Andrew Bruce Thorpe v Ricardo Vatner

• 6 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 Master: The plaintiff is a solicitor (a partner in the firm acting for him). He alleges that he made a loan in the sum of $7,076.95 to the defendant. The loan is said to have related to the payment of fees to the Ascham School. 2 He brought proceedings in the Local Court. It was dealt with in the Small Claims Division of that Court pursuant to Practice Note No. 3/2001. It was defended. 3 It was listed for pre-trial review on 20 June 2003. On that day, directions were given for the exchange of statements of evidence on or before 15 September 2003 and the proceedings were set down for hearing on Monday 13 October 2003 at North Sydney Local Court. 4 At least by about August of 2003, steps had been taken to deal with the estate of the defendant pursuant to the Bankruptcy Act 1966. A trustee was appointed on 14 August 2003. By late August 2003, the plaintiff had become aware of that appointment. 5 What happened thereafter is set forth in detail in the affidavits relied on by the plaintiff in these proceedings. For present purposes, I will expressly refer to just some of that material. 6 At some time prior to 15 September 2003, a decision was made by the plaintiff not to prepare and exchange statements. By facsimile transmission of 16 September 2003, the plaintiff was advised by the solicitor for the defendant that the defendant was in the process of filing statements and sought advice as to the position of the filing and serving of statements by the plaintiff. 7 On 16 September 2003, there was a meeting of creditors. It was adjourned to 30 September 2003. A further meeting took place on that day. At that meeting, the trustee announced "Congratulations Mr Vatner, you have a Part X". The plaintiff was represented at both meetings. 8 By letter dated 1 October 2003, the solicitor for the defendant advised inter alia "Yesterday, as you are well aware, Mr Vatner entered into a Part X arrangement". The letter also addressed the question of the future course of the litigation. It concluded with "We look forward to hearing from you within 48 hours". 9 It is common ground that at some time prior to the hearing date, both parties came to the belief that the defendant had entered into a Part X arrangement. Further, it is common ground that the effect of such an arrangement would be to bring about a stay of the proceedings. 10 The plaintiff lodged a proof of debt. There were discussions with the trustee concerning it. 11 By 10 October 2003, there had been no adjudication on the proof of debt. By facsimile transmission on that day, the solicitors for the plaintiff expressed the view that the hearing should be adjourned and sought consent to an adjournment of the hearing. The solicitor for the defendant responded by facsimile transmission on the same day. It advised that the defendant was ready, willing and able to proceed. It also advised that any adjournment would be opposed. 12 Because of a deficiency in execution, there was in fact no Part X arrangement in effect as at 10am on 13 October 2003. The solicitor for the plaintiff had become aware of that matter shortly before the commencement of the hearing. The solicitor appearing for the plaintiff on 13 October 2003 (who was an employee of the firm) became aware of that matter shortly following the making by her of an application for adjournment. She had been instructed to attend before the court and seek an adjournment on the basis that the proceedings had been stayed. The arrangement came into effect later on that day after the proceedings had been dealt with by the court. 13 The proceedings came before an assessor. She heard a contested application for adjournment. 14 The parties were given the opportunity to address the court on the question of adjournment. After listening to the submissions (and reading the documents put before her), the assessor refused the adjournment. She concluded that the matter should proceed on that day on the basis of what was before the court. She dismissed the plaintiff's claim on the basis that there was no evidence to support it before the court and no submissions were made by the plaintiff. 15 The plaintiff now appeals to this court. The summons was filed on 10 November 2003. The grounds of appeal formed part of that document. Not all of the grounds are pressed. 16 There is a limited avenue of appeal from the Small Claims Division. The legislature has made it clear that save for questions of lack of jurisdiction and denial of natural justice, there is to be no appeal from the Small Claims Division. 17 In the present case, the grounds look to denial of natural justice as the area of relief. The denial is said to arise from the refusal of the adjournment. 18 There is a transcript of what took place before the assessor. There is common ground as to various matters. I shall mention some of them. The parties had legal representation. The parties had an opportunity to be heard on the question of the adjournment. Each party made submissions on that question. A decision was made to refuse the adjournment after the hearing of those submissions. I should also mention that there was no suggestion of bias. 19 There is no issue between the parties that a decision to grant or refuse an adjournment is an exercise of discretionary power and that in the exercise of that power the court has regard to the interests of justice. 20 There is abundant authority on the question of a court of appeal interfering with such a decision at first instance. The court has been referred to a number of authorities. For present purposes, it is unnecessary to make any express reference to those cited cases. 21 In the present case, the court is dealing with an appeal from the Small Claims Division of the Local Court. A small sum is involved. A special procedure has been prescribed for the conduct of actions in that division. The parties followed the procedure for informal hearings (which involved the exchange of statements and a hearing on those statements with submissions). 22 It has been said that the requirements of natural justice do not constitute a fixed body of rules. What is required will depend upon the particular circumstances of the case before the court. 23 The case advanced on behalf of the plaintiff is that the assessor made an erroneous assessment of factual material and that this error was compounded by error of law (which arose in part because of the conduct of the defendant). The error of law was said to be a misconception that she was able to exercise the power to grant leave pursuant to s233 of the Bankruptcy Act. There was said to be a denial of natural justice because there was a refusal of an adjournment to a party that was not then in a position to run his case. 24 I am not satisfied that there was an erroneous assessment of factual material. Although there may have been confusion in the mind of the assessor as to the operation of s233, it seems to me that any such confusion lacked relevance to what lead the assessor to refuse the adjournment. In these circumstances, it is unnecessary to consider what may have flowed from the making of such errors. 25 What was said by the assessor in dealing with the question of adjournment may be found in paragraph 144 of the transcript. I shall mention some of the matters referred to therein. She accepted that the plaintiff had been proceeding on the basis that there was a Part X arrangement in existence. She accepted that the plaintiff had failed to comply with the direction of the court to exchange statements. She found that the plaintiff had made a crucial decision not to file statements in accordance with the direction. She took the view that the plaintiff had decided to act on the basis that the adjournment would be granted. She did not accept that the plaintiff had a valid reason for not complying with the direction of the court. 26 The question to be answered by the court is whether or not in the particular circumstances of this case there was a denial of natural justice. 27 The plaintiff is a solicitor. He made a decision not to prepare and exchange statements and not to comply with the court direction. He was made aware that the defendant was preparing statements. He did not give notice of an adjournment application until shortly before the hearing date (the Friday before). Thereafter, he was made aware that the defendant would not consent to an adjournment. He did not pursue the question of why that consent was not forthcoming. On the hearing date an employed solicitor was instructed to attend the court and apply for an adjournment. The granting of it was regarded as a mere formality. 28 In the circumstances of this case, it seems to me that he had chosen to place himself in a position where he was unable to proceed on that day and that he exposed himself to the risk that the adjournment might not be granted and that the court might proceed to hear his case on that day. 29 The plaintiff bears the onus of demonstrating an entitlement to relief. In my view, that onus has not been discharged. I am not satisfied that in the circumstances of this case there has been a denial of natural justice. Accordingly, the appeal fails. 30 The summons is dismissed. The plaintiff is to pay the costs of the proceedings.

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