Feiglin v Ainsworth
[2014] VSC 233
•22 MAY 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2010 3265
| ESTHER CECLIA FEIGLIN | Applicant |
| V | |
| DAVID SARGON AINSWORTH & ORS | Respondents |
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JUDGE: | ELLIOTT J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 15 MAY 2014 |
DATE OF JUDGMENT: | 22 MAY 2014 |
CASE MAY BE CITED AS: | FEIGLIN v AINSWORTH |
MEDIUM NEUTRAL CITATION: | [2014] VSC 233 |
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Practice and Procedure – Appeal from an associate judge – Application for leave to appeal out of time – Whether extension should be granted – Relevant test – Applicant an assignee of causes of action – Delay beyond applicant’s control – Injustice if extension not granted - Supreme Court (General Civil Procedure) Rules 2005 (Vic), 77.06.2(6).
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Dr J F Bleechmore | Behan Legal |
| For the Respondents | Mr S Stuckey | Dimos Lawyers |
TABLE OF CONTENTS
A.. Introduction................................................................................................................................... 1
B.. Background................................................................................................................................... 1
C.. Relevant test.................................................................................................................................. 6
D.. Consideration of the length and reasons for delay............................................................... 7
D.1... Delay generally.................................................................................................................... 7
D.2... Delay since delivery of the Primary Judgment............................................................... 8
E... Other matters............................................................................................................................... 10
E.1... Prejudice............................................................................................................................. 10
E.2... Merits of the proposed appeal........................................................................................ 10
E.3... Feiglin’s interest in the proposed appeal...................................................................... 10
F... Conclusion................................................................................................................................... 11
HIS HONOUR:
A. Introduction
The 1st plaintiff, Esther Celia Feiglin (“Feiglin”) applies to the court for an extension of time to serve a notice of appeal from a judgment delivered by an associate judge on 5 March 2013 (“the Primary Judgment”)[1]. The application is made by a summons filed on 6 August 2013.
[1]Feiglin v Ainsworth (No 2) [2013] VSC 83.
There have been interlocutory steps that have occurred after this summons was filed. It is not necessary to go into the detail. Whilst this time from 6 August 2013 until the hearing of this application is not irrelevant for the purposes of determining whether or not an extension ought to be granted, the timing of hearings and listings during this period has not been within the control of Feiglin. Although any delay may be relevant to the court’s discretion, principally, the relevant period of time to consider is from 5 March 2013 to 6 August 2013.
For the reasons that follow, the time for serving a notice of appeal from the Primary Judgment and the orders of the associate judge shall be extended to 4pm on 29 May 2014.
B. Background
This proceeding has a long history, both in relation to its underlying facts and also procedurally since the proceeding commenced. I do not propose to fully set out the background, but will provide a brief summary.
The proceeding was commenced on 15 June 2010. On 13 May 2011, the plaintiffs filed a proposed amended statement of claim. This proposed pleading first raised allegations that were the subject of the further amended statement of claim the subject of the proposed appeal. I will return to them shortly. The application for leave to amend to introduce these claims was refused by the court. On 19 September 2011,[2] the court held that the remedy sought by the 2nd plaintiff, Mark Feiglin (“the Husband”), was subject to a 6 year limitation period under s 5(2) of the Limitations of Actions Act 1958 (Vic). However, also on 19 September 2011, the court granted leave to the plaintiffs to file and serve a further amended statement of claim, and thereby to refer to additional facts and to rely on s 27 of the Limitations of Actions Act.
[2]Feiglin v Ainsworth [2011] VSC 454.
On 17 October 2011, a further amended statement of claim was filed. The new allegations included allegations of fraudulent concealment against the 1st defendant, David Sargon Ainsworth (“Ainsworth”).[3] Ainsworth is the father of Feiglin. The new allegations claim the existence of an agreement between the Husband and Ainsworth “in or about late 1990”, and breaches of that agreement.
