Brett Leybourne v Joseph Habkouk and Ors

Supreme Court of NSW|2011-04-08|Before: Sackar J

The Proceedings 1These proceedings involved the hearing of two motions brought by the plaintiff and a motion brought by each of the defendants. 2The plaintiff's amended motion which I granted him leave to file on 21 April 2011 seeks relevantly the following orders: (a)Pursuant to rules 35.15 and 36.16 (2)(d) of the Uniform Civil Procedure Rules 1995 (sic) that the Honourable Court set aside the Consent Judgment/Order 12777/08 in favour of Gregory Wickham as a director of the second defendant on the basis of sufficient cause being shown and the order was given and/or entered irregularly and against good faith; (b)Pursuant to rules 35.15 and 36.16 of the Uniform Civil Procedure Rules 1995 that the Honourable Court set aside the Consent Judgment/Order 12777/08 in favour of Jasica Pty Limited trading as Megaw & Hogg Property Valuations (NSW) as the second defendant on the basis of sufficient cause being shown and the judgment/order was given and/or entered irregularly and against good faith; (c)That leave be granted by this Honourable Court to join Gregory Wickham in the matter no 2010/372339 as the third defendant; (d)First and Second Defendants to pay the Plaintiff's costs of and incidental to the notice of motion. 3After the matter had been adjourned the plaintiff filed an additional motion which I heard on the resumed dates, 31 August and 1 September. That motion sought relevantly the following: "1. That the Honourable court grant leave pursuant to UCPR 49.20(4) to the applicant to file the notice of notice to review the registrar's judgment order of 2 July 2009, and chief clerk's order 22 February 2011 2. That the Honourable court set aside consent order in case no 12777 of 2009 by way of review of the registrar's decisions of the 2 July 2009 and chief clerk's order 22 February 2011 pursuant to UCPR 49.15, in the interests of justice, on the basis: (i) The registrar erred 2 July 2009 by not providing procedural fairness to the applicant as the order had the effect of finalising the proceedings. (ii) The registrar erred 2 July 2009 by not providing natural justice to the applicant as the order had the effect of finalising the proceedings. (iii) The registrar erred 2 July 2009 by not providing the applicant with recorded reasons for the judgment pursuant to UCPR 36.2. (iv) The registrar's order 2 July 2009 be reviewed on the basis the order was based upon an erroneous property valuation and representations from the solicitor for the respondent dated 28.5.2009 para 4 and 6. (v) The registrar (by delegated authority to a chief clerk) erred 22 February 2011 by not providing procedural fairness to the applicant by not providing the applicant with an opportunity to be heard. (vi) The registrar (by delegated authority to a chief clerk) erred 22 February 2011 by not providing natural justice to the applicant by making the order in the absence of the applicant. (vii) The registrar (by delegated authority to a chief clerk) erred 22 February 2011 by making the order 19 months after 2 July 2009, without objecting to the respondents solicitor's request. (viii) The registrar (by delegated authority to a chief clerk) erred 22 February 2011 by making the order on the incorrect from (sic) as provided by the UCPR." 4The first defendant in his motion of 24 January 2011 only sought the following (which was paragraph 2 of his motion): "2. In the alternative to the relief sought in paragraph 1, that the plaintiff's Statement of Claim be struck out pursuant to Rule 14.28 of the Uniform Civil Procedure Rules 2005." 5By amended notice of motion of 31 January 2011, the second defendant sought the following orders:

