FAIREY v FAIREY [2000] NSWCA 173 | Case summary

JUDGMENT 1 MASON P: The respondent to an appeal, which is an appeal as of right that has been pending since late 1998, moves the Court by notice of motion to have the appeal struck out summarily. 2 The basis of the application is Pt 51 r24 which provides relevantly that where an appellant has not done any act required to be done by or under the rules or otherwise has not prosecuted his appeal with due diligence, the Court of Appeal may, on application by any party, order that the appeal shall be dismissed for want of prosecution. 3 In 1993 these proceedings commenced in the Family Court as a cross vested claim linked with an application by the respondent for property settlement against her former husband. The appellant is the respondent's father-in-law. 4 At some stage the proceedings in the Family Court between the principal parties were resolved and the present claim was remitted to the Supreme Court. It was filed in the Equity Division in 1996. Over some days in 1997 and 1998 the matter was heard in the Equity Division by Santow J. 5 On 14 September 1998 Santow J made orders that the defendant, ie the appellant in this Court, pay to the plaintiff equitable compensation in the sum of $96,344.51 inclusive of interest under the rules of court. A cross claim by the defendant was dismissed. The defendant was also ordered to pay the plaintiff's costs of the proceedings with certain exceptions. 6 The subject matter of the proceedings in the Equity Division is not of present materiality beyond noting the irony that it relates to a claim by the respondent against the appellant that promises were made over a prolonged period of time, that property would be provided to her out of the development or redevelopment of certain property at Terrigal. 7 It is not part of the present application to suggest that the appeal is unarguable. As I have indicated, the appellant comes to this Court as of right and the appeal is yet to be determined. 8 On 9 October 1998 the appellant filed a notice of appeal without appointment. The order in the respondent's favour not having been satisfied, the respondent caused a writ of execution to be issued and it was registered against one or more of the appellant's Terrigal properties on 26 November 1998. The threat of enforcement action eventually prompted an application for a stay. 9 On 8 December 1998 Giles JA granted a conditional stay. It was a condition of the stay of execution that the appellant pay $250,000 into a trust fund by 30 April 1999. His Honour noted an undertaking to the Court on the appellant's behalf that he would comply with such directions. 10 On 24 December 1998 a notice of appeal with appointment was filed. 11 The 30 April 1999 deadline arrived without the money being paid in accordance with the undertaking to the Court. Through 1999 there were various steps taken under writs of execution. It is of some significance that during the period April to November 1999 there was no communication from the appellant's solicitors. 12 Ultimately the pressure through the Sheriff prompted the appellant to file a notice of motion for a further stay. This came before Santow J on 20 December 1999. His Honour made orders by consent granting a stay of execution on the basis that the appellant establish a trust fund in the sum of $250,000 by 11 January 2000. His Honour held that the appellant had given no adequate reasons for his delay in complying with the previous court orders or for the breach of his undertaking to the Court. 13 On 1 December 1999 the hearing of the appeal in this Court was set down for hearing on 1 June 2000. At about this time Mr Maloney commenced to act as the appellant's solicitor. The fixture was confirmed by letter dated 3 December 1999 from the Registrar of the Court of Appeal and that letter directed that three further copies of the red appeal book and four copies of the black, blue or consolidated appeal books, as applicable, were to be lodged as soon as possible and no later than one month prior to the hearing. 14 11 January, being the date fixed by the consent orders made by Santow J, came and went with the $250,000 not being paid. Enforcement proceedings resumed. Eventually in consequence of negotiations between the solicitors the trust fund was established on 24 February 2000 and since that date the sum of $250,000 has remained in that fund under the joint control of the respondent's present solicitor and the appellant's solicitor at that time, Mr Maloney. 15 On 6 March 2000 the matter was listed before this Court in connection with the appellant's failure to pay the hearing fee. In some way or other that matter seems to have resolved itself. Perhaps there was a waiver of that fee but it does not matter very much. 16 1 May was the deadline for the filing of the appeal books in accordance with the Registrar's direction to which I have made reference. They were not filed by that time. No notice had been given either to the Court of Appeal or to the respondent's solicitors suggesting that there would be delay or indicating any problem or any reason for delay or default. 17 In early May there was a flurry of activity directed at the preparation of the blue and black appeal books. It would appear that for the first time attempts were being made to uplift copies of affidavits from the Equity Division Registry to have them included in the appeal books. 18 One of the recurring themes in this litigation has been the appellant's change of solicitors from time to time and this, not surprisingly, has led to difficulties in the appellant always having ready access to documents that were filed earlier in the proceedings. 19 On 17 May the respondent's solicitor wrote to the appellant's solicitor providing copies of some of the missing affidavits. Mr Jay, the respondent's solicitor, asked Mr Maloney to ensure that the appellant's written submissions, together with the outstanding appeal books, were served not later than 23 May. The existing default was noted. It was stated that the respondent was anxious for the appeal to proceed on 1 June and that she would take no objection to the late service of the appeal books provided that they were served by 23 May. The respondent reserved her rights and the solicitor reiterated his desire that the appellant ensure that the submissions were served in accordance with the rules. 