Phoenix International Group v RAC Investments Pty Ltd
[2014] VSC 502
•16 October 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S CI 2005 06519
| PHOENIX INTERNATIONAL GROUP AND BEIJING GARDEN RESORT PTY LTD | Plaintiffs |
| v | |
| RAC INVESTMENTS PTY LTD AND ORS | Defendants |
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JUDGE: | DIXON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 October 2014 |
DATE OF RULING: | 16 October 2014 |
CASE MAY BE CITED AS: | Phoenix International Group & Anor v RAC Investments Pty Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2014] VSC 502 |
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PRACTICE AND PROCEDURE – Appeal against orders of associate judge – procedural orders - leave to appeal out of time refused – leave to appeal against an unauthenticated order refused – Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 60.01(1) and r 77.06(3).
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APPEARANCES: | Counsel | Solicitors |
| For the First Plaintiff | Mr A Cohen as agent for ICA Lawyers | |
| For the Defendants | Mr I Upjohn | Aitken Parners |
HIS HONOUR:
This is an appeal from procedural orders made by an associate judge. The proceeding was commenced on 8 June 2005. It is a contractual dispute. During the ensuing seven years the parties meandered through pleadings and discovery.
On 9 July 2012, Daly AsJ set the matter down for trial on 15 April 2013. That order seems to have engendered a further flurry of activity around discovery and particulars. Interlocutory orders were the subject of an appeal in September 2012. On 11 September 2012, the first plaintiff was placed in liquidation and Malcolm Howell was appointed liquidator. The title of the proceeding and the pleadings do not reflect this change.
The appeal from the orders of Daly AsJ was resolved in October 2012, but the defendants were dissatisfied with the refusal of their application for security for costs and sought leave to appeal from the Court of Appeal. That leave was refused in February 2013.
The plaintiffs then successfully applied to adjourn the trial, and the proceeding has not been refixed for trial since that time. The parties unsuccessfully mediated their dispute between May and December 2013. Curiously, after mediation failed, the liquidator then determined to conduct public examinations to assess the commercial merits of proceeding with the claim. I say curiously because the court would have expected a party to determine whether its proceeding had any merit before attending a mediation.
The summons for directions then returned before Daly AsJ, presumably for the allocation of a trial date, but on each of those four occasions the proceeding was further adjourned as no public examinations had been conducted.
On 8 July 2014, when the matter returned before Daly AsJ, there was no appearance entered for the plaintiffs. The defendants’ solicitor sought a self-executing order. Her Honour made such an order adjourning the directions hearing to 12 August 2014 and further ordering:
In the event that there is no appearance at the hearing by the plaintiffs, or either of them, at the next directions hearing that plaintiff’s claim in the proceeding stands dismissed, with costs.
The plaintiffs brought no challenge against the 8 July 2014 order and made no application to extend the times limited by that order or otherwise seek any variation of it.
On 12 August 2014, the directions summons returned before Zammit AsJ. A transcript of the hearing on 12 August 2014 was not available. As at that date, the first plaintiffs’ solicitors were ICA Lawyers, whose principal, Innis Cull, had the care and conduct of the proceeding on behalf of the liquidator. Alan Swanwick, who filed a notice of ceasing to act on 5 September 2014, was the second plaintiff’s solicitor on record.
Mr Cull deposed that he was unaware of the self-executing order. The 8 July 2014 order came to his attention by facsimile transmission from the defendants’ solicitor, followed by receipt of the order in the post. Mr Cull received three pages consisting of a covering letter, the first page of the order of 8 July 2014 and the schedule of parties.
I accept that Mr Cull was unaware of the self-executing order. The original of the 8 July 2014 order is printed on both sides of the paper, and when examining the letter that was faxed it is apparent that the second page of the order was not reproduced. His lack of awareness was unsurprising given that the second page of the order contains the self-executing paragraph.
Counsel for the defendants submitted that the court would have sent the order to Mr Cull but there is no evidence, either on the court file or in the affidavits, supporting that contention. Second, he submitted that on examining the first page of the served order, it was clear that it was incomplete, because the date of authentication, the signature of the Prothonotary and the stamp of the court were absent. The defendant did not persuade me that I ought to excuse its solicitors’ inadvertence in failing to serve a full copy of the order in this way.
