Miller v Miller
[2017] VSC 709
•21 November 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2017 01664
| DANIEL CHARLES MILLER | Plaintiff |
| v | |
| GRAEME JOHN MILLER and GRAEME MILLER WINES PTY LTD (ACN 111 748 933) | Defendants |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 November 2017 |
DATE OF RULING: | 21 November 2017 |
CASE MAY BE CITED AS: | Miller v Miller & Anor |
MEDIUM NEUTRAL CITATION: | [2017] VSC 709 |
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PRACTICE AND PROCEDURE — Application for administrative transfer of proceeding to County Court — Proposed amendment to pleadings — New claims not justiciable in Supreme Court — Transfer application made after completion of pre-trial interlocutory steps — Interests of justice — Overarching purpose of case management in civil proceedings — Courts (Case Transfer) Act 1991, s 26 — Civil Procedure Act 2010, ss 7, 8, 9 and 47 — AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Hartley | B2B Lawyers |
| For the Defendants | Mr M T Settle | RNG Lawyers |
HER HONOUR:
Introduction
The plaintiff is the adult son of the first defendant. The first defendant is aged 75 years. Until May 2017, the first defendant was the registered proprietor of a property at Dixons Creek (‘the Dixons Creek property’).
The first defendant is the sole director and shareholder of the second defendant. Until May 2017, the second defendant carried on business as a vigneron and winemaker under the business name of Dixons Creek Estate on the Dixons Creek property.
In March 2017, the first defendant sold the Dixons Creek property and the second defendant sold the Dixons Creek Estate business, with settlement due in late May 2017.
On a date unknown, the plaintiff lodged a caveat on the title to the Dixons Creek property claiming an equitable interest in that property. On 13 April 2017, the first defendant issued an originating motion returnable in the Practice Court seeking removal of the caveat.[1] On 22 May 2017, orders were made that the caveat be removed and that the plaintiff pay the first defendant’s costs of the proceeding. Settlement of the sale of the Dixons Creek property occurred in late May 2017.
[1]Proceeding S CI 2017 01367.
Plaintiff’s claim in this proceeding
By writ filed 8 May 2017, the plaintiff claims that the first defendant holds a one half beneficial interest in the Dixons Creek property and the issued shares of the second defendant on constructive trust for him. In the alternative, the plaintiff claims equitable compensation, including the taking of accounts.
The claim is pleaded as proprietary estoppel, alternatively, a common intention constructive trust. The plaintiff alleges that between July 2011 to March 2017, he worked in the business full time for little or no wages on the faith of the first defendant’s representation that he would be entitled to a half interest in the Dixons Creek property and the issued shares of the second defendant.
In a further and alternative claim, the plaintiff claims that the first defendant represented to him that he would be repaid for his efforts in working for the business full time between July 2011 to March 2017. He claims an entitlement to compensation by way of allocation of part of the proceeds of sale of the Dixons Creek property and the Dixons Creek business. The compensation for his work is calculated according to an hourly rate of $50 over the asserted period and amounts to $838 000 over and above the amount of $120 000 that he was paid.
The defendants deny all of the plaintiff’s claims.
Transfer to the County Court
On 10 November 2017, the plaintiff filed an application under Part 5 of the Courts (Case Transfer) Act 1991 (‘the CCT Act’) to transfer this proceeding to the County Court. The plaintiff proposes that once the proceeding is transferred, he will seek to amend his claim to add a further claim as set out in a proposed amended statement of claim sent to the defendants’ solicitors on 9 November 2017.
The defendants’ solicitors filed an affidavit sworn 10 November 2017 that exhibited a copy of the plaintiff’s proposed amended statement of claim. The proposed amended claim adds a money claim against the defendants under the Fair Work Act 2009 (Cth) (‘the Fair Work Act’). Under that Act, the claim is justiciable in the County Court, not the Supreme Court. Otherwise, the amendments reflect the sale of the Dixons Creek property and the Dixons Creek business.
