Riva NSW Pty Ltd v Mark A Fraser & Christopher P Clancy trading as Fraser Clancy Lawyers
[2014] NSWCA 454
•29 October 2014
Court of Appeal
New South Wales
Case Title: Riva NSW Pty Ltd (ACN 113 881 815) v Mark A Fraser & Christopher P Clancy t/as Fraser Clancy Lawyers (ABN 27 526 211 743) Medium Neutral Citation: [2014] NSWCA 454 Hearing Date(s): 29/10/2014 Decision Date: 29 October 2014 Before: Emmett JA Decision: (1) Summons filed on 16 September 2014 be dismissed with costs.
(2) Notice of motion filed on 14 October 2014 be otherwise dismissed.
(3) The respondents to the motion referred to in order (2) pay the applicant's costs of that motion.
(4) The costs of the proceedings referred to in orders (1) and (3) be paid on an indemnity basis.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: PROCEDURE - summons seeking relief under s 69 of the Supreme Court Act from orders of the District Court - notice of motion seeking summary dismissal of the summons - summons filed out of time - whether there is any prospect of an extension of time being granted - whether there is any basis on which the relief sought in the summons would be granted in any event Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
District Court Act 1973 (NSW0, ss 4, 127
Legal Profession Act 2004 (NSW), ss 384, 385
Supreme Court Act 1970 (NSW), s 69
Trade Practices Act 1974 (Cth), s 82
Uniform Civil Procedure Rules 2005 (NSW), rr 6.24, 6.26, 7.2, 36.16, 51.45, 59.3Cases Cited: Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178
Muldoon v Church of England Children's Homes Burwood [2011] NSWCA 46; 80 NSWLR 282Category: Principal judgment Parties: Riva NSW Pty Ltd (ACN 113 881 815) (First Applicant)
Angelo Ferella (Second Applicant)
Tiziana Ferella (Third Applicant)
Mark A Fraser & Christopher P Clancy t/as Fraser Clancy Lawyers (First Respondent)
District Court of NSW (Second Respondent)Representation - Counsel: Counsel:
G Foster (Applicants)
P Barham (Respondents)- Solicitors: Solicitors:
Zali Burrows Lawyers (from 29 October 2014) (Applicants)
Fraser Clancy Lawyers (Respondents)File Number(s): 2014/273003 Decision Under Appeal - Before: Curtis DCJ - Court File Number(s): 2012/13479 Publication Restriction: Nil
JUDGMENT
EMMETT JA: By summons filed on 16 September 2014 (the s 69 Summons), Riva NSW Pty Ltd (Riva) claimed relief under s 69 of the Supreme Court Act 1970 (NSW) against orders made by the District Court in favour of Mr Mark Fraser and Mr Christopher Clancy, who carry on practice as solicitors under the name Fraser Clancy Lawyers (Fraser Clancy). By notice of motion filed on 14 October 2014 (the Dismissal Motion), Fraser Clancy sought summary dismissal of the s 69 Summons or, alternatively, an order that Riva provide security for its costs in the event that the s 69 Summons is heard and is unsuccessful.
There are several bases upon which Fraser Clancy seeks the relief claimed in the Dismissal Motion. The first concerns the timing of the s 69 Summons, which seeks relief in respect of orders made by the District Court on 20 December 2013 and 11 April 2014. The first prayer for relief in the s 69 Summons is an order extending the time for filing the summons.
Fraser Clancy contends that, in the light of the circumstances that they have brought to the attention of the Court by affidavit of Mr Clancy, sworn on 22 October 2014, there is no prospect at all of an order being made extending the time for commencing the proceedings. That requires some consideration of the context in which the s 69 Summons was filed.
Background to the Proceedings
Fraser Clancy had previously acted for Riva in earlier litigation and a dispute arose as to the quantum of the costs to which they were entitled. An assessment was made and subsequently confirmed by a review panel. Riva then commenced proceedings against Fraser Clancy in the District Court by way of appeal in respect of the assessments of costs. On 10 August 2012, Curtis DCJ determined that the fair and reasonable amount of the legal costs for the work carried out by Fraser Clancy, pursuant to their retainer by Riva, was $38,118.57. His Honour noted the agreement between the parties that Riva had paid $3,268.02 on account of those costs, leaving a balance owing of $34,850.55.
