Pier (WA) Pty Ltd as trustee for Isandi Trust v Jean Maurice Pty Ltd (in Liq) [No 5]

[2018] WASC 203

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   PIER (WA) PTY LTD AS TRUSTEE FOR ISANDI TRUST -v- JEAN MAURICE PTY LTD (IN LIQ) [No 5] [2018] WASC 203

CORAM:   KENNETH MARTIN J

HEARD:   7 MAY 2018

DELIVERED          :   7 MAY 2018

PUBLISHED           :   2 JULY 2018

FILE NO/S:   CIV 2935 of 2016

BETWEEN:   PIER (WA) PTY LTD AS TRUSTEE FOR ISANDI TRUST

Plaintiff

AND

JEAN MAURICE PTY LTD (in liq)

First Defendant

SANCHO BAKERY PTY LTD

Second Defendant

FRANCK DUROLEK

Third Defendant

BELINDA DUROLEK

Fourth Defendant

Catchwords:

Practice and procedure - Application challenging paragraphs of practitioner's affidavit as misleading - Application misconceived - Application dismissed with indemnity costs orders

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiffs	:	Mr G R Ritter QC & Mr A Vinciullo
First Defendant	:	No appearance
Second Defendant	:	Mr C Williamson & Ms J M Somerville
Third Defendant	:	Mr C Williamson & Ms J M Somerville
Fourth Defendant	:	Mr C Williamson & Ms J M Somerville

Solicitors:

Plaintiffs	:	HopgoodGanim Lawyers
First Defendant	:	No appearance
Second Defendant	:	ABMS Lawyers
Third Defendant	:	ABMS Lawyers
Fourth Defendant	:	ABMS Lawyers

Case(s) referred to in decision(s):

Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [2018] WASC 22

Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [No 2] [2018] WASC 23

Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [No 3] [2018] WASC 24

Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

KENNETH MARTIN J:

(These reasons were delivered extemporaneously on 7 May 2018 and have subsequently been edited from the transcript for publication.)

Today was allocated for the first day of a hearing in respect of the assessment of damages which is to proceed against all defendants, three out of four of whom are represented.  However, a large component of the day was diverted to deal with a late application which is advanced on the part of the fourth defendant, Mrs Belinda Durolek, in respect of her seeking to strike out various paragraphs of the affidavit of Emily Pendlebury sworn 27 and filed 28 September 2017.

The expressed basis for seeking that rather extraordinary relief is that the court is said to have been allegedly misled by aspects of Ms Pendlebury's affidavit, and so effectively, that the court should address what is an unacceptable situation.  This is in circumstances where a judgment liability has sprung and has been in place against Mrs Durolek since October 2017, along with all other defendants.

Let me say at the outset that I am of the firm view that Ms Pendlebury's affidavit has not misled the court in any relevant respect.  It seems there was an error in terms of her affidavit at pars 7 and 8 referring to the first, second and fourth defendants.  I am quite satisfied that that was an innocent error.  The very attachment appended via par 7 of her affidavit, EGP1 at page 16, makes it very plain that the terms of order 1 of the orders of 7 September 2017, which are not complied with, were that:

By 26 September 2017 the Defendants (other than the fourth defendant) transfer and pay $AUD1,600,000 [into a bank account]. …

The orders continued in those terms.

Given the prominence and urgency of this matter at the time, I was certainly not misled by that innocent nomenclature error in the text of par 7, and in fact I did not even notice it at the time.  The position is that the orders of 7 September 2017 did not bind the fourth defendant.  That was not by accident ‑ it was by design.

However, my further orders of 28 September 2017 did expressly apply to the fourth defendant.  I endeavoured to explain that in the reasons as I articulated them ex tempore on 28 September 2017 and then as they were revised and published on 25 January 2018:  see Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [No 2] [2018] WASC 23 [27] - [30].

I should bear the responsibility for perhaps what is, on reflection, my less than perfect expression of the position in Pier [No 2] [2018] WASC 23 at [27] following the semicolon and my reference to $29,197. However, it is apparent that having heard over an hour's worth of argument that day, I was not in any way misled then as to the new information that emerged and was being complained of by the plaintiff.

That new information was about the undisclosed bank accounts which were identified in pars 15 and 16 of Ms Pendlebury's affidavit ‑ in reference to accounts with the ANZ Bank, the HSBC Bank and with the National Australia Bank.  At that time the fourth defendant's Bankwest account was not only known about, but it had actually been the subject of my previous orders.  Further, the plaintiff's access to that account had revealed payments to the plaintiff, which became the subject of concern as to monies leaking out of that same account in significant amounts.

