Proietti v Proietti

Court of Appeal (NSW)|2023-04-18|Before: Ward P, Adamson JA, Macfarlan JA, Mitchelmore JA

Solicitors: Not applicable (Applicant) Maatouks Law Group (First Respondent) Hunt & Hunt (Second Respondent) File Number(s): 2022/217751 Decision under appeal Court or tribunal: Court of Appeal Citation: Proietti v Proietti [2022] NSWCA 268 Proietti v Proietti [2022] NSWCA 234 Date of Decision: 14 December 2022 17 November 2022 Before: Macfarlan JA Mitchelmore JA; Basten AJA; Griffiths AJA File Number(s): 2022/217751

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The applicant, Philip Proietti, and his brother, Peter Proietti, are the registered owners as tenants in common in equal shares of a property at Marsfield which they inherited from their mother. The applicant has continued to reside at the property since their mother's death, asserting that he had a licence to do so for four years from her death (that is, until 28 November 2023). In January 2022, Peter filed a summons in the Equity Division seeking orders under s 66G of the Conveyancing Act 1919 (NSW) that trustees be appointed to sell the property. These orders were made. On 17 November 2022, the applicant's appeal against the orders was dismissed by the Court of Appeal. The applicant's application for a stay of the orders pending determination of his special leave application was refused by Macfarlan JA. On 9 March 2023, the High Court refused special leave to appeal. On 10 March 2023, the Supreme Court granted leave for a writ of possession to be issued in respect of the property. By amended notice of motion, the applicant sought orders to stay the writ of possession, to review the decision of Macfarlan JA to refuse the stay, and to set aside the orders of the Court of Appeal dismissing his appeal. The trustees sought a Teoh direction, which, if granted, would have prevented the applicant from filing further applications without the Registrar's leave. They also sought a special costs order that the applicant pay the trustee's costs on an indemnity basis, deducted from his share of the net proceeds of sale of the property, (rather than from the proceeds of sale of the property which would have resulted in Peter having to bear half the cost). The Court held (Adamson JA, Ward P agreeing): (1) There is no utility in reviewing Macfarlan JA's refusal of the stay since the applicant's application for special leave was refused, and the applicant did not seek a stay from Macfarlan JA that would operate beyond the determination of the special leave application: [17], [23]. (2) The Court has no power to set aside the orders of this Court made on 17 November 2022. The applicant's right to challenge such orders depended on a grant of special leave to the High Court, which has been refused: [22], [23]. (3) A Teoh direction is not warranted. The Court would be loath to limit a person's access to the Court in circumstances where the trustees have only recently been appointed: [27]. Choi v Secretary, Department of Justice and Communities [2022] NSWCA 170 at [222] (Ward P, Meagher and Leeming JJA), followed. (4) The order for costs sought by the trustees ought be made. There is no reason in principle why Peter ought be required to subsidise the applicant's unsuccessful litigation: [28].