20 18 May was the date on which, in accordance with the rules, the appellant's submissions were due to be filed. They were not filed. No explanation had been tendered to the Court prior that date. Nor, as far as I am aware on the evidence, had the Court been informed prior to that date that any problem was likely to be encountered. 21 On 22 May the appeal books were filed and served. 22 On 24 May the appellant briefed counsel. 23 The appeal is a matter of some complexity, having regard to the length of the trial hearing, the fact that the judgment turned, in large part, upon credibility findings and the nature of the dispute between the parties. 24 By 24 May it was clear that the appeal would not be able to be heard on 1 June. It was listed before me on 26 May. Counsel then briefed for the appellant, Mr Renwick, explained, as best he was able, the circumstances that had brought matters to that sorry stage. It was, however, common ground between both counsel that it was then too late for the hearing to take place. Not only had the appellant's counsel not been able to prepare the written submissions but, needless to say, the respondent's counsel had not received any. 25 On that day the hearing date was vacated. The respondent filed the notice of motion presently before me and moved instanter to dismiss the appeal. I granted the appellant an adjournment to enable him to lead evidence explaining what had happened and otherwise disputing the claim. Directions were given about the filing of further evidence. 26 The notice of motion was fixed for hearing on 9 June but it did not proceed on that date in circumstances that involved no question of a default on anyone's part. The respondent's solicitor had, however, served on the appellant, care of his solicitor, a notice to produce returnable on 9 June. The documents sought in that notice to produce related to the appellant's evidence in affidavits that had been filed on his behalf to the effect that his defaults in this Court were due to financial difficulties. The respondent had made it plain that she wished to test that evidence. 27 The notice of motion was refixed for hearing today with liberty to apply on 24 hours notice if any difficulty arose in relation to the notice to produce. At that stage the legal advisers were confident that the matter could be sorted out between them as a matter of convenience. Unfortunately the expectations of the appellant's then solicitor, Mr Maloney, which seemed to be confident at that stage, were not to be realised. 28 On 21 June the matter was relisted because the appellant's solicitor had been unable to arrange informal production of the documents sought under the notice to produce. On that date the matter came again before me. Mr Renwick appeared as a matter of courtesy to inform me that he was no longer instructed and that he understood that his solicitor's instructions had also been withdrawn. 29 I made an order that the appellant produce the documents referred to in the notice to produce to the Registrar of the Court of Appeal by 23 June and I gave directions (which were to be complied with) designed to ensure that this order came to the appellant's notice. The documents were not produced to the Registrar on 23 June or at any time thereafter. 30 The appellant changed his solicitors. There is, on the material before me, something of an unresolved and somewhat irrelevant issue between the appellant and Mr Maloney as to who was to blame for what did not happen in the days leading up to 23 June. I do not think it matters very much. What is more important is that, although the appellant was bound by the order I made, whether or not he had solicitors, that order was not complied with either on its due date or at any time thereafter. 31 What eventually happened was that the appellant delivered the documents that he had in answer to the notice to produce to his former solicitors sometime before 23 June. He later recovered those documents and handed them to his present solicitors. Those solicitors first offered to the respondent's solicitor the opportunity to inspect these documents in a telephone call yesterday afternoon at a time when, I was informed, the respondent's solicitor was in Sydney. His office is in Gosford. Shortly after the matter was called on this morning, counsel for the appellant produced the documents and offered them for inspection to the respondent's counsel. 32 It can be seen from what I have said that the appellant has defaulted in a number of respects in relation to his obligations to the Court as well as his obligations to the respondent. He did not comply with the substantive judgment. (I shall return to the question whether that non compliance is justifiable or excusable at a later stage in this judgment.) Secondly, he did not comply with the terms of the stay granted by Giles JA which were accompanied by his own undertaking to the Court. Thirdly, he did not comply with the terms of the stay embodied in the consent orders made by Santow J. Fourthly, he did not file appeal books in accordance with the Registrar's directions made six months before the hearing date. Fifthly, he did not file his submissions as appellant, notwithstanding the obligation to do so under the rules and the warning about the importance of that obligation embodied in the respondent's solicitor's letter. Sixthly, there were the breaches of his obligations under the order of the Court relating to the notice to produce. 33 The consequences of these defaults are fairly obvious. First and foremost the respondent has been kept out of money which, under an order of the Court, was to be paid to her. It is true that some of the time in which she has been kept out of that money was time during which, under the arrangement worked out between the solicitors, the money was put into the joint trust account where it remains as a form of security for her. 34 The respondent has incurred considerable cost in the various attempts to enforce her rights including her procedural rights as a litigant in this Court. 