Before the Court for hearing today are two Notices of Motion. The first has been filed by the first defendant and seeks an order for security for costs. The second has been filed by the second defendant and seeks to set aside a default judgment which has previously been entered against him.
The orders sought in both of those motions are opposed by the plaintiff.
At the commencement of today's hearing, an application was made by the solicitor for each of the first and second defendants for an adjournment of the hearing of the motions. That application was opposed by counsel for the plaintiff. For the purposes of determining those applications, it is necessary to set out the procedural history of this matter, particularly as it applies to the conduct of each of the first and second defendants.
[2]
The defendants' conduct of the proceedings
Default judgment was entered against the second defendant in favour of the plaintiff on 11 October 2019 in a sum of $935,071.19. On 14 September 2020, some 11 months later, the second defendant filed the present motion, at a time when he was not legally represented. The motion was initially supported by two affidavits sworn by the second defendant, one of 14 September 2020 and the second of 6 October 2020. A third affidavit of 27 October 2020, apparently prepared after he had engaged legal representation, is now also relied upon.
The second defendant's motion was originally listed before me for hearing at 10.30am on 28 October 2020. By that time, the second defendant had retained Mr Bastick, solicitor, to act on his behalf. At 10.31am that day, my Associate received an email from Mr Bastick which was (in part) in the following terms:
… I am now instructed to make an application today or [sic] the hearing to be adjourned on the grounds [sic] now instructs that he believes he was not in fact served by the process server Sal Roppolo on 25 July 2019 as claimed, and accordingly, wishes to make [sic] application that Mr Roppolo should be called to give evidence and to be cross-examined as to that fact.
Further that [sic] my client would seek to file further evidence detailing his intended grounds of defence.
Mr Robertson of counsel, who appears for the plaintiff, had been notified by Mr Bastick, at or about the time of that e-mail being sent, that Mr Roppolo (the process server who filed an affidavit of service) was required for cross-examination.
The hearing of the second defendant's motion commenced before me on 28 October. I initially dealt with the plaintiff's objections to the second defendant's affidavit material, following which the issue of Mr Roppolo's attendance was raised. Without going into detail, it can be fairly said that in light of the late notice that had been given by Mr Bastick as to the necessity for Mr Roppolo's attendance, there was some doubt as to whether or not he was available. When I asked Mr Bastick why those acting for the plaintiff had not been notified until the morning of the hearing that Mr Roppolo would be required to attend, he responded:
My client's instructions were that he had no recollection of having been served and the basis for that lack of recollection is set out in his affidavit of 27 October. There seems to be some confusion, on the part of Mr Neylon, on the interplay between the two separate proceedings.
The following exchange then took place between myself and Mr Bastick:
HIS HONOUR: I am looking at Mr Neylon's affidavit of 6 October. He said, in paragraph 6, "I have never been served in these proceedings." Presumably you had his affidavit of 6 October, 2020 when you were preparing this matter. Presumably you saw the affidavit of Mr Roppolo, upon which reliance is placed by the respondent. Why was it, in those circumstances, that the necessity for Mr Roppolo's attendance was not communicated earlier than this morning? Your client asserted as long ago as 6 October that he had not been served.
BASTICK: My client asserted that he had not been served, but he was otherwise aware of the proceedings.
HIS HONOUR: Presumably you wish to cross-examine Mr Roppolo and challenge his assertion that your client was served. My point is that as long ago as 6 October your client was asserting that he was not served. I would have thought that long prior to 10 o'clock this morning you had made [sic] aware of the existence of Mr Roppolo's affidavit of service. I query, in those circumstances, why it was only this morning that you indicated that he would be required for cross-examination.
BASTICK: Your Honour, my client has provided varying instructions. One has been that he had not been served, however then instructing that he was, nevertheless, aware of proceedings against the company and some form of personal action against both himself and Mr Sommers. He goes on to explain, in his affidavit of 27 October, that he proceeded, nevertheless, on the expectation that these matters were being negotiated and resolved by Mr Sommers.
It should be noted at this point that the second defendant's present solicitor, Mr Sewell, indicated to me earlier this morning that he does not wish to cross-examine Mr Roppolo, from which I infer that the fact of service of the statement of claim is no longer an issue on the second defendant's notice of motion.