JUDGMENT

WARD P: In this matter, the Chief Justice directed pursuant to s 46B(2) of the Supreme Court Act 1970 (NSW) that the application be heard and determined by two Judges of Appeal. Accordingly, the applicant's amended notice of motion was heard by Adamson JA and myself. I am of the view that, for the reasons her Honour gives, the orders proposed by Adamson JA should be made. I also agree that it is not appropriate at this stage to issue a Teoh direction. That said, it would be a matter of no little concern if, following the High Court's very clear determination that the Court of Appeal was correct in dismissing Mr Proietti's appeal from the decision of Kunc J at first instance, the applicant were to persist in seeking relief inconsistent with that determination.
ADAMSON JA: By amended notice of motion filed on 5 April 2023, Philip Proietti (the applicant) seeks the following orders: "1 A stay of the Supreme Court's orders of March 10, for the Writ of Possession of my property. The application is made under section 46(4) of the Supreme Court 1970 to review the refusal of a stay by Macfarlan JA and pending the determination of the setting aside of the 17 November 2022 orders of the Court of Appeal. 2 The setting aside of the 17 November 2022 Court of Appeal orders under UCPR 36.16 (4), and the Civil Procedure Act 2005 section 63(3)(a)."
The respondents to the notice of motion are the applicant's brother, Peter Proietti (Peter) and Joseph Dominello and Ian Miller (the trustees). Peter did not participate in the notice of motion. The trustees, for whom Dr Eun appeared, opposed the orders sought.
In substance, the applicant seeks to have this Court review Macfarlan JA's refusal of his application for a stay (ordered on 14 December 2022) pursuant to s 46(4) of the Supreme Court Act 1970 (NSW) and to set aside the orders made by this Court on 17 November 2022.
In order to appreciate why I consider that neither of the orders sought can be granted, it is necessary to summarise the background to the application.
By summons filed on 17 January 2022, Peter sought an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) for the sale of real property at Marsfield (the property) of which their mother, Miranda Proietti, had been the registered proprietor (the Equity proceedings). On 23 March 2020, following their mother's death on 28 November 2019, probate was granted of her will dated 17 March 2016. Following the grant of probate, the applicant and Peter were registered as proprietors of the property as tenants in common in equal shares.
The applicant, who was the sole defendant in the Equity proceedings, opposed the relief sought by Peter on the basis of his asserted right to be permitted to live in the property for a period of four years following their mother's death (being the period to 28 November 2023). On 10 June 2022, Kunc J heard the matter and, on 30 June 2022, published reasons and requested the parties to prepare draft short minutes of order to give effect to the reasons: Proietti v Proietti [2022] NSWSC 875.
On 7 July 2022, Kunc J made orders which included an order that the trustees be appointed trustees for the sale of the property (order 1); that the property vest in the trustees (order 2); that the applicant give vacant possession of the property by 16 October 2022 (order 4); and that the applicant pay Peter's costs of the proceedings (order 8). His Honour also ordered a stay of orders 1, 2, 4 and 8 up to and including 25 July 2022.
Kunc J also made the following costs order (order 5): "Order that upon completion of the sale of the Property pursuant to order 2 the Trustees distribute the proceeds in the following manner: (a) in payment of the Trustees' commission and costs for time in attendance up to completion of the sales on an indemnity basis, including (and without any limitation intended), costs for seeking vacant possession of the Property and dealing with any caveats or other registered dealings over the Property; (b) in payment of the other costs of sale including, but not limited to legal costs, advertising costs and agent's commission; (c) in payment of expenses incurred by the Trustees for the purpose of bringing the Property up to a condition which would facilitate sale; (d) in payment of all rates, taxes and insurances and other outgoings on the Property; (e) the balance to be divided between the Plaintiff [Peter] and the Defendant [the applicant] as follow: i. 50% to the Trust Account of Maatouks Law Group, bearing BSB XXX Account Number XXX, on behalf of the Plaintiff Mr Peter Proietti. ii. 50% to the Defendant Mr Philip Proietti subject to and conditional upon payment or security of the plaintiff's costs of these proceedings as agreed or assessed being deducted from these funds prior to their payment to the Defendant; and iii. If the Defendant, Mr Phillip Proietti has not agreed to the costs claimed by the Plaintiff and the assessment has not been finalised by the time of distribution, the Trustee shall hold back a sum sufficient to cover the costs claimed by the Plaintiff, as well as any associated costs of the assessment. iv. Subject to the finalising of the Cost Assessment or agreement between the parties with respect to the plaintiff's costs, any surplus funds held by the Trustee in accordance with (iii) above are to be released to the Defendant."
On 25 July 2022, the applicant filed a notice of appeal and a notice of motion for an extension of the stay granted by Kunc J on 7 July 2022.
The appeal and the notice of motion were heard by this Court (Mitchelmore JA, Basten AJA and Griffiths AJA) on 14 October 2022. On 17 November 2022, the Court dismissed the appeal, refused the stay and published its reasons: Proietti v Proietti [2022] NSWCA 234. It made the following orders: "(1) Dismiss the Notice of Motion filed on 25 July 2022 with costs. (2) Dismiss the appeal. (3) Set aside order 10 made by the primary judge on 7 July 2022 and, in lieu thereof, order that Orders 1, 2, 4 and 8 be stayed for 28 days from the date of this judgment. (4) Order that the appellant pay the respondent's costs in this Court."
Order (3) was made in circumstances where the applicant applied for, and Peter did not oppose, an extension of the stay for 28 days from the date of the Court's judgment.
On 1 December 2022, the applicant filed a notice of motion seeking an extension of the stay pending the determination of his application for special leave to appeal to the High Court, which was filed on 8 December 2022. The applicant's notice of motion was heard by Macfarlan JA on 12 December 2022 and dismissed, with reasons published on 14 December 2022: Proietti v Proietti [2022] NSWCA 268.
By notice of motion filed on 28 February 2023, the trustee sought a writ of possession of the property. On 9 March 2023, the High Court (Gordon and Steward JJ) refused special leave to appeal: Proietti v Proietti [2023] HCASL 15. The High Court's reasons for its refusal were as follows: "The applicant has not identified a question of principle of general importance sufficient to warrant a grant of special leave to appeal and otherwise advances no arguable ground of appeal against the decision of the Court of Appeal of the Supreme Court of New South Wales (Mitchelmore JA, Basten and Griffiths AJJA agreeing) dismissing the applicant's appeal from the decision of the Supreme Court of New South Wales (Kunc J). The decision of the Court of Appeal is plainly correct. Special leave should be refused."
On 10 March 2023, the Supreme Court granted leave for a writ of possession to be issued in respect of the property.
On 14 March 2023, the applicant applied for the leave to be revoked. Justice Lindsay refused to make any order in response to the application.

