Trinity Properties Pty Ltd v Gilles, Joseph John
[1996] FCA 325
•9 MAY 1996
CATCHWORDS
COSTS - actions commenced by 6 companies apparently in receivership - motion brought to challenge authority to commence actions - receiver's consent not required for 3 companies, motion discontinued to that extent - receiver's consent given shortly after commencement of motion in relation to other 3 - motion discontinued by consent - moving party sought no order as to costs - respondent to the motion sought costs on indemnity basis - on the facts, proper for moving party to raise question of authority to bring action - but moving party did not act in reasonable or timely fashion - on balance costs awarded to respondent on the motion on party/party basis.
PRACTICE AND PROCEDURE - action commenced by 6 companies in receivership - motion brought to challenge authority to commence action - motion sought to have companies' solicitor named as second respondent - proper procedure to be followed where solicitor's authority challenged.
Attorney-General v Wylde (1946) 47 SR(NSW) 99
Mertelmeyer v Mertelmeyer (1904) 21 WN(NSW) 75
Selangor United Rubber Estates Ltd v Cradock (No 4) [1969] 3 All ER 965
In re Wilks (1933) 33 SR(NSW) 276
TRINITY PROPERTIES PTY LIMITED and OTHERS (Applicant) v JOSEPH JOHN GILLES, PETER NEIL BOLLARD, CATHERINE NANCY SIDOTI, GREGORY GEORGE ELIADES, GLENN KEVIN WALSH, PATRICK IGNATIUS LIM t/as R.F. GILES, PAYNE & CO. (Respondents)
Nos G3514-G3524 of 1995
FINN J
SYDNEY
9 MAY 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3514 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF TRINITY PROPERTIES PTY LIMITED
(ACN 002 782 452)
BETWEEN: TRINITY PROPERTIES PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3515 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF PALLISAR PTY LIMITED
(ACN 001 048 460)
BETWEEN: PALLISAR PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3519 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF KEDGE PTY LIMITED
(ACN 000 697 307)
BETWEEN: KEDGE PTY LTD
Applicant
AND: JOSEPH JOHN GILLES PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3520 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF WOODCO PTY LIMITED
(ACN 001 256 417)
BETWEEN: WOODCO PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3521 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF JUSTAL PTY LTD
(ACN 001 743 657)
BETWEEN: JUSTAL PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3524 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF LOGWON PTY LTD
(ACN 002 323 588)
BETWEEN: LOGWON PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
CORAM:FINN J
PLACE:SYDNEY
DATE:9 MAY 1996
MINUTES OF ORDERS
THE COURT ORDERS THAT:
In relation to the notice of motion in each of the six applications, the respondents pay the costs of Mr Sutherland and of the respective applicant company.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3514 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF TRINITY PROPERTIES PTY LIMITED
(ACN 002 782 452)
BETWEEN: TRINITY PROPERTIES PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3515 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF PALLISAR PTY LIMITED
(ACN 001 048 460)
BETWEEN: PALLISAR PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3519 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF KEDGE PTY LIMITED
(ACN 000 697 307)
BETWEEN: KEDGE PTY LTD
Applicant
AND: JOSEPH JOHN GILLES PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3520 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF WOODCO PTY LIMITED
(ACN 001 256 417)
BETWEEN: WOODCO PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3521 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF JUSTAL PTY LTD
(ACN 001 743 657)
BETWEEN: JUSTAL PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G3524 of 1995
)
GENERAL DIVISION )
IN THE MATTER OF LOGWON PTY LTD
(ACN 002 323 588)
BETWEEN: LOGWON PTY LTD
Applicant
AND: JOSEPH JOHN GILLES
PETER NEIL BOLLARD
CATHERINE NANCY SIDOTI
GREGORY GEORGE ELIADES
GLENN KEVIN WALSH
PATRICK IGNATIUS LIM
t/as R.F. GILES, PAYNE & CO.
Respondents
CORAM: FINN J.
PLACE: SYDNEY
DATE: 9 MAY 1996
REASONS FOR JUDGMENT
The only question before me relates to costs. I have ordered that the parallel notices of motion in each of the six proceedings otherwise be dismissed.
The costs question arises in this way. On 15 September 1995 separate applications were initiated by eleven companies in the Jury Group including the six companies in whose applications the present notices of motion were brought - Trinity Properties Pty Ltd, Pallisar Pty Ltd, Kedge Pty Ltd, Woodco Pty Ltd, Justal Pty Ltd, Logwon Pty Ltd. The applications sought to set aside a statutory demand served on the companies individually by R F Giles, Payne & Co ("RFG"), a firm of solicitors, the principals of which are responsible for the present motion.
The solicitor purporting to act for the six applicant companies (as well as the others in the Jury Group) in filing and prosecuting the applications, was a Mr Andrew Sutherland.
Receivers had previously been appointed to all six companies, a matter of which RFG was aware, the firm having been the applicants' solicitors at the time of the appointments.
