to appeal, I am satisfied that I would be able to vary the order previously made under the provisions of 0.10 r.1 relating to the power of the court to give directions with respect to the conduct of the proceeding as it thinks proper. In my opinion, however, the motion put by the first, second and third respondents, is entirely without merit. Indeed, in my view, the procedure that they propose and the application for leave to appeal constitute the kind of tactic which does nothing to inspire public confidence in the administration of justice or the reputation of the legal profession. There is no important question at all involved in a direction that they file and deliver an outline of submissions on a strike out motion. The terms of the order require only an outline and that is a practice followed in the High Court, the State Supreme Court and in this Court in relation to Full Court appeals. Indeed, as it happens, in the 24 hours that elapsed between the oral delivery of these reasons and their publication in writing, the Chief Justice of the Supreme Court of Western Australia has promulgated Practice Direction No. 1 of 1988 which requires, inter alia, the filing and service of typed outlines of submission two days prior to the hearing of any cause or matter in the court or in judge's chambers. In any event, I have no doubt that 0.10 r.1 authorises the making of an order of this kind and the suggestion that it imports some question of principle which would require the delay of these proceedings is, to put it kindly, if colloquially, nonsense in legal drag.

2. For those reasons, I propose to dismiss the motion. I now turn to the question of the first, second and third respondents non-compliance with the order which I made on 11 October. I appreciate that the failure to file the submissions is, no doubt, linked to their desire to seek the stay, but I will now require that they file the outline by no later than close of business tomorrow.