[3]The remaining 3 defendants are companies. The further amended statement of claim refers to 4 defendants. It does not appear on the court file that a formal order has been made joining the 4th defendant. Ainsworth is the sole director and secretary of each of those companies.
On 23 November 2011, further and better particulars were provided in relation to, amongst other things, the allegations of fraud. The respondents did not accept the adequacy of those particulars.
On 25 November 2011, the respondents issued a summons seeking judgment on the causes of action the subject of the new allegations in the further amended statement of claim (“the Causes of Action”).[4] Alternatively, the summons sought that the relevant paragraphs of the further amended statement of claim be struck out. The matter was listed for hearing on 31 January 2012.
[4]These allegations are to be found in paragraphs 8L to 8Y of the further amended statement of claim.
On 5 March 2013, the associate judge delivered the judgment in relation to the hearing conducted on 31 January 2012.[5] The associate judge ordered that there be judgment for Ainsworth, together with costs, on the claims contained in paragraphs 8L to 8Y of the plaintiffs’ further amended statement of claim filed 17 October 2011.
[5][2013] VSC 83.
As may be seen from the above facts, there was a delay of some 13 months in the delivery of the Primary Judgment. While the parties were waiting for judgment to be delivered by the associate judge, a sequestration order was made on 27 September 2012, against the Husband.
The Husband has sought to have his bankruptcy annulled. A proceeding is on foot in the Federal Circuit Court in relation to this matter. That proceeding commenced on 27 June 2013. Save for some directions, it does not appear the proceeding has progressed. Certainly, at the time of hearing this application, there was no suggestion of an imminent hearing or determination of the Federal Circuit Court proceeding.
The time for a notice of appeal from a decision of an associate judge to be served is 14 days.[6] On 19 March 2013, that is on the 14th day after the Primary Judgment was delivered, a notice of appeal was served and filed in the name of the Husband (“the Previous Notice”). Feiglin has deposed, in an affidavit filed in support of this application, that the Previous Notice was served and filed on her instructions in order to seek to preserve the position of the Husband[7] until an arrangement could be made with the trustee in bankruptcy for the Husband (“the Trustee”) as to the future conduct of the proposed appeal, and also the proceeding generally.
[6]Rule 77.06.2(1)(a).
[7]Cf Adams v London Motor Builders [1921] 1 KB 495, 503.6 (Atkin LJ).
The appeal proposed by the Previous Notice was the subject of directions on 9 April 2013. At the directions hearing, orders were made, by consent, that the appellant (ie the Husband), have leave to discontinue the appeal. An order was also made for the respondents’ costs of the appeal to be paid by the Husband.
As already stated, on 6 August 2013, Feiglin filed a summons in which Feiglin, amongst other things, sought, pursuant to r 77.06.2(6) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), an extension of time to serve a notice of appeal. On the same day, an affidavit was filed in support of the summons setting out an explanation in relation to some of the history of the proceeding, including some of the events that occurred from 5 March 2013 until 1 August 2013.
On 26 November 2013, a further affidavit was filed by Feiglin, sworn the previous day, which annexed a fresh draft notice of appeal (“the Draft Notice”). The title of the Draft Notice records Feiglin as the appellant.[8] It is unnecessary to set out the grounds of appeal contained in the Draft Notice. In short, the Draft Notice seeks to raise issues concerning the applicability, or otherwise, of the Limitation of Actions Act to the Causes of Action. The Draft Notice also asserts that the associate judge failed to make certain determinations and generally erred in the exercise of the court’s discretion.
[8]This position of Feiglin is in her capacity as assignee: see par 16(8) – (15) below.
In addition to the 2 affidavits sworn by Feiglin, oral evidence was led in support of this application from the solicitor acting for Feiglin (“the Solicitor”). The relevant chronology of the evidence of the Solicitor is as follows:
(1)On 18 March 2013, the Solicitor first contacted the Trustee in regard to the Trustee’s attitude to prosecuting the appeal. A copy of the Previous Notice was sent to the Trustee.
