Di Gregorio v Lumi Finance Pty Ltd

Introduction 1 At a hearing on 5 August 2022, I dealt with the following notices or applications: (a) a notice of objection to competency filed by the then second, fifth and sixth respondents (the LegalVision Parties); (b) a notice of objection to competency filed by the then fourth respondent (the fourth respondent); (c) an interlocutory application lodged by the appellant on 24 June 2022; and (d) an interlocutory application lodged by the appellant on 27 June 2022. 2 At the conclusion of the hearing, I gave ex tempore reasons dealing with some aspects of the above notices and applications. However, certain other issues were left to be dealt with 'on the papers' after giving the parties the opportunity to file written submissions. Certain other issues were adjourned to the hearing of the appeal. 3 These reasons deal with the issues that were left to be dealt with 'on the papers'.

Outstanding issues relating to the notices of objection to competency 4 In my ex tempore reasons of 5 August 2022, I dealt substantively with the notices of objection to competency, but deferred issues of costs. In this section of these reasons, I deal with the costs issues. 5 To provide context for the costs issues, I set out the relevant part of my ex tempore reasons of 5 August 2022. In relation to the notices of objection to competency, I provided the following reasons: I turn now to consider the notices of objection to competency. The first is filed by the LegalVision parties, who are the firm of solicitors and the individual solicitors who acted for the respondent below. The other objection to competency is filed by the fourth respondent who is the counsel who acted for the respondent below. I have considered the following affidavit material that is before the Court: (i) an affidavit of Ms Di Gregorio dated 27 June 2022; and (ii) an affidavit of Mr Peter Ansell dated 27 June 2022. I have also considered the following written submissions that have been filed by the parties: (i) the submissions on behalf of the appellant received by the Court on 27 June 2022; (ii) the second, fifth and sixth respondents' outline of submissions dated 22 June 2022; (iii) the second, fifth and sixth respondents' further outline of written submissions filed 13 July 2022; and (iv) the fourth respondent's outline of submissions dated 24 June 2022. At the hearing this morning, Ms Di Gregorio submitted that the notice of objection to competency filed by the fourth respondent was filed out of time. I reject this submission. There is no affidavit of service showing when the notice of appeal was served. It is not apparent on the material that the notice of objection to competency was filed and served out of time. If Ms Di Gregorio wanted to make this argument, she should have filed an affidavit of service so it could be seen when the notice of appeal was served on the fourth respondent. I note that the 14-day period in r 36.72 of the Federal Court Rules 2011 runs from the date of service, not the date of filing of the notice of appeal. In my view, having considered the affidavit evidence and the written submissions filed by the parties, there is no proper basis for the second, fifth and sixth respondents, or for the fourth respondent, to be joined as respondents to the appeal. They were not parties to the proceeding below. The contentions against them were not raised in the proceeding below. They are, therefore, new issues sought to be raised on appeal. This requires an application for leave to appeal. No such application has been made. Further and in any event, the matters raised against these respondents constitute allegations of fraud and other misconduct. The material relied upon by the appellant, including the matters identified in the appellant's written submissions, does not provide a proper basis to make these serious allegations. Accordingly, I accept the contention that the appeal against the second, fifth and sixth respondents, and the appeal against the fourth respondent, is incompetent. These respondents will be removed as parties to the appeal, and the following parts of the amended notice of appeal will be struck out: under the heading "Grounds of Appeal", paragraphs 3, 5, 6 and 7; and, under the heading "Orders Sought", paragraphs 5 and 6, paragraph 7 insofar as it relates to the second, fourth, fifth and sixth respondents, and paragraphs 8 to 10. 6 Accordingly, I made orders on 5 August 2022 that: 1. The second, fifth and sixth respondents be removed as parties to the appeal. 2. The fourth respondent removed as a party to the appeal. 3. The following parts of the amended notice of appeal be struck out: a. grounds 3, 5, 6 and 7; and b. in the section dealing with "orders sought", paragraphs 5 and 6, paragraph 7 (the reference to the second, fourth, fifth and sixth respondents) and paragraphs 8 to 10. 7 In relation to costs, I made the following orders on 5 August 2022: 5. In relation to the issues of costs relating to the notices of objection to competency and the appeal against the second, fifth and sixth respondents, and the fourth respondent: a. by 4.00 pm on 12 August 2022, the second, fifth and sixth respondents, and the fourth respondent, file and serve any further outline of submissions on the appellant and on Erudite Legal; b. by 4.00 pm on 26 August 2022, the appellant and Erudite Legal file and serve any submissions in response; c. by 4.00 pm on 31 August 2022, the second, fifth and sixth respondents, and the fourth respondent, file and serve any submissions in reply; and d. the issues of costs be determined on the papers. 8 I note that the above order provides for submissions to be filed by Erudite Legal (the solicitors for the appellant until, at least, the morning of 5 August 2022) in addition to the appellant. This was in a context where the LegalVision Parties had made clear (by their submissions dated 13 July 2022) that they would be seeking a personal costs order against the solicitors for the appellant. 9 The LegalVision Parties and the fourth respondent have filed written submissions in accordance with the above timetable. The fourth respondent has also filed an affidavit of Jonathan Newby, the solicitor acting for the fourth respondent, dated 12 August 2022. 10 Neither the appellant nor Erudite Legal filed any submissions on costs by the date set out in the above orders. The external manager appointed to Erudite Legal communicated to the Court that Erudite Legal would not be filing submissions on costs. On 18 October 2022, my chambers emailed the appellant and Erudite Legal to check whether they sought to file any submissions. A response was requested by 4.00 pm on 19 October 2022. No response has been received. 11 In circumstances where the notices of objection to competency have been upheld, it is appropriate to order the appellant to pay the costs of the appeal (including the notices of objection to competency) of the LegalVision Parties and of the fourth respondent. This follows from the ordinary rule that costs follow the event. 12 The next question is whether those costs should be payable on an indemnity basis. The applicable principles as regards the making of an indemnity costs order are well-established. It is sufficient for present purposes to refer to Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 232-234 per Sheppard J and Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [5] per Jagot, Yates and Murphy JJ. Applying these principles to the facts of this case, I consider it appropriate to order that costs be payable on an indemnity basis. There was no proper basis for joining the LegalVision Parties and the fourth respondent to the appeal. They were not parties to the proceeding at first instance. Rather, they were the solicitors and the counsel who acted for the first respondent in the proceeding at first instance. The allegations that the appellant made against them, including serious allegations of fraud and other impropriety, had no proper basis and should never have been made. 13 I turn next to consider whether the costs to be ordered should be payable by Erudite Legal in addition to being payable by the appellant. The applicable principles as regards the making of a costs order against the solicitor acting for a party are set out in Levick v Commissioner of Taxation (2000) 102 FCR 155 at [43]-[44] per Wilcox, Burchett and Tamberlin JJ; see also Macteldir Pty Ltd v Roskov [2007] FCAFC 49 at [56]-[57], [74]-[75] per Spender, Kiefel and Emmett JJ. In the circumstances of this case, I consider it appropriate to make a costs order against Erudite Legal. As set out above, the allegations that the appellant made against the LegalVision Parties and the fourth respondent, including serious allegations of fraud and other impropriety, had no proper basis and should never have been made. Erudite Legal was involved in the joinder of these respondents and the making of these allegations. Erudite Legal prepared and filed the amended notice of appeal. Erudite Legal appeared at the hearing on 27 June 2022 and provided a lengthy written submission in support of the joinder of the LegalVision Parties and the fourth respondent and the allegations against them. In these circumstances, I consider that Erudite Legal's conduct of the case was unreasonable in the sense described in the authorities referred to above. Putting it another way, I consider that their involvement was such that they should be considered responsible for the joinder of the relevant respondents and the pursuit of the case against them with no proper basis. 14 The fourth respondent has requested that the costs be determined on a lump sum basis, and has put forward a nominated amount and an affidavit in support. I consider it preferable for the amount of the lump sum to be determined by a Registrar, and I will make directions to facilitate this occurring. The LegalVision Parties have sought an order that the costs be "agreed or assessed". I will make an order to this effect, but will reserve liberty to apply in case the LegalVision Parties wish to apply for the costs to be determined on a lump sum basis.

Applicant's interlocutory application lodged on 24 June 2022 15 The other issue that was left to be dealt with 'on the papers' was an application by the appellant (contained in paragraph 2 of her interlocutory application lodged on 24 June 2022) to join the following additional parties as parties to the appeal: (a) The Victorian Legal Services Board; (b) Ms Fiona McLeay; (c) Colin Biggers & Paisley Pty Ltd; (d) Ms Alexandra Doddridge; (e) Mr Patrick Tuohey; and (f) Mr Shivesh Kuksal. 16 The application for joinder of these parties was due to be heard on 5 August 2022, but the appellant requested time to file a written submission in support of the order sought. I gave her that opportunity, and relevantly made the following order on 5 August 2022: 7. In relation to paragraph 2 of the appellant's interlocutory application lodged on 24 June 2022 (seeking joinder of additional parties): a. by 4.00 pm on 26 August 2022, the appellant file an outline of submissions and any affidavit material; b. the application be determined on the papers. 17 The appellant did not file any submissions by the date set out in the above order. Nor has she filed any submissions subsequently. 18 None of the proposed parties set out in [15] above was a party to the proceeding at first instance. I am not satisfied that there is a proper basis to join those persons as parties to the appeal. I will therefore order that paragraph 2 of the appellant's interlocutory application lodged on 24 June 2022 be dismissed. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky.