Black v Rafa Pastoral Pty Ltd & Ors [2009] VSCA 295

2 The Court has before it two separate applications which arise out of proceedings in the Trial Division of the Supreme Court concerning a claim by Robert John Black, the applicant, over a property once owned by a family company in which he claims an interest. These proceedings have a long history, having been commenced by the applicant in 1991. The trial is now scheduled to take place next year.

3 The orders which are the subject of the present application concern a refusal by a judge of the Trial Division sitting in the Practice Court to grant an application in favour of the applicant restraining the respondents, being the family company, the trustees in bankruptcy of his late brother's estate, and the wife of his late brother, from disposing of or dealing with the property that is the subject of the applicant's proceedings. His Honour refused the injunction on the balance of convenience. The property was subsequently sold and the proceeds have been distributed. The applicant has commenced an appeal against the refusal to grant the injunction.

4 On 24 August 2009, the applicant filed an application on summons seeking to file new material on his prospective appeal. He appears in person today in support of that application.

5 By amended summons dated 12 October 2009, the fourth and fifth respondents, being the trustees in bankruptcy of the second respondent's estate, seek an order that the applicant's notice of appeal be struck out as constituting an abuse of process. They rely upon two distinct bases as occasioning the alleged abuse: first, that the grounds of appeal mistakenly attempt to litigate the issues which are the subject of the upcoming Trial Division litigation, so that, they submit, the appeal is doomed to fail; second, that as the property has been sold and the proceeds of sale distributed, the appeal against the refusal to grant injunctive relief has been rendered nugatory and is therefore oppressive and vexatious.

6 The dispute between the applicant and the respondent concerns the applicant's claim of an interest in a Traralgon property comprising a ten-acre block at 150 Hazelwood Road, Traralgon ('the property'). The first respondent is a family company known as Rafa Pastoral Pty Ltd; it was created in 1969, when the applicant's father, Thomas Black, transferred his farming business into the company. At this time the applicant and his brother (the second respondent) owned shares in the company. Part of the company's assets included the property. The issue between the parties arose out of events alleged to have occurred in relation to the property in 1976. In that year the second respondent subdivided the property and built on it. He then transferred the property into the names of himself and his wife, Judith Louise Black, who is the third respondent, and some ten years later Thomas Black died.

7 The applicant alleges that impropriety occurred in relation to the transfer of the property out of the name of the company. The transfer wrongly deprived him, it was said, of the ownership he shared in the property as a shareholder of the company. In March 1991 he commenced proceedings against the first respondent, the second respondent and the third respondent in relation to the transfer.

8 The events leading to this application arose out of the death of the second respondent, which occurred on 5 December 2007. Subsequently, on 17 December 2007, the estate of the second respondent became bankrupt. Trustees of the bankrupt estate were appointed; they were then joined as respondents to the proceedings. Directions were then made in the Trial Division with the apparent intention of moving the proceedings towards a resolution. On 10 November 2008, Master Kings, as she then was, directed the parties to mediation to be concluded by 31 March 2009. Shortly before the scheduled time for the mediation, the applicant learned that steps had been undertaken by the trustees to sell the property. The property had been marketed for sale at auction and this auction was due to take place on 28 February 2009. By way of summons dated 26 February 2009, the applicant sought to restrain the sale and sought the following orders:

1. That the defendants and each of them, whether by themselves or by their officers, directors, servants or agents [or contractors] or otherwise, be restrained from disposing of or in any way dealing with the assets of the pleadings outlined in the Amended Statement of Claim, for example, the property at 150 Hazelwood Road, Traralgon as well as the assets and income associated with the firstnamed defendant, Rafa Pastoral Pty Ltd, the subject-matter of this proceeding until the conclusion of the trial or further order.

2. The defendants pay the costs of this application.

9 The matter came before Smith J in the Practice Court. The applicant appeared on his own behalf and the trustees appeared with counsel to respond to the summons. In his submissions to the trial judge, the applicant made a number of allegations of impropriety against his brother, the deceased second respondent. Most of those concerned broader issues than the issue of the injunctive relief raised by the summons. The applicant acknowledged in the course of the hearing that he claimed only a half interest in the property the subject of the injunction. He urged the trial judge to in effect prevent the sale of the property until the proceedings between the parties had been concluded. That submission was resisted by counsel for the trustees. He submitted that the need for injunctive relief could not be made out on the balance of convenience.

10 Counsel for the trustees stated, both in the court below and on the appeal, that in the event that the applicant succeeded in establishing in the proceedings at trial an entitlement to the property, there were adequate assets of the second respondent's estate to which the trustees could have recourse to satisfy an award of damages. This fact had plainly militated against the making of an order restraining the sale of the property.

11 Counsel for the trustees further submitted that he was instructed to offer an undertaking with the effect that, if the trustees were successful in selling the property, then they would not distribute the net proceeds, that is, the amount remaining after selling costs, before 30 April 2009. The amount was to be held in an interest bearing trust account of the solicitors for the trustees. The date of 30 April 2009 appears to have been chosen as it was after the date that had been set down for mediation, therefore giving the parties an opportunity to resolve the dispute.

