Adam v Sara [2010] NSWSC 530 | Case summary

JUDGMENT 1 HIS HONOUR: Before the court is a Notice of Motion in which Nadia Adam (whom I shall refer to as the applicant) seeks the following relief: "1 The order made ex parte on 27 April 2010 dismissing the Summons be set aside. 2 That the Summons be heard at the same time as this Notice of Motion. 3 Costs." 2 The matter came on for hearing at short notice for reasons that will become apparent in due course. 3 An affidavit in support of the Notice of Motion was sworn by the applicant's instructing solicitor, Mr Jim Kekatos. He deposes to the fact that he briefed Mr Damien Allen of counsel to appear on 27 April when the summons was to be heard. He further deposes to the fact that counsel informed him that he had forgotten "to diarise the date" and that as a consequence, counsel had not appeared. There being no appearance on behalf of the applicant when the matter was called on, the summons was dismissed with costs. 4 The relief which the applicant sought in the summons was an order that proceedings which had been commenced in the District Court by Edward Sara (whom I shall refer to as the respondent) be transferred to this Court. 5 In support of the summons the applicant swore an affidavit to which is annexed the Amended Statement of Claim that was filed by the respondent in the District Court. At the heart of the dispute, as best I can understand, is a claim by the respondent for the recovery of money which he lent to the applicant (and others) but which has not been repaid. Pursuant to the Amended Statement of Claim, it is claimed that the applicant, together with her mother and step-father and an entity known as Arteria Property Pty Ltd (Arteria), entered into an agreement dated 2 February 2009 in which they acknowledged that they had incurred a debt of $160,000 that was payable to the respondent on or before 8 November 2008. The debt had not been repaid. It is claimed that it was a further condition of that agreement that Arteria would pay the respondent the sum of $340,000 on or before 16 February 2009 and that if it failed to do so, interest at the rate of 10% per annum would accrue until the whole amount of the loan was repaid. It is further claimed that the applicant and her parents guaranteed that Arteria would meet its obligations under the agreement and that they would indemnify the respondent against any liability or loss that was occasioned in the event that Arteria failed to do so. Accordingly, the respondent claims the sum of $340,000 together with interest and costs. 6 The applicant seeks to file a cross-claim in these proceedings. In her cross-claim the applicant, who is a law student, asserts that she was 21 at the time that she signed the agreement and that, in effect, she only did so because of threats she received from the respondent. More particularly, it is asserted that the respondent threatened the applicant and her mother that if the money was not repaid the respondent "would have physical violence done to [the applicant and her mother] including sexual assault". The applicant went on to assert that the effect of the document which she had signed was that the respondent would not enforce the terms of the original agreement if she guaranteed that the sum of $340,000 would be paid to the respondent by 16 February 2009. It is asserted that the applicant signed the agreement in the circumstances which I have just outlined. It is also claimed that the respondent knew that she had only signed the agreement because of the threats which he had made to her and to her mother and that she was not given an opportunity by the respondent to obtain independent legal advice before she had done so. 7 The applicant also sought to rely upon a further affidavit, which was sworn on 17 May 2010, for the purposes of these proceedings. Objection was taken to the affidavit upon the basis that it did not contain anything that was relevant to these proceedings. I have formed the view that it has some, albeit limited relevance, and accordingly I overrule the objection which was taken to it. That said, the weight that can be attributed to some of the claims made in the affidavit, given the manner and form in which they are made, must be somewhat questionable. In that affidavit, the applicant deposes to the fact that the respondent has been charged with three counts of stalking or intimidation with the intention of causing another person to fear physical or mental harm pursuant to s 13(1) of the Crimes (Domestic and Personal Violence) Act 2007 and one count of using a carriage service to menace/harass or offend pursuant to s 474.17(1) of the Criminal Code Act 1995 (C'th). The latter charge, I was informed, relates to the applicant's mother. The details of the other charges are, to say the least, scanty. For example, I have not been provided with any information about the identity of the alleged victims of the stalking charges. Those charges were apparently listed for hearing last Friday, presumably in the Local Court. The applicant also annexes to her affidavit a copy of an apprehended personal violence order dated 29 October 2009 which was made against the respondent at the instigation of the applicant's mother. 8 The applicant then deposes that the following events have occurred: (a) Endless telephone calls and text messages. On one day my mother received 58 calls from the [respondent]; (b) Threats of rape and physical harm; (c) My stepfather and other members of the family have been stalked by the [respondent]; (d) On 13 July 2009, a brick was thrown through my grandmother's bedroom window; (e) On 2 September 2009, my mother received a telephone call from a contract negotiator by the name of Raymond Younan who goes by the name of "Big Ray" stating that the [the respondent] had gone to see him and wanted him to collect the money off my mother. (f) On 10 September 2009 my mother's motor vehicle was set on fire whilst parked in the driveway. 