The proceedings between the six applicant companies and RFG appear to have taken a normal pre-trial course. It was on 27 February 1996 that a date for hearing was given. The applications came periodically before Registrars for procedural purposes the last such occasion being 13 March 1996. Until the events now to be narrated, at no stage was any question raised by RFG as to whether the six applications of present concern were properly constituted.
The applications of all eleven Jury Group members were to be heard by me on 25 March 1995. On 20 March the notices of motion with which I am concerned were filed by the respondents, the principals of RFG. They each sought orders:
"1.That Andrew Paul Tennent Sutherland be added as Second Respondent in these proceedings.
2.That these proceedings be dismissed.
3.That the Second Respondent personally pay to the First Respondents their costs of and incidental to these proceedings on a solicitor and own client basis."
The essence of the motions is the assertion that, with each of the six companies being in receivership, their applications could not be commenced or pursued by Mr Sutherland without the receiver's authorisation and that it was the respondents' belief that such authorisation had not been given.
In the event it transpires that such was the nature of the receivership of property of Trinity Property Pty Ltd, Kedge Pty Ltd and Justal Pty Ltd, that there could be no question at all as to need for obtaining authorisation from the receiver. The respondents no longer pursue their notices of motion in relation to those three companies. I have ordered that they be dismissed. The respondents have, in my view, no reasonable grounds upon which to resist a costs order against them in favour both of the companies and of Mr Sutherland (who was separately represented for the purpose) in respect of those three notices of motion.
As to the remaining three notices of motion - those involving Pallisar Pty Ltd, Woodco Pty Ltd and Logwon Pty Ltd - after a short adjournment almost as soon as the matter was called on before me on 25 March, the directors of the three companies agreed without admission to indemnify the companies against any costs order made against them relating to their applications to set aside the statutory demands. This having been agreed to by the receiver, the three notices of motion fell to the ground.
Counsel representing Mr Sutherland on the notices of motion sought not merely the usual order as to costs but costs on an indemnity basis. Counsel for the respondents in contrast submitted either that costs should be ordered in their favour or else that no costs order should be made. Before enlarging on the bases for these submissions it is necessary to refer in a little more detail to the chronology of this matter.
As I noted, the notices of motion were filed on 20 March 1996. The applicants, I am informed, were only served with these on Thursday 21 March. From correspondence with the solicitors for the receivers on Friday 22 March they ascertained, first, that the receiver of Pallisar Pty Ltd had not consented to the application brought by Pallisar and, later in the same day, that a like view was taken in relation to Logwon Pty Ltd and Woodco Pty Ltd. The receiver's solicitors indicated that they would be appearing before me on 25 March to advise me accordingly.
It equally is the case that from at least 15 March 1996 the respondents had had confirmed to them by the receiver's solicitors that the receiver had not provided his consent to the application made by Pallisar Pty Ltd. I assume that RFG had only raised the question of consent in relation to that company.
As part of a sequence of correspondence initiated by Mr Sutherland with RFG on 13 March relating to a notice to produce of 11 March 1996, RFG wrote to Mr Sutherland's firm on 15 March replying seriatim to issues raised in the letter of 13 March. The RFG letter concluded with the paragraph:
"Finally, we note that the Notice to Produce was issued in the Proceedings numbered G3514 of 1995 Trinity Properties is the Applicant. Would you please confirm as a matter of urgency that you still act for all of the other companies in the Jury Group which issued concurrent equivalent proceedings."
By facsimile of the same date Mr Sutherland's firm provided the confirmation sought:
"We confirm that we still act for all applicants in these matters. On 17 November 1995 Registrar Hedge of the Federal Court directed that matters G3514 to G3524 be heard together and the evidence in one be evidence in all. This is the reason why only notices to produce in one proceeding have been served."
The correspondence quoted above is relied upon by the respondents as indicating that the question of Mr Sutherland's authority or retainer was raised specifically in relation to all of the companies on 15 March and that he unequivocally affirmed his authority to act. What, apparently, is being urged in this is that at that time the efficacy of his retainer was being called into question rather than that he was merely being questioned as to the fact of his retainer.
I am being asked to give this correspondence a burden it simply cannot bear. Indeed, given the knowledge possessed by RFG as to the stance being taken by the receiver of at least Pallisar Pty Ltd, the terms of RFG's letter to Mr Sutherland's firm of 15 March could only be said to be evasive of the true issue as to authorisation that the letter is now being said to have raised if - and I have no evidence of this - RFG had that knowledge at the time it wrote the letter.
In any event the letter has to be seen in the context of the questions both about the notice to produce and about that notice only being filed in one of the applications, i.e. that of Trinity Property Pty Ltd. In this setting I am unable to extract from this correspondence anything which could reasonably be taken as suggesting that a question mark of some sort was being raised by RFG in relation to Mr Sutherland's retainer.
The very obvious reason why RFG sought to have its interpretation of the correspondence accepted was that it could then be said that Mr Sutherland had been given 10 days notice that his retainer was in question and not, as the applicants contend, less than two working days before the hearing of the notice of motion. As I have said, I reject the construction the respondents seek to place on the correspondence.
