Metropolitan Petar v Mitreski

Case •

[2008] NSWSC 293

•

27 March 2008

No judgment structure available for this case.
CITATION: Metropolitan Petar v Mitreski [2008] NSWSC 293
HEARING DATE(S): 27/03/08
JURISDICTION: Equity Division
JUDGMENT OF: Young CJ in Eq
EX TEMPORE JUDGMENT DATE: 27 March 2008
DECISION: Directions made by way of case management.
CATCHWORDS: PROCEDURE [40]- Overriding purpose of Civil Procedure Act and court rules to facilitate just, quick and cheap resolution of real issues- Modern policy re particulars- Defendants' request for particulars postponed where defendants in a position to file the defence, and where plaintiffs' affidavits are yet to be filed- Hearing date set down despite aspects of the case pending in higher courts.
LEGISLATION CITED: Civil Procedure Act 2005, ss 56-60
CASES CITED: Barnes v Addy (1874) LR 9 Ch App 244
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (207) 230 CLR 89
Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 599
Philliponi v Leithead (1958) 59 SR (NSW) 352
Sydney City Council v Greek Australian Finance Corporation Pty Ltd (1974) 32 LGRA 32
PARTIES: His Eminence Metropolitan Petar, The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (P1)
The Very Reverend Father Mitko Mitrev (P2)
Lambe Mitreski (D1)
Pero Damcevski (D2)
Boris Minovski (D3)
Eftim Eftimov (D4)
Mile Marcevski (D5)
Macedonian Orthodox Community Church St Petka Incorporated (D6)
Naum Despotoski (D8)
Attorney General for the State of New South Wales (D9)
FILE NUMBER(S): SC 3369/97
COUNSEL: T G R Parker SC and R E Steele (P)
G O Blake SC (D1-6 & 8)
M McFadden (D9)
SOLICITORS: Sachs Gerace Lawyers (P)
McConnell Jaffray Lawyers (D1-6 & 8)
Crown Solicitor's Office (D9)


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 27 March 2008

3369/97 – METROPOLITAN PETAR v MITRESKI

JUDGMENT

1 HIS HONOUR: These proceedings were commenced in 1997 by the person who would appear to be the presiding Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand in order to ensure that he had control of part of what he claims to be the Macedonian Orthodox Church, namely, the ministry being conducted by the persons on the defendants' side of the record as the Macedonian Orthodox Community Church of St Petka at Rockdale.

2 I gave a brief history of the proceedings in the judgment I handed down on 25 March, cited as Metropolitan Petar v Mitreski [2008] NSWSC 243 and I will not repeat what I said there.

3 After an aspect of the matter was dealt with by the Court of Appeal on 23 October 2007 (see Metropolitan Petar v Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 287), I have been case-managing the matter to get it disposed of finally as soon as possible, compatible with giving each party procedural fairness.

4 Two very awkward matters have caused a lot of time in interlocutory proceedings: (a) whether the principal defendant, the sixth defendant (the Association), was entitled to be given judicial advice under s 63 of the Trustee Act 1925 about certain aspects of the case and as to whether it should pursue the case; and (b) whether the sixth defendant should be able to have recourse to what may well be trust property in order to properly prepare for and conduct the defence.

5 So far as (a) is concerned, the current situation is that Palmer J gave certain advice under the Trustee Act by order which was made on 22 March 2007, to which I will return, but that order was set aside by the Court of Appeal on 22 June 2007 (see [2007] NSWCA 150). The High Court has given special leave to appeal and it may be that that appeal will be heard in June 2008, but that is by no means certain.

6 As to (b), the Court of Appeal made orders by way of injunction protecting the assets which are vested in the sixth defendant and allowing only very limited resource to them for the purpose of the sixth defendant funding this litigation. The orders were varied from time to time, but in my judgment [2008] NSWSC 243 I declined to vary them further.

