Spitfire Nominees Pty Ltd & Anor v Hall & Thompson (a firm)
[2000] VSCA 243
•4 December 2000
SUPREME COURT OF VICTORIA
COURT OF APPEAL Not Restricted
No. 10046 of 1991
| SPITFIRE NOMINEES PTY. LTD. and MELIBEE NO. 2 PTY. LTD. |
| Applicants/Appellants |
| v |
| HALL & THOMPSON (a firm) |
| Respondent |
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APPLICATION ON SUMMONS
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JUDGES: | BROOKING, PHILLIPS and CHARLES, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 4 December 2000 | |
DATE OF JUDGMENT: | 4 December 2000 | |
MEDIUM NEUTRAL CITATION: | [2000] VSCA 243 | |
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PRACTICE AND PROCEDURE – Appeal dismissed – Self-executing order for security for costs – Whether Court has power to resuscitate appeal – Enlarging time for compliance after time has expired.
COSTS – Security for – Bank guarantee – Appropriate form.
Rules of Court – Chapter I – Rules 3.02, 24.06, 64.20 and 65.09.
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APPEARANCES: | Counsel | Solicitors |
For the Applicants/Appellants | Mr B.J. Shaw, Q.C. and | Issac Brott & Co. |
| For the Respondent | Mr D.J. Habersberger, Q.C. and Mr D.J. O’Callaghan | Middletons Moore & Bevins |
BROOKING, J.A.:
On 22 September last, an applications day, Charles, J.A. and I made an order, pursuant to r.64.24(2), for security for the costs of an appeal. We ordered the provision of security in the sum of $50,000 by the lodgment with the Prothonotary by 30 October of an irrevocable bank guarantee in that sum in a form satisfactory to the Prothonotary or otherwise as agreed between the parties. We further ordered that if the appellants failed to provide that security the appeal be dismissed.
The appellants failed to comply with that order. An application was made by them by summons filed on 13 November for the "reinstatement" of the appeal. That application was supported by affidavits. According to one of them, the daughter of the appellants' solicitor, Mr Brott, was found on 7 October 2000 to have a brain tumour, which was removed by surgery two days later. I need not summarise what that and further affidavits said about other events. It all appears in the material, and that material has been canvassed in the written outlines of submissions for the purposes of the application we have heard today. The appellants say that, notwithstanding that they left their attempts to obtain the security to a late date and may perhaps be said not to have allowed a sufficient margin for contingencies, they were overtaken by a very substantial contingency in the form of the daughter's serious illness, and that in all the circumstances, notwithstanding that their level of diligence can perhaps be criticised in some respects, they should be relieved of the very serious consequences of the dismissal of their appeal.
The guarantee of 25 October - in what I say I shall to some extent continue to presuppose familiarity with what the affidavits disclose - had been rejected by the Prothonotary. (I shall call it the first guarantee.) It was unsatisfactory in a number of respects. First, it was expressed to expire at 4 p.m. on 31 January 2001. The guarantee should not have contained any expiry date at all, but, in addition, it should have been apparent to a competent practitioner that the date 31 January 2001 was far too early. The appeal had been fixed for hearing on 4 December. It was quite possible that there would be no decision given by the Court of Appeal by 31 January, quite apart from the possibility of an application for special leave made to the High Court after the giving of this Court's decision. There was, moreover, presumably a need for a taxation of costs before the guarantee would be invoked. In the second place, the words in the standard form of performance bond or guarantee issued by the Australia and New Zealand Bank referring to a contract or agreement between the principal and customer remained in the form, notwithstanding that they were inappropriate where what was to be secured was the possible liability for costs under an order of the Court. Not only did those words remain in the form, but the marginal direction to provide a description of the contract or agreement had not been observed, with a resulting blank space in the instrument. In the third place, the guarantee was given not to the respondent but to its solicitors; and, in the fourth place, although the respondent's solicitors were a firm, the guarantee was given to "Hall & Thompson Pty Ltd".
