Pinanca Pty Ltd v Trinity Projects Pty Ltd (No 2)

[1991] TASSC 106

101/1991
List "A"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Pinanca Pty Ltd v Trinity Projects Pty Ltd (No 2) [1991] TASSC 106; A101/1991

PARTIES:IN THE MATTER OF THE COMMERCIAL ARBITRATION ACT 1986 AND IN THE MATTER OF AN ARBITRATION BETWEEN TRINITY PROJECTS PTY LTD AS CLAIMANT AND PINANCA PTY LTD AS RESPONDENT PINANCA PTY LTD v TRINITY PROJECTS PTY LTD

FILE NO/S:  M482/1988
DELIVERED ON:  28 November 1991
JUDGMENT OF:  Underwood J

CATCHWORDS:

Courts and Judges—Interlocutory order for security for costs—Application to vary by both parties—Jurisdiction to vary interlocutory order, inherent jurisdiction—Rules of Court, O47, r28.

Judgment Number:  A101/1991
Number of paragraphs:  19

Serial No 101/1991
List "A"
File No M482/1988

IN THE MATTER OF THE COMMERCIAL ARBITRATION ACT 1986
and IN THE MATTER OF AN ARBITRATION BETWEEN TRINITY PROJECTS PTY LTD AS CLAIMANT and PINANCA PTY LTD AS RESPONDENT
PINANCA PTY LTD v TRINITY PROJECTS PTY LTD (NO 2)

REASONS FOR JUDGMENT  UNDERWOOD J

28 November 1991

1. By an application dated 2 August 1991 Trinity Projects Pty Ltd (Trinity) sought the following orders pending the hearing of Pinanca Pty Ltd's (Pinanca's) application to set aside, and appeal from an arbitrator's award:

1That Pinanca pay into court the sum the arbitrator awarded Trinity.

2That Pinanca pay into court $200,000.00 being the estimated cost of the arbitration.

3That Pinanca provide security for the costs of the appeal and the application to set aside the award.

4That the appeal and the application to set aside the award be stayed until security is given.

1. On 4 October 1991 Cox J (Serial No 80/1991) determined the application by an order that Pinanca secure the sum of $5,000.00 on or before 18 November 1991, failing which further proceedings be stayed until the security is given. Security has not been given and the proceedings are now stayed.

1. Trinity and Pinanca have each made a further interlocutory application arising out of the order of Cox J. Trinity now seeks orders:

1That the application to set aside the award and the appeal be struck out for want of prosecution.

2Alternatively, pursuant to the Rules of Court, O47, r28, the order of Cox J. be varied by ordering Pinanca to pay into court the sums of $58,760.00 and $81,950.00 pursuant to the Commercial Arbitration Act 1986, s.42(3) by bank cheque on or before 28 November 1991 and that Pinanca pay into court the sum of $22,000.00 being security for past and future costs by the same date.

1. Pinanca now seeks an order that the order of Cox J. be vacated or set aside or alternatively, that the time for the payment of security of costs be extended to 17 December 1991.

1. The order of Cox J finally determined the application then before him but it was an interlocutory order in the sense that it did not finally determine the rights of the parties to the appeal and the application to set aside the award. The court has "a sort of general control over orders made on interlocutory applications", per Jessell MR in Mullins v Howell (1879) 11 Ch D 763. However, that does not mean that the issues determined on an interlocutory application can be relitigated afresh at the will of the parties as was suggested by the solicitor for Pinanca. In Prestney v Corporation of Colchester (1883) 24 Ch D 376 Cotton LJ at pp384,385 held that, in the case of interlocutory orders concerning practice and procedure, where new facts are put to a judge following the making of the order there is jurisdiction to vary the terms of the order. However, his Lordship added, "it would be very different if this were an interlocutory order in which the rights of the parties had been decided, then it is a case for appeal."

1. Cox J determined the rights of the parties with respect to giving security for costs for the appeal and the application to set aside the award by ordering that security in the sum of $5,000.00 be given. That order is not a mere matter of practice or procedure. There is no appeal against that order so it is final in the sense that it determined the rights of the parties on the interlocutory application. Part of his Honour's order was that such security be given on or before 18 November 1991 failing which further proceedings will be stayed until the security is given. In my opinion that part of his Honour's order is a "method of giving effect to it"; see Lewis v Daily Telegraph Ltd [1964] 1 All ER 705 at p710. Such part of an interlocutory order may be varied by later application upon new facts being established to show that following the directions precisely would cause inconvenience or injustice. See Prestney v Corporation of Colchester (supra) at p385; Kelsey v Doune [1912] 2 KB 482 at p489. In Wilkshire v The Commonwealthof Australia (1976) 9 ALR 325, Muirhead J said at p330:

"I take the view that there is inherent power in this court to regulate and govern its own practices and procedures, subject of course to questions of jurisdiction, and that this power includes the right to review and set aside orders including consent orders made in chambers upon a summons for directions provided the orders are procedural only and have not determined in whole or in part the rights or status of parties on the essential issues involved in the case."

1. In the absence of an authorising rule of court, to the limited extent explained above, I rule that I have jurisdiction to vary the procedural or machinery part of the order of Cox J dated 4 October 1991. This enables me to deal with Pinanca's application. In support of it, two affidavits by Peter Lance Brewer, director and controlling shareholder of Pinanca were read. He was cross–examined. In essence, his claim was that neither he nor any of the beneficiaries of "his" family trust, for whose benefit Pinanca held and holds all its assets, has been able to raise $5,000.00 between 4 October and 21 November 1991. However, according to his evidence, during the same period he was able to arrange loans in Sydney in the order of $4,000,000.00 to buy commercial properties in Perth, Western Australia. It is unnecessary for me to refer to Mr. Brewer's evidence in any detail. It is sufficient to say that:

1By his own admission neither of his affidavits read on this application made anything remotely resembling full disclosure concerning his and his family's financial affairs.

2By his own admission in cross–examination, if he put all his efforts into raising $160,000.00 he could do it.

3Apart from one instance, he was unable to particularise the unsuccessful attempts deposed to in his affidavit that he had made to raise the $5,000.00 security for costs.

4From his demeanour and the answers given in the witness box I formed the clear view that no weight could be given to any part of his evidence which was the subject of challenge.

1. Accordingly, I find that no new material was put before me which would warrant a variation of the procedural part of the order of Cox J

1. The Rules of Court, O79, r7(1) give the court or a judge power to enlarge or abridge the time for doing any act or taking any proceeding limited or allowed by any order of the court or a judge. However, the principles which activate the exercise of the discretion to extend time under this rule are substantially the same in this case as those which activate the discretion of the court in the exercise of the inherent power referred to above. Pinanca's application is dismissed.

1. I now turn to Trinity's application. It was submitted that jurisdiction to make the orders sought in the application, (other than dismissal for want of prosecution) is conferred by the Rules of Court, O47, r28 which provides:

"No proceeding by audita querella shall hereafter be used; but any party against whom judgment has been given may apply to the court or a judge for a stay of execution or other relief against such judgment, upon the ground of facts which have arisen too late to be pleaded, and the court or judge may give such relief, and upon such terms as may be just."

1. An identical rule was to be found in the Rules of Court (UK) O47, r27 but now replaced in slightly different form by O45, r11. The writ of audita querella has ancient origins. It is described in Blackstone, Laws of England, vol3 at p404 in the following terms:

"An audita querella is where a defendant, against whom judgment is recovered, and who is therefore in danger of execution, or perhaps actually in execution, may be relieved upon good matter of discharge, which has happened since the judgment: as if the plaintiff hath given him a general release; or if the defendant hath paid the debt to the plaintiff, without entring [sic] satisfaction on the record. In these and like cases, wherein the defendant hath good matter to plead, but hath had no opportunity of pleading it, (either at the beginning of the suit or puis darrein continuance, which, as was shown in a former chapter, must always be before judgment) an audita querella lies, in the nature of a bill in equity, to be relieved against the oppression of the plaintiff. It is a writ directed to the court, stating that the complaint of the defendant hath been heard, audita querella defendentis, and then setting out the matter of the complaint, it at length enjoins the court to call the parties before them, and having heard their allegations and proofs, to cause justice to be done between them."

