Application to vacate the hearing date
11 On 25 November 2013 the applicants filed an interlocutory application seeking orders which included an order that the hearing date of 2 December 2013 be vacated forthwith.
12 The application is supported by an affidavit of Mr Angelo Ferella. The affidavit contains only six paragraphs, which read as follows (Annexures A & B referred to in 1. and 3. are not included):
1. I make this application and affidavit in support of the first applicant as Attorney under a Power of Attorney and also as the manager of the second applicant. Annexed and marked "A" is a copy of the power of attorney.
2. Counsel for the applicants has withdrawn from the proceedings effectively on 14 November 2013.
3. McCue & Associates Solicitor for the applicants has withdrawn from the proceedings and has ceased to act effectively on 18 November 2013. Annexed and marked "B" is a copy of the notice of ceasing to act.
4. To instruct new solicitors and counsel to prepare for the hearing set down for 2 December 2013 is not possible.
5. The applicants respectfully seek the proceedings listed on 2 December 2013 be vacated and adjourned to a date fixed as and when convenient to the Court and the parties in the new year so as to allow the applicants to instruct new solicitors and counsel as soon as possible.
6. It is respectfully requested that the Orders sought in the application be granted.
13 The interlocutory application was given a return date of 2 December 2013 to coincide with the commencement of the hearing but I brought the return date forward to 28 November 2013 and arranged for the parties to be notified.
14 When the application was called there was no appearance for the applicants although I was informed during the course of the hearing that Mr Angelo Ferella had acknowledged receipt of the communication from the Court that the matter was listed for 28 November.
15 Nevertheless, I adjourned the hearing to today but I requested the respondent's solicitors to inform the applicants that, if the interlocutory application was dismissed, I would then proceed with the hearing of the case.
16 When the matter was called this morning, Mr John Conti appeared as solicitor for the applicants in the interlocutory application. He informed me that he was not retained for the hearing in the event that I refused the adjournment.
17 In the course of submissions, I permitted Mr Conti a very short adjournment to enable him to call Mr Angelo Ferella, who was in Court, in order to supplement his affidavit evidence. I did so notwithstanding the force of the submissions put by Mr Golledge, counsel for the respondent, that Mr Ferella had chosen to proceed solely upon the basis of his affidavit evidence and that there was prejudice to the respondent by the course that was taken.
18 Mr Ferella's evidence in chief was that he had a conversation with Mr Svehla shortly before 14 November 2013, in which Mr Ferella had sought to vary an instalment arrangement he had made with Mr Svehla for the payment of counsel's fees. He said the proposed variation was not "palatable" for counsel, who then withdrew from the case.
19 Mr Ferella said that he did not blame Mr Svehla for taking that course and that he had no criticism of counsel's actions in withdrawing from the case. In cross-examination Mr Ferella gave no explanation as to why his mother could not swear an affidavit in support of the adjournment application other than her age. He agreed with Mr Golledge that there was no reason why his sister, who appears to be the sole director of the second applicant, could not swear an affidavit.
20 Mr Ferella also accepted that he has been on notice from April of this year that the hearing was listed for December. He agreed that he had informed his mother and sister of the hearing date. In addition, Mr Ferella informed his mother and sister of the commercial terms on which Mr Svehla had been retained some time well in advance of the hearing. He said the arrangement was an oral one made between Mr Svehla and himself, apparently with his sister present at the time. Mr Ferella accepted that he, his mother and sister were aware of the need to pay counsel some months before the hearing.
21 Mr Ferella was cross examined on a letter, to which I referred earlier, that he wrote to the Australian Financial Security Authority (AFSA) on 19 November 2013. The letter, which was marked urgent and was faxed to AFSA by Mr Ferella, is as follows:
I refer to the above mentioned proceedings in the Federal Court of Australia proceedings no. NSD 405/2012 and respond as follows.
On 18 November 2013 Margaret McCue of McCue & Associates appeared before his Honour Jacobson J to seek an adjournment as Counsel has withdrawn from the matter as of 14 November 2013. As of 19 November 2013 Margaret McCue has ceased to act in the proceedings.
I have flagged urgently to the Associate for Jacobson J the circumstances why the adjournment is warranted and to allow the plaintiffs to engage new representation.
I have made it clear to the Associate the Plaintiffs will not participate any further in the proceedings with regard to any further directions with regard to a joint tender bundle etc notwithstanding the plaintiffs have filed and served some many months ago without a Solicitor on the record and new Counsel briefed.
The Plaintiffs are not in a position to now proceed the time left is inadequate for the preparation of Submissions, List of Authorities etc.
The Plaintiffs will not appear on 2 December 2013 the Associate for Jacobson J has been made aware of the position, if you proceed to appear on 2 December 2013 notwithstanding you have been put on notice the plaintiffs will appeal any adverse decision and seek all costs without recourse.
What you do from this point on in the proceeding is a matter for you adequate notice has been given to you so as to make your solicitor and counsel aware they need not prepare for a hearing where the plaintiffs will not appear.
