Molnar v Butas (No 5)
[2018] VSC 166
•16 April 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2016 03185
IN THE MATTER of the Estate of ROZALIA WRIGHT, deceased
| ANDREAS MOLNAR | Plaintiff |
| v | |
| ZOLTAN BUTAS (in his capacity as the Executor of the Estate of Rozalia Wright, deceased) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 March 2018 |
DATE OF JUDGMENT: | 16 April 2018 |
CASE MAY BE CITED AS: | Molnar v Butas (No 5) |
MEDIUM NEUTRAL CITATION: | [2018] VSC 166 |
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PRACTICE AND PROCEDURE — Plaintiff’s failure to comply with order to file and serve proposed amended statement of claim — Plaintiff’s inordinate delay and no proper explanation for failure — Where defendant made oral application for a self-executing order — Further directions made for filing of proposed amended statement of claim.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ian G Hone | |
| For the Defendant | Mr B Carew | Griffin Law Firm |
HER HONOUR:
Background
Rozalia Wright died on 5 September 2015. Probate of her will dated 7 May 2006 was granted to the defendant on 15 September 2016. The estate of the deceased was left to the defendant, his wife and the plaintiff as tenants in common in equal shares.
The plaintiff issued this proceeding on 11 August 2016, following the lodging of a caveat on 15 June 2016 over the principal asset in the deceased’s estate, a property in Bundoora. The plaintiff claimed a constructive trust over the Bundoora property.
By summons issued on 18 September 2017, the plaintiff made an application to amend his statement of claim. The plaintiff’s proposed amended statement of claim was exhibited to an affidavit of his solicitor, Mr Hone, sworn 18 September 2017. The proposed amendments in the document were not adequately marked to reflect all the amendments. On 22 November 2017, the Court delivered reasons in respect of this application[1] and made orders that by 13 December 2017, the plaintiff file and serve an amended statement of claim substantially in the form of exhibit ‘IGH-1’ to the affidavit of Mr Hone sworn 18 September 2017 and that each amendment be marked to distinguish it from the original statement of claim.[2]
[1]Molnar v Butas (No 2) [2017] VSC 710 (22 November 2017).
[2]Molnar v Butas (No 2) [2017] VSC 710 (22 November 2017) [22].
The plaintiff’s application to amend the statement of claim was made more than a year after the proceeding was commenced. In essence, the plaintiff’s amendment is a new claim. The substance of the plaintiff’s amended statement of claim makes significant alterations to the material facts alleged by the plaintiff and alters the plaintiff’s detriment claim. The date and the terms of the alleged agreement are different, as are the parties to the alleged agreement, which are now said to include the plaintiff’s wife and the deceased’s husband. These amendments did not seem to accord with the facts in the plaintiff’s two affidavits.
The reasons delivered on 22 November 2017 set out the procedural history of the proceeding up to the application for the amendment and concluded that the plaintiff’s conduct of the claim to date had been unsatisfactory, with significant delays caused by the plaintiff and his advisers.[3] The plaintiff’s new claim was precipitated by the defendant determining that the plaintiff’s pleaded case had no prospect of success and issuing an application for summary dismissal of the plaintiff’s claim.[4] The defendant made his application after he conducted an arduous discovery process against the resistant plaintiff.[5]
[3]Molnar v Butas (No 2) [2017] VSC 710 (22 November 2017) [19].
[4]Ibid [17].
[5]Ibid [5], [17].
Plaintiff’s failure to comply with order
The plaintiff failed to file and serve the amended statement of claim by 13 December 2017.
On 4 January 2018, Mr Hone sent a document to the defendant’s solicitors that was purportedly the amended statement of claim. This document did not track the proposed amendments as required by the orders made 22 November 2017 and no explanation was given for the delay or the failure to track the amendments. In addition, the document comprised ten pages whereas the document exhibited to Mr Hone’s affidavit and referred to in the order made 22 November 2017 comprised eight pages. These irregularities and the non-compliance with the orders were raised with Mr Hone by the defendant’s solicitors in correspondence dated 9 January 2018.
By email dated 12 January 2018, Mr Hone suggested that the defendant should consent to the late filing and service of the document on the basis of professional courtesy and the absence of prejudice, adding that he would make enquiries as to the missing pages of the document.
On 13 February 2018, the defendant’s solicitor sent correspondence to Mr Hone seeking from him the proposed consent orders to extend the time for compliance. On 22 February 2018, the defendant’s solicitor sent further correspondence stating that as a result of Mr Hone’s refusal to provide consent orders and non-compliance, there was no other option than to list the proceeding for the purpose of making further orders and that indemnity costs would be sought against the plaintiff.
Mr Hone continued to ignore the defendant’s correspondence. By letter dated 2 March 2018, the defendant’s solicitor informed Mr Hone, inter alia, that she had prepared consent orders in an attempt to correct the irregularities and progress the proceeding. The letter warned Mr Hone that if she did not receive the executed consent orders by 4 pm on 6 March 2018, she would ask the Court to list the proceeding for the purposes of seeking further orders and costs on an indemnity basis.
Mr Hone failed to respond and on application by the defendant pursuant to liberty to apply, the Court listed the proceeding for directions on 16 March 2018.
At the directions hearing, counsel for the defendant presented two forms of proposed orders for the consideration of the Court. Both sets of orders sought orders extending the times for compliance with the interlocutory steps ordered by the Court on 22 November 2017. However, in the first set of orders, the defendant also sought a self-executing order in the event that the plaintiff failed to file and serve his amended statement of claim by 21 March 2018.[6] The self-executing order proposed that the amended statement of claim to be filed be substantially in the form as exhibited to the affidavit of the defendant’s solicitor sworn 9 March 2018.
