IML P/L v International Vineyards P/L

[2006] SASC 310

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

IML P/L & ORS v INTERNATIONAL VINEYARDS P/L & ORS

[2006] SASC 310

Judgment of The Honourable Justice Anderson

25 October 2006

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - JUDGMENTS AND ORDERS

EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES

STANDING TO INSTITUTE AND CONTINUE PROCEEDINGS

Appeal from a decision of a Master - defence struck out and judgment entered against defendants - further defence and counterclaim filed subsequently purporting to be in response to consolidated statement of claim in respect of which judgment had already been entered - further defence and counterclaim struck out - whether further defence and counterclaim should have been struck out - whether second defendant has standing to represent the other defendants - whether second defendant has any standing to represent himself - Held: appeal dismissed, second defendant does not have standing in any capacity, defence and counterclaim struck out properly in accordance with Rules of Court, appeal incompetent.

Supreme Court Act 1935 (SA) s50(2); Supreme Court Rules r3.04, r30.01, r59.06; Bankruptcy Act 1966 (Cth) s58(1)(a), s134(1)(j), referred to.
Bailey v Marinoff (1971) 125 CLR 529; Shanks & Co Pty Ltd v Hohne [1963] VR 198; Cummings & Fuller v Claremont Petroleum NL & Anor (1996) 185 CLR 124; Evans v HiFert Pty Ltd [2003] SASC 186, applied.

IML P/L & ORS v INTERNATIONAL VINEYARDS P/L & ORS
[2006] SASC 310

Civil: Appeal from a Master

1. ANDERSON J      Andrew Morton Garrett has filed a notice of appeal from a decision of a Master dated 4 May 2006.  The Master struck out Mr Garrett’s defence and counterclaim because a default judgment had already been entered against him.  That was a final judgment and the Master ruled that no counterclaim could be filed because the proceedings had been brought to an end.

2. The issues to be decided are:

   1Does Mr Garrett have any standing in this matter to represent himself and, or, any entities related to his former business; and

   2If so, should the subsequent defence and counterclaim have been struck out by the Master.

   Standing

3. Mr Garrett asserted that he appeared as a trustee of a trust, and as agent for the appellants, International Vineyards P/L, and in his own personal capacity.  Mr Garrett is presently an undischarged bankrupt.  None of the defendants are legally represented.  Mr Garrett has previously attempted to represent the corporate defendants, other natural persons and himself.  A Master has earlier refused him leave to do so on the basis that he could not represent the companies as he was not a director and not shown to be duly authorised.  He was also refused leave to represent the other natural defendants. This refusal was on 21 April 2005.

4. Mr Garrett asserted that since that time there had been “a significant shift in (his) capacity to stand before this court.”  I do not believe that to be so.  I do not consider that he has any standing to bring actions on behalf of, or to represent the corporate defendants or natural persons, nor do I think that it would be appropriate to grant him leave to do so.  In my opinion, the reasons given by the Master on 21 April 2005 are still valid reasons to deny Mr Garrett the ability to represent anyone.

5. Mr Garrett argued that he appeared pursuant to r 30.01 as a trustee of a trust. This was a matter previously dealt with by the Master in his reasons. With respect, I agree with the reasons of the Master. His Honour pointed out that this rule does not give the right to appoint other representatives. It merely allows an action to be pursued without having to join beneficiaries of a trust. Accordingly, I find that Mr Garrett has no standing as a trustee of a trust or otherwise. Nothing has changed since the ruling given by the Master.

6. Mr Garrett also sought to appear in his own capacity as the second defendant in this action.  He filed this notice of appeal and appeared before me on 14 July 2006.  Mr Garrett was declared bankrupt on 24 September 2004.  A sequestration order was then made against his estate.  There is clear authority that a bankrupt does not have valid standing to prosecute an appeal.  The High Court in Cummings & Fuller v Claremont Petroleum NL & Anor (1996) 185 CLR 124 dismissed an appeal from a decision of the Full Court of the Federal Court as incompetent on the basis that the appellants had no valid standing. (That decision was applied by Duggan J in Evans v Hi Fert Pty Ltd [2003] SASC 186).

7. In Claremont Petroleum Brennan CJ, Gaudron and McHugh JJ pointed out that the trustee would have been authorised to prosecute the appeal by virtue of the power to “bring, institute or defend any action or other legal proceeding relating to the administration of the estate” pursuant to s 134(1)(j) of the Bankruptcy Act. 

8. Dawson and Toohey JJ reached the same view but for different reasons.  They were of the view that the right of appeal was ‘property’ within the meaning of the Bankruptcy Act 1966 (Cth) and that it vested in the trustee pursuant to s58(1)(a). The right of appeal was a right which could not be exercised by the appellants personally after the sequestration order had been made.

9. Mr Garrett is not able to bring or prosecute any appeals in this Court.  He does not have valid standing and cannot continue to appear in this court in this matter.

10. However, if I am wrong and Mr Garrett does have valid standing, I now turn to consider the merits.

    Background Facts

11. The history preceding the Master’s decision to strike out the defence and counterclaim is as follows:

    (a)On 18 November 2004 actions 247, 253 and 321 of 2004 were consolidated by an order made by Gray J.

    (b)On 9 December 2004 the plaintiffs filed a consolidated statement of claim (FDN 54).

    (c)On 24 January 2005 the second defendant (Mr Garrett) filed his defence (FDN 56).