35 The vacation of the hearing date on 1 June means that, assuming no further defaults or mishaps, the hearing would not take place for some further months. If it turns out that the appeal is dismissed, then the respondent will have been kept out of her money for that additional period, albeit that she will have the rights of post judgment interest and/or the interest earned on the trust fund. 36 What is clear is that the various defaults I have recounted were personal to the appellant. The appellant, in his evidence today and in his affidavit evidence, attributed some of the responsibility for some of the defaults to his former solicitors. What is clear is that the appellant is an intelligent man. He is a licensed real estate agent. There is nothing to suggest that such difficulties as have occurred were the consequence of ignorance or want of intellect. It is very clear that the appellant fully understands the legal consequences of his actions. 37 For reasons which I shall explain in a minute, the defaults are, in my view, indicative of an attitude on the appellant's part that he will suit himself as to when and if he will comply with his obligations to the exclusion of any obligation to the respondent or to the Court, except so far as he is driven by harassment and threat of legal action to comply. The very fact that the appellant seeks to excuse his defaults by blaming his former lawyers in circumstances where I cannot accept that they were at fault only makes the position clearer. 38 There have been several changes of solicitors over the sorry saga of this litigation. These changes have, in turn, contributed to the defaults through lack of ready access to documents and through the need for new solicitors and at times new counsel to come into a matter at a time when it is too late for the previous defaults to be remedied in a timely fashion. 39 The pattern of switching solicitors, when coupled with the evidence given today by the appellant, also satisfies me that a significant reason for that pattern is that those solicitors have endeavoured to bring home to the appellant his obligations to the Court and that it is the unpalatable nature of that advice that has led to the change of solicitors on at least some of these occasions. 40 These matters concerning changing of solicitors are a factor which raise a doubt as to what might happen in the future. Although the appeal books have now been filed, it still remains for the appellant to file and serve his written submissions. 41 Because the hearing date on 1 June had to be vacated, the respondent's hope to bring this litigation to an end was frustrated yet again. Needless to say, other litigants in this very busy Court have lost the opportunity to have their appeals heard on the days that were set aside for the hearing that aborted. 42 The principal explanation advanced by the appellant, leaving aside the alleged defaults of his former solicitors which I do not accept, was his financial difficulties. In a sense, those difficulties obviously contributed to the delay in complying with Santow J's substantive order, the breaches of the orders made by Giles JA and Santow J for the stay, the failure to file the appeal books in time and the inability of the appellant to have counsel briefed in time to have the written submissions filed, as required, for the purpose of the 1 June hearing date. 43 I said they contributed in a sense. It is clear that at critical points of time the cash required to satisfy whatever need was then present was not available. The real issue is, was this because the appellant lacked the means or because he lacked the will to make the means available? 44 The appellant is a wealthy man. His real estate holdings in the Terrigal area include a property at 31 Hillcrest Street valued at approximately one million dollars subject to a $550,000 mortgage. That $550,000 mortgage was used, in part, to provide the $250,000 trust fund to which I have already referred. He also owns a property at Lot 1, Terrigal Drive worth about $265,000 on which there is about $50,000 outstanding. There is another property at 31 York Street which he values at between $325,000 and $350,000, although possibly as high as $600,000 subject to a development application for subdivision. Fourthly, there is a property at Mason's Parade jointly owned with the appellant's wife and worth currently about $240,000 and unencumbered. 45 In times past the caveats placed against some or all of these titles by the respondent and writs of execution registered at the respondent's instruction have impeded, at least temporarily, the capacity to sell one or more of these properties. I say at least temporarily because at least from the time of the judgment below, the respondent's rights were crystallised as rights to compensation and clearly then they became such that they would not have sustained a caveat, at least as I see matters at present. To the extent that there were writs of execution, these were only in aid of the limited money judgment which was and remains the respondent's right to have satisfied in her favour. Now that the $250,000 has been put into the joint solicitor's trust account, there would appear to be no continuing basis for any caveats or writs and, as I understand the evidence, there are none currently encumbering the titles. 46 In his affidavit the appellant deposed to having listed some of these properties for sale. Any sale takes a concurrence of a willing vendor and a willing purchaser. There is nothing to indicate that these properties are incapable of sale at around their present values, which I take to be a fair indication of what their values would have been in the past allowing for some obvious leeway up or down. 47 It is quite clear to me that the appellant has had the capacity, both legally and financially, to cash up sufficient funds through selling or, if necessary, mortgaging one or more of these properties. He could have done so had he turned his mind to it in time in order to put his solicitor in proper funds to prosecute the appeal in this Court and that is the matter that is of particular concern in the present application. 