Fewin Pty Limited v Prentice (No 2)

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FEDERAL COURT OF AUSTRALIA

Fewin Pty Limited v Prentice (No 2) [2019] FCA 53

File number: NSD 484 of 2017
Judge: MARKOVIC J
Date of judgment: 31 January 2019
Catchwords: PRACTICE AND PROCEDURE – whether interlocutory orders should be set aside pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) and r 39.05(c) of the Federal Court Rules 2011 (Cth) – application dismissed.
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 23, 53

Federal Court Rules 2011 (Cth) rr 39.05(c), 41.10

Cases cited:

Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 4) [2013] FCA 318

Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44

Fewin Pty Limited v Prentice [2018] FCA 852

Keynes v Rural Directions Pty Ltd (No 4) [2011] FCA 304

Luo v Zhai(No 6) [2016] FCA 805

Patel v Minister for Immigration and Citizenship (No 4) (2012) 208 FCR 128

Date of hearing: 17 August 2018
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 50
Counsel for the Applicants: Mr J Zmood
Solicitor for the Applicants: Murphy Lyons
Counsel for the Respondent: Ms M Castle
Solicitor for the Respondent: Gillis Delaney

ORDERS

NSD 484 of 2017
BETWEEN:

FEWIN PTY LIMITED ABN 64 051 132 453

First Applicant

RONALD MICHAEL COSHOTT

Second Applicant
AND:

MAXWELL WILLIAM PRENTICE

Respondent

JUDGE:

MARKOVIC J

DATE OF ORDER:

31 JANUARY 2019

THE COURT ORDERS THAT:

1.The interlocutory application filed by the applicants on 12 July 2018 be dismissed.

2.The applicants pay the respondent’s costs. 

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

MARKOVIC J:

  1. On 7 December 2017 Maxwell William Prentice, the respondent to this proceeding, filed an interlocutory application seeking a stay of the proceeding until costs of $189,888 ordered in proceeding NSD1222/2015 (Costs Order) were paid or, in the alternative, that any leave that is granted to the applicants, Fewin Pty Limited (Fewin) and Ronald Michael Coshott (Mr Coshott), to file their proposed amended statement of claim be conditional upon the payment of those costs into Court (Stay Application).

  2. The Stay Application was heard on 18 December 2017, together with an application made by the applicants to amend their statement of claim.  At the parties’ request judgment on the Stay Application was reserved until a date after a Full Court of this Court delivered its judgment in proceeding NSD1137/2017 in which Mr Coshott and Robert Coshott appealed the Costs Order (Full Court Judgment).

  3. Following the delivery of the Full Court Judgment, on 8 June 2018 I made orders, among others, that pursuant to r 26.15 of the Federal Court Rules 2011 (Cth) (Rules) this proceeding be stayed until the applicants pay the Costs Order and that the applicants pay the respondent’s costs of the Stay Application (June 2018 Orders):…

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Details
Case
[2019] FCA 53
Decision Date

CaseChat Overview and Summary

The case of Fewin Pty Limited v Prentice (No 2) involves an application by the applicants to set aside interlocutory orders made by the Court on 8 June 2018. The applicants sought to amend their statement of claim and set aside the orders that this proceeding be stayed until the applicants paid a Costs Order and that the applicants pay the respondent’s costs of the Stay Application. The Full Court of the Federal Court of Australia had previously delivered a judgment in a related proceeding, NSD1137/2017, which influenced the Court’s decision in this case. The primary issue before the Court was whether the interlocutory orders should be set aside under section 23 of the Federal Court of Australia Act 1976 (Cth) and rule 39.05(c) of the Federal Court Rules 2011 (Cth).

The Court considered whether the June 2018 Orders were inconsistent with Order 3 of the NSD786/2015 Orders. The Court held that the applicants had not demonstrated good reason to set aside the June 2018 Orders. The Court emphasised that the applicants had the opportunity to lead evidence and make submissions in relation to the Stay Application, and that the June 2018 Orders, being interlocutory, carried an element of finality in relation to the issue with which they were concerned. The Court rejected the applicants' reliance on Patel v Minister for Immigration and Citizenship (No 4) (2012) 208 FCR 128, as the circumstances of this case did not involve orders for the filing of further evidence that were not brought to the Court’s attention.

Ultimately, the Court dismissed the interlocutory application filed by the applicants on 12 July 2018 and ordered that the applicants pay the respondent’s costs. The Court’s reasoning was grounded in the principle that the applicants needed to demonstrate good reason to set aside the June 2018 Orders, a burden which they had not met. The decision underscores the importance of following proper procedural steps when seeking to set aside interlocutory orders in the Federal Court of Australia.

ORDERS:
1. The interlocutory application filed by the applicants on 12 July 2018 be dismissed.
2. The applicants pay the respondent’s costs.