12 The trial judge accepted the undertaking and otherwise refused the applicant's request for an injunction. He did that on the view that no injustice would arise if the property were sold, with the proceeds to be held by the trustees in accordance with their undertaking. He explained:

I don't think the court would regard the notion of the land being converted into money representing the value of the land as such a big step. The asset will change its nature from land to cash. That offer of the undertaking having been made, I have difficulty seeing how I can find that undertaking being given, that the balance of convenience lies in [the applicant's] favour.

His Honour then explained to the applicant that if the proceedings were not resolved during the mediation, the applicant remained free to make a further application to the court in respect of any proceeds from the sale. The costs of the application were then reserved.

13 The property was sold for $535,000 at auction on 28 February 2009, settlement took place on 3 April 2009, and the net proceeds of the sale, being $474,433, were paid into a trust account of the trustee's solicitors. A change in the registered ownership of the property was completed on 5 May 2009. In compliance with the undertaking, the proceeds were then held in trust until 30 April. The mediation between the parties to be held prior to this date does not appear to have taken place. We have been informed that the mediation is now to take place at a time shortly hereafter.

14 In the intervening period, the applicant commenced the appeal which is the subject of the present applications. The applicant's notice of appeal was filed on 13 March 2009. No further application has been made by the applicant in respect of the proceeds of the sale of the property. Those proceeds, we have now been informed, have been disbursed.

15 We turn to the applicant's request that leave be granted to enable him to rely upon fresh evidence in his prospective appeal. Rule 64.22 provides:

(3) The Court of Appeal shall have power to receive further evidence upon questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner.

16 Looking at the evidence that the applicant seeks to adduce, it is readily apparent that the evidence does not satisfy the threshold that the evidence could not have been discovered with reasonable diligence; nor, had it been adduced, would it have produced an opposite result. It suffices to observe that the new evidence concerns allegations of impropriety against the second respondent which are to be the subject of the Trial Division proceedings. None of this evidence relates to the narrow issue of the injunctive relief which was before the trial judge. That application must therefore be refused.

17 We turn to the application on behalf of the trustees which seeks summary disposal of the appeal. The Court has the power to summarily dismiss claims which are determined to be an abuse of process, whether by reason of rule 23 of the Rules or in its inherent jurisdiction. The Court's discretion to order summary dismissal is one which must be exercised with 'exceptional caution'.[1] Ordinarily, a party will be permitted the opportunity to place his or her case before the Court in the ordinary way, and after taking advantage of the usual interlocutory processes. The course of summary dismissal should only be taken if it is clear that there is no real question to be tried.[2] As Latham CJ said in Dey v Victorian Railways Commissioners, if a court is of opinion that the plaintiff cannot succeed, there is every reason for protecting a defendant from vexation by the continuance of proceedings which must be futile. Further, the joint judgment in Walton v Gardiner[3] confirms that proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail.

18 The applicant contends that there is an abuse of judicial process for two distinct reasons warranting summary dismissal. First, the notice of appeal discloses that the respondent has instituted the appeal for an impermissible or alien purpose, namely, to agitate issues yet to be decided at trial, and not for the purpose of reviewing the decision the subject of appeal. They contend the issues which the applicant seeks to agitate do not fall within the jurisdiction of the Court of Appeal and submit that the notice of appeal contains no grounds which could attract the Court's power to allow the appeal and set aside the order dismissing the application for an interlocutory injunction. Second, they contend that the proceedings themselves serve no utile purpose as there is no longer a live controversy between the parties as to the subject matter of the proposed injunction. The proceeding is therefore said to be vexatious or oppressive in the sense that it imposes on the applicants an unnecessary injustice, that is to say, a burden beyond that which they should bear as a necessary incident of the litigation.

19 As to the first basis on which summary dismissal is sought, reliance is placed upon non-compliance with rule 64.05 of the Rules:

(1) A notice of appeal -

(a) shall state whether the whole or part only and which part of the decision of the court of first instance is complained of; and

(b) shall also state specifically and concisely the grounds of complaint and the judgment or order sought in place of that from which the appeal is brought.

20 The (amended) notice of appeal filed by the appellant is lengthy and regrettably unclear. The nine grounds of appeal, which are in narrative form, consist of arguments relating to issues which will arise in the substantive proceedings between the parties, including alleged breaches of duty by the directors of the first respondent. The notice of appeal demonstrates that the appeal has been mistakenly understood as the vehicle to agitate the issues which are to be determined at the trial set down for later on. The notice fails to set out any clear legal grounds for appeal against the decision to refuse the grant of the injunction. It does not identify any errors in the decision below; nor does it state specifically and concisely the grounds of complaint. It does not identify an arguable basis upon which the decision of Smith J might be successfully challenged. In fact the notice of appeal only makes passing reference to his Honour under the section 'Orders appealed from', and in the grounds of appeal makes no reference to his Honour or to his findings or the decision he has made. In other words, it does not identify any basis on which the injunction should have been granted.

