AGRICULTURAL AND RURAL FINANCE PTY LTD v KIRK

LEGISLATION CITED: Supreme Court Act 1970 (NSW), s 101 Uniform Civil Procedure Rules 2005 (NSW), r 51.18

Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423 CASES CITED: Licul v Corney [1976] HCA 6; 180 CLR 213 Macatangay v State of New South Wales [2009] NSWCA 81 Macatangay v State of New South Wales (No 2) [2009] NSWCA 272

Agricultural and Rural Finance Pty Ltd (Applicant) PARTIES: Geoffrey Sinclair Kirk (First Respondent) Peter Andrew Jones (Second Respondent)

COUNSEL: C J Bevan (Applicant) N M Bender (First and Second Respondents)

SOLICITORS: Evangelos Patakas & Associates (Applicant) Henry Davis York (First and Second Respondents)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT DATE OF DECISION: 11 February 2010

LOWER COURT MEDIUM NEUTRAL CITATION: Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 42

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2010/0057554

31 May 2010 AGRICULTURAL AND RURAL FINANCE PTY LTD v Geoffrey Sinclair KIRK and Peter Andrew JONES Judgment 1 BASTEN JA: In 1997 and 1998 Agricultural and Rural Finance Pty Ltd ("the applicant") provided credit to numerous investors in a tea tree plantation project near Port Macquarie. The project was financially unsuccessful and disputes arose as to the liabilities of the borrowers to repay the loans. On 18 June 2003 the applicant commenced proceedings against numerous defendants, comprising more than 200 borrowers. 2 Mr Kirk and Mr Jones ("the respondents") were two of the original defendants. However, they were not served with the originating process within the time permitted by the rules. On 14 November 2008 Bergin J made an order extending time for service until 4 January 2009. The respondents were served in December 2008. By notices of motion filed in May and August 2009 respectively, the respondents sought to have the order extending the time for service discharged and the service on each of them set aside. On 11 February 2010 Einstein J acceded to each of those applications: Agricultural and Rural Finance Pty Ltd v Atkinson [2010] NSWSC 42. The applicant seeks to challenge that judgment and the consequential orders made on 18 February 2010. Leave required 3 By notice of appeal dated 5 March 2010, the applicant sought to appeal as of right. By notice of motion filed on 1 April 2010 the respondents seek to have the appeal struck out as incompetent. They claim that the judgment of Einstein J was interlocutory and that, accordingly, the applicant requires leave to appeal: Supreme Court Act 1970 (NSW), s 101(2)(e). There was also a submission on behalf of Mr Kirk that the amount of the claim against him is only $65,000 and that leave is also required by virtue of s 101(2)(r). It is not necessary to address that submission as leave is clearly required because the judgment was interlocutory. 4 A judgment is interlocutory, at least for these purposes, unless its effect is to dispose finally of the rights of the parties. The relevant principles and authorities were stated succinctly in Macatangay v State of New South Wales (No 2) [2009] NSWCA 272 at [11]. There may be cases, of which Macatangay itself was an example, where it is not clear whether a claim has been disposed of on the merits, or summarily dismissed: Macatangay v State of New South Wales [2009] NSWCA 81 at [8]-[9]. However, no such issue arises in the present case: no order has been made disposing of the proceedings as between the applicant and the respondents. The order extending time was discharged "nunc pro tunc" and the service on the respondents was set aside. In practical terms, it may be quite unlikely that the applicant would obtain leave from a judge to extend time for service, but in legal terms, there is no order disposing of its causes of action against either of the respondents. 5 The applicant, in its written submissions, placed great weight upon the fact that the order extending time permitted the respondents to be served up to the date of expiry of the relevant limitation period. They were served within that time, but the notices of motion seeking to set aside service, and the ruling on those motions, occurred only after the limitation period had expired. Accordingly, the applicant contended, it was now not in a position to commence fresh proceedings against the respondents and hence its claims against them had been finally disposed of. 6 Those submissions were based upon the misconception already identified. No order has been made determining the claims on their merits. Indeed, no order has been made setting aside the commencement of proceedings against the respondents. The question of whether, and if so when, any limitation period expired is irrelevant for present purposes. 