48 One of the properties is a residence that is unoccupied and there has been no tenant for years. Whatever the reasons for this, it is obvious that the property is an available asset. 49 The evidence the appellant gave in relation to the unit property at Mason's Parade owned jointly with his wife brought home to me the resolve that he has to keep the respondent out of her assets at all costs as well as his willingness to be tricky and prevaricating. I found it quite unsatisfactory to be told in the way that I was, that the jointly owned property was, for some undisclosed and inexplicable reason, leased only by the appellant's wife and that, therefore, the appellant has no cash flow and, by inference, no right of a cash flow arising out of this property. I reject the evidence to the extent that it was suggested or inferred that the Mason's Parade property is not and has not been at all relevant times an available asset, either through its income stream or, if necessary, its capital value for the appellant to have provided his solicitor with funds to have enabled the appeal not to have gone off the rails. 50 I am satisfied that it is because of the appellant's frankly conceded determination not to pay any money to the respondent, even after judgment to that effect has been given by Santow J, that has led the appellant to conduct the litigation in this Court in the way that he has. I am equally satisfied that the appellant will, if he can continue to get away with it, continue to consider his own interests to the exclusion of the interests of the respondent and the exclusion of his duties as a litigant. I have no real confidence, although I do not put it as high as a probability, that there will not be further problems brought about by change of solicitors, change of counsel, lack of money at the critical time or whatever. I am satisfied that the lack of ready cash resources at critical times has been a consequence of deliberate inaction on the appellant's behalf motivated by the considerations I have already referred to. 51 Summary dismissal of an appeal brought as of right is an extreme measure, especially in a case such as the present when past defaults are not continuing. I am troubled about the matter and the issue of whether it is proper to look at the present situation, notwithstanding the past defaults, and to reach the view, in the exercise of the discretion, that I am satisfied that the respondent should have the relief she seeks in the notice of motion. 52 The power to dismiss proceedings summarily serves the dual purposes of ensuring fairness to litigants and preserving the integrity of the judicial system. The former purpose aims essentially to protect the litigant, in this case the respondent, from the consequences of delay, be those consequences financial, impacts on litigation, psychological or otherwise. The latter purpose, namely the integrity of the judicial system promotes the expedient resolution of cases and has some regard to the interests of litigants generally in the Court. I hasten to say that regard cannot over-reach the rights of the individual litigants to justice in their own case. 53 Unlike an application to dismiss for want of prosecution proceedings prior to trial, this is an application made when a further trial seems most unlikely and where it is not suggested that the delay is itself likely to have any impact upon the just disposition of the present appeal. It must also be recognised that the respondent's financial situation seems to be reasonably well protected by virtue of the trust account to which I have referred. 54 In Lenijamar Pty Limited v AGC Limited (1990) 27 FCR 388 there is a discussion by the Full Federal Court (Wilcox, Pinkus and Gummow JJ) in relation to the power given by order 19 r7 of the Federal Court Rules. That is a power to dismiss proceedings for want of prosecution or to grant alternative forms of relief where a party has failed to comply with an order of the Court directing that party to take a step in the proceedings. 55 Lenijamar was a case where the application was made prior to the trial. In that context the joint judgment of Wilcox and Gummow JJ contains the following passage (at 396): The discretion conferred by order 10 r 7 is unconfined, except for the condition of non compliance with a direction. As it is impossible to foresee all of the circumstances under which the rule might be sought to be used, it is undesirable to make any exhaustive statement of the circumstances under which the power granted by the rule will appropriately be exercised. We will not attempt to do so. But two situations are obvious candidates for the exercise of the power: cases in which the history of non compliance by an applicant is such as to indicate an inability or unwillingness to cooperate with the court and the other party or parties in having the matter ready for trial within an acceptable period and cases, - whatever the applicant's state of mind or resources - in which the non compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent. Although the history of the matter will always be relevant, it is more likely to be decisive in the first of these two situations. Even though the most recent non-compliance may be minor, the cumulative effect of an applicant's defaults may be such as to satisfy the judge that the applicant is either subjectively unwilling to cooperate or, for some reason, is unable to do so. Such a conclusion would not readily be reached; but, where it was, fairness to the respondent would normally require the summary dismissal of the proceeding.

FAIREY v FAIREY

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Judgment (9 paragraphs)

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Cited By (14)