Johnson v Powrie

[2018] ACTSC 284

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Johnson v Powrie

Citation:

[2018] ACTSC 284

Hearing Date:

12 February 2015

Submissions Dates:

9, 12 and 24 February 2015

DecisionDate:

12 October 2018

Before:

Refshauge J

Decision:

It is declared that the proceedings have ended, save for any assessment of costs which requires the trustee of the bankrupt estate of Alan Charles Powrie to apply to become a party to the proceedings and seek leave to prosecute them.

Catchwords:

PRACTICE AND PROCEDURE – Settlement of Proceedings – failure of implementation of settlement – dismissal of claim – whether costs can be assessed – defendant made bankrupt – position of trustee

BANKRUPTCY – Proceedings against a bankrupt – application dismissed with costs – right of trustee of defendant’s bankrupt estate to seek assessment of costs – need for trustee to be made a party – need for leave to continue with proceedings

Legislation Cited:

Bankruptcy Act 1966 (Cth), ss 58(1), 86
Court Procedures Act 2004 (ACT), s 11(1)
Court Procedures Rules 2006 (ACT), rr 35(3), 231, 6351, Div 2.17.5
Legal Profession Act 2006 (ACT), s 294A(6), Div 3.2.7
Limitation Act 1985 (ACT)

Cases Cited:

Armour v Mason [2002] NSWSC 464
Gye v McIntyre (1991) 171 CLR 609
Johnson v Powrie [2018] ACTCA 46

Re Davies [1961] ALR 886

Parties:

Noel Patrick Johnson (Plaintiff)

Alan Charles Powrie (Defendant)

Representation:

Counsel

Mr W Sharwood (Plaintiff)

Mr J Weller (Defendant)

Solicitors

Nichol & Co (Plaintiff)

Weller & Associates (Defendant)

File Number:

SC 408 of 2012

REFSHAUGE J:

1. These proceedings constitute one action in the long set of proceedings between the parties arising out of unsuccessful defamation proceedings in the Supreme Court of New South Wales taken by the Plaintiff, Noel Patrick Johnson, for whom the Defendant, Alan Charles Powrie, acted as his solicitor.

1. I have set out the background and progress of the proceedings in Johnson v Powrie [2018] ACTCA 46 at [4]-[73] (“the Court of Appeal decision”). I do not need to repeat those matters and, so far as they are relevant, what I there said is incorporated into these reasons.

The Proceedings

1. By Application in Proceedings dated 30 November 2012 but filed on 3 December 2012, Mr Johnson sought leave to file an Originating Application “out of time”.

1. That Originating Application sought a review under Div 3.2.7 of the Legal Profession Act 2006 (ACT) of certain costs charged by Mr Powrie to Mr Johnson which Mr Johnson then paid.

1. Insofar as r 6351 of the Court Procedures Rules 2006 (ACT) applies to an extension of time, it does not apply here, for the extension is made under s 294A(6) of the Legal Profession Act 2006 (ACT) which, like an extension of the limitation period under the Limitation Act 1985 (ACT), is not made “under these rules [that is, the Court Procedures Rules] or an order of the court” but by a Territory law other than the Rules Court Procedures Rules.

1. It is probable that an Originating Application should be used for such applications: r 35(3) of the Court Procedures Rules. This, however, means that when the extension of time is granted then fresh proceedings, as permitted when the time is extended, will have to be commenced, involving a fresh file and, perhaps more importantly, a fresh filing fee. This is a matter to which the Advisory Committee, established under s 11(1) of the Court Procedures Act 2004 (ACT), commonly known as the Joint Rules Advisory Committee or JRAC, may care to consider.

1. The Application in Proceedings  was made returnable on 17 December 2012 and was then, and thereafter on four separate occasions, adjourned until it came before Higgins CJ on 9 April 2013 when, by consent, the Application was dismissed by consent with an order that Mr Johnson pay Mr Powrie’s costs on a solicitor-client basis as at 8 February 2013.

1. The foreshadowed Originating Application to which the application for extension of time referred was, accordingly, never filed.

1. Notwithstanding the dismissal of the Application in Proceedings, the matter has been mentioned before the Court on six further occasions, including on 12 February 2015. It was on this occasion that I was asked to consider making orders or directions at the same time as doing so for the Court of Appeal proceedings. There have also been certain other ACT Supreme Court proceedings between Mr Johnson and Mr Powrie, which was also mentioned at the same time, for the purpose of determining how all three proceedings should be progressed.

1. It may be that the three matters were simply listed together without either party giving any consideration as to whether each proceeding was still active.

1. Nevertheless, on a number of occasions, the bench sheet on which the associate to the judicial officer hearing the matter records the orders made and other matters needing to be noted, shows that there was a reference on at least two occasions to a proposal to file a Notice of Discontinuance in these proceedings.

1. Since the only application extant in the proceedings had been dismissed, the proceedings were at an end and there was certainly no need and probably no power to file a Notice of Discontinuance as there were no proceedings on foot to discontinue.

1. That the misconception continued is shown by the fact that the written submissions filed for Mr Powrie referred to these proceedings as well as to the other two matters involving these parties.

1. Having now scrutinised the proceedings carefully, it is clear that not only are there no directions or orders required but that none could validly be made for proceedings which have already ended.

1. Despite this, it would be possible to have the costs order assessed under Div 2.17.5 of the Court Procedures Rules.  That has not happened.

Bankruptcy

1. As noted in the Court of Appeal decision at [70], Mr Powrie was made bankrupt on 27 May 2013.  This possibly affects these proceedings in at least two ways.

1. In the first place, by s 58(1) of the Bankruptcy Act 1966 (Cth), any entitlement to the costs order made on 9 April 2013 vested in the trustee of Mr Powrie’s bankrupt estate: Armour v Mason [2002] NSWSC 464 at [7]-[10], [20]. The trustee appointed was, it appears, Stephen Hundy.

1. If Mr Hundy wished to have the costs assessed, then, as he is not currently a party to the proceedings, he would have to apply to be added or substituted as a party to the proceedings.  See Re Davies [1961] ALR 886. He would also have to apply under r 231 of the Court Procedures Rules for leave to continue the proceedings.  Such applications are made by Application in Proceedings.

1. The other matter is that Mr Johnson may be entitled under s 86 of the Bankruptcy Act to set-off the costs payable in these proceedings against the $10,000 payable by Mr Powrie under an Agreement made between them on 31 August 2011 compromising the Court of Appeal proceedings, which payment is explained in the Court of Appeal decision at [51]-[63].  The costs order and settlement sum may well be mutual dealings as referred to in the section, permitting such a set-off.

1. In Gye v McIntyre (1991) 171 CLR 609 at 625, the word “dealing” was held to be used in the section in a non-technical sense, usually referring to matters of a commercial or business nature but, again, not in a limited sense.

1. Whether this would be so held is not clear and I have heard no submissions on the matter; indeed, it has not expressly arisen in the proceedings.

Disposition

1. In the circumstances, there is no order or direction that needs to be made in these proceedings. The proceedings have ended, save for any assessment of costs before which the trustee must seek leave and apply to be made a party.

1. I shall so declare.

I certify that the preceding twenty-three [23] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge.

Associate:

Date:  12 October 2018