7 Mr Blake SC, who has appeared in this case for some time, informs the court that he is no longer able to appear because the sixth defendant just has no moneys to be able to properly fund the preparation and the appearance at the trial. I also formed the view from what he said that there is a possibility that leave to appeal will be sought from my judgment [2008] NSWSC 243 and I would assume that if that course is pursued that the Court of Appeal will consider the application for leave somewhere in May or June.

8 The plaintiffs and the Attorney General, who is the ninth defendant, all press for the fixing of the hearing date. This is opposed by the first to sixth and eighth defendants who say that until matters (a) and (b) are finalised at an appellate level, they are powerless to prepare properly for a hearing.

9 Today I am asked to consider twelve matters, only three of which are within Mr Blake's instructions to make submissions. These are the first three. The twelve matters are, and I merely list them to give myself some headings on which to hang my reasons:


      (1) the time for filing a defence to be extended;

      (2) request for particulars;

      (3) whether the directions hearing should merely be adjourned until after the High Court's decision;

      (4) a date for filing a reply;

      (5) discovery;

      (6) whether the cross-claim should be severed;

      (7) a hearing date;

      (8) a date for filing the plaintiffs’ evidence in chief;

      (9) a variation of the existing undertaking by the plaintiffs not to interfere with worship at the local church;

      (10) the status of the evidence before Hamilton J on the hearing of a separate point;

      (11) the defendants’ security for costs application; and

      (12) the question of costs of the interlocutory application made on 16 December 2004 on the sixth defendant's cross-claim.

10 I will briefly deal with each of these in turn, but, before I do so, I should make some preliminary observations.

11 Under Part 6 of the Civil Procedure Act 2005, the guidelines for dealing with case management and procedural applications have changed considerably from the previous regime. How this came about was that for many years in New South Wales, judges in the Equity Division and the previous Commercial Division, now part of this Division, have been making orders directed to the just, quick and cheap resolution of real issues in proceedings. That practice and other considerations were adopted by the Woolf Report in England into civil procedure and as a result of the Woolf Report, the Civil Procedure Rules 1998, known by everybody as CPR, came into effect in England on 26 April 1999.

12 The very first rule, CPR 1.1(1), declared that the rules constituted a new procedural code with the overriding objective of enabling the court to deal with cases justly. Although this seems to be a last minute addition to the CPR from the original drafts, judges in England have put considerable emphasis on it. So much so that it is now said that when the rules deal with the just resolution of disputes in a court, this does not mean merely deciding the merits according to procedural fairness, there is now a new three dimensional concept of procedural justice. The principal goal of civil procedure, namely the doing of substantive justice, is now overlaid with an overriding objective that establishes a procedural discipline so that the court reaches a substantially correct outcome by means of proportionate resources and in a reasonable time. See, for instance, Zuckerman, Civil Procedure (2003) at para 1.2.

13 Part 6 of the New South Wales Act obviously draws on the English experience and so uses the words "overriding purpose". Section 56, referring to the overriding purpose of the Act and rules of court as facilitating the just, quick and cheap resolution of the real issues, is supplemented by ss 57 through to 60. Section 57 says that for the purpose of furthering the overriding purpose, proceedings in the court are to be managed having regard to the following objects:


      (a) the just determination of the proceedings;
      (b) the efficient disposal of the business of the court;
      (c) the efficient use of available judicial and administrative resources;
      (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

14 Section 58 then says that in deciding what orders to make in an application during the case management process, the court must seek to act in accordance with the dictates of justice. Subsection (2) then fleshes out what are the dictates of justice in any particular case. Accordingly, one is not now dealing with what in the old days was called “entitlements to an order” and focusing principally on the rights of a party in litigation, but one is now looking at a much broader picture, that is, the overall just disposal of the proceedings within a reasonable time. Accordingly, when a court is making case management orders, the court is required more to focus on sections 56 to 60 of the Uniform Civil Procedure Act than on utterances made under the old procedure which focused more on the rights of parties.

15 Having unburdened myself of that, I will now deal with the twelve matters as briefly as I can.

16 (1) Extension of time to file a defence. After discussion, it would seem that there is no problem at all about an unverified defence being filed by 4pm on 3 April with a verified defence to be filed and served by 4pm on 15 April. It seems to me that there is no problem about that and in due course I will make an order to that effect as order 1.

17 (2) Particulars. This refers to paras 31, 32A and 32C of the current (ninth) version of the statement of claim.

18 Paragraph 31 pleads that the committee members caused the Association to do certain things and had assisted with, and/or participated in breaches of the church trust by the sixth defendant and did so "with knowledge that, or, alternatively, were recklessly indifferent as to whether, the Association was acting in breach of the church trust". Paragraph 32A makes a similar suggestion, that the committee members "have done so with notice of those breaches of the church trust", and para 32C refers to one Despotovski as the purported parish priest receiving property of the church trust in breach of trust "and has done so with notice of those breaches". Paragraph 31 is a second limb of a Barnes v Addy (1874) LR 9 Ch App 244 claim, whereas 32A and 32C are first limb claims, but for the moment that does not matter.

19 By particulars sought in a letter of 11 March 2008, the first to sixth and eighth defendants sought as to para 31 particulars in respect of each alleged breach of the church trust and in respect of each committee member specific facts and circumstances where he was recklessly indifferent as to whether the Association was acting in breach of the church trust. As to paras 32A and 32C, particulars were asked as to the notice, whether it was oral or in writing, and in each case to identify what was meant by notice.

20 The plaintiffs oppose giving these particulars on a number of grounds. One is that the application is made very late in the hunt and it will delay the trial. I really do not want to say much about that because I think the situation is that there has been delay in the past, but here we are in March 2008 and we have just got to do the best we can to make sure there is a fair trial. The other, and I thought more substantial reason was that the particulars are not needed for the purpose of providing a defence because we know that a defence can be filed by next Wednesday. Mr Parker SC, who appears for the plaintiffs, acknowledges that if after the affidavits of the plaintiffs have been filed, there is any doubt in the mind of a reasonable defendant as to what is the plaintiffs' case as to why each committee member was recklessly indifferent as to the matter of notice, then further particulars may be ordered to make sure that there is no doubt before the time for the defendants filing their affidavits has expired.

21 Under the old system, great delays were caused by requests for particulars, particularly voluminous requests for particulars or insubstantial interrogatories, and part of the reason for adopting sections 56 and following is to minimise those delays. Even under the old system, however, as is made clear by the decision of the Full Court of this Court in Philliponi v Leithead (1958) 59 SR (NSW) 352 at 360:

          "An applicant for particulars must always show that circumstances exist which make it desirable and proper that particulars should be furnished.”

22 Particulars, in the first instance are to show the defendant as to what allegations he, she or it should be pleading. In a court system where there was oral evidence, particulars also serve the purpose of enabling the party to see what case had to be met so that the evidence to meet it could be assembled. There was also in the old common law system the device of permitting a plaintiff to new assign which assisted in that process.

23 However, where we have a system as at present where all evidence to be adduced by a party must be produced by a certain deadline or else not at all, then, provided that a person can plead to an allegation, it is just a waste of time and money to require particulars to be given when all the details, including the evidence, is going to be put in the other side's affidavits. If when the plaintiffs' affidavits have all been filed there is any doubt, then at that stage an order for particulars can be made.

24 Mr Blake relied on two authorities to the effect he says that he is entitled to particulars now. Both I think dealt with cases that started before the Civil Procedure Act came into force. The first case certainly did, and that was Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 599, a decision of Einstein J where his Honour considered that a 1910 decision of the High Court and a 1977 decision in a taxation matter in the High Court meant that he should order further particulars to guard against surprise. The particulars seem to have been ordered at the pleading stage rather than the hearing stage.