1. By the Common Law Procedure Act 1854, s.84 any matter which, if it arose before or during the time for pleading, would be in answer to the action by way of plea, may, if it arises after the lapse of the period during which it could be pleaded, be set up by way of audita querella. The essence of the proceedings was to provide a remedy for the benefit of a person who had been or was in danger of being taken in execution upon a judgment or recognizance when he had good cause to show against the justice of such execution. It was a complex proceeding. Turner v Davies 2 Wms Saund 137; (85 ER 871) illustrates the complexity of the ancient proceeding. The writ occupies four pages of the original report! Even in those times, the court said that, in general, "the Courts will not put the defendant to the trouble and expence [sic] of an audita querella, but will relieve him in a summary way on motion. 4 Burr 2287, Sutton v Bishop 6 Bing 572. But where the ground of his relief is a release, when there is some doubt about the execution, or some matter of fact which cannot be clearly ascertained by affidavit, and therefore proper to be tried, the Court has driven the defendant to his audita querella." (ER p880).

1. That brief historical excursion demonstrates that the provisions of O47, r28 give the same relief as formerly was obtained by way of audita querella but in a summary manner. Griffith CJ (as he then was of the Supreme Court of Queensland) in Woods v Sheriff of Queensland [1895] QLJ 163 said that the proceedings by way of audita querella and by way of the rule which abolished those proceedings but retained the relief thereby provided, prevent a judgment being carried into execution. Speaking of the rule he said at p164:

"Thus, although the mode of procedure is altered, full power is retained to relieve a party from the effect of a judgment which, though just pronounced, ought not to be carried into execution. The same principle that allows relief to be given against the continued operation of a final judgment obviously extends to giving relief against the continued operation of an interlocutory order, if after it is made new facts come into existence or are discovered which render its enforcement unjust." [My emphasis].

1. Woods v The Sheriff of Queensland (supra) was applied in Hutchinson v Nominal Defendant [1972] 1 NSWLR 443 to relieve a plaintiff from an order staying continuance of his action (the second one) until the costs of the first action had been paid. However the rule is of no avail to Trinity for it is not a party against whom any judgment has been given nor is it of course, a party against whom execution is about to be made on any interlocutory or final judgment.

1. There remains Trinity's application to dismiss the appeal and the application to set aside the award, for want of prosecution. The principles upon which this Court will act in the exercise of its discretion on an application to dismiss a proceeding for want of prosecution, are authoritatively set out in The Closer Settlement Board v Thomas [1982] Tas R 179. They need not be repeated here. I would venture to adopt what I said in Gutteridge, Haskins and Davey Pty Ltd v Seaview Properties and Ors, Serial No B31/1990 concerning these principles, Thomas's case and Calvert v Stollznow, reported on appeal at [1980] 2 NSWLR 749.

1. The prejudice Trinity is suffering and will suffer by reason of non–compliance with the order of Cox J is twofold:

1If the appeal and the application proceed to a hearing Trinity will incur the costs of that hearing without the benefit of security in the sum of $5,000.00.

2For so long as the proceedings are stayed Trinity will not be able to enforce any award it might retain at the end of those proceedings.

1. The stay presently in force protects Trinity against prejudice arising from the first matter. However, the same stay, caused by the failure to give security, is responsible for continuing prejudice arising from the second matter. Consideration of the application to dismiss the appeal and application is complicated by the fact that the solicitor for Trinity has stated that, if the appeal and application are not struck out on this application then Trinity wish the appeal and the application to proceed to the hearing listed for these sittings, whether or not security has been given. Thus, the question is whether in all the circumstances Trinity is entitled to an order that the appeal and the application be struck out either now or by a specified date within the next week or ten days if security is not sooner given.

1. Application of the principles in the cases to which I have just referred decree that Trinity is not entitled to an immediate order that the appeal and the application be struck out.  Default in compliance with the order of Cox J has continued for less than two weeks. I am not satisfied that the default arises from a deliberate act not to give security. Having regard to the lateness of the application for security for costs, a matter referred to by Cox J at p2 of his reasons for judgment, and having regard to the relatively small amount of money ordered to be secured and having regard to the length of time Pinanca has been in default it would not be just to deprive Pinanca now of all rights of appeal against the award by reason of the failure to make security. If Trinity wishes to proceed in any event during these sittings, then it must accept that it may do so without security having been given. If however it does not wish to take that course and prefers to leave the stay order in effect until the first sittings next year then, it would not be unreasonable to make an order that the appeal and the application be struck out for want of prosecution if security as ordered is not made on or before 15 January 1992. However, as Trinity, by its solicitor, has plainly indicated the course that it wishes to take these sittings and, as the hearing of the appeal and the application can proceed these sittings I will make no order with respect to striking out the proceedings for want of prosecution.

1. Accordingly, Trinity's application also fails.