McIntyre v Eastern Prosperity Investments Pte Ltd [2002] FCA 1387

FEDERAL COURT OF AUSTRALIA

McIntyre v Eastern Prosperity Investments Pte Ltd [2002] FCA 1387

DONALD COLIN McINTYRE v EASTERN PROSPERITY INVESTMENTS PTE LTD and DBF PROPERTY HOLDINGS PTY LTD AS TRUSTEE FOR THE FREARSON FAMILY TRUST

W243 of 2000

CARR J

29 OCTOBER 2002

PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W243 OF 2000

BETWEEN: DONALD COLIN McINTYRE (for and on behalf of himself and Patricia Ann McIntyre and as a representative of the Group Members referred to in the application)

Applicant

AND: EASTERN PROSPERITY INVESTMENTS PTE LTD

(ACN 065 747 006) and DBF PROPERTY HOLDINGS PTY LTD AS TRUSTEE FOR THE FREARSON FAMILY TRUST

Respondents

JUDGE: CARR J

DATE OF ORDER: 29 OCTOBER 2002

WHERE MADE: PERTH

THE COURT ORDERS THAT: 1. The motion (other than paragraph 2 of the orders sought, which was the subject of orders made on 7 October 2002) be dismissed. 2. The applicant pay the respondents' costs of the motion (including costs of the hearing on 7 October 2002). Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W243 OF 2000

BETWEEN: DONALD COLIN McINTYRE (For and on behalf of himself and Patricia Ann McIntyre and as a representative of the Group Members referred to in the application)