25 Secondly, he relies on the decision of the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 162 at [170] where the judges said that a Barnes v Addy allegation was a very serious allegation, it involved an allegation that the accused persons were knowing participants in a dishonest and fraudulent design and that that meant "it ought to have been pleaded and particularised".

26 I think that too much stress is being made on the actual words that were used by the judges rather than on the context. The problem was, in the High Court's eyes, that the Court of Appeal had departed from the way in which the case had been conducted, and the comment really was that they should not have done so with such an important allegation which should have been pleaded and particularised.

27 I do not consider that they were saying that in a case of this nature where the serious allegation has been made and where in the normal course of proceedings, the defendants will be made fully aware of the allegations by the time the plaintiffs' case is finalised in the sense of all its affidavits being served, that it is imperative for the court to order particulars of the allegations at the pleading stage and there does not appear to be any difficulty in filing a defence. Accordingly, it seems to me that the proper approach in accordance with the Civil Procedure Act is to postpone the question as to whether further particulars should be ordered in accordance with McConnell Jaffray’s letter of 11 March 2008 until 29 May 2008, a date that will become significant, I hope, later.

28 (3) Postponement of the directions hearing. There are very good reasons for doing this. Normally when there are substantial issues being considered by an appellate court, the trial court should hold its hand. However, that is only one consideration. The quick disposal of the action, if that really can be properly used in a case that has now been going for twelve years, is another consideration and that is exacerbated where, as here, a significant section of the public is affected by the case.

29 I said I would return to the orders made by Palmer J on 22 March 2007 which were set aside by the Court of Appeal and which the sixth defendant seeks to restore in the High Court. Those orders were:

          “1. The Association would be justified in defending the Main Proceedings on the issue of the terms of the trust declared by Hamilton J on 7 February 2007 and without limiting its generality:
              (a) the allegations in paragraphs 7A and 22 of Statement of Claim (version 8);
              (b) the allegations that are raised by the plaintiff by way of defence to the allegations in paragraphs 7A and 22 of Statement of Claim (version 8);
          (Schedule A Property Issue)
          2. The Association be entitled to have recourse to the property in Schedule A in the judgment Metropolitan Petar v Mitreski [2003] NSWSC 262, other than the Church Land, for the purpose of paying its reasonable costs of defending the Main Proceedings as to the Schedule A Property Issue as follows:
              (a) $78,666.01 for the period from 9 July 2004 to 9 February 2007;
          (b) up to $216,295.00 for future costs.
          3. The directions and orders in paragraphs 1 and 2 are subject to the proviso that the expenditure by recourse to the Schedule A Property is justified only if the Association is reasonably of the opinion at the time of making of the expenditure that, if the expenditure is made the Association will have sufficient funds remaining from which it can properly pay the costs of defending the Schedule A Property Issue to finality.
          4. The Association be entitled to have recourse to the property in Schedule A in the judgment Metropolitan Petar v Mitreski [2003] NSWSC 262, other than the Church Land for the purpose of paying its reasonable legal costs of obtaining an assessment of its costs ordered to be paid by the opponents in Macedonian Orthodox Community St Petka Inc v His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand [2006] NSWCA 160.”

30 “Association” in those orders means the sixth defendant. Mr Parker says that I should not be over-influenced by what the High Court might do as the highest achievement of the appellant would be to have Palmer J’s orders reinstated which would only be of limited assistance to the sixth defendant.

31 There is considerable force in this submission.

32 Mr Blake says that the possible application to the Court of Appeal for leave to appeal against my decision in judgment [2008] NSWSC 243 is interconnected with what is before the High Court. This is so, at least to a degree, but as Mr Blake concedes, at present my decision in [2008] NSWSC 243 must be seen as correct.

33 These factors make me less reluctant about proceeding with case management even though aspects of the case are pending in higher courts.

34 It seems to me that even though it is a little uncertain what might happen at an appellate level in the next three months, but that, with one exception, there is no real reason why the matter should not be progressed in the meantime. That one matter is the alleged impecuniosity of the first to sixth and eighth defendants.