Background Facts 7It is important to understand the procedural history in respect of not only these proceedings but a number of other proceedings involving the plaintiff. This provides the appropriate context in which the motions are to be considered. 8Each of the proceedings to which I am about to refer concern a property situated at 20 Duperry Street, Wentworth Falls, in the State of New South Wales. In each of the proceedings the plaintiff alleged that a valuation of that property prepared in 2003 by the defendants in these proceedings was flawed and as a result he suffered loss. 9In October 2003 the plaintiff completed an application for a loan of $432,000 on the security of the relevant property. The stated purpose of the loan was to re-finance the existing mortgage taken by the plaintiff and his former wife, to purchase the interest of his former wife in the property and to undertake improvements. 10The application for the loan was accompanied by a valuation of $540,000 prepared by the second defendant with assistance from the first defendant in these proceedings and was dated 11 September 2003. The loan was approved on 7 November 2003. On 2 December 2003 all necessary documentation for the re-financing was processed. 11As will become apparent later in this judgment the mortgagee Permanent Custodians Ltd (Permanent) alleged that the plaintiff (as defendant) fell into default of his loan obligations and ultimately commenced proceedings in this court for possession on 31 October 2006, No 15297 of 2006 . The history of those proceedings is essentially not relevant until 2008. 12On 28 March 2008 the plaintiff commenced proceedings before the Consumer, Trader and Tenancy Tribunal (CTT) . 13He asserted in those proceedings that the mortgage which he had entered with Permanent was unjust because it was based on an "inflated and reckless valuation". He sought that the mortgage debt be varied "to be $200,000". He alleged that the valuation was reckless, inflated and a "breach of their duty as valuers". 14On 20 May 2008 the matter came on for hearing before the Tribunal but was adjourned to a date to be fixed by the Registrar. In a letter of the same date the Registrar set out in some little detail difficulties (including jurisdictional) which were perceived with the plaintiff's application and indicated that if the plaintiff wished to pursue the matter he should, amongst other things, articulate the legal basis for the orders sought. 15The plaintiff chose to withdraw that application to the CTT by letter of 27 June, 2008. 16On 11 June 2008 however the plaintiff had commenced proceedings in this court against Mr Wickham as first defendant and the second defendant in these proceedings in matter No 12777 of 2008 . 17In his original statement of claim filed in those proceedings amongst other things, the plaintiff asserted that the second defendant through the negligence of the first defendant (Wickham) and an employee (Joseph Habkouk) were liable for damages through the "tortious liability of the reckless and inflated valuation of the property..." 18In what was Annexure B to that pleading the plaintiff asserted that Mr Wickham (as director) had breached the Trade Practices Act 1974 (TPA) by preparing a valuation which misrepresented the true value of the property. It was further asserted that Mr Wickham had breached his duty of care to the plaintiff. It was further asserted that Mr Habkouk was involved with Mr Wickham in the preparation of the valuation. Although he was not then a party to those proceedings he is of course the first defendant in the current proceedings before the court. 19On 23 June 2008 Permanent filed an amended statement of claim in its proceedings No 15297/06 . Apart from seeking possession an order was sought that the plaintiff pay the sum of $560,232.26 plus interest. Further consequential orders were sought. 20Permanent asserted that a loan agreement had been entered between itself and the plaintiff on or about 13 November 2003. The amount of the loan was said to be $432,000. Permanent had taken a registered first mortgage over the property. It was asserted further that funds were advanced to the plaintiff on 2 December 2003, and that he had been in breach of the terms and conditions of the loan agreement by failing to make repayments on various days as agreed between 2 January 2004 and 2 August 2006. 21The plaintiff filed a defence on 25 July 2008 in those proceedings denying liability and sought relief under the Contracts Review Act 1980 amongst other relief. In his defence he asserted that the amount loaned was inflated due to a "reckless and misleading land valuation" which had been used by Permanent for loan purposes. It was asserted that the correct loan amount should have been $224,800 based upon what was said to be the appropriate valuation. 22The 2003 valuation was prepared by the second defendant as has been put before the court in these motions. That valuation notes that the property was subject to a power line easement "cutting through the front left hand side of the property". The valuation of $540,000 was made up of a land value of $375,000 and improvements estimated to be worth $165,000. As part of his defence to the proceedings by Permanent the plaintiff alleged a flaw in the valuation was the failure properly to take the easement and matters associated with it into account. 23In 15297/06 the plaintiff filed a cross claim, also dated 25 July 2008, seeking various forms of relief but again asserting that Permanent had "negligently relied upon an inflated valuation of the property to provide an excessive credit loan to the cross claimant". 24On 25 July 2008 the plaintiff filed an amended statement of claim in proceedings 12777/08 . In the amended pleading a claim for damages for pain and suffering was added as well as a further allegation that Mr Wickham had breached the Fair Trading Act 1987 . 25In paragraphs 11, 13, 15 and 16 of that amended pleading the plaintiff made various references to his ill health, anxiety and incapacitation due to heart surgery in June 2006, alleging that these had been caused by the negligence of the defendants. He claimed further incapacitation from stomach surgery due to the stress and anxiety of the "repossession" proceedings. 26I should observe that by 30 September 2008 the plaintiff no doubt for the purposes of his litigation had secured his own valuation of the relevant property. That valuation had been prepared by a Mr Michael Begg, valuer. It valued the property at $280,000, but as at 30 September 2008, not at the date when the alleged conduct was said to have taken place. The then state of construction of the dwelling together with the easement obviously played significant roles in the valuation. 