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[2023] VSC 605
General information, not legal advice.
Supreme Court of Victoria
2023-10-13
Stynes J
Original judgment source is linked above.
(a) in answer to Issue 1, there are four significant periods of delay attributable to the plaintiffs and which could not be ascribed in any significant way to the defendant;
(b) in answer to Issue 2, there has been inordinate and inexcusable delay on the part of the plaintiffs;
(c) in answer to Issue 3, the inordinate and inexcusable delay has prejudiced the defendant and gives rise to a substantial risk that a fair trial cannot be had; and
(d) in answer to Issue 4, any delay caused by the defendant's provision of discovery does not, in the circumstances, adversely impact its application for dismissal.
(a) Whether the plaintiffs' default in relation to the preparation of their lay evidence had been intentional and contumelious.
(b) Whether the proceeding should be dismissed on the ground it is an abuse of process.
(c) Whether the time for the plaintiffs to file and serve their lay evidence should be extended to 9 June 2023.
(a) the first plaintiff, Pentridge Village Pty Ltd ('PV'), a developer of land. PV is in liquidation;
(b) the second plaintiff, West Homes Australia Pty Ltd ('WHA'), a construction company engaged by PV to undertake the construction of buildings and other works in relation to the Development. WHA was in receivership. I was informed by the plaintiffs' counsel during the hearing that the receivership had come to an end;[3]
(c) Leigh Chiavaroli, the sole director and company secretary of each of PV and WHA;
(d) the defendant, Capital Finance Australia Ltd (sometimes referred to as 'CFAL'), a financier that provided banking and credit services to PV; and
(e) the third party, John Mallon, who was employed by the defendant and during the relevant period held the position of Senior Manager, Property Finance, Victoria.
(a) Mr Mallon represented that he had authority to determine whether financing for the Development would be provided and renewed by the defendant (the 'Authority Representations'). The Authority Representations are alleged to be partly in writing, partly oral and partly implied. The conduct relied on dates back to March 2006. The pleaded particulars reveal that the plaintiffs rely predominantly on words allegedly said by Mr Mallon between October 2008 and February 2010. The Authority Representations are central to the dispute because they form the basis for allegations of misleading or deceptive conduct, deceit and unconscionable conduct for which loss is claimed.
(b) In mid-2005, the plaintiffs, the defendant and others entered into an agreement (the 'Facility Agreement') under which the defendant agreed to provide PV with a credit facility in respect of the Development. WHA agreed to act as guarantor. The Facility Agreement was varied by agreement from time to time.
(c) Prior to 2007, PV's strategy in undertaking the Development was to develop successive individual stages, using the net profits realised from the sale and settlement of apartments to pay down debt owed to a former financier and to assist with funding the Development.
(d) From late 2006 to late 2007, Mr Mallon advised PV that the defendant recommended that PV alter its strategy by developing multiple stages of the Development concurrently, rather than in successive individual stages. He represented to PV and WHA that the defendant would provide PV with sufficient funding to ensure the successful implementation and completion of a multi-stage development (the 'MSD Financing Representations'). The MSD Financing Representations are alleged to be oral. The plaintiffs rely on words allegedly said by Mr Mallon between February and December 2007.
(e) On 1 December 2007, in anticipation of increased financing enabling a multi-stage development, WHA and PV entered into a number of construction contracts pursuant to which WHA was to construct the multi-stage development in exchange for payment on a costs plus margin (20%) basis.
(f) In late 2007 to early 2008, Mr Mallon prepared a client proposal recommending to the defendant an increase in financing to PV under the Facility Agreement to finance the implementation of the multi-stage development. The defendant provided approval for an increase to the Facility Agreement peak debt and for funding in order to commence the development of concurrent stages.
(g) On or around 15 January 2008, the Facility Agreement was further amended to increase the financing to PV, increase the peak debt limit, and extend the termination date. As amended, the repayment date and expiry of the term of the facility was 30 June 2010.
(h) The Facility Agreement was further varied between June 2008 and November 2009, with such variations limited to how advanced sums were to be allocated.
(i) In reliance on the MSD Financing Representations:
(i) PV proceeded to pre-sell 100% of the apartments for each of the stages in the multi-stage development; and
(ii) PV and WHA commenced development and construction of multiple stages.
(j) From December 2007 to January 2008, the defendant knew or should have known that, amongst other things:
(i) PV had entered into construction contracts with WHA in respect of the multi-stage development;
(ii) PV and WHA were required to complete construction of any pre-sold apartments by late 2010 to early 2011 because the sale contracts included a three year sunset clause. If the purchase was not completed and settled within three years of the date of the contract, the purchaser was not obliged to settle the purchase of the apartment and was entitled to the return of their deposit; and
(iii) construction of various parts of the Development was expected to take at least 18 months from the time of financing in respect of those parts which had been approved by the defendant and construction commenced.
(k) From mid-2008 to late 2009, the defendant knew or should have known that:
(i) the multi-stage development was delayed for various reasons, including delays in the defendant's approval processes for the release of funds and delays in payments of progress claims, and would not be completed by 30 June 2010, being the expiry date of the facility under the Facility Agreement; and
(ii) an increase in the facility was required to accommodate an accelerated and more intensive construction program.
(l) The matters the defendant is alleged to have known, as referred to in sub-paragraphs 9(j) and 9(k) above, are relevant to and form the basis for other allegations of misconduct for which loss is claimed.
(m) From mid-2009 to late February 2010, Mr Mallon represented to PV and/or to WHA that the defendant would renew or rollover the Facility Agreement prior to the date of its expiry on 30 June 2010 on terms no more onerous than the existing Facility Agreement and on terms which would increase the limit of PV's peak debt by $10 million (the 'Renewal Representations'). The Renewal Representations are alleged to be partly in writing, partly oral and partly implied. The conduct relied on dates back to the period from July 2009 to February 2010. The pleaded particulars reveal that the plaintiffs rely predominantly on words allegedly said by Mr Mallon.
(n) In mid-February 2010, Mr Mallon's employment with the defendant was terminated. At that time, the stages included in the multi-stage development were scheduled to be completed by 30 June 2011.
(o) The Renewal Representations were misleading or deceptive, or likely to mislead or deceive, and Mr Mallon did not have reasonable grounds for making them.
(p) As at March 2010, representatives from the defendant informed PV that, amongst other things:
(i) Mr Mallon had left everything at CFAL (ie, the defendant) in a mess;
(ii) the defendant had not approved a variation to or renewal of the Facility Agreement;
(iii) Mr Mallon did not have the authority of the defendant to approve the type of credit facility rollover contemplated by PV;
(iv) the defendant had expected that the stages of the Development under construction were on schedule and that the facility would be repaid by 30 June 2010;
(v) there was no record at the defendant of any credit facility renewal application having been made or approval process having been commenced; and
(vi) before considering whether to renew or rollover PV's facility, the defendant would first have to reconstruct its file for PV.
(q) Between March and mid-July 2010, the defendant represented to PV and/or to WHA that the defendant would finalise a restructure and extension of the Facility Agreement on terms no more onerous than the Facility Agreement with an extension of time from 12 to 18 months (the 'Confirmation Representations'). The Confirmation Representations are alleged to be partly in writing, partly oral and partly implied. The pleaded particulars reveal that the plaintiffs rely predominantly on words allegedly said by Rob Moulden and John Degaris of the defendant.
(r) The Confirmation Representations were misleading or deceptive or likely to mislead or deceive.
(s) From 27 October 2009, the defendant had determined not to extend, renew or rollover the Facility Agreement on terms no more onerous than the existing Facility Agreement.
(t) Further or alternatively, between July 2009 and 4 March 2010, and during the period of March to mid-July 2010, the defendant was aware that renewal of the Facility Agreement on terms no more onerous than the existing Facility Agreement was unlikely to occur (the 'Material Information').
(u) The defendant was under an obligation to disclose the Material Information to PV or WHA at the earliest opportunity but did not do so until after the Facility Agreement had expired. Its failure to provide the Material Information constituted conduct by the defendant that was misleading or deceptive.
(v) In reliance on the Renewal Representations and in the absence of the Material Information, during the period from 2 July 2009 to the end of February 2010:
(i) PV did not pursue alternative sources of debt and/or equity financing to replace the Facility Agreement; and
(ii) PV and WHA instead directed their efforts to implementing the multi-stage development strategy.
(w) Further or alternatively, acting in reliance on the Confirmation Representations and in the absence of the Material Information from March to mid-July 2010:
(i) PV did not pursue alternative sources of debt and/or equity financing to replace the Facility Agreement; and
(ii) PV and WHA instead directed their efforts to implementing the multi-stage development strategy.
(x) As at 30 June 2010, the defendant had not renewed or rolled over the Facility Agreement, either on terms no more onerous than the existing Facility Agreement, or at all.
(y) In late July 2010, the defendant issued notices of default to PV under the Facility Agreement. Thereafter, PV was in a worse bargaining position than it had been in terms of negotiating re-financing for the Development either with alternative financiers and/or equity partners, or with the defendant itself.
(z) In September 2010, the defendant provided PV and WHA with a draft of a new facility agreement. The terms of the draft facility agreement were more onerous than the terms of the Facility Agreement and did not include an increase in the peak debt limit to $95 million.
(aa) On or around 8 November 2010, PV and WHA executed a new facility agreement (the 'November 2010 Facility Agreement'). From 15 November 2010, PV undertook the Development with reduced financing and on the terms of the November 2010 Facility Agreement. PV could not comply with, and was in immediate default of, the loan to value ratio set in that agreement. As a consequence, the defendant was not obliged to make advances to PV.
(bb) From around April 2010, significant numbers of purchasers to whom apartments had been pre-sold either rescinded their contracts of sale and refused to settle or sought reduced prices for settlement of their purchases.
(cc) On 17 July 2014, PV and WHA were placed into receivership. On 22 August 2014, PV was placed into liquidation.
(dd) In or around April 2015 the land on which the Development was situated was sold to a property developer.
(ee) PV says that by reason of the defendant's alleged misleading and deceptive conduct it has suffered loss and damage flowing from:
(i) the lost opportunity to negotiate with alternative financiers or the defendant from the bargaining position it previously held;
(ii) being forced to enter into the November 2010 Facility Agreement with the defendant which exposed it to higher financing costs and other burdens;
(iii) the lost opportunity to continue the multi-stage development to completion with funding from a suitable alternative source; and
(iv) the lost opportunity to develop the land to its full potential.
(ff) WHA says it lost its future entitlement to its builder's margin through to a completed Development.
(gg) Further or alternatively, relying on the same conduct, it is alleged that the defendant:
(i) acted fraudulently;
(ii) engaged in unconscionable conduct; and/or
(iii) is estopped from resiling from its representations that the Facility Agreement would be rolled over or extended on terms no more onerous than the existing Facility Agreement and on terms including an increase of the peak debt limit and an extension of the term of the agreement to 30 June 2011.
Writ and general indorsement of claim filed in the Supreme Court.
The documents were filed by PV and WHA's then solicitors, Mills Oakley.
First Notice of Change of Solicitor filed on behalf of PV and WHA.
The liquidator of PV and PV entered into a deed with Mr Chiavaroli that purported to assign PV's right, title and interest in the proceeding to Mr Chiavaroli.