Doing the best I can, and bearing in mind Mr Bastick's various statements to the Court (including his statement that the second defendant had provided him with "varying instructions" in relation to this issue), as well as Mr Sewell's indication that Mr Roppolo is now not required, I infer that in relation to the issue of service:
1. the second defendant's initial position, as set out in his affidavit of 6 October, was that he had not been served with the statement of claim;
2. he initially instructed Mr Bastick that he had no recollection of being served;
3. he then instructed Mr Bastick that he had been served;
4. he then instructed Mr Bastick that he had not been served, resulting in Mr Bastick's indication that Mr Roppolo was required for cross-examination; and
5. he has now instructed Mr Sewell that Mr Roppolo is not required for cross-examination, from which I infer that the fact of service as deposed to by Mr Roppolo is not in issue.
The unsatisfactory nature of those conflicting positions will be obvious without any further comment.
Because Mr Roppolo's availability could not be confirmed on the last occasion, the second defendant's Notice of Motion was adjourned. However, I took the step of allocating a date on which I was available to hear it. That is not necessarily the usual course which is taken. However, having read the entirety of the material in preparation for the hearing for the motion, I did not think it appropriate to burden another Judge of the Court with that task. I also had in mind that if I did not take that course the motion may not be listed for hearing for some time.
In the course of adjourning the motion I was made aware that the first defendant (from whom Mr Bastick also had instructions to act) had indicated that he proposed to file a motion seeking an order for security for costs. It was generally agreed that it would be efficient to hear both motions together and accordingly, I also listed the first defendant's motion for hearing today.
The background to the first defendant's conduct of these proceedings is set out at length in an affidavit of Peter Harkin, the plaintiff's solicitor, of 12 November 2020.
Mr Harkin has stated that a Mr Daoud of Sydney City Lawyers had originally been retained to act for the first defendant in November 2019. Mr Harkin has stated that for a seven and a half month period between 6 November 2019 and 19 June 2020, the first defendant repeatedly failed to comply with orders of the Court and file his evidence in respect of the proceedings, leading the Court to a position where "guillotine orders" were made on 19 June 2020 requiring him to file and serve his evidence by 27 July 2020. [1] On that day the first defendant, absent Mr Daoud's intervention, served an affidavit directly on Mr Harkin. That caused Mr Harkin to enquire of Mr Daoud by an e-mail of 29 July 2020 whether Mr Daoud was in fact still acting for the first defendant. Mr Harkin did not receive the courtesy of a response.
The proceedings against the first defendant were listed for directions before the Registrar on 27 August, and at that stage were ready to take a hearing date. Mr Harkin's employed solicitor, Ms Bullen, appeared for the plaintiff on that day. Neither the first defendant nor Mr Daoud appeared. Orders were made on that occasion by the Registrar of which Mr Daoud was advised by Mr Harkin on the same day. Following that, the first defendant, without notice to Mr Harkin, arranged for the matter to be listed for directions on 3 September 2020.
In light of this, Mr Harkin again contacted Mr Daoud on 31 August 2020 enquiring whether he was still retained to act for the first defendant. On that occasion Mr Daoud advised him that he was no longer retained in the matter. He ultimately filed a Notice of Ceasing to Act for the first defendant on 6 October.
The first defendant then appeared personally at a directions hearing on 3 September and informed the Registrar that he was in the process of obtaining new legal representation, as a consequence of which the matter was adjourned for a period of two weeks. Mr Bastick appeared for the first defendant at a directions hearing on 17 September. Mr Bastick then appeared at a further directions hearing on 16 October 2020 and he also appeared before me on 28 October 2020 on the hearing of the second defendant's motion, and again on 30 October 2020.
The first defendant's motion came before me two days later on 30 October, for the purposes of making directions to facilitate the hearing. On that day I confirmed today's listing of both motions, and I directed the first defendant to file and serve any affidavit evidence in support of this motion for security for costs by 5.00pm on 6 November 2020. No evidence was filed by the first defendant pursuant to that direction.
At 12.10pm on 9 November 2020, my Associate received an e-mail from Mr Bastick, which incorporated an e-mail that he had sent earlier that morning to the solicitor for the plaintiff, and which was in the following terms:
I refer to previous correspondence and write to you in my capacity as an officer of the court.