9 The potential significance of that material, as I understand the situation, is said to derive from the concluding paragraph of the applicant's affidavit which is in the following terms: From about February 2009 both my family and I have suffered continual harassment and intimidation by the [the respondent]. It has been difficult for me to deal with this matter due to the previous threats of violence. 10 The evidence upon which the respondent relies consists of an agreed chronology together with the Defence and the Defence to the Amended Statement of Claim which were filed by the applicant in the District Court. 11 From the chronology I have been able to glean the following information about the conduct of these proceedings. The respondent filed a Statement of Claim in the District Court on 22 May which was served on 10 June 2009. On 13 July 2009 the applicant filed a Notice of Motion seeking to have the Statement of Claim dismissed. In an affidavit sworn on 3 July 2009 in support of the Notice of Motion, the applicant deposed that "if the matter is not dismissed I will seek to have the matter transferred to the Supreme Court to have the document set aside". On 7 August 2008 the Notice of Motion was dismissed with costs. Leave was however granted to the respondent to file an Amended Statement of Claim which was duly filed on 28 August 2009. On 13 October 2009 a Defence was filed by the applicant but, for reasons which remain unexplained, it dealt only with matters raised in the original Statement of Claim. On 9 December 2009, at a directions hearing, it was indicated that the applicant intended to apply to the Supreme Court for an order transferring the proceedings to that Court. No such application was made at that time. On 2 February 2010 a Second Amended Defence was filed by the applicant. On 29 March 2010 the proceedings in the District Court matter were fixed for hearing on 27 May 2010. It was only thereafter, on 9 April 2010, that the summons seeking to have the proceedings transferred to this Court was filed. It was not served until 23 April 2010. It will be readily apparent, since the matter is listed for hearing in the District Court tomorrow, that a decision about the present application has to be reached today. 12 Both Mr Kekatos and the applicant were required for cross-examination. It is unnecessary to refer to that evidence in any detail. Suffice it to say that Mr Kekatos was unable to provide any satisfactory explanation as to why various directions made in the District Court were either ignored or not complied with within the prescribed time limits or indeed why the present application was filed only after the hearing date was obtained in the District Court. Nor could the applicant shed any light upon those matters. 13 In seeking to have the order dismissing the summons set aside, the applicant relies upon Part 36 Rule 16(2)(b) of the Uniform Civil Procedure Rules 2005 which makes provision for the setting aside of an order that is made in the absence of a party even if the party had notice of the hearing. Although the respondent contended that there had not been a "full and frank explanation" for counsel's non-appearance, I am disposed to accept at face value the evidence which, as I have indicated, is to the effect that counsel did not appear because of an oversight on his part. In the final analysis, the matter has proceeded upon the basis that should the applicant make out her case that the proceedings ought to be transferred to this court, then no real impediment existed to granting to the applicant the relief which is sought in the Notice of Motion. By the same token, were the applicant to fail to persuade the court that the proceedings ought to be transferred, it would follow that the Notice of Motion should be dismissed. In practical terms, the consequence has been that the applicant's desire to have the Notice of Motion and the Summons heard together has been accommodated. 14 Section 140 of the Civil Procedure Act 2005 which governs the present application relevantly provides: (1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court … order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court. … 15 It is clear that the onus rests upon the party seeking the order and that the discretion which I am bound to exercise is a broad one. There is no limit placed upon the exercise of that discretion such as appears, for example, in ss (3) of that section which is concerned with a claim for damages arising from personal injury or death. In exercising the discretion I must have regard to the relevant circumstances of the case in order that justice is best served between the parties. See Trilogy Corporate Solutions & Anor v Fitzroy Shopfitting & Building Pty Ltd [2006] NSWSC 1026 at [para 11]; Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631 at paras 17-18. The powers under s 140 of the Civil Procedure Act must be exercised in accordance with s 56 of that Act in order to facilitate the just, quick and cheap resolution of the real issues in the proceedings: Guthrie v Spence [2009] NSWCA 369 at para 27: See also Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. 