Amended Statement of Claim filed and served by PV and WHA.
Defendant requested further particulars of the Amended Statement of Claim.
Second Notice of Change of Solicitor filed on behalf of PV and WHA.
Particulars of the Amended Statement of Claim filed by PV and WHA.
Mr Chiavaroli applied for orders to be substituted for PV as the first plaintiff on the basis that all of PV's claims and causes of action had been assigned to Mr Chiavaroli (the 'Substitution Application')
Orders were made by Connock J adjourning the hearing of the Substitution Application to 18 July 2018.
Mr Chiavaroli applied, in the alternative to the Substitution Application, to intervene in the proceeding for the purpose of taking responsibility for it on behalf of PV (the 'Derivative Action Application').
The defendant applied to strike out part of the Amended Statement of Claim.
Judgment was handed down and Orders were made by Connock J to the effect that:
a) the Substitution Application and Derivative Action Application were dismissed; and
b) parts of the Amended Statement of Claim that pleaded the assignment of statutory claims to Mr Chiavaroli were struck out. The defendant's application was otherwise dismissed.
The proceeding was listed for further directions on 30 November 2018.
The plaintiffs applied for an adjournment of the directions hearing scheduled for 30 November 2018 until late February 2019 and informed the defendant, amongst other things, that the plaintiffs were in advanced discussions with a litigation funder.
The directions hearing listed for 30 November 2018 was adjourned to 22 February 2019.
The plaintiffs applied for an adjournment of the directions hearing scheduled for 22 February 2019 and informed the defendant, amongst other things that:
a) PV's liquidator was to be replaced; and
b) Mr Chiavaroli expected to enter into a litigation funding agreement with the involvement of the new liquidator.
Mr Chiavaroli filed an affidavit deposing, amongst other things, that he needed a further 120 days to replace the liquidator of PV and to execute a suitable funding agreement.
Orders were made by Connock J listing the proceeding for further directions on 31 May 2019.
The plaintiffs applied for an adjournment until 5 July 2019. The liquidator of PV had not been replaced at that time.
Orders were made by Connock J that, amongst other things, required the plaintiffs to serve any proposed further amended statement of claim by 19 July 2019. The proceeding was listed for further directions on 9 August 2019.
Brian Silvia of BRI Ferrier replaced Peter Marsden of RSM Australia.
Third Notice of Change of Solicitor filed on behalf of PV.
Lipman Karas replaced Howard Bear. Howard Bear continued to act for WHA.
PV applied for an adjournment of the directions hearing scheduled for 9 August 2019 until 29 November 2019 on the basis that the liquidator of PV required an adjournment.
a) the date by which the plaintiffs were to serve any proposed further amended statement of claim be extended from 19 July 2019 to 4 October 2019; and
b) the directions hearing be adjourned to 6 December 2019.
A proposed Further Amended Statement of Claim was served on the defendant.
The plaintiffs applied for orders to file the proposed Further Amended Statement of Claim.
Leave was granted to the plaintiffs to file and serve the Further Amended Statement of Claim, which they did.
Leave was also granted to the defendant to join Mr Mallon as a third party to the proceeding.
Defence to the Further Amended Statement of Claim and Third Party Notice filed by the defendant.
Defence to the Third Party Notice filed by Mr Mallon.
Amended Defence to the Third Party Notice filed by Mr Mallon.
Benjamin Conrad and Andrew Schwartz of AS Advisory replaced Brian Silvia.
Fourth Notice of Change of Solicitor filed on behalf of PV.
Howard Bear replaced Lipman Karas. Howard Bear continued to act for WHA.
Orders were made by Connock J, by consent, for discovery to occur by 26 February 2021 and mediation to occur by 26 March 2021.
Orders were made by Efthim AsJ, by consent, requiring the plaintiffs to provide $1,025,000 as security for the defendant's costs to the first day of trial.
Orders were made by Connock J, by consent, extending the date for discovery from 26 February to 31 May 2021.
Orders were made by Connock J, by consent, extending the date for discovery to 28 June 2021.
WHA's solicitor provided by email 'an index to Tranche 1 of the Plaintiffs discovery' and access to a file of 7,276 documents.
Solicitor for the third party filed a Notice of Ceasing to Act.
Fifth Notice of Change of Solicitor filed on behalf of PV and WHA.
The plaintiffs served their first affidavit of documents. Piper Alderman provided a letter that listed the documents from Tranche 1 (provided by Mr Bear on 13 July 2021) over which privilege was claimed.
Sule Arnautovic replaced Benjamin Conrad and Andrew Schwartz of AS Advisory.
The plaintiffs served their second affidavit of documents (for Tranches 2 and 3 of the plaintiffs' discovery).
Orders were made by Connock J extending the date for discovery from 28 June to 22 October 2021.
a) requiring the plaintiffs to file and serve further and better particulars of their alleged loss and damage by that day, 13 December 2021;
b) timetabling the exchange of lay and expert evidence, the preparation of a court book, a list of issues, an agreed chronology of the relevant facts and events, and opening submissions; and
c) adjourning the directions hearing until 3 June 2022.
Most significantly, for the purpose of the defendant's application, those Orders required the plaintiffs to file and serve their lay evidence by 20 April 2022.
Further and better particulars of their alleged loss and damage were filed by the plaintiffs.
Subpoenas were issued by the Court at the request of the defendant to numerous addressees.
The plaintiffs' solicitors informed the defendant's solicitors that the plaintiffs had entered into a funding agreement on 18 March 2022. The funding agreement was subject to the approval of the creditors and the Court.
The plaintiffs objected to the inspection by the defendant of documents produced under subpoenas.
Orders were made by Connock J requiring the plaintiffs to provide further and better particulars of their Further Amended Statement of Claim.
Sixth Notice of Change of Solicitor filed on behalf of PV and WHA.
AJ & Co Lawyers ('AJ & Co') replaced Piper Alderman.
Further and better particulars of the Further Amended Statement of Claim provided by the plaintiffs.
Orders were made by Connock J granting the plaintiffs leave to file a Second Further Amended Statement of Claim, and revising and extending the timetabling orders made on 13 December 2021.
Relevantly, the date by which the plaintiffs were to file their lay evidence was extended from 20 April 2022 to 19 August 2022.
Second Further Amended Statement of Claim was filed by the plaintiffs.
Amended Defence to the Second Further Amended Statement of claim was filed by the defendant.
The matters addressed at this directions hearing relevant to this application are set out below at paragraph 87 below.
Orders were made by Connock J extending the date by which the plaintiffs were to file their lay evidence from 19 August 2022 to 23 January 2023.
Orders were made by Barrett AsJ timetabling the exchange of materials in relation to the plaintiffs' objections to documents produced under subpoena.
The defendant discovered over 10,000 documents. This discovery is addressed at sub-paragraph 138(h) below.
Hearing of subpoena objections application before Barrett AsJ.
His Honour ordered that the defendant's costs of the subpoena objections were payable forthwith to be taxed on an indemnity basis.
AJ & Co filed a Notice of Ceasing to Act on behalf of PV and WHA.
Seventh Notice of Change of Practitioner filed on behalf of PV and WHA.
Alexander Law replaced AJ & Co. This change is addressed further at section C.3 below.
(a) the plaintiffs were required to file and serve any affidavit and submissions in response to the Dismissal Application by 5 May 2023; and
(b) the defendant was required to file and serve any affidavit and submissions in reply by 12 May 2023.
(a) by email dated 24 February 2023, the plaintiffs' then solicitors, AJ & Co, sought an extension to 10 March 2023 to file their materials;
(b) the defendant agreed to an extension to 6 March 2023;
(c) by letter dated 7 March 2023 to the defendant's solicitors, the plaintiffs' new solicitors, Alexander Law, then sought a further extension and an adjournment of the hearing. The defendant did not consent to the further extension or the adjournment of the hearing;
(d) on 16 March 2023, Alexander Law served a report of the plaintiffs' cost consultant. On Friday, 17 March 2023 at 6:15pm, they served an affidavit exhibiting that report;
(e) at the commencement of the hearing on Monday, 20 March 2023, the plaintiffs appeared before Efthim AsJ and applied for an adjournment. An adjournment was granted to 1 May 2023;[11]
(f) following the hearing, on 25 May 2023, Efthim AsJ ordered that the plaintiffs provide further security in the sum of $1 million by 26 June 2023.[12] By its affidavit of Ms Hunt filed on 8 June 2023, the plaintiffs foreshadowed a need to seek an extension of time for the provision of that security;
(g) ultimately, the time for payment was extended to 14 August 2023;[13] and
(h) I have been informed by recent correspondence from the defendant's solicitors, copied to the plaintiffs' solicitors, that the ordered security was not provided by the due date or at all.
C.3 The plaintiffs' recent change of solicitors
(a) Alexander Law sent a letter to AJ & Co requesting the delivery up of the plaintiffs' files;[14] and
(b) AJ & Co rejected that request, stating, amongst other things:[15]
The funding provided by your clients to this Firm has been sporadic and indeed we did not have any funding between early November 2022 and mid-January 2023. As you are aware, your clients' refused to provide further funding in relation to this matter to our Firm to prepare for the hearing before Justice Efthim and to draft witness statements by 14 April 2023, despite being put on notice on 17 February 2023 that we could not prepare for the hearing before Justice Efthim without funding to engage a costs assessor.
...
On 6 March 2023 we received an email from your clients pointing out that if this matter was struck out as a result of the failure to provide lay evidence to the court by 14 April 2023, your client would sue each member of this Firm individually and the Firms' indemnity insurer. Again, this insistence to prepare lay statements was against the background that on several occasions your clients refused to meet to prepare their witness statements for several months and refused to provide funding.
...
We also draw to your attention, that your clients prior to our Firm being engaged, had engaged Piper Alderman and refused to pay their outstanding fees and Counsels fees of over $300,000. Piper Alderman claimed a lien over their file and accordingly, we have not been able to obtain their files while we were acting in this matter....
(a) that the plaintiff's default has been intentional and contumelious, for example disobedience to a peremptory order of the Court or conduct amounting to an abuse of Court process; or
(b) that there has been an inordinate and inexcusable delay by the plaintiff or their solicitor and that:
(i) such delay gives rise to a substantial risk that it is not possible to have a fair trial of the issues in the action; or
(ii) the delay has caused or is likely to cause serious prejudice to the defendant, as between the plaintiff and defendant, or between the defendant and a third party.
The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates'. Sometimes the deterioration of quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist even without the parties or anybody else realising that it exists. ... '[W]hat has been forgotten can rarely be shown'. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance ... The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.
(a) whether a plaintiff was warned about the effects of its delay by the defendant or by the Court. Where the application for dismissal depends on delays involving more than mere inactivity, warnings can have 'particular significance' and 'the plaintiff cannot say that it was not given fair warning about its dilatory conduct';[44] and
(b) the hardship to the plaintiff if dismissal of the proceeding would leave the plaintiff's cause of action statute barred.[45]
D.2 Inordinate and inexcusable delay causing prejudice
(a) first, that there has been an inordinate and inexcusable delay; and
(b) second, that the defendant has demonstrated prejudice arising or likely to arise from the delay. This involves assessing the unfairness of the delay caused by the plaintiff's behaviour, and its effect on the defendant, as measured by prejudice.[47]
(a) a substantial risk that a fair trial cannot be had; or
(b) some other type of serious prejudice caused by the plaintiff's delay.
