Dawson & Ors v LNG Holdings Pty Ltd & Ors [2006] NSWSC 1484 | Case summary

2031/05 Rhonda Dawson & Ors v LNG Holdings Pty Ltd & Ors JUDGMENT (ex tempore) 1 HIS HONOUR: These proceedings - in which the plaintiffs allege that the second and third defendants are liable as accessories for breaches of trust said to have been knowingly assisted by them and committed by the first defendant, a company now in liquidation, and for misleading and deceptive conduct in which they are said to have engaged; and in which the second and third defendants cross-claim for alleged wrongful lodgement of caveats, and conspiracy - are fixed for hearing before me on 5 February 2007, for 15 days, as an expedited matter. They were previously fixed for hearing before me on 29 May 2006, for four days. That hearing was vacated in circumstances to which I shall have to return. 2 The present proceedings were commenced on 21 March 2005. On 23 November 2005, the plaintiffs filed a motion seeking expedition. That was returnable on 9 December 2005, when it was adjourned to 10 February 2006. On 10 February 2006, the Chief Judge made directions for the filing of defences and evidence, and stood the matter over to 3 March 2006. The defendants filed affidavit evidence in opposition to the application for expedition, and opposed the grant of expedition. On 3 March 2006, the Chief Judge fixed the matter for hearing before me to commence on 30 May 2006, and made further directions for the filing of evidence by the defendants by 3 May, and in reply by 17 May. 3 Some six weeks later, on 18 April 2006, the defendants' then solicitor foreshadowed to the plaintiffs' solicitor an application to vacate the trial date, principally upon the basis of the unavailability of counsel who was then retained to appear for the defendants, so the Court was informed. Another ground relied on in connection with the application to vacate the 30 May 2006 trial was the convenience of the second defendant, Ms Nash, having regard to professional commitments which she had as a barrister who practises at the criminal Bar; ultimately the evidence in support of the application included a list of her unavailable dates in June, July and I think August 2006. 4 When agreement to the vacation of that hearing was not forthcoming, the defendant served an unfiled notice of motion on 1 May 2006, supported by an affidavit of the defendants' then solicitor. That application then came before me on 2 May 2006, and I stood the matter over to 5 May for hearing of the motion. 5 The motion which sought the vacation of the trial listed to commence on 30 May 2006 also sought other relief. In one of the more curious applications that I have encountered, the defendants sought an order that the order shown in the records of the Court, for the proceedings to be heard on an expedited basis, be set aside: they contended that, although the Chief Judge had set the matter down for hearing in an expedition list, he had not made a formal order for expedition, and further, that even if an order for expedition had been made, it had been wrongly made and should be set aside. I make these observations because the history of the proceedings and the attitude of the parties to prosecuting them is necessarily relevant to the decision I now have to make. 6 On 5 May 2006, I rejected each of these contentions, and I declined at that stage to vacate the hearing on the defendants' application, in circumstances where I was assured that the defendants would be in a position to have all of their evidence served, albeit very late, before the trial commenced, and there remained a possibility that the plaintiffs might be in a position to meet it. The defendants did serve what was then said to be all of their evidence prior to the date for trial, but in such volume and at such a late stage - a bundle of eight affidavits at 9:15am on the morning of 26 May 2006 - that the plaintiffs were unable to meet it, and later that day, I vacated the hearing. The trial having been vacated, on 15 June 2006 I made further directions to prepare the matter for hearing, including extending time for further evidence to be served by the second and third defendants, and the usual pre-trial documents. 7 The defendants did not complete the service of their affidavit evidence in accordance with the directions made on 15 June, and on 31 July I again extended time for service by the defendants of any further affidavit evidence, this time to 11 August. On 11 August, the defendants served only the affidavit evidence of the second and third defendants personally, advising that the remainder of their affidavit evidence would be served later; they served further affidavits on 29 August and 1 September 2006. 8 The proceedings came before me on 12 September 2006 for further directions. On that day I ordered that no party may read without leave any affidavit not already served, save an affidavit of Geoffrey Sayhoun to be served by the defendants by 15 September, and any reply affidavit of the plaintiffs and sixth cross-defendant to it, which was served by 24 October 2006. I otherwise made my usual directions for hearing, including for preparation of a list of pleadings and affidavits and witnesses required for cross-examination; a pre-trial document incorporating chronology, skeleton argument, notice of objections, and an agreed bundle of documents. I was assured that, subject to the affidavit of Mr Sayhoun, which was in any event served shortly thereafter, the defendants were ready for hearing. 9 It seems that by October 2006 the defendants had become dissatisfied with the services of their former solicitor, and his retainer was terminated - it is not entirely clear whether by him or by the defendants - some time in late October 2006. On 29 November 2006, the defendants filed the present motion, which seeks to have the trial commencing on 5 February 2007 vacated.

