Mizzi Pty Ltd & Anor v Meredith & Anor
[2010] VSCA 186
•16 July 2010
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 3879 of 2009
| MIZZI PTY LTD (ACN 084 591 122) (AS TRUSTEE OF THE TOWNSEND UNIT TRUST) | First Applicant |
| a | |
| MANTONELLA PTY LTD (ACN 069 102 531) | Second |
| v | |
| GREGORY POLLARD MEREDITH | First Respondent |
| a | |
| NATIONAL AUSTRALIA BANK ( | Second Respondent |
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| JUDGES | WEINBERG and HANSEN JJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 16 July 2010 |
| DATE OF JUDGMENT | 16 July 2010 |
| MEDIUM NEUTRAL CITATION | [2010] VSCA 186 |
| JUDGMENT APPEALED FROM | Mizzi Pty Ltd & Anor v Meredith & Anor [2009] VSC 367 (Byrne J) |
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PRACTICE AND PROCEDURE – Applications for extension of time and leave to appeal – No satisfactory explanation for delay – Decision below not attended by sufficient doubt or risk of substantial injustice to warrant reconsideration on appeal – Applications refused – Relief granted on respondent’s summons dismissing purported appeal as incompetent.
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| Appearances: | Counsel | Solicitors |
| For the Applicants | Mr G. Thomas | Frank Sanna & Associates |
| For the Respondents | Mr C. Scerri QC and Mr E. Woodward | Minter Ellison |
WEINBERG JA:
I shall ask Hansen JA to deliver the first judgment in this matter.
HANSEN JA:
There are two applications before the Court today. First, there is a summons filed by the applicants, who were the plaintiffs in a proceeding in the Trial Division, seeking leave to appeal out of time from orders made by Byrne J on 8 September 2009. The second is a summons filed by the respondents, being the defendants to the proceeding, which seeks an order that an appeal purportedly commenced by the applicants by a notice dated 21 (or 22) September 2009 be dismissed as incompetent, the applicants' summons be dismissed and the applicants pay the respondents' costs of the purported appeal and of each summons.
By his orders Byrne J dismissed an appeal by the applicants against an order made by Daly AsJ on 18 May 2009, which itself dismissed an application of the applicants by summons filed on 26 September 2008 that sought the setting aside of a self-executing order made on 18 July 2008. The 18 July order required the applicants to provide inspection of their discovered documents by 29 July 2008 in default of which the proceeding would stand dismissed.
By reason of the applicants not making all documents available for inspection by the stipulated date, the proceeding stood dismissed. That was the position accepted by Daly AsJ and Byrne J on appeal. It was to avoid the consequence that the proceeding had thus been brought to an end, that on 26 September 2008 the applicants filed the summons to set aside the self-executing order made on 18 July 2008.
It is to be noted that also before Byrne J was an appeal by the respondents against orders made by Daly AsJ on 9 May 2008 whereby she dismissed the respondents' application that the proceeding be dismissed for want of prosecution. That application had been brought by summons dated 26 October 2007.
In a careful and thorough judgment, Byrne J determined that the appeal that sought the setting aside of the self-executing order should be dismissed with the consequence that the proceeding had been determined by the operation of that order. He thus did not have to finally determine the appeal on the want of prosecution application as, in the circumstances, that application and appeal were redundant. Nevertheless his Honour considered the merits of that application and concluded that if it had been necessary to do so, he would have allowed that appeal and dismissed the proceeding for want of prosecution, considering that the applicants had been guilty of an inordinate and inexcusable delay in the conduct of the proceeding, such that there was a substantial risk that a fair trial of the central issues in the case could not be had.
In these circumstances his Honour ordered only that the applicants' appeal be dismissed together with an order for the costs of the proceeding.
The proceeding itself, as appears from his Honour's judgment, arose out of transactions in which two companies which owned certain plant and equipment used in the manufacture of die-cast components granted the second respondent, National Australia Bank Ltd, a debenture charge over their assets as security for financial accommodation. Subsequently the companies sold the plant and equipment to the second applicant. The first applicant, as a trustee, conducted the business which used the plant and equipment.
