Riva NSW Pty Ltd v Mark A Fraser and Christopher P Clancy trading as Fraser Clancy Lawyers

Background

In order to address the parties' submissions, it is necessary to say something of the extensive litigious history between them. However, what follows is not remotely exhaustive. Fuller accounts may be found in earlier judgments of the Court: Riva NSW Pty Ltd v Mark A Fraser & Christopher P Clancy t/as Fraser Clancy Lawyers [2014] NSWCA 454 (Emmett JA), [2018] NSWCA 53 (Simpson JA), [2018] NSWCA 186 (Gleeson and Leeming JJA and Emmett AJA).
Fraser Clancy had acted for Riva and a dispute arose as to the quantum of the firm's solicitor/client costs. An assessment was made and subsequently confirmed by a review panel. Riva exercised its right of appeal. On 10 August 2012, a judge of the District Court determined that the fair and reasonable amount of the legal costs for the work carried out by Fraser Clancy was $38,118.57, as to which Riva had paid slightly more than $3,000. On 20 December 2013, a judge of the District Court recorded that he had entered judgment for Fraser Clancy against Riva in the sum of $38,867.02 but had made no orders as to costs. By motion dated 13 November 2013, Fraser Clancy had applied for orders that Mr Angelo Ferella and Ms Tiziana Ferella be joined and that all three parties be ordered to pay the costs of all of the proceedings to date. Those orders were granted and his Honour ordered that the three present applicants pay Fraser Clancy the sum of $78,256.
Fraser Clancy appears to have moved ex parte on 11 April 2014 and obtained the orders which are sought to be attacked by prayer 3 of the summons. That order was in the following form: "That Riva NSW Pty Ltd be restrained, by itself and/or its servants or agents an/or by Macquarie Bank Ltd, from transferring and/or otherwise dealing with moneys held by it with Macquarie Bank Ltd in the name of or for the benefit of Riva NSW Pty Ltd and/or Riva NSW Pty Ltd ATF Cavallino Unit Trust to the extent of $106,325.81 being the amount of the Defendants Garnishee Order, until further order of the Court."
That order, made ex parte, should not have been expressed to be "until further order of the Court". It seems that the parties were, some six days later, again before the Court, on which occasion the order was extended by consent. The precise details of what was disclosed in the ex parte application and the form of the order do not presently matter, because - skipping ahead some 4 and a half years - by consent that order was side aside on 4 September 2018. Mr Newton, who appeared for the plaintiffs before me, accepted that the orders sought in prayer 3 of the summons would not be made.
Returning to 2014, by summons filed on around 16 September 2014, Riva, Mr Ferella and Ms Ferella sought orders including: "an order that order 1 of the terms of order made of the District Court of NSW made on 11 April 2014 dated 11 April 2014 be set aside" [sic]. (Prayer 5).
That summons was dismissed summarily, on Fraser Clancy's application, by Emmett JA on 29 October 2014. His Honour said of that prayer the following at [23]: "Prayer 5 of the s 69 Summons is for an order that the injunction ordered on 11 April 2014 be set aside. As I have said, the continuation of that order was consented to by counsel for Riva. It was not suggested that Curtis DCJ granted the injunction on the basis of some erroneous understanding of the facts. It is certainly an order that was within the jurisdiction of the District Court. Accordingly, prayer 5 could not possibly succeed."
On 7 November 2016, Riva filed a notice of motion in the District Court seeking to have the freezing order made on 11 April 2014 set aside. That application was dismissed by Wilson DCJ on 3 August 2017. The actual order made on that occasion was not in the material placed before me. That order has already been the subject of proceedings in the nature of judicial review, which came before Simpson JA on Fraser Clancy's application for security for costs. Her Honour ordered that security should be provided, noting that the large amount of $70,000 was supported by an affidavit of a solicitor who had not been required to attend for cross-examination: [2018] NSWCA 53 at [24]. The Court made an order that security for costs in the sum of $70,000 should be provided within 21 days, and that in the event of non-compliance with that order, the proceedings would be dismissed.
There was non-compliance with the order, although it is Riva's case that that occurred because of separate proceedings in the Equity Division of the Court. Those details do not presently matter. On 13 April 2018, Riva applied to vary the orders made by Simpson AJA. That application was dismissed by this Court constituted by Gleeson JA, Emmett AJA and me on 9 August 2018: [2018] NSWCA 186. The consequence was that the (second) application made by Riva to seek judicial review of the orders made on 11 April 2014 was dismissed.
There was, at the time of the hearing before me, an undetermined application for various costs orders made in favour of Fraser Clancy. On the other hand, Riva contends that it has presently satisfied all of its outstanding - in the sense of presently enforceable - obligations to pay costs. (It being necessary to reserve on the present application, I indicated that I would seek to deliver judgment on it and the other application for cost orders at the same time.)
Those were the circumstances when, on 8 November 2018, Riva and Mr and Ms Ferella applied to set aside the orders made by the District Court on 11 April 2014, and those subsequently made on 3 and 4 August 2017, and for an extension of time to do so.