(2)On 20 March 2013, an advice, prepared by Feiglin’s counsel, was forwarded by the Solicitor to the Trustee.
(3)On 21 March 2013, the Solicitor met with the Trustee for approximately 1 hour concerning the conduct of the appeal and the proceeding generally.
(4)On 2 April 2013, an agreement was reached that the Trustee would appoint an independent solicitor to review the file, at the cost of Feiglin.
(5)On 4 April 2013, the file was provided to the independent solicitor appointed by the Trustee.
(6)On 5 April 2013, the independent solicitor provided his response.
(7)As noted above,[9] on 9 April 2013, a directions hearing was held in the appeal and the appeal was discontinued by consent, with costs.
(8)On 12 April 2013, Feiglin instructed the Solicitor to put an offer on her behalf to purchase the Husband’s Causes of Action from the Trustee.
(9)On 17 April 2013, an offer was put to acquire the Causes of Action for the sum of $5,000 or 10% of whatever was recovered. The Trustee was invited to choose between these 2 options.
(10)On 22 May 2013, the Trustee rejected Feiglin’s offer. In substance, the Trustee conveyed that he was anxious to sell the Causes of Action, but the offer was “wholly inadequate”. The Trustee also indicated that he considered that he was obliged to obtain the market value of the Causes of Action before he could agree to any assignment.
(11)On 24 May 2013, the Solicitor wrote to the Trustee indicating Feiglin was not willing to increase her offer. The Solicitor invited the Trustee to contact the Solicitor in the event that the Trustee received a better offer.
(12)No further offer was put by Feiglin and the matter stayed in abeyance for some time.
(13)On 19 July 2013, the Trustee sent a circular to creditors in which, amongst other things, the Trustee conveyed that he proposed to accept the offer that had been made by Feiglin by 26 July 2013, unless some further and better offer was made by any creditor.
(14)On 26 July 2013 (a Friday), the offer made by Feiglin was accepted and, on the same day, a proposed deed was provided by the solicitors for the Trustee to the Solicitor.
(15)On 1 August 2013, the deed was executed and the Causes of Action were duly assigned to Feiglin.[10]
[9]At par 13 above.
[10]Clause 2 of the deed of assignment reads, “In consideration of payment by the Assignee to the Assignors of the sum of $5,000.00, which sum is payable upon the execution of this Deed, the Assignors hereby assign their right title and interest in the Action to the Assignee, effective upon the execution of this Deed and subject to the terms of this Deed.” Clause 1.1 states that “‘Action’ means any causes of action held by the Bankrupt in the Proceedings and those set out in the proposed Further Amended Statement of claim dated 17 October 2011 and which vested in the Assignors pursuant to section 58 of the Bankruptcy Act 1966.”
Under cross-examination, the Solicitor acknowledged that the Trustee was not willing to conduct the Husband’s case in the proceeding generally. On 5 April 2013, the Trustee informed the Solicitor in writing that if the Trustee were put to his election, he would decide to discontinue the proceeding on behalf of the Husband.
As to the amount offered to purchase the Causes of Action, the Solicitor accepted that Feiglin was only willing to offer a nominal sum because she understood that, unless she could persuade the court to exercise its discretion to extend the time for filing a notice of appeal, she was not purchasing “very much at all”.
The Solicitor also stated it was not his practice to bid against himself. He said it was for this reason, combined with the need to get an extension of time before any substantive rights of appeal could be exercised, that Feiglin chose to wait for the Trustee to respond with a counter offer. The Solicitor accepted that it was only when the Trustee was prepared to meet Feiglin’s offer that the assignment was agreed to.
C. Relevant test
It is well established on the authorities that the granting of an extension of time for filing a notice of appeal is far from automatic.[11] A litigant in whose favour a judgment has been given has, after the time for an appeal has lapsed, a vested interest in the judgment which “ought not to be disturbed unless there is some good reason for disturbing it”.[12]
[11]See, for example, Giurina v Owners Corporation No 1579 [2013] VSC 39, [15] (McMillan J) and Cooper v Sztainbok [2009] VSCA 73, [21] (Dodds-Streeton JA, with whom Kellam JA agreed), both citing Gallo v Dawson (1990) 93 ALR 479, 480.6 (McHugh J). See also Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257, 263.2-264.3 (McInerney J).
