FEDERAL COURT OF AUSTRALIA Carey v Freehills [2014] FCA 818 Citation: Carey v Freehills [2014] FCA 818 Appeal from: Carey v Freehills [2013] FCA 954 Parties: NORMAN PHILLIP CAREY and others named in the attached schedule v FREEHILLS File number: VID 1350 of 2013 Judge: WHITE J Date of judgment: 31 July 2014 Catchwords: PRACTICE AND PROCEDURE – re-opening hearing before judgment – new evidence – whether appellant should be permitted to re-open to admit new evidence against background of procedural defaults Cases cited: Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 Smith v New South Wales Bar Association (1992) 176 CLR 256 Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232 Date of hearing: 31 July 2014 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 26 Counsel for the Appellants: Mr A Schlicht Solicitor for the Appellants: Metaxas & Hager Counsel for the Respondent: Mr D A Klempfner Solicitor for the Respondent: Colin Biggers & Paisley Lawyers IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1350 of 2013 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: NORMAN PHILLIP CAREY and others named in the attached schedule Appellants AND: FREEHILLS Respondent JUDGE: WHITE J DATE OF ORDER: 31 JULY 2014 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The oral application made by the appellants on 31 July 2014, that the hearing in this proceeding should be re-opened so as to permit Mr Carey's affidavit of 29 July 2014 to be read, is refused. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1350 of 2013 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: NORMAN PHILLIP CAREY and others named in the attached schedule Appellants AND: FREEHILLS Respondent JUDGE: WHITE J DATE: 31 JULY 2014 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 I am dealing with an oral application to re-open a hearing so as to permit the appellants to lead further evidence and to make further submissions. 2 On 15 May 2014, the Court reserved its judgment on an application by the appellants filed on 7 May 2014 to set aside the dismissal of their appeal to the Full Court against the judgment of Kenny J in Carey v Freehills [2013] FCA 954; (2013) 303 ALR 445. The appeal had been summarily dismissed by North J on 28 April 2014. North J made that order having regard to defaults by the appellants in prosecuting their appeal. Those defaults included a failure to provide the security for the respondent's costs which had been ordered by Marshall J on 1 April 2014. 3 On Monday, 28 July 2014, the parties were informed that judgment would be delivered today, Thursday, 31 July 2014. Just before midnight on 28 July, the appellants' solicitors sent to the Court by facsimile a copy of an affidavit sworn by Mr Carey, the first appellant. The affidavit shows that it was sworn by Mr Carey on 29 July 2014, despite the fact that the facsimile header indicates that it was sent to the Court, as I have said, just before midnight on 28 July 2014. However, nothing turns on that for present purposes. 4 A second affidavit of Mr Carey in relevantly the same terms as the first was filed on 29 July 2014. It is that second affidavit which is relevant for today's purposes. Mr Carey refers to his earlier affidavits sworn in March and May 2014 and then deposes as follows: [2] I now have funds available to pay into Court the sum of $148,000 to be provided as security for the respondent's costs of the appeal. [3] I undertake that sum will be paid into the Court within 48 hours after an order is made to reinstate the appeal. 5 On Tuesday, 29 July 2014, the appellants' solicitor informed my associate by email that the appellants would apply to re-open the application so as to permit Mr Carey's affidavit to be read in support of their application to set aside the dismissal of the appeal. Despite that intimation, no interlocutory application seeking a re-opening of the hearing has been filed nor has any affidavit in support of the foreshadowed re-opening application (other than the affidavit of Mr Carey of 29 July 2014 to which I have referred) been filed. 6 As I have indicated, the Court listed the matter today for the delivery of judgment and not for the purpose of hearing a further application or submissions concerning the application on which judgment was reserved. That does not, of course, preclude the Court from hearing further submissions or from dealing with a further application if a proper basis for doing so is established. If the appellants sought in the circumstances I have outlined to establish such a proper basis, one would have expected that they would file an interlocutory application together with an appropriate supporting affidavit or affidavits. Instead, Mr Schlicht, who has appeared for the appellants, applied orally, immediately before the Court proposed delivering its judgment, for the hearing to be re-opened. For the purposes of determining that oral application, and for that purpose only, I have received the affidavit of Mr Carey of 29 July 2014. 7 Freehills, the respondent to the appeal, oppose a re-opening of the hearing. 