16 The relief which the applicant seeks in her cross-claim is a "declaration that the document dated 2 February 2009, headed 'Acknowledgment of Debt and Repayment of Loan/Debt Agreement and Guarantee' and signed by the cross-claimant is void pursuant to section 23 of the Supreme Court Act 1970, section 72 of the Fair Trading Act or section 7 of the Contracts Review Act." 17 Section 7(1) of the Contracts Review Act 1980 relevantly provides that: (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract … 18 Section 72 of the Fair Trading Act relevantly provides that: … (5) The orders referred to in subsections (1) and (2) are: (a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Supreme Court thinks fit, to have been void from its beginning or at all times on and after such date before the date on which the order is made as is specified in the order, (b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified, (c) an order refusing to enforce any or all of the provisions of such a contract or arrangement … 19 The applicant contends that "the document is void… because it was the fruit of [the respondent's] unconscionable conduct" within the meaning of s 43 of the Fair Trading Act which, in turn, creates an entitlement to seek relief pursuant to s 72 of that Act. In support of that submission, the applicant relies upon the allegations concerning the respondent's conduct towards her to which I referred earlier. It is submitted, given her age and her relationship with her mother, that the respondent took advantage of the applicant in having her sign the document. It is also contended that the agreement is "unenforceable' because the applicant's promise to pay "was not supported by consideration". 20 The submission which is advanced on behalf of the applicant is that the proceedings have to be transferred because the District Court "does not have jurisdiction to make a declaration in equity". Although I did not have the benefit of any further elucidation of that proposition by counsel, I am not disposed to accept the submission. Section 134B(1) of the District Court Act is in the following terms: The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings in which relief under the Contracts Review Act 1980 is sought, where the amount or value of the consideration that has passed or would, if the contract were fully executed, pass from one contracting party to another does not exceed the amount for the time being specified in section 44 (1) (a), as determined by the Court. 21 Section 135 of the Act is in the following terms: The Court has the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in any proceedings in which relief is sought under the Fair Trading Act 1987 and where the amount of the claim concerned does not exceed the amount for the time being specified in section 44 (1) (a). 22 It is apparent that the amount in question in the present case does not exceed the monetary limit of the District Court's jurisdiction. Furthermore, the District Court is clothed with the same jurisdiction as is exercisable by the Supreme Court in respect of the relief which the applicant seeks pursuant to the Fair Trading Act and the Contracts Review Act respectively. It would appear tolerably clear that the District Court is thereby empowered to grant a declaration pursuant to each of the sections to which I have just referred. But even if I am wrong about that issue, those same legislative provisions and upon which, as I have said, the applicant seeks to rely, nevertheless provide her with other adequate remedies in the event that she is able to demonstrate that the respondent's conduct had been either unconscionable or that the contract was unjust. Putting the matter another way, it is not necessary for the applicant to obtain a declaration in the District Court in order to have her interests in those proceedings adequately protected: see Bushby v Dixon Holmes Du Pont Pty Ltd [2010] NSWSC 234. 23 Putting that matter to one side, there are a number of other reasons which would incline me to exercise my discretion not to accede to the application. First, as I have already said the matter is listed for hearing in the District Court tomorrow. That date was obtained nearly two months ago and the respondent is entitled to have his claim heard without any further delay. Moreover, the dispute itself and the issues to which it gives rise are of no great complexity. Indeed I was informed that the hearing is listed for one day only. Secondly, it is important to have regard to the requirements of s 56 of the Civil Procedure Act. Thirdly, the attitude of the applicant and that of her legal representatives to the proceedings in the District Court has been, as the evidence to which I referred earlier readily demonstrates, decidedly leisurely. As I have already indicated, no satisfactory explanation has been forthcoming as to why court orders in relation to matters such as the filing of pleadings within prescribed time periods have not been complied with by the applicant. Nor has any satisfactory explanation been provided as to why the cross-claim was not prepared until April this year, given that it was first foreshadowed in July last year. Furthermore the applicant's solicitor's decision to file a Defence and then a Defence to the Amended Statement of Claim in the District Court before the cross-claim itself was prepared appears to be at odds with the stance which was originally indicated. Moreover, the applicant's claim in her affidavit of 17 May 2010 that she was unable to "deal with this matter due to the previous threats of violence" from the respondent is difficult to reconcile with the various steps in which she has engaged with her legal representatives, being steps that were apparently designed to advance her interests in this matter. Counsel for the respondent submitted that the evidence reveals that the applicant and her legal representatives have been engaged in, what was described as, "stalling tactics". I am not in a position to draw any such inference but it is reasonable to observe that their approach could hardly be described as a model of how litigation should be conducted. Such a consideration certainly tells against the exercise of the court's discretion in favour of granting the relief which is sought. Accordingly, I have reached the conclusion that no proper basis has been established for granting the relief sought in the Summons. 24 I make the following orders:

Adam v Sara

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