Chargold Project Management Pty Ltd v Jalak Pty Ltd

2 In my opinion each of the applications should be granted. My reasons are as follows. The appeal is from a judgment of the County Court in relation to a contractual dispute between the parties. The table below shows the chronology of events between the making of final orders on 14 April 2010 in the County Court and the correspondence up to 19 July 2010 in which the respondent made an offer of settlement.

Reasons published by Judge Anderson (anticipating parties would determine orders).

Hearing re orders, brief reasons given but no orders made.

Final orders made by Judge Anderson (following brief argument).

Copy of 'draft' orders received by applicant's solicitor.

Applicant's solicitor advised that appeal abandoned due to Court Book not being filed.

Authenticated orders (as made on 14 April) received by applicant's solicitor.

Applicant's solicitor wrote to respondent's solicitor enclosing notice of proposed contents of appeal book and seeking consent to late filing of this.

Applicant's solicitor sought response to 19 May letter.

Respondent's solicitor refused to consent to applicant's request.

Respondent's solicitor sent open offer of settlement to applicant's solicitor.

Respondent's solicitor demanded payment of judgment amount.

Applicant's solicitor advises applicant would seek to set aside any statutory demand for payment.

Respondent's solicitor sent further open offer of settlement to applicant's solicitor, offering to consent to extension if interim amounts paid.

3 The principles governing extension of time were summarised in Luxmore Pty Ltd v Hydedale Pty Ltd[1] in the joint judgment of Kellam JA and myself:

The interests of justice will almost always require that an extension of this kind [of the date for filing of the notice of appeal] be granted where there is an explanation for the non-compliance and there is no irremediable prejudice to the other party. Of course there will be circumstances in which the appeal is so obviously hopeless that the Court could be satisfied that the extension would really be futile.[2]

4 The delay here was only five days. It is not disputed that the reason for the delay was a bona fide mistake by the applicant's solicitor. There is not suggested to be any prejudice to the respondent as a result of the delay, certainly none that cannot be remedied by an appropriate costs order. It follows on ordinary principles that the extension of time should be granted.

5 So far as the reinstatement of the appeal deemed abandoned, the Court has a broad discretion to reinstate. Comparably with the extension of time jurisdiction, this involves the Court weighing up any prejudice to the respective parties associated with reinstatement or refusal to reinstate. There is room for consideration of the merits of the appeal but, generally speaking, except where the appeal is shown to be wholly devoid of merit, this is not an appropriate occasion for detailed investigation of the grounds. It is but faintly argued by counsel for the respondent that the grounds of appeal are of such a dubious - he would say opaque - character that the Court should on that account, amongst others, refuse the application.

6 The primary argument which the respondent makes is expressed in the language of futility. The argument is put in this way. The judgment debt is unpaid. The respondent contends that the applicant is hence in defiance of the order of the court below. If reinstatement is ordered, the respondent argues, there will inevitably be enforcement action taken on the judgment debt. The respondent, the judgment creditor, will serve a statutory demand on the appellant company, the judgment debtor. That will, so it is postulated, require the appellant to meet the insolvency application. The next step in the argument is that it will not be sufficient for the appellant to refer merely to the existence of this appeal, in order to establish a substantial dispute about the debt. That will in turn force the appellant to seek a stay of the judgment in this Court and then, so it is argued, the issue of payment of the judgment debt will have to be litigated in this Court on that stay application. Accordingly, so the respondent submits, if the Court were minded to reinstate the proceeding, that should only be done on condition that the judgment debt be paid in full.

7 I reject that submission. In my opinion, the respondent is seeking to take advantage of what was an excusable error on the part of the appellant's solicitor. As Nettle JA pointed out in argument, had the mistake not been made and the Rules complied with, the respondent would have had no standing to seek from this Court an order for payment of the judgment debt as a condition of the appellant being able to prosecute the appeal. It has never been suggested that payment of the judgment debt is a precondition of an appellant's right to prosecute an appeal from the judgment. As Nettle JA pointed out, the judgment creditor has all the enforcement remedies available to it from the moment of the making of the order.

8 The proposition that such a condition would be imposed assumes that the reinstatement power is much broader in scope than I think it is. As is clear on the face of the Rules, the power of reinstatement is essentially an administrative power, exercisable upon proper material being advanced by the applicant for reinstatement, to rectify the procedural state of the appeal. There is no occasion on the present application to consider the extraneous issues of payment or non-payment of the judgment debt.

