Commonwealth Bank of Australia v iInvest Pty Ltd

The application

1. An affidavit sworn by the applicant on 3 August 2016 was read in support of the motion. The applicant states that, on 21 June 2016, he received an estimate of professional costs from his then solicitor in relation to the pending hearing. He states that this was the first occasion on which he received a detailed estimate of these costs which amounted to $187,700, including senior counsel's fees. On 30 June 2016, he received a downwardly revised estimate of costs that took into account the fees of junior counsel only. The applicant was required to pay that amount to his solicitor's firm no later 8 July 2016.
2. Prior to receiving these estimates, the applicant had entered into agreements with his solicitor to pay $64,000 in professional costs. He deposes that he has already paid to his solicitor an amount in excess of $200,000 since these proceedings were commenced.
3. The applicant failed to pay his solicitor the revised amount by 8 July 2016 and on 13 July 2016 his solicitor served on him a notice of intention to file a notice of ceasing to act.
4. The applicant's application is that his six-day hearing commencing next Monday, 15 August 2016, be vacated as he currently has neither counsel nor a solicitor available to represent him at the hearing. Mr Storie, who appeared on behalf of the applicant at the hearing of this application, and Mr Peter King of counsel are prepared to represent the applicant but they are unable to do so next Monday as they both are unavailable and need more time to prepare the matter for hearing in any event.

Submissions on behalf of the applicant

1. Mr Storie, when pressed as to why an application to vacate the hearing dates has been brought at this late stage, submitted that the applicant endeavoured rigorously to find an arrangement in relation to costs that would be suitable both to his previous solicitor and to himself but to no avail. Mr Storie noted that the applicant has already paid $140,000 in excess of what was agreed with his previous solicitor. After finding himself unrepresented, the applicant approached Mr Storie. Mr Storie said that the applicant has been a client "for many years" and that he is content to act for the applicant at the hearing, although he is not prepared for the present hearing date.
2. Mr Storie noted that he and Mr King of counsel had come to an acceptable arrangement with the applicant as to costs that did not depend on a large sum of money being transferred to them on account. He submitted that, in the unusual circumstances of this matter, Mr King was the only counsel who would accept terms favourable to the applicant.
3. In response to the respondent's submission that the extent of the debt secured by the Yass properties now eclipses the value of the properties, such that the adjournment would cause prejudice that cannot be cured by a costs order, Mr Storie submitted that the value of the applicant's cross-claim is greater than $5 million. Further, if the respondent is to be successful, the interest accruing on the mortgage debt would become a further debt of the applicant.

Submissions on behalf of the respondent

1. Mr White submitted that the applicant should not be permitted to use his own lack of action in failing to secure new representation at an earlier time as a reason to vacate the hearing. Mr White said that there was no evidence that the applicant has made efforts to seek counsel who is available on 15 August 2016, only that he has engaged Mr King. There is also no evidence as to whether the arrangement between the applicant and Mr King is uniquely advantageous to the applicant. It was submitted that a trial date should not be vacated to suit the convenience of counsel.
2. To meet the applicant's claim that his previous solicitor had not released his file, Mr White indicated that his solicitor had provided a copy of the four volume court book to the applicant's new solicitor last Friday 5 August 2016 in order to assist them to prepare for the hearing. He submitted the plaintiff had done everything possible to keep the hearing date.
3. Mr White pointed out that the value of the debts outstanding secured by the relevant properties is over $5.5 million whereas valuations tendered by him show the value of the properties to be $2.7 million. On this basis any prejudice caused by the adjournment cannot be cured by the respondent being awarded the costs thrown away by the adjournment.
4. Mr White conceded that the nature of the applicant's cross-claim involved some complexity and would involve making findings of the applicant's credit. Although he acknowledged that proceeding to hearing with the applicant unrepresented in such circumstances was unsatisfactory, Mr White relied upon his primary submission that the applicant should be able to find other counsel by the time of the hearing next Monday.
5. Finally, Mr White relied upon ss 56-58 of the Civil Procedure Act 2005 (NSW) including the fact that it is not only the interests of the parties before the court which should be considered but also other litigants who were precluded from obtaining the six-day listing next Monday 15 August 2016.

