Strike Out Application for Failure to Pay Security

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The ACT Court of Appeal has considered a strike out application of the proceedings in Hussain & Anor -v- Ngep & Anor (No. 3) [2105] ACTCA 50 following the failure of the Applicant to comply with an earlier order to pay an amount as security of costs.

The Applicant (Respondent on Appeal) sought an order under Rule 425 which states that the Court may strike out the whole or any part of the proceedings if the pleading r425(1):

(a)   discloses no reasonable cause of action or defence appropriate to the nature of the pleading; or

(b)   may tend to prejudice, embarrass or delay the fair trial of the proceeding; or

(c)   is frivolous, scandalous, unnecessary or vexatious; or

(d)   is otherwise an abuse of the process of the court.

The Applicants had previously been awarded judgment in the Magistrate’s Court for the sale of a vehicle, the sum of this sale was not stayed. Further a Statutory Demand from the Applicant for the judgment debt went unanswered.

The application was appealing a decision of a single judge of the Court of Appeal awarding a security of costs in the substantive appeal against the party appealing the Magistrate’s Court decision. The Appellant had his matter put over to the Registrar by Robinson AJ at first instance on the appeal for an apparent lack of jurisdiction concerning whether the Court of Appeal can hear an appeal on an interlocutory decision (security of costs) from a single Judge of the Court of Appeal.

Before the matter could be progressed before the Registrar, the Applicant made the current application for the proceedings to be struck out for lack of payment on the security of costs order.

Chronology

  • Magistrate’s Court decision
  • leave to appeal out of time denied
  • appeals the denial
  • Statutory Demand made
  • security of costs application made
  • security of costs appealed, reverted back to registrar
  • applicant applies for strike out based on non-compliance with security of costs

The Appellant pleaded that a range of health concerns and apparently a clash with unrelated proceedings in Sydney as part of the reason for non-compliance.

There were a number of difficulties associated with the application, namely that rule 425 concerns deficient pleadings and the application was being sought on the grounds of non compliance with an order. The Applicant was permitted to alter their application to correctly plead rule 1904 which allows the Court to dismiss the proceedings if the security order is not complied with.

Interestingly in the published decision the Court also made a statement on the apparent strength of the appeal without ruling on it. The appeal purported to appeal a decision which of itself involved a decision not to grant leave to appeal to the Court, therefore no jurisdiction had ever been correctly invoked in the making of the actual appeal.

Given the inadequacy of the position of both parties the Court declined to make a ruling but has adjourned the matter before another Judge (as Murrell CJ had made the Security for Costs order) whilst also providing some clues about how the application will play out if it were to proceed;

Which is probably that the Court will look grimly on a failure to pay a security of costs order and if that were not enough to have the pleadings struck out, then there is no jurisdiction or even if there is then the appeal would probably fail anyway. Let’s hope the parties read the decision. 

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.