    (d)On 19 May 2005 the plaintiffs filed a notice for specific directions (FDN 76) seeking an order that the defence be struck out pursuant to Supreme Court r 59.06, on the basis that the second defendant had failed to fulfil his discovery obligation pursuant to the orders made by Gray J on 18 November 2005.

    (e)On 6 July 2005 Master Bowen Pain ordered that the defence be struck out for failure to comply with previous orders in particular, Mr Garrett’s failure to adequately discharge his discovery obligations pursuant to Supreme Court r 59.06.

    (f)On 20 July 2005 the plaintiffs filed a subsequent notice for specific directions (FDN 94) seeking, in particular, judgment in default of defence against two defendants, International Vineyards P/L and Andrew Morton Garrett. It should be noted that the plaintiffs’ application for judgment against Mr Garrett was made pursuant to Supreme Court r 59.06(1)(b) on the basis that the defence should be struck out for failure to give adequate discovery. The plaintiffs also sought judgment in default of filing a notice of address for service against the defendants Averil Gay Garrett, Garrett International Investments P/L and Evajade P/L.

    (g)On 5 September 2005 Master Burley heard the plaintiffs’ application to enter judgment in default of defence.  That application was dealt with in open court.

    (h)On 13 October 2005 Master Burley gave judgment in favour of the respondents.  The order was formalised and sealed on 19 October 2005.  In the judgment given, Master Burley granted declaratory and injunctive relief in favour of the respondents dealing with, amongst other things, the identity of the participants in the joint venture, the identity of the shareholders, directors and secretaries of the ninth plaintiff, International Vintners Australia P/L, the validity of a purported extraordinary general meeting of International Vintners held on 18 March 2004, of resolutions purportedly passed at that meeting, and injunctive relief in respect of Mr Garrett’s dealings with the joint venture.  The relief disposed of most of the orders sought in the plaintiffs’ consolidated amended inter partes summons (FDN 54).

    (i)On 17 November Mr Garrett filed a notice of appeal (FDN 120) in respect of that judgment. Vanstone J heard this appeal on 17 January 2006. Her Honour dismissed the appeal as incompetent and published her reasons on 19 January 2006. Her Honour found that the notice of appeal was so defective that it was not susceptible to amendments, and that further, there was no application to amend and that in any event it would be inappropriate to exercise the power given in r 3.04 to validate the notice. On this basis she dismissed Mr Garrett’s appeal as incompetent and ordered the respondents to have the costs of this appeal. The proceedings by the present respondents against the Garrett Group were thereby finalised as a result of that judgment.

    (j)On 24 November 2005 Mr Garrett filed a defence and counterclaim (FDN 127), purporting to be a new defence and counterclaim to the consolidated statement of claim in respect of which judgment had been given against him.  The plaintiffs then filed a notice for specific directions seeking to have the defence and counterclaim struck out (FDN 152).  This matter was listed for hearing before Master Lunn on 10 April 2006 but, at the request of Mr Garrett, was adjourned to 4 May 2006.  On 4 May 2006 Mr Garrett did not attend the hearing, and in his absence Master Lunn ordered that the defence and counterclaim be struck out. 

    Was the Master correct in striking out the defence and counterclaim?

12. Mr Garrett argued that the defence and counterclaim were struck out in his absence on 4 May 2006 when he did not attend due to a mistake on his part.  He argues that the Master should have taken all the matters in his proposed new counterclaim into account, and that the matter should have then been examined on the merits and in “the interests of justice”.

13. The difficulty for Mr Garrett is that once an order has been drawn up as the record of the court, the proceeding is at an end.  (See Bailey v Marinoff (1971) 125 CLR 529 at 530). Mr Garrett was attempting to proceed on his counterclaim after final judgment had been entered. When a final judgment has been entered, no counterclaim can proceed. (See Shanks & Co P/L v Hohne (1963) VR 198).

14. This was a final judgment, and therefore Mr Garrett cannot be permitted to file his defence and counterclaim.   It is my view in any event that there was nothing Mr Garrett could have said to the Master, if he had appeared, which would have been likely to have changed this outcome.

    The proposed counterclaim

15. Mr Garrett requested that I read the proposed counterclaim to see the injustice of the situation.  Having read the counterclaim, I can see that it comprises a history of the Andrew Garrett Group of Trusts including, a history of Andrew Garrett himself, his involvement in the wine industry and his involvement in some of the plaintiff group of companies.  It was therefore to be used as a proposed launching pad for what Mr Garrett wants to argue is the injustice brought upon him and his group, by virtue of the impecuniosity of the group, caused by the actions taken by persons and entities owed money and seeking to enforce their legal rights.  The matters raised in the counterclaim are irrelevant to the present appeal. 

    Conclusion

16. The Master did not publish any reasons.  There was no need to publish reasons, in my view.  It is a very simple matter. The order was made on a procedural basis pursuant to the rules of this Court.  In my view the appeal in this matter is without any merit at all.   Reference to the alleged injustices in the proposed counterclaim do not advance the matter.

17. Mr Garrett did not put forward any valid submissions in relation to the  merits of the appeal, but rather attempted to re-agitate issues which were irrelevant to the issues at hand.  The present appeal, as I have indicated, involves a very simple procedural matter.  It is my view that the appeal should be dismissed.   I will hear the parties as to costs.