(a) the loss or destruction of important documentary evidence or other material;
(b) the disappearance or death of a witness; or
(c) the degradation of witnesses' memories.
But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings.
E Issue 1 - Has there been a delay attributable to the plaintiffs
E.1 Alleged delays attributed to the plaintiffs
(a) Delay in serving proceedings.
(b) Delay in settling pleadings.
(c) Delay in respect of the plaintiffs' discovery.
(d) Delay in the preparation of lay evidence.
(e) Delay in resolving subpoena objections.
(a) On 14 August 2017, the plaintiffs filed and served their Statement of Claim, comprising 12 pages and 34 paragraphs.
(b) On 27 October 2017, the plaintiffs filed and served their Amended Statement of Claim, comprising 38 pages and 95 paragraphs and containing multiple new claims.
(c) On 5 December 2017, the defendant requested the plaintiffs provide particulars of the Amended Statement of Claim.
(d) On 2 March 2018, the plaintiffs filed particulars of the Amended Statement of Claim.
(e) On 19 March 2018, the defendant filed its Defence to the Amended State of Claim.
(f) On 20 April 2018, the plaintiffs filed their Reply to the Defence to the Amended Statement of Claim.
(g) On 7 May 2018, Mr Chiavaroli applied for orders to be substituted for PV, the first plaintiff, on the basis that all of PV's claims and causes of action had been assigned to Mr Chiavaroli.
(h) On 25 May 2018, the defendant filed an Amended Defence to the Amended Statement of Claim.
(i) On 14 June 2018, the plaintiffs filed a Reply to the Amended Defence to the Amended Statement of Claim.
(a) for PV's newly appointed liquidator to familiarise himself with the matter;
(b) to overcome difficulties experienced by the new solicitors obtaining documents and information from the former solicitors; and
(c) to finalise the proposed amendments to pleadings.
(a) '[n]ow, it's safe to say, Your Honour, that the matter has stalled somewhat since Your Honour's judgment in October last year';
(b) litigation funding had not been finalised; and
(c) '[t]he current liquidator has expressed that he has no intention of taking carriage of the proceedings' and 'he won't take any action to be replaced ... until there's an indemnity for past costs due to adverse cost orders'.
It's openly acknowledged, the delay in the conduct of this proceeding is entirely unsatisfactory; I made that plain in the submissions that I sent to Your Honour, and maintain that position now. But we know at least this: that Mr Marsden will not any longer be the liquidator of [PV] by 30 June. > > [...] > > -I just wish to state clearly for the transcript that there's never been any suggestion that the delay - or any criticism levelled at the defendant in respect of the delay. And the points, with respect, my friend made as to the normal prejudices that occur when delays of this type are encountered are, with respect, well made. Those prejudices are real. > > [...] > > -... I understand the submission - and it's well made - that [the proceeding] does relate to representations made a long time ago, in relative terms. And that does prejudice the defendant. > > The difficulty with a self-executing order is how to ensure that [PV] is not adversely or unduly, I should say, prejudiced in providing an amended pleading, when it presently doesn't have the ability - or at least anyone interested in it - to instruct my instructors or any other lawyer to draw an amended pleading.
(a) the unwillingness of PV's then liquidator to prosecute the proceedings;
(b) the application brought by the plaintiffs to substitute Mr Chiavaroli as first plaintiff; and
(c) delays in obtaining litigation funding.
E.1.3 Delay in respect of the plaintiffs' discovery
(a) on 16 April 2021 extending the date for compliance to 31 May 2021; and
(b) on 16 June 2021 further extending that date to 28 June 2021.
(a) the plaintiffs had executed a funding agreement, that the funding agreement was subject to court approval and, as a consequence, there had been a delay to the provision of further and better particulars and lay evidence;[65] and
(b) pending the timetabling of the application for approval of the funding agreement, it was difficult to provide a concrete commitment on the extension required, although he foreshadowed an extension in the order of three months.[66]
HIS HONOUR: Mr Di Stefano, for me to have to raise the matter with the parties in this way, or the plaintiff in this way, the order not having been complied with, and being made on 13 December 2021, which, on the face of it, records that they were by consent - but even if it had not been so, they're court orders. They're not, you know, optional suggestions. Why has it not been incumbent upon the plaintiffs to bring this matter to the attention of the court, and if it is now foreshadowing that such an extension is required, there's not material before the court that fully explains why that is sought, the basis upon which it's sought, why the orders haven't been complied with? > > MR DI STEFANO: I accept that, Your Honour; and if I can respond to that in stages. The first point is that the plaintiffs are currently, as I stated, without a clear visibility - and I don't mean that to over-egg it being unclear; but just to say that we cannot be certain around the timetabling of the approval application. In those circumstances, I accept we probably should have written and said the current orders' not going to be met, and we'll correspond with you further about that; however - - - > > HIS HONOUR: It was only in December that they were agreed to on the basis that the work would and could be done; and to say that you don't have full visibility, from the court's perspective, it probably couldn't be more opaque to me at the moment as to what and why this has occurred; but is the upshot of that, you're currently not in a position to assist me about that, said not critically of you?
18 As previously raised in Court, these ongoing delays cause prejudice to the defendant in circumstances where the proceeding was commenced almost 6 years ago and is based largely upon oral representations alleged to have been made as early as March 2006. In such circumstances, the memories of witnesses and parties to the proceeding will, inevitably, have faded and will continue to fade. Additionally, most relevant persons involved from CFAL have left its employ, and with the passing of time it becomes more difficult to locate previous employees and expect them to recall events from so long ago, in respect of which they have had no involvement for many years. Additionally, and unfortunately, one such potential witness is significantly unwell. > > 19 These matters present genuine difficulties in defending a very sizeable claim for loss and damage; now quantified at in excess of $800M by the plaintiffs further and better particulars of loss and damage dated 22 December 2021. > > 20 The defendant has also been prejudiced in respect of the costs of having to make applications and address matters that should not fall to be addressed, had the plaintiffs been prompt in compliance with the timetable and requests for particulars, or at minimum kept the defendant informed about the reasons for delay. Orders for costs do not remedy the defendant's prejudice while such costs remain unpaid until the unknown conclusion of this matter. > > 21 Further, prejudice is not just sustained by the defendant, but also by the Court in the administration of justice where delays to the expeditious hearing of the matter continues to be a drain on court resources in circumstances where the proceeding has been on foot for almost 6 years and yet, discovery was only provided late last year (over 5 years after the generally endorsed writ was filed). > > 22 In 2019, as a result of continual adjournments sought by the plaintiffs, limited evidence that the plaintiffs were progressing the matter and the previous statements that had been made by or on behalf of the plaintiffs in relation to the state of funding (which remained ambiguous), the defendant sought a self-executing order for dismissal of the proceeding. This was resisted by the plaintiffs on grounds that "there was a funding proposal". > > 23 Notwithstanding this, it was only on 24 March 2022 - almost 3 years later - that the defendant was notified that any such funding agreement had been entered into.
(a) AJ & Co had been provided with part but not all of the former solicitors' file and had not yet been provided with the parties' discovery (despite having sought access);.
(b) I funding approval proceeding, filed on 10 May 2022 and initially set down for its first return on 27 May 2022, had to be adjourned due to AJ & Co recently taking over the file.
(a) The defendant refused to provide them with the defendant's discovery in circumstances where Piper Alderman, the plaintiffs' previous solicitors, would not release its files. Piper Alderman did not release its files to the new solicitors for several weeks. This issue had been a subject of discussion during the directions hearing on 3 June 2022. The plaintiffs' senior counsel had explained that his instructing solicitors expected to be provided with access to that discovery by 10 June 2020. He said "I'm not certain of why that's being held onto but I suspect if I was to [sic] enquiry it'd be the usual reasons solicitors don't release their file."[77] Connock J queried whether, if the plaintiffs did not get the discovery by that date, the defendant's solicitors may provide the documents to the plaintiffs.[78] The defendant's senior counsel submitted that for the defendant's solicitors to be asked to hand over documents to circumvent a lien that may be held by another firm would put them in a very invidious position.[79] Connock J acknowledged that whether or not there was a lien was a proper matter to be considered.[80]
(b) The plaintiffs' concerns about the adequacy of the defendant's discovery. This issue and the delays that may be attributable to the defendant are addressed further below.
(c) Mr Chiavaroli testing positive to COVID-19 which prevented the plaintiffs' solicitors from meeting with him to prepare his witness statement.
(d) Other potential witnesses having had the flu and/or COVID-19 which similarly hampered the obtaining of witness statements.
(a) the defendant filed its Amended Defence to the Second Further Amended Statement of Claim which introduced previously unpleaded allegations concerning Mr Mallon;[83]
(b) Mr Chiavaroli having been unwell due to COVID-19 infection;[84]
(c) Mr Peter Chiavaroli passing away on 25 July 2022. Mr Peter Chiavaroli was described as the figurehead of his family, and his sons Leigh and Damian had been mourning since his death;[85]
(d) the plaintiffs' former solicitors, Piper Alderman, had not provided AJ & Co access to the plaintiffs' online discovery database. It was explained that Piper Alderman continued to maintain a lien over its file. The reasons for this were said to be privileged;[86]
(e) the defendant failed to make discovery of the following categories of documents which the plaintiffs' solicitors identified as being necessary for the plaintiffs to review prior to filing their evidence:[87]
(i) the personal file of Mr Mallon, including his file notes;
(ii) documents concerning the investigation conducted into Mr Mallon's conduct by the defendant;
(iii) an employment agreement for Mr Mallon;
(iv) documents evidencing any commissions or bonuses paid to Mr Mallon;
(v) internal records concerning correspondence with the quantity surveyor for the project; and
(vi) documents concerning the defendant's attempts to obtain documents from Lloyds International Pty Ltd ('Lloyds'); and
(f) the plaintiffs had not had the opportunity to review and consider documents produced to the defendant pursuant to various subpoenas issued to third parties.[88]
(a) the history of the change of ownership of the defendant and the steps taken to locate relevant files;
(b) the recent steps taken to revisit legacy IT systems that had been integrated into Westpac's IT systems; and
(c) that, as a result of those steps, emails of a number of relevant individuals, including Messrs Mallon and Mouldon had been identified and it was anticipated that there would be 'a considerable volume of documents not previously discovered' to be discovered (as much as several thousand documents).
(a) the plaintiffs' solicitor, Gerard Breen of AJ & Co, assured the Court that the plaintiffs had been endeavouring to prepare witness statements in accordance with the timetable;[92]
(b) in response to a question asked of Mr Breen by Connock J that 'it could hardly be said ..., could it that the plaintiff has been moving this proceeding along with expedition in its history', Mr Breen said 'yes, I would have to accept that' and noted there were three other proceedings that the plaintiffs were involved in 'and there have been some issues with those as well which ... had delayed the matter more than [he] would've preferred';[93]
(c) Connock J expressed his intention to press the matter along and stated 'I don't propose to allow discovery to be the tail that starts to wag the dog';[94]
(d) counsel for the defendant submitted that:[95]
(i) Mr Breen's evidence was to the effect that:
(1) Mr Chiavaroli himself would like to inspect the defendant's additional discovery of some 10,000 documents; but
(2) Mr Chiavaroli had also been advised by his doctor to take a break for several weeks following his father's death and contracting COVID-19;
(ii) there was no evidence before the Court as to his ability in terms of time and resources to review the voluminous discovery that would be provided and to also prepare his evidence; and
(iii) for that and other reasons articulated (including the involvement of the plaintiffs in other proceedings), the Court cannot be confident that the date of 9 January 2022 proposed by the plaintiffs is realistic; and
(e) in response to those submissions, Mr Breen informed the Court that:[96]
(i) Mr Chiavaroli was well-rested and that he would not personally be inspecting the 10,000 documents; and
(ii) in relation the other proceedings, 'there is a period now where in reality nothing will be happening of any substance.'
(f) Before making orders Connock J stated:[97]
'... it is not in this case or in other cases that one waits until every possible document that might be relevant is found before witness statements are to be filed and what I would expect to occur, which I contemplate also is the position, Mr Breen, is wherever you get to with discovery in that timeframe, you put your witness statements on. If at a later point in time some document arrives that needs to be dealt with then no doubt at that time, that'll be addressed between the parties and sensibly agreed, or if it can't be sensibly agreed, ruled upon by me or whoever is managing the proceeding. and the position is also nearly always the same with respect to subpoenas. Parties often don't have subpoenas until after witness statements have gone in. And I am anxious to ensure that the document parts of the exercise in the Commercial Court here as I have said before do not see the tail wagging the dog and so that is how I propose to approach the matter.
(a) The plaintiffs had experienced a death of a close family member which personally impacted Mr Chiavaroli and his brother Damian.
(b) Mr Chiavaroli had been unwell for several months and had been undergoing various medical examinations and tests.
(c) Mr Breen's father passed away requiring Mr Breen to return to Ireland for a period of two weeks.
(d) The defendant did not provide discovery of the further 10,000 documents until 31 October 2022, over two weeks late.
(e) The defendant discovered a further 104 pages on 15 December 2022.
(f) There were further documents produced pursuant to a subpoena issued by the defendant that had yet to be reviewed.
(g) A substantial amount of time had been invested in an attempt to resolve subpoena objections and each party's discovery.
E.1.5 Delay in resolving objections to subpoenas
(a) The issue to be resolved by him was costs.
(b) The defendant applied for indemnity costs payable forthwith.
(c) The primary reason given for the delays in resolving the Subpoena Objections was the delays associated with the inspection of documents produced on subpoena as well as documents produced by way of discovery.
(d) 'Quite often one of the critical aspects [of subpoenas] is their relevance to a question in issue and ... it might be expected [that this] would be apparent from pleadings or originating process.'[102]
E.2 Alleged delays attributed to the defendant
(a) the defendant delayed in making formal discovery in relation to documents no longer in its possession but instead held by Lloyds (the 'Lloyds Documents'). It was not until 4 November 2022 that the defendant served an affidavit recording that documents that had been in its possession were now in the possession of Lloyds; and
(b) the defendant delayed discovering 10,488 documents until late October 2022[104] (the 'defendant's third tranche of discovery').
(a) While not necessary, it was desirable for the plaintiffs to have the defendant's discovery before preparing their witness statements and to enable them to produce tender bundles at the same time as their witness statements.[105] I address the impact of the defendant's delays on the preparation of the plaintiffs' lay evidence at sub-paragraph 138(h) below. For the reasons given, I determined the impact was very limited.
(b) Had the plaintiffs filed their witness statements and taken all other steps as were originally timetabled on 13 December 2021, a trial would have been possible towards the end of 2022 or early 2023 and relevant documents in the defendant's discovery may never have come to light which the plaintiffs submit would have resulted in a miscarriage of justice at trial.[106] The plaintiff's submit that it would be a very acute irony in dismissing this case for want of prosecution '[b]ecause if there has been a want of prosecution by the plaintiffs in this case, it's that want of prosecution that will now guarantee a fair trial.' [107]
(c) The defendant's delay in providing discovery is a factor relevant to whether the defendant should succeed in getting an order for dismissal for want of prosecution.[108] I have addressed this submission in section H below in respect of Issue 4.
(a) Various changes to the ownership of the defendant occurred during the relevant period:[109]
(i) Prior to April 2009, the defendant was part of the HBOS plc group of companies.
(ii) In around April 2009, the defendant was acquired from HBOS by Lloyds.
(iii) In April 2012, the defendant sold the whole of its Australian property loan portfolio (including the facility the subject of this proceeding) to AET SPV Management Pty Ltd.
(iv) In October 2013, Lloyds sold the defendant to Westpac Banking Corporation ('Westpac') noting that the Facility was not a current asset of the defendant at that time.
(b) Mr McAteer deposes to the steps taken by Westpac to locate documents relevant to the proceeding after learning of the existence of the Writ in July 2016.[110]
(c) As set out in paragraph 64 above, on 26 November 2020, orders were made by consent for discovery to occur by 26 February 2021. The defendant's initial discovery was delivered on 13 July 2021 and 22 O[111]ber 2021,111 noting that there had been extensions to the timetable initiated by the plaintiffs' solicitors.
(d) By a letter dated 29 October 2021, the plaintiffs' then solicitors, Piper Alderman, observed that a number of relevant categories of documents had not been produced by the defendant including employment files.[112]
(e) On 9 November 2021, the defendant's solicitors responded by letter confirming that a reasonable search for potentially discoverable documents had been conducted and explained that the defendant faced some difficulties due to the various changes in ownership of the defendant in the period before proceedings were served in June 2017, described in sub-paragraph 99(a[113] above.113
(f) Further, the defendant's solicitors informed the plaintiffs that they had contacted Lloyds to try to obtain the files of personnel but Lloyds refused to provide them and Westpac was not able to compel Lloyds to do so.[114]
(g) No further communication regarding these matters was received from the plaintiffs until eight months later on 11 July 2022 when their then solicitors, AJ & Co, wrote to the defendant's solicitors highlighting categories of documents which had not been discovered concerning Mr Mallon's employment.[115]
(h) The parties exchanged further correspondence about this issue in July 2022.[116]
(i) At the request of the plaintiffs' solicitors, on 2 August 2022 the defendant's solicitors provided to AJ & Co the contact details of the person at Lloyds to whom they could direct enquiries regarding personnel files.[117]
(j) On 12 August 2022, the defendant's solicitors sent a letter to AJ & Co setting out the steps taken to locate documents relevant to the proceeding including human resource records and confirming that the further enquiries undertaken had revealed that a considerable volume of discoverable documents existed which had not yet been discovered.[118]
(k) On 3 November 2022, the defendant made formal discovery of documents in its possession and, in relation to the personnel files sought by the plaintiffs, Paul Green (Senior Lawyer of Westpac), deposed in the Defendant's Third Affidavit of Documents that:[119]
The Defendant had, but no longer has, in its possession, custody or power, the personnel files of relevant employees of CFAL during the relevant period. To the extent that such personnel files still exist, I believe them to be in the power, possession and custody of Lloyds International Pty Limited (Lloyds), in the United Kingdom. The Defendant has asked Lloyds to provide such files, but they have refused.
(l) On 31 January 2023, AJ & Co confirmed that they had made contact with Lloyds and were advised by them that over 213 boxes of potentially relevant documents had been located.[120]
(a) Mr McAteer deposed on information that in their initial search for documents relevant to the proceeding, Westpac staff had 'made enquiries of CFAL's legacy IT systems (which were, at that time, separate from Westpac's IT systems) to locate any emails in the mailbox for Mr Mallon, but without success'.[121]
(b) Those enquiries did identify a backup system for pre-2010 files located in an old data centre that was due to be decommissioned.[122] The old system comprised a number of tapes but the related hardware was not operational and it was not known if the tapes were in readable condition.
(c) Mr McAteer deposed on information that Mr Green of Westpac:[123]
... was informed by Westpac's IT staff that initial attempts to inspect the tapes resulted in a tape becoming stuck in the drive, and it was determined the tape might be broken if removed. It was determined that it could only be fixed by the original vendor - Hewlett Packard - at commercial rates. It was also not known if the tapes (if readable) contained any documents relevant to the proceeding. The best assessment of Westpac at the time was that they did not, given that the defendant's property division was not transferred to Westpac as part of the purchase from Lloyds. This was consistent with the fact that the property division of CFAL had been sold before CFAL was acquired by Westpac.
(a) The period of 12 months preceding the service of the originating process on 29 June 2017.
(b) The period from 14 June 2018 to October 2019 when a Further Amended Statement of Claim was delivered albeit not filed. The delay from 14 June 2018 to 24 October 2018 was the period during which the plaintiffs' attention was directed to its application to assign its statutory causes of action to Mr Chiavaroli, and to substitute him into the proceeding for PV. The delay from October 2018 to October 2019 was the period when the matter stalled while the plaintiffs pursued funding and a new liquidator and then required time for the newly appointed liquidator to familiarise himself with the matter and to overcome difficulties experienced by the new solicitors obtaining documents and information from former solicitors.
(c) The period from 26 February 2021 to 18 September 2021 in relation to its discovery.
(d) The period from 20 April 2022 (when the plaintiffs' lay evidence was first due) to June 2023 (when it was ready to be filed).[126]
F Issue 2 - Is the delay identified in Issue 1 inordinate and inexcusable
(a) the litigation is large and complex, involving factually dense and legally complicated allegations. They say that such litigation invariably requires time for proper pleadings and it requires very significant time and resources for proper discovery;
(b) if, or to the extent that, the proceeding has taken more time for these steps than even its scale and complexity require, then that is attributable to peculiar aspects of the case such as the fact that the plaintiffs are in liquidation or receivership and the difficulties that have been encountered in funding the litigation; and
(c) this is an example of a David and Goliath litigation where there is a very clear inequality of arms.[131] Specifically the plaintiffs are failed property developers, one company is in liquidation, the other in receivership. Those entities are up against a financial institution owned by Westpac.
(a) The first lockdown - 31 March to 12 May 2020.
(b) The second lockdown - 8 July to 27 October 2020.
(c) The third lockdown - 12 to 17 February 2021.
(d) The fourth lockdown - 27 May to 10 June 2021.
(e) The fifth lockdown - 15 July 2021 to 27 July 2021.
(f) The sixth lockdown - 5 August to 21 October 2021.