Last Wednesday, 4 November, Mr Neylon [the second defendant] instructed me to cease work, and terminated my authority to act on his behalf in the above proceedings. He had previously advised that he had taken steps to engage alternate representation.
For his part, Mr Sommers [the first defendant] has refused to accept my advice regarding further preparatory steps required ahead of the hearing on 16 November.
On 4 November Mr Sommers similarly sent me a series of messages which, in addition to various threats, clearly communicated that the solicitor/client relationship had irretrievably broken down.
I advised Mr Sommers that I intended to treat his conduct as a repudiation of our retainer and that I intended to treat his conduct as constituting an instruction to cease to act and that he had terminated my instructions. In view of his conduct I am not, in any event, prepared to act further for him.
I have advised both Mr Neylon and Mr Sommers of their obligation under r 7.27 of the UCPR to file a notice of termination with the Court and serve that notice on the other parties. However on logging onto the court portal this morning I can see no indication that either has followed that instruction.
At my direction, my Associate responded to Mr Bastick thanking him for his courtesy, advising him that he would be excused from attendance today, and requesting that to the extent that it was within his capacity to do so, he write to each of his former clients informing them that the notices of motion would remain listed for hearing before me today. My Associate did not receive any confirmation from Mr Bastick that this request was met, although I do not say that by way of criticism. In circumstances where Mr Bastick is an officer of the Court, and in circumstances where he obviously had a means of communication with each of his former clients, I am prepared to infer that he acted in accordance with the request that I had made of him, and notified both the first and second defendants of the matters to which I had referred.
In support of the present application, Mr Sewell, who appeared on behalf of both the first and second defendants read his affidavit which was filed with the Court at 6.14pm on 13 November 2020. That affidavit discloses that Mr Sewell was engaged by the second defendant, in relation to bankruptcy proceedings commenced against him, on 4 November 2020. On 12 and 13 November 2020 he was engaged by the first and second defendants to act for each of them in these proceedings. This engagement was made in circumstances where their respective motions were listed before the Court today, a fact of which I am satisfied that each of them was aware.
Mr Sewell conferred with the first and second defendants on 12 November and again on 13 November. He received instructions to retain a Ms Case, Barrister to appear on the second defendant's motion, and forwarded counsel a brief on 13 November 2020 at about noon. Mr Sewell made no reference to receiving similar instructions to brief counsel to appear on behalf of the first defendant on his motion. I should also note that after this affidavit was read, and in the course of an exchange between myself and Mr Sewell, it emerged that Ms Case had in fact returned the brief. It is not entirely clear when that occurred.
[3]
Submissions of the first and second defendants
In support of the application for an adjournment, Mr Sewell submitted that the position of each of the defendants would be more advantageous if the application were granted. He foreshadowed that additional affidavit evidence would need to be filed although when pressed, his description of the nature of that affidavit evidence was somewhat nebulous.
Mr Sewell also indicated that he wished to brief counsel, I infer, to appear on behalf of both of the defendants on the respective notices of motion. On a number of occasions Mr Sewell emphasised that his application for an adjournment was limited to a period of two weeks, and submitted that in the light of such a short period, there would be no prejudice to the defendants if the application was granted in each case.
It should be noted that Mr Sewell did not submit that he was not in a position to proceed if the application was refused. However, he emphasised that he wished to be in a position to brief counsel to enable the matters to proceed, as he put it, in a way which was fair to each of the defendants.
[4]
Submissions of the plaintiff
Counsel for the plaintiff, made reference to various aspects of the procedural history to which I have already referred. He highlighted, in particular, the procedural defaults on the part of the first defendant and made reference, in the course of submissions, to both defendants having engaged in what he described as "solicitor shopping".
Fundamentally, counsel submitted that both defendants had been given an ample opportunity to properly prepare for the hearing today. He submitted in those circumstances the applications should be refused.
[5]
CONSIDERATION
The discretionary power to grant an adjournment is conferred by s 66 of the Civil Procedure Act 2005 (NSW) (the Act). The discretion is obviously a wide one and must be excised having regard to the individual facts and circumstances of each case. It must also be exercised by reference to the overriding purpose of the Act and the Uniform Civil Procedure Rules 2005 (NSW) which are set out in s 56 of the Act, as well as by reference to the dictates of justice set out in s 58.