27On 29 October 2008 a most comprehensive defence in 12777/08 was filed on behalf of the defendants. Amongst other things it asserted (paragraph 7.3) that Mr Habkouk was a "contract valuer". It did not admit that the defendants owed a duty of care; it denied breach, and it also denied any liability under section 52 of the Trade Practices Act 1974 or any provision of the Fair Trading Act 1987. Further, it asserted contributory negligence on the part of the plaintiff and importantly pleaded proportionate liability on the basis that Mr Habkouk should, for the purposes of the relevant legislation, be seen as a concurrent wrongdoer. 28In the meantime the Permanent proceedings 15297/06 were heard before Justice Michael Grove in this Court between 23 and 27 March 2009. 29Prior to the proceedings commencing before Justice Grove the plaintiff issued a subpoena in those proceedings directed to Mr Wickham (a non-party) which required him to attend and give evidence in the proceedings and also produce documents described in the relevant schedule as "all documents relating to preparation of property valuation of Lot 1 DP 19027426 located at 20 Duperry Street, Wentworth Falls, 2782 on or about 11 September 2003". 30On 23 March 2009 (the first day of the hearing before Justice Grove) Mr Berg, solicitor, sent a letter to the plaintiff. Mr Berg had been instructed to act on behalf of Mr Wickham in 12777/08 . The letter referred to a telephone conversation with the plaintiff in which the plaintiff had apparently indicated he wished to call Mr Wickham in the proceedings. The letter raised the question of the relevance of his evidence and indeed his valuation to those proceedings. The letter pointed out that no conduct money had been provided upon the service of the subpoena and that Mr Wickham had already sought and obtained advice about the subpoena and that further costs were likely to be expended totalling $6,490.00. The plaintiff was asked to provide a cheque for that amount if he wished to call Mr Wickham. The letter also referred to a subpoena which had apparently been served on Mr Habkouk (the first defendant in the current proceedings). Mr Berg indicated that he did not at that point have, though he expected that he would receive, instructions to act on behalf of Mr Habkouk and would revert to the plaintiff about that in due course about that matter. 31The plaintiff in the end did not seek to call on the subpoena directed to Mr Wickham during those proceedings. However, during the course of the hearing of the proceedings a Mr Arsen Ostrovsky, a solicitor assisting Mr Berg, attended court at least on 23 March 2009. He remained in court for a time and took notes of the proceedings on that day. The plaintiff apparently observed him in court. 32By 25 March 2009 however the plaintiff had secured a second valuation from Mr Berg. This time the valuation purported to be a valuation of the property as at 11 September 2003 (the relevant date) which valued the property at $350,000. Again it referred to the relevant easement at some length. 33Justice Grove gave judgment for Permanent in 15297/06 on 20 April 2009. He ordered possession and payment of the sum it had claimed. He also dismissed the plaintiff's cross claim with costs against the plaintiff. 34On 28 May 2009 Mr Berg wrote a letter to the plaintiff in relation to proceedings 12777/08 . This was said to be a Calderbank Offer which was open to be accepted for a period of 28 days from the date of the letter. It was an offer to settle the proceedings on the basis of judgment for the defendants with each party paying its own costs. The letter set out in some considerable detail by reference to authority the alleged factual and legal weaknesses in the plaintiff's case. It not only addressed the question of liability but the question of causation and damages. It also referred to the procedural history and in particular the issue of the subpoena issued in the proceedings brought against the plaintiff by Permanent and the costs incurred in relation to addressing the subpoena on Mr Wickham's behalf. The offer was clearly expressed so as to include the costs associated with the subpoena. 35On 9 June the plaintiff responded in writing. He said: "The letter is still being considered. A number of subjects have been raised and I am seeking to reply, however ask the date for reply be extended 7 days from 25 June 2009 to be 2 July 2009. I have a number of matters to attend to and feel the extra 7 days will be well worth it." 36On 10 June Mr Berg replied confirming that his clients would agree to extend the period of acceptance of the Calderbank Offer from 25 June to 2 July 2009. 37On 28 June however the plaintiff wrote to Mr Berg and stated: "I have considered your Calderbank Offer and decided to accept the offer. As you are probably aware the matter is returning to court on 2 July 2009. I will have difficulty in attending that date. I am seeking the orders be prepared and if satisfactory I can sign them. The matter can presumably be mentioned by consent without me needing to appear." 38On 30 June Mr Berg replied and enclosed a form of consent judgment/order which he indicated would be handed to the court on 2 July. He requested that the plaintiff sign and return the executed document as soon as possible by 1 July 2009. 39On 30 June however the plaintiff signed the document and at 4.51 pm sent by facsimile a letter attaching the signed consent judgment. In the letter he said: "I refer to the above and your letter dated 30 June 2009 and accompanying Consent Judgment. Please find enclosed the signed copy enclosed. My computer opens these documents in the Landscape format rather than the Portrait format. I trust this does not present as a problem. I thank you for your attendance on 2 July 2009." 40On 8 July Mr Ostrovsky sent an email to the plaintiff (and a copy to Mr Berg) in which he stated: "We refer to your facsimile and our telephone conversation of 30 June 2009 and confirm that we attended the directions hearing on 2 July 2009 and mentioned your appearance. We informed the court that the matter resolved and confirm that the court made the orders in the Consent Judgment/Order. Please find attached a copy of the Consent Judgment/Order filed at the directions hearing on 2 July 2009 disposing of these proceedings. Attached to the email was the document which the plaintiff had signed on 30 June which now bore a stamp of the court indicating that it had been filed in court on 2 July 2009." 41In the meantime the plaintiff appealed Justice Grove's decision of 20 April 2009. The appeal was heard by the Court, comprising Justices Giles and Tobias and Sackville AJA on 9 March 2010. The court delivered judgment on 23 April 2010 dismissing all grounds of appeal with costs. 42The current proceedings before the court were commenced by statement of claim filed 9 November 2010. In these proceedings as I have observed the first defendant is this time, Mr Habkouk and the second defendant is again Jasica Pty Ltd (Megaw and Hogg).

