Supreme Court New South Wales Medium Neutral Citation: Solarus Projects v Vero Insurance [No 3] [2013] NSWSC 603 Hearing dates: 17 May 2013 Decision date: 17 May 2013 Jurisdiction: Common Law Before: Campbell J Decision: (1) Prayer 2 is stood over for hearing on a date in or about mid July to be fixed with my associate before 4pm today. I give the parties leave to contact my associate by telephone for that purpose. (2) Prayers 3, 4 and 5 are stood over for mention or direction on the date fixed pursuant to order 1. (3) The defendant to serve any affidavit on which it will rely by 14 June 2013. (4) The second plaintiff to file any affidavit in reply by 28 June 2013. (5) I direct the second plaintiff circulate amongst the parties for their consideration its "amended statement of claim" by 14 June 2013. (6) I reserve all questions of costs in relation to the second plaintiff's motion for determination when prayer 2 is determined. Catchwords: PRACTICE AND PROCEDURE - notice of motion - application by first plaintiff to be represented separately to second plaintiff - application for leave to amend statement of claim PRACTICE AND PROCEDURE - application by second plaintiff for leave to file notice of motion in court and make it returnable instanter - application for extension of time to comply with orders for security of costs - application for a stay of the whole proceedings whilst second plaintiff advances a claim against its former solicitors from the Legal Practitioners Fidelity Fund Legislation Cited: Civil Procedure Act 2005 (NSW) Category: Interlocutory applications Parties: Solarus Projects Pty Ltd (Plaintiff) G.A.P. Constructions Pty Ltd (Second Plaintiff) Vero Insurance Limited (Defendant) Representation: Counsel: A. Leopold SC, R. Higgins (First Plaintiff) I.R. Pike SC (Second Plaintiff) A.S. Martin SC, J. Hynes (Defendant) Solicitors: DLA Piper Australia (First Plaintiff) Sarvaas Ciappara Lawyers (Second Plaintiff) Carter Newell (Defendant) File Number(s): 2011/154276 Judgment 1The present proceedings relate to a claim on an insurance policy arising out of damage to a development complex in the course of construction in Queensland. The damage is said to have been caused by the very heavy rain events which led to flooding in Queensland in two successive summers, of 2009 and 2010. 2The first plaintiff's application filed on 10 January 2013 seeking orders in relation to separate representation and for leave to file and serve a document setting out its amended claim was the only application originally listed today. Those prayers for relief were resolved, more or less amongst the parties, and I have already pronounced orders today giving effect to that agreement and my own view as to the appropriate orders that should be made. 3Late yesterday afternoon the second plaintiff notified the Court, and the other parties, that it would be seeking leave to file an application in court today. It is important to record that in the course of this matter's progress toward hearing, the defendant obtained orders from Button J on 10 April 2013 for the second plaintiff to provide security for costs. In the usual way there was a contingent stay if security could not be provided in accordance with his Honour's orders. The second plaintiff has been unable to provide that security and accordingly, its claim is stayed. 4I have already, after hearing from counsel for the parties, made orders in accordance with prayer 1 of the second plaintiff's motion, that is, giving it leave to file the motion in court and making it returnable instanter. 5Effectively, the balance of the relief sought in the motion relates, firstly, to an extension of time for it to comply with the orders for security, and secondly (in prayers 3, 4 and 5), a stay of the whole proceedings whilst it advances a claim against its former solicitors from the Fidelity Fund. 6An affidavit of Charles Ciappara - the solicitor instructing Mr Pike SC, who appears for the second plaintiff - sworn on 16 May 2013, has been served, and a copy has been provided to me. I read that affidavit in chambers in preparation for court today. It has not been formally read in open court but there are circumstances (to which I will refer) which inform the decision I have made in relation to the orders that should be pronounced today. 