Paragraph 1 of the amended notice of motion: review of the refusal of the stay by Macfarlan JA on 14 December 2022

As referred to above, the applicant sought a stay of Kunc J's orders 1, 2, 4 and 8 pending determination of his application for leave to appeal to the High Court. Macfarlan JA refused the application, in part because the prospects of the application for special leave were adjudged to be insufficient to warrant a stay and also because the period of occupation to which the applicant claimed to be entitled would expire, in any event, on 28 November 2023. As the application for special leave was refused on 9 March 2023, there is no utility in this Court reviewing Macfarlan JA's refusal of the stay since, in the application before his Honour, the applicant did not seek a stay that would operate beyond the determination of the special leave application. In these circumstances, I would refuse the relief sought in paragraph 1 of the amended notice of motion.

Paragraph 2 of the amended notice of motion: application to set aside the orders of this Court made on 17 November 2022

The applicant sought to set aside the orders of this Court made on 17 November 2022. He invoked the Court's powers under Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 36.16(4) and s 63(3)(a) of the Civil Procedure Act 2005 (NSW). These powers will be addressed in turn.
UCPR, r 36.16(4) provides that nothing in the rule "affects any other power of the court to set aside or vary a judgment or order." The applicant accepted that UCPR, r 36.16 did not otherwise apply. He submitted that this Court had an inherent jurisdiction to set aside its orders which was preserved by UCPR, r 36.16(4).
It is a fundamental principle that "no court has authority to review its own decision pronounced upon a hearing inter partes after the decision has passed into a judgment formally drawn up": Bailey v Marinoff (1971) 125 CLR 529 at 530-531 (Barwick J); [1971] HCA 49, cited with approval in DJL v The Central Authority (2000) 201 CLR 226; [2000] HCA 17 at [38] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). Thus, this Court does not have jurisdiction to review the orders made by the Court constituted by Mitchelmore JA, Basten AJA and Griffiths AJA. The only avenue available to the applicant was to challenge these orders by applying to the High Court for special leave. He took this course and was unsuccessful. In these circumstances, no further challenge can be made to the orders made by this Court on 17 November 2022.
Section 63 of the Civil Procedure Act relevantly provides: "63 Directions with respect to procedural irregularities (1) This section applies to proceedings in connection with which there is, by reason of anything done or omitted to be done, a failure to comply with any requirement of this Act or of rules of court, whether in respect of time, place, manner, form or content or in any other respect. (2) Such a failure - (a) is to be treated as an irregularity, and (b) subject to subsection (3), does not invalidate the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings. (3) The court may do either or both of the following in respect of proceedings the subject of a failure referred to in subsection (1) - (a) it may, by order, set aside the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings, either wholly or in part, (b) it may exercise its powers to allow amendments and to make orders dealing with the proceedings generally. (4) The court may not take action of the kind referred to in subsection (3) (a) on the application of any party unless the application is made within a reasonable time and, in any case, before the party takes any fresh step in the proceedings after becoming aware of the failure."
Section 63(3)(a) of the Civil Procedure Act is limited to interlocutory, default or consent judgments and does not apply to formal orders, regularly made and entered, which can only be challenged on appeal: Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190; [2009] NSWCA 387 at [38], [42]-[45] and [48] (Allsop P, Campbell JA and Handley AJA). Thus, this Court has no power to set aside the orders it made on 17 November 2022. The applicant's right to challenge such orders required a grant of special leave to appeal to the High Court, which has been refused.