10 At this stage, I am unable to indicate when the matter could be heard if the February trial were to be vacated. So far as my diary is concerned, unless I allocate three weeks of the expedition list, which could not be done before mid-August at the earliest, I would otherwise have no time next year to hear it. It is likely that the matter could be heard by another judge in about mid next year but, it being vacation, I do not presently have access to the Divisional diary and am unable to ascertain with certainty when the matter could be heard before another judge. I can, however, indicate that it is practically impossible that it could be heard during the period in April, which the second defendant Ms Nash has suggested might be appropriate. I think, therefore, I must proceed on the basis that if the matter is vacated, it is unlikely to be heard before about July 2007. 11 The principal grounds relied on for the application, as I understand them, may be summarised as follows. So far as the second defendant Ms Nash is concerned, Senior Counsel whom she wishes to retain for the trial is unavailable, at least for the second of the three weeks for which the matter is set down in February. Senior Counsel is prepared to undertake the matter instructed by a new solicitor, who is also prepared to act, for both of them on a contingency or deferred fee basis. Due to impecuniosity, Ms Nash feels unable to retain other counsel for 5 February and that in any event other counsel - having regard to the impending vacation, and that the files are still retained by the defendants' former solicitor - could not now be prepared for a hearing in February. On the other hand, there is at least a high degree of probability that if the trial is adjourned she (and the Court) will have the assistance of a competent solicitor and Senior Counsel. 12 So far as the third defendant, Mr Vaughan, is concerned, he has resolved to be a self-represented litigant; but he says that due to his commitments as project manager of developments in which he and Ms Nash were involved, he is unable to devote himself sufficiently to preparation for a trial commencing in February, or if he were to do so, he would not be able to perform his duties, and would not be retained, as project manager, and would lose his job, which would result in financial ruin, one way or the other, for him and for Ms Nash. He also wishes to adduce further evidence, which has not yet been served. 13 The present application falls to be determined having regard to the provisions of (NSW) Civil Procedure Act 2005, s58 in particular, but that involves also ss 56, 57 and 59. It is convenient to approach the matter having regard to the factors listed in s58(2). 14 First, the Court is obliged to have regard to the provisions of ss56 and 57. Section 56 identifies the overriding purpose as the just, quick and cheap resolution of the real issues in the proceedings. Naturally enough, the defendants emphasise the "just" resolution of the proceedings, but their submissions tend to overlook the "quick" and "cheap" elements of the formula. An adjournment may further the just resolution of the real issues, at least at from the defendants' perspective, but it will not assist their quick and cheap resolution. 15 Section 57 identifies, as the object of case management, the just determination of the proceedings, the efficient disposal of the business of the Court, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings and all other proceedings in the Court. In the present context, this does not involve considerations significantly additional to those in s 56. 16 Section 58(2)(b) lists a number of factors to which the Court may have regard, to the extent to which it considers them relevant. 17 The first is the degree of difficulty or complexity to which the issues in the proceedings give rise. I accept that the proceedings involve questions of some complexity and difficulty, though it seems to me that the defendants' submissions overstate the difficulty and complexity of the case. 18 The second factor is 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 activity. The plaintiffs have approached the proceedings with a considerable degree of expedition, having sought an order for an expedited hearing, and have been timely in their interlocutory activity including, generally speaking, compliance with directions of the Court. The defendants have been dilatory. They opposed expedition. It is very difficult to escape the conclusion that at times they have intentionally sought to impose delay. They have, as appears from the history I have recited, repeatedly failed to comply with directions of the Court. 19 I shall return to the third factor because I think it is of wider significance. 