8 The overriding consideration on which the Court acts on an application of the present kind is the interests of justice. Will those interests be better served by allowing or rejecting the application to re-open? See: Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]. In Bradshaw, Kenny J identified four recognised classes of case in which a court may grant a re-opening in circumstances like the present, noting that these classes may overlap and are not exhaustive. Those classes are fresh evidence, inadvertent error, mistaken apprehension of the facts, and mistaken apprehension of the law. 9 The present application appears to be of the first kind, namely, a case in which a litigant wishes to adduce new or additional evidence. 10 The High Court referred to the exercise of the discretion to allow a re-opening of a matter after judgment has been reserved and before judgment is delivered in Smith v New South Wales Bar Association (1992) 176 CLR 256. Mr Schlicht drew attention to the following passage in the judgment of the plurality (at 266 and 267): It is again necessary to distinguish between the considerations which may bear on a decision to re-open and the processes involved in reconsideration once a case has been re-opened. If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily, that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised. But those considerations bearing on re-opening are not decisive of the question whether, a matter having been re-opened by reason of error, further evidence can be called. (Citations omitted) 11 Mr Schlicht emphasised the passage which indicates that, in the case of an application to re-open before judgment has been delivered, the primary consideration should be the embarrassment or prejudice to the other side. 12 The authorities also indicate that courts should not readily allow a case to be re-opened once judgment has been reserved. The public interest in finality of litigation and the associated requirement that parties present all their evidence and submissions at the one hearing provide the underlying rationale for that approach: Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232 at [17]-[18]. 13 In considering the present application, it is appropriate to have regard to a number of matters. First, the proposed evidence relates to an application to set aside the summary dismissal of an appeal. If that summary dismissal stands, the appellants will be shut out from pursuing the appeal. 14 Next, the proposed evidence is relevant to the issues agitated on the application. Mr Klempfner, for Freehills, has quite properly pointed out that the principal reasons for the summary dismissal of the appeal by North J related to defaults by the appellants in the prosecution of the appeal and not their failure to provide the ordered security. That failure appears to have been in the nature of a secondary consideration. Accordingly, Mr Carey's affidavit concerning the provision of security at this stage goes, not to the primary basis for the dismissal of the appeal, but to a secondary basis. It also goes to the utility of the order of dismissal being set aside. 15 Next, apart from the bare statements by Mr Carey that he now has funds allowing him to pay $148,000 into Court within 48 hours, the appellants have not provided any other evidence to support the application to re-open. I have described Mr Carey's statements as bare. That is because the appellants have not provided any corroborative material to support the assertion that he does have the funds available. Ordinarily on an application of the present kind, one would expect a party making that assertion to evidence the truthfulness of the assertion. 16 There is no evidence from the appellants as to the source of the funds now said to be available, nor is there any indication as to how it is that the funds are now available but were not previously available to the appellants. There is no evidence at all as to when the funds have become available, nor is there any evidence as to why, if the funds were available earlier, the appellants did not take action to provide the required security earlier. 17 These are pertinent matters as the passage from the judgment in Smith, to which Mr Schlicht referred, indicates. The plurality indicated that, in relation to an application to re-open on the basis that there is new or additional evidence, it is pertinent to inquire initially why the evidence was not called at the hearing. The appellants, as I have said, have not provided evidence on that topic. 18 The Court has not been provided with any explanation as to why the affidavit of Mr Carey sworn on 29 July, or for that matter the affidavit provided by facsimile shortly before midnight on 28 July, was provided only after the Court had notified the parties of the time for judgment delivery. That may be a coincidence, as Mr Schlicht has submitted, but it may also support an inference that it was the notification of judgment delivery which prompted the preparation and filing of the affidavit. The circumstance that the first affidavit was delivered to the Court just before midnight on 28 July 2014 adds to that inference. Mr Carey's affidavit does not address that obvious inference. This in turn raises a question as to whether the application to re-open has been made promptly, that is to say, as soon as reasonably practicable. 