22 Mr Ferella accepted in cross-examination that the letter reflects what he told his mother and sister and that, by 19 November 2013, his mother and sister had decided that neither would appear on 2 December to conduct the proceeding because there was inadequate time to prepare. Mr Ferella also accepted that the decision not to appear on 2 December was made on 19 November and that he did not speak to any solicitor about the matter until 29 November when he approached Mr Conti.
23 Mr Ferella again made his position clear in a letter to AFSA dated 28 November 2013 which was tendered in redacted form because it apparently contains an offer made by Mr Ferella in relation to the proceedings. The letter concludes with the following paragraph:
Failing acceptance of the offer solicitors will be instructed this day to appear on Monday to formerly [sic] vacate the hearing of 2 December 2013 in accordance with the interlocutory application and supporting affidavit filed and served 25 November 2013 and listed for mention on 2 December 2013 at 10.15 am notwithstanding the defendant being given substantial notice prior that the applicants will not and cannot proceed on 2 December 2013.
24 At the conclusion of the hearing of the interlocutory application, I indicated that I would refuse the adjournment. These are my reasons.
25 First, the evidence in support of the application contained a number of deficiencies as to the full circumstances in which the lawyers withdrew. I was told in very general terms what happened but I was not told the substance of why it happened. It seems to me that I should infer from such evidence as was given that the applicants were not prepared to fund the litigation. This has a significant bearing on the question of whether an adjournment should be granted.
26 Second, it is plain that Mr Ferella, with the full knowledge of his mother and sister, took the decision no later than 19 November 2013 that the case was not to go ahead. This was a unilateral decision which amounted to a fait accompli, the consequences of which must be accepted by the applicants.
27 What seems to me to be significant is that, while the case is listed for four days, it is not a particularly complex one. The dispute between the parties turns largely upon a conversation that took place on 13 June 2006, when the cheques were handed over. Of course, the circumstances in which this occurred would also be relevant. However, it is plain that any reasonably competent counsel could have prepared for the case on very short notice. The factual issues are, as I have said, not complex, and the answers to the legal questions would follow almost as a matter of course from the factual findings.
28 Third, nothing was put to me to give me any confidence that, if the matter is adjourned, the position will alter. In particular, Mr Ferella made no offer to fund lawyers to prepare the proceeding for hearing. Mr Conti, as I have said, was briefed only to conduct the adjournment application and then to withdraw if the application was unsuccessful. There was no suggestion that any difficulties in having the matter ready for hearing were short term matters which could be addressed in a relatively short period, let alone any period at all.
29 Fourth, the High Court has made it clear that the overarching principles stated in legislation in similar terms to s 37M of the Federal Court of Australia Act 1976 (Cth) have the object of the administration of justice, which takes into account the effects of conduct not only on the parties to the dispute, but upon other litigants: see Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46 at [51], [56]-[57].
30 The relevant principles were aptly expressed by Kenny J in Wu v Avin Operations Pty Ltd [2006] FCA 36 at [51]. Her Honour there said that when applying the relevant principles, the Court must balance the need for the expeditious conduct of litigation, particularly in a court committed to a case management system, and the strong reluctance of courts to prevent litigants having "a proper opportunity" to present their cases.
31 What seems to me to be clear in the present case is that the applicants have had a proper opportunity to present their case. It cannot be suggested that a period of eight months was not adequate, but having been given that opportunity to prepare, the applicants took a unilateral decision on (or perhaps before) 19 November 2013 not to go ahead with the hearing. There was ample time from 18 November, when I refused to adjourn the hearing, to seek to approach and brief alternative counsel.
32 The applicants have failed to put themselves in a position to present their case today. They have put nothing to me to give me the remotest idea when the matter may be ready for hearing, if at all. I do not accept Mr Conti's submission that an order for costs is sufficient to meet the respondent's prejudice. The High Court has made it clear that a costs order is often an inadequate answer.
33 Indeed, a costs order is of no utility at all in the present case. Applicants who are apparently unwilling or unable to fund their own litigation can hardly be expected to be in a position to meet a costs order against them resulting from the time and expense wasted as a result of the vacation of the hearing.
34 The balancing exercise referred to by Kenny J in Wu, between the expeditious and timely conduct of litigation and the need to provide a litigant with a proper opportunity to present its case, comes down firmly against the grant of an adjournment. Accordingly, I dismissed the application.
35 I then turned to the hearing of the proceeding. The indication given by Mr Conti that he would withdraw left the case in a position that the applicants were in default under r 5.22(c) or (d) of the Federal Court Rules 2011. I therefore considered it appropriate on Mr Golledge's application to order, under r 5.23(1)(b)(i) that the whole of the proceeding brought by the applicants be dismissed immediately.
36 Costs should follow the event, but Mr Golledge sought costs on an indemnity basis from 18 November 2013 to today. He submitted than an order for indemnity costs was appropriate for that period because his client had to be ready to proceed today, notwithstanding the insistence on the part of the applicants that they were not prepared to go ahead.
37 It is true that the respondents had to proceed to prepare and appear at the hearing but, in my view, this is not sufficient to warrant an order for costs other than on the usual party/party basis.