35 Now, it has been stated on many occasions that unless there is some access to the assets that are vested in the sixth defendant, the first to sixth and eighth defendants are not able to meet the costs of proper preparation by competent lawyers.

36 Mr Parker keeps saying that that has been said often enough, but it has never ever been properly supported, but, on the other hand, the fact that Mr Blake says it gives it a considerable amount of credibility.

37 Certainly the court would prefer to have the case presented to it with the best arguments being put forward on both sides after both sides have had proper time and facilities to prepare and, indeed, in a declaratory action or in an action involving a public charity, the court is usually reluctant to act unless there is a proper contradictor to what the plaintiff says; see eg Sydney City Council v Greek Australian Finance Corporation Pty Ltd (1974) 32 LGRA 32.

38 However, that is only one of the matters that must be taken into account and it was a matter of great disappointment to me in one sense that I had to make my decision in [2008] NSWSC 243 the way I did because Mr Blake, who has been appearing for the first to sixth and eighth defendants, is surely one of the most experienced ecclesiastical lawyers in Australia.

39 I also need to take into account that it really is to the public interest that this case be disposed of as soon as possible if that can be done appropriately. Looking from March 2008, it seems to me that in view of what I am about to say, other aspects of the proceedings can be progressed considerably, particularly on the part of the plaintiffs, and that there is no real reason why I should delay a directions hearing generally. I will put the matter back in the list for directions on 29 May 2008 and things may be clearer at that stage.

40 Those three matters were the ones which Mr Blake had instructions to deal with. The other nine matters are matters that came up from Mr Parker's address.

41 (4) The reply. There would seem to be no difficulty at all about a reply being filed and served by 4pm on 19 May and I will so order.

42 (5) Discovery. Hamilton J made an order for discovery, that is order 4 of 26 November 2003. His Honour ordered that without prejudice to the right of the plaintiffs to claim additional discovery, the defendants were to provide discovery of documents in nine categories with various sub-categories by 17 December 2003 I will not go into why four and a half years later that has not been complied with. The order was made and should be observed and really the only matter I have to consider is whether to extend the date for compliance. The practical problem is that if the sixth defendant has no assets and the first to fifth and eighth defendants are persons who I think were described by the lawyer on their side as being members of an ethnic community with little ability to put together a document complying with an order for discovery without legal assistance, the order is really just a waste of energy.

43 In the limited time available to me, I have looked at the authorities to see whether orders should be made that the plaintiffs or someone else provide funds to conduct their discovery. It would not seem that that order has ever been made. It would seem in the 19th century, from Bray, Law of Discovery (1985) that it was once upon a time compulsory for a plaintiff seeking discovery to deposit 5 pounds as security for costs for the people giving discovery, but that was found to be unworkable by the end of the 1890s and has not been imposed since.

44 It seems to me that Mr Parker is right, that the order should be made and then if the question comes up as to whether any penal consequences should follow from the non-compliance with the order, such as questions of poverty etc, it can be considered at that time. I think the appropriate thing to do is to extend the date to 19 May so that the status could then be reviewed again on 29 May.

45 (6) The cross-claim. The cross-claim was filed on 16 December 2004 by the sixth defendant for an order that the Metropolitan Bishop not "interfere in certain activities". The matter came on for an interlocutory hearing before Barrett J on that day and the proceedings on the cross-claim were to continue by way of pleadings. This has never occurred.

46 The plaintiff/cross-defendant now wants an order that would mean that the cross-claim be separately tried after the final judgment in the principal proceedings, and in the meantime should be stood over generally. It is against policy at the moment to stand matters over generally because of the way the court's computer works, but I think the general flavour of what is suggested should occur, but the way to do it is merely to stay the cross-claim until the pleaded cross-claim is filed and to extend the time for the pleaded cross-claim to 17 November 2008 or until further order.