The Plaintiff ' s Motions 43The effect of both of the plaintiff's motions is to seek to have the consent judgment entered on 2 July in favour of Mr Wickham and Jacisa set aside. He also now seeks to join in Wickham as an additional party.

The First Motion 44In the first motion the plaintiff relies upon Rules 36.15 and also 36.16 of the UCPR . 45Rule 36.15 provides that a court may set aside a judgment or an order if it was given or entered irregularly, illegally or against good faith. As Kirby P pointed out in Coles v Burke in referring to the identical rule in the District Court Rules 1973 (NSW) that the rule had its genesis in allegations of misconduct or dishonourable conduct of the person who procures the judgment which has the tendency to undermine the authority of the judgment. That would warrant the exceptional course of setting the judgment or the order aside. 46The plaintiff identified in broad terms at least what he meant by "irregularly" when he appeared before me on 21 April. He contended that the judgment did not explicitly indicate that it was a consent judgment. I must confess to not quite understanding that argument. The document he signed made it plain on both pages that not only was it a consent judgment but that all parties had consented and agreed to a particular outcome. If I understood it correctly he also contended that the certificate issued under the hand of the chief clerk of the court on 22 February 2011 supported his argument that some irregularity had occurred. That document in my view merely confirmed (historically) that judgment had been entered for the first and second defendants with each party paying its own costs on 2 July 2009. I am afraid I cannot see any irregularity of that sort which can be made out pursuant to rule 36.15. So far as rule 36.16 is concerned, the relevant order was entered on 2 July. Rule 36.16 (3A) provides that any motion seeking to have a judgment or order varied must be filed within 14 days of the judgment or order being entered. The plaintiff's notice of motion on any view is out of time. It is plain from a number of authorities that the time provided for in rule 36.16(1) cannot be extended: See for example: The Deputy Commissioner of Taxation v Meredith (No 2) . 47The plaintiff also submitted that the judgment was entered in his absence. However, whilst technically speaking the consent judgment was entered in the plaintiff's absence he consented to that course (subject to a further issue he raised as to health at the time which I will deal with separately). He knew in my opinion that the matter was going to be dealt with in his absence and he knew that either Mr Berg or perhaps someone from Mr Berg's firm would be attending court for the purposes of having consent orders made. He asked for that course to be followed. Again I see no basis for any challenge that could be brought pursuant to rule 36.16 by reason of his absence from court on 2 July. 48The plaintiff alternatively asserts that the judgment was entered "against good faith". He submits a number of matters cumulatively amount to a lack of good faith. He asserts he was physically and mentally fragile at the time (in 2009) and that the second defendant through its legal adviser (Mr Berg in particular) in effect pressured him to accept an offer to settle, and as a result felt compelled to do so. 49The plaintiff refers back to the presence of Mr Ovstrovsky in court on 23 March 2009 during the possession proceedings (before Justice Grove) at which time Mr Ostrovsky took some notes and the plaintiff witnessed him doing so. As I understand it the plaintiff suggested that that was in some way unnerving or intimidating. The proceedings before Justice Grove were heard in open court. Mr Ovstrovsky as a member of the public was entitled to be there. In any event his firm was advising Mr Wickham in respect of whom a subpeona had been issued by the plaintiff and Mr Ovstrovsky as one of the lawyers involved had a keen interest in understanding as much as he could about the course of the proceedings. That the plaintiff found his presence unnerving or intimidating is not to the point. There is no suggestion, nor could there be, that Mr Ovstrovsky was there for the purpose of deliberately causing stress or anxiety to the plaintiff. He was there in my opinion pursuant to his duty to his client. 50The plaintiff also relies upon the letter of 23 March 2009 from Mr Berg to him in relation to the subpoena he issued in the possession proceedings. That letter in my opinion was in context a perfectly appropriate letter. It pointed to the costs incurred and/or likely to be incurred. I consider that the work done and to be done would be likely to take time. There was no evidence that the assessment by Mr Berg was inappropriate in the circumstances. The letter sets out clearly and unequivocally (and if I may say so, correctly) that the evidence relating to the valuation which might or might not come from Mr Wickham could not be relevant in the proceedings brought by Permanent notwithstanding the plaintiff's attempt to plead it in. Not only was Mr Berg entitled on behalf of his client to make this point, he was in my view obliged to do so. I cannot accept that the letter on its own or in combination with Mr Ostrovsky's presence in court could amount to a lack of good faith. 51The plaintiff then relies upon the letter of 28 May 2009. It was a most comprehensive and detailed letter. Again consistent with his duty to his clients Mr Berg was by means of the letter attempting to resolve the litigation. Costs had been incurred and would undoubtedly continue to be incurred on behalf of Mr Berg's client and for that matter the plaintiff to some extent. Whenever a person is confronted by litigation brought by or against a litigant in person, even one who is a solicitor, there will always be a need to consider that even if ultimately successful recouping any awarded costs may be a futile exercise. It was by no means clear that the plaintiff in 12777/08 would in the end be successful, quite to the contrary. Further it was by no means clear what level of damages he could prove, if any, as having been caused by the defendants. Leaving to one side the form of the pleading there was going to be in my mind considerable difficulty in the plaintiff proving a breach of the duty of care and/or liability pursuant to Trade Practices Act 1974 and/or Fair Trading Act 1987 and then there were questions of contributory negligence and proportionate liability which he needed to confront. 52Given the issues, the arguable flaws in the plaintiff's case and the likely cost and the likely duration involved, I see nothing objectively wrong with the letter, its tone or its content. It was clearly written for a dual purpose, namely to attempt to persuade the plaintiff to resolve issues on the basis offered or if rejected to put the defendants in as favourable position as possible on the question of costs. I do not consider the letter alone or in combination with other matters relied upon could amount to a lack of good faith. 53The plaintiff additionally submits that at the relevant time (that is in 2009) he was emotionally debilitated, mentally fragile and incapable of making a rational decision in respect of his own litigation. Further he asserts that either Mr Berg and/or Mr Ovstrovsky was aware of his debilitated state. This later allegation seems to be founded upon their alleged awareness of assertions as to his state of health contained at least in the amended statement of claim filed 25 July 2008 and hence the fact. It cannot be gainsaid that assertions in pleadings particularly ones which are poorly drafted, do not amount to anything more than assertions. They do not prove the fact. They are not evidence . I leave aside questions of admissions. See for example: Laws v Australian Broadcasting Tribunal per Mason CJ and Brennan CJ at [88] and Gaudron and McHugh JJ at [101]). 54On the question of his health, apart from giving evidence himself the plaintiff called the evidence of a person whom he had consulted as a psychotherapist (a Mr Maasen) and further a person he had consulted as a general practitioner (a Dr Rassaby) each during the relevant period.

