Judge Not So Subtley Blasts “Defective Processes” in Registry

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Statutory Demands have a notoriously strict timeline imposed by the Corporations Act. But what on earth happens when the Court registry doesn’t issue your documents in time and the deadline lapses…..well, read on.

In Adhesive Pro P/L -v- Blackrook Supplies P/L the Court was pretty scathing of the turnaround time of the registry but didn’t recognise the set aside application despite the position of the plaintiff that it had been lodged within the 21 days.

To avoid confusion, the Plaintiff in Adhesive is the Debtor and the Defendant the Creditor.

The 21 day period was set to expire on 28 August 2014. On the 27th a solicitor for the plaintiff filed the originating application with the registry and was told that no service copy was available that day. The solicitor who lodged the application informed the registry that a copy was required that day. Signed, unsealed copies were served later that day. Sealed copies were served on the defendant’s solicitors on 31 August (day 24) and on the defendant’s registered office on 2 Sept (day 26).

s459G of the Corps Act requires that a copy of the set aside application must be served within the 21 day period.

There was extensive discussion on the authorities that explain what a “copy” of a document is as well as the differences between filing and lodging, noticeably how the Federal Court distinguishes but the ACT definitions do not make that distinction. [21]

The Court decided that it was unnecessary to decide on what constitutes service and what is a copy as the statutory provisions were intended to operate definitely without much room for interpretation. The Court noted that it did not need to rule on the position but if required it was inclined to agree with the position of Stanley J in Craneford Nominees Pty Ltd v VGC Co-Operative Ltd (2012) 262 FLR 283:

An analysis of the authorities demonstrates that a document will satisfy the definition of a “copy of the application” where:

(1) the copy document reflects the form of the originating process accepted by the court within the 21 day period;

(2) the copy document evidences the fact of the court’s acceptance, and hence, the fact that proceedings have been commenced, by some mark, whether it is the seal of the court, the Registrar’s signature, or some other authenticating mark such as the court stamp or action number; and

(3) the copy document records the important fact of the return date of the application.

“Acceptance” by the Court does not immediately occur upon the registry accepting the documents for consideration as they still hold the right to reject the documents under rule 6140. The proceedings were ultimately dismissed for lack of jurisdiction arising from the fact that a valid application had not been made in accordance with the Corporations Act, as adopted in Schedule 6 of the Supreme Court Act.

The Court had some sympathy towards the Plaintiff and all but directed the registry to refund the filling fee under the Court Procedures (Fees) Determination 2015 (ACT).

I am somewhat less sympathetic (in general, but also specifically). Everyone who has dealt with the ACT Court Registry understands that they can be frustrating at times but that it is completely normal for there to be a delay in returning documents sealed. Ultimately the solicitors for the plaintiff should have been aware that waiting until the 20th day of the 21 day period may result in an unfavourable outcome. Alternatively if the client waited that long to approach the solicitors then they will simply have to wear the consequences of that. Simply, do not delay on anything involving a statutory demand.

Duelling Drongos

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In today’s civilised practice the biggest risk to your person is generally a cranky debtor or lower back problems from not standing up enough during the day. There is certainly very little chance that a snarky email or public reprimand will result in pistols at dawn.

I’m not overly interested in tracing duelling back hundreds of years to the concept of trial by combat or discuss outdated concepts of honour. Instead if you’ll indulge, there are a few short tales I think are worth telling including some early judges and lawyers instigating duels over the most seemingly trivial matters. There probably is also some sort of contemporary comparison to club bashings, ie. a violent reaction to someones honour being stained, but I digress.

Duels were not legal in the colonies and were seen by most as a senseless risk of life and at worst as a deliberate act of contempt by taking “justice” into one’s own hands. The Australian colonies and indeed Great Britain were early movers towards classifying duels as “murder” instead of “crimes of honour”, and you only need to consider that ‘merkin President Andrew Jackson (of $20 bill fame) as well as several other signatories of the declaration of independence were ardent participants of several notorious duels.

Depending on how cynical you are of the legal justice system, not much has changed between the colonies and today. Although duels were illegal and ironically punishable by death, it was very rare for a member of the gentry to actually be prosecuted. There was a level of romanticism invoked when gentlemen resolved their differences compared to the common pleb, such as the Adelaide Milkman sentenced to death for killing a nobleman in a duel in 1884 for not paying his milk bill. Despite the Law, the British had their fair go including in 1809 when Lord Castlereigh, the secretary for state, war and the colonies, shot the foreign secretary in a duel just before a cabinet meeting…brilliant.