21 Having said that, we do not wish to be understood as suggesting that the applicant's conduct is deliberately vexatious. Rather, in our view, he has proceeded on a fundamental misconception as to the nature and purpose of an appeal from the refusal to grant the interlocutory injunction. The notice of appeal is, however, so deficient in substance as to demonstrate that it does not serve the purpose for which an appeal may be brought before this Court. In so far as there are grounds that relate to the order appealed from, those grounds show that the appeal is foredoomed to fail, and in so far as he seeks to agitate questions which relate to the substantive issues later to be determined at trial, it is, as we have said, a purpose alien to the Court's present task. While we do not doubt that such grounds may warrant summary dismissal, we do not stay to consider whether in the present case on those grounds alone such a drastic order should be made.

22 There is a further factor which calls for the use of the summary power. The trustee submitted that the proposed orders sought in the appeal demonstrate that the prospective appeal has in any event been rendered nugatory. The proposed orders are described in the following form:

That an injunction be placed over landholdings in the name of Rafa Pastoral Pty Ltd including land comprised in Certificate of Title Volume [ ] Folio [ ], the subject of Supreme Court action, whereby funds derived from the lease of company are not assigned to the company's board of directors, John Grace and/or Barry Bramwell but rather the income derived from the lease of company land being made available to the applicant for the purpose of maintaining and improving the company's land, farmhouse, infrastructure and to replace a four-wheel drive vehicle (stolen) tractor and farm machinery to run the family farming enterprise.

That the auction of the land comprised in Certificate of Title Volume 11039; Folio 431, (previously Vol 9136, Fol 096 - cancelled), the subject of Supreme Court action (for the sum of $535.000.00) was a wrongful act, the auctioning/sale of the land to be deemed null and void, the land to remain in the estate of Gary Black (deceased) under the protection of an injunction until the determination of the Supreme Court proceedings, File No. 6154 of 1991;

The applicant and respondents to pay their own costs; and

Any other order that the Court deems suitable for the purpose of this appeal.

Counsel for the trustees submitted that, the funds having been disbursed by the trustee, the consequence is that the orders sought could have no possible effect. There is therefore nothing to which injunctive relief might be directed, even if the applicant was to succeed upon the appeal against the decision at first instance to refuse such relief. On this basis, counsel for the trustees submits, the appeal must be summarily dismissed.

23 That submission must be accepted. The applicant's appeal has been brought pursuant to s 17A(4)(b)(ii) of the Supreme Court Act 1986, which provides for an appeal without leave in circumstances which include a refusal to grant an injunction; but the Court of Appeal retains a jurisdiction to decline to hear an appeal where no live issue remains to be determined between the parties. The circumstances where a court might exercise such a discretion were recently set out in the decision of Yarra Valley Ranges v Russell[4]. There, the Court considered an application for summary dismissal of an appeal in the context of an attempt to prevent the demolition of a community building. The respondent had sought a stay in VCAT, which was refused, and then sought to appeal from the decision in the trial court, which upheld that refusal. In the intervening period the building was demolished. The applicant submitted that the appeal should be dismissed as it had been rendered nugatory. The court acceded to that submission and exercised its summary power to dismiss the appeal. In doing so, Redlich JA referred to the observations of Phillips JA, with whom Winneke P and Kenny JA agreed, in Leibler v Air New Zealand Ltd[5], that the Court could decline to proceed to hear an appeal if satisfied that the subject matter had become wholly academic so that there was no live controversy between the parties. Phillips JA also stated that, whether the power is inherent or statutory in origin, it is one to control and supervise proceedings brought in its jurisdiction, and that that involves an ample discretion. One or other of the twin discretions to stay proceedings as an abuse, or to control and supervise proceedings are sufficient to enable the Court to decline to hear an appeal whenever the circumstances are such as to make that a proper course to follow. Redlich JA referred to other authority which reflects the aversion of courts to determining issues which are moot, hypothetical or academic, and which have resulted in the refusal to determine an appeal which would produce no foreseeable consequence for the parties.

24 That said, the circumstances in which it is appropriate to exercise the power are limited. The prima facie right of a plaintiff is not to be lightly displaced or denied. The exercise of the discretion would have to be approached with those principles in mind. But an appeal should not proceed unless the legal rights of the parties can still be said to be in actual controversy, so that any judgment which might be given on the appeal should confirm or modify rights which remain capable, in a real and genuine sense, of being enjoyed. In Russell,[6] it was observed that a related consideration which weighed upon the Court in the exercise of its discretion was the constraints of time and resources to which the Court is presently subject.

25 As in Russell, it is our view that these considerations also weigh heavily in the Court's exercise of discretion. The sale of the property and the disbursement of the proceeds to third parties have had the effect that no meaningful orders could now be made, even if the respondent were somehow successful in his appeal against the orders of the judge in the Practice Court. In the words of Warren CJ in Russell, there remains no utility in granting the injunction. The justice of the case does not call for further deployment of the Court's resources where there are no longer issues in controversy of real practical significance.

26 The Court would therefore exercise its discretion to summarily dismiss the appeal.

27 The order of the Court will be: Appeal dismissed.

[1] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 129.

[2] Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99; Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62, 91; Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 602.

[4] [2009] VSCA 279.

[5] [1998] 2 VR 525.

[6] [2009] VSCA 279.