Manny v David Lardner Lawyers (No 2)
[2022] ACTCA 13
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Manny v David Lardner Lawyers (No 2) |
Citation: | [2022] ACTCA 13 |
Hearing Date(s): | 23 March 2022 |
DecisionDate: | 23 March 2022 |
Before: | Elkaim J |
Decision: | See [25] |
Catchwords: | CIVIL LAW – APPEAL – application in proceeding –– where the appellant seeks leave to act on behalf of four companies – where three of those companies are in liquidation – requirements for notice of appeal under r 5403 of the Court Procedures Rules 2006 (ACT) – where the respondent makes an application in proceeding to strike out a further amended notice of appeal |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 30, 5403 |
Cases Cited: | Manny v David Lardner Lawyers(No 2) [2021] ACTSC 289 Manny v David Lardner Lawyers [2022] ACTCA 8 Manny v David Lardner & Associates (No 2) [2019] ACTSC 86 |
Parties: | J Manny ( Appellant) Ernest David Lardner & Kenneth William Power trading as David Lardner Lawyers ( Respondent) |
Representation: | Counsel Self-represented ( Appellant) J Larkings ( Respondent) |
| Solicitors Self-represented ( Appellant) Boettcher Law ( Respondent) | |
File Number(s): | AC 59 of 2021 |
Decision under appeal: | Court/Tribunal: Supreme Court Before: Murrell CJ Date of Decision: 5 November 2021 Case Title: Manny v David Lardner Lawyers (No 2) Citation: [2021] ACTSC 289 Court File Number(s): SC 527 of 2016 |
Elkaim J
There were two applications before me today.
For convenience, for purposes of both applications, I will refer to Mr Manny as the applicant and to Lardner Lawyers, Kenneth William Power and David Lardner Lawyers Pty Ltd collectively as the respondent.
The first in time is an application, filed on 18 February 2022, requesting leave for the applicant to act on behalf of four companies.
The second, filed on 18 March 2022, is an application by the respondent to strike out a further amended notice of appeal filed on 11 March 2022.
The applicant wishes to appeal from a decision of Murrell CJ delivered on 5 November 2021 (Manny v David Lardner Lawyers(No 2) [2021] ACTSC 289).
The applicant and four companies were the plaintiffs before Murrell CJ. They lost. Verdicts were given for the defendants.
The four companies are Landagency Pty Ltd, Jeff Manny Constructions Pty Ltd (in liquidation), JK3L Pty Ltd (in liquidation) and Lonagann Pty Ltd (in liquidation).
The liquidator of the three companies in liquidation is not interested in pursuing the appeal. He initially refused to give consent to the applicant acting on behalf of the companies but, by a letter dated 17 March 2022, he has now stated:
I neither consent to, nor do I oppose your application to act for the companies in liquidation on the appeal but will leave the matter to be determined by the Court.
The current notice of appeal was filed with the leave of Acting Justice Berman given on 2 March 2022 (Manny v David Lardner Lawyers [2022] ACTCA 8). His Honour’s orders specifically do not permit the appeal to be filed on behalf “of any Corporation in liquidation where the liquidator has not given consent to that occurring”.
The respondent recognised that if I gave leave to the applicant to act on behalf of the companies then there would necessarily need to be yet another notice of appeal. The respondent also says that regardless of this fact, the further amended notice of appeal does not in any event comply with r 5403 of the Court Procedures Rules 2006 (ACT). The deficiencies are obvious, in particular in regard to sub rules (1)(e) and (f).
Whatever the position in relation to the companies the applicant will need to make another attempt to ‘get it right’. The applicant is self-represented and although the history of the litigation has no doubt given him a good deal of experience, he is entitled to a degree of latitude in order for him to pursue his appeal.
The applicant needs to comply with r 5403. A continued failure to do so will ultimately result in his appeal being permanently denied.
As can be seen above, one of the four companies is not in liquidation. This is the Landagency Pty Ltd. The relevant rule in respect of this company is r 30(4). The applicant is the sole director and shareholder of the company. I am satisfied that the company has authorised him to represent it. Although leave is still required, the company will not be able to pursue its rights of appeal from the decision of Murrell CJ absent a grant of leave.
In order for this company to appeal, and exercise those rights, I think it appropriate for leave to be given.
Turning now to the companies in liquidation. McWilliam AsJ dealt with the relevant requirements in an earlier decision concerning the applicant (Manny v David Lardner & Associates (No 2) [2019] ACTSC 86). Commencing at [22] her Honour said:
22.Creditors and members of a company have standing to seek leave to bring a derivative action in the name of a company in liquidation: Chahwan v Euphoric Pty Ltd t/as Clay & Michael [2008] NSWCA 52; 245 ALR 780 (Chahwan v Euphoric) at [124], cited in the judgment of Re DH International Pty Ltd (in liq) (sub nom Challis v Hoffman)[2017] NSWSC 870; 121 ACSR 585 (Challis v Hoffman)at [5] per Gleeson JA. As Mr Manny is at least a shareholder (and on his version of the evidence, also a creditor, although it is not necessary to determine that fact), he has standing to bring the application.
