Carey v Freehills

REASONS FOR JUDGMENT 1 On 20 September 2013, Kenny J delivered judgment in Carey v Freehills [2013] FCA 954 against the appellants, the applicants at first instance. 2 On 1 April 2014, Marshall J made orders in these proceedings that the appellants provide security for costs in the sum of $148,000 by 17 April 2014, and in default, that the appeal be stayed. The appeal was fixed for hearing on 15 and 16 May 2014. The security was not paid. 3 The respondent now applies to have the appeal dismissed because security for costs ordered by the Court has not been provided by the appellants. The respondent also says that the appeal should be dismissed because the appellants have failed to comply with directions made by the Court, and for want of prosecution of the appeal. The respondent relies upon s 25(2B)(ba) and (bb)(i), and s 56(4) of the Federal Court Act 1976 (Cth). 4 The basis for the application lies in four separate identified defaults. 5 First, the respondent says that under r 36.52 of the Federal Court Rules 2011, the appellants were required either to apply to a Registrar of the Court for assistance to settle the indexes to Part A and/or Part B of the appeal book within seven days of the filing of the notice of appeal, or else to submit draft indexes. The appellants did not request assistance from the Registrar. The respondent also says that draft indexes were due to be prepared by 3 February 2014, but were not submitted until 14 March 2014. The respondent says that the draft indexes submitted were deficient and required amendment. 6 Second, the respondent says that the appellants were required in accordance with Practice Note APP2 to finalise the indexes to the appeal book by 7 April 2014, and this was not done. 7 Third, the appellants were required by 14 April 2014, in accordance with Practice Note APP2, to file an outline of submissions and a chronology. This was also not done. 8 Fourth, the respondent argued that the fourth, fifth, 10th, 11th, 13th, 15th, 16th, 17th, 19th, 20th and 25th appellants have been deregistered and are therefore not proper appellants in any event. The de-registrations all occurred after Kenny J delivered judgment. 9 The respondent's application was emailed to the solicitor for the appellants on Tuesday 22 April 2014. The email also sent an extensive affidavit which set out the basis upon which the application was made. At this time, the application had no return date. However, the return date of today, 28 April 2014, was obtained on the following day, Wednesday 23 April 2014, and the appellants were notified of the return date on that day. 10 In response to the respondent's application, the appellants seek an adjournment in order to put further material before the Court. It should be noted that the formal notification of the application on 23 April 2014 left only one business day for the appellants to respond. The respondent's application was short-served, and an abridgement of time is necessary if the matter is to be heard today. 11 Despite the short notice, the solicitor for the appellants has sworn an affidavit today in support of the application for adjournment, but also indicating in brief terms the basis upon which the appellants would resist the order sought for dismissal of the appeal. The essence is contained in [13] and [14] as follows: 13. On In [sic] order to put up the cash security as ordered by Justice Marshall the appellants have to utilise the interest of Earlmist Pty Ltd as first mortgagee of the Warwick Commercial Park - see Mr Carey's affidavits sworn herein on 27 and 31 March 2014. The receivers with whom Mr Carey has been in conflict since 2009 will have to be notified on the proposal to deal with the land and it is expected that they will seek to restrain the interest being so utilised. 14. The appellants have not yet sought that consent because they have been dealing with the matters above and other matters. The receivers are likely to oppose any use of the mortgagee's interest on the basis that they will probably dispute payment of the judgment debt in CIV 1094 of 2008. 12 It is noteworthy that the solicitor for the appellants has not addressed the reasons for the defaults in compliance with the steps necessary for the preparation of the appeal. But Mr Schlicht, who appeared as counsel for the appellants, contended that the periods of the defaults have not been gross or excessive. Nonetheless, the accumulation of the defaults, taken with the failure to pay security and the tenuous basis upon which it appears that the funds necessary for security could be raised by the appellants, suggests that there is not a genuine and real intention to prosecute the appeal on substantial grounds. 13 An appeal should not be dismissed lightly, but on the other hand, where the facts indicate a disinclination of the appellant to proceed with the appeal, that step should not be resisted. 14 The appellants did not contend that the deregistered appellants were proper appellants. The appeal should be dismissed against them, at least on the basis which is proposed below. In respect of the 16th appellant, North Sydney Development Pty Ltd ACN 107 037 838, the respondent asserted that it had been deregistered. It appears however, that the company has not been deregistered and is in external administration. Regardless, the appeal should be dismissed against it for the reasons explained above. 15 It is appropriate to grant the respondent an abridgement of time for the hearing of this application, given the facts presently outlined. However, it is not possible to say at this stage that the appellants do not have matters of substance to raise, although it appears doubtful that they do have matters of substance to raise. Justice is therefore best served by making an order that the appeal be dismissed, but also by giving the appellants the opportunity within a short period to apply to set aside this order on further material. 16 The appeal should be dismissed, but with leave granted to the appellants to apply to set that order aside. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.