20 The fourth factor is the degree to which the respective parties have fulfilled their duty under s56(3) to assist the Court to further the overriding purpose and, to that effect, to participate in the processes of the Court and to comply with directions and orders of the Court. The plaintiffs have fulfilled those duties; the defendants, as appears from the history I have recited, have not. 21 The fifth factor is the use that any party has made, or could have made, of any opportunity available to the parties in the course of the proceedings. The defendants have been afforded ample opportunity to be ready for trial. They have twice, through their former solicitor, assured the Court that they were ready for trial. They have been afforded ample opportunity to adduce evidence, even after they have said that all their evidence is complete, yet they have failed to do so. Since they have become dissatisfied with their former solicitor and learnt that there were difficulties with their Senior Counsel's dates, they have not sought to ascertain whether alternative counsel might be available. I accept Ms Nash's evidence that she has asked the former solicitor to deliver up his files and that he has claimed a lien, but no process has been instituted to compel him to deliver them up. 22 It is at this point that I return to the third factor, which is the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the relevant parties. 23 For present purposes I am prepared to accept - though one has to be conscious that the former solicitor has not had an opportunity to answer the serious allegations made against him - that the lapses of the defendants may be due, at least in part, to the conduct of their former solicitor. In particular, I accept that that solicitor did approach the case on the basis that delay was in the interests of his clients: it is clear, from his email to Ms Nash of 24 October, that he believed that he had served his clients well by protracting this litigation for two years until the prospective hearing in February next year. 24 The inevitable conclusion - from the opposition to expedition, and from the application to have the decision to expedite the proceedings reviewed, to which I have referred - is that a course of imposing delay was adopted. Ms Nash accepted that she gave instructions to oppose the application for expedition, and I have to say that I did not find her explanation for that particularly convincing. It must also follow, from the circumstance that she provided her own available dates to her former solicitor, who used them in connection with the application to have the grant of expedition rescinded, that she had at least some knowledge of that application being made. 25 It also has to be observed that Ms Nash, although I fully accept that she has not practised on the civil side since her first year at the Bar, is nonetheless, a barrister and an officer of the Court, and must be taken to have some appreciation of court procedures and the type of directions that are made in the preparation of a matter for trial. 26 On the other hand, I do accept Ms Nash's evidence that, just as when she conducts a matter for a client she assumes responsibility for its conduct and compliance with orders and directions, so she thought, in this case, that she could leave the preparation of the matter to her former solicitor; and I accept that she largely did so. I also have to bear in mind that, while the circumstances to which I have referred raise doubt in my mind as to whether the defendants adopted a deliberate course of imposing delay, no such allegation was ever distinctly put to her in cross examination, although there was ample opportunity to do so. In those circumstances, I should not and do not conclude that Ms Nash or Mr Vaughan have themselves personally deliberately embarked on a course of delaying this matter coming to trial. 27 At the same time, I do not think they can completely avoid responsibility for what has happened. While the responsibility may largely be that of their former solicitor - a conclusion which will have to await another day - it cannot be said that it was entirely beyond their control. Nonetheless, these considerations mollify, to some extent, the gravity of the defaults to which I have so far referred. 28 Moreover their Senior Counsel's available dates were obtained when the matter was listed for hearing on 12 September, and a clerk in their former solicitor's office was given dates, which she brought to court, which included those in February for which the case was set down. It transpires, so it seems, that, as sometimes happens, an error was made by someone in Senior Counsel's chambers in that respect, and a prior commitment which he had was overlooked. In those circumstances, I do accept that the unavailability of counsel prepared to appear for Ms Nash, in circumstances in which she may well not otherwise be able to afford counsel, is a matter which was relevantly beyond her control. 