Procedural history of the proceeding
After the plaintiff’s claim was issued, the defendants filed their defence. On 26 July 2017, orders were made by consent for the plaintiff to deliver further and better particulars of his statement of claim pursuant to the defendant’s request dated 14 June 2017 and for mediation to take place on or before 29 September 2017. The proceeding was adjourned for further directions on 20 October 2017.
On 9 August 2017, the plaintiff filed further and better particulars of his statement of claim. On 23 August 2017, the defendants filed their affidavit of documents. On 5 September 2017, the plaintiff filed his affidavit of documents.
On 22 September 2017, the proceeding was listed as a result of a summons filed by the plaintiff on 20 September 2017 whereby the plaintiff sought to vacate the orders made on 26 July 2017 and for the defendants to file a further affidavit of documents and for the proceeding to be referred to mediation to take place by 17 November 2017. Orders were made extending the date for mediation to 9 October 2017.[2] The application for further discovery was adjourned to a directions hearing on 20 October 2017.
[2]This date was an earlier date than sought by the plaintiff.
A mediation of the proceeding took place on 6 October 2017 but the parties failed to resolve the proceeding by agreement.
On 13 October 2017, the plaintiff changed solicitors.
The Court required the parties to provide a joint case outline for the trial of the proceeding before the directions hearing on 20 October. On 19 October, the defendants provided a case outline. This case outline had not been prepared in conjunction with the plaintiff’s solicitors despite a copy having been provided to them.
By the time of the directions hearing on 20 October, the plaintiff’s new solicitors had not received the plaintiff’s file from his former solicitors. The defendants’ solicitors provided the documents discovered by the plaintiff to his new solicitors. The plaintiff’s summons for further discovery remained outstanding. That application was opposed by the defendants on the grounds of relevance. The Court expressed concern at the progress of the plaintiff’s proceeding and length of time it was taking, particularly in view of the age of the first defendant, the breakdown of the relationship between the father and son and the stress that litigation caused on the parties. As noted, the defendants had provided a case outline and wanted a trial date on an estimate of one day. The plaintiff did not agree that the trial would be one day and said that he may need to transfer the proceeding to the County Court as there was an issue about the employment award which was within the jurisdiction of that Court and not the Supreme Court. To enable the plaintiff to review his claims in the proceeding, the directions hearing was adjourned to 13 November 2017.
Plaintiff’s proposed amendment to his statement of claim
At the directions hearing on 13 November 2017, the plaintiff outlined his position concerning the proposed amendments to his statement of claim and informed the Court that an application under Part 5 of the CCT Act had been filed to transfer the proceeding to the County Court. The plaintiff’s application under Part 5 of the CCT Act is an administrative case transfer form.
The defendants object to the transfer at this late stage of the proceeding and maintain that the proceeding should be listed for trial on an estimate of one day.
On 16 November 2017, the defendants sought to object to the plaintiff’s application under Part 5 of the CCT Act, relying on s 28 of that Act.
Applicable principles
Part 5 of the CCT Act is titled ‘Administrative Transfers’ and includes the following relevant provisions:
26Certification by plaintiff that proceeding within lower court's jurisdiction
(1)The plaintiff to a proceeding in the Supreme Court or the County Court may apply to the Prothonotary of the Supreme Court or the registrar of the County Court (as the case requires) for an order that the proceeding be transferred to a lower court if the plaintiff certifies in accordance with the case transfer rules that the lower court has, or with the written consent of the parties will have, jurisdiction to hear and determine the proceeding, including any counterclaim.
(2)The Prothonotary or registrar must grant an application under subsection (1) and make an appropriate order if satisfied—
(a)that the lower court has, or (by consent of the parties) will have, jurisdiction; and
(b)that the requirements (if any) of the case transfer rules are met.
…
28Consequences of order under this Part
Sections 21(2) and (3) and 22 (except subsection (1)(d)) apply to a proceeding transferred under this Part in the same manner as they apply to a proceeding transferred under Part 3.
