JZ Lee Interiors Pty Ltd v Smith

[2015] VCC 799

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL DIVISON
GENERAL LIST

Case No. CI-14-03345

JZ LEE INTERIORS PTY LTD	Plaintiff
v.
BRENDAN ASHLEY SMITH & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	18 June 2015
DATE OF JUDGMENT:	18 June 2015
CASE MAY BE CITED AS:	JZ Lee Interiors Pty Ltd v. Smith & Ors
MEDIUM NEUTRAL CITATION:	[2015] VCC 799

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Stay of proceeding until the determination by the Court of Appeal of an application for leave to appeal

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I Upjohn QC and Mr S Freire	Webb Korfiatis Commercial
For the Defendant	Mr S Dyrenfurth	Altus Lawyers

HIS HONOUR:

1The issue for determination today is whether the timetable for the delivery of pleadings in this proceeding should be suspended until the Court of Appeal has determined the defendants’ application for leave to appeal against a decision of Her Honour Judge Kennedy on 16 April 2015 granting leave to the plaintiff to file and serve an amended statement of claim, and notwithstanding my decision on 3 June 2015 to refuse an application to stay the proceeding (and a related proceeding) pending the determination of the Court of Appeal.

2The Court of Appeal will hear the application for leave to appeal and an application for a stay of the proceeding on 16 July 2015. The order of Judge Kennedy on 16 April 2015 laid down a timetable for the pleadings responding to the plaintiff’s amended Statement of Claim, including the filing of:

a.an amended defence and counterclaim by 4 June 2015;    

b.an amended reply and defence to counterclaim by 18 June 2015.

3On 3 June 2015, when I refused the defendants’ application for a stay of the proceeding, I extended the date for the delivery of the amended defence and counterclaim to 17 June 2015.

4At that time, I rejected a submission by defendants’ senior counsel, Ms Loughlan QC that the timetable for further pleadings should be suspended until the Court of Appeal had determined the application for leave to appeal from Judge Kennedy’s decision.

5A draft of the proposed amended statement of claim had been served by the plaintiff on 4 February 2015. An earlier version of the proposed amended pleading had been served on about 13 January 2015 and was the subject of a hearing and orders by me on 23 January 2015.

6Notwithstanding the orders made by Judge Kennedy on 16 April 2015, the defendants apparently took no steps to be in a position to comply with the order for the delivery of a defence to the amended statement of claim. No application was made to either Judge Kennedy, or to the Court of Appeal, for a stay of the orders.

7On 29 May 2015, the defendants gave notice of their intention to make application to the Commercial Division Duty Judge to vacate the trial date of 21 September 2015 and for the stay of the proceeding until the Court of Appeal determined the application.

8The application was supported by the material filed with the Court of Appeal on the application for leave to appeal. The grounds of the proposed appeal were essentially that the decision of Judge Kennedy, in her application of legal principles and the exercise of discretion, had miscarried. One ground asserted that, “The learned Judge erred in relation to [certain claims] because such claims are statute barred”. In respect of other claims, it was asserted that the claims had “no reasonable prospects of success” and were “fundamentally flawed or defective”.

9I was reluctant to entertain the application in these circumstances. Whilst clearly I had jurisdiction to make the orders sought, I considered that Judge Kennedy, as the judge who had determined the application, and the Court of Appeal itself, were better placed to consider arguments essentially challenging the correctness of Judge Kennedy’s decision making.

10In her reasons for decision, Judge Kennedy at paragraph 15, referred to the fact that the plaintiff in the proposed amended statement of claim had not addressed all the matters I had included in my order dated 23 January 2015. I foresaw the possibility of arguments being advanced on the stay application based on perceived inconsistencies between Judge Kennedy’s reasoned decision, and the earlier orders made by me after reaching tentative conclusions.

11The issue of whether a claim is statute barred is always a matter which must be pleaded as a defence. In this proceeding, Judge Kennedy was satisfied that the amended claims raised in the proposed amended statement of claim were not futile. The plaintiff asserted that there was a basis for relying upon the claims, notwithstanding the limitation period, as time would only begin to run after the plaintiff had discovered the alleged fraud of the defendants.

12In my view, the Court of Appeal’s consideration of the matters before it, is likely to be assisted if it has the defendant’s pleaded responses to the plaintiff’s amended statement of claim and the plaintiff’s reply to the defences based upon the Limitation of Actions Act.

13The present proceeding (and the related proceeding) were commenced by Writ dated 11 July 2015. The proceedings are fixed for trial together on 21 September 2015, with an estimate of 20 sitting days. The Commercial Division of the County Court has only 5 judges. It handles about 3,000 cases each year. It is difficult to ensure that long cases (in excess of 10 sitting days) are heard reasonably quickly.

14The trial may need to be refixed, whatever the result of the leave application to the Court of Appeal, because of the delay with the finalisation of the pleadings and any further necessary interlocutory steps. It is likely, in that event, that the trial would not be refixed until 2016.

15On 16 June 2015, the defendants’ solicitors wrote to the plaintiff’s solicitors in relation to the present application in which they asked that, “an undertaking be given by return that the plaintiff will take no action adverse to the defendants by reason of the defendants not filing a defence and counterclaim to the amended statement of claim by 4pm tomorrow”.

16The plaintiff’s solicitors replied, inter alia, “the plaintiff does not intend at this stage to enter a default judgment against the defendants for failure to file a defence to the amended statement of claim. However, the plaintiff reserves all its rights with respect to the matters outlined herein”. Plaintiff’s senior counsel, Mr Upjohn QC reaffirmed at the hearing today, that the plaintiff would take no steps to enter judgment against the defendants prior to the determination by the Court of Appeal of the leave application.

17Weighing on the one hand, the asserted prejudice the defendants say they will suffer if they are required to file an amended defence and counterclaim in advance of the determination by the Court of Appeal, and on the other hand, the desirability to all parties of keeping the cases moving, I consider that justice is best served by refusing the defendants’ present application.

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Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 18 June 2015.

Dated: 18 June 2015

Olivia Bramwell    

Associate to His Honour Judge Anderson