Applicant

AND: EASTERN PROSPERITY INVESTMENTS PTE LTD

(ACN 065 747 006) and DBF PROPERTY HOLDINGS PTY LTD AS TRUSTEE FOR THE FREARSON FAMILY TRUST

Respondents

JUDGE: CARR J

DATE: 29 OCTOBER 2002

PLACE: PERTH

REASONS FOR JUDGMENT 1 This is an adjourned motion in the relevant portion of which the applicant seeks leave to appeal against interlocutory orders made by his Honour French J on 12 September 2002. Those interlocutory orders were as follows: 1. The statement of claim be struck out. 2. The applicant pay the first and second respondents' costs of the motions filed on 31 May and 4 June 2002 respectively forthwith. [These were successive motions to strike out then current versions of the statement of claim. His Honour made other orders which are not the subject of the application for leave to appeal today]. 3. Unless on or before 12 October 2002 a solicitor is on the record as representing the applicant and the group members, the proceedings shall thereafter not continue as representative proceedings under Part IVA of the Act [the Federal Court of Australia Act 1976 (Cth)]. 4. The directions hearing be adjourned to 17 October 2002 at 9.30 am, at which time the question whether the application as a whole should be dismissed or other directions made will be considered. 2 This motion came on for hearing on 7 October 2002. On that date, for short reasons delivered ex tempore, I made an order extending the time for filing the application for leave to appeal. 3 A summary of the principal application and the procedural history of the application can be found in those short reasons. I incorporate that summary by reference into these reasons. 4 The main factor which weighed in the balance when I granted that extension of time was the risk of a substantial injustice if the third paragraph of the interlocutory orders took effect in such manner that any future claims by the group members might be now barred by the relevant statutory or other time limitation. 5 On 10 October 2002, that is since I made the order extending time, Mr M Levitan, a solicitor, has filed a notice of appointment to act on behalf of the applicant and the group members. 6 Accordingly paragraph 3 of the interlocutory orders has not taken effect. That is the application, at least for the time being, continues as a representative proceeding under Part IVA of the Act. 7 When the adjourned directions hearing came before his Honour French J on 18 October 2002, his Honour made an order that it be further adjourned to 5 December 2002 at 9.15 am. 8 Mr Levitan, who appeared as counsel for the applicant today, did not press that part of the motion which sought leave to appeal against paragraph 3 of the interlocutory orders. 9 That leaves the order striking out the statement of claim and the order that the applicant pay the first and second respondents' costs of the two strike-out motions forthwith. On well-established principles it would, in my opinion, be quite wrong to grant leave to appeal in respect of the costs orders. 10 The remaining relevant order is that the statement of claim be struck out. In my recitation of the procedural history of the application, in my earlier short reasons, I noted that the original statement of claim was struck out with leave to file and serve a substituted statement of claim, that in due course the substituted statement of claim was struck out with leave for the applicant to file a further substituted statement of claim limited to a cause of action or causes of action based upon implied representations as to the financial capacity of the first respondent. 11 His Honour gave detailed reasons for striking out the further substituted statement of claim. Mr Levitan in submissions this morning said that his Honour erred in that he should have struck out certain paragraphs which he regarded as deficient. In my opinion, his Honour did not err in the manner suggested. Paragraph 21 of his Honour's reasons, in my view, helpfully summarises his conclusions. It was in the following terms: "The most substantial difficulty with the further substituted statement of claim is that it imports a large number of representations outside the terms of the leave given on 8 April 2002. Although there are assertions which raise the issue of financial capacity the further substituted statement of claim taken as a whole involves so much in the way of untenable contentions as irrelevant and embarrassing material that it is beyond rescue by way of blue pencil exercise deleting particular paragraphs. The confinement of the leave given on 8 April 2002 to re-plead causes of action based upon implied representations as to the financial capacity of Eastern Prosperity was designed to achieve a clear focus upon that aspect of the case which might have given rise to an arguable cause of action. That clear focus has not been achieved and the statement of claim must be struck out." 12 The matters which are to be taken into account when considering whether to grant leave to appeal from an interlocutory judgment are relatively well-settled. One of the leading cases is Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. The major considerations are first, whether the correctness of the interlocutory judgment from which leave to appeal is being sought is attended by sufficient doubt; and secondly, supposing the interlocutory judgment to be wrong, whether substantial injustice would result if leave to appeal were refused. The Court also stated (at p 400) that there was an important distinction to be observed between a common interlocutory decision on a point of practice and an interlocutory decision determining a substantive right. In my view, the relevant order in this matter is in the former category i.e. a decision on a point of practice – see for example Auspine Pty Limited v H S Lawrence & Son Pty Ltd (Full Court, 24 July 1998, unreported). 13 The authorities show that a tight rein should be kept, so far as appeals are concerned, in respect of interlocutory orders of the type involved in this matter. See Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at p 177. 14 In my view, the correctness of paragraph 1 of the interlocutory orders which the applicant seeks to challenge is not attended by sufficient doubt. I think that any appeal would be unsuccessful. The applicant did not seek leave to appeal against the orders made on 8 April 2002 which limited the cause or causes of action which could be re-pleaded to those based upon implied representations as to the financial capacity of the first respondent. It is quite clear that the applicant has not observed that limitation. Secondly, the numerous defects in the further substituted statement of claim, referred to in his Honour's reasons for judgment, quite clearly justify, as a matter of discretion, the course which his Honour took i.e. to strike out that pleading. 15 Nor do I consider that substantial injustice would result if leave to appeal were refused, on the supposition that his Honour's order was wrong. 16 It remains to be seen whether, now that the applicant has obtained legal representation, his Honour may extend a further chance to the applicant to file a fresh statement of claim. 17 As Katz J observed in Hamod v State of New South Wales [2001] FCA 1766 at [16] relevant substantial injustice is (by which I take his Honour to mean "includes") substantial injustice affecting a party's ability to conduct subsequently the case in which the interlocutory judgment has been given. 18 In all the procedural circumstances of the present matter, in my view, it would be most inappropriate to grant leave to appeal against these interlocutory orders. 19 The motion will be dismissed. Despite the fact that the applicant was successful in obtaining an extension of time, that was an indulgence granted to him in the particular circumstances referred to in my short reasons. 20 I consider that the applicant has been unsuccessful in the motion to the extent that the appropriate order should be that he pay the respondents' costs of the motion. There will be orders accordingly. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr.