Sobey v Nicol

REASONS FOR JUDGMENT 1 By interlocutory process dated 23 August 2006, the respondents to the present appeal (plaintiffs below) sought orders in proceedings involving a number of defendants. The orders sought related to funds realised on the sale of property at Jerningham Street, North Adelaide, in the State of South Australia. On 24 November 2006, the interlocutory process came on for hearing before a Judge of this Court. The respondents were represented before the Judge. The only other person who claimed an interest in the relevant funds was Mr Anthony John Sobey. He was represented before the Judge and his counsel applied for an adjournment of the hearing. The Judge refused that application and he went on to hear submissions on the merits of the substantive application. 2 On 4 December 2006, the Judge made the following orders: "1. The full amount of moneys paid into the Minter Ellison Trust Account, being surplus funds available from the proceeds of sale of the land comprised in Certificates of Title Volume 5339 Folio 53, Volume 5339 Folio 56, Volume 5339 Folio 57, being the land situated at 22 - 32 Jerningham Street, North Adelaide in the State of South Australia be paid to Colin McIntosh Nicol and Samuel Charles Davies in their capacity as joint receivers and managers of the property of Guiseppe Antonio Mercorella and the unregistered managed investment scheme operated by Guiseppe Antonio Mercorella (the Scheme) and as joint liquidators of the Scheme and the corporate entities which were a party to the Scheme, as the relevant parties entitled to receive such moneys. 2. The costs of and incidental to this application be paid by Anthony John Sobey. 3. To the extent to which Anthony John Sobey needs leave to appeal from the orders made today, leave to appeal is given for the operation of order 1 hereof be stayed until 14 December 2006." 3 The Judge delivered reasons for making those orders and for refusing Mr Sobey's application for an adjournment: Nicol v PGLE Pty Ltd [2006] FCA 1669. Mr Sobey asked for, and was granted, leave to appeal from the orders made on 4 December 2006. 4 By notice of appeal filed and served on 14 December 2006, Mr Sobey appealed against "the judgment of Justice Mansfield handed down on 4 December 2006". The notice of appeal recites the following: "This appeal is brought in accordance with leave granted by Justice Mansfield on 4 December 2006." 5 There are 12 grounds of appeal. A number of those grounds relate to the Judge's decision not to grant Mr Sobey's application for an adjournment. Others relate to his final orders set out in [2] above. 6 Mr Sobey's appeal was listed for hearing before three Judges of the Court, including myself, on Monday 14 May 2007. On Thursday 10 May 2007, I sat with the authority of Branson and Lindgren JJ to raise a number of matters with the parties. The first matter that I raised was that it appeared that the order refusing Mr Sobey's application for an adjournment had not been entered and that it needed to be entered if it was to be the subject of an appeal or an application for leave to appeal: O 36, r 2(c). The order has now been entered. Secondly, I raised with the parties the fact that it appeared unclear at the very least whether the leave to appeal granted by the Judge extended to the order refusing the application for an adjournment. On the face of it, the leave did not extend to that order because the relevant order made on 4 December 2006 says "leave to appeal from the orders made today" and the order refusing the adjournment was made on 24 November 2006. Thirdly, I raised with the parties the fact that if leave to appeal from the order refusing an adjournment had not been given, then an application for leave to appeal is outside the seven day time limit specified in O 52, r 10(2A)(b). There is power in that rule for the Court or a Judge to extend time. 7 An important matter concerning the appeal needs to be mentioned. Mr Sobey seeks to tender what he says is his fresh evidence on the hearing of the appeal. The application is opposed by the respondents and it is said that the so-called fresh evidence is contentious, if not highly contentious. 8 When the appeal came on before the Full Court on 14 May 2007, it could not proceed because of the illness of Mr Sobey's senior counsel. During brief submissions, Mr Sobey's junior counsel appeared to accept that the leave to appeal granted by the Judge on 4 December 2006 did not extend to the order refusing the application for an adjournment and there was discussion about Mr Sobey bringing an application for an extension of time within which to seek leave to appeal and an application for leave to appeal. The Court indicated that those applications could be made to a single Judge (see s 25(2) of the Federal Court of Australia Act 1976 (Cth). 9 Mr Sobey issued a notice of motion on 21 May 2007 wherein he sought the following orders: "1. Pursuant to leave granted by the Full Court on 14 May 2007 that this notice of motion be made returnable to a single judge; 2. That an extension of time within which to apply for leave to appeal the orders of Justice Mansfield made on 24 November 2006 refusing the application to adjourn the hearing be granted nunc pro tunc; 3. That leave to appeal the said decision be granted; 4. That an extension of time within which to appeal the orders of Justice Mansfield made on 24 November 2006 be granted nun pro tunc; 5. Such further or other orders as this Honourable Court sees fit." The notice of motion is issued in the appeal and it is convenient to refer to Mr Sobey as the appellant even though, strictly, on this application he is the applicant for leave. 10 The notice of motion came on for hearing before me on 31 May 2007. 11 In the usual case, the application for an extension of time to make the application for leave to appeal and the application for leave would be heard at the same time. The test on an application for leave to appeal is well established: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. The complicating factor in this case is that the appellant wishes to put forward fresh evidence on the appeal against the final orders and on the application for leave to appeal against the refusal of an adjournment. In the latter case it seems that the evidence is being put forward to show that had an adjournment been granted, the result of the application would have been, or may have been, different. In the circumstances of this case, I did not think that I should be making a decision about the admissibility of the fresh evidence or the weight to be put on the evidence if it is admissible. I think that in the end the parties recognised the difficulties in me doing so and directed their submissions to the question of an extension of time only. Certainly, the respondents recognised the difficulties and, other than an argument about futility, did not ask me to address the merits of the application for leave to appeal. In the unusual circumstances of this case I am prepared to proceed in that way. 12 In my opinion, the time within which the appellant may file a notice of motion seeking leave to appeal from the orders made on 24 November 2006 should be extended up to and including 21 May 2007. 13 The respondents opposed the application for an extension of time and they referred me to the decision of the Full Court in Deighton v Telstra Corporation Ltd (unreported, Lee, Heerey and Nicholson JJ, 17 October 1997). They submitted that in that case the Court laid down a number of requirements for the granting of an extension of time. First, there must be a satisfactory explanation for any delay in making the application. The respondents submitted that there was no satisfactory explanation in this case. Secondly, special reasons for such an order must be shown. When pressed, the respondents did not suggest that this particular requirement added anything to their submissions in this case. Thirdly, an extension of time should not be granted if the exercise is an exercise in futility. The respondents submitted that this was such a case because the moneys which are the subject of the orders have been disbursed by them. Counsel for the appellant's response to this third requirement was to submit that the respondents had acted in breach of trust in paying the moneys out and were liable to account for those moneys. I am not in a position to resolve that issue on the evidence and arguments which have been put before me. I do not think it appropriate to proceed on the basis that the present exercise is an exercise in futility. In the result, as far as the three requirements are concerned, the matter comes down to whether there is a satisfactory explanation for the delay. I should add that it is not suggested that the respondents would suffer any prejudice if an extension of time is granted. 14 In his submissions, the appellant referred to more general rules of Court which enable the Court to dispense with compliance with the requirements of the rules (O 1, r 8) and to extend or abridge any time fixed by the rules (O 3, r 3) and submitted that I could grant an extension of time under one or more of these rules. The respondents submitted that I could not proceed under the more general rules and they referred me to the decision of Fernance v Nominal Defendant (1989) 17 NSWLR 710. I do not think that I need to resolve this particular argument because even if I can proceed under the more general rules of Court, a satisfactory or proper explanation for the delay would ordinarily be required and is certainly something I would wish to be satisfied of in the circumstances of this case. 15 By something of a narrow margin, I am satisfied that there is a satisfactory explanation for the delay when all the circumstances are taken into account. Counsel who appeared before me as counsel for the appellant also appeared before the Judge on 24 November 2006 and 4 December 2006. He has sworn an affidavit which is part of the so-called "fresh evidence". Only a part of his affidavit was received in evidence on the application before me. It seems that on 24 November 2006, counsel wrote to his instructing solicitors, who were the appellant's solicitors at that time, advising them that the application to adjourn had been refused and that leave should be sought to appeal the decision. He advised the solicitors that there was only 7 days within which to seek leave. The evidence of the appellant's present solicitor is that on 4 December 2006 there was an application for leave to appeal against the Judge's decision. It is said that leave to appeal was strictly only necessary in relation to the interlocutory aspect of the judgment, that is to say, the refusal to adjourn the proceedings. The evidence of the appellant's present solicitor is that he spoke to counsel for the appellant on 4 December 2006, and was told by him that his intention on that day was "that the leave to appeal order related to the application to adjourn (as that was an interlocutory decision)". Counsel concedes that having reviewed the transcript of that day the order granting leave to appeal only refers to the orders of 4 December 2006 and not of 24 November 2006 although the reasons for refusing the order on 24 November 2006 were published as part of the reasons for judgment on 4 December 2006. The evidence of the appellant's present solicitor is that the respondents did not raise any issue about the grounds of appeal complaining of the refusal to adjourn not being part of the leave granted on 4 December 2006 or that the grounds were improper as not being subject to any grant of leave until the matter was brought to the parties' attention by me at the directions hearing on 10 May 2007. 16 Direct evidence of these matters by the appellant's counsel, rather than indirect evidence through his present solicitor, would have been more appropriate. However, I am satisfied that, in the circumstances, the explanation for the delay is an adequate one and, for that reason, I will extend the time within which to make the application for leave to appeal. 17 The orders of the Court are as follows: