Bastian v Travel Air International Pty Ltd and Chandershekar

JUDGMENT 1The short facts of the matter are that following business dealings between the parties, the plaintiff issued proceedings against the defendant for damages. 2Those proceedings came on for hearing before the Blacktown Local Court on 22 June 2010. At the hearing the plaintiff was represented by Mr Prakash, solicitor, and the defendants were represented by Mr Kells, solicitor. 3Prior to the commencement of the hearing the Magistrate made a general inquiry as to whether the parties were aware of the cost implication should a party's claim fail. A further discussion took place regarding a Statement of Agreed Facts and Issues. The plaintiff was then called and the Magistrate adjourned to read the plaintiff's affidavit. 4When the Court resumed, the Magistrate referred the parties to an authority that he believed had direct relevance to the issues before the Court. He then suggested that the parties should consider that authority and explore the prospects of settling the proceedings. At this point the solicitor for the defendant (who later gave evidence that he had a hearing impediment) indicated that he was having a problem hearing what the Magistrate was saying. The parties informed me (and the transcript bears this out) that an attempt was made to utilise a court-installed device to assist the solicitor. Whilst initially there appeared to be some difficulty with the device, the transcript of 22 June 2010 on page 7 at line 10 and thereafter seems to indicate that the defendant's solicitor was conversing freely with the Magistrate. 5During the discussion the solicitor for the defendant made reference to the defendant's assertion that it had a claim against the plaintiff, and the Magistrate pointed out that as the defendant had not filed any cross claim, the Court was only dealing with the plaintiff's claim. 6At this point Mr Kells asked for the matter to be adjourned for a short period so that he could speak to his client. 7Mr Kells returned and asked the Court's leave to file a cross claim. This request was, quite understandably, refused and the Magistrate indicated that he was going to deal with the matter on the pleadings before him. 8Mr Kells then in effect asked the court to allow him to get instructions from his client, and the court was adjourned. 9After a short adjournment the parties returned to Court and the defendant's solicitor informed the court that a settlement had been reached. Mr Kells then informed the court of the terms of the settlement. I was told in evidence before me that all the parties were before the court when this occurred. 10The Court then entered judgment in the terms of the compromise that was announced by the defendant's solicitor. 11On 15 July 2010 the applicants/defendants filed an application to the Court seeking to set aside the judgment pursuant to rule 36.15 of the Uniform Civil Procedure Rules. That rule says as follows: 36.15 General power to set aside judgment or order (1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent. 12The grounds relied upon by the applicant can be summarised as: (a)that the solicitor for the defendant was suffering from a defect of hearing and could not hear nor understand the proceedings before the Magistrate; (b)that the defendant's had not given instructions to their solicitor, and that he had consented to the judgment without their authority. 13In submissions to me on 18 February 2011, the applicants indicated that in relation to rule 36.15 they were relying on the ground that the judgment was given or entered up 'irregularly'. They were not relying on the grounds of illegality or against good faith. 14Prior to the hearing before me a transcript of the hearing on 22 June 2010 was obtained. Initially, I understand that there was an indication by the applicants that they disputed the accuracy of the transcript. During the hearing before me on 8 October 2010, the applicants conceded the accuracy of the transcript and after discussion with the applicants it became clear that the only ground relied upon by them was that they had not instructed Mr Kell to enter the judgment against them. 15At the hearing before me evidence was given by Mr Kells and by Mrs Chandershekar. 16From the evidence it appeared that, when Mr Kells requested that he be allowed to get instructions from his client, the parties left the court room. The second defendant and other members of her family were sitting and Mr Kells was talking to them. The plaintiff's solicitor, Mr Prakash, approached and asked if he could speak to Mr Kells in front of Mr Kells' clients. Mr Kells deferred to his client and tacit agreement was given. Some discussion took place between the solicitors and Mr Prakash indicated his client would make a concession on the amount of the damages claimed by his client. As I have said this discussion took place in the presence of the defendants. 17On 8 October 2010 during the hearing of this application, Mr Kells gave what can only be described as confusing evidence. At one point Mr Kells told the court that he did consent to the judgment but that he did not have the consent of his client (see page 11) but shortly thereafter he said "... at the time I believed that I had consent. I believed by the actions and demeanour of my client" (see page 17) and later "... and the certain demeanour of the client. I believed that she consented ..." (page 18). 18Leave was given for the applicant to cross-examine Mr Kells, who indicated that while the settlement was being discussed in the presence of the defendants, the son of the second defendant said words to the effect "Let's walk away from this and we'll get him later on..." (see page 21). Mr Kells said further "... and I believe at that point my client was nodding. I decided that she was consenting to that move by that time..." (see page 21). 19Mrs Chandershekar also gave evidence before me. Her evidence was that she did not instruct Mr Kells to settle her claim and that he did so without her authority. In cross-examination she conceded that she was present when settlement discussions took place between Mr Prakash and Mr Kells. She recalls the original Magistrate giving Mr Kells material to look at and said that whilst she was in court when the judgment was entered, she did not hear everything that was said. She heard the statement about the costs order and heard the Magistrate say "judgment for the plaintiff ". 20The applicants' submission is that I should conclude that Mrs Chandershekar had not given her then solicitor instructions to settle the claim, therefore he acted without her authority. In such circumstances, the judgment has been entered irregularly.