The Plaintiff 55The plaintiff gave evidence that he was admitted as a solicitor in February 1996. He has a masters degree from the University of New South Wales. He went through the Goulburn Police Academy and graduated in March 2007. He works part time for the police department inputting data. He agreed that in June 2008 he was the principal of a firm called Kimber James. He also confirmed that prior to being admitted as a solicitor in 1996 he worked as a police prosecutor attaining the rank of senior constable and for a time in an acting sergeant's role. He fulfilled the role of a police prosecutor for approximately 11 years prior to being admitted as a solicitor. He agreed that he held himself out to the public as having had 20 years experience in litigation, conveyancing and mortgages. He further conceded that he held himself out as having practical knowledge and experience in small business and was able to assist people with business proposals. All of these details were on his website, in for example, 2008. 56The plaintiff accepted that he currently practises at a firm known as Langley Wright and Associates of which he is the principal. He agreed that his current firm also has a website. He agreed that from June 2008 onwards he believed he was able to provide services to clients competently, diligently and professionally in various practice areas including litigation. He said at all times that that was the case. 57He agreed that as at 2008 he had had experience in litigation matters in the local court and some in the District Court. He had a small amount of experience in relation to civil matters. He was relatively familiar with the notion of consent orders, directions hearings, callovers and the like. The plaintiff accepted that when he received the letter of 28 May 2009 he read it carefully. He said he felt very much under siege, but he read the letter, put it down and went back to it a day or so later. He accepted that he understood what was being put from the outset and that it was an offer to resolve the proceedings. He accepted it was an offer open for acceptance within 28 days and he agrees that he wrote his letter of 9 June asking for more time to think about the matter. He also accepted that he asked Mr Berg's firm to extend the offer for an extra seven days so that the offer would not expire. The plaintiff indicated quite frankly that he just "wanted it all to go away". 58I have little doubt that at the relevant time the plaintiff was anxious and that the letter perhaps made him more anxious. But it did so for a very obvious reason. It set out the forensic landscape that lay ahead in a realistic way. The letter argued that his case was propounded on a flawed factual and legal basis. It set matters out in some detail. He did very carefully consider it, as indeed he should. He did not believe he spoke to anybody about the letter. He said that he might have spoken to a lay person sharing a house with him at the relevant time but he could not be sure. 59He was asked the following: "Q. You signed them and had given them to Phillips Fox and asked Phillips Fox to appear and mention your appearance and have the orders made. Correct? A. That was, Yes Q. That was because you had reached an agreement with my client to resolve the proceedings? A. Not correct. I complied with an ultimatum that is the only expression I can use. I complied with an ultimatum. I suppose it happens frequently. But that is what I did do, complied with an ultimatum."

Mr Maassen 60The plaintiff called evidence from a Mr Boudi Maassen a registered psychotherapist (although not medically qualified) whose practice is and was in Leura in the Blue Mountains. Mr Maassen prepared a statement which purported to be an expert report. Mr Maassen was for a time the plaintiff's treating psychotherapist. He saw the plaintiff during the period 2005 to mid 2008 and had brief contact with him in 2009. During that time he observed that the plaintiff had what he described as acute anxiety issues and exhibited symptoms consistent with the onset of clinical depression. In a number of places in his statement Mr Maassen indicated that he relied upon "my files" and/or "my notes". He expressed the view that the plaintiff when provoked could act on impulse rather than in a prudential manner expected of a solicitor in order to preserve his sense of well being and to avoid at all costs the loss of his most prized possession - that of being a solicitor. 61He noted that the plaintiff had terminated his therapeutic relationship with him in the middle of 2008 for financial reasons, however he expressed the view that the plaintiff was still in a "reactive state of mind" given the events as Mr Maassen understood them up to and including 2008. In the period 2009 to 2010 he believed that the plaintiff would have been highly susceptible to the "regression and poor processing of outcome based decisions due to inordinate stress". Mr Maassen expressed the view in his "considered clinical opinion" that the plaintiff "would have acted in a manner inconsistent with that of a reasonable person, especially a solicitor, and signed the documents for the sake of preservation of his professional status" at the time he signed the consent judgment in 2009. 62Mr Maassen confirmed that he had ceased treating the plaintiff in mid 2008 but he did see him in 2009 for a one off consultation and had two phone calls again in 2009 to check if he was alright. He indicated that at the time he was treating the plaintiff he knew that the plaintiff was also being treated by a Dr Rassaby, a general practitioner. He was not however aware whether the plaintiff was or was not on any medication. Mr Maassen agreed that a subpoena had been issued to have him produce his clinical notes. He said he did not keep any clinical notes as his practice was to destroy all patient notes two years after the patient had ceased therapy. When asked about references in his statement to his notes, he indicated that he had not kept notes of any consultation he had had with the plaintiff. He did create a couple of pages of notes in 2011. He agreed that between 2005 and 2008 he knew the plaintiff was practising as a solicitor, that he was assisting clients in the course of his profession and that he did not advise the plaintiff to stop working. He agreed that work provided the plaintiff with a stable environment. He was also aware that at the time the plaintiff was working as a litigation solicitor and attending court. The plaintiff, he said told him he was running a fairly small practice but he was hoping to expand. Mr Maassen had little if any recollection of the one off consultation he had with the plaintiff in 2009. He conceded that for example he never contacted Dr Rassaby after the meeting of 2009 to enquire about the plaintiff. He agreed that when he made the statement about relying upon his notes or his files he did not in fact have them in front of him to read before making that statement. He agreed that his affidavit was prepared upon what he believed was his memory of the plaintiff rather than having been able to refresh his recollection from contemporaneous clinical notes. Mr Maassen asserted that he had an ability to recall in some little detail the progress of the plaintiff's condition to the point where by 2007 and 2008 and particularly the middle of 2008, the plaintiff's condition seemed to be more stable. He agreed that the plaintiff requested him to prepare his report for court. He thought that the meeting in 2009 and his recollections of treating the plaintiff in 2008 led him to think that the plaintiff had prematurely terminated the therapeutic relationship. 63I must confess that I have grave misgivings as to the content and basis of Mr Maassen's opinion as expressed in his affidavit and the evidence he gave before me. I am by no means persuaded that he has attended to his task in a proper way as an expert is expected to. I find it extraordinary given the absence of his clinical notes that his affidavit was couched in the language it was. It is quite misleading and I cannot think that he could have thought it would be of assistance to the court to give the appearance that it was an accurate reconstruction of his contemporaneous clinical notes. Likewise I regard as quite untenable that having had the therapeutic relationship terminated in mid 2008 and having had one meeting in the middle of 2009 and a couple of telephone calls that he could possibly feel able to express the view as a professional psychotherapist as to the plaintiff's state of mind in July 2009, in relation to the consent judgment. He did not impress me in his written report, further he did not impress me when he gave his evidence. I simply cannot and do not accept it as proper and reliable expert testimony and as an objective assessment of the plaintiff's mental health as at July 2009. I consider that is wholly inconsistent with what actually happened, especially the plaintiff's admitted careful consideration of the letter of 28 May.

Dr Rassaby 64The plaintiff also called Dr Rassaby whom he attended as a general practitioner. Importantly he only saw Dr Rassaby once in 2009, on 15 May of that year. The plaintiff also saw a Dr Wong, who worked in the same practice as Dr Rassaby in August 2009. There is no reference in either note prepared by either doctor of any state of anxiety, distress or depression observed by them or for that matter reported to them by the plaintiff. Dr Rassaby in his statement to the court expressed the view that the plaintiff had earlier presented "demonstrating symptoms consistent with "acute depression", but not it seems in 2009. 65He agreed in cross examination that he never prescribed anti depressants for the plaintiff. His definition which he intended to convey by the phrase "acute depression" he said was something of sudden onset and was to be distinguished from severe depression. Further the phrase was not intended to convey something which was chronic. He agreed that there were only two clinical notes of his which mention or allude to depression. One on 25 March 2008 when the plaintiff indicated that he generally felt depressed and an earlier note of 11 October 2007 where the plaintiff reported "a lot of anxiety". 66I do find any support in what Dr Rassaby said which in my view relevantly touches upon the plaintiff's ability to make a rational forensic choice in respect of the proceedings as they existed in the May/June 2009. In so far as Dr Rassaby expressed the view in his affidavit that the plaintiff "had great difficulty in responding to other work or social pressure in an appropriate and reasoned manner", this does not appear to have any relevance to May/June 2009. I do not regard Dr Rassaby's evidence as in any way supporting the plaintiff's case as to his alleged fragile mental health at the relevant time.

Mr Berg 67For completeness I should observe that the plaintiff cross examined Mr Berg to suggest amongst other things that he was aware of the plaintiff's impaired mental health, such as to rob him of the ability rationally to consider the offer of 28 May. Mr Berg denied that and I accept his denial. That assertion is of course based upon an assumption which I do not accept in any event. 68The resolution of any litigation at any time before judgment will rarely qualify as an irrational act. Compromise creates certainty and there is no case that cannot be lost. 69Here on the facts the plaintiff in my mind proceeded in a cautious and considered way. He read the letter of 28 May carefully through the eyes of an experienced solicitor asking for more time. I am certain he put it to good use in his deliberations. In the end he obviously did not need all of the time requested. 70The letter of 28 May was comprehensive and thought provoking and was intended to be. It certainly made him think about what he was doing. 71I do not consider he came to an irrational decision by irrational means at all and in all the circumstances I do not believe he was under any form of duress so as to rob him of the means rationally to look after his own interests. The evidence from him and Messrs Maasen and Dr Rassaby does not support the suggestion that he was so affected by stress as not to be able to make an informed choice. He made a conscious and deliberate decision to take the undoubted stress associated with any litigation out of his life. As he said he just wanted it to go away. That in my mind was a sensible decision for him to have taken. 72In so far as there is a suggestion of some form of impropriety on the part of Mr Berg and/or his firm, I reject it, both in respect of the letter concerning the subpoena and the letter of 28 May. Mr Berg acting entirely in his client's interest was entitled to put matters he thought were relevant in order to bring home to the plaintiff the forensic and cost consequences of pressing on with either the subpoena or the proceedings. Mr Berg was entitled to proceed on the basis that he was writing to an experienced solicitor. The tone and content of both letters was detailed and measured. As for Mr Ostrovsky taking notes in court no complaint can be levelled at him in my view. He was entitled to be there and take notes if he wished. 73As I have said I regard the plaintiff's response to the offer as both rational and appropriate. His case against the valuer was arguably weak if not misconceived. It would arguably have been more prudent not to have commenced it in the first place but it was not imprudent in June of 2009 to have brought it to an end especially in circumstances where he avoided a costly loss. Life is difficult enough for a sole practitioner let alone one who has himself as a client. 74I do not consider the plaintiff has made out his allegations that there was a lack of good faith. 75In addition (although in my view it is unnecessary to deal with this aspect) the defendants assert that the consent judgment amounted to a binding contract and that the plaintiff has failed to point to any reason why it should be set aside, given its contractual status. It was pointed out that there was no application to set aside the contract as between the parties. McHugh JA with whom Samuels and Clark JJA agreed in Paino v Hofbauer said at 198(f): "Nevertheless when a party asks that a consent order based on a contract should be set aside or varied and the underlying contract could not be set aside or varied the case would need to be exceptional before the Court would exercise its discretion in favour of an applicant. Moreover by itself the failure of the applicant to comply with the terms of a consent order based on a contract would rarely if ever be a sufficient ground to vary the order. This is particularly so when parties have stipulated the time for the performance of the parties' obligations was to be of the essence of the agreement." 76I should say that I consider that there was a binding contract formed here but in my view there was no basis in any event for setting aside the judgment for the reasons previously expressed. 77For the reasons expressed above in my view the plaintiff's motion pursuant to rules 36.15 and 36.16 must fail.