29 The sixth factor is the degree of injustice that would be suffered by the respective parties as a consequence of granting an adjournment. If I do not grant an adjournment, it is likely, though I do not accept certain, that the second defendant will be forced to participate in a relatively complex trial, without representation. To some slight extent, the significance of that is moderated by the circumstance that she is a barrister, though not one experienced in the equity jurisdiction. The significance is also reduced, to some extent, by what I regard as an unfortunate absence of any serious attempt to find alternative representation, rather than seeking a vacation of the hearing. But against that, it might be said that any replacement barrister would have had difficulty in being ready by 5 February, in circumstances where the former solicitor still has the files (so that an application to the Court may be necessary to obtain them), and where the vacation has already commenced and the trial would commence in the second week of the new term. 30 Evidence given this morning has enhanced, to a significant extent, the prospect that, if the trial is vacated, Senior Counsel will appear for Ms Nash at the adjourned trial, it having been indicated today for the first time that there is now agreement in principle that he will do so. 31 In the case of Mr Vaughan, the prejudice from declining an adjournment is that, if the trial goes ahead on 5 February, he will be, at least, under prepared for it, and may be left without relevant evidence which he wishes to adduce; or, alternatively, he may be compelled to give up his present employment, with the prospect of financial ruin for both him and Ms Nash. 32 Some might suggest that the relatively late dismissal of the former solicitor makes this a self-inflicted situation but, after careful consideration, I am not prepared on the current state of the evidence, to conclude that the course of dismissing the solicitor was a stratagem or otherwise unwarranted. 33 So far as the plaintiffs are concerned, the prejudice from granting an adjournment is that some additional costs are likely to be incurred which, given the defendants' impecuniosity, may well prove irrecoverable, and the plaintiffs will suffer, probably, considerable further delay and if they are ultimately entitled to succeed, will have been kept out of their rights for still longer. Indeed, it is a striking feature of this that the case may well come to trial eighteen months after it was expedited by the Chief Judge. 34 On the other hand, no significant material prejudice to the plaintiffs from the grant of an adjournment has been identified and, although the proceedings have been expedited, no demonstrable urgency, such as would require the case to be heard in February as opposed to July, has been suggested. 35 It is significant, on the degree of injustice which would be occasioned to the respective parties by granting or declining to grant an adjournment, that, from the perspective of the defendants, not only the question of an adjournment, but the outcome of the case itself, is probably a matter of financial survival or ruin; whereas there is no suggestion that that is so from the perspective of the plaintiffs. 36 The seventh factor is such other matters as the Court considers relevant in the circumstances of the case. One matter that I consider relevant is that the Court is likely better to be able to do justice between the parties if at least one of the defendants is represented. The case is also likely to be conducted more efficiently, and there may be some saving in court time if that is so. Another relevant consideration is that, as has been pointed out by Ms Ghabrial for the defendants, this application is not made at the last moment, although it has to be said that, given the intervention of the vacation, it is not far short of the last moment, and it is the second such application. A third additional matter is the bona fides of the present application. It will be apparent from the observations I have made about the history of the proceedings and the opposition to the application to vacate, that I have been troubled as to whether or not this application is brought bona fide. Ultimately, and taking into account my observations of Ms Nash and Mr Vaughan as they have given evidence, I am not prepared to find that the application is made other than bona fide. 37 Against that, one matter still cries out for observation and that is that, while there has been a great deal said about justice to the defendants in this case, very little has been said about justice to the plaintiffs and the circumstance that, if this application succeeds, they will be kept out of their rights (if ultimately entitled to succeed) still longer, and are being put to additional costs, which are unlikely, given the defendants' impecuniosity, ever to be recoverable. 38 There are also the observations of Lord Griffiths, in Ketteman v Hansell Properties [1987] AC 189, to the effect that justice cannot always be measured in terms of money, and that a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues and the raising of false hopes. For a second application to be made to vacate a fixture, those observations apply all the more strongly, and I give them considerable weight. 