Wollongong City Council v Legal Business Centre Pty Limited

Judgment 1BEAZLEY JA: On 8 August 2012, the Court gave judgment in this matter whereby it ordered the respondent, Legal Business Centre Pty Limited (LBC), to provide security for costs: Wollongong City Council v Legal Business Centre Pty Ltd [2012] NSWCA 245 (the Court's principal judgment). The order made by the Court in respect of the provision of security was: "4.Order that the respondent, Legal Business Centre Pty Limited provide security for costs as follows: (1)by payment of the sum of $100,000 to the Registrar of the Supreme Court (Common Law Division) or in such other manner as may be agreed by the parties; (2)liberty to the appellant, Wollongong City Council, to apply to the Supreme Court for such further order for security as it sees fit on the giving of 21 days notice" 2The Court made an additional order when judgment was handed down, as follows: "The security for costs in the sum of $100,000 to be paid within 21 days of today's date. Liberty to either party to apply in respect of that timeframe on 7 days notice." 3On 28 August 2012, LBC Lawyers, solicitors for LBC, wrote to the Registrar of the Court of Appeal, exercising the liberty to apply, seeking "further time including to negotiate such other manner as may be agreed by the parties" (the application to extend time). 4There was a listing of the matter before the Registrar of the Common Law Division on 3 September 2012. It is not apparent from the Court of Appeal file who arranged that listing or why, although the outcome of the listing would indicate that the request came from TressCox Lawyers (TressCox), solicitors for Wollongong City Council (the Council). TressCox appeared on that day and mentioned the matter on behalf of LBC. The Registrar made the following orders: "The Court orders: 1.The whole of the proceedings be stayed until such time that [LBC] provides security for costs in the manner ordered by the Court of Appeal ... 2.Liberty to apply on 3 days' notice." 5TressCox wrote to LBC Lawyers on 3 September 2012, informing them that those orders had been made and that the Registrar had been informed that LBC neither consented to nor opposed the orders. 6In the same letter, TressCox requested that LBC Lawyers provide them with a copy of the material upon which LBC intended to rely in support of its application to extend time. 7By letter dated 18 September 2012, TressCox repeated its request for the material upon which LBC intended to rely in support of the application to extend time. 8By email communication dated 21 September 2012, the Registrar of the Court of Appeal advised the parties that the Court proposed to deal with the application to extend time on the papers. The Registrar also made directions for the filing and serving of affidavits and submissions. 9On 26 September 2012, TressCox again requested LBC Lawyers to furnish the material upon which LBC intended to rely in support of its application. 10On 2 October 2012, LBC filed submissions together with an affidavit of Amir Paul Harb sworn 2 October 2012. 11The Council filed submissions on 9 October 2012, together with a supporting affidavit of Nina Alexandra Morgan, affirmed on the same date. 12By letter dated 10 October 2012, LBC Lawyers wrote to TressCox, in which it made the following proposal: "Pursuant to the orders made and notwithstanding [LBC's] submission filed on 2 October 2012, [LBC] asks that [the Council] accept; 1)A legal and equitable interest under a Guarantee Agreement where [LBC] mortgages and charges the land described as Lot * in DP ***** being the land known as **** ***** Street Wollongong ('the land') in respect of the sum of $100,000 for security for costs. 2)A caveat over the land in satisfaction of the order 4(1) made by the Court of Appeal." 13A copy of that letter was forwarded to the Court under cover of letter from LBC Lawyers of the same date, in which they requested that the Court, when considering LBC's application for an extension of time, and notwithstanding its submissions filed on 2 October 2012: "... consider the attached letter that has been sent to [the Council] in an attempt by [LBC] to satisfy the orders made by the Court and the necessity to extend time to fulfil the order and the agreement." 14On 12 October 2012, TressCox wrote to the Registrar, objecting to the Court taking LBC Lawyers' letter of 10 October 2012 into account in its consideration of the application to extend time. 15In its submissions filed in support of its application to extend time, LBC sought the following orders: "i.Extend the time until 6 December 2012 in which [LBC] is to comply with the Order subject to [the Council] exercising its overriding governing body duties in reaching an appropriate agreement with [LBC] over any payment of security for costs, or in any other manner or at all. ii.Make any other orders as it deems fit. iiiMatter to be heard ex parte." 16LBC argued, at para (2) of its written submissions, that the Court's principal judgment relating to: "... delay, [LBC's] financial situation, the claims' [sic] prospects of success, the bona fides and nature of the claim including the underlying duties and obligations of [the Council] and the proper factual matrix [were] grossly misconceived by [the Council] and therefore the evidence that went before the Court of Appeal was predicated on error." 17There was an assertion made in para (9) of LBC's written submissions which, as I understand it, was that the application for security for costs was an abuse of process. It may be, however, having regard to other assertions made in the written submissions, that the Council's defence of the proceedings was alleged to be an abuse of process. Alternatively, the assertion may have been directed to both these matters. 18In a similar vein, LBC contended, at para (10), that the Council had made "improper assertions" to the Court of Appeal in respect of the delay that had occurred in the bringing of the application for security for costs. 19At para (16) of the submissions, LBC advanced the following further submission: "Despite how and why the security for costs order was constituted based on the evidence that went before the Court of Appeal, in the circumstances, the strict compliance of a security of costs order does not override, restrict or absolve [the Council] who is a model litigant and governing body from reaching an appropriate agreement between [LBC and the Council]. This has been allowed for within the order and should prevail in light of the compelling underlying issues, concerns, duties and obligations that are bestowed upon [the Council]." 20LBC also complained, at para (19), that the Council's defence of the proceedings, "including the demand for security of costs" had been "nothing more than a cruel hoax predicated on ..." a number of allegations, which included an allegation against TressCox of misconduct. 21The balance of the submissions were of a purely argumentative nature and sought only to advance LBC's assertions which appear to underlie its claim that the Council had breached its duty of care. 22It appears from the submissions, taken in conjunction with the order LBC now seeks (see at [15] above), that LBC contends it ought not to be required to pay security unless the Council either reaches an agreement with it in respect to the form of security to be provided, or an agreement that LBC not pay security at all. 23Apart from the letter of 10 October 2012, there was no mention in LBC's submissions as to any attempt that had been made to satisfy the order for security, or as to why further time was required to comply with the Court's order. 24Mr Harb's affidavit filed in support of the application to extend time was contained in a lever arch folder which, together with its 15 annexures, comprised approximately 2 inches of material. 25Mr Harb's affidavit made reference to: "exposing corruption" (para 4); his and LBC's counsel's surprise as to the result arrived at by this Court in the principal judgment (para 13); and Mr Harb's opinion that the principal judgment was based on wrong factual material put forward by the Council (para 14). 26The annexures to the affidavit included copies of submissions made by LBC to the Office of the Legal Services Commissioner against TressCox; to the Independent Commission against Corruption; to the Minister for Planning; and correspondence between LBC Lawyers and TressCox. 27There was nothing in the affidavit or the annexed material that related to the Court's order of 8 August 2012 or to any attempt that LBC had made to obtain security or why an extension of time was required to do so. 28The grant of liberty to apply to extend time was not an invitation to LBC to canvass the Court's ruling or its reasons, or to re-agitate the concerns that underlie LBC's proceedings against the Council. In my opinion, not only do the submissions of LBC and the affidavit of Mr Harb fail to advance any reason why further time is necessary in order to comply with the Court's orders, the content of this material was such that its filing was an abuse of the leave granted by the Court in its order of 8 August 2012. The material filed makes serious allegations of misconduct against the Council and its solicitors, TressCox, and separately, the solicitor from that firm with the carriage of the matter. None of these allegations was relevant to the application to extend time which is presently before the Court; and no sensible argument was made as to why they were said to be relevant to that application. 29As has already been indicated above, LBC made an offer to the Council on 10 October 2012. It is apparent from the letter to the Registrar from TressCox dated 12 October 2012 that the Council has not accepted that offer. Although TressCox objected to this Court having regard to that offer, it may not have been inappropriate for the Court to do so if the offer provided an appropriate means to satisfy the order for security made on 8 August 2012. I leave to one side the precise terms of the offer, which are by no means clear and I will treat it as an offer of an unregistered mortgage protected by caveat over the subject land. 30In my opinion, however, the Court ought not to act upon the offer contained in LBC Lawyers' letter of 10 October 2012. There is no information, let alone evidence, provided by LBC as to the value of the property or whether LBC has any equity in the property. This is of fundamental importance, as there was an issue in the appeal concerning the financial position of LBC. At [41] of the principal judgment, I concluded that the net asset position of the Harb Family Trust, of which LBC is a trustee, was virtually nil. Having regard to that finding, the failure to adduce any evidence of the net equity in the land demonstrates that no credence can be given to the offer contained in the letter of 10 October 2012. Indeed, in the absence of any supporting valuation and evidence as to security and other interests to which the property is subject, the offer has no more than nuisance value and does not represent a timely or well-considered means of providing security so as to satisfy the Court's order. 31For the foregoing reasons, I would reject the application to extend time. 32Before making orders in the matter, reference should be made to further correspondence from LBC Lawyers to the Registrar on 29 October 2012 said to enclose "an addendum to the Respondent's submission". These so-called submissions were delivered to the Court without any direction by the Court that further submissions were to be filed. In the usual course, the Court will not have regard to such submissions: see Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; 147 CLR 246 at 257-8; Jackson v Conway [2000] FCA 1530 at [29]; Singh v Secretary, Department of Employment and Workplace Relations [2009] FCAFC 59. As these cases indicate, a party is not at liberty to file written submissions other than in accordance with the court's directions. As the Court remarked in Singh, were it otherwise, a case could go on interminably. 33Notwithstanding that this further submission has been filed without the Court's direction, I have considered the letter which purports to contain the submissions and briefly perused the correspondence attached to it. All of that correspondence postdates the last date for the filing of submissions by the respondent as directed by the Registrar on 21 September 2012. The submission again attacks the Court's orders. It does not advance any reason why an extension of time for the provision of security is required. The attached correspondence is also irrelevant to the matters upon which the respondent was directed to file submissions. I consider that given the matters to which I have referred, the filing of this material was an abuse of the processes of the Court. 34Accordingly, I propose the following orders: 1.Dismiss the respondent's application to extend the time in which to provide security for costs as ordered by the Court on 8 August 2012; 2.Confirm the order made by Registrar Bradford on 3 September 2012 that the proceedings are stayed unless and until security is provided in the manner ordered by the Court on 8 August 2012; 3.Order the respondent to pay the appellant's costs of the application to extend time in which to provide the security. 35MEAGHER JA: The orders proposed by Beazley JA should be made for the reasons that her Honour gives. 36BARRETT JA: I agree with Beazley JA.