Huntley Management Limited v Australian Olives Limited
[2010] FCA 1030
•21 September 2010
FEDERAL COURT OF AUSTRALIA
Huntley Management Limited v Australian Olives Limited
(No 2) [2010] FCA 1030
Citation: Huntley Management Limited v Australian Olives Limited (No 2) [2010] FCA 1030 Parties: HUNTLEY MANAGEMENT LIMITED (ACN 089 240 513) v AUSTRALIAN OLIVES LIMITED (ACN 078 885 042), ANTHONY JOHNSTON, PATRICK GEOFFREY HANDBURY, BLAKE ANTHONY AMMIT, GEORGE ALFRED ILK, SEAN PATRICK CONEY and GRANT BRUCE MURDOCH File number: VID 170 of 2009 Judge: GORDON J Date of judgment: 21 September 2010 Legislation: Corporations Act 2001 (Cth)
Federal Court of Australia Act 1976 (Cth)Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Huntley Management Limited (ACN 089 240 513) v Australian Olives Limited (ACN 078 885 042) [2009] FCA 1081
Huntley Management Limited (ACN 089 240 513) v Australian Olives Limited (ACN 078 885 042) [2010] FCA 579Date of hearing: 17 September 2010 Date of last submissions: 17 September 2010 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 21 Counsel for the Applicants: D Collins SC with A Dinelli Solicitor for the Applicants: DMAW Lawyers Counsel for the First Respondent: JD Elliot SC with G Harris Solicitor for the First Respondent: Lander & Rogers Counsel for the Second, Third, Fourth, Fifth, Sixth and Seventh Respondents: WT Houghton QC with T Di Lallo Solicitor for the Second, Third, Fourth, Fifth, Sixth and Seventh Respondents: Johnson Winter & Slattery
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 170 of 2009
BETWEEN: HUNTLEY MANAGEMENT LIMITED (ACN 089 240 513)
ApplicantAND: AUSTRALIAN OLIVES LIMITED (ACN 078 885 042)
First RespondentANTHONY JOHNSTON
Second RespondentPATRICK GEOFFREY HANDBURY
Third RespondentBLAKE ANTHONY AMMIT
Fourth RespondentGEORGE ALFRED ILK
Fifth RespondentSEAN PATRICK CONEY
Sixth RespondentGRANT BRUCE MURDOCH
Seventh Respondent
JUDGE:
GORDON J
DATE OF ORDER:
17 SEPTEMBER 2010
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.By 22 September 2010, the Respondents notify the Applicants and the Court of their position concerning the applicability of the transitional provisions of the Corporations Act 2001 (Cth);
2.By 4:00pm on 24 September 2010, the Applicants file and serve all affidavits of the Advisers identified in Annexure C to the proposed Third Further Amended Statement of Claim on which they intend to rely;
3.By 4:00pm on 27 September 2010, the Applicants file and serve all remaining affidavit evidence on which they intend to rely. After that date no other evidence will be able to be filed by the Applicants.
4.By 4:00pm on 27 September 2010, the Second to Seventh Respondents file and serve all of the evidence on which they intend to rely.
5.The application for leave to amend the statement of claim be adjourned until 9:30 am on 27 September 2010.
6.Costs reserved.
7.Liberty to apply.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 170 of 2009
BETWEEN: HUNTLEY MANAGEMENT LIMITED (ACN 089 240 513)
ApplicantAND: AUSTRALIAN OLIVES LIMITED (ACN 078 885 042)
First RespondentANTHONY JOHNSTON
Second RespondentPATRICK GEOFFREY HANDBURY
Third RespondentBLAKE ANTHONY AMMIT
Fourth RespondentGEORGE ALFRED ILK
Fifth RespondentSEAN PATRICK CONEY
Sixth RespondentGRANT BRUCE MURDOCH
Seventh Respondent
JUDGE:
GORDON J
DATE:
21 SEPTEMBER 2010
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
This is the third judgment relating to proceedings filed by the Applicants on 18 March 2009. The nature and content of the proceedings was summarised in Huntley Management Limited (ACN 089 240 513) v Australian Olives Limited (ACN 078 885 042) [2009] FCA 1081 and Huntley Management Limited (ACN 089 240 513) v Australian Olives Limited (ACN 078 885 042) [2010] FCA 579. These reasons for decision adopt the same abbreviations as the earlier decisions.
