Commonwealth Bank of Australia v Kyriacou

Supreme Court of NSW|2024-11-27|Before: Chen J, Henry J, Beazley JA

Introduction

By statement of claim filed 20 October 2021, Commonwealth Bank of Australia ('the plaintiff') seeks to recover the sum of $779,309.90 from Filomina Kyriacou ('the defendant') under the terms of guarantees, said to guarantee the payment to the plaintiff of money owing under two agreements entered on 16 June 2015 but varied on 4 February 2016.
The defendant relies upon an amended defence filed on 25 August 2023. The defence, largely, makes non-admissions in relation to the loan facilities but in connection with the guarantees raises a number of substantive matters, including that she denies signing any guarantee (par 17(a)); that her signature "was forged on the 16 June 2015 guarantor acknowledgement and acceptance" (par 17(c)); seeks relief under s 4 of the Contracts Review Act 1980 (NSW) essentially on the footing that there was an "inequality in bargaining power" (par 17(d)); and seeks relief under ss 20 and 21 of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law (par 17(e)).
On 9 August 2024, the matter was fixed for hearing for three days commencing 9 December 2024.
The defendant, by notice of motion filed 25 November 2024, seeks an order vacating that hearing on "medical grounds": in very broad terms, it is suggested that the defendant is "not mentally fit to stand trial" (defendant's submissions at [1] and [13]).
The application is opposed.
The defendant read, on the application, an affidavit of her solicitor, Khoder Dandachli, sworn 25 November 2024. Exhibited to that affidavit were two reports from a psychologist, Sam Borenstein, dated 12 November 2024 and 21 November 2024. The plaintiff read, on the application, an affidavit from its solicitor, Campbell Hudson, affirmed 26 November 2024.

The basis for the adjournment: consideration

As I have said, the defendant's essential submission is that, given her current [REDACTED] state, the hearing should be adjourned. The defendant relies upon two reports from Mr Borenstein, and the opinions that he has expressed about the defendant's ability to participate in the forthcoming trial.
[REDACTED]
There are aspects of this report that should be noted. First, it seems clear that Mr Borenstein was asked to assume, and did assume, that the defendant [REDACTED]. Whether this is, or is not, accurate is simply unknown. The material tendered on the current application relating to the precise subject matter of the proceedings, and the evidence that has been served, is confined to the statement of claim filed 20 October 2021 and the amended defence filed 25 August 2023. Secondly, as noted above, Mr Borenstein appears to proceed on the footing that the cross-examination, putting to one side its length, extends to "complex financial matters". Whether that is, in fact, so appears, based upon the pleadings, to be doubtful. Again, I would emphasise that none of the material that would be relevant to inform whether the cross-examination would be of this character was in evidence. [REDACTED]. Fourthly, the tests that were administered involved self-reporting; or, at a minimum, it is unclear precisely what they do involve.
The third and fourth matters noted combine with the earlier ones, and do not persuade me that I should act on Mr Borenstein's opinion. I am unpersuaded that the key matters assumed, relating to the length and subject matter of any cross-examination, are likely to be representative of the course of the trial. There is simply no evidence upon which I could, even in a preliminary way, make any reliable finding about those matters. Further, on the face of the report, there remains some outstanding questions: [REDACTED]. It is possible that these matters are reconcilable, but that is not evident from the terms of the report or, if it is, at least in a way that I accept.
There is a further matter. [REDACTED]. This trial, it was accepted, was a reference to three sets of proceedings in this Court brought by a number of parties against the defendant: Dandachli affidavit, pars 6(a)-(c) and 8. [REDACTED].
To be clear, however, Mr Borenstein did not address when, if at all, the defendant was likely to become fit to participate. [REDACTED]. Whether a patient decides to be treated with that type of medication is a matter for them, of course, but the fact that the defendant has expressed that position has the consequence that I am not prepared to infer that, over a period of time, the defendant's symptoms would necessarily abate. Further, I would add that there is nothing in the treatment regime suggested by Mr Borenstein that might be suggestive of the likely course of the defendant's condition in the short to mid-term.
This squarely raises what Henry J described as a situation where the Court "will take another course" - namely, that the party is "so ill that it is unlikely that even if the case is adjourned, he or she will be in any better position on the next occasion": Valuestream at [20]. Before dealing with this further "situation", reference will be made to Mr Borenstein's second report.
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To return to the likely course of the defendant's condition, to the extent anything can be inferred about this matter based upon the content of his second report, it tends to suggest, consistent with the matters to which I have earlier referred, that the defendant's condition will not change in the foreseeable future.
Aside from the issue raised about the timeliness of the interlocutory activities of the parties, the focus of the submissions was upon the dictates of justice. The defendant's basic submission was that it favoured an adjournment because of the defendant's medical condition. The plaintiff submitted to the contrary, particularly emphasising the wider statutory considerations in the CPA.
I have given consideration to the overriding purpose (ss 56(1) and (2)), the objects of case management (s 57(1)) and the dictates of justice in ss 58(1) and (2). Each side has sought to call in aid the timely way in which they have dealt with "their interlocutory activities" (s 58(2)(b)(ii)). The plaintiff, however, submitted that the defendant's submission to the effect that she has been "reasonably expeditious" in the way in which she has conducted the litigation, including the interlocutory activities, should not be accepted (plaintiff's submissions at [14]-[16]). There is force to this submission, based as it is upon the matters set out in the affidavit of the solicitor for the plaintiff, which I accept: Hudson affidavit, pars 16-31. However, in the circumstances, this is not a matter that I have attached significant weight. In making that finding, I have not overlooked the submission made by the plaintiff, to the effect that the plaintiff had default judgment entered in its favour on 4 May 2022 such that the conduct, and delay generally, should not be dismissed lightly.
In my view, absent evidence that the defendant's position is likely to change in the foreseeable future, the dictates of justice favour refusal of the application. Even if one were to assume, favourable to the defendant, that the position will change by the middle of next year such that, at that time, or shortly thereafter, the matter was ready to be fixed for hearing, there is a realistic prospect that no hearing dates will be available to hear the matter until, at the very earliest, this time next year but more likely some time in 2026. Given the history of the litigation in this Court, when the cause of action is said to have arisen, and when the proceedings were commenced, they reinforce why I consider the dictates of justice are against adjourning the matter.
There is a further matter. [REDACTED]. As I have indicated, there was no evidence about the issues that arise in the action, although Ms Steer emphasised that any assumed length of cross-examination was done without the involvement of the plaintiff, and its legal representatives. [REDACTED]. That, the plaintiff submitted, was apparent from an examination of the letter of instruction dated 19 November 2024 together with what is recorded on page 1 of the report dated 21 November 2024. In my view, that submission should be accepted. In short, it is apparent that the opinion expressed by Mr Borenstein is linked to that assumption and, given there is no evidence that the matter would involve "complex financial matters", it provides a further basis why I consider the application should be refused.

Orders

For the above reasons, I make the following orders: 1. Refuse the defendant's application to adjourn the hearing commencing 9 December 2024. 2. Order the defendant to pay the plaintiff's costs of, and incidental to, the application to adjourn the hearing.

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