Section 21 of the CCT Act, which falls under Part 3 ‘individual transfers’, provides:
21 Transfer order
(1)If no objection is filed or the senior judicial officers determine that a proceeding should be transferred following the filing of an objection, the transferor court (constituted by its designated judicial officer) must, as soon as practicable, make an order transferring the proceeding to the transferee court.
(2) If an order is made under this section—
(a)the proceeding is discontinued in the transferor court; and
(b)the transferor court must cause the record and all documents relating to the proceeding to be sent to the transferee court.
(3) An appeal does not lie from an order made under this section.
The defendants contend that s 21(1) refers to an objection to an application for transfer and s 21(2) refers to an order made under s 21(1). On this basis, the reference in s 28 to s 21 of the Act contemplates an objection to a transfer under Part 5 of the CCT Act.
Section 28 expressly states that subsections (2) and (3) of s 21 apply to proceedings transferred under Part 5. It makes no reference to s 21(1). Importantly, s 21(1) relates to objections whereas s 21(2) refers to the section generally, and not specifically to s 21(1). Section 28 draws a distinction between the subsections of s 21 for the purpose of transfers under Part 5 of the CCT Act. The effect of that distinction is to exclude s 21(1). It follows that the CCT Act does not allow for objections to transfers under Part 5. On a fair reading of s 28, the defendants’ submission must be rejected.
The plaintiff contends that, as the application is an administrative transfer under Part 5 of the CCT Act, when the application is made to the Prothonotary of this Court for transfer of the proceeding to the County Court and the relevant certification has been made in accordance with the case transfer rules,[3] the Prothonotary must grant the application if satisfied of the matters in s 26(2) of the Act. As the CCT Act does not expressly confer discretion on the Court in granting an administrative transfer, the application must be granted provided the relevant certifications are made by the plaintiff.
[3]See Courts (Case Transfer) Rules 2011.
Interpreting s 26 of the CCT Act in isolation and without reference to other legislation, the plaintiff’s interpretation has some attraction. However, this proceeding is a civil proceeding and the section must be read together with the Civil Procedure Act 2010 (‘the CP Act’)[4] and the overarching purpose of that Act ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.[5] The provisions of the CP Act invest the Court with wide discretionary powers, particularly in relation to case management of civil proceedings.[6] The legislative aims of the CP Act and the CCT Act are similar in that they both seek to improve the efficiency of the administration of civil justice in Victoria. These aims are reflected in the provisions of both Acts and their respective second reading speeches. Importantly, pursuant to s 8(2) of the CP Act, the Court must seek to give effect to the overarching purpose despite any other Act or law to the contrary, with the exception of the Charter of Human Rights and Responsibilities Act 2006.
[4]Civil Procedure Act 2010, s 4.
[5]Ibid s 7(1).
[6]Ibid ss 7, 8, 9 and 47.
In recent cases, the Court of Appeal has discussed the importance of the CP Act and the pivotal role it plays in civil proceedings whereby trial judges are encouraged to engage the provisions of the Act by carefully balancing the competing interests of the parties and the administration of justice more generally.[7]
[7]Northern Health v Kuipers [2015] VSCA 172 (19 June 2015) [22]–[33] (Kyrou and McLeish JJA). See also Eaton v ISS Catering Services Pty Ltd (2013) 42 VR 635.
In AON Risk Services Australia Limited v Australian National University, the High Court reinforced the importance of case management principles in ensuring the interests of justice are served by minimising costs and delay in litigation as follows:
Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon a proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation.[8]
[8]AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, 189 [24] (French CJ).
These principles are of ‘general application’[9] and are relevant to this proceeding.
[9]See, eg, Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401, 414 [51] (Spender, Graham and Gilmour JJ); Basha v Basha [2010] QCA 123 (25 May 2010) [24] (Fraser JA); Brocx v Hughes (2010) 41 WAR 84, 101 [93]–[94] (Newnes JA); Markisic v Commonwealth [2010] NSWSC 24 (25 February 2010) [203] (Davies J); QBE Workers Compensation (NSW) Ltd v BAE Systems Regional Aircraft Ltd [2010] NSWSC 82 (19 February 2010) [46] (Latham J); Field v Luxor Products Pty Ltd [2009] QSC 218 (20 July 2009) [38]–[41] (P Lyons J).