The substantive trial of these proceedings is due to commence on 4 October 2010 for an estimate of eight weeks. On 19 August 2010, the Applicants advised the Court that they sought leave to further amend their statement of claim (the proposed FASC). The First Respondent and the Director Respondents opposed the Applicants being granted leave to file the proposed FASC.
At the directions hearing on 17 September 2010, I adjourned the application for leave to file the proposed FASC until 27 September 2010 (when all of the Applicants’ evidence will have been filed and served). I made several orders concerning the filing and serving of evidence by the Applicants in preparation of the commencement of the substantive trial on 4 October 2010. The orders were in the following terms:
1.By 22 September 2010, the Respondents notify the Applicants and the Court of their position concerning the applicability of the transitional provisions of the Corporations Act 2001 (Cth) [(the Corporations Act)];
2.By 4:00pm on 24 September 2010, the Applicants file and serve all affidavits of the Advisers identified in Annexure C to the proposed Third Further Amended Statement of Claim on which they intend to rely;
3.By 4:00pm on 27 September 2010, the Applicants file and serve all remaining affidavit evidence on which they intend to rely. After that date no other evidence will be able to be filed by the Applicants.
4.By 4:00pm on 27 September 2010, the Second to Seventh Respondents file and serve all of the evidence on which they intend to rely.
5.The application for leave to amend the statement of claim be adjourned until 9:30 am on 27 September 2010.
6.Costs reserved.
7.Liberty to apply.
These reasons for decision explain the reasons for making those orders relating to the time for filing of the Applicants’ evidence.
FACTS
The procedural history of these proceedings until June 2010 was summarised in Huntley Management [2010] FCA 579 at [4]-[20]. I ordered that the Applicants pay the Respondents’ costs thrown away by reason of the vacation of the Preliminary Trial that was listed to commence on 31 May 2010. An excerpt of that judgment reveals that this case has been the subject of continual delays in the Applicants’ filing of their evidence and presentation of their case:
[8]On 18 December 2009, interlocutory Orders were made for the Preliminary Trial which was to be limited to the evidence identified by the Applicants in the Reliance Document and which involved all Applicants. The Applicants were directed to file and serve their evidence to be relied upon at that trial by 26 February 2010.
[9]At the next directions hearing on 18 February 2010, it was acknowledged by the Applicants’ Counsel then engaged that it was “understood” that the Applicants’ proposal for a split trial was not intended to include an assessment of damages. The Applicants’ Counsel stated that the Applicants were on track in relation to the filing of their lay evidence.
[10]What then happened has been described in various and colourful ways. Leaving the rhetoric to one side, the Applicants simply changed their team of Counsel. The Applicants did not file their lay evidence by 26 February 2010 and, contrary to directions made concerning experts, the Applicants sent letters of instruction to experts. The lay evidence was filed and served on 2 and 30 March 2010.
[11]On 16 March 2010, the Applicants’ solicitors informed the Court in correspondence “I confirm that Mr John Dixon SC and Mr Albert Dinelli have now been retained as [C]ounsel for the Applicants. … Mr Dixon has asked that I ascertain her Honour’s availability next week, with a view to having a directions hearing at which Mr Dixon can explain the current position from the Applicants’ perspective …”. Those directions were held on 22 March 2010.