Turning now to the submissions made on behalf of Mr Sutherland seeking costs on an indemnity basis, it is contended:
that, having regard to the chronology, the respondents caused costs to be incurred which were totally unnecessary in that, by raising the issue of authorisation at the last moment, they did not provide an adequate opportunity for such an agreement to be reached before the hearing as was in fact reached at the hearing;
that the notices of motion were procedurally misconceived in that no order as to joinder of Mr Sutherland could or should have been made on them under the Federal Court Rules, O6r8; and
that, even as to the three companies in relation to which the receiver claimed authorisation was necessary, that need did not, as a matter of law, exist in the circumstances and reference was made to Bank of New Zealand v Essington Developments Pty Ltd (1991) 5 ACSR 86.
I should add that the third of these was not enlarged upon in oral submissions, although Mr Biscoe QC for Mr Sutherland indicated that he was willing so to do if I considered it necessary which I did not.
Mr Gray for the respondents submitted:
that the notices of motion were not procedurally defective and reliance was placed on Mertelmeyer v Mertelmeyer (1904) 21 WN(NSW) 75 and McAusland v Deputy Commissioner of Taxation (1993) 12 ACSR 432;
that sufficient time was given to the applicants from service of the notices of motion to enable them to reach an appropriate arrangement with the receiver and that it was their failure so to do that necessitated the hearing before me;
as I have already considered and rejected, that Mr Sutherland had notice that his retainer was in question from 15 March and had ample time in consequence to confirm his authority to act for the six companies with receivers appointed; and
that it was only by bringing the parties to the court that at least three of the applications were placed on a proper footing and that, while the notices of motion were dismissed in relation to these, the respondent had acted responsibly in the matter so that costs orders on those three motions should be made in their favour or, alternatively, no order as to costs should be made on the three motions.
The conclusion at which I have arrived is that, while the applicants are entitled to an order for costs on the Pallisar Pty Ltd, Woodco Pty Ltd and Logwon Pty Ltd notices of motion as well, those costs should be of the usual kind and not indemnity costs. It is the case in my view that it was reasonable for the respondents to raise the issue of Mr Sutherland's authority to act for the companies in receivership. To that extent they have acted responsibly and to that extent I agree with the respondents' fourth submission. They were entitled to expect proper confirmation of Mr Sutherland's authority - and I would note their correspondence with the receiver's solicitors only confirmed their need for that confirmation. They should not in consequence be visited with an order against them for indemnity costs.
The principal reason, though, why a costs order of the usual kind should be made nonetheless is that the respondents have not acted in a reasonable or timely fashion in the manner in which they alerted Mr Sutherland to the actual issue they were taking as to authorisation, given (a) the time of serving the notices of motion relative to the hearing of it and the main applications; (b) the opportunity they clearly had, at least as of 15 March 1996, to flag the issue openly and fairly; and (c) the general course of pre-trial dealings between the parties leading up to the main hearing on 25 March. I agree, then, with the first of the submissions made on Mr Sutherland's behalf and reject the respondents' second submission.
This conclusion renders it strictly unnecessary for me to consider the question whether the notices of motion were, in any event, doomed on procedural grounds. Suffice it to say that I consider there to be much force in the objection taken to the joinder order sought. While there is authority to support the view that a substantive application is an appropriate vehicle to be employed to dispute a solicitor's authority to initiate or to continue proceedings - and the decision of Mertelmeyer v Mertelmeyer, above, relied upon by the respondents is consistent with this - that motion should ordinarily be one for a stay of proceedings: see Selangor United Rubber Estates Ltd v Cradock (No 4) [1969] 3 All ER 965 at 975-76; In re Wilks (1933) 33 SR(NSW) 276.
What equally is abundantly clear is that the jurisdiction to make a costs order against a solicitor in such a case does not depend at all upon the solicitor being made a party to the proceedings to be stayed. On the contrary: see Attorney-General v Wylde (1946) 47 SR(NSW) 99 at 113 and the cases there referred to. In this state of affairs it is not at all obvious to me why a joinder order under the Federal Court Rules, O6r8 would be either appropriate or necessary.
I have concluded that the respondents should pay the costs of Mr Sutherland of all six notices of motion. The six applicant companies have likewise sought their costs and I see no reason for denying them this.
My orders, then, are that in relation to the notice of motion in each of the six applications, the respondents pay the costs of Mr Sutherland and of the respective applicant company.
I certify that this and the preceding 12 pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.
Associate
Dated: 7 May 1996
Counsel for the applicant : A Vernier
Solicitors for the applicant : Eakin McCaffery Cox
Counsel for the respondent : V R W Gray
Solicitors for the respondent : Giles Payne & Co
Counsel for Mr Sutherland
on the motion : P M Biscoe QC
Solicitors for Mr Sutherland
on the motion : Eakin McCaffery Cox
Solicitors for the receiver : Clayton Utz
Date of hearing : 25 March 1996
Date of judgment : 9 May 1996
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