ASIC v Rich

COUNSEL : R B S Macfarlan QC with J P A Durack SC (P) D L Williams SC with M J Steele (D1, D4)

SOLICITORS : Georgina Hayden, Solicitor for Australian Securities and Investments Commission (P) Thompson Eslick (D1, D4)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V JOHN DAVID RICH & ORS JUDGMENT 1 HIS HONOUR: These reasons for judgment relate to the defendants' application for an extension of time of four weeks to lodge their written submissions, and the plaintiff's application to extend the time for providing their written submissions in reply from four weeks to 4 1/2 months. 2 After hearing the applications on 5 February 2007, I postponed my decision until today so that I could speak to the Chief Judge in Equity to see whether acceding to the applications would cause difficulty in the administration of the business of the court of such a kind as to affect the public interest. The outcome of my discussion with the Chief Judge is that a substantial deferral of the completion of the case will cause inconvenience and disruption, but the court would be able to accommodate any such variation and so the difficulties created for the court should not, and do not, affect my decision. 3 This is litigation of great size and complexity. In such a case the submissions of the parties are of very great importance. The court needs and expects to receive submissions that will assist it to reach its conclusion. 4 In my opinion clarity and logical structure of argument, submissions that join issue, and consequently assistance to the court, are more likely to be achieved in such a case if the primary submissions are made in writing, than if they are made by oral argument. It follows that the parties should be allowed sufficient time, within reasonable limits, to present their written submissions fully and clearly. If that occurs, the parties may fairly be constrained in the extent to which they are permitted to supplement their written submissions by oral argument. 5 Senior counsel for a party is in the best position to know the amount of work required to carry out his client's instructions in any given task, and the resources available to complete the task. My experience in this litigation has enabled me to rely on senior counsel's estimates of the times needed to perform the tasks assigned to their respective clients, and to accept those estimates unless there is a strong reason for not doing so. My observation is that the very large amount of work required in this case has been carried out on both sides with prodigious effort and application and without any padding, prolixity or any significant waste of time. 6 Consequently, when it became necessary to set the timetable for final written submissions, I accepted the estimates given by senior counsel (except that I shaved two weeks from the vacation period), in the result giving the plaintiff and the defendants seven weeks each for their primary written submissions. ASIC proposed four weeks for its submissions in reply, subject to the qualification that longer time might be needed if the defendants' submissions were substantially longer than 600 pages. My timetable allowed ASIC four weeks. 7 The plaintiff delivered its primary written submissions, comprising 641 pages and schedules in three lever-arch folders, on the day prescribed by the timetable, 10 November 2006. On the due date for the defendants' written submissions, 29 January 2007, the defendants delivered eight lever-arch folders containing 1780 pages of submissions, with a covering letter making it clear that these were not the complete submissions. On 2 February 2007 the defendants supplied another lever-arch folder comprising 394 pages, making the total 2174 pages. The defendants seek leave to have the court receive these submissions out of time, and they also apply for a variation of the timetable to permit further written submissions to be lodged within the next three weeks. Senior counsel for the defendants outlined the content of the remaining submissions during the hearing of this application on 5 February. It is thought that the remaining submissions will comprise another lever-arch folder of (very roughly) 400 pages, though that estimate is necessarily provisional, as the writing of the final part of the submissions has scarcely begun. 8 ASIC complains that the defendants provided no explanation for their failure to meet the timetable, and no warning to the court or ASIC that it would occur, beyond notification on the day upon which the submissions were to be lodged. Those matters are regrettable, in my view, but they do not, at this stage, influence the decision that I have made. 9 If one reflects upon the nature of the plaintiff's and defendants' cases, and the evidence that has been adduced to support them (and in particular, the defendants' lengthy affidavits), it is unsurprising that the defendants' written submissions are lengthier than the plaintiff's submissions. My perusal of the defendants' submissions does not suggest that they are padded or prolix. 10 In my opinion the defendants have provided a satisfactory explanation for their failure to comply with the timetable for lodgment of their submissions. Clearly a great deal of work has been done and a substantial amount has been achieved in the available time. In my view it has become plain that the allocated time was simply too short to permit the defendants' legal team to complete the task to the standard they set themselves. I regard the defendants' submissions as generally helpful, and therefore in my opinion, it is in the interests of the court that they be completed to the satisfaction of the defendants' lawyers. 