There were however strict codes of conduct usually enforced by the “Second”, a back-up duellist/referee. In 1840, William Ryrie fired his shot into the air when his opponent Peter Snodgrass shot himself in the foot accidentally.  Snodgrass was a failed pastoralist, long-time Victorian politician and fought land grants to avoid creating an Australian aristocracy. Snodgrass was perhaps lucky in his opponents given that the next year he was involved in another duel with Sir Redmond Barry when he again prematurely discharged his pistol. Barry fired in the air displaying all the honour expected of a Queen’s Counsel, KCMG, facial-hair enthusiast, later Judge of the Supreme Court of Victoria and the inaugural Chancellor of Melbourne University.

There are plenty more early notable duels including the WA barrister and newsman William Clark who killed his opponent in a duel in 1832 and then successfully defended his subsequent manslaughter charge. In 1846 Alexander Sprot and William Campbell travelled 400km+ to get into South Australia after a Melbourne Magistrate specifically told them they would both be arrested for attempted murder if the duel happened in Victoria. (I’ve always liked this one, it seems like a classic rogue lawyer: obeying the letter of the law, not the spirit.) In 1892, lawyer and politician Charles Kingston, was offended when a conservative member of the legislative council called him a “coward, a bully and a disgrace to the legal profession”. Kingston bought two French duelling pistols and sent one to his opponent with a note naming a place and time for the duel. Kingston was “flummoxed” when the Police showed up instead of his opponent holding the note, the pistol and a fresh warrant. Kingston was still serving his good behaviour order when he became the Premier of South Australia in 1893. History books have forgiven Kingston’s many temperamental moments and best remember him for leading the SA government to become the first jurisdiction in the world to extend the voting franchise to women.

If you’ve been following the years and have OCD you’re going to hate this, but I’m jumping around in time now to end with my two particular favourites.

Possibly the most famous duel and duellist in Australian history, is John Macarthur. A real prickly guy, but if Australia had such a thing as the founding fathers, he’d probably be one of them. Macarthur was a legendary grazier, politician, architect, entrepreneur etc. He imported spirits against the orders of the Governor who wanted a dry colony, stacked juries and official positions with mates, deposed 5 Governors during his time and fathered the Rum Corp; which was considered the most corrupt collection of men in Australian history prior to Obeid’s Terrigal group. A fiery Scotsman with an inferiority complex, the first thing Macarthur did when he boarded a ship for Australia was duel Captain Gilbert for a better cabin. Both survived but the Captain was replaced for not responding like a gentleman (ie. don’t duel your passengers) and the Macarthur family transferred to the Scarborough. Macarthur then tried to duel the Scarborough Captain who refused and instead boarded up Macarthur’s cabin’s access to the deck, making him walk through the diseased crowd in the bows of the “hellship” to make it up top. The ship was called a “hellship” due to it’s 30% fatality rate, which included Macarthur’s wife and children. This no doubt contributed to Macarthur’s hatred of the aristocracy and their rules.

Macarthur, using his position as commandant, paymaster and master of public works in Parramatta, used the unpaid salaries of soldiers to fund his import business and arranged for tariffs on other importers as well as using the Parramatta regiment to host his own Boston Tea Parties on rival ships. His aggressive trade policy soon led to him becoming the richest man in NSW. So on and so on, you could write all day about Macarthur and he probably deserves his own poorly-shot Underbelly, but let’s get back to duelling.

In 1801, Governor King, who loathed Macarthur, passed over Macarthur’s man for the equivalent of Attorney-General and fired several of his appointed Magistrates in an attempt to weed out corruption. Macarthur promptly challenged the replacement AG, Colonol Paterson, to a duel. Apparently the entire duel could have been avoided if both Macarthur and Paterson weren’t both intemperate wild Scotsman who refused to backdown. Macarthur jam-packed his own pistol with lead shot (a big no-no), blew Paterson away (he survived) and then show-boated by crowing over his writhing body (another big no-no), apparently saying “King Kong ain’t got shit on me.” That quote might be conflating Denzel with Macarthur, but you get the idea. Macarthur was sent back to England by Gov King to face Court-Martial, knowing that if he tried him in Australia, Macarthur’s loyal officers would simply acquit him. King sent back 3 copies of the duelling charges with a note that apparently read:

               “if Captain Macarthur returns here in any official character, it should be that of Governor, as one-half the                                           colony already belongs to him, and it will not be long before he gets the other half.”