With those matters in mind, aspects of the procedural history of this matter, and more particularly the conduct of each of the defendants, are of some significance.
The first defendant was consistently in breach of the Court's orders over a period of some seven months. Significantly, those orders were directed to the filing of his evidence in the substantive proceedings. Until a few days ago, the first defendant had retained two solicitors to act for him. He has now retained a third.
On 4 November last Mr Bastick, who was the second of those solicitors advised the Court that his retainers to act on behalf of both defendants had been terminated. I took the step of asking Mr Bastick to notify the first and second defendants that these matters would remain listed for hearing. I am satisfied he did so. Even if he did not, both defendants must have been aware of the fact that the motions were listed for hearing today.
There is absolutely no evidence as to what steps the first or the second defendant took between 4 November (when Mr Bastick's retainers were apparently terminated) and 12 November (when according to Mr Sewell, he was first instructed). This is of particular significance in relation to the second defendant, given Mr Bastick's indication in his email that the second defendant had advised him, either at or before 4 November, that he had taken steps to engage alternative representation.
Moreover, the hearing of the second defendant's motion commenced before me on 28 October last. It was adjourned until today because of his late application to have Mr Roppolo attend for cross-examination, a step I am now informed is not necessary, and one which was apparently brought about by a "variation" in the instructions that the second defendant had given to Mr Bastick about the issue of service of the statement of claim. But for the circumstances, leading to an adjournment of the motion, all of which were brought about by the second defendant, the hearing would have proceeded and concluded on that day.
In my view, both defendants have been given ample time to file the necessary evidence in relation to their respective motions in order to have that dealt with.
It is also necessary for me to make specific mention of the reference by Mr Sewell to the fact that he was seeking an adjournment for "only" two weeks. That proposition overlooks a number of matters. Firstly, it overlooks the fact that it is not necessarily the case that the matter would be ready to be heard in two weeks' time. Whether it could proceed at that point would necessarily depend, to some degree, upon the nature and extent of any evidence that the first and second defendants sought to file and, more specifically, whether the plaintiff, having considered that evidence, saw a need to file further evidence in reply.
The proposition that only a two week adjournment is required also overlooks the system of listing which operates in this Court. I have already made note of the fact that the only reason that the matters were listed before me today was that, in circumstances where I had read the entirety of the material which had been filed, I had what might be described as a window of opportunity today to deal with them. I took that course because I considered that it was in the interests of all parties to have these matters heard and determined. My commitments between now and the end of the current law term in a matter of weeks' time do not allow me to hear the motions at any time other than today. Having made an enquiry with the Court's Listing Manager, that if the application for an adjournment were granted the motions would not be heard until February 2021. That is not, by any means, determinative but it is a relevant factor to take into account.
In Sali v SPC Ltd, [2] the majority observed that in the exercise of a discretion to refuse or grant an adjournment, the Judge of a busy Court is entitled to consider the effect of any adjournment on the Court's resources and the competing claims by litigants in other cases awaiting hearing. Toohey and Gaudron JJ, although in dissent, acknowledged [3] that the contemporary approach to Court administration supported the conclusion that on an application such as this, it is relevant to have regard to the fact that the conduct of litigation is not merely a matter for the parties, but is also one for the Court. Their Honours recognised the need to avoid disruptions in the Court's lists, inconvenience to the Court, and prejudice to the interests of other litigants whose cases are waiting to be heard. Those judgments were referred to by the High Court in its decision in Aon Risk Services Australia Limited v Australian National University. [4]
Coupled with the previous conduct of the defendants to which I have referred, along with the fact that both defendants have had ample opportunity to prepare their cases and retain representation, those factors weigh heavily against an adjournment being granted.
For those reasons, the application for an adjournment is refused and the hearing of each motion will proceed forthwith.
[6]
Endnotes
At [6].
[1993] 116 ALR 625, [1993] HCA 47 at 629 per Brennan, Deane and McIntyre JJ.
At 636.
[2009] 239 CLR 175; [2009] HCA 27.
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Decision last updated: 18 November 2020