Jambere Pty Ltd v Body in Balance Chiropractic Pty Ltd [2017] VSCA 143

2 The solicitors for the applicants accept responsibility and submit that the failure to comply with the due date was due to a mistaken assumption on their part that the directions from the registry would be revised.

3 The respondents, BIB and Bianca Beaumont ('Beaumont'), submit that the failure to comply by the due date is a symptom of the applicants' 'cavalier approach to Court directions'[1] and that the proceeding should not be reinstated.

4 For the reasons set out below, I consider that the application for leave to appeal should be taken not to be abandoned, pursuant to r 64.45(4)(a) of the Rules of Court.

5 BIB and Beaumont operated a chiropractic practice in Richmond ('the business'). Amongst the people who worked at the chiropractic practice was Clarence Ho ('Ho'), a qualified chiropractor.

6 On 24 June 2015, Jambere entered into a contract with BIB and Beaumont for the sale of the business ('the Contract'). The purchase price was $150,000. The purchase price included consideration for goodwill in the business. Ritchie and Thompson guaranteed the obligations of Jambere under the Contract.

7 The deposit of $15,000 was not paid on the date of execution of the Contract but the parties proceeded for some time on the basis that the Contract would proceed. The deposit has never been paid and nor has the balance of the purchase price.

8 Prior to the scheduled settlement date, Thompson and Ritchie negotiated with Ho in respect of him continuing to perform chiropractic duties in the business following the sale of it to Jambere. Ho did not accept that offer. On 28 June 2015, Ho emailed Beaumont (and copied Thompson) stating that he had sought legal advice and had been advised that he was truly an employee rather than an independent contractor and that he was owed workplace entitlements. On 29 June 2015, Thompson emailed Ho withdrawing the previous offer. On 30 June 2015, BIB terminated Ho's services as an independent contractor. Jambere made a further offer to Ho but this was rejected, principally, it appears, because of a restraint of trade clause.

9 On 16 July 2015, BIB and Beaumont commenced proceedings in the County Court of Victoria against Ho, seeking an injunction restraining him from wrongfully soliciting clients of BIB. On 20 July 2015, Ho commenced proceedings in the Fair Work Commission against BIB for wrongful dismissal and against Jambere for wrongful withdrawal of an offer of engagement. The County Court proceeding and the Fair Work Commission proceeding against BIB and Beaumont were settled by a Deed of Release ('the deed') on 4 September 2015. Jambere was not a party to the settlement. Both proceedings were discontinued.

10 Further negotiations between BIB and Jambere were unsuccessful. The sale of the business was never completed.

11 On 28 September 2015, BIB and Beaumont commenced proceedings against Jambere, Ritchie, and Thompson, seeking an order for specific performance of the Contract or, in the alternative, seeking damages for the unpaid deposit and expenses incurred by BIB as a result of the breach of the Contract. Jambere, Ritchie and Thompson alleged that at no time was BIB able to perform its obligations under the Contract, in that it was unable to transfer the assets of the business including its goodwill.

12 His Honour Judge Smith delivered judgment on 16 December 2016 and found that Jambere did not rescind the Contract. He ordered judgment for BIB and Beaumont for damages, interest and costs.[2] He ordered judgment against Jambere, Ritchie, and Thompson in the sum of $29,005.00 together with interest in the amount of $3,707.45 and costs.

13 On 30 January 2017 Jambere, Ritchie, and Thompson filed an application for leave to appeal from Judge Smith.

Application for leave to appeal taken to have been abandoned

14 On 24 April 2017, the registry advised the parties that the application for leave to appeal had been listed on 4 August 2017.

15 On 2 May 2017, the parties were advised that a hearing date on 1 June 2017 had become available and that the Judicial Registrar would like to move the case up the list. In two separate emails they were advised that '[e]xpedited directions for the filing of material in this proceeding will be sent to the parties shortly' and that they should 'notify me of any issues relating to this listing'. The directions given included an order that the settled leave application book was to be filed with the registry on or before 10 May 2017.

16 At 2:33 pm on 2 May 2017, the solicitor for the applicants advised the registry that counsel was not available on 1 June 2017 and that they preferred the 4 August 2017 listing date.

17 On 4 May 2017, the registry confirmed that the Judicial Registrar had considered correspondence from the parties about the issue of the availability of the applicants' counsel and had decided that the matter would remain listed on the original hearing date of 4 August 2017.

18 The solicitors for the applicants failed to file the leave application book by 10 May 2017.

19 On 11 May 2017, the registry advised the parties that, as a consequence of the non-compliance with the order to file the application book by 10 May 2017, the application for leave to appeal was taken to be abandoned. The parties were advised that if they signed consent orders requesting the matter not be taken to be abandoned within 28 days, the Judicial Registrar had the power to reinstate the matter.

20 The solicitors for BIB and Beaumont refused to sign consent orders.

21 The applicants now apply to reinstate the proceeding.

Should the application for leave to appeal be reinstated?

22 As mentioned at the outset, the solicitors for the applicants accept responsibility for the proceeding having been taken as abandoned. They submit that they proceeded on the assumption that the expedited directions sent on 2 May 2017 would be revised and were waiting for revised orders when they missed the due date to file the application book. To this effect, they rely on the affidavit of their solicitor, Mark Andrew Schofield, sworn on 2 June 2017, who explained his misapprehension.

