Jerome Properties Pty Ltd v Hamilton

[2021] SASCA 77

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

JEROME PROPERTIES PTY LTD & ORS v HAMILTON & ORS

[2021] SASCA 77

Judgment of the Court of Appeal  

(The Honourable Justice Doyle and the Honourable Justice Livesey)

10 August 2021

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - LEAVE TO APPEAL

The applicants seek leave to appeal an order made by a single Judge, refusing their oral application for the proceedings the subject of the proposed appeal, having been commenced by originating application and affidavit, to proceed by way of pleadings. 

Held (by the Court), refusing the application for leave to appeal:

1.      In circumstances where the Judge’s decision was discretionary and related to a matter of practice and procedure, and did not preclude a later application and order that the matter proceed on pleadings, her Honour’s decision was not attended by sufficient doubt to warrant a grant of leave, and would not occasion substantial injustice to the applicants if left to stand.

Uniform Civil Rules 2020 (SA) r 82.1, referred to.
McDonald v Attorney-General for the State of South Australia [2021] SASCA 57; Harris Scarfe Ltd (in liq) v Ernst & Young (No 2) [2005] SASC 168; Commonwealth v Saadat (2019) 134 SASR 184; Draoui v Le [2021] SASCA 33, considered.

JEROME PROPERTIES PTY LTD & ORS v HAMILTON & ORS
[2021] SASCA 77

Court of Appeal – Civil:  Doyle and Livesey JJA

1. THE COURT:     The applicants (the Jerome parties) seek leave to appeal an order made by Auxiliary Justice Bochner on 15 June 2021, refusing an oral application by the Jerome parties that the proceedings, having been commenced by originating application and affidavit under r 82.1 of the Uniform Civil Rules 2020 (SA), proceed by way of pleadings.  

2. For the reasons which follow, we refuse the application for leave to appeal.  The appeal raises a matter which is quintessentially a matter of practice and procedure, involving an order made in the management of relatively complex commercial proceedings, and in respect of which the Judge had a very broad discretion.  Given the principles of appellate restraint that would govern the appeal, we are not satisfied that her Honour’s decision was attended by sufficient doubt to warrant a grant of leave.  More fundamentally, because her Honour’s decision does not preclude a later application and order that the matter proceed on pleadings, it cannot be said that any substantial injustice would be caused if the decision were left to stand.

   Background 

3. These proceedings were commenced by the respondents to the proposed appeal, Airlie Hamilton and Alexandra Hamilton (together, the Hamiltons).  The proceedings seek orders, inter alia, for the removal of certain corporate entities as trustees of two discretionary trusts, pursuant to s 36 of the Trustee Act 1936 (SA) (the Trustee Removal proceedings). The respondents in the Trustee Removal proceedings are JJR Investment Holdings Pty Ltd and Westfield Station Nominees Pty Ltd (together, the Trustee companies). The present applicants, the Jerome parties, are a group of 32 companies named as interested parties in the Trustee Removal proceedings. Deborah Hamilton (the mother of the Hamiltons) was joined as an interested party. Her sister, Shauna Roche, was also joined as an interested party. Another sister, Fiona Roche, was joined as a respondent.

4. As mentioned, the Hamiltons commenced the Trustee Removal proceedings by originating process and affidavit under r 82.1. They filed two voluminous affidavits in support of their claim, being affidavits sworn by Airlie Hamilton and Deborah Hamilton. In combination, those affidavits run to approximately 300 pages in length, and are accompanied by approximately 4,000 pages of documentary exhibits. They cover a wide range of dealings involving the various companies and family members involved in the proceedings over a lengthy period of time. The Jerome parties contend that it is not readily apparent from the affidavits how the detail of the matters addressed is said to support the relief sought.

5. Although still at an early stage in their procedural life, the Trustee Removal proceedings have already become complex, and have generated a lot of procedural activity and heat.

6. From the outset, the Jerome parties complained that the affidavits of Airlie Hamilton and Deborah Hamilton, as well as containing matters which are not of any apparent relevance, also include a substantial number of documents in respect of which they assert claims of legal professional privilege, confidentiality or commercial sensitivity.  They complained that the affidavits, or at least many of the documents exhibited to the affidavits, should thus be uplifted or removed from the file. 

7. The Jerome parties ultimately brought an application seeking orders to this effect.  Fiona Roche, who had been joined as a respondent upon her own application, and had been making similar complaints about the affidavits and their exhibits, also brought an application seeking similar orders in respect of the affidavits.  It is convenient to refer to these applications as the Documents applications.  The Jerome parties also issued separate proceedings seeking to enforce their contended rights of confidentiality in respect of a number of the documents attached to the affidavits (the Delivery Up proceedings).

8. Following the issue of the Documents applications (and the Delivery Up proceedings), and at a directions hearing on 15 June 2021, the Jerome parties made an oral application seeking orders that the Trustee Removal proceedings proceed on pleadings, and that the Hamiltons file their statement of claim prior to the other parties having to respond to the affidavits filed on behalf of the Hamiltons, and prior to the determination of the Documents applications. The Judge refused this application, and directed that the respondents (the Trustee companies and Fiona Roche) and the interested parties (including the Jerome parties) file their affidavits in response within eight weeks (that is, by 10 August 2021).

9. Having refused the Jerome parties’ oral application on 15 June 2021, the Judge delivered written reasons for this decision on 25 June 2021.

   The Judge’s reasons

10. The Judge commenced her reasons by providing a brief overview of the history of the proceedings, and the procedural difficulties and disputes that had arisen in the early directions hearings.

11. This included reference to the Jerome parties and Ms Roche having raised, at the first directions hearing on 26 February 2021, their concerns about the documents exhibited to the affidavits relied upon by the Hamiltons.  Her Honour put in place a timetable for the filing of the foreshadowed applications, together with supporting affidavits and submissions.

12. These documents had not been filed by the time of the next hearing on 17 March 2021 and, in light of other procedural complications that had arisen, her Honour suspended the timetabling orders on this occasion.

13. At the next directions hearing on 14 April 2021, further submissions were made by the various parties about when and how the foreshadowed applications should proceed.  It was envisaged at that stage that the applications might be heard on 28 June 2021.  The possibility that they might be heard in conjunction with the foreshadowed Delivery Up proceedings had also been the subject of submissions.

14. The next directions hearing was held on 18 May 2021.  By this time the Documents applications and the Delivery Up proceedings had been filed.  However, counsel for the Jerome parties, Mr Roberts QC, indicated that it would be difficult for the Delivery Up proceedings to proceed to a final hearing on 28 June 2021, given the potential for discovery to become necessary.

15. By the time of the directions hearing that took place on 15 June 2021, defences had been filed in the Delivery Up proceedings.  Mr Roberts advised that the Delivery Up proceedings would not be ready for hearing on 28 June 2021.  He took issue with various aspects of those defences, complaining that they involved the further use of the impugned affidavits and documents.  He also indicated that a separate originating application filed by Deborah Hamilton, relying on the impugned affidavit material, had given rise to the need to amend the statement of claim in the Delivery Up proceedings.  

16. As the Judge explained in her reasons, it was in this context that Mr Roberts contended that the preparation of the Delivery Up proceedings would be hampered by the lack of pleadings in the Trustee Removal proceedings; and that there was an inherent difficulty in assessing the relevance of Deborah Hamilton’s affidavit, and her use of confidential information, in the absence of a statement of claim in the Trustee Removal proceedings to define the issues in dispute. Mr Roberts submitted that a statement of claim was required before the parties could determine what permissible use could be made of the affidavits of Airlie Hamilton and Deborah Hamilton.

17. The Judge further explained that counsel for the Hamiltons, Mr Duggan QC, objected to an order that the matter proceed on pleadings.  He submitted that the Documents applications should be heard on 28 June 2021, and that there was no need for the Delivery Up proceedings to be dealt with at the same time.  However, Mr Roberts submitted that the Documents applications could not proceed on 28 June 2021 because his clients needed to respond to the affidavits and were prevented from (or at least hindered in) doing so in the absence of pleadings.

18. The Judge then referred to the order she made:

    Given the impasse, I ordered that in this action, the respondents and interested parties were to file their affidavits in response to [Airlie’s and Deborah’s] affidavits.  This was in response to Mr Roberts’ submission that it was impossible to proceed with the interlocutory applications until they had responded to [Deborah’s] affidavit.

19. The Judge explained that there were a number of reasons why she considered it appropriate to dismiss the Jerome parties’ application that the matter proceed on pleadings.  It is useful to set those reasons out in full:

    First, while the question of pleadings had been raised on a number of occasions before 15 June 2021, it has not previously been put as an application that required immediate answer.  It appeared that the applicants were not on notice that this application was to be made.  Given the consequences of making such an order, I considered that it would be inappropriate to make the order in the absence of a formal application, supported by affidavit material and without the applicants having the opportunity to bring a considered position to the application.

    Second, from the commencement of this action in January 2021, the companies and Fiona Roche treated as of paramount importance the need to deal with the documents issue.  There has, in fact, been no engagement with the substantive issues raised in the originating application in the six months since its issue, because of the insistence of the companies and Fiona Roche that the documents issue be dealt with first.  The documents issue has been dealt with on the basis that it is not an “evidence issue”, or that the material is irrelevant; rather, the objection is much more fundamental, that the applicants and Mrs Hamilton have made use of documents which are subject to various types of privilege, are confidential and to which they were not entitled.  It was, in fact, the use itself that has been objected to, as being a breach of good faith, various provisions of the Corporations Act by Mrs Hamilton and a range of other duties.  The objection has not simply been on the basis of relevance and “evidence issues”.  Thus, for Mr Roberts to raise these issues now, as a basis for an application for the matter to proceed on pleadings, is in complete contradiction to the manner in which the companies have conducted themselves to date.  Relevance and “evidence issues” could, perhaps, appropriately be left to a trial judge, and the question of relevance, in particular, may be assisted by pleadings.  Questions of breach of good faith, confidence and other duties are much more fundamental problems, and ones that both the companies and Fiona Roche sought to have addressed prior to dealing with the action in any more substantive way.  In my view, it was inappropriate for the companies to change their approach mid-stream.

    Third, in the six months since the originating application was filed, not only do the applicants not have the documents question dealt with, but they have received no response to the issues raised in their originating documents.  It appears that the position at first, was that the underlying issues could not be dealt with until the documents issue had been resolved; now, it appears that it has become, that the documents issued cannot be resolved until the underlying issues have been addressed in some way.  This is not fair to the applicants.  They are entitled to have either one or the other dealt with.  Given that Mr Roberts has submitted that the documents issue cannot now be dealt with until they have responded to Mrs Hamilton’s affidavit, I considered that it was appropriate that such an answer be filed, so that the documents issue can be dealt with.  If an order was made at this time that the matter proceed on pleadings, even more time would be lost before the interlocutory applications could be dealt with, as the pleadings would need to be finalised, prior to their hearing.

    Finally, the scope of any statement of claim in this matter may well depend on the outcome of the interlocutory applications.  If the companies and Fiona Roche are correct that the applicants and Mrs Hamilton have made use of the documents in such a way that some, many or all of them must be removed from the affidavit material on which they seek to rely, the breadth of the statement of claim may be substantially curtailed, and the nature of the proceeding may be fundamentally changed.  I consider, in the circumstances that it is in the interests of justice, and the efficient conduct of this proceeding, that the document issue be dealt with prior to considering whether this matter should proceed on pleadings.

    For these reasons, I dismissed the oral application that this action proceed on pleadings.  Once the interlocutory applications have been dealt with, and the documents on which the applicants and Mrs Hamilton are entitled to rely have been identified, it may be appropriate to engage in further consideration of whether this action should proceed on the basis of pleadings.

20. It can thus be seen that the considerations leading the Judge to decline to make the order sought by the Jerome parties included the informal nature and late timing of the application given its procedural consequences; the fact that the application involved a change in position or approach on the part of the Jerome parties; the delay and need for progress in the proceedings more generally; and the potential for the determination of the Documents applications to impact the content of any statement of claim.  It was in these circumstances that her Honour concluded that it was in the interests of justice, and the efficient conduct of the proceedings, that the Documents applications be dealt with prior to considering whether the matter should proceed on pleadings.  Importantly, her Honour expressly contemplated that the issue of whether the matter should proceed on the basis of pleadings could be revisited following her determination of the Documents applications.