[12]At that hearing, the Applicants’ new Counsel stated “I’m not going to pretend that I’m fully on top of all of the issues”. He also submitted that “[t]he position in relation to the Applicants’ preparation for trial is that, as a result of this process, we’ve fallen behind”. The Applicants’ Counsel then sought to contend that his clients’ delay had been caused by issues raised by the Respondents’ amended defences in respect of the pleas of contributory negligence and concurrent responsibility. The amended defences did raise these issues. However, until that point in time, it had been common ground that there would be utility in having some issues determined before others in the manner proposed.
…
[14]In short, the Applicants’ new Counsel disagreed with the way the case had been conducted in the past by the Applicants and informed the Respondents and the Court that it intended to alter the way in which they intended to prove their case. The Applicants are entitled to retain Counsel of their choice. They have done so. The question is where the costs thrown away by that decision to change course should lie and whether the costs should be paid forthwith.
[15]The Applicants’ abandonment of the inferred reliance position was formalised at the next directions hearing, held on 26 March 2010. The Applicants’ new Counsel informed the Court that evidence would need to be called by the individual Investor Applicants to prove their actual reliance. Various categories of Investor Applicants were identified. A sampling was suggested by the Applicants’ Counsel – an alternative form of Preliminary Trial. That “new proposal” was rejected by the Court. There was no common question or questions. The “new proposal” was contrary to the way in which the Applicants’ had filed their lay evidence at that date and contrary to their pleadings. In fact, the “new proposal” suggested that at least some of the Investor Applicants may have relied on matters beyond the prospectus when they invested.
…
[18]At the last relevant directions hearing, held on 23 April 2010, the position adopted by the Applicants about the scope of the Preliminary Trial was one which was totally at odds with that advanced and accepted by the Court and the Respondents on 18 December 2009. As a result, I informed the Applicants that they had a choice – either run the Preliminary Trial on the basis that the Court had understood it was to be run since December 2009 or abandon the Preliminary Trial because they accepted that the Respondents would not be ready for a trial on any other issues. The Applicants abandoned the Preliminary Trial and requested a trial on all issues.
Since the decision in Huntley Management [2010] FCA 579, the Applicants have again changed their Senior Counsel. Mr Dixon SC (as he then was) has been appointed a judge of the Supreme Court of Victoria.
There have been other delays. Orders made on 26 March 2010 required the Applicants to file and serve any expert material on which they intended to rely by 9 April 2010. That evidence was filed progressively from 16 April 2010 until 15 September 2010. Further Orders were made on 13 April 2010 providing, inter alia, any evidence on which the Applicants intended to rely which was not filed and served by 16 April 2010 would not be relied upon except with leave of the Court. Orders made on 23 April 2010 required the Applicants to provide a list of witnesses they proposed to call, including expert witnesses, and a summary of the proposed evidence, by 24 May 2010. Summaries of evidence were received as late as 27 July 2010. On 27 May 2010, orders were made requiring the Applicants to file and serve all additional evidence on which they intended to rely (with the exception of Mr Knox) by 24 June 2010. That was not complied with.
On 5 August 2010, the parties came to the Court for a directions hearing and orders were made granting the Applicants an extension to file and serve certain evidence (the 5 August Orders). Orders were also made for the First Respondent and the Director Respondents to file and serve their evidence on which they intended to rely (by 20 August 2010 and 27 August 2010 respectively). The 5 August Orders also required the Applicants by 19 August 2010 to, inter alia, circulate to the Respondents and the Court the proposed FASC which would include an Amended Annexure A which identified:
1.in respect of each grove interest allocated to the Applicants listed in Amended Annexure A, the specific basis on which each Applicant “ceased” to hold the grove interest(s) allocated to them, including the documents evidencing that event; and
2.in respect of any Investor Applicant(s) on whose behalf investor summaries had not been filed and served by 4:00pm on 19 August 2010, an amendment removing such Investor Applicants from the proceedings.
The Applicants were also to provide to the Court a proposal of how they intended to conduct their case at trial.