Mr Cull deposes that on the morning of the directions hearing of 12 August 2014, he attempted to travel from his office in Camberwell into the city using a vehicle that had been temporarily loaned to him while his own vehicle was off the road. He experienced mechanical difficulties with that vehicle. At approximately 9.30am, he telephoned Mr Steven Phillips, a director of the second plaintiff who was intending to attend the directions hearing, informing him of his difficulties. He then rang the defendants’ solicitors but was unable to speak with Mr Fox, who had left for court. Mr Fox’s office agreed to arrange for Mr Fox to call Mr Cull. Mr Cull then called Mr Phillips back, explained what had occurred and informed him that he would contact the judge’s associate to seek a very short adjournment of the hearing because of his difficulties. He asked Mr Phillips if he could also mention these circumstances to the court. Mr Cull then sent an email from his phone to Zammit AsJ’s associate explaining the circumstances and seeking an adjournment of no more than seven days. He received no immediate reply.
Mr Fox deposed that when the plaintiffs did not appear at the directions hearing on 12 August 2014, he informed Zammit AsJ of the terms of the 8 July 2014 order and applied for dismissal of the proceedings. Mr Fox said that his submission was interrupted by Zammit AsJ who informed him that her chambers had received a phone call from Mr Cull advising that he was experiencing car problems and requesting that the matter be stood down until he could arrive. Mr Fox said he knew nothing of these difficulties. When the matter was stood down, he checked his mobile phone and discovered a text message from his personal assistant advising of Mr Cull’s contact and request for a short adjournment.
When the matter was called on again, Mr Fox informed the court of the text message that he had received, and Zammit AsJ then stated that ‘she would accordingly adjourn the matter for further argument’.
Although Mr Fox neither sought nor consented to that order, but he did not oppose it and he stated that one-week’s adjournment would be satisfactory. The associate judge adjourned the summons until 21 August 2014. As he was leaving the Bar table, Mr Fox noted that Mr Phillips had been sitting in court. Mr Fox stated that Mr Phillips did not seek leave to appear.
I refused Mr Phillips leave to appear on behalf of the second plaintiff before me. The first plaintiff relied on his affidavit as to the events on 12 August. Mr Phillips confirmed that he received two telephone calls from Mr Cull as he made his way to court, and that he expected the matter would be adjourned for a short period. Mr Phillips said that when the matter was called on, he approached the Bar table and the judge, who knew him from previous appearances, inquired what he wanted. Mr Phillips said he stated his name, and that he was a director of the second plaintiff. He asked that the matter be stood down, explaining that Mr Cull was having difficulty getting to court because of car trouble. Mr Phillips stated that Mr Fox handed a document to the judge and submitted that the proceeding should be dismissed. The matter was then stood down.
When the matter was again called on, Mr Phillips stated that Mr Fox informed the court that Mr Cull had tried to reach him and said to the court ‘the matter can be adjourned by consent to a date to be fixed’ or words to that effect.
The order of Zammit AsJ has not been authenticated. The court’s blue ‘Court Record of Hearing’ sheet records Mr Fox’s appearance for the defendants, although the practitioners usually complete appearances on that form. The adjournment of the directions hearing is noted in the judge’s handwriting, although there is no notation that the order was made by consent.
On the return of the summons on 21 August 2014, Mr Fox again appeared for the defendants. Mr Cull appeared for the first plaintiff and Mr Phillips sought leave to appear on behalf of the second plaintiff. Mr Fox sought dismissal of the proceeding in accordance with the order of Daly AsJ while Mr Cull sought time for the liquidator to apply to assign its cause of action to the second plaintiff.
Zammit AsJ acceded to the first plaintiff’s request and made orders accordingly. In doing so, she rejected the defendants’ application for judgment under the 8 July 2014 self-executing order. Her reasons for so doing were stated in ‘Other Matters’:
1.The second plaintiff’s solicitors are still on the record but did not appear today or on 12 August 2014. Mr Phillips, a director of the second plaintiff, was in court on 12 August 2014 and appeared today on behalf of the second plaintiff.
2.Mr Cull did not appear on 12 August 2014. There is no affidavit material before the court explaining why Mr Cull did not appear. However, on 12 August 2014, Mr Cull contacted the court to indicate that he could not attend. The court was informed by Mr Fox that Mr Cull had contacted his office on the morning of 12 August 2014 and consented to an adjournment of the directions hearing to today.
