Hillier v Martin (No 8)

Case [2021] FCA 1272

FEDERAL COURT OF AUSTRALIA

Hillier v Martin (No 8) [2021] FCA 1272

File number: SAD 113 of 2020
Judgment of: CHARLESWORTH J
Date of judgment: 19 October 2021
Catchwords:

PRACTICE AND PROCEDURE – party in default of orders requiring the filing of a defence –defaulting party failing to apply for extensions of time before previous deadlines passed – defaulting party subject to a self-executing order limiting defaulting party’s participation in the trial if no application for an extension of time made in accordance with an order of the Court – no adequate explanation for past defaults – application of s 37M(3) of the Federal Court of Australia Act 1976 (Cth) – consideration of the outcome that best promotes the overarching purpose of the Court’s civil practice and procedure provisions – consideration of the interests affected by the Court’s orders in circumstances where the defaulting party is a trustee company – defaulting party denied relief

PRACTICE AND PROCEDURE – application for an order restraining a person from acting as a company’s lawyer in a proceeding – person enrolled as a practitioner of a court of a State – person not holding a current practising certificate – meaning of the word “lawyer” as defined in s 4 of the Federal Court of Australia Act 1976 (Cth) – person having personal pecuniary interest in the outcome of the proceedings – person having conflict of professional duties and personal interests – application allowed

Legislation:

Federal Court of Australia Act 1976 (Cth) ss 4, 23, 37M, 37N, 37P, 43

Federal Court Rules 2011 (Cth) rr 1.32, 4.01, 4.03, 9.05, 16.51

Legal Practitioners Act 1981 (SA)

Legal Profession Act 2008 (WA)

Legal Professional Conduct Rules 2010 (WA) rr 33, 42

Cases cited:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27

Hillier v Martin (No 3) [2021] FCA 709

Hillier v Martin (No 6) [2021] FCA 1009

Hillier v Martin (No 7) [2021] FCA 1221

Lazarus Estates Ltd v Beasley [1956] 1 QB 702

Prodata Solutions Pty Ltd v South Australian Fire and Emergency Services Commission (No 3) [2020] FCA 1210

Rozenblit v Vainer (2018) 262 CLR 478

Shaw v Buljan [2016] FCA 829; 153 ALD 252

Sheraz Pty Ltd v Vegas Enterprises Pty Ltd (2015) 48 WAR 93

Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 175
Date of last submissions: Applicant:  13 October 2021
Second Respondent:  14 October 2021
Date of hearing: 29 September 2021 and 11 October 2021
Counsel for the Applicant: Mr R Whitington QC with Ms H Doyle
(29 September 2021)
Counsel for the Applicant: Mr D O’Leary with Ms H Doyle (11 October 2021)
Solicitor for the Applicant: Sykes Bidstrup
Counsel for the First Respondent: Mr Williams (29 September 2021)
Counsel for the First Respondent: Mr S Ower SC (11 October 2021)
Solicitor for the First Respondent: Norman Waterhouse
Counsel for the Second Respondent: Mr T Martin
Counsel for the…

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Details
AGLC
Hillier v Martin (No 8) [2021] FCA 1272
Case
[2021] FCA 1272
Decision Date

CaseChat Overview and Summary

In Hillier v Martin (No 8), the parties were engaged in a legal dispute in the South Australian Supreme Court. The case involved two primary issues concerning the defence of the proceedings by the second respondent, Nordburger Operations Pty Ltd, which will be referred to as the Defence issue and the Representation issue. Mr James Hillier, the applicant, argued that Nordburger Operations Pty Ltd failed to comply with specific orders regarding the filing of its defence, while Mr Martin, the respondent, disputed these claims and sought an extension of time to file a complete defence. The court was required to determine whether Nordburger Operations Pty Ltd's application for an extension of time was made in accordance with the previous orders and whether the evidence provided was admissible.

The court considered whether Nordburger Operations Pty Ltd's 1 October application for an extension of time to file a defence complied with the conditions set out in Order 7. This included whether the application was filed within the specified time and whether it was supported by the necessary affidavit and complete draft defence. The court also assessed the admissibility of evidence provided by Nordburger Operations Pty Ltd after the conclusion of oral arguments. The applicant argued that the evidence was irrelevant and should not be considered. The court ruled that the evidence provided by Nordburger Operations Pty Ltd was irrelevant to the issues at hand and therefore inadmissible.

The court ruled that Nordburger Operations Pty Ltd's 1 October application for an extension of time to file a defence did not comply with Order 7. The application was not filed within the specified time, and the supporting affidavit did not include a complete draft of the proposed defence as required. Consequently, the court determined that Nordburger Operations Pty Ltd was not entitled to file a defence and would only be permitted to be heard in the trial regarding the terms of the final relief if the applicant's claims were established. The court also found that the evidence provided by Nordburger Operations Pty Ltd was irrelevant to the matters being decided and, therefore, inadmissible.

The final orders of the court were that Nordburger Operations Pty Ltd's application for an extension of time to file a defence was refused. Nordburger Operations Pty Ltd was not entitled to file a defence in the action and could only be heard in the trial regarding the terms of the final relief if the applicant's claims were established. The evidence provided by Nordburger Operations Pty Ltd was deemed irrelevant and inadmissible.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Mr Martin otherwise directed criticism to the Court and expressed his lack of confidence in the conduct of the proceedings. Again, it was open to Operations to include that subject matter in a supporting affidavit as relevant to its explanation, but it did not do so.Rulings on evidence Before turning to the question of the Court’s discretion, I will rule on the admissibility of evidence provided by Operations after the conclusion of oral argument. The opportunity to submit further evidence was granted in circumstances where Mr Martin submitted that Mr Hillier’s reliance on his prior email communications to the Court was productive of unfairness. In advancing that complaint, he submitted that there was evidence he would have relied upon had proper notice been given. On the material before me, I did not consider the reliance by Mr Hillier on the email correspondence to be productive of unfairness. However, I invited Mr Martin to describe the additional evidence he wished to adduce. Mr Martin said that he wished to adduce evidence in two categories. The categories were stated in an order granting Operations leave to refer the Court to the material falling within them. The categories are “correspondence passing from the second respondent to the applicant in connection with the merits of the applicant’s case and the alleged deficiencies in the statement of claim” and “evidence relating to proceedings in the District Court of South Australia to which the second respondent referred to in submissions”. Mr Hillier objected to Operations adducing any evidence within those categories on the basis of relevance. I nonetheless granted Operations the opportunity to provide the additional evidence to the Court. The parties were informed that a ruling on the objection would be given in these reasons for judgment and I now provide that ruling. There are three emails before the Court, now marked R1, A3 and R2. R1 is an email from Mr Martin the body of which contains additional submissions. It has four attachments, namely:(1)a document titled “District Court Proceedings”;(2)a document titled “Structure of greengrocer business”;(3)a document titled “Applicant emails to first respondent”; and(4)an email titled “correspondence”. A3 is an email from Mr Hillier’s solicitor maintaining Mr Hillier’s earlier submission that evidence in the two categories is irrelevant and therefore inadmissible and asserting that two of the attachments to R1 do not fall within the scope of the leave to adduce additional evidence and so should not be read. R2 is Operations’ response to A3. A3 and R2 are read as submissions going to the evidentiary ruling and for no other purpose, save for one matter discussed at [109] ff of these reasons. The document titled “correspondence” shows that on 31 August 2021 Mr Martin wrote to Mr Hillier’s solicitor to articulate Operations’ position in response to Mr Hillier’s claim and to draw attention to evidence that Operations asserted contradicted the case. The fact that Mr Martin wrote to Mr Hillier in those terms is not relevant to the issues I am now asked to decide. As I have said, if Operations considers Mr Hillier’s claim to be baseless or untenable it may make applications to this Court for relief, or it may file a defence to join the issues. It has done neither. The documents do not demonstrate that Operations has an adequate excuse for its failure to comply with the Court’s orders. As mentioned earlier, this application is not an occasion for the Court to make any finding or express any view on the relative merits of any party’s case. In the course of the hearing Mr Martin denied that he was inviting the Court to decide the underlying controversy. It follows that the document is irrelevant.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The underlying controversy in this dispute has been summarised in prior interlocutory judgments of the Court. These reasons relate to two issues affecting the defence of the proceedings by the second respondent Nordburger Operations Pty Ltd. I will refer to them as the Defence issue and the Representation issue.Summary of the Defence issue The Defence issue arises by virtue of orders made on 28 September 2021 in the following terms:7.At or before 4.00 pm (ACST) on 1 October 2021, the second respondent if so advised is to file and serve any application for an extension of time in which to file a defence, such application to be supported by an affidavit deposing to:a.the reasons for non-compliance with the previous deadlines fixed by the Court for the filing of the defence; andb.annexing a copy of a complete draft of any defence proposed to be filed.8.In the event that an application is filed and served in accordance with paragraph 7, the application is, by this order set down for hearing at 10.30 am (ACDT) on 11 October 2021.9.In the event that no application is made by the second respondent in accordance with paragraph 7 then, by force of this order, the second respondent is not entitled to file a defence in the action and shall be entitled to be heard in the trial of the action only in respect of the terms of the final relief (if any) to which the applicant may be entitled should the facts alleged in the third amended statement of claim or any subsequent amended statement of claim be established. In these reasons the above orders will be referred to as Order 7, Order 8 and Order 9. The circumstances in which the orders were made will be detailed later in these reasons. No party has applied to set them aside. On 1 October 2021 at 4.33pm, Operations filed an application seeking an extension of time by which to file a defence. I will refer to it as the 1 October application. The supporting affidavit of its lawyer, Mr Thomas Martin, had annexed to it a copy of a defence proposed to be filed (Proposed Defence). The applicant, Mr James Hillier, submits that for the purposes of Order 9, the 1 October application was not an application “made in accordance with” Order 7, both because it was not filed within the time specified in the opening words of Order 7, and because the supporting affidavit did not have annexed to it a copy of Operations’ complete defence as required by Order 7(b). The Court has granted Operations leave to make an oral application for an order that the time specified in Order 7 be extended to accommodate a delay of about half an hour in filing the 1 October application. Operations otherwise disputes that the Proposed Defence is incomplete. It presses the application for an extension of time to file a defence. The proposed date for filing that document is 5 October 2021. That date has passed due to the necessity to hear and determine the 1 October application as indicated in Order 8. As explained below, on the assumption that Order 9 is not operative, I would refuse the 1 October application on its substantive merits, with the consequence that Operations ought to be restricted in the presentation of its case in the same manner as presently provided for by Order 9 in any event. Accordingly, I will not allow Operations’ application for an order varying the time specified in Order 7 as I do not consider it to be in the interests of justice to do so. Order 9 should remain undisturbed.Summary of the Representation issue