11 On any view, completion of the remaining work outlined by the defendants' counsel in court will take weeks rather than days. In my view it is not worth debating whether the additional time should be three weeks or (say) two weeks, as I have before me the considered estimate of senior counsel for the defendants and there is no good reason for departing from it. 12 I shall therefore grant the defendants leave, nunc pro tunc, to provide volume 9 of their submissions to the plaintiff and my associate on Friday 2 February 2007, and I shall extend the time for lodgment of the remaining submissions, on the subject matter outlined by senior counsel for the defendants in court on 5 February, to 26 February 2007. I expect this revised deadline to be strictly adhered to. 13 I have reached my decision on the basis that, if the defendants are given the opportunity they seek to complete comprehensive written submissions, it is fair and practicable to limit strictly their oral submissions. I shall return to this point. 14 The plaintiff's application for an extension of time has given me greater difficulty. I regard it as obvious that the plaintiff will need substantially more than the four weeks that has been allotted to them, in order to respond to submissions which, when completed, will be more than four times as long as the plaintiff's principal written submissions. The defendants' submissions will not be completed until 26 February, and the plaintiff will therefore need substantially more than four weeks after that time, in order to complete its task, even though it was able to commence its task on 30 January. 15 Senior counsel for the plaintiff has, with some force, given the court an estimate that three months will be needed to enable the plaintiff to respond to the initial tranche of submissions lodged by the defendants on 29 January. Though I begin with the prima facie view that such an estimate should be respected, in the present circumstances there are some countervailing factors that need to be considered, namely: · ASIC's remaining written submissions are submissions in reply, the plaintiff already having been given the opportunity to make its principal written submissions within the time estimated by its counsel; · disregarding the court's summer vacation, it has been 14 weeks since 21 September 2006 when the evidence in this case concluded, and over the period since that date all of the plaintiff's principal submissions and most of the defendants' principal submissions have been prepared and received, and yet ASIC now seeks approximately that same amount of time for its submissions in reply to only the first tranche of the defendants' submissions; · the plaintiff's assessment of the amount of time that will be needed to respond to the first tranche of the defendants' submissions is based, at least partly, on counsel's calculation that four weeks would have been (barely) adequate to respond to a submission of 600 pages, and therefore three months is needed to respond to a submission approximately three times that length, reasoning that seems to me unduly mechanical without reflecting an assessment of the substantive content of the submissions; · the plaintiff's assessment is also based, partly, on the test of what would be a reasonable time to respond to written submissions in an ordinary commercial case, senior counsel presenting the view that two weeks would be a reasonable response time to submissions of 250 pages, and therefore over three months would be a reasonable time to respond to 1800 pages, but again this is a mechanical approach that disregards the substance of the submissions, and it also fails to take into account the fact that these are submissions limited to submissions in reply; · the plaintiff's application proposes a further substantial postponement of completion of the hearing and judgment, significantly extending the time during which the defendants have these unresolved proceedings hanging over their heads and inhibiting their lives and careers (bearing in mind, however, that the additional time is a consequence of the length of the defendants' submissions). 16 There is additional difficulty in accepting the estimate by senior counsel for the plaintiff that a further 1 1/2 months (making the total time 4 1/2 months) will be needed to respond to volume 9 and the remaining tranche of the defendants' submissions. Senior counsel for the plaintiff informed the court that he and his client had not had a proper opportunity to assess volume 9, which arrived only last Friday. Volume 10 (if there is only one further volume) has not yet been written. That being so, the estimate of an additional 1 1/2 months can only be based on page length without any regard to content. 17 Doing my best to balance these considerations in reaching an overall assessment, it seems to me that the correct course is to grant the plaintiff a period of three months to provide its submissions in reply, but to set the case down for a directions hearing after the expiration of two of those three months so as to review progress and, if necessary, hear any application for a further extension, likely at that stage to be based on better information than is available now. 18 As in the case of the defendants' submissions, this substantial extension of time is based on the understanding that the need for extensive oral submissions will be reduced. Once the plaintiff's written submissions in reply have been received, I shall fix a time for a directions hearing to plan the taking of supplementary oral submissions, which will be on a strict timetable. I think it is pointless to fix a hearing date at this stage.

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