On 19 August 2010, the Applicants provided to the Court and the Respondents two alternative proposed FASC (Option A and Option B). The “Options” reflect alternative proposals put forward by the Applicants, the outcome of which depends on the Respondents’ position concerning the transitional provisions of the Corporations Act. Also on 19 August 2010, the Applicants’ provided a document entitled “The Applicants’ Proposal of how they intend to conduct their case at trial in accordance with the [5 August Orders]” (the Applicants’ trial proposal). The Applicants’ trial proposal relevantly provided:
2.That the evidence in chief of the investor applicants be by way of affidavit to be filed and served as follows:
2.1No fewer than 12 affidavits of investor applicants are to be filed and served by each of the following dates:
2.1.16 September 2010;
2.1.2 17 September 2010;
2.1.324 September 2010;
2.1.41 October 2010.
2.2Directions for the filing and service of the affidavits of any investor applicants for whom affidavits have not been filed and served by 4 October 2010 be given at the trial of the proceedings.
…
4.That the evidence in chief of any adviser referred to in Annexure C to the third further amended statement of claim be by way of affidavit to be filed and served by 15 September 2010.
…
Notwithstanding the Orders outlined above and the Applicants’ trial proposal, as at 17 September 2010, the Applicants’ lay evidence (being 119 Affidavits in total, including the 113 Investor Applicants identified in the proposed FASC) has not been filed. At the directions hearing on 17 September 2010, the following exchange took place between Counsel for the Applicants and the Court concerning that evidence:
MR COLLINS: I can tell you what the present position is, your Honour. There have been instructions taken to enable 66 affidavits to be prepared. There have been 62 draft affidavits prepared. Of those 62, 11 have been settled.
HER HONOUR: Have they been filed and served?
MR COLLINS: They haven’t been, but that ---
HER HONOUR: Why not?
MR COLLINS: Because those responsible for preparing them haven’t been able to progress it to complete them.
…
HER HONOUR: So that’s 11 out of 66.
MR COLLINS: Yes. It’s expected, but we can’t guarantee, that 27 to 37 will be completed next week.
HER HONOUR: Why can’t it be guaranteed?
MR COLLINS: Because it depends upon the applicants attending to swear the affidavits, and there’s the mechanics of contacting them and getting them to come in, and then arriving and swearing them.
The estimate of 27 to 37 affidavits able to be completed during the course of the week commencing 20 September 2010 was inclusive of the 11 that Counsel for the Applicants had said had already been settled. As to the remaining affidavits of the 66 investors the Applicants had received instructions from, the Applicants were “hopeful of completing them all before 4 October”.
In relation to the remaining 53 Affidavits, Counsel for the Applicants confirmed that those affidavits had not been started, but the Investor Applicants had been contacted. In relation to those Applicants they had been unable to contact, Counsel for the Applicants stated it was likely that for some Applicants, material would not be filed and their claims under s 728 of the Corporations Act would not proceed. Counsel for the Applicants further informed the Court that Slater and Gordon Lawyers had been retained to assist with the trial preparation. The Court was not told when they were retained or what additional resources they were going to provide.
The investors in fact also included a number of advisers. The Applicants’ trial proposal identified the following advisers by reference to Annexure C in the proposed FASC:
1.Kostas Livadaras;
2.Leonie Ladgrove;
3.Spyridon Livadaras;
4.Peter Mattmann;
5.Tanya Schumann; and
6.Alex Vovos.
(collectively, the Advisers). Of those six Advisers, four are also Applicants in these proceedings. Save for Mr Vovos, all of the Advisers were employed by one or other of the Stantins group (comprising Stantins Financial Group Pty Ltd, Stantins Financial Services Pty Ltd and Stantin Partnership Pty Ltd and its predecessor Deckker Partners Holdings Pty Ltd). Mr Vovos was at the relevant time an employee of Meridian Finance.
Counsel for the Applicants informed the Court that the Advisers had been interviewed but the affidavits had not yet been prepared. His instructions were that those affidavits (the Adviser Affidavits) would be sworn by “the end of next week”, being Friday 24 September 2010.
