Ghosh v Renew You Cosmetics Clinic Pty Ltd

Supreme Court of NSW|2014-02-03|Before: Garling J

EX TEMPORE Judgment 1On 24 December 2013, Dr Ratna Ghosh filed a Notice of Motion in these proceedings returnable today, in which she sought the following orders: "1. Rehearing to present new evidence and re-examine the facts. 2. Set aside the judgment of his Honour G Bellew. 3. Stay the proceedings until after the Court of Appeal review. 4. Costs for this application."

Factual Background 2Some background to the proceedings in this Court and the disputes between the parties is necessary in order to understand the Motion and the disposition of it. 3Dr Ghosh is one of the owners of a property located in Queensland. She alleges that in June 2007, she and her fellow co-owners entered into a lease of the property to a company called Renew You Cosmetic Clinic Pty Limited and Dr Lee-Ooi Lua. It will be convenient to refer to these two parties jointly as the tenants. She alleges that a real estate firm, Robina Realty, and its principal Alanah Day, were her agents for the purpose of that transaction. It will be convenient to refer to these parties as the estate agents. She alleges that there has been default under the lease by the tenants, and misconduct by the estate agent.

Local Court Proceedings 4Dr Ghosh commenced proceedings in the Local Court at Newcastle against those four named parties by a Statement of Claim. The proceedings were filed in the Local Court on 3 April 2013. 5The substantial part of that Local Court claim was described in the following words under the heading "Pleading and Particulars", namely: "1. Failure to pay rent by tenant (Renew You Clinics) or any deposit. 2. Failure to enforce lease by agent (Robina Realty) or collect any deposit before handing over keys to 15 Bundall Road, Surfers Paradise, to 'Renew Clinics' - Dr Lee-Ooi Lua. 3. Damage to property by Renew You Cosmetic Clinic, including theft of patio blinds. 4. Conflict of interest as Alanah Day's son was to live in the house with Bonny Sleep's daughter as de facto engaged, boyfriend/girlfriend. So the property was deliberately kept off the market by Robina Realty for Bonny Sleep for over 6 months while Bonny Sleep at Renew You Clinics was given the keys but no rent was collected because of the intimate relationship between Alanah Day, principal at Robina Realty and Bonny Sleep. Alanah Day was listed as a referee for the tenants on the lease." 6On 6 May 2013 each of the defendants sought by Notice of Motion filed in the Local Court, that the proceedings brought by Dr Ghosh be summarily dismissed because the Local Court had no jurisdiction to hear the claim. The first and Second defendants, Renew You and Dr Ooi, filed their motion on 29 May 2013 after that filed by the third and fourth defendants, Robina Realty and Alana Day, on 6 May 2013. 7According to the unchallenged evidence of the solicitor for the tenants, Mr Gary Fox, the matter came before the Local Court at Newcastle on 6 June 2013 for a directions hearing at which Dr Ghosh was personally present. On that day the Local Court made orders that any further material was to be filed by Dr Ghosh by 17 June 2013, and adjourned the hearing of the Notices of Motion to 20 June 2013 for final determination. No material was filed by or on behalf of Dr Ghosh in the period between 6 June 2013 and 20 June 2013. 8On 20 June 2013, Cheetham LCM was engaged in hearing a criminal matter. At a point in the course of that criminal matter which was convenient to the Court, the learned magistrate interposed the hearing of the defendants' Notices of Motion seeking dismissal of the proceedings on the basis of a lack of jurisdiction. According to Mr Fox's unchallenged evidence, his Honour identified various documents which were relied upon by Dr Ghosh and sought submissions from all parties present which were provided to him. His Honour considered the position, and then delivered an ex tempore judgment, dismissing the Statement of Claim, and hence the proceedings, and making costs orders in favour of each defendant. Ultimately, the costs order was made on an indemnity basis.