When the appellants by their summons of 13 November sought the "reinstatement" of their appeal, they had already obtained a replacement guarantee (the second guarantee), which was dated 3 November. This was in favour not of the solicitors but of the respondent itself, and it contained no time limit. It was thus a considerable improvement on the first guarantee; but it was still unsatisfactory. It referred to "a contract or agreement between the principal or customer for the provision of $50,000 costs". The guarantee went on to refer to the performance or non-performance of the customer or principal under the terms of the contract or agreement. There was no such contract or agreement, and the customer was a stranger to the litigation.
The summons came before Charles, J.A. and me on 22 November. We formed the view that the second guarantee was unsatisfactory, for reasons which we then gave, and we made an order which was entirely without prejudice to the question whether the appeal was going to continue to stand dismissed by reason of the appellants' failure to provide security as required by the order of 22 September. The order we made on 22 November adjourned the summons for hearing on 4 December in the list in which the dismissed appeal was fixed for hearing, ordered that the dismissed appeal remain fixed for hearing on that date (so that it might, if resuscitated, be heard) and directed the provision of security by the lodging of a $50,000 bank guarantee, that security to be for the costs of the appeal and (if the appeal continued to stand dismissed) the dismissed appeal, including in either case the costs of the application. That requirement of the provision of security was, I repeat, entirely without prejudice to the question whether the appeal was to continue to stand dismissed by reason of the failure to provide security by 30 October.
Last Wednesday, 29 November, this matter came again before Charles, J.A. and me, the appellants' summons of 13 November having been brought on again at the respondent's request. We expressed our dissatisfaction with the form of guarantee (the third guarantee, as it may be called) which had been lodged by the appellants with the approval of the Prothonotary. It was nothing more or less than the second guarantee dished up again by the appellants, notwithstanding that Charles, J.A. and I had made it quite clear, before parting with the case on 22 November, that the second guarantee was unsatisfactory and had to be re-formed. In view of the failure to draft a satisfactory guarantee and the imminence of the date fixed for hearing the appeal, Charles, J.A. and I took the most unusual step of settling the third guarantee so as to make it acceptable. And so the fourth guarantee came into being, and it was lodged within the time allowed by us, that is, by 30 November. The Court had, on 29 November, made an order varying its own order of 22 November by enlarging the time fixed for the provision of security from 24 November to 30 November and requiring the bank guarantee to be in the form scheduled to the order. The order also directed the Prothonotary to allow the appellants to uplift the third guarantee for cancellation upon the provision of the fourth. We also ordered on 29 November that the date for the hearing of the appeal be vacated, for reasons which we then gave.
In the result, there now comes before the Court as presently constituted, being the Court which was to have heard the appeal, the appellants' summons seeking "reinstatement" of their appeal. Both sides accept that it is appropriate that the Court of three should now deal with the application made by that summons. We have heard argument on two questions: first, the competency of the application and, secondly, if the application is competent, what its outcome should be on the merits.
As appears from the reasons given on 22 November, the Court on that day raised the question of the competency of the present application because of the possibility that it might be said that the decision of the High Court in Bailey v. Marinoff[1] stood in the way of the view that an application of the present kind could be entertained. The correctness of Bailey v. Marinoff was not considered by the High Court in FAI General Insurance Company Ltd v. Southern Cross Exploration NL[2], where, in the leading judgment, Wilson, J. at 285 pointed out that in Bailey v. Marinoff no rule of court fell for consideration, whereas in the FAI Case the question was whether the rule of court relied on by the respondent plaintiffs was, as the appellant defendants contended, to be narrowly construed. The question was one of the proper construction of a rule of court.
[1](1971) 125 C.L.R. 529.
[2](1988) 165 C.L.R. 268.
In my opinion, it is unnecessary for us to consider whether the order made by the Court of Appeal on 22 September can be varied by us, as the appellants contend, pursuant to paragraph (a) of r.24.06 of Chapter 1, on the basis that the order of 22 September falls within r.24.05 as an order "that upon the failure of a party to ... comply with an order that he do any such act or take any such step the proceeding be dismissed". Nor need we decide whether the Court of Appeal has, as the appellants contend, the power conferred by r.3.02 of Chapter 1, that being the power to extend or abridge times, a power which expressly authorises an extension of time after the time expires and whether or not an application for extension is made before the time expires. Compare what Wilson, J. said in the FAI Case at 285.
In making the order of 22 September the Court was disposing of an application made under Order 65. The Court of Appeal is given, by Orders 64 and 65, power to "extend or abridge any time fixed by or under this Order": paragraph (1) of r.64.20 and paragraph (1) of r.65.09. Unlike r.3.02, these two provisions do not contain express words of extension. Counsel for the appellants have also drawn attention in this regard to r.5.12(3) and r.11.07(4).
The plain fact is that for years this Court as a Court of three, and this Court as a Court of two, and single judges of this Court, have been extending times notwithstanding that they have expired and notwithstanding that the application is made after that expiration. I think it may be confidently said that there is not a judge of this Court who has not enlarged time with regard to an appeal or enlarged time with regard to an application under Order 65 on the basis that the power may be exercised in the same way as the power given by r.3.02 is exercised, that is to say, notwithstanding the expiration of the time and the making of the application after expiration. The course of the Court is inexorably against the view that the present application is incompetent. The explanation of the established practice may well be that the view has been taken that r.3.02 applies to the Court of Appeal. If this view has not been taken, then the explanation must be that the Court has proceeded upon the basis that r.64.20 and r.65.09 have been drawn in the modern fashion. The difference between those two rules and r.3.02 and other rules to which the appellants have drawn attention is an altogether unsafe foundation for the view that those two rules in Orders 64 and 65 do not empower the Court to extend a time that has expired and to do so after its expiration. On this explanation of the practice, the drafting of rr.64.20 and 65.09 reflects the modern tendency to confer wide powers in general terms without negativing possible suggested implied limitations.
In my view, the present case is covered by the decision of the High Court in the FAI Case, not Bailey v. Marinoff, and the present application is competent. I am pleased to be able to reach this result, which is agreeable to justice and to the needs of this Court.
I turn to the discretion. On the assumption that the present application is competent, both sides accept that we should approach it by asking whether the appellants have shown that it would in all the circumstances be unjust to allow the dismissal of the appeal to stand. The appellants' case in this regard is adequately summarised in their written outline of submissions. The respondent has criticised that case and the material put forward in support of the application, and has criticised the conduct of the appellants in a number of respects, which are adequately summarised in the respondent's outline of submissions.
It may fairly be said that the appellants were dilatory and inefficient in notable respects, and I will assume that we may have regard, in favour of the respondent, to the fact that the appeal was saved from abandonment only by an order which I myself happen to have made as long ago as 26 March 1999, and further have regard to the conduct of the appellants since the appeal stood dismissed on 1 November, which conduct Charles, J.A. and I have criticised on earlier occasions.
Still I am persuaded that, having regard to circumstances relied on by the appellants, they have shown that it would be harsh that their appeal should stand dismissed and that it would in all the circumstances be unjust to allow the dismissal of the appeal to stand. Accordingly, I would allow the application.
PHILLIPS, J.A.:
I agree. I add only this. It seems to me, as at present advised, that, save to the extent that context otherwise dictates, the rules to be found in Orders 64 and 65 operate, and were intended to operate, in conjunction with the other rules in Chapter 1, including, thus, r.3.02. It follows that the power described in r.64.20 and r.65.09 may properly be regarded as an instance of the more general provision made by r.3.02(1), bringing with it accordingly the words of extension found in r.3.02(2). I see no context dictating a different result. On the other hand, it is possible that paragraph (3) of r.3.02 is in different case, and I say nothing of it.
CHARLES, J.A.:
I agree with Brooking, J.A.
BROOKING, J.A.:
As regards costs, the only question in dispute is whether we should give the respondent its costs on a party-party or solicitor-client basis. As to that, we think that we should only order costs on a party and party basis. Accordingly, we make an order in accordance with these minutes:
1. Enlarge time fixed by order of 22 September 2000 for giving security to 30 November 2000 and direct that guarantee lodged with Prothonotary on 30 November 2000 be taken to comply with requirements of order of 22 September 2000 and this order.
2. Respondent's costs of application by summons filed 13 November 2000 to be paid by appellants.
3. Direct that appeal be fixed for hearing by Registrar and intimate to him that it should be fixed for hearing on earliest available date consistent with other business of Court.
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