(a) The plaintiffs' discovery. The plaintiffs relied on the following evidence in particular:
(i) An email from the plaintiffs' then solicitor, Howard Bear, to the defendant's solicitors dated 27 May 2021 stating that the plaintiffs' discovery was close to being finalised but that the timing was potentially impacted by staffing issues at 'Lit Support' which had arisen as a result of the COVID-19 lockdown imposed that morning.[140]
(ii) A letter from Howard Bear to the defendant's solicitors dated 8 June 2021 seeking an extension to the date for delivery of discovery due to the plaintiffs' litigation support provider, TIMG, being impacted by the then current lockdown in Victoria.[141]
(iii) An email from Howard Bear to the defendant's solicitors dated 25 June 2021 seeking an extension to the date for delivery of discovery to allow Howard Bear a week to review what TIMG provided before delivering it to the defendant.[142]
(iv) A letter from Howard Bear to the defendant's solicitors dated 4 July 2021 asserting that the COVID-19 lockdown in NSW impacted the ability of TIMG to complete the work they were engaged to undertake.[143]
(v) A letter from Howard Bear to the defendant's solicitors dated 16 July 2021 which sought to explain that the plaintiffs' affidavits of documents could not be prepared because of the delays attributed to TIMG. The reason given were:[144]
(1) the COVID-19 restrictions in NSW which resulted in staff being required to isolate;
(2) Mr Bear's own health issues preventing him from continuing to act for the plaintiffs; and
(b) The preparation of the plaintiffs' lay evidence. The plaintiffs rely on the following evidence in support:
(i) A letter dated 21 July 2022 from the plaintiffs' solicitors to the defendant's solicitors proposing an extension of time for a number of reasons including that Mr Chiavaroli had tested positive for COVID-19 and that 'other potential witnesses have had the flu and/or COVID-19'.[145]
(ii) The affidavit of Mr Hitchcock of the plaintiffs' solicitors sworn 12 August 2022 deposing that Mr Chiavaroli had been diagnosed with COVID-19 on 16 July 2022 and was unable to conference with counsel for the preparation of his witness statement from 19 July to 3 August 2022.[146]
(iii) The affidavit of Mr Chiavaroli affirmed on 18 May 2023 in which he deposed that:
(1) many of the witnesses that the plaintiffs intended to call advised him and Howard Bear that between April 2020 and August 2021 they were self-isolating and unwilling to meet to discuss the matter, review material and/or provide information for their witness statements; [147] and
(2) from the first lockdown in 2020 to late 2020/early 2021, Mr Chiavaroli and the team of individuals that were assisting in progressing the litigation were unable to attend their office due to COVID-19 restrictions, which significantly impacted their ability to progress the litigation.[148]
(a) in relation to the proceeding he refers to as the Union proceeding,[150] the plaintiffs and Mr Chiavaroli were the plaintiffs in that proceeding. It was alleged that the defendants (a registered union and officials) had engaged in conduct amounting to the torts of intimidation and conspiracy causing increased costs to be incurred by the plaintiffs.[151] In the second half of 2022 and into 2023 that proceeding progressed through mediation, discovery and the preparation of witness outlines.[152] There was also a successful appeal heard in June 2022 against an order dismissing the proceeding for non-compliance with a self-executing order regarding the filing and service of the plaintiffs' expert evidence. Mr Chiavaroli deposes that he was 'deeply involved in providing instructions, information and documents in relation to that proceeding and evidence in it'.[153] Further, he deposes that 'over the period it was on foot including the second half of [2022] until March [2023], it was necessary for [him] to spend large periods of time in doing work in connection with that proceeding';[154] and
(b) each of the other three proceedings demanded considerable amounts of his time and attention in order to provide instructions including in relation to a large number of interlocutory applications.[155]
(a) 10 August 2022, advising a six week break from any legal proceedings.
(b) 28 November 2022, advising a four week break from work and legal proceedings.
(c) 15 December 2022, advising a work break until 15 January 2023.
(a) a substantial contributing factor to the period of time this proceeding has been on foot is the ongoing disputes between the parties about discovery;[159]
(b) the importance of discovery in this case is singular. It is highly probable that many of the questions in issue will be determined by the Court by reference to documents rather than oral evidence; [160] and
(c) in that context, the proper finalisation of Mr Chiavaroli's witness statement requires reference to a large number of documents including, significantly, documents found by Mr Chiavaroli's own examination of a tranche of thousands of documents which were only belatedly discovered by the defendant in October 2022.[161]
(a) PV has been in liquidation since 2014;
(b) the complexities of litigating with a liquidator in place, including considering the proper plaintiff and the need for funding, would have been apparent from that time or very soon thereafter; and
(c) it was inappropriate for the plaintiffs to proceed as they did, seeking to substitute the first plaintiff, which necessitated a significant application resulting in the decision of Connock J.[164]
(a) The plaintiffs' former solicitor deposed in May 2018 that a litigation support provider had been engaged in early 2018 and that Mr Chiavaroli had in his possession approximately 1000 folders and five large filing cabinets of documents, and maintained 100GB of electronic files on hard drives.[166] It is apparent therefore that those documents had been in the plaintiffs' possession and could have been processed for the purpose of the inevitable discovery obligations, and it is unexplained by the plaintiffs why they did not discover that electronic material in a timely way.[167]
(b) Melbourne was not in lockdown from late October 2020 to 13 February 2021.[168]
(c) By his affidavit sworn on 18 May 2023, Mr Chiavaroli deposes that from the first lockdown in 2020 to late 2020/early 2021, he and the team of individuals assisting to progress the litigation were unable to attend the office out of which they operated due to COVID-19 restrictions. However, that inability is not linked to any particular delay with discovery.[169]
(d) Further, the plaintiffs' former solicitor, Mr Bear, also deposed that the collation of documents for the purpose of discovery commenced in October 2020 meaning that lockdowns before October 2020 did not adversely affect the plaintiffs' ability to comply with the discovery order made in November 2020.[170]
(e) In late May 2021, the plaintiffs advised that their discovery was "close to being finalised_"_ but then, in June and July 2021, the plaintiffs sought to attribute further delay to COVID-19 lockdowns impacting TIMG first in Melbourne, then in Sydney.[171] However, it was not explained how COVID-19 measures in Sydney prevented work continuing on discovery, despite the defendant pressing for an explanation.[172] In any event, the evidence of Mr Chiavaroli is that TIMG advised that as a result of the lockdowns they were delayed by only two to three weeks.[173] It is relevant that, in this period, the plaintiffs were warned of the prejudice to the defendant caused by the delays.[174]
(f) While Mr Bear informed the defendant's solicitors by letter dated 16 July 2021that there would be further delays as a result of his health issues (owing to which 'arrangements [had] been made to replace [him] as the practitioner on the record'), [175] it was only on 8 September 2021 that Piper Alderman filed a notice of change of solicitor on behalf of the plaintiffs.[176]
(a) is correspondence issued on 15 July 2021 (many months after the material was due) from TIMG advising the plaintiffs that they were delayed by two to three weeks due to COVID-19 lockdowns; and
(b) at most, could only substantiate a delay of two to three weeks due to COVID-19 lockdowns.
That is the extent of evidence that supports the proposition that there was a delay out of the plaintiffs' control. That being said, there is no apparent reason why the plaintiffs left the discovery to a point when the COVID-19 delays identified in the letter from TIMG became relevant.[177]
(a) The plaintiffs' former solicitors', Piper Alderman's, refusal to hand over their file after ceasing to act on 25 May 2022.
(b) A delay in the defendant's discovery.
(c) Mr Chiavaroli having tested positive to COVID-19 on 16 July 2022.
(d) Other witness having had the flu and/or COVID-19.
(e) Mr Chiavaroli's ill health.
(f) Various changes of the liquidator.
(g) The death of Mr Peter Chiavaroli.
(h) The death of another close family member.
(i) The recent change of solicitors in March 2023.
(a) The plaintiffs' inability to obtain materials from their previous solicitors is of their own making. The delay was caused by the plaintiffs changing solicitors and the former solicitors maintaining a lien over their files.[178] The reason that the defendant did not provide its discovery to the plaintiffs' new solicitors was because such action 'would have defeated a proper determination with respect to the lien that Piper Alderman was asserting at the time'.[179] For that reason, responsibility for this delay falls at the feet of the plaintiffs.
(b) Mr Chiavaroli's COVID-19 diagnosis on 16 July 2022 cannot explain why a statement from Mr Chiavaroli had not been prepared earlier or why the statements of other witnesses were not progressed.[180] As at 16 July 2022, witness statements were already overdue. It also did not explain why the preparation of witness statements could not be progressed via telephone.[181]
(c) The medical evidence concerning Mr Chiavaroli's general ill health does not excuse the delay in the progress of the other witness statements. Further, and inconsistent with that medical evidence, Mr Chiavaroli separately deposes that he was working in the second half of 2022, including on the three other proceedings in which the plaintiffs were involved. The defendant relies on Mr Chiavaroli's evidence that:[182]
[He] was deeply involved in providing instructions, information and documents in relation to that proceeding and evidence in it, and the conduct of that proceeding and over the period it was on foot including in the second half of last year and until March this year. It was necessary for [him] to spend large periods of time in doing work in connection with that proceeding. [He] was the person who has negotiated, made and administered on behalf of the plaintiffs in the Union proceeding arrangements for its funding.
(d) The liquidator of PV has the care and conduct of this proceeding. No evidence has been filed from the liquidator to explain the delays in the conduct of the proceeding.[183] There is also no evidence why the various liquidators resigned or were removed.[184]
(e) In relation to the recent change of solicitors, there is no proper evidence adduced by the plaintiffs as to the cause of the breakdown in relationship between the plaintiffs and their solicitors.[185] When the plaintiffs are seeking an indulgence of more time as a result of a change of solicitors at a critical time, it is incumbent on them to be candid with the Court concerning the reasons for the delay.[186]
(f) In relation to the death of Peter Chiavaroli, no explanation of why this caused delays has been offered other than accepting it would have made it harder for Mr Chiavaroli to work.[187] In any event, the evidence of Mr Chiavaroli is that he was working in the second half of 2022 on other proceedings.[188]
(a) By letter dated 28 July 2010, the plaintiffs' then solicitors, Madgwicks, wrote to the defendant's solicitors in response to the receipt by PV of notices of default and asserted, amongst other things, that:[190]
(i) the plaintiffs had acted in reliance on representations by various officers of the defendant to the effect that the defendant would continue to provide funding to the plaintiffs under the Facility Agreement and that the facility would be extended or otherwise rolled over post 30 June 2010;
(ii) contrary to those representations, the defendant had served notices alleging the facility expired on 30 June 2010 and that, as a consequence, the plaintiffs were in default under the Facility Agreement and relevant securities; and
(iii) in the circumstances, the defendant is by its conduct estopped from alleging that the plaintiffs are in breach under the Facility Agreement or alternatively, the defendant has engaged in conduct that is misleading or deceptive in contravention of the Trade Practices Act 1974 (Cth).
(b) Draft correspondence from Mr Chiavaroli and Peter Chiavaroli to the Financial Ombudsman Service dated 28 May 2012 referring to concerns of PV in relation to:[191]
(i) the defendant's conduct and administration of the loan facility;
(ii) maladministration of the loan facility through the conduct of two senior executives (naming Mr Mallon and Mr Moulden);
(iii) various representations made to PV which PV asserted had no proper basis; and
(iv) the disappearance of vital documents relevant to the history of the loan facility between PV and the defendant.
The letter sets out the history of the relationship between the parties and describes the conduct of Mr Mallon relevant to the complaint including identifying alleged representations by Mr Mallon in July 2009 that funding had been approved for an extended loan to June 2011. It also describes the conduct of other executives of the defendant relevant to the complaint including Messrs Mouldon, Withers and Degaris.
(a) the fourth lockdown from 27 May to 10 June 2021;
(b) the fifth lockdown from 15 July to 27 July 2021; and
(c) the sixth lockdown from 5 August to 21 October 2021.
(a) The magnitude and complexity of the proceeding. The following passage in Bishopsgate is of acute relevance:[193]
It should not ... be supposed that merely because the litigation is complex there is some general principle of leniency and that expedition is not required by the litigants. Indeed it is all the more necessary to require proper and fair expedition in conducting a complex case lest it become out of control and remain a never-ending threat to the defendant.