Supreme Court Proceedings 9On 2 August 2013 Dr Ghosh filed a Summons in this Court seeking leave to appeal against the decision of the Local Court to dismiss the proceedings. At the time of filing, the Summons had endorsed upon it that it would be listed before the Court at 9am on 13 August 2013. The sealed Summons including that endorsement was served by the plaintiff, Dr Ghosh, or at her behest by her secretary, on each of the four defendants in these proceedings, who had been the defendants in the Local Court. Accompanying that Summons was an affidavit of Dr Ghosh of 2 August 2013. 10On the return date of 13 August 2013, there was no appearance by Dr Ghosh. The matter was referred to Bellew J who was sitting as the duty judge in the Common Law Division. On that day, his Honour was asked by the defendants to dismiss the proceedings. For the reasons which his Honour gave orally on 13 August 2013, his Honour dismissed the Summons in this Court by which proceedings had been commenced by Dr Ghosh. He ordered the plaintiff to pay the costs of the defendants of the proceedings. 11On 18 September 2013, Dr Ghosh filed a Notice of Motion seeking to set aside the orders made by Bellew J on 13 August 2013. In so doing, amongst other things, she relied upon the provisions of r 36.16(2b)of the Uniform Civil Procedure Rules 2005 (UCPR),on the basis that she was not present at the initial hearing before Bellew J and had not been notified of the hearing. 12The Notice of Motion of 18 September 2013 was heard by Justice Bellew on 28 November 2013. On that day, his Honour was taken to the affidavit material in support of the motion and he was confronted with the fact that all defendants opposed the relief sought by Dr Ghosh. Dr Ghosh indicated to his Honour that she wished to have an adjournment because she had other Court commitments on that day. One was apparently a commitment in the Federal Circuit Court, another commitment in the District Court, and a third in the Parramatta Local Court. His Honour having made inquiries of all of the parties before him had indicated to Dr Ghosh that he was minded to stand the matter over to the following day if she was not available on that day. 13The matter stood in the list and his Honour, when the matter was recalled, indicated that he was prepared to make an order to adjourn the proceedings to the following day. Having completed making that order his Honour was then informed by Dr Ghosh that she was happy "... to go ahead now". Bellew J, having confirmed with her that she was happy to proceed with the hearing, then vacated the order for an adjournment, which he had just made. His Honour went on to take submissions from counsel appearing for the four defendants and also from Dr Ghosh. There was no reply from counsel to the submissions of Dr Ghosh. His Honour indicated that he would reserve his judgment and list the matter for delivery of judgment orally at 9.30am on Monday 2 December 2013. His Honour indicated in answer to a question from Dr Ghosh that she did not need to be present saying this: "If you are not here the matter will proceed in your absence but in the event that you can't be here I will direct the registrar to send you a copy of my reasons." 14An issue of costs was raised and his Honour said he would grant the parties liberty to restore the matter to the list in the event of there being any residual issue as to costs. 15On 2 December 2013, for the reasons which he announced in the course of delivering his judgment, Bellew J dismissed the Notice of Motion of 18 September 2013. In the final paragraph of his reasons, immediately before pronouncing the orders, in summarising what had gone before, his Honour said this: "In all of those circumstances I have come to the view that the plaintiff has failed, firstly, to provide an adequate explanation for the failure to appear before the Court on 13 August 2013; and, secondly, to adduce any evidence which would establish that they have an arguable case in respect of the proposed appeal." 16His Honour dismissed the motion and directed the registrar to "forward by pre-paid post a copy of these reasons to the plaintiffs once these reasons are revised." 17An issue of costs was raised and his Honour indicated his preparedness to hear the parties on the question of costs but stood the matter over to 5 December 2013 to enable that to occur. 18Subsequently on 5 December 2013 his Honour ordered the plaintiff to pay the costs of each defendants on an indemnity basis.

An Appeal to the Court of Appeal 19On 20 December 2013, as I am informed today, Dr Ghosh filed a Notice of Intention to Appeal against the second judgment of Bellew J of 2 December 2013. That matter was filed in the Court of Appeal and has received a separate file number. Dr Ghosh tells me that the Notice of Intention to Appeal has been served on the solicitors for the other parties. Counsel for those parties inform the Court that they have not received any such document. For present purposes I do not need to resolve that difference of fact. However, after that Notice of Intention to Appeal was filed, Dr Ghosh then filed the Notice of Motion of 24 December 2013, which I am obliged to consider in this judgment.