23.As the Companies are in liquidation, the application falls within the Court’s general equitable jurisdiction, rather than s 237 of the Corporations Act: Chahwan v Euphoric at [124]-[125]. The Court thus has a general exercise of discretion having regard to all the circumstances of the case: Challis v Hoffman at [28]-[29]; Re Dungowan Pty Ltd (in liq) [2014] NSWSC 1721 (Dungowan) at [26] per Black J.
24. As part of that discretion, the Court considers the “three main matters”:
(1) Whether the proceedings proposed to be pursued have some solid foundation, in that they exhibit such a degree of merit as to be neither vexatious nor oppressive and to present reasonable prospects of success.
(2) The liquidator’s attitude to the question whether the proceedings should be pursued.
(3) Whether practical considerations support the initiation of the proceedings, with particular reference to financial protection of the liquidator and the estate of the company by means of indemnity and, if indicated, security.
25.These three matters were referred to by Barrett J in Carpenter v Pioneer Park Pty Ltd [2008] NSWSC 551; 71 NSWLR 577 (Carpenter)at [34]. They have subsequently been applied by Ward J (as her Honour then was) in Hu v PS Securities Pty Ltd t/as Trustee of Joseph Family Trust [2011] NSWSC 303 at [38], and by Black J in cases such as Re Sundara Pty Ltd [2015] NSWSC 1694 (Re Sundara) at [10] and Dungowan at [25] (citing an earlier decision of his Honour to the same effect).
Absent a compliant notice of appeal on behalf of the companies it is difficult to assess whether the appeal has a “solid foundation”. I note however that McWilliam AsJ, albeit only dealing with the proceedings at first instance, concluded that:
I am satisfied on the balance of probabilities that proven creditors would receive some small dividend, and this is sufficient to warrant pursuing legal proceedings.
At this stage, notwithstanding that the companies lost before the Chief Justice, I am satisfied that I can proceed to the next stage of the test set out by McWilliam AsJ. I have quoted the liquidator’s current position above. He neither opposes nor consents to the companies being represented by the applicant.
Had the liquidator maintained his opposition this application would fail. But he has amended his position to one of effective neutrality. As I have said above, to deny the application would be to deny the companies the capacity to pursue their rights of appeal. The liquidator is clearly not interested in doing so. Further, the companies are an intricate part of the case that the applicant wishes to pursue on appeal. I think the liquidator’s position is enough for me to consider allowing the application, subject of course to the final consideration.
This final consideration effectively relates to the Court being satisfied that the liquidator and the estates of the companies are protected as to their costs. The respondent says that this protection should include security for its own position on costs.
McWilliam AsJ seemed to adopt this approach in her decision in which her grant of leave to the applicant included the applicant paying $30,000 into court by way of security against an adverse costs order payable to the first defendant.
I note that this sum of money remains in court pending the appeal. If the appeal was not successful, the $30,000 would not indemnify the respondent’s costs on the appeal.
I asked the respondent what sum of money would be sought by way of security. The answer was $200,000. This sum, but I recognise only at first sight, appears excessive. I would have considered making a security order as part of today’s orders but having regard to the amount sought, further justification is necessary.
I think the way forward should be as follows: I grant leave to the applicant to act on behalf of the four companies. I then grant leave for the filing of a fresh notice of appeal. Finally, I grant leave to the respondent, following the receipt of the new notice of appeal, to file any application it wishes either in respect of the notice of appeal and, or, to seek security for its costs on the appeal.
I will hear the parties on the costs of the applications before me today. My preliminary view is that the applicant should pay the costs of the respondent’s application and each party should pay its own costs of the applicant’s application.
I make the following orders:
(i)Mr Jeff Manny is granted leave to act on behalf of the following companies: Landagency Pty Ltd, Jeff Manny Constructions Pty Ltd (in liquidation), JK3L Pty Ltd (in liquidation) and Lonagann Pty Ltd (in liquidation).
(ii)Mr Manny, acting on behalf of himself and the companies, is to file and serve a fresh notice of appeal within 28 days.
(iii)Following the passage of the 28 days, and within a further 28 days, the respondents are to file and serve any applications they wish to strike out the fresh notice of appeal and/or to seek security for their costs on the appeal.
(iv)The applicant is to pay the respondents’ costs of respondents’ application filed on 18 March 2022, such costs not to be payable until the conclusion of the appeal proceedings.
(v)Each party is to pay its own costs of the applicant’s application filed on 18 February 2022.
(vi)The preceding two costs orders are subject to further order of the Court.
| I certify that the preceding twenty-five [25] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim. Associate: Date: |
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