At the relevant time, it might have been feasible for the fourth defendant to offer some sort of explanation about what was happening concerning the discovered HSBC account and her credit card.  But none of that happened.  In fact, those factual revelations at the time were woven into an unprecedented scenario.  That is all the subject of my reasons in Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [2018] WASC 22, Pier [No 2] [2018] WASC 23 and Pier Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [No 3] [2018] WASC 24, which were delivered ex tempore and then revised and published on 25 January 2018. Consequently, the orders that I issued on 28 September 2017 striking out the defence and counterclaim were directed at all defendants, including Mrs Durolek as fourth defendant.

The striking out order was appropriate in respect of the first, second and third defendants.  They had failed to comply with my orders of 7 September 2017.  But then, I also thought it at that later time appropriate to incorporate the fourth defendant into that overall scenario of an extended opportunity for either payment into court, or a delivery up of the gold.  This was due to the further circumstances which had come to pass as they are articulated in Pier [No 2] [2018] WASC 23 at [27] - [30]. I revisited those circumstances in Pier [No 3] [2018] WASC 24 at [6] and [9], delivered ex tempore on 16 January 2018.

The ex tempore reasons delivered along the way were needed to record and assimilate a very considerable amount of unusual facts put before the court which evolved and changed significantly.  That is reflected in the orders issued on 28 September 2017 striking out the joint defence and counterclaim filed for all defendants.

For that to happen, my orders necessarily needed to bind all defendants (ie, be extended to the fourth defendant as well).  I was satisfied then, and I remain satisfied, that that was fully appropriate.  That was the position for some time as I made the extended time orders enforceable by way of springing order on 28 September 2017.  But subsequently my orders were still not complied with.

In those circumstances, the automatic judgment 'sprang' against all defendants.  That appears to have been well‑appreciated by all defendants concerned.  In particular, there was an application brought by a third set of lawyers for the defendants on a global basis to extend time for compliance.  No suggestion of the court being possibly misled as regards the fourth defendant emerged at that time.  That is telling.

The present application that is advanced on the basis of a chamber summons of 27 April 2018 seeking leave to proceed in accordance with a motion of 24 April 2018 (which is somewhat novel in its own right) is now dismissed.  In short, this is once again an exceptional scenario where there has been what I would view as an extremely serious allegation directed at a practitioner of this court, that is without a shred of substance.

A painful exercise which has unfolded throughout the course of today (which as mentioned was intended to be devoted to the assessment of damages exercise) indicates no misleading of the court.  A nomenclature error has been pointed out in pars 7 and 8 of Ms Pendlebury's affidavit.  At the same time, in par 7 the true position was always explicit from the referenced attachment.  Additionally, bearing in mind the high levels of interlocutory activity in this matter and the multiple number of occasions that the action was before me in chambers at that time, any suggestion that I might have overlooked or been misled into wrongly thinking that an earlier order had been made against Mrs Durolek, in circumstances where she had been specifically carved out of the orders of 7 September 2017, was always wholly untenable.

The ancillary question now is whether this is a case where the court should indicate its active displeasure, concerning what was a time wasting order that was always a diverting application so hopeless it should never have been brought.  Those criteria are met here, I regret to say.  There was nothing in Ms Pendlebury's affidavit that was materially misleading.

It takes some imagination to advance a spin on what was written to suggest that somehow or other this court had been misled into thinking that a Bankwest account had not previously been revealed ‑ in circumstances where that very account had been the subject of previous orders and put before me on prior interlocutory applications.

Through the course of cross-examination, that point seems to have emerged as the significant factor as referred to by Mrs Durolek ‑ that she might have been accused of not disclosing the existence of the Bankwest account.  But that was not the case at all.

On my assessment, this is a case where the present application ought not to have been brought.  It is a serious thing to accuse a legal practitioner of misleading the court without foundation.  Quite frankly, that suggestion ought to have been withdrawn.  I remain concerned it was not withdrawn once the true position was exposed today.

Hence, there will be an order for indemnity costs as I am satisfied the principles for the application of such an extraordinary order are met.  I refer to the principles as expressed by the Court of Appeal in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S).

Costs should be payable forthwith.  I will issue orders in the following terms:

1.Application dismissed.

2.The fourth defendant is to pay the plaintiff's costs of the application to be taxed on an indemnity basis, payable forthwith upon ascertainment.

3.The plaintiff has leave to concurrently apply for its costs of and incidental to the present application against the lawyers for the fourth defendant.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

TG

RESEARCH ASSOCIATE TO THE HONOURABLE JUSTICES KENNETH MARTIN AND CORBOY

2 JULY 2018