[6]Freeman v Rabinov [1981] VR 539 (Lush, Murray and King, JJ).
Submissions
Mr Hone submitted there was no need for self-executing orders on the basis that there was already an order for the filing of an amended statement of claim in the form of exhibit ‘IGH-1’ to his affidavit sworn 18 September 2017 and all that needed to be done was ‘we need to either clarify what the original exhibit is, whether it’s the eight page or ten page version’. Mr Hone then sought for the Court to clarify which document was the plaintiff’s proposed amended statement of claim.
Counsel for the defendant informed the Court that he would be content if the order simply referred to the proposed amended statement of claim as exhibited in exhibit ‘VWD-1’ to the affidavit of the defendant’s solicitor sworn 9 March 2018, being the document sent by Mr Hone on 4 January 2018.
Mr Hone then submitted that the timetable for interlocutory orders in the defendant’s minutes of orders should be considered in the light of the two extant applications for leave to appeal in the proceeding. Mr Hone described the first appeal as being against the decision dismissing the plaintiff’s application to remove the defendant as the executor of the estate[7] and was unable to describe the second appeal. Mr Hone submitted that as the executor might be removed the parties ‘might spend a lot of time and effort and parties’ money and Court time and mediator’s time and all sorts of things in going through that exercise’ and it is a case ‘where it makes sense to hasten slowly’. For this reason, Mr Hone sought a longer time frame for the proposed interlocutory orders. Mr Hone also explained that counsel for the plaintiff was unwell with a virus that could last some seven to ten days, his own and his counsel’s commitments the following Monday and Tuesday were such that he and counsel ‘are going to be very much under the pump until the middle of next week’, and that he himself was overseas from 2 May until 11 June, although someone would be in his office during his absence overseas.
[7]Molnar v Butas (No 3) [2017] VSC 711 (22 November 2017).
Counsel for the defendant was surprised to hear that the plaintiff’s counsel was unwell as this had not been mentioned the day before when he had discussed his proposed directions with the plaintiff’s counsel.
Consideration
An application for a self-executing order may be made pursuant to Order 24 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) or in the inherent jurisdiction of the Court. Such orders may be made in circumstances where a party has been persistently dilatory in taking steps in the proceeding. Such an order has serious consequences for a party as it results in the termination of the litigation. To avoid dismissal, a plaintiff must give a proper and credible explanation for the delay.
The defendant’s application for a self-executing order was made at the directions hearing on the basis of the proposed minutes of orders, referring to the decision of Freeman v Rabinov.[8] The defendant did not file a summons seeking self-executing orders. Pursuant to Order 46 of the Rules, the application should have been made by summons and served on the plaintiff returnable at the directions hearing.
[8][1981] VR 539 (Lush, Murray and King JJ).
The conduct of the plaintiff and his advisers in this proceeding has been persistently dilatory. The proceeding is no further advanced than it was since being issued in August 2016, save perhaps for some of the discovery process. The plaintiff’s appeal against the dismissal of his removal application does not stay this proceeding. After obtaining leave to file a proposed amended statement of claim, particularly in the circumstances of the application, the plaintiff should have adhered to the order made and filed and served the document by 13 December 2017. Complying with this order should not have been difficult as the proposed amended statement of claim was exhibited to Mr Hone’s affidavit sworn 18 September 2017 and it simply needed to be properly marked up. Mr Hone did not provide any explanation for the plaintiff’s failure to comply with the order by the due date of 13 December 2017 or at any time thereafter, despite the latitude given by the defendant’s solicitors.
At the directions hearing, Mr Hone was unsure which document was the proposed amended statement of claim and of the appropriate marking up of the amendments. The substance of Mr Hone’s submissions was to delay the proceeding because of the pending appeal, for the convenience of counsel and himself, and on the basis that if the appeal were successful, any future mediation would be conducted with the person appointed to administer the deceased’s estate. Mr Hone was unable to provide the time frame for the hearing of the pending appeal. The effect of his submissions would be to stay this proceeding yet he accepted that the appeal was not a stay of this proceeding.
The fact that there is an appeal pending is not a proper reason to delay the proceeding. Even if the appeal were successful, the defendant must necessarily be involved in the proceeding as he and his wife are entitled to two thirds of the deceased’s estate under the deceased’s will. The convenience of Mr Hone and counsel, whether for holidays, court commitments, or an alleged virus, are not proper reasons for delaying the proceeding. The plaintiff will be given one further opportunity to file his proposed amended statement of claim and the previous interlocutory steps will be extended. Overall, there is no basis for the further directions to be delayed.
This directions hearing should not have been necessary. It was as a result of the plaintiff’s failure to comply with the previous orders of the Court and by reason of Mr Hone’s failures, as set out in the exhibited correspondence to the affidavit of the plaintiff’s solicitor. The plaintiff’s conduct justifies an order that the costs be assessed on an indemnity basis as it has wasted the time of the Court and of the defendant and has further delayed the proceeding.
Accordingly, the Court will make the following orders:
(a) order 1 as per the minutes of proposed directions without the self-executing order and allow 7 days from the date of delivery of these reasons;
(b) extend the time for compliance with the orders made 22 November 2017, excluding order 9 for mediation;
(c) the proceeding to be adjourned to 10 am on 22 June 2018 before the Judge in charge of the Trusts, Equity and Probate List;
(d) the plaintiff personally pay the costs of the defendant of and incidental to the directions hearing on 16 March 2018, to be taxed on an indemnity basis in default of agreement.
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