7Essentially the first plaintiff, represented by Mr Leopold SC and Ms Higgins, and the defendant, represented by Mr Martin SC and Mr Hynes, submit that I should adjourn the balance of the motion, so far as prayer 2 is concerned, to enable the defendant to file evidence. So far as prayers 3, 4 and 5 are concerned, both the first plaintiff and the defendant say that it is contrary to the overriding purpose of the administration of civil justice and to the provisions of ss 56-58 of the Civil Procedure Act 2005 (NSW) that I should permit the whole proceedings to be stalled, as it were, for an indefinite period whilst the second plaintiff's claim is processed by the Law Society, if I may put it in that informal way. 8The present proceedings have been on foot for two years, having been commenced in May 2011. They are very complex, involving issues of law and fact and difficult questions relating to the quantification of the claims. Fundamentally they relate to a claim on an insurance policy by parties who claim on the policy in relation to their large development in Queensland, which, I assume from the material I have read, is going nowhere, pending the claim.1 It seems to me that in those circumstances, it is very unlikely that a judge of this Court would stay the proceedings as a whole for an indefinite period whilst the Fidelity Fund claim is determined. For my part, although the door of the Court is open, not closed, that absence of prospect persuades me that I should accede in that regard to the position advanced by the first plaintiff and the defendant, that prayers 3, 4 and 5 should at this stage simply be stood over for mention, but that prayer 2, which after all is the real gravamen of the relief sought, should be fixed for hearing. 9I say that prayer 2 is the real gravamen of the relief sought because it seeks an extension of time for complying with Button J's order. There is no dispute that the second plaintiff has standing to make that application and if successful in that regard, then the relief sought in prayers 3, 4 and 5, I think, would be rendered otiose. 10The other matter which influences me in accepting the argument put by the first plaintiff and defendant, notwithstanding the persuasion of Mr Pike SC, is that there has been some relevant delay on the part of the second plaintiff. The evidence contained in the affidavit of the solicitor for the second plaintiff, Mr Charles Ciappara, discloses amongst other things that at present the guiding mind of the second plaintiff is a person named Mr Tsanis. He has previously been a director of the company and he is also the director of another company named Albatross Developments (Australia) Pty Limited ("Albatross"). Albatross apparently lent some money to the second plaintiff by way of payment direct to the former solicitors of a very large sum on account of costs and disbursements. During the middle and latter part of 2012, Albatross made a claim on the Fidelity Fund, which it discontinued in about October of last year. That delay, it seems to me, is significant because the current claim, although brought on behalf of the second plaintiff, also goes forward with a revitalised claim by Albatross. There is no evidence before me as to why Albatross discontinued its claim or the wisdom of that course. 11Although Albatross is a different company, there is a commonality of interest between it and the second plaintiff, and therefore this period of five or six months has effectively been lost. That factor suggests to me that the proper exercise of my discretion, in giving the second plaintiff another opportunity to continue its proceedings, should extend only to giving it the opportunity to seek an extension of time to comply with Button J's order. 12I am also concerned, as I expressed in the course of argument, with the idea that the consideration of the relief sought in prayers 3, 4 and 5, at a practical level, constitutes a collateral attack on the decision of Button J to order the provision of security. The consequence of the second plaintiff's default is that the proceedings are stayed, so far as it is concerned. It seeks to remedy its position by seeking a stay of the whole of the proceedings. To my mind, that would be not only ironic, but contrary to the interests of the administration of justice and to the interests of the other parties. 13The orders I will make, for these reasons, in relation to the second plaintiff's motion filed in court today, are as follows: (1)Prayer 2 is stood over for hearing on a date in or about mid July to be fixed with my associate before 4pm today. I give the parties leave to contact my associate by telephone for that purpose. (2)Prayers 3, 4 and 5 are stood over for mention or direction on the date fixed pursuant to order 1. (3)The defendant to serve any affidavit on which it will rely by 14 June 2013. (4)The second plaintiff to file any affidavit in reply by 28 June 2013. (5)I direct the second plaintiff circulate amongst the parties for their consideration its "amended statement of claim" by 14 June 2013. (6)I reserve all questions of costs in relation to the second plaintiff's motion for determination when prayer 2 is determined. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 May 2013