[12]Youngman v Melbourne Storage Co Ltd (1885) 7 ALT 53, 54.3 col 1 (Higinbotham J), referred to with approval in Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257, 263.4.
On the other hand, if there is a proper explanation for the delay and the non-compliance with the Supreme Court Rules, then the interests of justice ordinarily require an extension of time be granted.[13] That said, if the appeal would be hopeless and would clearly fail if leave were granted, then any extension would be futile and ought not be granted.[14]
[13]Slaveski v State of Victoria [2009] VSCA 6, [77] (Kellam JA, with whom Dodds-Streeton JA agreed), citing Jackamarra v Krakouer (1998) 195 CLR 516, 521 [7] (Brennan CJ and McHugh J); Luxmore Pty Ltd v Hydedale Pty Ltd (2008) 20 VR 481, 482 [3] (Maxwell P and Kellam JA).
[14]Ibid.
The issues which are enlivened on an application such as this were succinctly put recently by the Court of Appeal:[15]
The question whether the court should exercise its discretion to extend time for the filing and service of a notice of appeal involves consideration of the length and reasons for the delay, prejudice to the respondent and whether the proposed appeal so lacks merit as to be futile.
D. Consideration of the length and reasons for delay
[15]Spanovic v Carter Holt Harvey Ltd (Unreported, 2 May 2014), [4] (Ashley JA, with whom Almond AJA agreed).
D.1 Delay generally
The respondents point to the substantial delay that has occurred in this application generally. The respondents refer to the fact that the Husband initially sought to raise these claims more than 3 years ago.[16] Further, the claims relate to events that occurred in the 1990s. It was submitted by the respondents that in these circumstances, the court should be slow in granting any extension of time.
[16]See par 5 above.
Whether or not the subject matter of the Causes of Action ought to be able to be pursued in this proceeding is a substantive matter to be raised on the proposed appeal. In those circumstances, I do not consider any significant weight should be attached to the fact that the events the subject of the allegations themselves are somewhat stale. Further, although the initial application to make the amendments to the statement of claim was made more than 3 years ago, the relevant history does not suggest that Feiglin, or the Husband, have acted in breach of court orders or otherwise unduly delayed in taking the appropriate interlocutory steps. In the circumstances, any delay prior to the delivery of the Primary Judgment is not as significant to the outcome of this application as the period after the delivery of the Primary Judgment.
D.2 Delay since delivery of the Primary Judgment
As will be apparent from the background set out above,[17] if the Primary Judgment had been handed down at any time prior to 13 September 2012,[18] then the Husband would have been capable of serving a notice of appeal within time in his own right. Accordingly, the circumstances in which Feiglin found herself, together with the Husband, were, in part, due to the delay of the court in delivering the Primary Judgment. Such matters are plainly beyond the control of Feiglin, and the Husband.
[17]See pars 9-12 above.
[18]That is, 14 days before the sequestration order was made.
Given the status of the Husband as a bankrupt at the time the Primary Judgment was delivered, the ability of Feiglin to act promptly and within time was severely curtailed. Largely, the ability to prosecute the appeal in an orderly and timely manner was in the hands of the Trustee. However, the Trustee was also in a delicate position.
There was no suggestion the Trustee had the funds to prosecute the Causes of Action himself. The fact that he insisted on being put in funds to obtain independent advice on the Causes of Action suggests otherwise. Further, the Causes of Action had a value to them and, pursuant to his obligations and duties as a Trustee, the Trustee was undoubtedly keen to ensure that he did not sell the Causes of Action at a substantial undervalue. In order to ascertain the market price for the Causes of Action, it is likely that some period of time was required to test “the market”. The actions of the Trustee reflect this position. Having allowed approximately 5 months to pass, it was apparent to the Trustee that the offer made by Feiglin was the best offer that could be achieved. There is nothing in the materials to suggest the Trustee was derelict in his performance, and no submission was made to this effect.
Criticism was made by the respondents concerning the amount of the offer by Feiglin. It was submitted that the amount reflected the poor prospects of success of the Causes of Action, coupled with Feiglin’s realisation that there was a substantial risk that an extension of time would not be granted.
In circumstances where the Trustee made it clear he was not willing to assign the Causes of Action until a market price had been ascertained, and where an offer had been made promptly by Feiglin, coupled shortly thereafter with an invitation to further negotiate if a better offer were made to the Trustee, little, if any, valid criticism can be made of Feiglin’s conduct. Indeed, as events transpired, Feiglin was proved correct in not offering any more than $5,000 or 10% of the proceeds for the Causes of Action. This proved to be the best the Trustee could achieve in selling the Causes of Action.
Furthermore, there is nothing on the evidence to suggest that if Feiglin had offered a higher purchase price for the Causes of Action, the Trustee would have acted more quickly. Even with a higher offer it may have taken some months before the Trustee would, or perhaps could, make a proper assessment of the appropriate price. The respondents did not submit (quite properly, in my view) that the court should draw any adverse inference by reason that the Trustee did not give evidence in support of the application.
In the circumstances, the conduct of Feiglin did not give rise to any material delay that could be attributed to any fault on Feiglin’s part.
Once the Causes of Action were assigned, Feiglin acted promptly to file an application to extend the time to serve a notice of appeal. There was no submission by the respondents that there was any delay in this regard.
E. Other matters
E.1 Prejudice
No submission was made on behalf of the respondents that they had suffered any prejudice beyond Ainsworth losing a judgment in which he had a vested right.
E.2 Merits of the proposed appeal
As to the merits of the proposed appeal, the respondents made some potentially persuasive submissions concerning Feiglin’s prospects on appeal. That said, on the more limited basis that the merits were argued, namely for the purpose of this application, I cannot be satisfied that the appeal is plainly hopeless and is bound to fail. Given the subject matter that needs to be considered by reason of the proposed grounds of appeal, it would be unsatisfactory to seek to form a concluded view without full argument on the merits, and a careful consideration of the issues. As it is highly likely I will hear the appeal, I propose to say nothing more presently on the merits of the proposed appeal.
E.3 Feiglin’s interest in the proposed appeal
The respondents submitted that there would be no injustice to Feiglin if the extension were refused. They contended that at the time of the assignment of the Causes of Action, Feiglin could have no greater interest in the Causes of Action than the interest she acquired pursuant to the assignment. The respondents emphasised that, at the time of the assignment, the Causes of Action had already been the subject of a judgment in which the claim was dismissed, and the time for appealing had lapsed.
If the Causes of Action were the only piece of litigation between the parties, there would be some force in this submission. However, the proceeding involves other claims made by Feiglin and a counterclaim made by the 3rd respondent. The relief sought in the counterclaim includes an order for possession of the family home of Feiglin and the Husband. Accordingly, if Feiglin is able to succeed in prosecuting the Causes of Action this may have the result in Feiglin, and the Husband, being able to, at the very least, maintain possession of the family home. In these circumstances, Feiglin cannot be properly characterised as a mere intermeddler with no real interest in the Causes of Action beyond seeking to profit from them.
Accordingly, I do not accept that a refusal of the extension of time would cause no injustice.
F. Conclusion
Feiglin was placed in a situation concerning the Husband’s ability to serve a notice of appeal for reasons beyond her control. The delay in serving the notice of appeal after the time had lapsed was also, largely, beyond her control. Once matters were within Feiglin’s control, she acted promptly. Notwithstanding the delay in the proceeding generally, in these circumstances, for the reasons stated, an extension of time will be granted to serve a notice of appeal within 7 days. I will also make directions for the hearing of the appeal so that it may be heard promptly.
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