Orders

Orders of the court

1. The interlocutory application filed by the applicants on 12 July 2018 be dismissed.

2. The applicants pay the respondent’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The Stay Application was heard on 18 December 2017, together with an application made by the applicants to amend their statement of claim. At the parties’ request judgment on the Stay Application was reserved until a date after a Full Court of this Court delivered its judgment in proceeding NSD1137/2017 in which Mr Coshott and Robert Coshott appealed the Costs Order (Full Court Judgment). Following the delivery of the Full Court Judgment, on 8 June 2018 I made orders, among others, that pursuant to r 26.15 of the Federal Court Rules 2011 (Cth) (Rules) this proceeding be stayed until the applicants pay the Costs Order and that the applicants pay the respondent’s costs of the Stay Application (June 2018 Orders): see Fewin Pty Limited v Prentice [2018] FCA 852 (Fewin v Prentice). On 12 July 2018 the applicants filed an interlocutory application seeking an order pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 39.05(c) of the Rules that the June 2018 Orders be set aside.BACKGROUND The relevant background to the making of the June 2018 Orders is set out at [4]-[10] and [47]-[61] of Fewin v Prentice. The following additional matters are relevant to the present application. On 26 October 2017 in proceeding NSD786/2015 between Mr Coshott and Fewin as appellants and Mr Prentice as respondent the Court made an order granting leave to Mr Coshott and Fewin for the issue of a writ for levy of property in the form of the draft submitted (Writ). On 14 November 2017 the Sheriff of New South Wales issued a notice of custodian of seizure purporting to seize Mr Prentice’s sailing vessel known as “Ticket of Leave” located at the Royal Sydney Yacht Squadron at Kirribilli. On 15 November 2017 Mr Prentice lodged an interim application in proceeding NSD786/2015 (Interim Application) seeking orders that the execution upon the Writ be stayed pending the determination of the Interim Application and that the Writ be set aside. The Interim Application was set down for hearing on 30 April 2018 before his Honour Justice Lee. Leading up to the hearing Lee J made a number of orders, including on 9 February 2018 an order requiring Mr Prentice to provide “a schedule describing and summarising the nature, status and orders in all extant proceedings which are related to these proceedings” (February Order). It is not clear what document was provided to his Honour in compliance with the February Order. However, in evidence before me were two documents which I understood were provided to Lee J for the purposes of the Interim Application:(1)the first was a document titled “Bankrupt estate of Robert Gilbert Coshott Reconciliation of costs orders and interest calculation To 7 February 2018” (Costs Orders Reconciliation). The Costs Orders Reconciliation at item 7 included the Costs Order and showed interest calculated on that order but did not include any reference to this proceeding; and(2)the second was a document titled “Briefing Document as aid to Justice Lee and not intended to be proof of any underlying fact prepared on behalf of Maxwell William Prentice” (Briefing Document) (in relation to which see [18] below).

Ratio Decidendi

Legal Principle Established

The applicants submitted that, in contrast, they had taken steps to bring the NSD786/2015 Orders to my attention before the June 2018 Orders were made by filing the Lyons Affidavit. They contended that upon doing so the Lyons Affidavit became part of the Court record and, had the Court been properly notified of its existence, it could have considered it prior to delivering judgment. While that did not occur, the applicants contended that the evidence is relevant and that the Court should take account of it and rely on it as a basis to set aside the June 2018 Orders.CONSIDERATION Whether the June 2018 Orders ought to be set aside depends on whether the June 2018 Orders are inconsistent with Order 3 of the NSD786/2015 Orders. In considering that issue, the applicants urge the Court to consider the context in which the NSD786/2015 Orders were made. While the overriding principle dictating the exercise of the discretion under r 39.05(c) is the interests of justice, what that will require will vary according to the circumstances of each case. Here the parties had the opportunity to lead evidence and make submissions in relation to the Stay Application after which judgment was delivered. Although the June 2018 Orders are interlocutory, given the circumstances in which they were made and the application which they resolve, they are not merely procedural. In addition, they carry with them an element of finality in relation to the issue with which they are concerned. Against that background, in my opinion, it falls to the applicants to demonstrate that there is good reason to set them aside. Before proceeding further to consider whether the applicants have demonstrated that is so, I wish to address the Lyons Affidavit. That affidavit was filed electronically prior to the delivery of judgment. However, as I have already observed, it was not at that time served on Mr Prentice and no application was made to the Court by the applicants to reopen their case to rely on the Lyons Affidavit. To the extent it may be have been suggested, albeit faintly, that in those circumstances the Court ought to have been aware of and have regard to the Lyons Affidavit in determining the Stay Application, that suggestion is rejected. The applicants relied on Patel v Minister for Immigration and Citizenship (No 4) (2012) 208 FCR 128 (Patel). In that case the appellant had emailed submissions to a Deputy Registrar of the Court but, for reasons which were unexplained, those submissions were not brought to the attention of the trial judge nor placed on any part of the Court file, including by lodgement in accordance with the Rules, before dispositive orders were made. In those circumstances, after considering the Court’s power to do so and the relevant authorities, Collier J held at [45] that the Court had the power to, and should, reopen its decision made on the assumption that no submissions had been filed by the appellant and should consider the appellant’s submissions. In contrast to Patel, this was not a case where orders had been made for the filing of further evidence and, in compliance with such orders, material had been delivered to the Court which was not brought to my attention. Here, having heard the application over the course of half a day, judgment was reserved. If the applicants wished to rely on further evidence, it was incumbent on them to make such an application and give notice to Mr Prentice of their intention to do so. While the Lyons Affidavit, having been filed, may have formed part of the Court’s file maintained for the purpose of the proceeding, it did not, absent such an application being successfully made, form part of the evidence to which the Court would have regard for the purpose of determining the Stay Application.