3.I consider that there was at least an attendance in court by Mr Phillips on behalf of the second plaintiff and Mr Cull was unable to attend.
4.In such circumstances I do not consider that Associate Justice Daly’s self-executing order made 8 July 2014 came into effect.
5.The court has been informed by Mr Cull that the first plaintiff will now seek to assign the current cause of action to the second plaintiff and that the current application can be made within three weeks.
6.The second plaintiffs’ solicitors are still technically on the record. Mr Phillips was given leave to appear only for today. He was informed that if the second plaintiff’s current solicitors are no longer on the record he will need to make an application to the court to appear on behalf of the second plaintiff.
Although there was a conflict on the affidavits as to whether the defendants consented to the short adjournment of the directions hearing from 12 August 2014, and no deponent was cross-examined on his affidavit, I am satisfied that Mr Fox did consent to the adjournment of the summons to 21 August 2014.
The defendants’ notice of appeal dated 15 September 2014 challenges both the orders of 12 and 21 August 2014 made by Zammit AsJ. However, the plaintiffs objected that the notice of appeal was out of time in respect of the later order of 21 August 2014, and, a fortiori, in respect of the earlier order of 12 August 2014. The defendants submitted that the 21 August order was not authenticated until 2 September 2014, but did not persist with a submission that the date of authentication is relevant in determining the period in which an appeal must be filed. The defendants contended that it was not feasible to draw a notice of appeal until the order had been authenticated. I do not accept that submission, primarily because the defendants actually challenged the order of 12 August 2014. Their submission was that because there was no appearance on 12 August the proceeding was dismissed by operation of Daly AsJ’s earlier order. The orders made on 21 August could not therefore be made. Any error in the orders of 21 August is a consequence of error on 12 August 2014 when the proceeding was not dismissed but adjourned by consent. There was no explanation for the defendants’ failure to file an appeal against the order of 12 August 2014 within time.
The defendants faced a further difficulty in that r 60.01(1) precludes the court from entertaining an appeal against an unauthenticated order. However, the court has power under that rule to otherwise order, and power under r 77.06(3) to extend the time for filing a notice of appeal. The defendants invited me to exercise those discretions in their favour.
The event that triggered self-execution was ‘no appearance at the hearing by the plaintiffs’. I am satisfied that it was open to the associate judge to find that the failure of the first plaintiff’s solicitor to appear at the directions hearing on 12 August 2014 was explained to both the court and the defendants, albeit informally. When the defendants accepted, as did the judge, the explanation proffered by Mr Cull, they consented to the short adjournment and excused the non-appearance of the first plaintiff. I see no error in the associate judge’s conclusion that the pre-condition for self-execution of the order did not come into effect in respect of the first plaintiff.
Two matters complicate the position of the second plaintiff. First, the second plaintiff had, at the relevant time, a solicitor on the record as acting for it. The associate judge granted Mr Phillips leave to appear for the second plaintiff on 21 August, as paragraph 6 of ‘Other Matters’ makes clear. It is not in dispute that Mr Phillips attended court seeking to appear on behalf of the second plaintiff on 12 August 2014. The associate judge permitted Mr Philips to address the court and in doing so simply confirmed Mr Cull’s difficulties at a time when both the judge and Mr Fox were aware that unexpected circumstances had precluded his attendance at court. As the associate judge was doing no more than making a consent adjournment order, I am not persuaded that there was any error in her conclusion that the attendance in court by Mr Phillips on behalf of the second plaintiff was sufficient to preclude the self-executing operation of the order of 12 August 2014 in respect of the second plaintiff.
It would be futile to exercise my discretion in favour of permitting the defendants to appeal out of time against an unauthenticated order, because I am not persuaded that there is error on the part of the associate judge. The unexplained delay on the part of the defendants in connection with authentication of the order is greater than the delay that Mr Cull occasioned through his difficulties with his car. There was no relevant injustice to the defendants caused by the orders of the associate judge.
I have considerable sympathy for the position of the defendants who have remained exposed to possible liability in this proceeding for more than 10 years while the plaintiffs have been unable or unwilling to bring their causes of action to trial. However, in my view, the associate judge was right in declining to pull the trigger on the order of 12 August.
Because it would be futile to do so, leave to appeal out of time and, in respect of the order of 12 August 2014, leave to appeal against an unauthenticated order, is refused. The orders of the associate judge made 12 August and 21 August 2014 are confirmed.
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