7 The respondents contended that the circumstances of the case fell squarely within the principle established in Licul v Corney [1976] HCA 6; 180 CLR 213 at 220 (Barwick CJ) and 225 (Gibbs J) applying the principles established in Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423. Those submissions should be accepted; accordingly, the orders made below were interlocutory and leave was required. Concurrent hearings 8 Somewhat awkwardly, in procedural terms, on 26 May 2010 the applicant filed an amended notice of motion seeking leave to appeal and seeking to have its application for leave heard together with argument on the appeal. It also sought consequential directions with respect to dispensing with requirements in relation to the filing of a summons seeking leave and a white folder containing the relevant documents; it sought further directions in respect of written submissions. 9 The respondents oppose a concurrent hearing. They do so on the basis that there are good grounds to resist the application for leave to appeal and that the arguments in that respect will be quite confined, as compared with the issues raised by the amended notice of appeal. 10 Whether the draft amended notice of appeal states the grounds "briefly", as required by the rules, may be doubted: Uniform Civil Procedure Rules 2005 (NSW), r 51.18(e). Rather, it appears that, when drafted, no stone was left unturned in the search for error, with the result that the grounds cover 14 typed pages. (I note that the limit for written submissions in support is 20 pages.) However, I am told that some of the grounds are not likely to be pursued and that the written submissions filed in support of the appeal indicate that. While verbosity is to be deplored, it is difficult to see that separation of the hearings will be likely to achieve a significant saving in time and resources even if some of the issues are not pursued at the hearing of the appeal and, indeed, in part because they may not be pursued. It is inevitable that the applicant will agitate on the leave application the strength of its grounds identifying error on the part of the primary judge. Further, because the amounts involved are close to (in the case of Mr Kirk) or above (in the case of Mr Jones) the amount required to engage an appeal as of right, and because the orders effectively put an end to the proceedings between the parties, there is insufficient likelihood that the Court would refuse leave. Even if it were to take that step, it would be unlikely to save significant hearing time by considering the leave application separately. Nor would a significant reduction in the costs or delay occasioned to the parties be likely. It is appropriate, therefore, to order that the application for leave and the appeal be heard concurrently. Other matters 11 I am conscious that the main proceedings have gone ahead, as between the applicant and some or, indeed, all of the remaining respondents. There is, in these circumstances, a risk that issues going to the merits of the other claims will be caught in the proposed appeal. Also, it is possible that some of the issues which appear to have been resolved on an interlocutory basis by the primary judge may be re-agitated in this Court, but only on behalf of the two remaining respondents. However, that consequence seems unavoidable. Suffice it to say that the primary judge should be kept informed by the parties of the issues sought to be raised in this Court and the likely timetable for their disposition. 12 The costs of the respondents' objection to competency should be paid by the applicant. That order should be taken to include the hearing today which would otherwise not have been necessary. Orders 13 The orders are as follows:

(1) The appeal brought as of right is dismissed as incompetent, but without prejudice to the applicant's right to seek leave to appeal from the judgment of Einstein J setting aside service of the proceedings on the respondents. (2) Dispense with the requirement for the filing of a summons to seek leave to appeal, together with a white folder, and treat the amended notice of motion dated 26 May 2010 as the application for leave to appeal. (3) Grant leave to the applicant to file, if so advised, an amended draft notice of appeal by Monday, 7 June 2010. (4) Direct that the respondents file and serve their written submissions on the substantive issues on the appeal by Monday, 28 June 2010. (5) Direct that the applicant file and serve any written submissions in reply by Monday, 12 July 2010. (6) Direct that the written submissions together with the written summaries of argument, and, if necessary, any amended draft notice of appeal be included in an orange book. (7) Order that the applicant pay the respondents' costs of the objection to competency, including the costs of today. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.