    The proposed appeal

21. In their proposed grounds of appeal, the Jerome parties contend that the Judge erred:

    1.   in failing to consider whether the affidavits relied upon by the Hamiltons adequately defined the issues;

    2.   in proceeding upon the erroneous factual premise that there had been a change in the Jerome parties’ position when they had previously raised (and it had appeared to be common ground) that the matter should proceed on pleadings;

    3.   in reaching a manifestly unreasonable conclusion as to the desirability of the matter proceeding on pleadings (and those pleadings being filed ahead of the determination of the Documents applications); and

    4.   in taking account of the delay in the progress of the proceeding without considering the (lack of) responsibility for that delay on the part of the Jerome parties.

22. We are not satisfied that any of the proposed grounds provides an arguable basis for interfering with the Judge’s decision.  As mentioned at the outset of these reasons, the Judge was dealing with a matter of practice and procedure that arose in the course of a directions hearing relating to the management of relatively complex commercial proceedings.  It is crucial that appellate courts respect the broad latitude to be afforded to judges in these circumstances.

23. Here, the Judge was confronted with a difficult decision as to the appropriate sequencing of procedural steps.  The issue her Honour was dealing with was not so much whether the matter should ultimately proceed on pleadings, but rather whether pleadings should be required ahead of the hearing and determination of the Documents applications.  The Jerome parties’ grounds and submissions tend to overlook, or at least do not adequately take account of, this characterisation of the issue with which the Judge was confronted.

24. It is readily apparent that there were advantages and disadvantages with whichever course her Honour adopted.  While the Jerome parties’ submissions on this application point to some advantages of requiring pleadings ahead of the determination of the Documents applications, it cannot be said that this was the only reasonable course for her Honour to have adopted.  While views might differ as to the most efficient way of progressing the proceedings, the course her Honour adopted was, for the reasons she gave, one that was reasonably open.

25. We do not accept that the Judge proceeded on an erroneous factual premise.  Whilst her Honour did mention the change in the Jerome parties’ position, we understand this to be a reference to their position as to the timing or sequencing of pleadings rather than suggesting that the Jerome parties had previously opposed pleadings more generally. 

26. We also do not accept that there is any arguable merit in the contention that the Judge erred in failing to consider the extent to which the Jerome parties had contributed to the delay in the progress of the proceedings.  While her Honour was apparently influenced by a desire to progress the proceeding in light of the delay, we do not think her Honour placed any weight upon any view she might have had as to the various parties’ responsibility for this delay.  In any event, given that her Honour set out the procedural history of the matter in her reasons, we do not think it can be said that her Honour overlooked or misunderstood the relevant procedural history insofar as it may have informed her consideration of the Jerome parties’ oral application.

27. In summary, bearing in mind the discretionary nature of the decision made by the Judge, we are not satisfied that it is attended by sufficient doubt to justify a grant of leave.

28. Further, and in any event, a grant of leave to appeal would require both satisfaction that the decision was attended by sufficient doubt to justify a grant of leave, and that substantial injustice would be done by leaving the decision unreversed.[1]

    [1]     McDonald v Attorney-General for the State of South Australia [2021] SASCA 57 at [12]; Draoui v Le [2021] SASCA 33 at [60]; Commonwealth v Saadat (2019) 134 SASR 184 at [50]-[52]; Harris Scarfe Ltd (in liq) v Ernst & Young (No 2) [2005] SASC 168 at [4]-[11].

1. We are not satisfied that it would occasion substantial injustice to allow the decision below to stand (even if made in error).  As we have already emphasised, the Judge did not purport to finally determine the issue of whether the matter should proceed on pleadings or by originating application and affidavits.  While her Honour’s view as to the sequencing of procedural steps may, on one view, have caused some unnecessary inconvenience and expense to the Jerome parties, we do not think that would constitute substantial injustice of the type contemplated by the authorities.  There is also the practical consideration that the Jerome parties have no doubt already incurred much of that inconvenience and expense through their endeavours to comply with her Honour’s order.

2. For these reasons, we refuse the application for leave to appeal.