The statement of claim alleged that the sale price of the plant and equipment to the second applicant was $1.05 million and alleged arrangements with the bank as to, in part, deferral of calling up the securities, some of which allegations were denied by the bank. On 16 October 1995 the bank appointed the first respondent to be receiver and manager of the assets subject to the debentures. On 21 October 1995, the receiver and manager took possession of the plant and equipment and on 17 November sold it to a company associated with the applicants for $600,000.00.
The statement of claim alleges that the actions of the receiver and manager constituted acts done by the bank in breach of the agreement to defer enforcement of the securities, a conversion of the plant and equipment, a trespass upon the premises at which the plant and equipment was located, and a trespass to the subject chattels, and substantial damages were claimed. There was also a claim against the second respondent for damages based on alleged misleading or deceptive conduct constituted by representations made by an officer of the bank. His Honour referred to the claim by the first applicant for damages following the entry on the subject premises and loss of the plant and equipment pending their repurchase in amounts being said to be between $21.6 million and $36.6 million together with exemplary and aggravated damages. The second applicant sought repayment of $150,000 alleged to have been paid to the bank under a variation agreement, which agreement the bank denied.
The next thing to note is that on 21 (or 22) September 2009 the applicants served a notice of appeal from the orders of Byrne J and on 29 September 2009 filed the notice together with a draft index of the contents of the appeal book. These steps, as it appears, were taken in the appropriate time for an appeal or, if outside that time, by such a small margin as to be the merest technicality. However, the applicants’ solicitor had failed to appreciate that his Honour's orders were interlocutory in nature, thus requiring the appropriate initiation to be by way of an application for leave, and the consequence was that the appeal was incompetent.
What was required, as I have said, was an application for leave and that application was not made within the time allowed by the Rules. The applicants did not take steps to correct that irregularity until 9 February 2010 when they filed the present application for leave to appeal out of time 'to regularise the appeal' as stated in the summons. In fact the applicants seek both an extension of time in which to appeal and leave to appeal.
It was in these circumstances that, on 10 March 2010, the respondents filed their summons, the purpose being to ensure that the competence of the purported appeal and all questions of costs were dealt with.
The applicants recognise that the appeal is incompetent. They submit that the error in proceeding by way of notice of appeal is properly to be regarded as an honest mistake in the light of the clear intent to appeal and the compliance or virtual compliance with the times allowed in the Supreme Court (General Civil Procedure) Rules 2005. This context explained the error and supported the allowance of leave. Recognising, however, that a grant of leave required that the decision of Byrne J be wrong or attended with sufficient doubt such as to warrant the grant of leave and, in addition, that if leave were not granted the applicants would suffer substantial injustice, the applicants referred to the following matters.
It was said that sufficient doubt as to the correctness of the decision was to be seen in the following, according to the affidavit of the applicants’ director. This, he said, was a 'compelling $30 million case' which had been struck out largely because of technical grounds involving discovery matters and delay, where case law opposed cases being dismissed on such grounds. This was especially so as the respondents had contributed to that delay and, it was said, the alleged missing documents, which included mainly irrelevant payroll records and computer printouts and the like, had no material effect on the outcome of the case or prevented a fair trial.
It was said that an indication of the prospects of success could be gleaned from the notice of appeal, exhibits attached to the affidavits sworn by the applicants’ director and the statement of claim. In addition, the applicants had provided security for costs of about $200,000, and had spent to date in excess of $500,000 in legal fees. As to substantial injustice, the loss of the substantive right constituted by the choses in action sued upon was tantamount to a substantial injustice. As part of their submissions the applicants relied on a number of authorities all of which are well known and to which I have had regard.
As mentioned, there are two aspects to the applicants' summons; first, an extension of time in which to seek leave to appeal; and secondly, leave to appeal itself. In my opinion the application, whether for an extension of time or considered as leave to appeal, must fail. There are several reasons why, taken together, that is so.
In the first instance, it is the applicants' fault that the purported appeal is incompetent. The applicants were represented by lawyers who with reasonable attention to the rules ought have appreciated that the correct procedure was by application for leave. Furthermore, once the applicants' attention was drawn to the problem, they delayed in filing the present summons. There is no satisfactory explanation for this overall conduct, in my view.
Then it is necessary to return to the judgment of Byrne J in which he engaged in a thorough analysis of the conduct of the applicants in the litigation. As his Honour demonstrated, the making of a self-executing order was well justified in the overall circumstances and the fact was, as he records in his judgment, that there had been non-compliance with the subject order. His Honour concluded that the principal reason for the applicants' non-compliance was the director's careless attitude to Court orders and to the applicants' interests in the litigation.