On 20 December 2013, Curtis DCJ recorded that he had entered judgment for Fraser Clancy against Riva in the sum of $38,867.02, but had made no order as to costs at that time. By motion of 13 November 2013, Fraser Clancy had moved the Court for orders that Mr Angelo Ferella and Ms Tiziana Ferella, in addition to Riva, be ordered to pay the whole of those costs. That application was made under s 98 of the Civil Procedure Act 2005 (NSW). The motion also sought an order that Mr Ferella and Ms Ferella be added to the proceedings as defendants under rr 6.24(1) and 6.26(2) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), on the basis that they would otherwise be proper parties to the proceedings within r 6.26(2)(a), for the purposes of Fraser Clancy seeking costs orders against them.
Curtis DCJ observed that, earlier in the proceedings, Riva had itself sought to add Mr Ferella and Ms Ferella as plaintiffs. His Honour considered that that move was tactical in order to defeat a suggestion that Riva was out of time in relation to its appeal from the decision of the costs assessors. His Honour had denied that relief. However, his Honour did not consider that it was inconsistent that he should then give leave to Fraser Clancy to add Mr Ferella and Ms Ferella as parties for the purpose of seeking costs orders against them. His Honour considered that it was appropriate that they have leave to cross-claim against the Ferellas, and in the circumstances assumed that such an application was satisfied by application from the bar table. His Honour considered that, in circumstances where the Ferellas had a significant role in the primary proceedings, it was appropriate that they should be joined. He did that on the basis that Ms Ferella was at all times a sole shareholder and director of Riva, and at all times stood to benefit from the appeal. Moreover, Mr Ferella had been the original moving party in relation to the relief sought before Curtis DCJ and had been the moving party in earlier proceedings in the Local Court.
Curtis DCJ was satisfied that both Mr Ferella and Ms Ferella had either been served with the motion of 13 November 2013 or that the proposed hearing of the motion had been adequately brought to their attention. Nevertheless, neither of them appeared on the hearing of the motion on 20 December 2013.
The motion of 13 November 2013 sought orders that Riva and the Ferellas be ordered to pay Fraser Clancy's costs of the whole of the proceedings, which Curtis DCJ described as the costing procedure, including the review panel proceedings, Fraser Clancy's enforcement costs thrown away, the Local Court judgment, Local Court proceedings 2011/240531, and the present District Court proceedings. His Honour was satisfied that the proceedings both in the District Court and in the Local Court were vexatious, and that the Local Court proceedings additionally involved bad faith, for the reasons that he had published on 10 August 2012. His Honour therefore considered that it was appropriate that the costs in the proceedings in the District Court and in the Local Court be paid on an indemnity basis.
His Honour was satisfied from the evidence of a Ms Kerrie-Ann Rosati, a costs consultant, that the appropriate amount of costs in both proceedings was the sum of $78,256. His Honour therefore ordered that Riva, Mr Ferella and Ms Ferella pay to Fraser Clancy the sum of $78,256. His Honour noted that the order imposed liability both jointly and severally upon all three parties.
It appears that, subsequently, an application was made for a garnishee order in respect of a deposit with Macquarie Bank Ltd (Macquarie) in the name of Riva. It appears that a garnishee order was made on 6 March 2014, although I do not have any details of the order. There was, however, a question as to whether or not Riva was the beneficial owner of the fund.
By notice of motion filed on 11 April 2014, Fraser Clancy claimed further interlocutory relief in aid of the judgment that it had obtained on 20 December 2013. By that motion, they claimed an injunction preventing Riva from dealing with the deposit held by Macquarie in its name. They also sought additional relief including the issue of a garnishee order to Macquarie in relation to that deposit.
On 11 April 2014, Curtis DCJ made an order ex parte restraining Riva from transferring or otherwise dealing with monies held by it with Macquarie in its name or for its benefit, to the extent of $106,325.81 (being the amount of the earlier garnishee order). The other claims in the motion were not pressed before his Honour. On the same day, Fraser Clancy informed Riva that it would not press the other orders made ex parte and the Court was informed that the garnishee order claim would not be pressed. Fraser Clancy accepted that it could not be enforced. The matter came before Curtis DCJ again on 17 April 2014, when Riva was represented by counsel. Riva consented to the orders made on 11 April 2014 being continued and the motion was stood over to 2 June 2014.
