Jingalong Pty Ltd v Todd

Other background matters 23Order 2(c) of the 10 April 2014 orders required Jingalong to provide evidence of various expenses it had incurred prior to, and following, the date of registration of the subdivision in respect of Lot 1 within 14 days (the "expenses issue"). Bradleys forwarded a schedule setting out their calculation of such expenses to Mr Todd's and Mr Pernice's legal representatives on 28 April 2014. Mr Pernice's solicitors replied on 21 May 2014 contending that none of the claimed expenses were caught by order 2(c). The matter appears to have rested there. 24Mr Roskov wrote to Bradleys on 15 May 2014 enclosing a transfer in relation to Lot 1 and asking that it be executed by Jingalong and returned with the relevant certificate of title. That request was repeated on 5 August 2014 on which occasion Mr Roskov foreshadowed filing a motion to compel the transfer. The letter also reserved Mr Pernice's rights to initiate contempt proceedings against Jingalong in the event the transfer was not executed and returned. 25On 12 August 2014 Mr Roskov wrote to Ms Barmes observing that the notice of appeal did not seek a stay, nor had a motion seeking such relief been filed. The letter also complained that Jingalong had failed to execute the transfer and advised that should that transfer not occur on or before 18 August 2014, Mr Pernice would commence proceedings for contempt. 26On 20 August 2014 Ms Barmes wrote to Mr Todd's solicitors advising she was instructed to seek to have the matter relisted before the primary judge to seek a stay. The letter enclosed an affidavit sworn on 19 August 2013 by Mr Cameron. Both respondents tendered the affidavit. In it, Mr Cameron expressed the belief that if Jingalong transferred Lot 1 to Mr Todd it was likely the latter would dispose of it "immediately or swiftly" such that, if successful on appeal, Jingalong would be unable to recover the land. Mr Cameron also expressed the belief that neither Mr Todd or Mr Pernice were capable of providing the value of Lot 1 to Jingalong, nor meet any costs orders in the event the appeal was successful. Accordingly Mr Cameron asserted that Jingalong would suffer serious damage that could not be redressed or compensated for if Lot 1 was transferred prior to the determination of the appeal. 27Mr Todd has lodged a caveat on the title to Lot 1.

The state of Lot 1 28Since 2003 Mr Pernice, as I have said, has undertaken improvements on Lot 1. He cleared it of some vegetation, and added a shed, dams and fencing. He used the land, according to his counsel, Mr D H Nagle, as a hobby farm. It was not his permanent place of residence. 29In about March 2012, Mr Cameron revoked Mr Pernice's permission to attend the property. Mr Pernice resumed his visits to Lot 1 following the primary judgment and orders, but not for the purpose of carrying out any further work. He complained that the property had deteriorated during the period of his absence due to inaction on Jingalong's part and that Jingalong had refused to allow him to access the property to clear debris and repair damage caused since March 2012. Quotes of between $69,000 and $71,000 for work said to be necessary to repair damage said to have occurred during that period and to bring the property back into a workable state of repair were exhibited to Mr Roskov's affidavit. Photographs exhibited to Mr Roskov's affidavit indicate increased vegetation over a period from 2005 to the "present," such as might be expected on a rural property. There were no comparative photographs tendered indicating the state of the property in March 2012 and the present. 30According to Ms Barmes' affidavit of 8 September 2014, after Mr Cameron asked Mr Pernice to vacate the property, he also asked him to remove equipment he had left there. Ms Barmes gave evidence on information and belief that those items had not been removed, that Mr Cameron was unable to get access to the property recently because the gate had been padlocked (he believed by Mr Pernice, without contradiction from those representing the latter), that the property remained substantially in the state it had been for a number of years, that there had been no substantial degradation of it and that it had been attended to as necessary when Jingalong had been able to gain access to it.