39 (NSW) Civil Procedure Act 2005, s59 requires that the practice and procedure of the Court be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for necessary interlocutory activities and the fair and just determination of the issues in dispute. Needless to say, an adjournment will not advance that end. 40 In Phornpisutikul v Mileto [2006] NSWSC 57, proceedings under the (NSW) Family Provision Act 1982 had been listed for hearing before McDougall J on 7 February 2005. That hearing was vacated, because the plaintiff had sworn affidavits as late as 3 February 2005, with which the defendant was unable to deal on such short notice. Directions were made for the filing of further affidavit evidence by the plaintiff, but she thereafter repeatedly failed to comply. The matter eventually came before Campbell J on 10 February 2006, in circumstances where a year had passed since the direction had first been made, and there had been repeated breaches. His Honour referred to the possibility that, despite the reluctance of the Court to dismiss a case without a hearing on the merits, the power to dismiss proceedings for failure to comply with directions was one which would be used in an appropriate case. Nonetheless - notwithstanding that, in more than a year since the first trial had been vacated, and a direction made for the plaintiff to file her affidavits, she had not filed a single document, but influenced by the fact that proceedings had been on foot since 2003 and that preparation of an affidavit was, apparently, well advanced - his Honour granted a final indulgence of a further month in terms of a self executing order for dismissal of the proceedings otherwise. 41 In Kane v Wyllie [2006] NSWSC 710, Gzell J similarly made a self executing order for dismissal of proceedings if the plaintiffs failed to serve a further amended statement of claim by the following day. His Honour observed that the Court must strike a balance between the parties and decide whether or not, on balance, justice demanded that an action should be dismissed. 42 The ultimate aim of the Court is the attainment of justice, and that aim is not surpassed by any principle of case management or efficiency in the procedures of the court. In particular, the achievement of efficiency in procedure, while not irrelevant, is generally of less weight than the injustice of precluding the determination on the merits of a genuine issue between the parties [State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146]. The (NSW) Civil Procedure Act 2005 does not alter this, but continues to give primacy to the dictates of justice. The dictates of justice are determined by weighing the injustice of denying a party a hearing on the merits, against the injustice of requiring the other to tolerate the first's procedural defaults. While, in evaluating the dictates of justice, it is relevant to take into account such procedural defaults, it will only be in exceptional cases that the injustice they occasion to the other party is such as to justify the injustice of denying the delinquent party a hearing on the merits [Chandra v Perpetual Trustee Victoria Limited [2006] NSWSC 1046, [28]]. 43 This case must be approaching one of those exceptional cases. The essential decision is between, on the one hand, the prospect, albeit somewhat short of a certainty, that if an adjournment is granted, one of the defendants will obtain representation, and both defendants are likely to be better prepared and be in a position to adduce all the evidence they wish to put before the Court, and may avoid ruinous financial consequences which may well otherwise ensue if the matter proceeds in February; and on the other hand, the reality that they have had ample opportunity to be ready for trial. But the failure to take those opportunities is not entirely their personal faults; the granting of an adjournment will occasion little material prejudice to the plaintiffs (though I do not overlook the factors to which Lord Griffiths referred in Ketteman and I think it is significant that, in terms of the ultimate outcome of the case, as I have said, its consequences are likely to make the difference between survival and ruin for the defendants, but not, at least as far as the evidence before me shows, for the plaintiffs. 44 In those circumstances, and not without enormous reservation, I have concluded that the balance of injustice is such that I should vacate the hearing. 45 I will not be able to allocate further hearing dates until early in the new term. That should not be taken as the slightest excuse by the defendants for deferring the further preparation of this matter in the interim, and my attitude as to what further hearing date should be allocated, and to any application for the striking out of the defences for further default, will be much influenced by signs of diligent progress or absence thereof in the interim. 46 My orders are: 1. Order that the hearing appointed to commence on 5 February 2007 be vacated. 2. Order that the defendants pay the costs of the plaintiffs and the sixth cross defendant of this application and thrown away by the vacation of the hearing, on an indemnity basis. 3. Stand the proceedings over to 5 February 2007, at 9.30am, before me, for further directions. 47 As the preparation of bills of costs and assessment procedures will only be a further distraction from preparing the matter for hearing, I decline to order that the assessment of costs may proceed forthwith.

Dawson & Ors v LNG Holdings Pty Ltd & Ors

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Judgment (14 paragraphs)

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Cases Cited (4)