In the meantime, Riva filed a notice of appeal from the orders made by Curtis DCJ on 20 December 2013. That appeal was incompetent, since the proceedings in the District Court before Curtis DCJ were not by way of "action" (see District Court Act 1973 (NSW), ss 127(1), 4(1)) but by way of statutory appeal pursuant to ss 384 and 385 of the Legal Profession Act 2004 (NSW). Accordingly, the only relief that would be available in respect of the orders would be by prerogative writ relief under s 69 of the Supreme Court Act (see generally Muldoon v Church of England Children's Homes Burwood [2011] NSWCA 46; 80 NSWLR 282 at [6]-[11]). Once that error was drawn to the attention of Riva's advisors, the notice of appeal was withdrawn and orders were made that Riva pay Fraser Clancy's costs of those proceedings.
The present proceedings were commenced some six weeks later. Thus, it is apparent that they were commenced some four months beyond the three-month period fixed by the UCPR within which any claim for prerogative writ relief could be brought. The proceedings were commenced by the filing of the s 69 Summons in accordance with r 59.3 of the UCPR. Rule 51.45(3) provides that, in proceedings under s 69 of the Supreme Court Act that are assigned to the Court of Appeal under s 48 of that Act, the summons must be accompanied by a folder containing a copy of the summons, a statement of any orders or decision in respect of which relief is sought, the reasons for the decision (if any), the written submissions of the parties (when available), and any other document that the applicant seeks to rely on. That rule was not complied with by Riva when the s 69 Summons was filed.
Rule 51.45(5) provides that the applicant must, within 28 days of filing the summons, file and serve written submissions. That rule was not complied with, notwithstanding the service on Riva of the Dismissal Motion. Thus, apart from the grounds stated in the s 69 Summons, the Court has no knowledge of the basis upon which the relief is sought by Riva.
A further instance of Riva ignoring the rules is in relation to r 7.2 of the UCPR. Rule 7.2 deals with the commencement of proceedings by a company. The rule also deals with the commencement of proceedings by individuals. The applicants in the present proceedings are Riva and Mr Ferella and Ms Ferella. The summons appears to be signed by Mr Ferella but there is no record of Ms Ferella (who is the sole director of Riva) giving any authority to Mr Ferella. No solicitor is named in the s 69 Summons and there is no evidence of Riva having given any authority to Mr Ferella. That would be a basis for a stay of the proceedings until the rules have been satisfied.
Disposition of the Proceedings
Fraser Clancy contends that, in the absence of some indication in the papers of the basis upon which an extension of time might be granted, the Court should proceed on the basis that the application for an extension of time is hopeless and therefore would not succeed. In that case, it would follow that the s 69 Summons would be incompetent and should be dismissed. I am not disposed to deal with the matter on that basis, although I should say that the evidence rather indicates that there has been contumelious failure to comply with the UCPR. The claim made in the abandoned notice of appeal is different from the claim made in the s 69 Summons, and even though the notice of appeal was filed closer to the time when the orders were made by Curtis DCJ, I would have considerable reservations as to whether that is sufficient to justify extending the time from March to September for the commencement of these proceedings. I would rather deal with the summons on a more substantial basis.
Prayer 1 of the s 69 Summons is for an order extending time. Prayer 2 seeks an order for mandamus directing Curtis DCJ to provide adequate reasons for his decision. Counsel for Riva, Mr Ferella and Ms Ferella was somewhat vague as to the basis upon which it could be said that Curtis DCJ did not provide adequate reasons for making orders on 20 December 2013. It is of course significant that neither Riva nor Mr Ferella or Ms Ferella bothered to appear before Curtis DCJ in order to oppose the orders claimed by Fraser Clancy in its notice of motion of 13 November 2013. The third prayer for relief in the s 69 Summons is for an order in the nature of certiorari quashing the orders made on 20 December 2013. It is desirable to deal with prayers 2 and 3 together in that they are interconnected.
Curtis DCJ made orders that the Ferellas be joined as parties, doing so under UCPR r 6.24(1). Rule 6.24(1) provides that, if the Court considers that a person ought to have been joined as a party, or is a person whose joinder is necessary to the determination of all matters in dispute in any proceedings, the Court may order that the person be joined as a party. His Honour in fact found that it was appropriate that the Ferellas be joined. His Honour also referred to r 6.26, which deals with joinder to recover costs. Rule 6.26(1) provides that, except to the extent to which the rules expressly provide, a party may not join another person as a party to any proceedings for the purpose of making an application for costs against the other person.
However, under r 6.26(2), that rule does not apply if the other person would otherwise be a proper party to the proceedings, or if the party joined the other person by means of a cross-claim in respect for a claim for costs against the party. As I have said, his Honour considered that it was appropriate to give Fraser Clancy leave to cross-claim against the Ferellas and, accordingly, there does not appear to be any basis for suggesting that the orders made by Curtis DCJ were beyond the jurisdiction conferred by r 6.24.