Present Notice of Motion filed 24 December 2013 20Accompanying the notice of motion was an affidavit of Dr Ghosh sworn 23 December 2013. The affidavit amongst other things asserts that she seeks a rehearing "to present new evidence and re-examine the facts." She says that she was unable to properly represent herself on 28 November 2013 due to too much stress from a divorce hearing at the same time and says that she was never sent a copy of the judgment. Her affidavit then goes on to challenge all allegations made by the defence counsel. She then sets out what the allegations are said to be and presents arguments to the contrary of those allegations. I admitted that material on the basis that it should be taken as a submission to this Court rather than evidence of any disputed fact. 21There are two possible rules which give this Court the power to set aside a judgment of the Court in any proceedings after the judgment has been entered. Rule 36.15(1) of the Uniform Civil Procedure Rules is in the following form: "(i) judgment or order of the Court in any proceedings may, on sufficient cause being shown, be set aside by order of the Court if the judgment was given or entered or the order was made irregularly, illegally or against good faith." 22Irregularity, illegality and lack of good faith are each alternative bases for the exercise of this power to set aside a judgment of the Court. 23The entry of a judgment can be categorised as irregular if it occurs without compliance with the rules or in some other limited circumstances. The entry of judgment here, both on 13 August 2013 and 2 December 2013, with respect to the Summons originally filed and then the Notice of Motion subsequently filed, occurred as a consequence of the orders made by Bellew J. There is no irregularity of a kind contemplated by this basis to set aside the judgment. 24Under r 36.15(1) of the UCPR, the second possible basis for setting aside a judgment is when it has been entered illegally. I would take such a basis to be that a judgment is entered contrary to law or else where the judgment was entered in circumstances where the entry is effected unlawfully or illegally. There is no suggestion that that is what occurred here. In fact the judgments entered were, as I have said, regularly entered as a direct consequence of an order made by Bellew J and were in no sense illegal. 25The third possible basis under r 36.15(1) of the UCPR, is that the judgment was entered against good faith. I would be reluctant to identify, in the course of an ex tempore judgment given in the duty list, all of the possible ways in which a judgment may be against good faith. The judgment that was entered here was entered in circumstances where proceedings were called on, the plaintiff was absent, and for the reasons which he gave Bellew J was persuaded to enter judgment on the first occasion in August 2013, and after a further full hearing make an order dismissing the Notice of Motion in December 2013. I am not satisfied that anything which occurred in the orders made by the Court in either August 2013 or December 2013 can properly be categorised as against good faith. 26As Davies J has pointed out in Zakaria v Dr Noyce [2012] NSWSC 981, even if an error is made by a judge, the judgment or ordered is not against good faith. What is necessary is that there must be misconduct or dishonourable conduct by the person who procured the judgment: Zakara at [22]; Coles v Burke (1987) 10 NSWLR 429; Kendall v Carnegie [2006] NSWCA 302 at [44] and [53]. There is nothing that has been identified in the evidence before this Court today which would enable me to conclude that the orders of the Court which are attacked were made against good faith or in any other circumstances which would give rise to the power set out in r 36.15 of the UCPR being exercised. 27An alternative source of power for the exercise of the Court's power to set aside judgment can be found in r 36.16 of the UCPR. That rule contains various bases for the settling aside or else the varying of a judgment or order. The first possible basis under r 36.16(1) of the UCPR is that the Court may set aside or vary a judgment if the notice of motion is filed before entry of judgment or order. That did not occur here. Rule 36.16(3A) and (3B) allow for the extension of 14 days for the filing of such a notice of motion from the date of the entry of the order. That did not happen here. Both notices of motion, namely that of 18 September 2013, and that of 24 December 2013, were filed outside of the requisite 14-day period. Accordingly, any application based on r 36.16(1), r 36.16(3A) and r 36.16(3B) is not available. 28Rule 36.16(2)(a) of the UCPR provides that: "A Court may set aside or vary a judgment or order after it is entered if it is a default judgment." If it has been made in the absence of a party whether or not the absent party had notice of the relevant hearing or of the order." 29That does not apply here because the judgments of Bellew J were not default judgments. 30Another possible basis is the absence of a party as noted in r 36.16(2)(b) of the UCPR. Here the judgment which is sought to be set aside is the order of Bellew J made after delivery of his reasons on 2 December 2013. That judgment followed a hearing at which all parties were present. The provisions of r 36.16(2)(b) do not apply to that judgment. The provisions may arguably apply to the orders entered on 13 August 2013 but as is apparent Bellew J has already considered and determined that question. I would not, in any exercise of my discretion, be inclined to reach any different conclusion. 31The other possible basis under r 36.16 to give the Court the power to set aside Bellew J's orders is that set out in r 36.16(3). Rule 36.16(3) provides that the Court may set aside or vary any judgment or order, but then precludes that happening where the judgment or order determines any claim for relief, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. The effect of the two orders of Bellew J made respectively in August and December 2013, was to dismiss proceedings so far as they concerned all claims for relief. Accordingly, the power which is given to the Court under r 36.16(3) is not available to be exercised here. 32Although these two powers are the specific powers it is arguably possible that the Court always retains a general discretion to be exercised in the interests of justice, to intervene when orders are made and to set them aside. However, the exercise of any such discretion must always be tempered by close attention to the principle of finality of litigation. 33As Gleeson CJ, Gummow, Hayne and Heydon JJ said in D'Orta Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at [34]: "A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be re-opened ..." 34The Courts do not permit final determinations to be re-litigated, except in very limited circumstances such as by the taking of appropriate proceedings in the Court of Appeal pursuant to specific provisions which permit appeals or applications for leave to appeal. Or, alternatively, in the limited circumstances described in the rules to which I have earlier made reference. 35There is nothing in the material before me which would suggest that if I have any inherent power as a single judge, that I ought set aside orders made by another single judge of this Court which have been made after due consideration and in respect of which there may be rights of appeal.

