Wolfe v Geaney[2012] QDC 249

[2012] QDC 249

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 1093 of 2006

BRISBANE 

DATE 14/08/2012

ORDER

HIS HONOUR: This is a proceeding of unusual interest which becomes more so as time elapses. Before the court yesterday was Mrs Geaney's application to be removed as a plaintiff under rule 69(1)(a). She also sought costs of the application against the first named plaintiff, Rachel Louise Wolfe, on the indemnity basis.

It was an unusual application in that the plaintiffs, on 18th of August last year, were awarded a judgment against the second defendant in a sum exceeding $100,000, if I've got that correct. The first defendant is bankrupt and out of the picture. The judgment followed a trial before Judge Dorney at which the "active" defendant was not represented. The other application before the court is hers for the setting aside of that judgment. In pronouncing it, the court acted under rule 476(1).

Judge Dorney heard all of the plaintiff's evidence, and in particular evidence of a handwriting expert whose opinion persuaded his Honour that on the balance of probabilities a contested apparent signature of Nina Williams on a lease document was, on the balance of probabilities, hers. The lease is one in registrable form which, in fact, was registered.

Nina Williams had available her own handwriting expert's opinion that the impugned signature and another one on an agreement for lease were not written by her. That opinion of Mr Dale has been placed before the court on today's application.

His Honour thought that Mr Marheine's contrary opinion gained some support from the evidence of the Williams' former solicitor, Mr Rigo, who appeared under subpoena and unsurprisingly gave evidence of what amounts to a system that if he signed a document to attest a signature he would have seen that signature placed on the document. He didn't purport to have any recollection of this particular lease.

Rule 476(4) authorises the court to set aside or vary any judgment obtained under sub rule (1) on terms the court considers appropriate. The defendants' application is to have it set aside so that the matter could proceed to trial.

Another possible course of action for the court, which would not have dealt with the defendant’s application, would have been to vary the judgment so that the judgment creditor became Rachel Louise Wolfe alone. The remarkable circumstances giving rise to that possibility are in Mrs Geaney's evidence, that she did not sign the lease herself or, it seems, agree to it. She asserts total ignorance of the proceeding instituted in her name in 2006, until in receipt of a letter from the solicitors instructing Mr Ashton who appeared for Nina Williams, advising the instructions given to have the judgment set aside.

Two bases are advanced for Mrs Geaney being brought in and perhaps kept in the proceeding as a plaintiff: an alleged partnership with Mrs Wolfe, such that she was entitled to commence a proceeding in the partnership name under rule 83;   and activity of Mr Warat who held, it seems, a general power of attorney that was on 22 March 2005. Whereas Mrs Geaney who's forthright in denying some signatures attributed to her, for example, on partnership returns which have been prepared by accountants engaged by the co-plaintiff, but are not said to have actually been lodged with the taxation authorities, (the material being silent in that regard and, intriguingly, the lease agreement), she has not in terms denied the signature on the power of attorney.

In the trial before Judge Dorney, Mrs Wolfe said she recognised Mrs Geaney's signature on the lease. His Honour was intrigued to note that she had not signed the related agreement for lease. This was said to be an oversight. Some late affidavits assert that the power of attorney was signed on an occasion when the two plaintiffs and their partners were together at the home of one of them. They are unusual, it seems to me, in not containing any signature of the attorney and in not containing any limitations on what he might do.

It is interesting that Mrs Wolfe, who now uses her partner's surname of Fennell, explains that, "The reason for the powers of attorney was that as we were all travelling overseas we needed to appoint someone to handle business affairs in our absence." 

The attorney, in relation to Mrs Geaney's affairs, went far beyond that limited brief. Whereas Mrs Geaney on her account in all events was kept in ignorance of this proceeding and had nothing to do with it, Mrs Wolfe was active, notwithstanding that the original instructions to the Gold Coast firm which commenced the proceeding came from the attorney. It might be mentioned that for the last several years he has been an employee of the Fennell camp, giving rise to the thought that it is there that his primary loyalties might lie.

The application has been the occasion for me to examine some interesting authorities bearing on the situation of a plaintiff without whose authority court proceedings are commenced. The courts appear to have avoided the restrictions inherent in the way the slip rule is applied. In a case such as the present where the mischief to be corrected might be limited to the removal of one or more, but not all, plaintiffs, the solution that appears to have been arrived at is, effectively, one of substituting the errant solicitor who commenced proceedings without authorisation in place of the named plaintiff. The situation is particularly acute where the impugned proceeding fails. The courts have had little difficulty in ordering outcomes whereby the errant solicitor bears ultimate or primary, and in some cases sole, responsibility for costs that successful defendants might be entitled to.