His Honour considered the matter of prejudice to the parties if the order were to stand, acknowledging that the prejudice to the applicants was obvious enough, as their proceeding would stand determined against them. As to the respondents, if the self-executing order were set aside, they would suffer the prejudice of having to face a trial at which evidence as to conversations which occurred 14 and perhaps 15 years prior to trial, would have to be given by three bank officers, each of whom had left the employ of the bank, and whose recollection, and reasonably anticipated difficulty in recollection, was referred to.
His Honour noted, as a further consideration upon which he placed some weight, the applicants' 'sorry history of neglect of their obligations as litigants'. The chronology, his Honour observed, showed 'persistent and repetitious default'. His Honour referred to the need to do justice to all of the parties but observed that in the circumstances he saw no reason to relieve the director and the applicants of the consequence of the neglect which he placed at the feet of the director and not his lawyers. It was in those circumstances that his Honour concluded that the appeal against the self-executing order ought be dismissed.
In his judgment, Byrne J also referred to the nature of the claims against the respondent bank and noted that there were serious issues on the matter of whether the bank consented to the sale agreement and as to the existence and terms of the alleged agreement to defer enforcement of the securities and of an alleged variation of the matter of payments. It is clear that his Honour was alert to the issues in the pleadings and to the nature and scope of the relief claimed by the applicants.
On applications such as the present, it is neither practical nor possible to enquire into the merits of the litigation in a way that might permit one to essay a likelihood of success. Nevertheless, it is open to an applicant to place material on affidavit which goes some way to showing the injustice which it may suffer if it is not permitted to proceed with an appeal or application for leave to appeal. With that in mind, the applicants’ director has deposed to matters which relate to the quantum of damages sought and, in relation to the prospects of establishing liability against the respondents, to 'damning evidence' found in the respondents' discovery.
In my view, this evidence does not advance the case on the matter of merits of an appeal beyond that referred to Byrne J, or, if it was thought to do so, to an extent that was sufficient to establish an injustice if the self-executing order stands, beyond that which flows from that discussed by Byrne J as injustice flowing from a self-executing order. In other words, the applicants have not demonstrated that the proposed appeal has meaningful prospects of success. Nor have they established that this matter warrants the exercise of discretion to either extend the time in which to seek leave to appeal or for the purpose of granting leave to appeal. I do not overlook the further explanations by the applicants’ director as to the nature and extent of the discovery that was provided. The fact is, as both Daly AsJ and Byrne J have found, the applicants did not comply with the condition in the self-executing
order and in consequence the order operated according to its terms.
Furthermore, in my view, his Honour's decision is neither shown to be wrong nor attended with sufficient doubt as to warrant it being reconsidered on appeal. Nor, having regard to the various matters discussed, is the decision productive of substantial injustice if allowed to stand. Indeed, if anything, the prejudice and risk of injustice is the other way.
There is also the additional matter of the want of prosecution which his Honour found on his alternative consideration was established, although, as mentioned, his Honour did not have to finally conclude on the matter as the proceeding had come to an end by reason of the operation of the self-executing order. Nevertheless, the considerations that his Honour mentioned in that respect are not without relevance as they bear on the utility of granting either the extension of time or leave to appeal sought. However, it is not a decisive aspect of my consideration.
For all of these reasons, in my view, the applicants' application for leave to appeal out of time should be refused. The applicants’ summonses should be dismissed. On the summons of the respondents it is appropriate to make orders as sought.
WEINBERG JA:
I agree for the reasons given by Hansen JA that leave to extend time, and leave to appeal should be refused. I also agree that the notice of appeal dated 22 September 2009 should be dismissed as incompetent.
Orders
1. The summons filed by the applicants on 9 March 2010 be dismissed.
2. Pursuant to r 64.03(4), ,the applicants’ purported appeal made by
notice of appeal dated 22 September 2009 be dismissed as incompetent.
3. The applicants pay the respondents' costs of and incidental to the purported appeal including, without limit, the directions hearing before Lansdowne AsJ on 8 February 2010, the respondents' summons of 10 March 2010, and the applicants’ summons filed on 9 March 2010.
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