Under Part 4.2 of the CP Act, the Court is invested with wide discretionary powers in relation to case management. In some cases, the proper exercise of those powers requires the Court to be proactive in its approach. There are no authorities specifically on point with this application, however, recent cases reveal that the Court has utilised the CP Act case management powers in a variety of circumstances. An example can be seen in McCready v Bendigo Health, where the Court on its own motion gave lawyers the opportunity to present submissions regarding the transfer of a proceeding to an alternate venue, albeit, from the Melbourne Registry to the Bendigo Registry. The Court held that the balance of convenience should be paramount and the choice of the plaintiff should be subsidiary to the result of that analysis.[10] Another example is in Ying Mui Pty Ltd v Hoh (Ruling No 1), where it was held that the special factors of the case, including the length and complexity of the case, called for special management of the trial, pursuant to s 47 of the CP Act.[11] A further example is in James v Seltsam Pty Ltd where Zammit J relied on the CP Act for the purposes of the production of an explanted lung for testing as being conducive to the effective and complete determination of the issue relevant to the proceeding.[12]
[10]McCready v Bendigo Health [2014] VSC 565 (7 November 2014).
[11]Ying Mui Pty Ltd v Hoh (Ruling No 1) [2016] VSC 519 (31 August 2016) [57] (Vickery J).
[12]James v Seltsam Pty Ltd [2017] VSC 506 (30 August 2017).
Consideration
In his current statement of claim, the plaintiff seeks a monetary claim for the amount of $838 000 in the alternative to his constructive trust claims. This alternative monetary claim remains in the proposed amended statement of claim. It then adds monetary claims pursuant to award rates of pay and a contract of employment under the Fair Work Act for the same period, either at an hourly rate or, alternatively, an annual salary. The new claim also alleges various contraventions of relevant provisions of the Fair Work Act. In the prayer for relief, 16 declarations are sought, as well as orders for payment of penalties under the Fair Work Act, contractual damages, interest and costs. To the equitable claims, there are added claims for equitable damages and interest.
The plaintiff’s justification for his application for transfer of the proceeding at this late stage is that his proposed amended claims under the Fair Work Act are not justiciable in the Supreme Court, whereas all of the claims can be heard in the County Court.
Prior to the plaintiff’s application under the CCT Act, the Court had already expressed concerns as to the progress of the proceeding on several occasions, particularly where the first defendant is elderly and the proceeding is a dispute between father and son. While it is common ground that the first defendant is in reasonable health, at his age and with the stress of litigation, that may change. Since the removal of the caveat on the Dixons Creek property in May 2017, there has been continued delay by the plaintiff: the defendant has been required to appear at three directions hearings without any substantial progress of the proceeding on the plaintiff’s side.
The plaintiff’s primary claims are the equitable claims by which he seeks a declaration of constructive trust over one-half of each of the Dixons Creek property and the Dixons Creek Estate business. Unlike many constructive trust proceedings heard in this Court, both parties are able to give evidence. As the arrangements between them are primarily a result of their discussions, their oral evidence will be important. Such claims involve careful investigation of the facts and what implications flow from the facts having regard to the various legal principles. This is a complex area of law that is continually developing. Constructive trust claims in the Supreme Court are allocated to specialist Lists. Claims that are not appropriate for the Commercial Court are allocated to the Trusts, Equity and Probate List. Unlike the Supreme Court, the County Court does not have an equivalent specialist list for constructive trust claims. Claims for equitable relief of the nature that the plaintiff seeks are traditionally heard by the Supreme Court, as the plaintiff recognised when he commenced his proceeding. Very few judgments in this area emanate from the County Court.
In the event of the plaintiff’s constructive trust claims failing, the plaintiff has his alternative monetary claim in this proceeding. This claim relies on oral evidence of the arrangements made between the parties and the hours worked by the plaintiff in the relevant timeframe.
Given that discovery and all other interlocutory steps have occurred—save for the plaintiff’s thrice adjourned application for further discovery from the defendant—and a mediation has taken place, the proceeding is ready to be set down for trial in February 2018. If the proceeding is transferred to the County Court, it will not be set down for trial in the foreseeable future. That might suit the plaintiff but it does not suit the first defendant. He wants the proceeding to be heard and determined as soon as possible.
The plaintiff contends that as his proposed amendments include claims under the Fair Work Act, the proceeding must be transferred to the County Court for determination as such claims are not justiciable in the Supreme Court. It would be preferable for the one court to hear all claims in the proceeding so that time and costs for the parties and the courts are mitigated. He contends that prejudice would result to the parties if the current proceeding remained in the Supreme Court and the proposed claims under the Fair Work Act were heard separately by the County Court. It would involve rehearing the proceeding, the duplication of examination and cross-examination of witnesses and have the potential for alternative findings of fact by the separate courts.
The plaintiff’s claims under the Fair Work Act simply reformulate the monetary claim as originally pleaded. In this sense, the claims based on the Fair Work Act are not new. They are based on facts previously known to, and pleaded by, the plaintiff. The Fair Work Act claims were open to the plaintiff upon commencement of this proceeding, he simply chose not to pursue them at that time. Instead, he chose to initiate his proceeding in this Court and has pursued the proceeding through significant interlocutory steps, such that it should be ready to be fixed for trial. It is likely that this was a strategic decision by the plaintiff to focus on his equitable claims through the specialist Lists of this Court. Now that those claims are here and well developed in an interlocutory sense, it would be antithetical to the interests of justice for the plaintiff to restart the proceeding in a different court to the prejudice of the defendants.
In short, the plaintiff’s contentions fail to take into account the lateness of his proposed transfer of the proceeding to the County Court, the fact that he chose to initiate the proceeding in this Court, the detriment and prejudice to the defendants of the proposed transfer given its lateness and that if his constructive trust claims fail, he has an alternative monetary claim in this proceeding. If the plaintiff is intent on pursuing his claims under the Fair Work Act in the County Court, the facts determined in the current proceeding could be agreed from the judgment. It follows that it would be unlikely that additional evidence would be required and unlikely for there to be alternative findings of fact as the Fair Work Act claims rely on the facts pleaded in this proceeding.
The plaintiff chose to issue his proceeding in this Court. His timing and reasons for changing the status quo are questionable. It might be inferred that the plaintiff has an ulterior motive for raising the Fair Work Act claims at this stage of the proceeding. Regardless of the plaintiff’s intention, the effect of the transfer application and the amended pleadings is to place undue pressure and detriment on the defendants by prolonging the litigation and making multiple lengthy claims based on the same factual scenario.
The plaintiff’s application presents unusual circumstances in the context of his conduct and the wide discretionary powers invested in the Court in relation to case management of civil proceedings, balancing the competing interests of the parties and the administration of justice generally. The Court has wide powers to give effect to and further the overarching purpose set out in s 7 of the CP Act. The plaintiff’s conduct thus far has caused delay in the proceeding and the proposal to transfer the proceeding to the County Court does not further the just, efficient, timely and cost-effective resolution of the proceeding. Despite the plaintiff’s submissions as to the mandatory nature of the administrative transfer provisions of the CCT Act, the provisions of the CP Act also apply to this application.[13] In all of the circumstances and in the interests of the administration of justice pursuant to s 47 of the CP Act, it is appropriate and necessary for the plaintiff to withdraw his application for administrative transfer under the CCT Act to ensure the proceeding is managed and conducted in accordance with the overarching purpose.
[13]Civil Procedure Act 2010, s 8(2).
Final directions will now be made for listing the proceeding for trial and the Court will also determine the plaintiff’s outstanding application for further discovery from the defendant. Subject to the parties being available, the proceeding will be listed for those matters on 1 December 2017.
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