19 There has been no attempt by the appellants to address their ability to provide the additional security sought by Freehills at the hearing on 15 May in the event that the appeal was reinstated. By "additional security" I mean security over and above the $148,000 ordered by Marshall J on 1 April 2014. Freehills sought that additional security to take account of the costs which they have incurred as a result of the appellants' dilatoriness in prosecuting the appeal and the interlocutory activity which has ensued. Those costs would deplete the amount of the security intended by the order of Marshall J. 20 Given the depletion of the amount of security available to Freehills, the application for the additional security, in the event that the appeal was reinstated, plainly had a reasonable basis. The Court is left uninformed about the appellants' ability to provide the additional security as sought by Freehills. By itself this raises a question as to the utility or, perhaps I should say, the sufficiency of Mr Carey's affidavit of 29 July. 21 Given the unusual circumstances of this case, the absence of evidence from the appellants on these matters is, to my mind, striking. The relevance of the matters I have mentioned to an application of the present kind is readily apparent, and the Court should not be left to speculate about them. 22 Freehills do make a submission as to prejudice. That submission really went to their prejudice in dealing with the application to re-open but also included, on my understanding, the prejudice which they would suffer if a re-opening was allowed. In particular, Freehills pointed to the prejudice arising from the lateness of the application and from the manner in which it has been made. They contend that the lateness of the application and the paucity of the material provided have denied them an opportunity to investigate the claims that the appellants do now have the capacity to provide security and the circumstances by which that capacity has been achieved. Implicit in Freehills' submission is that, if an order for re-opening is made today, there is likely to be further interlocutory activity while these matters are investigated. 23 In addition to the prejudice resulting from that delay, I accept that there is prejudice, tangible and intangible, resulting from continued uncertainty as to the fate of this appeal. That uncertainty would result from the continued delay bearing in mind, as I have said, the apparent need for investigation of the matters upon which the appellants now rely. 24 It is also appropriate, in my opinion, to keep in mind that the present application is brought against a background of repeated procedural defaults by the appellants. As I have said, those defaults were the principal reason for the summary dismissal of the appeal. 25 In considering the interests of justice, I keep in mind the consequence for the appellants if the appeal remains dismissed. I also keep in mind that the proposed evidence does bear in part on matters relevant to the application to have the appeal reinstated. Nevertheless, I consider that, having regard to the lateness of the application, the shortcomings in Mr Carey's affidavit, the absence of other material in support of the application to re-open, the circumstances in which the appeal came to be summarily dismissed, the prejudice to Freehills, and the interests of finality of litigation, the Court should not presently exercise the discretion to allow the re-opening. 26 Accordingly, the oral application made today that the hearing should be re-opened so as to permit Mr Carey's affidavit of 29 July 2014 to be read, is refused. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. Associate: Dated: 5 August 2014 SCHEDULE OF PARTIES Second Appellant: QUARTZ NOMINEES PTY LTD (ACN 008 859 103) Third Appellant: HECA NOMINEES PTY LTD (ACN 053 581 874) Fourth Appellant: ACEBID PTY LTD (ACN 074 566 046) Fifth Appellant: ANDRIANNI PTY LTD (ACN 005 458 720) Sixth Appellant: ANN STREET BRISBANE PTY LTD (ACN 101 943 711) Seventh Appellant: BENNALONG HOLDINGS PTY LTD (ACN 008 741 008) Eighth Appellant: DOSIUS PTY LTD (ACN 009 449 450) Ninth Appellant: EARLMIST PTY LTD (RECEIVER AND MANAGER APPOINTED) (CONTROLLER APPOINTED) (ACN 069 056 926) Tenth Appellant: ETNAS PTY LTD (ACN 056 599 350) Eleventh Appellant: HEALTHCARE PROPERTIES PTY LTD (ACN 074 501 955) Twelfth Appellant: HUNTINGDALE VILLAGE PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 085 048 531) Thirteenth Appellant: JEVWOOD PTY LTD (ACN 074 525 321) Fourteenth Appellant: K.I.S. REALTY PTY LTD (ACN 100 871 314) Fifteenth Appellant: KEEP IT SIMPLE INVESTMENTS (GLOBAL) PTY LTD (ACN 100 871 270) Sixteenth Appellant: NORTH SYDNEY DEVELOPMENT PTY LTD (CONTROLLER APPOINTED) (ACN 107 037 838) Seventeenth Appellant: PAQUERO PTY LTD (ACN 003 540 556) Eighteenth Appellant: PARAGON APARTMENTS LTD (RECEIVER AND MANAGER APPOINTED) (ACN 087 200 413) Nineteenth Appellant: RENAISSANCE MEZZANINE PTY LTD (ACN 110 978 491) Twentieth Appellant: ROMPRIDE PTY LTD (ACN 074 524 824) Twenty-first Appellant: SCOTS CHURCH DEVELOPMENT LTD (RECEIVER AND MANAGER APPOINTED) (ACN 091 686 323) Twenty-second Appellant: SILKCHIME PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 066 849 429) Twenty-third Appellant: VANNIN PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 067 610 271) Twenty-fourth Appellant: WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVER AND MANAGER APPOINTED) (ACN 054 246 918) Twenty-fifth Appellant: WESTPOINT FINANCIAL SERVICES PTY LTD (ACN 074 148 324) Twenty-sixth Appellant: WESTPOINT MANAGEMENT (CENTREWAYS) PTY LTD (ACN 082 349 068)