I did not accept the Applicants’ trial proposal. First, it was apparent that the trial proposal had not been complied. For example, no investor affidavits had been filed, yet the timetable envisaged that at least 24 would have been filed and served by now. Secondly, the Adviser Affidavits had not yet been prepared, let alone filed and served, notwithstanding that the proposed trial timetable stated such evidence would be filed by 15 September 2010. No explanation was provided for this delay. Counsel for the Applicants did not know what were likely to be the contents of these affidavits. The orders made on 17 September 2010 were for the Adviser Affidavits to be filed and served by 24 September 2010. This date is important. As was apparent from the directions hearing on 17 September 2010, consideration of the Applicants’ application for leave to file the proposed FASC may depend on the content of these affidavits. As the date of the trial of the substantive hearing approaches, any further delay in considering the application for leave to amend is unacceptable.
In relation to the Investor Applicants, it was unacceptable that Counsel for the Applicants were not in a position to inform the Court when those affidavits would be filed and served. When asked of an appropriate date for a guillotine order being set for the filing of the investor affidavits, Counsel for the Applicants stated:
… [O]bviously, it’s the last possible date as otherwise it might result in some [A]pplicants being denied their case.
…
…[W]hat your Honour says is true, there’s been – the case has been around for a long time, all of that’s true. But I’d ask your Honour to bear in mind these are [A]pplicants in a scheme, each [A]pplicants’ claim is not a big claim, it’s like a class action… It seems reading the previous transcripts as to what could actually progress it but while it’s unsatisfactory it is a difficult case to manage, there are a lot of individuals.We do have to…make time to see them go through the material to prepare an affidavit with them and that’s why there’s been a delay and there’s likely to be difficulties in concluding it with people. So if your Honour could give us [until] the 27th, and its highly desirable from everyone’s point of view, and most importantly the applicants, that we get as many as we can as early as possible.
(Emphasis added.)
I have adopted the date selected by the Applicants’ Counsel. On that basis, I have ordered the Applicants to file all of their remaining evidence (save for the Adviser Affidavits referred to above) on which they intended to rely by 27 September 2010.
I also note that, as at 17 September 2010, the Director Respondents had not filed and served their evidence contrary to the 5 August Orders. The Applicants were emphatic that this was unacceptable. The explanation by the Director Respondents for the delay was, in short, that the affidavits (which were limited to the Director Respondents) were finalised but were so finalised on the basis of the present pleadings and the present evidence of the Applicants. The uncertainty created by the further amendment application and the failure of the Applicants to file their remaining evidence, according to the Director Respondents, could result in changes to those affidavits. The Director Respondents sought to defer the filing of their evidence until a point in time that they knew the case they were responding to. Although the Director Respondents initially sought to file their evidence after the filing of the Applicants, the Director Respondents agreed that the appropriate date to file their evidence would be 27 September 2010, reserving the right to “respond to anything that takes [them] by surprise”.
ANALYSIS AND CONCLUSION
The Federal Court of Australia Act 1976 (Cth) (the FCA) provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: s 37M of the FCA. Parties must conduct the proceedings in a way consistent with that overarching purpose: s 37N of the FCA.
The reason for imposing the restrictions on the Applicants’ evidence was simple. It would be contrary to the principles of case management (as reflected in the FCA and stated recently by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175) to allow the continual delays that have persisted throughout these proceedings to continue any further. In order for the Respondents to efficiently prepare for the substantive trial on 4 October (which all parties agree should be maintained if possible), they must know the case which they are to respond to. That is not the case at present, despite considerable and a more than appropriate length of time for the Applicants to file their evidence.
While I am mindful that the Applicants’ task of coordinating the evidence of in excess of 100 Investor Applicants is a difficult task, I am also mindful of these continual delays, and the costs thrown away, from the Applicants’ management and conduct of the proceedings to date. In order to facilitate the “just resolution” of this dispute, the Orders made on 17 September 2010 were and remain in my view necessary and just.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate:
Dated: 21 September 2010
3
2