Adjournment of the hearing date
6The basis of the application for the adjournment of today's hearing is the ill health of Mr Lazar. Mr Lazar (or his secretary) sent an email describing these illnesses as follows:
"I have, over the past few months, have been suffering from a variety of illnesses that have seen me go into hospital repeatedly. These illnesses have had a major impact on my work and have resulted in me not being able to attend the office or attend to work that was required to be done. I have a variety of medical documentation to evidence my numerous illnesses.
My stays in hospital include, but are not limited to, Royal North Shore on four occasions, St Andrew [sic] as late as last week.
My illnesses, which relate to issues with my red blood cells, pneumothorax/consolidation, which is a precondition of adrenal cancer. I also suffer breathing issues which require me to have a major operation in two weeks' time with Dr Paul Gerarchi FRACS ENT and facial surgeon. I, due to my condition, was unable to give instructions to the previous law firm acting, Cambridge Law. They withdraw [sic] from acting because of this failure to provide them with instructions. Further, the staff member that was assisting me with this matter is no longer employed and we are having difficulty compiling the documents that she was working on.
Rural Security wish to prosecute this matter and require the hearing to be vacated in order to allow a sufficient time to instruct a new law firm.
Regards, Ian Lazar FGAA, DipDT, MAICD (Sydney) Director Structured Mortgage Securities."
7There then follows a corporate profile website and LinkedIn address.
8No objection was taken by the plaintiff to the appearance of Mr Reynolds on behalf of the defendant, although he is not legally qualified. Mr Reynolds tells me, from the bar table, that he has never seen anyone as sick as Mr Lazar, and that his inability to carry out his daily activities is immediately apparent and a matter of concern to the shareholders. A picture has been painted of Mr Lazar as a man in the poorest of health, who was rushed to hospital as recently as last Wednesday, and who has been unable for this reason to give instructions in relation to the conduct of this litigation. Mr Reynolds also tells the court that, because of Mr Lazar's ill health, he first knew of this litigation only two weeks ago.
9The first problem is that no attempt was made, even by Mr Reynolds during the two weeks that he has been on notice about these proceedings, to contact the plaintiff's legal representatives or the Court to advise of these difficulties. Nor did he notify the court. The email, sent at 5.02pm last night, did not reach this Court for the simple reason that it was sent to the wrong court. I understand Mr Reynolds endeavoured to telephone the Court registry but, since it appears he rang outside hours, I do not know what sort of response he received or, indeed, if he even rang this Court, bearing in mind that Mr Lazar's email is addressed to the Supreme Court. Let us assume that he telephoned this Court last night at 4.53; however, that would not have been sufficient time for this Court to do anything in relation to a hearing at 10 o'clock today.
10It is always very difficult for the court to know what to do when a person suffers from illness which prevents attendance in court. Had there been affidavits filed in accordance with the timetable, there would have been little difficulty in some form of vacation of a hearing date or at least some sort of arrangement for the taking of evidence in such a way as to ensure that Mr Lazar's health was not compromised.
11However, this application to vacate the hearing date is not only brought extremely late, but it is brought against a pattern of total non-compliance with all of the orders for the serving of affidavit material, in circumstances where the plaintiff has been diligent, not only in writing to the defendant/cross-claimant about the outstanding steps, but in bringing these to the Court.
12Mr Craney tells me that on two occasions guillotine orders have been sought from the Judicial Registrar, by reason of the failure of the defendant/cross-claimant to comply with timetables. I note in the affidavit of Mr Hargraves (at paragraph 6) a reference to his first affidavit of 18 March 2013 concerning failures of the defendant/cross-claimant to comply with directions of Judicial Registrar Smith and his request for a guillotine order on 19 March, which request was opposed by the plaintiff's legal representatives and refused by the Judicial Registrar.
13It is also set out, at paragraph 8 of this affidavit of 26 July, that when the matter was next before the court the plaintiff's solicitor sought a second guillotine order, with a view to "forcing" the defendant/crossclaimant to comply with the Court's directions which are to this day the subject of non-compliance. He went on, to point out (in paragraph 9) that the plaintiff had complied with all directions, and that the plaintiff's sole occasion of late compliance occurred by reason of delay by the defendant/crossclaimant.