The Second Motion 78The plaintiff however filed a further notice of motion on 22 August 2011 supported by a further affidavit from him. The affidavit was read at the resumed hearing on 31 August. 79The plaintiff in that motion sought to rely upon rules 49.19 and 49.20 of the UCPR. Those rules of course are concerned with a review of "decision" of a Registrar. Clearly and obviously the orders of 2 July do not involve a "decision". They were orders as I have found made by consent. 80The sealed order of 22 February 2011 is not a new judgment or order nor is it a decision in the relevant sense. It is merely an historical record of what occurred in court on 2 July 2009 and the entry of judgment on that day. 81In addition relief under rule 49.20 has to be filed within 28 days of the material date. That date is 2 July 2009. Such application is out of time and I see no basis whatsoever for exercising any discretion to extend time pursuant to rule 49.24. This motion must fail as well. 82In my opinion therefore the plaintiff has been unsuccessful in respect of both motions (except one matter I have not yet dealt with) and they should be dismissed and therefore the judgment of 2 July 2009 will stand. 83This deals with all aspects of the plaintiff's motions except paragraph (c) of the first motion which concerns the proposed joinder of Mr Wickham to the proceedings who was the first defendant in 12777/08 . For convenience I deal with that below.

The Second Defendant 84I shall deal first with the second defendant's motion as it will lead to a stay of the proceedings if successful. 85The second defendant seeks a stay of the current proceedings and opposes the plaintiff's motion to join Mr Wickham as a third defendant. The defendant calls in aid section 67 of the Civil Procedure Act 2005 which is in the following terms: "Stay of proceedings Subject to the rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day". 86Alternatively the defendant seeks to invoke the inherent jurisdiction of the court. 87A cursory glance at the allegations in the current statement of claim as they relate to the second defendant makes it abundantly plain that not only does the plaintiff seek to re agitate the substance of the claim he had previously made in proceedings 12777/08 but much of the detail as well. 88The pleadings in 12777/08 and the pleadings in the current proceedings, clearly deal with the same valuation made by the same person(s) and in respect of which causes of action in negligence, section 52 of the Trade Practices Act and sections 42 and 43 of the Fair Trading Act 1987 are or were agitated. 89In matter 12777/08 the initial pleading (filed on 11 June 2008) claimed relief for negligence on the part of Mr Wickham (the first defendant) and Mr Habkouk (not then a party), and a liability to the plaintiff in damages for the "tortious liability of the reckless and inflated valuation of the relevant property". Damages were claimed on the basis that the negligent valuation for example had caused the plaintiff's ill health. An indemnity was sought from the defendant in relation to the claims which had been made by Permanent in proceedings 15297/06 . 90In what was described as "Annexure B" in 12777/08 there is an allegation of a breach by the defendants of the Trade Practices Act 1974 and breach of a duty of care. 91In the amended statement of claim filed on 25 July 2008 in that matter, there was a claim for a declaration that the valuation prepared by the defendants and Mr Habkouk was "unjust, reckless, inflated and misleading". 92"Annexure A-1" therein purports amongst other things to quantify the damages of the alleged pain and suffering. There was then added (on 25 July 2008) a claim that the first defendant was in breach of the Fair Trading Act 1987. There remained an allegation of a breach of the TPA and a claim in negligence. Ill health is said to be have been one of the consequences of the defendant's conduct. 93In the current proceedings the pleading is in a somewhat different format. However the essential facts pleaded are in substance the same as in 12777/08 and again are said to support actions in negligence and breaches of the TPA and FTA. 94To seek to agitate in substance here the same if not identical claims against the second defendant in these proceedings having consented to judgment in favour of the very same defendant in July 2009 in the earlier 12777/08 proceedings is an abuse of process and plainly oppressive. Likewise, to seek to join Mr Wickham to these proceedings so as to in substance agitate similar claims having consented to judgment in his favour in the earlier proceedings amounts also in my opinion to a clear abuse of process. 95Relatively recently the High Court has restated the principles governing an abuse of process; Jeffery & Katauskas Pty Limited v. SST Consulting Pty Ltd; Jeffery & Katauskas Pty Limited v. Rickard Constructions Pty Limited . 96In the judgment of French CJ, Gummow, Hayne and Crennan JJ their honours said: "27. an early statement of power of any court to prevent abuse of its processes is found in an 1841 case, Cocker v. Tempest [39]: "the power of each Court over its own process is unlimited; it is a power incident to all Courts, inferior as well as superior; were it not so, the Court would be obliged to sit still and see its own process abused for the purpose of injustice." That statement foreshadowed the contemporary approach in the United Kingdom [40] and Australia [41] which takes no narrow view of what can constitute "abuse of process". Nevertheless, certain categories of conduct attracting the intervention of the courts emerged in the 19 th and 20 th centuries and included [42]: "(a) proceedings which involve a deception on the court, or are fictitious or constitute a mere sham; (b) proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way; (c) proceedings which are manifestly groundless or without foundation or which serve no useful purpose; (d) multiple or successive proceedings which cause or are likely to cause improper vexation or oppression." 28. The term "abuse of process", as used in Australia today, is not limited by the categories mentioned above or those which constitute the tort. It has been said repeatedly in the judgments of this Court that the categories of abuse of process are not closed [43]. In Walton v Gardiner [44] the majority adopted the observation in Hunter v. Chief Constable of the West Midlands Police [45] that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be "manifestly unfair to a party to litigation...or would otherwise bring the administration of justice into disrepute among right-thinking people". This does not mean that abuse of process is a term at large or without meaning [46]. Nor does it mean that any conduct of a party or non-party in relation to judicial proceedings is an abuse of process if it can be characterised as in some sense unfair to a party. It is clear, however, that abuse of process extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble and harassment" [47] " 97Justice Heydon, whilst in the minority in the result, said: "56. In Hunter v. Chief Constable of the West Midlands Police [89] Lord Diplock said that the court had inherent power "to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people." That statement has been approved in this Court by Mason CJ, Deane and Dawson JJ as stating the law "correctly" [90]. They also said that abuse of process arises in "all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness." [91] They quoted certain statements by Richardson J pointing to two aspects of the public interest. One was that the "public interest in the due administration of justice necessarily extends to ensuring that the Court's processes are used fairly" [92]. The second aspect of the public interest lay "in the maintenance of public confidence in the administration of justice. It is contrary to the public interest to allow that confidence to be eroded by a concern that the Court's processes may lend themselves to oppression and injustice." [93] "Abuse of process" extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" [94] or "productive of serious and unjustified trouble and harassment." [95] There is a "general principle empowering a court to dismiss or stay proceedings which are ...an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case." [96] A stay or dismissal prevents abuse of process: "[t]he counterpart of a court's power to prevent its process being abused is its power to protect the integrity of those processes once set in motion." [97] 57. The power of a court to deal with abuse of its process is one aspect of its more general power to control its own process. The exercise of the power to deal with abuse of process "is not restricted to defined and closed categories, but may be exercised as and when the administration of justice demands." [98] Further, the power to control abuse of process by granting a permanent stay "should be seen as a power which is exercisable if the administration of justice so demands, and not one the exercise of which depends on any nice distinction between notions of unfairness or injustice, on the one hand, and abuse of process, on the other hand." [99] There is no reason why any nice distinction of that kind should be drawn in relation to r 42.3(2)(c) either. 58. Words like "unfair", "unjust", "oppressive", "seriously and unfairly burdensome, prejudicial or damaging", "productive of serious and unjustified trouble and harassment" and "bring the administration of justice into disrepute among right-thinking people" are not words of exact meaning. Nor are the words "abuse of process" themselves. That notion is not "very precise" [100]. Hence it is not surprising that, as Lord Diplock said, "[t]he circumstances in which abuse of process can arise are very varied" [101]. "What amounts to abuse of court process is insusceptible of a formulation comprising closed categories. Development continues." [102]" 98In my opinion these proceedings ought to be permanently stayed as against the second defendant and the application to join Mr Wickham is likewise refused because to do so would in my mind give rise to an abuse of process.

99The first defendant was not of course a party to 12777/08 , but he was clearly identified however as a relevant actor in relation to the preparation of the valuation. 100For a number of reasons the first defendant submits that the pleading is wholly deficient. I agree. It is submitted that it is confused, ambiguous and lacking in the identification of material facts. It is said to be discursive and no more than a narrative of what appears to be matters of evidence. Again I agree. It is further asserted that it is by no means clear precisely what the duty of care is, nor precisely how section 52 of the Trade Practice Act and/or for that matter sections 42 and 43 of the Fair Trading Act relate to the proceedings. Without going through the paragraphs in any detail I must state unequivocally that I think the pleading is simply not in proper form. It is misconceived, confused and lacking in coherence. It is therefore embarrassing and in my opinion the first defendant should not be obliged to respond to it. 101The second defendant's written outline (paragraph 35) identifies with some specificity the particular paragraphs of the pleading which either involved rolled-up allegations which lack particularity, or would involve a failure to plead relevant material facts and therefore are confusing and ambiguous. 102I agree entirely with the submissions made by both defendants in relation to the pleading defects. Without intending any disrespect to the plaintiff the pleading cannot stand in its current form and it should be struck out. The plaintiff accepted as much in argument.

103For the foregoing reasons I dismiss both plaintiff's motions and order that he pay the defendant's costs of those motions. 104As the first and second defendants have succeeded in their motions the plaintiff should pay the costs of those as well. 105I order that these proceedings be permanently stayed. 106I would invite the parties to prepare short minutes to reflect my orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 October 2011

District Court Rules Uniform Civil Procedure Rules 2005(NSW)

Trade Practices Act 1974(Cth)

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