47 (7) The hearing date. Mr Blake in his application under heading 3 said that no hearing date should be set and that the matter should just be held in abeyance until the appeals are dealt with. There is strong pressure on me from both the plaintiffs and the Attorney General to fix a hearing date. There are difficulties in the early part of 2009 and I do not consider that the case is likely to be ready before October. Mr Blake suggested if a hearing date is fixed that it be fixed provisionally. I can see the merits of that, but I can also see the other side and that is that the community must get into their minds the idea that this case will be disposed of and that the time for delay, if it was ever in their minds, has gone.

48 I am told the case will take between two and four weeks. I think it should be fixed for 17 November 2008 and I will set aside four weeks. Whether I am the trial judge or somebody else can be decided at a later stage, but for the moment I will continue to case-manage it.

49 (8) The plaintiffs' case in chief. I am told that all the affidavits in chief can be filed and served no later than 19 May, but that the bundle of documents will have to await discovery and so I will make an order so far as the affidavits are concerned in due course.

50 (9) Release of undertaking. There is currently an undertaking given by the plaintiffs not to interfere with the activities at Rockdale. The plaintiffs seek to be released from that undertaking. This will need to be dealt with I would think by a separate application outside the case management process. However, to get things in order, I will direct that a notice of motion to release or vary the undertakings may be filed returnable before me at 9.30am on 22 April for mention only and at that stage we can see where and when it should be fixed for hearing.

51 (10) The evidence before Hamilton J. It may or may not be the case that Hamilton J will be the trial judge. If he is not then the question will have to be considered at some stage as to what is the status of material before Hamilton J. Mr Parker says that the problem will probably not arise because none of it will be used, but Mr Blake was not so certain. I merely flag this because I don't want to lose sight of it and will ask counsel in due course for their further submissions.

52 (11) The defendants’ application for security for costs. This was to be dealt with today, however, Mr Blake has no instructions to make it. Accordingly, I will just leave it in limbo, but record that Mr Parker has said that if it is reactivated he will be submitting that the delay in having it dealt with is a good discretionary reason as to why no order should be made.

53 (12) The costs before Barrett J on 16 December 2004. Mr Parker has suggested that I should make an order that the cross-claimant pay the cross-defendant’s costs of that interlocutory application. They are currently reserved. I cannot see any purpose in making an order at the moment. The costs could not be assessed and paid until after the proceedings are finished and if there is to be an order made, it probably should be made by Barrett J. So, accordingly, I decline to make that order at this stage.

54 It follows then that the court should make the following orders:


      1. Order that the time for filing a verified defence be extended to 15 April 2008 provided that an unverified defence in final form is served on the representatives of the plaintiffs and the ninth defendant no later than 4pm on 3 April 2008.
      2. Postpone the question of the particulars sought in McConnell Jaffray’s letter of 11 March 2008 to 29 May 2008.
      3. List the matter for further case management before me at 10am on 29 May 2008.
      4. Order that the plaintiffs file any reply to the defences no later than 19 May 2008.
      5. Extend the time for discovery ordered by Hamilton J in his order 4 of 26 November 2003 to 19 May 2008.
      6. Order that the sixth defendant's cross-claim filed on 16 December 2004 be stayed until a pleaded cross-claim is filed and extend the time for filing such a pleaded cross-claim to 17 November 2008.
      7. Fix the hearing date of the proceedings to 17 November 2008 to continue through to 12 December 2008 (Judge to be allocated. The judge also to have five days’ judgment writing time to the end of term).
      8. Direct that all affidavits in chief to be relied on by the plaintiffs in the proceedings be filed and served no later than 19 May 2008. (Note that the time for filing the bundle of documents will need to be considered after discovery is complete).
      9. Give leave to the plaintiffs to file a notice of motion to vary or
          discharge existing undertakings to be made returnable before me at 9.30am on 22 April 2008 for mention only.

      10. Costs of today reserved.

      ******************
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