I consider it is also significant that orders timetabling the exchange of lay evidence were first made by consent and thereafter, each time orders were made extending the timetable, the new dates were set having regard to dates proposed by the plaintiffs. I infer from their involvement in the nomination of the due dates that the plaintiffs thought they could, notwithstanding the complexity of the proceeding, achieve each new date at the time it was set. In these circumstances, I am not satisfied that the magnitude or complexity of the proceeding excuses the delay.
(b) The change made to PV's liquidator. During the period of delay, PV's liquidator changed for the fourth time on 30 September 2022. The plaintiffs say there is no evidence to support the conclusion that they were blameworthy for the change and any consequent delay. However, the reason for the change remains unexplained. It is a delay that clearly falls at the plaintiffs' feet and I find no basis on which it could be said that this fourth change made to the liquidator excused the delay to the preparation of lay evidence.
(c) Mr Chiavaroli's COVID-19 diagnosis. The evidence in support of Mr Chiavaroli's COVID-19 diagnosis excuses, at most, a period of delay of two to three weeks in relation to the preparation of his witness statement. However, that evidence does not serve to excuse the plaintiffs' failure to prepare Mr Chiavaroli's statement in the period from December 2021 until his diagnosis in July 2022. Nor does it excuse the delay to the preparation of the plaintiffs' other witness statements.
(d) Mr Chiavaroli's involvement in three other legal proceedings. Adopting the words of Byrne J in Mizzi Pty Ltd v Meredith,[194] '[t]his is not really an acceptable explanation for a failure to pursue a claim for over [$800 million]'. This factor was known to the plaintiffs at the time when the orders were first made and on each occasion that the timetable was reset with their input.
(e) Illness of Mr Chiavaroli. There is evidence, in the form of medical certificates, that supports the proposition that Mr Chiavaroli was not well for a period of around 14 weeks in the second half of 2022, specifically six weeks from 10 August 2022, four weeks from 28 November 2022 and a month from 15 December 2022 to 15 January 2023. However:
(i) that evidence does not excuse the delay to the preparation of the statements of the plaintiffs' other witnesses; and
(ii) contrary to Mr Chiavaroli's evidence that he was unable to prepare his witness statement due to the breaks in work advised in the medical certificates, Mr Chiavaroli deposes that:
(1) between 4 November 2022 and early December 2022, he set about examining recently discovered documents working many hours (from early morning until late into the night and sometimes the early hours of the following morning) often on consecutive days;[195] and
(2) during the second half of 2022 until March 2023, he was spending large periods of time doing work in connection with another proceeding.
Rather than serving to excuse the plaintiffs' delays to the preparation of their lay witness statements, the evidence reveals that Mr Chiavaroli was able to perform work but chose to prioritise another proceeding and examining discovered documents (which, as recorded in sub-paragraph 138(h)(ii), Connock J directed should not be allowed to distract the plaintiffs from preparing their lay evidence). In light of that evidence, I do not accept that Mr Chiavaroli's illness excuses the plaintiffs' delay.
(f) Death of Peter Chiavaroli. Mr Peter Chiavaroli died on 25 July 2022. As set out in the sub-paragraph above, in the months that followed, Mr Chiavaroli worked hard. I am sorry for Mr Chiavaroli's loss but his father's death does not, on the evidence before me, explain or excuse the delay to the preparation of Mr Chiavaroli's witness statement or the statements of the plaintiffs' other witnesses.
(g) The late change of the plaintiffs' solicitors in March 2023. The evidence about the cause of the breakdown in the relationship between the plaintiffs and their solicitors is very limited. What I do have is an observation made by Efthim AsJ that the plaintiffs' former solicitors, AJ & Co, had terminated their retainer for good cause.[196] Any delay caused by the change in solicitors falls at the feet of the plaintiffs. Little attempt was made by the plaintiffs to explain the cause of the breakdown in the relationship. Whether or not I find the delay following the change excusable is of little consequence to this application. If it does operate to excuse a period of delay, it is only the period from 8 March 2023. It does not serve to excuse the preceding delay from 20 April 2022 to 8 March 2023.
(h) Defendant's discovery. There has been a period of delay in the provision of the defendant's third tranche of discovery. The reasons for the late discovery of the third tranche has been explained by the defendant and appears to be a symptom of the delays to the commencement of the proceeding. That is, the third tranche of discovery are those documents derived from a legacy IT system which may have been more readily interrogated had proceedings been commenced at an earlier date. In any event, and in the following circumstances, any delay to the defendant's discovery does not excuse more than two months of the plaintiffs' delay from 19 August 2022 to 7 October 2022:
(i) The defendant's discovery was not identified as a cause of the plaintiffs failure to comply with the order first made on 13 December 2021 to produce lay evidence by 20 April 2022. That period of delay was said by the plaintiffs to be attributable to funding constraints. Nor was it identified as a reason why an extension to 19 August 2022 was required. The need for that extension was attributed to Piper Alderman maintaining their file after ceasing to act and the need to secure funding approval.
(ii) The inadequacy of the defendant's discovery was identified as one of the reasons why a further extension was required from 19 August 2022 to 28 October 2022, as outlined in sub-paragraph 84(e) above. However, at the directions hearing on 7 October 2022, in the knowledge that around 10,000 documents were to be delivered by the defendant in October 2022, Connock J directed that discovery should not be allowed to distract the plaintiffs from preparing their l[197]evidence.197 He ordered the statements to be filed by 23 January 2023.
(iii) The plaintiffs failed to comply with that order and it is clear from Mr Chiavaroli's affidavit evidence that he chose to ignore the Court's direction and spent a great deal of time inspecting the defendant's third tranche of discovery.
(i) In relation to the Lloyds Documents, I note that the defendant served its first and second tranches of discovered documents in July and October 2021. It was not materially delayed in doing so. The plaintiffs were then informed of the potential for documents to be in the possession of Lloyds shortly thereafter, in November 2021. That evidence is undisputed. No further steps were taken by the plaintiffs in relation to those documents until July 2022 when the plaintiffs' solicitors communicated to the defendant's solicitors that the personnel file of Mr Mallon and the financial package paid to him had not been discovered.[198] Shortly thereafter, on 2 August 2022, the defendant provided contact details of someone at Lloyds to whom they could make enquiries. It is not clear to me how the plaintiffs' knowledge of the existence of documents or their ability to pursue them is in any way improved after November 2021 by the production of a formal affidavit of documents by the defendant. In any event, for the same reasons set out in sub-paragraph 138(h) above, I am not satisfied that the identification of potentially relevant documents by Lloyds excuses the delay in the preparation of the lay evidence for more than a period of around two months.
G Issue 3 - If the delay has been inordinate and inexcusable, has that delay either given rise to a substantial risk that it is not possible to have a fair trial or otherwise caused serious prejudice to the defendant
(a) when Westpac acquired the defendant, the defendant no longer operated the property business of which the Pentridge Facility formed part. Very few employees of the defendant that were involved with the Pentridge Facility transitioned across to Westpac. Only two current employees of Westpac have been identified, both having only high-level involvement in the matters the subject of the dispute;[199]
(b) the plaintiffs name five individuals in particulars to the pleading as having made alleged representations: Mr Mallon, Mr Moulden, Mr Wither, Mr Degaris and Ms Spano;[200]
(c) Mr Mallon affirmed an affidavit of documents saying he has lost relevant documents that he had retained after departing CFAL in February 2010;[201]
(d) attempts to locate Mr Wither have been unsuccessful;[202]
(e) Mr Moulden has been contacted multiple times but in a call on 2 March 2023 he told Mr McAteer that he was not willing to cooperate in the preparation of a witness statement.[203]
(f) Mr Degaris and Ms Spano agreed to cooperate in the preparation of witness statements subject to their recollection of events;[204]
(g) a further potential witness, Mr Mahaffy, died in July 2022.[205] Documents indicate he was directly involved in dealing with PV after the facility with PV was transferred to Lloyds in around March 2011 which involved efforts to lower the loan to value ratio of the facility. Mr McAteer expected that evidence of these matters would be significant in the valuation of any loss claimed by the plaintiffs; and
(h) another potential witness for the defendant is Mr D'Rosario who was, from April 2010, closely involved in assisting the first plaintiff to prepare cash flows in support of requests for credit approval. Attempts to locate him have failed.[206]
(a) it would be more likely that Mr Moulden (who remained in the defendant's employ until December 2012) would have cooperated;
(b) the defendant may have been able to locate and speak with Messrs Wither and D 'Rosario;
(c) the defendant may have been able to call Mr Mahaffy as a witness; and
(d) the recollection of Mr Degaris and Ms Spano as to relevant events is likely to have been better.
(a) initial investigations undertaken as early as July 2016 after learning of the existence of the Writ in July 2016 by a telephone call from the then liquidators of PV. That initial investigation produced only seven boxes of hard-copy documents. Initial attempts to locate relevant HR records revealed that the records of any previous employees of the defendant, such as those involved with the Pentridge Facility would, if they existed, be held by the defendant's previous owner Lloyds;
(b) a Lloyds representative was contacted and confirmed they would not release confidential materials to a third party unless under a legal obligation to do so; and
(c) initial investigations of legacy IT systems were unproductive (as described in sub-paragraph 100(a) above) until subsequent enquiries were made in 2022.
(a) enable the defendant to verify if certain correspondence discovered by or relied on by the plaintiffs was sent; and/or
(b) contradict a number of allegations made in the plaintiffs' claim.
(a) documents referred to in the plaintiffs' further and better particulars;
(b) some original file notes recording conversations which form the basis of oral representations relied on by the plaintiffs. Typed notes that purport to be prepared from the handwritten notes have been discovered but the original notes have been discarded; and
(c) native form of spreadsheets relevant to the plaintiffs further and better particulars of loss and damage, such as:
(i) the spreadsheet underpinning the forecast profit for the multi-stage development which is now only available in pdf format; and
(ii) the document supporting WHA's claim for the unpaid builders margin, which was also only provided in pdf format.