23 The applicants submit that BIB and Beaumont will suffer no prejudice if the proceeding is reinstated with the view to preserving the original listing date of 4 August 2017.

24 The respondents submit that the applicants have a history of delaying the proceedings and this has resulted in the respondents incurring legal costs disproportionate to the sum of money at issue in the dispute and incurring disruption to the business and a strain on Beaumont's family by being temporarily deprived of those funds. They argue that reinstating the proceeding will cause them to incur further legal costs and strain, for which an order for costs will likely offer inadequate compensation. They allege that the applicants have not yet paid the damages or costs ordered in the County Court. They point to these matters as the prejudice they will suffer if the application for leave to appeal is reinstated.

25 The respondents rely on the affidavit of their solicitor, Nicola Lally, sworn 1 June 2017 to submit that the applicants, in addition to failing to file the application book by the due date, have previously:

(a) sought two separate extensions of time from the Court;

(b) advised the Court that they could not comply with a Court direction without seeking an extension of time;

(c) filed an agreed summary that did not comply with the Supreme Court Practice Note;

(d) sought an adjournment of a date fixed for hearing without providing any explanation as to why counsel was unavailable or why other counsel could not appear;

(e) been twice reminded by the Court of the need to attend to the filing of an agreed summary;

(f) ignored correspondence from the respondents' lawyers.

26 They rely on the above to submit that Jambere, Ritchie and Thompson have 'taken a cavalier approach to Court directions'.[3]

27 The respondents further submit that an assumption that the orders would be revised without checking with the registry is not an adequate reason to miss the filing date. They submit that the overarching purpose of the Civil Procedure Act 2010 for the just, efficient, timely and cost-effective resolution of the dispute is best served by not exercising the discretion to reinstate the proceeding.

28 In Longreach Family Living (Vic) Pty Ltd v Simonds Homes Melbourne Pty Ltd[4] I remarked on the considerable breadth of the discretionary power the Court of Appeal has to reinstate a proceeding otherwise taken to be abandoned:

The discretion to reinstate an appeal taken to be abandoned is, as Tadgell J said in Lagarna Pty Ltd v Bridge Wholesale Acceptance Corp (Aust) Ltd, 'as broad, wide and deep as the circumstances demand'. Some of the factors that may guide the exercise of the discretion include the legitimate expectation of a respondent to an appeal that there will be adherence to the Rules of Court, and the orders that are made in the application of the Rules of Court. There is also a need to balance any prejudice to either party that may result. Ultimately, it is a matter of a court determining 'what, in its opinion, is the just way in which its discretion should be exercised'. Where the failure of the appeal is 'plainly demonstrable' and reinstatement would be futile, the interests of justice will favour dismissal of the application.[5]

29 By contrast with the circumstances in Longreach, the respondents have not here sought to argue that the application for leave to appeal is devoid of merit.

30 The respondents' reliance upon the Civil Procedure Act cannot be gainsaid. Indeed, consistently with the respondents' submissions, McLeish JA in Bodycorp Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd [No 2],[6] observed that s 8 of the Civil Procedure Act must also be taken into account in the exercise of the Court's power to reinstate a proceeding. That section

obliges the Court when exercising its powers to give effect to the overarching purpose of that Act, namely to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. This acknowledges the importance of not only the just resolution but also the timely resolution of proceedings, which in turn underscores the importance of compliance with orders of the Court for the management of a proceeding.[7]

31 However, the reinstatement of the proceeding will not preclude the timely resolution of the real issues in dispute. The difficulty has arisen because of the possibility of an expedited timetable which was ultimately not proceeded with. Reinstatement ought permit the application for leave to appeal to be heard in accordance with the scheduling originally proposed by the registry as appropriate for the matter. In those circumstances, in my view the objectives of the Civil Procedure Act would not be thwarted if the proceeding was to be reinstated.

32 With respect to the prejudice the respondents allege that they will suffer if the proceeding is reinstated, in my view ultimately any resulting prejudice can be met by an appropriate order for costs, including an award of interest. It may be that an order for indemnity costs against the applicants would be appropriate,[8] especially given that the orders made by Judge Smith appear not to have been satisfied. The exact costs consequences of reinstatement can be dealt with at a later time when the general question of costs is dealt with, once the application for leave to appeal, and, if leave is granted, the appeal, have been heard and determined.

33 It is unsatisfactory that the applicants have failed to prosecute their application for leave to appeal with the diligence that is to be expected. Nevertheless, in this instance, the offending conduct was slight and explicable, albeit that it departed from acceptable practice.

34 In my view, the Court should order that the application for leave to appeal not be taken to be abandoned. The Court should decline to make any order dismissing the application under r 64.46. The question of costs of the application that the application for leave to appeal not be taken to be abandoned should be reserved to the hearing of the application for leave to appeal.

[1] Respondents' Outline of Submissions, 1 June 2017 [1].

[2] Body in Balance Chiropractic Pty Ltd v Jambere Pty Ltd [2016] VCC 1835 [57], [59] ('Reasons').

[3] Respondents' Outline of Submissions, 1 June 2017 [1].

[4] [2013] VSCA 274 ('Longreach').

[6] [2016] VSCA 183.