It's been suggested, and I think by myself, that one of the orders the court might make under rule 476(4) would be to vary the judgment of 18th August last year to one in favour of Mrs Wolfe only.

Mr Coulsen appeared for Mrs Geaney; it was asserted at one stage (presumably with some potential claim for costs in mind) that he had failed to persuade the Court that the primary relief he sought, namely removal of his client plaintiff from the proceeding entirely, that is, was unsuccessful. I am far from saying that that would not have been an appropriate outcome but it seemed a course not positively supported by the authorities and would not have obviated Mr Ashton's application which would have continued as one to have the judgment set aside against Mrs Wolfe solely.

The cases that have been alluded to indicate the seriousness with which the commencement of proceedings in the name of a person who has not authorised them is approached with the benefit of hindsight. In circumstances such as the present ones, one can readily understand why this is so. The unknowing plaintiff is placed in a perilous situation of being at risk of adverse cost orders, and Mr Ashton made it clear he wished to be in a position to seek costs against Mrs Geaney on his application to set aside the judgment in respect of which he's, for the moment, an unwilling beneficiary.

It was essentially this consideration that (in terms of convenience and simplicity) dissuades the court from ordering the bare removal of the plaintiff, Geaney, from the proceeding. That is the outcome which Mr Coulsen had sought unsuccessfully to get Mr Ashton's agreement to. In such circumstances, the unwilling plaintiff has to be made a defendant. It's intolerable to have persons independently represented on the plaintiff's side of the record in a single proceeding. The court is not in a position to insist that Mrs Geaney have a co-plaintiff or legal representation not acceptable to her.

Mr Warat is not a party and any comments in these reasons that seem adverse to him ought not to be taken as the final judgment of the court. He's had no opportunity to present his point of view and certainly no relief is sought from him. Mrs Geaney has terminated the power of attorney so that nothing further can be done under that. Nothing Mr Warat can do can achieve a continuance of Mrs Geaney's role as a plaintiff.

There's a question whether the alternative basis for keeping her in the proceeding, namely the partnership, is tenable. As the application has unfolded, Ms Downes, representing Mrs Wolfe, became accepting of Mrs Geaney's ceasing to be a plaintiff. She embraced the idea of the judgment which, of course, she wanted to retain being changed to one in favour of Mrs Wolfe only.

The proceeding, in my view, cannot be recognised as one  started in the partnership name as referred to in rule 83. It looks like a proceeding brought by two women, although the ampersand appearing in the title of the proceeding may seem curious. Asked to identify the name of the partnership, Ms Downes referred to the heading of "R Wolfe & P Geaney" which appears at the top of documents prepared by the accountants in connection with the partnership returns, of which Mrs Geaney professes total ignorance. It seems she never had anything to do with those accountants.

If the partnership name were indeed that used by the accountants with initials, then one notes that initials were not, as is sometimes the case, used in the title of proceedings. It might be asked why the plaintiffs aren't designated first and second plaintiffs but the court is familiar with occasions when married couples for example, might go together as first plaintiff, second plaintiff, third plaintiff and the like. Nothing about the documents presented to the court represents the claim as a partnership one.

There is an important decision of the Chief Justice of Queensland Southern Barramundi v Ough Properties Pty Ltd [2000] 2 Qd R 172 which confirms the entitlement of a partner and even against the opposition of a fellow partner to commence a proceeding in the partnership name. That was a somewhat special case in which the obvious purpose of the partner who would have held out, if asked, assuming he did not actually hold out, was embarking on an exercise of ensuring that the partnership did not commence the proceeding to recover moneys assertedly owing by his own private company. There are genuine issues in this context of ensuring that all relevant parties are before the court, one reason for keeping Mrs Wolfe in the proceeding. Mr Jurth, representing the interests of the current solicitors on record for the plaintiff, Mahoneys, was granted leave to appear to protect their interests. He's referred the court to Moore v Devanjul Pty Ltd [2010] QDC 353, particularly at paragraphs 56 to 59 which was to do with title to real property. Judge McGill considered that both lessees, who were husband and wife, were necessary parties insofar as any interests in the land as lessee was to be defended or vindicated. That was to be done by both the lessees, his Honour said. If Mrs Moore, as appears to have been the case, was not prepared to authorise the proceedings she ought to have been brought in as a defendant or a respondent so that all parties would be before the court. At paragraph 59, his Honour indicated that if a necessary party is joined without that party's authority, where the solicitor had the authority of one party to commence the proceeding and could have commenced a proceeding by the authorising party alone joining the recalcitrant one as a defendant or respondent, "the position may be different" in context where the court is determining whether a solicitor has acted properly or not.