Mysteriously, the copy left with Macarthur didn’t make it to England, the Captain’s copy disappeared from his lock box in transit and the third copy went to the bottom of the Pacific Ocean with the separate ship it was on. Macarthur was sent back to Australia without facing trial and in exchange for handing in his military commission was awarded the largest land grant in Australian history and a flock of Joseph Banks’ stolen Spanish half-breed Marinos to establish the Australian wool industry, which soon paid dividends courtesy of Napoleon’s blockade of Britain. Like it or not, and with the hindsight of history, Macarthur was romantically Australian. America has their Civil War, Britain beheaded a King and then changed their minds and Australia has the Rum Rebellion; backed by Macarthur as a bloodless coup which ousted the Governor via a drunken, singing mob whose only opposition was the Governor’s wife, armed with a paper parasol.

The “Last duel in Australia” happened in 1851 when Major Sir Thomas Mitchell faced off against Sir Stuart Donaldson in Sydney. Mitchell was the Surveyor-General of NSW at the time and was facing heavy criticism from Donaldson about the debt and deficit disaster being created by the department’s expenditure. Both missed 3 separate volleys before the Seconds intervened with honour having been satisfied. One bullet fortunately passed through Donaldson’s hat, allowing Donaldson to go on to become the first Premier of NSW, lasting only two months. When questioned as to why he stood down without a fight, Donaldson gallantly exclaimed “my colleagues and myself are all too independent of office to cling to it“. Obviously the same duty to the office has survived to this day.

Court Rejects Late Inclusion of Statutory Defence

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The Supreme Court considered, and duly rejected, a late application for pleading a statutory bar against the Nominal Defendant from seeking contribution in Jausnik v Nominal Defendant [2015] ACTSC 251.

The primary case was a high profile claim for compensation by an ACT Police Officer from the Nominal Defendant claiming psychological damage, who subsequently sought contribution from an individual police officer and NSW. The Plaintiff and the individual officer arrived on the scene of a motor vehicle accident following a NSW Police pursuit.

The first third party, being the individual officer, has sought to plead a bar under the NSW Police Act protecting individual members against personal liable:

Section 213 of the Police Act 1990 (NSW) (‘Police Act’) provides:

213  Protection from personal liability

A member of the NSW Police Force is not liable for any injury or damage caused by any act or omission of the member in the exercise by the member in good faith of a function conferred or imposed by or under this or any other Act or law (whether written or unwritten).

This bar wasn’t pleaded until late in the game (after pleadings closed and even settlement) so the Court naturally turned to the Court Procedures Rules and our old friend Aon Risk. Particular points that were drawn from Aon include;

  • First, generally speaking where a discretion is sought to be exercised in favour of one party and to the disadvantage of another, an explanation will be called for so as to permit the circumstances giving rise to the amendments to be weighed in the discretionary balance: [103]
  • Parties have a right to bring proceedings but have to make choices as to what claims are made and how they will be framed and prosecuted.  Limits will be placed on the ability to change the case they wish to run.  That is why in seeking the just resolution of the dispute, reference is made to the parties having sufficient opportunity to identify the issues they seek to agitate: [112].
  • The reference in the Rules to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore a just resolution to an application for leave to amend.  It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings upon the payment of costs.

Ultimately Associate Justice Mossop was reasonably scathing of the application to amend and include the statutory defence. Mossop AsJ noted that the application was “extremely late”, making the application was “wholly attributable to lack of thoroughness in the [first third party’s] camp” (read professional liability claim), the amendment would create a complete defence and the amendment would essentially require reopening the question of liability including lengthy adjournments [38].

Aon Risk is essential reading for anyone hoping to conduct commercial litigation or wishing to challenge the Fourth Horseman to a game of chess. Like playing Death in Chess, commercial litigation requires punters to not commence anything without being thoroughly aware and prepared, and to have planned at least 3 moves ahead at all times if not able to win in 6.