9 At the same time it is a matter of concern that this appeal, over a relatively modest amount, may generate a multiplicity of interlocutory proceedings in this Court and/or insolvency proceedings in the Trial Division or in the Federal Court. For that reason, I consider that we should make an order for appeal mediation. The parties are fortunate to be represented by competent, experienced, counsel. It seems to me that, having regard to the demands on the resources of this Court and the best interests of the litigants, this is a proper case for the Court, of its own motion, to order a mediation. As counsel for the applicant has acknowledged, appeal mediation is now commonly ordered in this Court in order to ensure that the new landscape which exists between judgment at trial and appeal is explored, with a view to settlement before the appeal process goes too far down the track.

10 Coming back to the substantive application, this is an ordinary application for reinstatement and, in my view, it ought be granted now for reasons which are again clear on the authorities. The delay was short, the oversight was entirely explicable and it was candidly admitted by the solicitor responsible. There is no suggestion of prejudice to the respondent as a result of the oversight. I take the view, as I did in Donis v Donis,[3] that this hearing today should not have been necessary. (I note that the solicitor for the applicant was aware of what had been said in Donis and in fact sent a copy of that decision to the respondent's solicitor inviting the respondent to consent to the reinstatement).

11 The authorities are well known. It will only be an exceptional case, where the appeal itself can be shown to be so hopeless that reinstatement would be futile, that reinstatement will be refused. Properly advised, in my opinion, the respondent ought to have known that opposition to this application was hopeless. The respondent should have known that this was not the occasion for applying leverage to try and have the judgment debt paid. It is, manifestly, in the interests of litigants for whom costs should be kept to a minimum, and it is also in the interests of this Court, that hearings about reinstatement should only occur in the exceptional case. This is an ordinary case with no unusual features, and reinstatement will be ordered.

12 It was submitted on behalf of the respondent that its entitlement to the costs of this application was illustrated, at least in part, by a letter of 31 May 2010 in which an order headed 'Without Prejudice as to Costs' was made. It is sufficient for these purposes to note that the respondent offered to consent to the procedural applications on two conditions: (1) that the full judgment sum be paid within 14 days; and (2) that the amount said to be the respondent's costs of the County Court trial be paid into an interest bearing bank account.

13 With respect, that submission is misconceived. It is said that, because it is inevitable that the appellant will be required in another court to pay the judgment sum in order to stave off insolvency proceedings, we should regard the respondent in some broader sense as having been successful. As I have endeavoured to explain, I consider that the respondent's attempt to use this procedural application to obtain leverage to secure the payment of the judgment sum was a misuse of the occasion. The provision of the letter simply reinforces what I have said. Having been helpfully referred to the relevant authorities, the respondent should have known that the applications would inevitably succeed. There should be no order as to costs.

14 I agree with respect with what has fallen from the President and wish to add only some very brief observations on four of the respondent's arguments.

15 First, the respondent contended that there should be no extension of time because there was a delay of several months between the publication of the County Court judge's reasons for judgment on 15 July 2009 and the making of final orders on 14 April 2010. I do not regard that as a reason to refuse the extension sought. The respondent was dux litem below and it does not appear that it was the applicant's fault that so much time was taken to settle the final orders. Even it were, it does not present to me as a reason to refuse the application.

16 Secondly, the respondent contended that the application should be refused because the applicant failed to pay the judgment sum or seek a stay. Like the President, I do not regard failure of payment as a reason not to extend time and, as matters stand, there is no reason to suppose that a stay would be granted. There is no suggestion of exceptional circumstances, nor is there reason to suppose that the appeal is not bona fide prosecuted. Nor, as the President has said, is there any reason to make extension of time conditional on the payment of the judgment sum into Court. As matters stand, there appear to be some substantial grounds of appeal.

17 Thirdly, the respondent contended that the application should be refused because the applicant's solicitor attempted to mislead the respondent's solicitor by the contents of the applicant's solicitor's letter of 19 May 2010. I do not agree that the letter was misleading. The applicant's solicitor said in his letter that it was doubtful that the note of the contents of the appeal book was out of time. I take him by that to have meant that it was not out of time because the authenticated order was not received by him until 10 May 2010. That may or may not be a good argument but, even assuming it were not a good argument, it does not follow that he was attempting to mislead anyone.

18 Finally, the respondent contended that the extension of time should be refused because the respondent had made an open offer to consent to an extension of time for payment if the applicant paid the whole of the judgment sum. I do not see that as a reason to refuse an extension after a delay of any only 15 days and only five days after the authenticated order was served on the applicant's solicitor.

19 Like the President, I would allow the application, I would make no order as to costs, and I encourage the prospect of appellate mediation.

[1] [2008] VSCA 212.

[3] (Unreported, Victorian Court of Appeal, 16 June 2006, Maxwell P and Bongiorno AJA) ('Donis').