Consideration

1. The relevant principles governing an application such is this are well known and were considered by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175. Although the application in that case was one to amend pleadings, the High Court addressed the concerns of case management more generally and in doing so noted the impact that substantial delay and wasted costs have on the parties to proceedings, the court and other litigants.
2. As French CJ observed at [5] in Aon Risk Services: "5 In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. …..."
3. His Honour further stated, at [30]: "Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes."
4. In considering this application I have also had regard to ss 56-58 of the Civil Procedure Act which are in the following terms: "56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. … 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: … (ii) any order granting an adjournment or stay of proceedings, … the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case."
5. I have had particular regard to what a "just resolution" of the proceedings requires in light of these principles. In particular, I have regard to the implications of further delay to the respondent who first obtained default judgment against the applicant on 17 June 2013 and has taken every possible step to have the matter proceed to finality next Monday 15 August 2016.
6. The applicant has created a most unfortunate situation by not acting earlier to secure legal representation for his hearing. He knew it was listed for a hearing since last November 2015. The matter has had a long procedural history and the applicant must have known that the hearing date was fast approaching. As soon as it became apparent to him on 30 June 2016 that his solicitor would withdraw if not paid the amount on account as required, he should have acted immediately to secure alternate representation that was actually available for the hearing.
7. Some aspects of the applicant's explanation for not obtaining the relevant documentation from his previous solicitor at an earlier date are unsatisfactory. The email exchange between the applicant and his former solicitor as set out in his affidavit does not suggest his former solicitor was unwilling to provide it to him. Further, the explanation for the applicant electing to brief counsel and engage a solicitor who were both unavailable to appear at next Monday's hearing is also unsatisfactory given that he had some time before the hearing in which he must have realised he needed new representation.
8. I have given consideration to standing the application over until the first day of the hearing next Monday in order to give the applicant the opportunity to make further efforts to brief alternative counsel, but this would only increase the costs thrown away by the respondent should the applicant be unable to do so. Although I acknowledge the submission made by Mr White on behalf of the respondent that the applicant should be able to brief alternative counsel and obtain a new solicitor by next Monday, there was no material placed before me to suggest that was a realistic possibility. On the contrary, the complexity of the matter and its long procedural history lead me to conclude that it is unlikely a new legal team could be located and prepared for hearing by next Monday. Mr White relied upon the fact that the court book was only four lever arch folders in support of a submission that alternate counsel would have sufficient time to prepare the matter before next Monday if they were engaged as soon as possible. However, as Mr Storie pointed out, the folders comprise double-sided pages and there is still further material in addition to the court book that Mr Storie has still not been able to obtain from the applicant's previous solicitor.
9. I have had regard to the need for efficiency and to minimise delay and expense. I have balanced this against potential injustice caused to the respective parties by the determination made by me.
10. Taking into account the material placed before me on the motion and the submissions of the parties, I have with some reluctance determined that the hearing date should be vacated. Although the situation to a significant extent has been caused by the actions of the applicant, the fact remains that he finds himself shortly before a complex hearing without legal representation. There is no doubt in my mind that the hearing would proceed more efficiently on the next occasion were the applicant to be legally represented.
11. It is unfortunate in the extreme that, after extensive case management, this Court is now faced with a situation in which six days' worth of court time is to be wasted.
12. I informed the parties during the hearing of the motion that if the applicant was successful the next available court time for a six-day hearing was 5 December 2016 and then after that 30 January 2017. I propose to list the matter for hearing on 30 January 2017 as it the first date suitable to the plaintiff.

Costs

1. Although the applicant in his motion sought that the costs of the motion be costs in the cause, I raised with counsel during the hearing of the motion that if I were to accede to the application the appropriate order is that the applicant pay the respondent's costs thrown away as assessed or agreed upon. No submission was made contrary to that position.

ORDERS

1. I make the following orders: 1. Vacate the hearing date of 15 August 2016. 2. The matter is listed for hearing on 30 January 2017, with an estimate of six days plus. 3. The applicant is to pay the respondent's costs thrown away as agreed or assessed.

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: 10 August 2016