(a) in this proceeding PV seeks loss of opportunity from July 2010 to earn profit from the Development and WHA seeks damages for alleged loss of opportunity to profit from the Development as builder;
(b) that same damage is claimed by PV and WHA against the defendants (referred to as the CVS Lane Parties) to a separate proceeding referred to as the Daimleigh Proceeding;[211]
(c) the very significant overlap in the damages sought in both cases only became apparent when the particulars of loss and damage in this case were filed on 22 December 2021 and the particulars of loss and damage in the CVS Lane case were filed in April 2022.[212] That is when a comparison could be made; and
(d) but for the plaintiffs' delay in issuing this proceeding and their delay in formulating their claim for damages in the Daimleigh Proceeding, the defendant would likely have been able to claim contribution under Part IV of the Wrongs Act 1958 (Vic) ('Wrongs Act') from the CVS Lane Parties in respect of any liability it may have to the plaintiffs in this litigation. However, pursuant to s 24(4) of the Wrongs Act, any claim for contribution from the CVS Lane Parties is statute barred.[213]
(a) The defendant, as a corporate defendant, being placed at risk in relation to a claim of at least $844 million for many years.[214]
(b) the professional reputations of the individuals said to have made misrepresentations and to have acted fraudulently hangs in abeyance as does the defendant's corporate reputation.[215]
(c) Prejudice can readily be inferred from the very long period of time that has elapsed since the relevant events, noting that this case overwhelmingly depends upon conversations and matters that were allegedly known to the defendant or of which it had notice.[216]
(a) in this case there is no prejudice to the defendant beyond that normally encountered in litigation of this kind, namely the dimming of memories, the lack of documents and the unavailability of witnesses.[220] These are primarily problems for the plaintiffs who bear the burden of proof;[221]
(b) the main prejudice relied on is the dimming of memories but, in this case, the disputes will almost invariably be resolved in favour of the party whose evidence of the old conversations most closely matches the contemporaneous documents;[222]
(c) there is no evidence (except in relation to Mr Mahaffy) that any of the witnesses who are not available, would have been available if the trial had been earlier;[223]
(d) it cannot seriously be suggested that Westpac is suffering stress and strain as a result of this litigation.[224] It is part of the business of a large trading bank to be engaged in litigation of this kind and it ought not be concluded that it imposes any stress or strain on the bank as an institution;
(e) to the extent it is said that Mr Mallon is prejudiced by the ongoing proceeding, he is a third party joined by the defendant. It is not a prejudice to the defendant, it is to a third party.[225] If the defendant is concerned for Mr Mallon's mental health, it can discontinue the third party proceeding; and
(f) to the extent there is alleged to be prejudice due to the defendant's inability to join the CVS Lane Parties, that submission does not withstand scrutiny.[226] The damages claimed in this proceeding for equitable compensation are the same damages that have been claimed from the outset for misleading and deceptive conduct. That is how it was put when the Writ was served on them and if they thought that somebody else had caused the same damage, they had the period allowed under the Wrongs Act to join that party.
To justify dismissal of an action for want of prosecution some prejudice to the defendant additional to that inevitably flowing from the plaintiff's tardiness in issuing his writ must be shown to have resulted from his subsequent delay (beyond the period allowed by Rules of Court) in proceeding promptly with the successive steps in the action. The additional prejudice need not be great compared with that which may have been already caused by the time elapsed before the writ was issued: but it must be more than minimal . . .
(a) the filing of the defendant's lay evidence;
(b) the exchange of reply lay evidence; and
(c) the staggered exchange of expert evidence.
(a) On 7 April 2021, in an email from the defendant's solicitors to the plaintiffs' then solicitor, Howard Bear, in response to Mr Bear's email seeking an extension of three months for the completion of discovery. The defendant's solicitor wrote: '[w]e remain concerned about the extensive delays in relation to this matter and your client's constant requests for additional time. These delays are prejudicial to our client, particularly given the events complained of are so long ago'.[232]
(b) On 27 April 2022, the defendant's solicitors wrote to the plaintiffs' then solicitors, Piper Alderman, noting that the plaintiffs had failed to file and serve their lay evidence as required by 20 April 2022 and the absence of any explanation for this failure. They wrote 'your clients' failure in this regard compounds their continuing failure to respond to the request for further and better particulars served upon you on 22 February 2022. Each failure is causing our client material prejudice in its ability to take instructions and to prepare its witness statements'.[233]
(a) On 19 May 2022, the defendant's solicitors sent a letter to the plaintiffs' then solicitors, Piper Alderman, which amongst other things set out the history of the plaintiffs' delays in the proceeding and the prejudice caused to the defendant by those delays.[234]
(b) At the directions hearing on 3 June 2022, senior counsel for the defendant requested a self-executing order. While the order was not made, the request for it served as a warning to the plaintiffs about the steps the defendant would take if faced with further delays.[235]
(c) On 22 July 2022, the defendant's solicitors wrote to the plaintiffs' then solicitors, AJ & Co, in response to the plaintiffs' request for a further extension of time, reiterating that the plaintiffs' delay prejudiced the defendant and referring to the letter of 19 May 2022, set out the history of delay and the ongoing prejudice and informing AJ & Co of the recent death of a potential witness, Mr Mahaffy.[236]
(d) At the directions hearing before me on 10 February 2023, the defendant again sought a self-executing order. While that order was not made, orders were made timetabling the Dismissal Application in the event that the plaintiffs failed to comply with the order to file their lay evidence.
H Issue 4 - Does the defendant's delay in discovery adversely impact the defendant's application to dismiss for want of prosecution?
(a) Hunter v Stingley [1997] 3 All ER 568.
(b) Austin Securities Ltd v Northgate and English Stores (1969) 2 All ER 753.
(c) Worcester v Allard [1990] QSC 430.
(d) Wilcox v Chapel (No 2) [2021] NSWSC 1607.
(a) the applicant was found to have contributed substantially to the period of delay;
(b) a fair trial was considered possible; and
(c) the application was rejected on the basis that the defendant had materially contributed to the delay.
[3] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Stynes J, 13 June 2023) 2 ('Day 2 Transcript').
[4] In their Second Further Amended Statement of Claim filed on 23 June 2022.
[5] Plaintiffs' further particulars of loss and damage dated 22 December 2021.
[6] Although I note that a live issue in dispute is whether the plaintiffs' claims are statute barred. See Amended Defence, [139(d)], [139(g)], [141(a)], [147(c)], [148(d)].
[7] Orders made by Stynes J on 10 February 2023, paragraphs (C)-(G) of Other Matters.
[8] Orders made by Stynes J on 10 February 2023, order 3.
[9] Orders made by Stynes J on 10 February 2023, order 4.
[10] Orders made by Stynes J on 10 February 2023, order 9.
[11] Orders made by Efthim AsJ on 20 March 2023, order 1.
[12] Orders made by Efthim AsJ on 25 May 2023, order 1.
[13] Orders made by Efthim AsJ on 17 July 2023, order 1.
[14] First McAteer Affidavit, Exhibit NM-7, 874.
[15] First McAteer Affidavit, Exhibit NM-7, 876.
[18] First Iskander Affidavit [16]; Order made by Efthim AsJ on 5 April 2023, paragraphs (B)-(C) of Other Matters.
[19] Order made by Efthim AsJ on 5 April 2023, orders 1-2.
[20] First McAteer Affidavit, Exhibit NM-7, 887.
[21] First McAteer Affidavit, Exhibit NM-7, 890.
[23] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 24.05; Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863, 873 [26]-[27] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]) ('Bishopsgate'); Weston v Publishing and Broadcasting Ltd [2011] NSWSC 433; (2011) 83 ACSR 206, 315-316 [499] (Ward J) ('Weston'). See also Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256, 263-264 [5]-[6], 438 [49] (Gleeson CJ, Gummow, Hayne and Crennan JJ); AMP General Insurance Ltd v Victorian Workcover Authority [2006] VSCA 236; (2006) 15 VR 175, 184 [40] (Maxwell P and Neave JA) ('AMP v VWA').
[24] Knörr v CSIRO [2014] VSCA 84, 18 [53] (Neave and Osborn JJA, Sifris AJA) citing Duncan v Lowenthal [1969] VicRp 21; [1969] VR 180, 182; Exell v Exell [1984] VicRp 1; [1984] VR 1, 7-8; Muto v Faul [1980] VicRp 3; [1980] VR 26; Bishopsgate (n 23).
[25] Civil Procedure Act 2010 (Vic) s 8(1)(a); see also Chan v Chen [2013] VSC 538, [39] (Digby J) ('Chen').
[28] Bishopsgate (n 23) 872 [25], 873 [28] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[29] [1989] AC 1197, 1203 (Lord Griffiths) ('Chris Smaller').
[30] Bishopsgate (n 23) 872 [24]-[25], [28] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]) quoting Chris Smaller (n 29), 1203 (Lord Griffiths).
[31] Bishopsgate (n 23) 873 [28] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]) citing Alginates (Australia) Pty Ltd v Thomson & Carroll Pty Ltd [1970] VicRp 74; [1970] VR 570, 574 (Smith J) and McKenna v McKenna [1984] VicRp 58; [1984] VR 665, 675 (McGarvie J).
[32] Weston (n 23) 316 [499] (Ward J) citing Stollznow v Calvert [1980] 2 NSWLR 749, [5]-[7] (Moffitt P, Hope JA agreeing at [24] and Mahoney JA agreeing at [25]) and Witten v Lombard Australia Ltd [1968] 2 NSWR 529; 88 WN (Pt 1) (NSW) 405, 411-412.
[33] Shepperdson v Lewis [1966] VicRp 59; [1966] VR 418, 419 (O'Bryan J); Masel v Transport Industries Insurance Co Ltd [1995] VicRp 59; (1995) 2 VR 328, 332 (Brooking, Teague and Hedigan JJ) ('Masel'); Imaging Applications Pty Ltd & Anor v Vero Insurance Limited & Ors [2008] VSC 178, [107] (Vickery J).
[34] Weston (n 23) 316 [501] (Ward J).
[35] Masel (n 33) 336 (Brooking, Teague and Hedigan JJ).
[36] Masel (n 33) 336 (Brooking, Teague and Hedigan JJ).
[37] Bishopsgate (n 23) 876-877 [36] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[38] Bishopsgate (n 23) 879 [41] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[39] Bishopsgate (n 23) 874-875 [32], 883 [50] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[40] Bishopsgate (n 23) 880 [42] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[41] [1996] HCA 25; (1996) 186 CLR 541, 551 (McHugh J, Dawson J agreeing at 544) ('Taylor').
[42] Bishopsgate (n 23) 875 [32] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]) quoting Chris Smaller (n 29) 1207-8 (Lord Griffiths).
[43] Cappelleri v Cappelleri [2020] VSC 306, [46] (Derham AsJ) ('Cappelleri'); Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 ('Aon').
[44] Bishopsgate (n 23) [51] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[45] , 280 (Bray CJ); Jones & Harvey Industries Group Pty Ltd [2019] WADC 214, [32] (Scott DCJ); Cappelleri (n 44) [47] (Derham J); see also Chen (n 25) [60] (Digby J).
[46] Bishopsgate (n 23) 880 [44] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[47] Bishopsgate (n 23) 878 [39] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[48] Bishopsgate (n 23) 879 [40] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[49] See eg, Chen (n 25) [42] (Digby J); see also Bishopsgate (n 23) 879 [40] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]); Taylor (n 41) 551 (McHugh J, Dawson J agreeing at 544).
[50] Bishopsgate (n 23) 875-876 [34], 887 [60] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[51] Bishopsgate (n 23) 875 [34] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[52] Bishopsgate (n 23) 875-876 [34]-[35] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[53] AMP v VWA (n 23) 185 [45] (Maxwell P and Neave JA).
[54] Aon (n 43) 214 [101] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[55] Bishopsgate (n 23) 875 [33] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[56] Bishopsgate (n 23) 885 [55] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[57] I again note that a live issue in dispute is whether the plaintiffs' claims are statute barred.
[58] Letter from Lipman Karas to Gilbert + Tobin dated 1 August 2019 (First McAteer Affidavit, Exhibit NM-7, 171-174).
[59] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Connock J, 22 February 2019) 1-3.
[60] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Connock J, 31 May 2019) 1, 12, 15 ('31 May 2019 Transcript').
[64] Order made by Connock J on 13 December 2021, order 3.
[65] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Connock J, 28 April 2022) 2 ('28 April 2022 Transcript'); First McAteer Affidavit, Exhibit NM-7, 313.
[66] 28 April 2022 Transcript, 17-18; First McAteer Affidavit, Exhibit NM-7, 328.
[67] 28 April 2022 Transcript, 17; First McAteer Affidavit, Exhibit NM-7, 328-329.
[68] Letter from Piper Alderman to Gilbert + Tobin dated 6 May 2022; First McAteer Affidavit, Exhibit NM-7, 345-348.
[69] Letter from Gilbert + Tobin to Piper Alderman dated 19 May 2022; First McAteer Affidavit, Exhibit NM-7, 351-356.
[71] First McAteer Affidavit, Exhibit NM-7, 361-369.
[72] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Connock J, 3 June 2022) 1-3 ('3 June 2022 Transcript').
[74] Order made by Connock J on 3 June 2022, order 3.
[75] Letter from AJ & Co to Gilbert + Tobin dated 21 July 2022; First McAteer Affidavit, [84], Exhibit NM-7, 411-412.
[76] Letter from AJ & Co to Gilbert + Tobin dated 21 July 2022; First McAteer Affidavit, [84], Exhibit NM-7, 411.
[81] Letter from Gilbert + Tobin to AJ & Co dated 22 July 2022; First McAteer Affidavit, Exhibit NM-7, 414-417.
[82] Affidavit of Jonathan Hitchcock dated 12 August 2022; First McAteer Affidavit, Exhibit NM-7, 420-452.
[87] Affidavit of Jonathan Hitchcock dated 12 August 2022; First McAteer Affidavit, Exhibit NM-7, 422, 424.
[89] Letter from Gilbert + Tobin to AJ & Co dated 12 August 2022; First McAteer Affidavit, Exhibit NM-7, 454-460.
[91] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Connock J, 7 October 2022) 10 ('7 October 2022 Transcript').
[98] Order made by Connock J on 13 October 2022, order 4.
[99] Letter from AJ & Co to Gilbert + Tobin dated 24 January 2023; First McAteer Affidavit, Exhibit NM-7, 652.
[100] Order made by Barrett AsJ on 1 March 2023, orders 2 and 3.
[101] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Barrett AsJ, 1 March 2023) ('1 March 2023 Transcript'); First McAteer Affidavit, Exhibit NM-7, 941-976.
[102] 1 March 2023 Transcript, 25; First McAteer Affidavit, Exhibit NM-7, 966.
[103] 1 March 2023 Transcript, 27; First McAteer Affidavit, Exhibit NM-7, 968.
[104] The plaintiffs by their written submissions and affidavit evidence mistakenly refer to the documents being delivered in August 2022: see Affidavit of Leigh Chiavaroli affirmed 18 May 2023, [34] ('Chiavaroli Affidavit'); Plaintiffs' Outline of Submissions dated 19 May 2023, [1(f)] ('Plaintiffs' Outline of Submissions'); Third Affidavit of Neil McAteer affirmed 6 June 2023, [7] ('Third McAteer Affidavit').
[109] Letter from Gilbert + Tobin to AJ & Co dated 12 August 2022; First McAteer Affidavit, Exhibit NM-7, 456; Third McAteer Affidavit, [11].
[110] First McAteer Affidavit, [155].
[111] Third McAteer Affidavit, [10].
[113] Third McAteer Affidavit, [11].
[118] First McAteer Affidavit, Exhibit NM-7, 453-460; Third McAteer Affidavit, [22].
[119] Defendant's Third Affidavit of Documents dated 3 November 2022, [6].
[120] First McAteer Affidavit, Exhibit NM-7, 665; Third McAteer Affidavit, [27(b)].
[121] Letter from Gilbert + Tobin to AJ & Co dated 12 August 2022; First McAteer Affidavit, [155(c)] and Exhibit NM-7, 453-460.
[122] First McAteer Affidavit, [155(d)].
[124] Letter from Gilbert + Tobin to AJ & Co dated 12 August 2022; First McAteer Affidavit, [155] and Exhibit NM-7, 453-460.
[125] Letter from Gilbert + Tobin to AJ & Co dated 12 August 2022; First McAteer Affidavit, [155(e)] and Exhibit NM-7, 453-460.
[127] Plaintiffs' Outline of Submissions, [11].
[130] Plaintiffs' Outline of Submissions, [16].
[131] Transcript of Proceeding, Pentridge Village Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v Capital Finance Australia Ltd (Supreme Court of Victoria, Stynes J, 9 June 2023) 78 ('Day 1 Transcript').
[132] Day 1 Transcript, 84; Day 2 Transcript, 30.
[133] Day 1 Transcript, 85-86; Day 2 Transcript, 30.
[135] Plaintiffs' Outline of Submissions, [18].
[137] Plaintiffs' Outline of Submissions, [18].
[138] Day 1 Transcript, 78-79; Day 2 Transcript, 30.
[139] Chiavaroli Affidavit, Exhibit LC-3, 27-28; Day 1 Transcript, 83-84.
[140] First McAteer Affidavit, Exhibit NM-7, 181; Day 1 Transcript, 79-80.
[141] First McAteer Affidavit, Exhibit NM-7, 182-183; Day 1 Transcript, 80.
[142] First McAteer Affidavit, Exhibit NM-7, 184.
[143] First McAteer Affidavit, Exhibit NM-7, 188-190; Day 1 Transcript, 80.
[144] First McAteer Affidavit, Exhibit NM-7, 200-202; Day 1 Transcript, 80.
[145] Letter of AJ & Co to Gilbert + Tobin dated 21 July 2022; First McAteer Affidavit, Exhibit NM-7, 410-412; Day 1 Transcript, 80.
[146] Affidavit of Jonathan Hitchcock dated 12 August 2022, [9.2], [20]; First McAteer Affidavit, Exhibit NM-7, 421-423; Day 1 Transcript, 81.
[147] Chiavaroli Affidavit, [17]; Day 1 Transcript, 82.
[148] Chiavaroli Affidavit, [18]; Day 1 Transcript, 82.
[150] Pentridge Village Pty Ltd (in liq) & Others v Construction, Forestry, Maritime, Mining and Energy Union & Ors (S Cl 2016 02556).
[151] Chiavaroli Affidavit, 2-3 [7].
[152] Chiavaroli Affidavit, 3 [10]; Day 2 Transcript, 70.
[153] Chiavaroli Affidavit, 3-4 [11]; Day 2 Transcript, 70.
[154] Chiavaroli Affidavit, [11]; Day 2 Transcript, 70.
[157] Chiavaroli Affidavit, Exhibit LC-3, 41-42.
[159] Plaintiffs' Outline of Submissions, [1(d)].
[164] Pentridge Village Pty Ltd v Capital Finance [2018] VSC 633; [2018] 58 VR 1.
[166] Day 1 Transcript, 44-45; First McAteer Affidavit, 192-194; affidavit of Howard Bear affirmed 7 May 2018, [8], [10] ('Bear Affidavit').
[167] Transcript Day 1, 45; First McAteer Affidavit, Exhibit NM-7, 192-194; Bear Affidavit, [8], [10].
[170] Bear Affidavit, [4(a)]; Transcript Day 1, 37-38.
[172] First McAteer Affidavit, [50], [53]-[54] and Exhibit NM-7, 191-194.
[173] Day 1 Transcript, 40; Chiavaroli Affidavit, [17] and Exhibit LC-3, 34.
[174] Email from Gilbert + Tobin to Howard Bear dated 7 April 2021; First McAteer Affidavit, [45] and Exhibit NM-7, 178-179.
[175] Day 1 Transcript, 80; letter from Howard Bear to Gilbert + Tobin dated 16 July 2021; First McAteer Affidavit, [58] and Exhibit NM-7, 200-202.
[176] First McAteer Affidavit, [62] and Exhibit NM-7, 207-209.
[182] Chiavaroli Affidavit, 3-4 [11].
[186] Defendant's Outline of Submissions, [26].
[188] Day 2 Transcript, 70, 87; Chiavaroli Affidavit, [10]-[11].
[189] Bishopsgate (n 23) 874-875 [32], 880 [42], 883 [50] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[190] First McAteer Affidavit, Exhibit NM-7, 96-97.
[191] First McAteer Affidavit, Exhibit NM-7, 98-110.
[192] Bishopsgate (n 23) 874-875 [32] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[193] Bishopsgate (n 23) 879 [41] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[194] [2009] VSC 367, [41].
[196] As recorded in paragraph C of 'Other Matters' in his Honour's Orders of 5 April 2023.
[198] Third McAteer Affidavit, [13].
[199] First McAteer Affidavit, [143].
[201] First McAteer Affidavit, [145] and quoting the affidavit of documents affirmed by John Mallon on 27 October 2021: Exhibit NM-7, 985-987.
[202] First McAteer Affidavit, [147].
[207] First McAteer Affidavit, [155].
[209] First McAteer Affidavit, [166].
[214] Defendant's Outline of Submissions, [31], [35]; Transcript Day 2, 54-55.
[215] Defendant's Outline of Submissions, [35]; Bishopsgate (n 23) 887 [60] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[216] Defendant's Outline of Submissions, [31]; Day 1 Transcript, 26.
[217] Defendant's Outline of Submissions, [34].
[227] Bishopsgate (n 23) 886 [57] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[228] Bishopsgate (n 23) 874 [32] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]) quoting Birkett v James [1978] AC 297, 323.
[229] Mizzi Pty Ltd v Meredith [2009] VSC 367, [30] (Byrne J).
[230] Bishopsgate (n 23) 887 [60] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[231] Bishopsgate (n 23) 888 [62] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[232] Email from Gilbert + Tobin to Howard Bear dated 7 April 2021; First McAteer Affidavit, [45] and Exhibit NM-7, 178-179.
[233] Letter from Gilbert + Tobin to Piper Alderman dated 27 April 2022; First McAteer Affidavit, [72] and Exhibit NM-7, 308-310.
[235] Affidavit of Gerard Breen sworn 2 June 2022; First McAteer Affidavit, [80] and Exhibit NM-7, 360-386.
[236] Letter from Gilbert + Tobin to AJ & Co dated 22 July 2022; First McAteer Affidavit, [86] and Exhibit NM-7, 413-417.
[237] 31 May 2019 Transcript, 6, 14, 16.
[238] Bishopsgate (n 23) [51] (Tadgell and Ormiston JJ, Brooking J agreeing at 865 [1]).
[239] Day 1 Transcript, 122-125; Day 2 Transcript, 1, 50.
Pentridge Village Pty Ltd (In Liq)
Capital Finance Australia
PRACTICE AND PROCEDURE - Application to dismiss proceeding for want of prosecution within the inherent jurisdiction of the Court - Whether inordinate and inexcusable delay - Where action commenced late in limitation period - Delay in serving proceedings - Failure to proceed with due expedition - Whether substantial risk that it is not possible to have a fair trial - Time at which prejudice is assessed - Where plaintiffs have failed to comply with Court orders - Whether plaintiffs ought to be relieved by defendant's delay - Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863; Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197; Mizzi Pty Ltd v Meredith [2009] VSC 367; Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541; Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 applied.
(1996) 186 CLR 541
(2009) 239 CLR 175
(2006) 226 CLR 256
(2006) 15 VR 175
(1995) 2 VR 328