14An additional basis upon which the application for adjournment is challenged is the scanty nature of the explanatory information and, in particular, its inconsistency with certain documents in the public eye. These documents consist of a series of press releases put out by a company with which Mr Lazar is involved.
15The first of these is dated Monday 25 November 2013 and is headed "AFR - Chatswood Bus And Train Interchange Sale Stalled By Lender Caveats". The text is as follows:
"The $80 million Chatswood bus and interchange in New South Wales remains on the market, but its mortgagee-in-possession vendor is up for yet another round of court action. Sydney businessman and distressed mortgage lender Ian Lazar through the company Commercial Mortgage Trade has today lodged caveats over the assets held by the Commonwealth Bank.
However, the sale of the asset has been a frustrating one for receivers after a series of protracted court cases between a numbers of developers of the site.
The latest civil dispute has arisen between Tripod Funds Management and Chinese based company and borrower Changzhou Hope Offices Equipment Ltd Co and its Guarantor Mr Zhuang Zhongyi.
Mr Zhongyi and his company entered into a mortgage agreement with Tripod, they induced us to fund the transaction and in turn we ceased dealing with other parties on the asset and threw away $3 million in fees and lost interest earnings to our underwriters, at the 11th hour they pulled out and have now exchanged contracts with the bank' said Mr. Lazar. We are now owed in excess of $3 million and we will upload the sale until we are paid, a criminal complaint is also imminent in respect of the actions of the guarantor' said Mr Lazar."
16This article was posted on the web by a Ms Michelle Faure who, I understand, is an employee of the defendant/cross-claimant. It goes on to talk about the retail precinct being boosted by the recently opened Chatswood to Epping Rail Link.
17The next news item is dated Wednesday 25 December 2013 and is headed "Commercial Mortgage Trade Christmas Party". This sets out that:
"Commercial Mortgage Trade Christmas party was one of the biggest celebrations of the year which took place at Trademark Hotel and it was quite the star-studded event with appearances from Tamara Jaber, Prinnie Stevens and Sarah De Bono Australian singer-songwriter and pianist."
18I understand Ms Jaber is the former associate of a Mr Kyle Sandilands and that the other persons named are performers.
19Underneath this article is a series of pictures. The first shows Mr Shane Reynolds, who is in court today, with Mr Ian Lazar and a Ms Angeline Aamariah, who I understand is Mr Lazar's fiancée. The second shows Mr Lazar with a Mr Shraga Gold, an "International Protective Agent & Recovery" employee.
20There are other pictures on the website, which the solicitor for the plaintiff states are still there today, showing Mr Lazar. One of those pictures shows Ms Michelle Faure, who is described as "Head of Credit, Tripod Funds Management & Meridien Securities Limited." She is pictured with Mr Shane Reynolds. Other pictures show Mr Reynolds with Mr Lazar, upon whose lap Ms Aamariah is sitting, Prinnie Stevens (who is identified as being a performer from "The Voice") with Ms Aamariah, Ms Aamariah with Mr Reynolds, and so on.
21I have been informed from the bar table, by Mr Reynolds, that this was in fact a small party with about 15 persons present. Whether it was large or small makes no difference. What the photographs show is that Mr Lazar was there and that he appeared to be able to participate in the events of the evening.
22The next entry in the bundle of documents tendered by the plaintiff and marked exhibit A is a document posted by Michelle Faure on Sunday 12 January 2014 headed "Commercial Mortgage Targets Growth in International Assets in Hong Kong and Mainland China". There is a photograph which is difficult to see in the exhibit, but which is rather clearer on the internet version. This text states as follows:
"Ian Lazar of Commercial Mortgage has sought to take advantage of its international mortgage resolution and advisory business by opening an office in Hong Kong, as a result, Sino-foreign joint ventures are likely to take place in 2014 where Commercial Mortgage will takeover a pool of distressed mortgage securities.
The latest venture is important in a market where local banks dominate distribution and overseas brands have penetrated the local market with limited success. The company's recent venture lays the foundation for offering differentiated and higher-value services, such as wealth management.