Jingalong's submissions 31Mr R E Dubler SC who appeared with Mr S Kanagaratnam, for Jingalong on its notice of motion, but not at trial, submitted that the extension of time to file the notice of appeal should be granted in circumstances where Jingalong had prospects of successfully arguing that the primary judge had erred in failing to find that the Settlement Agreement was legally binding and conferred the rights contained therein upon it. He contended that the length of delay in filing the notice of appeal was relatively small (26 days) and the reason for it was explained by Ms Barmes. He added that Jingalong had sought to make up for the delay by filing its final appeal submissions and was prepared to do everything it could to expedite the hearing of what he submitted would be a relatively short one day appeal. 32Mr Dubler emphasised that if there was any fault in filing and serving the relevant documents, it did not lie with Jingalong but, rather, with its lawyers. He contended that neither respondent suggested he had suffered any prejudice as a result of the delay. 33As to Jingalong's prospects of success, Mr Dubler relied upon Jingalong's written submissions on the appeal. They contend, in substance, that rather than the construction of the Settlement Agreement the primary judge applied (at [80]), the better interpretation was that the agreement fell within the first of the categories described in Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353. Thus, it used language suggesting that it was to be immediately binding, was prepared after the proceedings had commenced during a mediation at which each party was legally represented and, finally, was complete in its terms. 34Insofar as the stay application was concerned, Mr Dubler submitted that the balance of convenience favoured not disturbing the status quo. He proffered an undertaking from Jingalong as set out in the Schedule to this judgment in consideration for the stay being granted.

Respondents' submissions 35Mr Nagle submitted that as the notice of intention to appeal was not served in accordance with the rules, it was, in effect, a nullity. Accordingly the notice of appeal should have been filed on 8 May 2014 so that, rather than the 26 day delay for which Mr Dubler contended, the notice of appeal was filed three months out of time. 36Mr Nagle submitted that the Court ought not grant an extension of time in the circumstances of such delay when every stage of the proposed appeal had been attended either by incompetence, wilful blindness or disregard for the rules. He did not suggest that any of those conditions should be ascribed to Jingalong, but, rather, to its legal representatives. He argued that it would be contrary to the dictates of justice to allow Jingalong to profit from their lack of diligence at the expense of Mr Pernice losing the fruits of his judgment. Accordingly, he contended the proper course was to refuse the extension of time application and leave Jingalong to its remedy against its legal representatives. 37Mr Nagle did not wish to be heard on the stay application. He conceded that he could not submit Jingalong's proposed appeal was without any prospects or was unarguable. I did not understand however that he agreed that a stay should be granted, if the extension of time application was successful. I assume he relied on the evidence concerning the state of Lot 1 to contend, on the issue of balance of convenience that Mr Pernice should be given access to the land to prevent further deterioration and concomitant increased remediation costs. He also proffered an undertaking from Mr Pernice in the event a stay was not granted and Lot 1 was transferred to him, not to sell, further encumber or otherwise deal with the land pending determination of the appeal or other order. 38Mr D J Brezniak, counsel for the first respondent, adopted Mr Nagle's submissions.

Extension of time application 39The discretion to extend time for the filing of a notice of appeal is given for the sole purpose of enabling the court to do justice between the parties. Accordingly the discretion can only be exercised upon proof that strict compliance with the rules will work an injustice to Jingalong. In order to determine whether the rules will have that effect, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 (at 459) per McHugh J. 40The four factors of general relevance to an application to extend time within which to appeal are the length and reason for the delay, whether the applicant has a fairly arguable case and the extent of any prejudice suffered by the respondent to the application: Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 (at [55]) ("Tomko") per Basten JA (Hodgson and Ipp JJA agreeing). 41The power to extend time must be exercised in recognition of the fact that the respondents have a vested right to retain the judgment proposed to be the subject of appeal: Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 (at 519 - 510); Tomko (at [55]). 42The notice of intention to appeal was filed, but not served, within time. Mr Nagle submitted that it was, in effect, a nullity. It is not apparent to me that that is the case. Whether non-compliance with UCPR 51.8 had that effect turns on the text of the rule and the statutory scheme in which it is found, including of course, the CPA: Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364 ("Berowra Holdings") (at [19]) per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. 43UCPR 51.8 provides that a "notice of intention to appeal must be filed and served on each prospective respondent within 28 days after the material date". Although expressed in mandatory language, it is a procedural rule, found in the context of many provisions which can be engaged to excuse non-compliance. Primary among those provisions is s 63(2) of the CPA, pursuant to which failure to comply with a requirement of the UCPR, in this case, UCPR 51.8, is treated as an irregularity, and, relevantly, does not invalidate the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings. 44Other ameliorating or dispensing provisions are s 14, CPA (court may dispense with rules in particular cases, see Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Ltd v Rickard Constructions Pty Ltd (subject to Deed of Company Arrangement) [2009] HCA 43; (2009) 239 CLR 75 (at [23])), UCPR 1.12 (empowering the court, subject to the UCPR, to extend any time fixed by the rules, relevantly, after the time expires even if an application for extension is made after the time expires). An application to dispense with or extend the time for service of the notice of intention to appeal could have been made under either of these provisions. Other provisions could also have been invoked: see Atkinson v Zey [2008] NSWCA 30 (at [18]) per Basten JA (Handley JA agreeing). 45In this context it is apparent, in my view, that filing the notice of intention to appeal "engage[d] the jurisdiction and procedural rules", such that it was not a nullity, but, rather, was vulnerable to a strike-out application by the respondents when, once served, they became aware of the non-compliance with UCPR 51.8: Berowra Holdings (at [36]) However, "the outcome of such an application depend[ed] not upon the exercise of the right of a litigant or upon its denial, but upon the exercise of a discretionary power given to the court": Berowra Holdings (at [39]); see also Rust v Barnes [1980] 2 NSWLR 726 (at 741) per Yeldham J (speaking of the comparable provision to CPA, s 63(3)(a) in the Supreme Court Act 1970 (NSW), s 81). As is apparent, there is a smorgasbord of remedial provisions in the CPA and UCPR which gave the court discretion to extend the time for serving the notice of intention to appeal. 46Once the respondents filed a notice of motion seeking to have the appeal dismissed on the basis of the tardy filing of the notice of appeal, it was arguably too late for them to seek to set aside the notice of intention to appeal, as each had taken a "fresh step in the proceedings after becoming aware of the failure": s 63(4), CPA. 47It is arguable that once the filing of the notice of intention to appeal engaged the jurisdiction of the Court and the respondents failed to take any procedural step to set it aside for late service, that it should be treated as efficacious, such that the time for filing the notice of appeal was 10 July 2014 as Mr Dubler contended. On that basis the delay would be 26 days. 48However, in a similar case it has been held that such default means the Court's power to accede to an application to extend time for filing the notice of appeal is found in UCPR 51.16(1)(c): Despot v Registrar General (NSW) [2012] NSWCA 160 (at [2]) per Meagher JA. I am content to proceed on that basis. 49Accordingly, as the respondents submit, as the notice of appeal should have been filed and served by 8 May 2014, the period of delay should be treated as approximately three months. However, the fact that a notice of intention to appeal was filed and ultimately served within this period putting the respondents on notice of an impending appeal, is a factor to be taken into consideration in considering both the extent of delay, the reason for the delay and any prejudice the respondents suffered. 50As I have said, it is common ground that Jingalong has an arguable case on appeal. The question, therefore, is whether the interests of justice (including the case management principles enshrined in s 56 - 61 of the CPA) sufficiently displace its right to pursue that appeal because of the imperfect route it has taken to this stage. 51The appeal process has been plagued by a litany of errors. The notice of intention to appeal was filed within time, albeit that it contained the incorrect material date which, in turn, led to it identifying an incorrect date for filing the notice of appeal. Even when the tardy service of the notice of appeal was drawn to their attention, Jingalong's solicitors approach to seeking to rectify the situation was somewhat casual. 52The failure to serve the notice of intention to appeal within time was not due to any fault on Jingalong's part, in the sense of advertent non-compliance with the rules. Rather the evidence is that it relied upon Ms Barmes' advice in this respect. She, in turn, proceeded on a misapprehension as to the necessity for service within the 28 days limited by UCPR 51.8, stemming from her failure to consult the relevant rule. This misapprehension also appears to have been instilled by her understanding that the function of filing the notice of intention to appeal was, in effect, to give Jingalong an opportunity to decide whether to proceed with an appeal. While that may be one function of its filing, it does not detract from the obligation to serve the document so as to give the prospective respondents notice an appeal may be lodged. 53However, the notice of intention to appeal was ultimately served in early July 2014. Each respondent was aware of Jingalong's intention to appeal from that time. The possibility the notice of appeal may be filed out of time was apparent on the face of the notice of intention to appeal by the inclusion of the incorrect date for its filing. Once again, the fault for its late filing lay in the mistake made by its solicitors in inserting the incorrect material date in the notice of intention to appeal. 54Despite the procedural inadequacies in the instigation of the appeal I would accept the explanation for the delay as adequate. The fault in non-compliance with the rules was that of Jingalong's solicitors, rather than due to advertence on its part. On the evidence it should be treated as having sought to comply with the rules which would have preserved its option of having time to consider whether to appeal within the time preserved by filing and serving the notice of intention to appeal. Further, during the period of the delay, the respondents became aware that an appeal was on the cards. They did not take any step to challenge the commencement of the appeal. Their complaints first emerged after they received the notice of appeal. 55Insofar as prejudice is concerned, there is, of course, the general prejudice flowing from the respondents not having received the benefit of the primary judgment. However, it must be borne in mind that the possibility there would be a delay in that respect was always open because of the necessity to resolve the expenses issue prior to Jingalong being obliged to transfer Lot 1. Although that exercise started relatively early in the piece on 28 April 2014, by 21 May 2014 Jingalong and Mr Pernice were at issue as to the quantum. Neither had taken any steps to bring the issue back before the primary judge for resolution as contemplated by order 5 giving the parties liberty to apply in the event of disagreement on this issue. Further, although Mr Pernice's solicitors had sent a transfer to Jingalong's solicitors and sought its execution in mid-May 2014 (and repeated that request on 5 and 12 August), again, no steps were taken to compel the transfer. I do not, in those circumstances, find that the respondents have suffered any particular prejudice by reason of the delay. 56Further, I do not accept Mr Nagle's submission that, rather than accede to Jingalong's application to extend time for service of the notice of appeal, Jingalong should be left to its remedy, if any, against its solicitors. The fact that Jingalong may have a remedy against its solicitors if the application is dismissed is a relevant consideration, albeit that it is one which "'cannot carry much weight' and ... 'will depend upon the circumstances of each case'": see Andresakis & Skouteris t/as Andresakis & Associates v Alexus Holdings Pty Ltd [2006] NSWCA 294; (2006) 68 NSWLR 507 (at [81]ff; especially at [84], [90] and [92]) per McColl JA (Giles and Hodgson JJA agreeing). As might be expected, the viability of any such action was not explored. It would not, in my view, be an efficient use of the court's resources to leave Jingalong to that possible remedy, particularly in circumstances where the delay has been explained and the respondents have not demonstrated particular, as opposed to general, prejudice. 57Accordingly, I would grant Jingalong's application to extend the time for filing the notice of appeal to 7 August 2014.

The stay application 58To obtain a stay of the 10 April 2014 orders, Jingalong has to demonstrate a case that is suitable for the grant of a stay, in particular, one which is fair as between the respective interests of the parties: Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 (at 694); see also NSW Bar Association v Stevens [2003] NSWCA 95 Spigelman CJ (at [83]). Subject to what appears below, it is necessary for the Court to make a preliminary assessment about whether the appellant has an arguable case: Alexander v Cambridge Credit Corporation Limited (at 695); Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 ("Kalifair") (at [18]). As a stay will prevent the judgment being enforced while the appeal is pending, the Court should endeavour to preserve the status quo by protecting the judgment creditor from the risk of loss: Kalifair (at [28]). 59The respondents' concession as to the arguability of the appeal (although not of course conceding its ultimate success) may in some circumstances be sufficient to relieve the Court of the necessity to form a preliminary view of the prospects of success: see, for example Alexander v Cambridge Credit Corporation Limited (at 687). Having read Jingalong's written submissions, I am of the view that the respondents' concession was sensibly made. It also accorded with the respondents' obligations to the Court as recently explained by Leeming JA in Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2014] NSWCA 304 (at [16]). 60In my view the balance of convenience warrants granting a stay. I have already referred to the undertaking Jingalong is prepared to proffer to preserve the status quo. The status quo is also preserved by the caveat Mr Todd has lodged to secure his, and I would infer Mr Pernice's, interest in Lot 1. 61Mr Pernice has also proffered an undertaking not to deal with the land if it is transferred to him. He wishes to gain access to Lot 1 to commence restoring it to the state he says it was in when he was required to vacate it as well as to have access to equipment. However there is a controversy between the parties as to the state of Lot 1, in particular whether it is due to any fault on Jingalong's part which I cannot resolve merely on the untested assertions in the affidavits. 62Having regard to the fact that the respondents accept that Jingalong has an arguable case on appeal, it would be unwise, in my view, to reject the application for a stay, in circumstances where, assuming the expenses issue is resolved and Lot 1 is transferred to Mr Pernice, there is a possibility that Lot 1 would ultimately have to be re-transferred to Jingalong. The parties would incur the wasted costs of the transfer processes and, possibly too, a dispute about reimbursing Mr Pernice for any remediation expenses he incurred in respect of the land during the period, pending disposition of the appeal, it is under his control. 63Having regard to the possibility however that while the interests in Lot 1 are left undetermined, its condition may deteriorate, it is appropriate in my view to expedite the appeal so that the interests in Lot 1 can be determined as soon as possible.

Orders 64The majority of the argument on the applications was taken up by the application to extend time and the motions to dismiss the appeal as incompetent. Although Jingalong has been successful, it was its default in complying with the UCPR which necessitated the application and triggered the respondents' motions. In my view Jingalong should pay the costs of the motions. 65Upon Jingalong by its counsel giving the undertaking set out in the Schedule, I make the following orders: (1)Stay the orders made in Supreme Court proceedings 2012/344643 by Kunc J pending the hearing and determination of appeal proceedings 2014/137752. (2)Order that the time within which to file the notice of appeal in proceedings 2014/137752 be extended to 7 August 2014. (3)Dismiss Mr Pernice's notion of motion filed on 28 August 2014. (4)Dismiss Mr Todd's notion of motion filed on 3 September 2014. (5)Jingalong to pay the costs of its and the respondents' notices of motions. (6)Expedite the hearing of the appeal. (7)Direct the parties to approach the Court of Appeal Registrar to obtain a date for the hearing of the appeal and further directions for preparation for that hearing. Schedule Until the determination of the appeal or further order of the Court, Jingalong Pty Limited undertakes, for so long as such stay is in place: (1) not to sell, further encumber or otherwise deal with the land comprising Folio ID 1/1181699 (Lot 1); (2) to allow the second respondent access to Lot 1 on reasonable notice for the purposes of removing any chattels (including machinery) belonging to the second respondent or his associates, currently on Lot 1; (3) to comply with the Environmental Management Plan of the Shoalhaven City Council in respect of the state and condition of Lot 1.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 September 2014