Conclusion

For the reasons given above, there is no utility in reviewing the orders of Macfarlan JA made on 14 December 2022 and the Court has no power to set aside the orders of the Court made on 17 November 2022. In these circumstances, it would not be appropriate to address the various arguments that were advanced by the applicant in which he sought to challenge these orders. It is sufficient to note that many of these arguments were previously made to this Court and were rejected in the lengthy and detailed reasons for the decision published on 17 November 2022, which was regarded by the High Court on the special leave application as "plainly correct".

Application for a Teoh direction and order for costs

Dr Eun sought a direction along the lines of the direction made in Teoh v Hunters Hill Council (No 4) (2011) 81 NSWLR 771; [2011] NSWCA 324 (a Teoh direction). The making of such a direction would require the applicant to obtain the Registrar's leave before filing any further applications or court processes. Dr Eun submitted that the applicant's applications tended to thwart the discharge of trustees' obligations to sell the property as expeditiously as possible for the best price reasonably obtainable. Further, he directed the Court's attention to the statement made by the applicant in his submissions, which Dr Eun contended indicated that the applicant intended to continue to litigate the matter: "To contend that I am re-agitating the same argument that has been dealt with, is to ignore the fact that I have advanced my argument in each proceeding, and the response has either been erroneous or not even addressed the issues. In such circumstances the case cannot rest on these unjust terms. It then becomes appropriate for a litigant to pursue those remedies and actions that are available within the legal framework to arrest the situation as I am in these proceedings. If the courts continue to give unsatisfactory or inadequate reasons for their decisions I will continue to pursue those legal channels that are available under the law."
Dr Eun submitted that the applicant had made several baseless claims, including of bias against judges of the Court, and that his present applications were further examples of unmeritorious applications made without reasonable prospects of success. Dr Eun contended that a Teoh direction would protect the trustees and Peter (as the other beneficiary of the trust) from unwarranted interference and cost occasioned by the applicant.
Further, and in the alternative, Dr Eun sought an order that the applicant pay the trustees' costs on an indemnity basis, such costs to be deducted from the applicant's share of the net proceeds of sale of the property. The order sought is to be distinguished from order 5 (extracted above) made by Kunc J on 7 August 2022, which provides that costs are to be borne by both tenants in common (the applicant and Peter) in equal shares. Dr Eun submitted that it was not fair for Peter to have to subsidise litigation brought against the trustees by the applicant, which would occur if such an order were not made because the trustees were entitled to be indemnified against the trust property for expenses incurred by them in connection with the trust.
I am not persuaded that a Teoh direction is warranted. While the applicant's applications to this Court have failed on the ground that this Court lacks jurisdiction to entertain them, it is an extreme step to limit a person's access to the Court and one which this Court would be loath to take in circumstances where the trustees have only recently been appointed: see Choi v Secretary, Department of Justice and Communities [2022] NSWCA 170 at [222] (Ward P, Meagher and Leeming JJA).
I am, however, persuaded that the order for costs sought by the trustees ought be made. There is no reason in principle why Peter ought be required to subsidise the applicant's unsuccessful litigation. Absent a special order, the trustees would be entitled to deduct their legal fees, costs and expenses from the net proceeds of sale, which would have the result of making Peter pay half of such costs and expenses, even where they were the result of misconceived applications made by the applicant (of which the amended notice of motion is an example).

Proposed orders

I propose the following orders: 1. Dismiss the amended notice of motion filed on 5 April 2023. 2. Order the applicant to pay the respondents' costs of the notice of motion on an indemnity basis, such costs to be paid from the applicant's share of the net proceeds of the sale of the property at Marsfield of which the applicant and Peter Proietti are tenants in common in equal shares.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 April 2023

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