In any event, under s 98 of the Civil Procedure Act, the Court had power to make orders against non-parties for the payment of costs (see Knight v FP Special Assets Ltd [1992] HCA 28; 174 CLR 178 at 190-191). On that basis, it seems to me that there can be no argument that the decision made by Curtis DCJ to join the Ferellas and to order them to pay the costs was not within jurisdiction either under the UCPR or s 98 of the Civil Procedure Act, or a combination of both.
I do not consider that it is arguable that there is any deficiency in his Honour's reasons of 20 December 2013 in explaining the basis upon which his Honour made the orders in question. I therefore consider that there is no prospect of prayers 2 and 3 of the s 69 Summons being granted, assuming, as a matter of discretion, that the s 69 Summons would be entertained by the Court. Prayer 4 refers to the garnishee order made on 6 March 2014. That is not being enforced and is not referred to as a decision under review. That prayer by itself would lead nowhere and no order in terms of that prayer would be made by the Court.
Prayer 5 of the s 69 Summons is for an order that the injunction ordered on 11 April 2014 be set aside. As I have said, the continuation of that order was consented to by counsel for Riva. It was not suggested that Curtis DCJ granted the injunction on the basis of some erroneous understanding of the facts. It is certainly an order that was within the jurisdiction of the District Court. Accordingly, prayer 5 could not possibly succeed.
Prayer 6 of the s 69 Summons is for an order that Fraser Clancy pay Riva damages, including damages under s 82 of the Trade Practices Act1974 (Cth). Counsel for Riva and the Ferellas accepted that such a claim could not succeed in these proceedings.
Conclusion and Costs
In those circumstances, it seems to me that there is no possible basis upon which the relief sought in the s 69 Summons would be granted by this Court, quite apart from any extension of time. In any event, as I have said, the orders of 20 December 2013 were made in the absence of the parties who elected not to appear. It would therefore have been open to them and would now be open to them to apply, under r 36.16(2)(b) of the UCPR, to have the orders set aside, on the basis that they were made in their absence. They have chosen not to make any such application. In circumstances where adequate relief is available in respect of the decision under challenge, the Court would almost invariably decline as a matter of discretion to grant relief under s 69 of the Supreme Court Act. That is another reason why it seems to me that this application should not be allowed to proceed.
Given all of those matters, it is also extremely unlikely that there would be an order granting an extension of time, since the extension of time would be of no possible utility, given that the proceedings are doomed to failure. In those circumstances, I consider that the s 69 Summons should be dismissed with costs.
On 7 August 2014, Fraser Clancy wrote to Riva, Mr Ferella and Ms Ferella. After outlining a basis upon which a claim for a prerogative relief, if made, would not succeed, the letter said that, in the interests of finalising the prerogative relief proceedings, Fraser Clancy offered to settle any claim by agreeing to accept the amount ordered in the District Court proceedings on 20 December 2013, less $5,000, less interest, in full satisfaction of that judgment. That is to say, they agreed to accept payment of the sum of $73,256 plus interest in full satisfaction of the judgment within 14 days of the acceptance of the offer. The offer remained open for 14 days from the date of the letter. The offer was not accepted and the letter said that it would itself be relied upon on the question of costs and that Fraser Clancy would seek costs on an indemnity basis from the date of the letter.
Following the commencement of these proceedings, Fraser Clancy wrote again on 10 October 2014, suggesting that the proceedings were doomed to failure. The letter said that, if by 14 October 2014 the s 69 Summons was withdrawn, Fraser Clancy would not seek the costs of defending the summons. In all of the circumstances, I consider it is appropriate to order that the costs of the s 69 Summons and the Dismissal Motion be paid on an indemnity basis.
Riva and the Ferellas ask that any indemnity costs order be limited to costs incurred after 10 October 2014. In the circumstances, having regard to the earlier letter written in August, and having regard to the conduct of the plaintiffs in relation to the proceedings, I do not consider it appropriate to limit the order in that way.
The following orders should therefore be made:
(1)Summons filed on 16 September 2014 be dismissed with costs.
(2)Notice of motion filed on 14 October 2014 be otherwise dismissed.
(3)The respondents to the motion referred to in order (2) pay the applicant's costs of that motion.
(4)The costs of the proceedings referred to in orders (1) and (3) be paid on an indemnity basis.
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