Establishing an authorised fund in Hong Kong can be a complex process, which requires a good understanding of local regulations, accounting and disclosure requirements and tax efficiency, for Commercial Mortgage[sic] its recent discussions represent an opportunity to access one of the most promising markets for growth in assets worldwide. Commercial Mortgage will circulate a media release in the coming weeks."
23I note in relation to this press release that I have been informed by Mr Reynolds that there is in fact no Hong Kong office, and that this media release was put into the public arena by Ms Tracey McMullen whose services have since been dispensed with. I understand that a request has been made for this item to be taken down from the Internet. Accordingly, the degree of weight to which I give this document will be limited. It is clearly a matter where, if false information about this company has been put onto the net and in fact it has not activities in China, then I need to exercise caution.
24The next document is headed, Monday 20 January 2014. No such objections relate to this publication, the contents of which are agreed to be correct. It states:
"Echelon majority shareholders appoint Ian Lazar to manage litigation (3.5 million dollar litigation)."
25The article is illustrated with a picture of a judge's gavel and a set of scales, of the "stock photo" variety, and states:
"Gold Coast Echelon Property Management has appointed alternate Director Ian Lazar to manage and litigate company debt owed to the group in relation to shareholder disputes.
Mr. Lazar has successfully litigated a series of complex civil disputes. He was involved in winding up the failed Gold Coast group City Pacific's then $800 million mortgage fund and was instrumental in a three year Federal and Supreme Court Action to successfully wind-up EquitiTrust Limited and ultimately led to the Supreme Court action by ASIC which now sees the protection of the remainder of the unit holders monies for distribution this year and the bankrupting of founder Mark Mcivor for $150 million dollars.
For more information, visit: HTTP://www.echalonfund.com.au/blog/majority-shareholder-appoint-new-director-to-manage-litigation-35m-litigation/52."
26There appears to be a follow-up to this on Sunday 26 January "Echelon Claims Create Curious Trail of Crumbs", from the Gold Coast Bulletin. While my associate was printing copies of the original document of 20 March for the parties, this article has come out of the website as well. However, it is has not been read or commented upon by the parties, so I do not propose to consider it in my summary of events.
27These newspaper articles, or publicity press releases, or whatever they may be, paint a picture of Mr Lazar as being able to attend at least some business functions over the past few months. What, however, is the position in relation to the solicitors who have been acting on his behalf? It is sometimes the case that there are problems with solicitors carrying out their clients' instructions, and the court is again very conscious of the fact that the need for all issues to be litigated properly. The court might be sympathetic had there been some form of wrongful conduct or failure to comply that should be sheeted home to the solicitors and not to the client.
28In the present circumstances, however, this is not the case. Cambridge Law filed a notice of intention to file notice of ceasing to act in this Court on 2 September 2013, some months after the hearing date had been set down. The contents of that notice, addressed correctly to both parties, clearly state that 28 days from the date of service of that notice, a notice of ceasing to act would be filed and advising the defendant/cross-claimant that it must file in the registry and serve on the plaintiff a notice stating the name and address of a solicitor who is to act or, if they do not have a solicitor, a notice stating their address for service of documents. Until that notice is filed and served, any document may be served on the defendant/cross-claimant by leaving it or posting it to an address at 123 Clarence Street, Sydney. A notice of ceasing to act was duly filed on 4 November 2013, the contents of which state that a notice of intention to file and serve this notice had been served on the defendant/cross-claimant on 20 September 2013 and providing the residential or business address of the defendant last known to the former legal representative.
29This means that the defendant/cross-claimant has been on notice since 2 September that the solicitors they had retained proposed to cease to act. The explanation given both by Mr Reynolds and by Mr Lazar in the email which is exhibit A, is that Mr Lazar was unable to give instructions to Cambridge Law and that they withdrew because of failure to provide them with instructions.
30The additional complaint is made that the staff member who was assisting Mr Lazar was no longer employed, but I apprehend that this was an event which occurred just before Christmas 2013. That does not explain the prior delay, and goes only a short way to explaining any delay since.
31There is a clear pattern here of a solicitor for the defendant giving ample notice to his client of the intention to cease acting, in circumstances where Mr Lazar and the defendant/cross-claimant are not merely experienced in business but also, judging by the contents of the material I have set out above, well experienced in the conduct of litigation.