There is apparently no point in reflecting today on the situation of the Gold Coast firm who started the proceeding. They are well and truly out of the picture.

Mahoneys took the proceeding over from them. I've expressed sympathy for their situation and incline to the view that a firm asked to take over a proceeding that had been ongoing for some years would be entitled to assume that the parties represented, in this case the plaintiffs, had given appropriate authority for the purpose of commencing and continuing the proceeding.

The situation is not quite so straightforward here in that Mr Seccombe of Mahoney Lawyers had actual or constructive notice of a potential problem. He recounts a history of being told by the plaintiffs' then counsel of the two of them being in partnership and Mr Warat holding a general power of attorney from Mrs Geaney.

He would appear to have developed a concern about her situation, having received a copy of an email to Mr Warat on 22nd of March 2011 which referred to his being about to receive instructions from the counsel mentioned, to take over the matter, make an offer and bring, in time, an application which would avoid potential difficulties under rule 389 flowing from a delay. That application was made, on the last day, as one for the defendant's signature or the request for trial date to be dispensed with; the application succeeded.

The email was one in a brief chain, the first of which dated 19th of February 2011, has that counsel reporting, "I understand that there's been a falling out between the Daryl and John Geaney. Is Mrs Geaney still happy to conduct this action (bearing in mind she's one of the plaintiffs)?"  That would appear to raise an issue and in the rather unusual context of the proffered the costs agreement, proffered Mahoney Lawyers, being sent for consideration to "Mr Daryl Fennell & Mrs Rachel Fennell", without any reference to Mrs Geaney except that in the schedule, she appears as a client.

The court today is spared from having to determine any potential liability for costs of Mahoney Lawyers. The amended application of Mrs Geaney, as amended on the 24th of July, sought costs against the solicitors. Mr Coulsen has been content to reserve questions in that regard. It may be appropriate to consider suing the solicitors further only if costs aren't recovered in some other way.

The greatest concern Mrs Geaney appears to have is that she be protected against costs she might be ordered to pay to the defendants. The costs agreement, or communication in relation to costs, sent to Mr and Mrs Fennell, pointedly advised them that litigation can be costly in terms of money, distraction and emotion, a successful result cannot be guaranteed. An instructive recent instance of a plaintiff joined without authority is Bray v Dye (No 2) [2010] VSC 152

The court’s conclusions begin with the conclusion that Mrs Geaney ought to be removed as a plaintiff where she contests the whole notion of the partnership, and no evidence whatever has been presented to persuade me that she knew of or approved of this proceeding. I am firmly of the view that she should not be kept in it on the basis of any partnership. It seems to me that it's considerations of property law and the like which might make her presence as a party a requisite. If there are such considerations then they are satisfied by her being a defendant.

It's of some interest to note that steps have been taken to enforce the judgment of 18 August last year by Mrs Wolfe alone. It hasn't been thought that there's any necessity to have Mrs Geaney involved in enforcement proceedings. It may well be the case that Mrs Wolfe satisfies the definition of enforcement creditor for purposes of chapter 19 of the rules, but it is another interesting aspect of this fascinating saga that she does not include her co-plaintiff in the enforcement exercise.

Needless to say, the emergence of assertions by Mrs Geaney that she has not authorised the proceeding (I interpolate that she also says she hasn't the slightest interest in obtaining any money from the Williamses) and further that she contends that her signature has been placed on important documents is a last minute unexpected windfall from Mr Ashton's point of view. Indeed, he sought to rely on the non-authorisation of the proceeding by Mrs Geaney as having the effect that she's not really in it, that it's improperly constituted and could not, therefore, properly lead to any judgment against his clients. There is the whiff of corroboration or an argument for corroboration of his client's forgery allegations that may be found in Mrs Geaney's. It ought to be said that Nina Williams does not appear to attribute blame in this regard to the plaintiffs’ side but rather to Mr Williams.

Another point raised by Mr Ashton is that the lease fails because on analysis it's been granted by one only of two co-owners which would leave Mrs Geaney free to insist on the right to be in and use the premises in diminution of the exclusive possession which the lease document purports to grant to the Williamses.

I note at this point Mrs Williams' contention that the active person in all of this was her husband, that at the restaurant business conducted in the premises was his and not hers and the like.

