Valimi Pty Ltd v Maniotis
[2003] VSC 374
•1 October 2003
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 6664 of 1995
| VALIMI PTY LTD and CON GEORGE THYSSEN | |
| Plaintiffs | |
| v. | |
| BASIL MANIOTIS and PETER MANIOTIS and ORS | Defendants |
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JUDGE: | BYRNE J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 30 September 2003 | |
DATE OF JUDGMENT: | 1 October 2003 | |
CASE MAY BE CITED AS: | Valimi Pty Ltd v Maniotis | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 374 | |
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Practice and Procedure – delay – want of prosecution – inordinate delay – prejudice – application refused.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr Simon Gillespie-Jones | AJH Lawyers |
| For the First and Second Defendants | Mr R.L. Berglund QC with Mr G. Meese | Ponte Earle Harrick |
HIS HONOUR:
This is an appeal from the order of Master Wheeler made on 8 September 2003. Before the Master on that occasion was an application brought by summons filed on 22 August 2003 by the first-named defendant, Basil Maniotis, and the second-named defendant, Peter Maniotis, against the plaintiffs, Valimi Pty Ltd and Con George Thyssen. The relief sought was for dismissal of the plaintiffs’ proceeding for want of prosecution. Other relief sought in the summons was not pursued before the Master. The Master refused the application to dismiss the proceeding and gave directions as to the filing of an amended defence by 15 September, and referred the proceeding to the Listing Master on 28 October for her to give trial directions.
As might be expected in a proceeding in respect of which such an application is made, it has a long and sorry history. The fact which speaks most eloquently in favour of the order sought is that the events which give rise to the claim date from June 1989, over fourteen years ago.
Valimi and the two Maniotises conducted a wholesale nursery in Silvan in partnership. Mr Thyssen was a director of Valimi. The partners fell out, and on 18 January 1990, on the application of the Maniotises, this court appointed the third-named defendant, David John Beattie, as receiver and manager of the partnership. By order made on 31 January 1990, the partnership was dissolved and the receiver authorised to sell the business and assets by public tender or by public auction. On 23 April 1990 the receiver sold the business to the Maniotises for $450,000. I was told that this money, after deduction of expenses, was paid to a secured creditor, so that nothing was left for the partners.
And so things stood until 21 July 1995, when this proceeding was commenced, originally by the present plaintiffs as well as by Natalie Thyssen, against the Maniotises and a firm of accountants, Arthur Andersen. The claim as then formulated was one for breach of fiduciary duty and negligence by the receiver and by the Maniotises.
The pleading, although settled by counsel, is a far from elegant document and occupies some 17 pages. Over the past eight years this pleading has been much amended. The current document, the sixth version according to the chronology with which I have been provided, has now doubled in size, not counting over 30 pages of schedules. Regrettably its quality has not improved with its quantity. I was told by counsel for the plaintiffs that it bears the scars of many applications to strike it out, and that parts owe their present form to judicial suggestions, even from the Court of Appeal. In the circumstances I say nothing further about it.
There is no evidence explaining the delay up to the date of commencement of the proceeding. The affidavits before me deal with events in the eight years which have followed. These affidavits are three affidavits of Jenny Giavris, the solicitor for the Maniotises, sworn respectively 22 August 2003, 4 September 2003 and 5 September 2003, and that of Jean Voltovich, the solicitor for the plaintiffs, sworn 5 September 2003. In these affidavits particular attention is focused upon events in 2001 and thereafter.
Much of 2001 was occupied by the plaintiffs resisting applications by the Maniotises to bankrupt Mr Thyssen and to wind up Valimi. The bankruptcy application was finally resolved on 17 July 2001, when a Federal Magistrate dismissed the application. The proceeding under the Corporations Law to wind up the company was likewise resolved in favour of Valimi on 15 August 2001. This decision was appealed and the appeal was not dismissed until 24 June 2002. Meantime, in this same period, the plaintiffs were resisting yet another attack by the Maniotises in this proceeding. This was an application to stay or dismiss the proceeding until the plaintiffs satisfied orders for costs against them totalling some $33,000. This application too was dismissed by the Master on 5 February 2001, but his order was reversed on appeal by a decision of Bongiorno, J. handed down on 24 May 2001. His Honour ordered that the proceeding be stayed until the costs were paid.
These were not paid and the proceeding moved forward against the third-named defendant only. By this stage the third-named defendant had become the present third-named defendant, David John Beattie, the court-appointed receiver. The trial of the claim against the receiver commenced on 27 May 2002. On the second day of the trial the claim was settled when an offer of compromise of the receiver was accepted. I do not have this offer before me, but I was told that it was an offer to pay $100,000. Following this acceptance an order was made by consent dismissing the claim of Valimi against the receiver. No mention is made in the order of the claim against the receiver by Mr Thyssen. I should add that the claim of Valimi so settled was particularised as being a claim for damages in the sum of $1,149,827, according to the particulars filed on 28 May 2002.
This resolution of the claim of Valimi not only left unresolved, so far as the court record is concerned, the claim of Mr Thyssen against the receiver, but also the claim for contribution against the receiver filed on behalf of the Maniotises on 17 December 1996. The statement of claim in this contribution claim, in very broad terms, puts against the receiver the allegations then being made by the plaintiffs against him.
Having recovered a substantial sum from the receiver in May 2002, the plaintiffs in March 2003 paid the outstanding costs orders in favour of the Maniotises, and on 1 April 2003 the stay imposed in May of 2001 was lifted. The matter was then listed before Master Bruce for directions on 1 May. On that occasion the solicitor for the plaintiffs told the Master that the proceeding was ready for trial. No trial directions, however, were given, as further mediation was planned. When the matter came before the Master on 24 July 2003, again no directions were given, since counsel for the Maniotises foreshadowed the present application. Approximately one month later, this application was brought.
I inquired of counsel for the Maniotises what prejudice, if any, was asserted. Having heard what they said, I find that their clients suffered the prejudice of being exposed to a substantial for many years and that of the normal erosion of memory of witnesses over a long period of time. In this regard I note that in his judgment of May 2001, Bongiorno, J. identified that issues of credit would be important at trial. I add to this that the Maniotises are both elderly and not in good health. I should say, however, that it has not been shown that the defendants have been deprived of witnesses or documents by reason of the delay.
A good deal of the hearing was occupied with submissions for and against the proposition that, by reason of the order dismissing the claim of the first-named plaintiff against the receiver, the claims of the Maniotises against him had been lost. I do not attempt to resolve this question. The fact is that this is a consequence of the settlement rather than that of any delay.
In the course of argument I ventured the view that the lapse of time since 1989 in this case was not only an inordinate delay but a scandalous reproach in the court process. I adhere to that view. I accept that the Maniotises have been conducting an active defensive campaign, as they are entitled to. They have obtained a court order in May 2001 which stayed the proceeding for nearly two years. They now rely upon that stay, or the plaintiffs’ inactivity during that stay, as one of the bases for their application.
My task is to form a view whether this inordinate passage of time is such that the justice of the case requires that the Maniotises not be obliged to go to trial. I am not so satisfied. No serious incurable prejudice has been shown.
The appeal therefore will be dismissed. The effect of the Master’s orders will be that this matter should be fixed for trial on 28 October.
I will order that the appeal against the order of the Master be dismissed with costs, including costs reserved.
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