Consideration

No utility was identified in setting aside the order dismissing Riva's notice of motion filed in November 2016. The result of doing so would be that there was an undetermined notice of motion pending in the District Court seeking to set aside the orders of the District Court made on 11 April 2014 which, as noted above, had in any event consensually been set aside in September 2018. Mr Newton conceded as much. Thus, early in the course of oral submissions, Mr Newton accepted that all of the substantive relief sought in his clients' latest summons was inutile. He contended that the substance of the matter would be addressed by an amendment, which although stated was never formulated in writing, seeking declaratory relief that the District Court had no power to make the orders it made on 11 April 2014.
There were two themes in Mr Newton's submissions in support of the absence of power. The first was that, so it was said, the injunctive relief was in the nature of an asset preservation order against third parties, the third parties being the persons with a beneficial interest in the Cavallino Unit Trust, and he pointed to authorities that directed to the limitations of the District Court's jurisdiction to make asset preservation orders against third parties, notably Tagget v Sexton [2009] NSWCA 91; (2009) 255 ALR 522 and Lawrence Lin v Ian Borrowdale [2011] NSWCA 65 (see at [51] and [53]). However, I understood him ultimately to concede that the order made on 11 April 2014 was directed at Riva, which, although it was a trustee, was a party to the proceedings and indeed the moving party seeking to appeal from the determination of the costs panel.
The second theme of Riva's submissions was that the interlocutory relief by way of asset preservation order occurred after the entry of judgment, and therefore, if it were to be valid, must have been in aid of some form of execution of that judgment. He submitted that the District Court lacked power to execute a judgment obtained against a trustee, and he pointed to the uncontroversial evidence that the sole business and activity of Riva was as the trustee of the Cavallino Unit Trust.
Although not for a moment conceding the point, Mr Barham accepted, in my view correctly, that the proposition was reasonably arguable, and I shall proceed on that basis.
Fraser Clancy, by that firm's written submissions, asked the Court to find that the litigation was an abuse of process for which reason alone the extension of time should be refused (see exhibit 1, paragraphs 2-12, concluding "the application should be rejected in limine as an abuse of process"). It is far from clear to me that I could accede to that submission in circumstances where Mr Ferella gave testimonial evidence as to the reason for this latest application and Mr Barham, after being allowed a short adjournment for the purpose of considering his position, chose not to cross-examine him.
However, it is necessary to look, if only in a general way, at the strength of the case sought to be propounded. All substantive prayers for relief are concededly doomed to fail. As reformulated orally, Riva sought declarations that the District Court had no power to make the order made on 11 April 2014, and that Wilson DCJ erred in not setting it aside (transcript, 10 December 2018, p 13). While it is true that declaratory relief may issue in the absence of any consequential relief (Supreme Court Act 1970 (NSW), s 75), I asked what might be the utility of a bare declaration in those terms, in relation to an order which has already been set aside. Mr Newton maintained the existence of the order of the District Court prevented his clients from bringing a claim for damage caused to them pursuant to the undertaking proffered by Fraser Clancy. I confess that I did not, and I do not, understand this submission. 1. I could readily accept a submission that no proceedings for loss caused by the interlocutory injunction could succeed while the injunction remained in place. But the injunction has been set aside. 2. The dismissal of the notice of motion in 2017 might have involved a finding that the interlocutory injunction was within jurisdiction. (As noted above, neither the order nor the notice of motion nor the transcript was in evidence before me.) But I fail to see how anything determined on that occasion could result in an obstacle to proceeding on the undertaking as to damages, if indeed loss has been occasioned by reason of the injunction, now that the injunction has been set aside. 3. Test the matter this way. Suppose a plaintiff obtains ex parte injunctive relief, and proffers the usual undertaking as to damages. The defendant consents to the continuation of the injunction, but three months later applies for its discharge on the basis of some non-disclosure or material change of circumstance. The application fails. Nevertheless, after a final hearing, the defendant is successful and the injunction is discharged. I see no reason why the refusal to discharge the interlocutory injunction for non-disclosure or material change of circumstance is an obstacle to the defendant's claim on the undertaking. Nor do I see any basis for distinguishing that example from the present facts. 4. Whether or not orders are within the limited jurisdiction of an inferior court such as the District Court is one thing. Whether or not a party (or even a third party) may suffer loss by reason of interlocutory relief and claim pursuant to the undertaking as to damages, is another. The latter claim is not dependent upon a finding that the order is beyond jurisdiction, although it is discretionary and a separate question from whether the injunction should have been discharged, as Sackville AJA observed with the agreement of Meagher and Barrett JJA in Nicholls v Michael Wilson & Partners Ltd (No 2) [2013] NSWCA 141 at [32].
When I asked Mr Newton for authority for the proposition that the order needed to be set aside in order to bring proceedings, he said he was aware of none, and said that it "is a matter that doesn't require authority". For the reasons I have given, I disagree. There may be very significant obstacles to a claim by Riva to enforce the undertaking. However, as presently advised I fail to see how the fact that the District Court, years after the injunction was given, dismissed a motion seeking to set it aside, of itself prevents Riva's claim, in circumstances where the interlocutory injunction has now been set aside.
For that reason alone, not only is the summons in the form filed concededly confined to orders which will not be made, but also the proposed reformulated declaratory relief is relief which I do not consider there is any reasonable prospect of being granted.
Secondly, the fact of the matter is that this is the fourth occasion in which Riva has sought to challenge the orders made on 11 April 2014. The first challenge was dismissed by Emmett JA in 2014. The second was dismissed by Wilson DCJ in 2017. The third was dismissed by reason of the non-provision of security pursuant to orders made by Simpson JA in 2018.
Thirdly, I note that Riva consented to the continuation of the order in April 2014, and the parties have now on 4 September 2018, consented to its discharge. Both of those matters tell against the granting of declaratory relief - in relation to an order that no longer exists, and which while it was originally made ex parte, was shortly thereafter consented to by Riva.
In Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213, Campbell AJA applied the same criteria to an application for an extension of time pursuant to UCPR r 59.10 as would be applied to any other application to extend time: see at [122]-[123]. In Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 at 459, McHugh J had said: "It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has 'a vested right to retain the judgment' unless the application is granted… It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice."
I am not persuaded that refusing Riva's application for an extension of time would constitute an injustice to it. None of the factors identified in r 59.10(3) persuade me that there should be an extension of time to permit Riva to challenge, once again, a decision of which it has long been aware.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (6 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (11)

Cited By (3)