Ms Downes, strenuously seeking to preserve the judgment of 18 August 2011 for the benefit of her client, referred to the philosophy underlying the Rules which can be found at rule 5 and the importance of finality. She describes the monetary extent of the claim, a large amount of which is interest of course, as modest and from some points of view, it is. It's said to be irresponsible of the system to permit reventilation of such relatively modest matters. I think there's much to be said for that approach if it comes to what might be called the property points but am not prepared to say the same where a defendant, as things stand, has been held liable under a lease to which she swears she was not a party. That's an inappropriate outcome the court would be reluctant to leave standing. The point is she has not had a trial. Judge Dorney heard only the plaintiffs’ case. The outcome might have been different had his Honour heard evidence from Mrs Williams and Mr Dale and others perhaps, maybe even Mrs Geaney.

Rule 474(4), under which Mr Ashton applies, places a judgment obtained under the circumstances presently relevant at risk of being set aside, obviously on the basis that it is the result of a trial at which the defendant was not heard. There are no requirements expressly set out in rule 476(4) as to what an applicant for setting aside a judgment must show. The rule is very similar in its terms to rule 290 in respect of which there is much more law. The considerations are not necessarily the same. Rule 290 applies where defendants have done nothing in the court to protect their interests, or indicate that they may have a defence. No such comments can be made about Ms Geaney.

The few cases that have been unearthed seeking to take advantage of rule 476(4) do not reveal any success being achieved by defendant/applicants.

There are, in my view, obvious requirements of a defendant/applicant under a rule such as 290 or 476(4). One is to show merits which, in my opinion, Mrs Williams, corroborated by Mr Dale, appears to do. The other issue which is typically looked at is the explanation for the defendant's failure to do, in time, what he or she ought to have done, whether by way of filing a notice of intention to defend or turning up at a trial.

The circumstances here are a little obscure. It cannot be said that the plaintiffs’ side were in default in any way or responsible for Mrs Williams' non-appearance on the 18th of August. They found themselves facing the unsatisfactory situation of a defendant who files notice of acting in person, a defendant who didn't give a conventional address for service, but rather a post office box that belongs to someone else, a company for which she's a consultant, it would appear. The post office box was used as the means of sending communications about the trial date.

Mrs Williams swears that it failed, that she didn't know of the trial date, indeed, didn't know of the judgment at all until about the 23rd of December last year, perhaps when steps were taken to enforce it. The most she could say against the plaintiffs’ side is that there was delay of sufficient proportions to create anxiety about the effect of rule 389. Well, that may add some slight colour to Mrs Williams' assertion that she thought the plaintiff might have given up. The possibility of doing that was adverted to in the e-mail of 19th of February but I don't think it was seriously entertained.

As Ms Downes says, Mrs Williams who is now represented by new lawyers, not the ones she's had in the past, has been a difficult defendant to pursue. She's been in trouble with the applications Judge on occasions and suffered substantial adverse costs orders.

In the ordinary course, having nominated the address for service which she did, with the consequences alleged by her, she might be regarded as responsible for her own misfortune and a defendant who shouldn't be let in to defend. However, the circumstances of this proceeding are highly exceptional. As well as the merits she puts forward which, in my view, would ordinarily entitle her to a hearing in which she participated, she has the unusual feature of one of the co-plaintiffs disavowing the entire proceeding and indeed, offering evidence that there are serious flaws blighting it.

I've perused Judge Dorney's reasons and some of the trial transcript. Notwithstanding Mr Fennell's assertions that there have been telephone conversations with Mrs Williams indicating she knew about the trial date and was determined not to turn up to spite the plaintiff, it seems that the Registrar's advice of the trial fixture was not delivered, but was returned to the Registry. His Honour determined to proceed with the trial in the circumstances, as I would have done myself, after Mrs Williams was called three times outside the court and failed to appear. It was the convenient course to make use of the day to advance the proceeding.

There's been some suggestion that the Judge might have directed his Associate or the Bailiff to attempt telephone contact with Mrs Williams after the hearing had commenced. Having notified the parties of my intention to do it, I asked his Honour about that and he had no recollection of it, expressing the view that if this had occurred it ought to be recorded, as it is not, in the transcript. It may be that the whispered exchanges that one of those present at the trial observed were misunderstood.

The court's orders today are that Philippa Geaney is removed as a plaintiff and joined as a defendant and that the judgement entered at the trial be set aside.

The remaining plaintiff, Mrs Wolfe's costs of and incidental to the trial on the 18th of August 2012 thrown away by the setting aside of the judgment and of the defendant's application to set aside are to be her costs in the cause.

The defendant's costs of her application to set aside the judgment are to be her costs in the cause.

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