Discernment 36The fact is this, Dr Ghosh's proceedings in the Local Court were dismissed before any hearing on the merits because the Court was not satisfied that it had jurisdiction. An appeal to this Court to challenge that decision was dismissed, firstly in the absence of Dr Ghosh, and, secondly, after a hearing which had regard to the merits of what was put before the Local Court on the debate about jurisdiction by Bellew J who was not satisfied that the appeal had any real prospect of success. 37There is nothing new in the material which is put before this Court by way of fact or by any submission which would cast any doubt on the conclusions of Bellew J with respect to the prospects of success of the Local Court appeal. 38As it seems to me, based on the material that I have before me on this motion, the decision of the magistrate, that a material part of the cause of action which was sued upon, did not arise in New South Wales was plainly correct. All of this means, so it seems to me, that Dr Ghosh's commenced proceedings in the Local Court of Newcastle, the Court has held it doesn't have jurisdiction, this Court has declined to uphold on appeal against that decision because it was the correct one, and Dr Ghosh has unfinished right to appeal to the Court of Appeal should she choose to go on and file a notice of appeal within the time limit. 39It is open to Dr Ghosh as it seems to me on the material which I have before me, should she be so advised, to commence proceedings in a court of appropriate jurisdiction in Queensland and to seek to have her claim determined on the merits. Whether she chooses to go ahead with that and whether there is or is not any valid defence to that claim, are not matters upon which I express any view. 40Accordingly, I would not be prepared to grant the substantive relief sought by the notice of motion of 24 December 2013, namely to permit a reopening of the proceedings before Bellew J which have resulted in a final judgment.

Costs 41On two occasions Bellew J made orders for costs. Dr Ghosh submits that I should order a stay on those orders. She does so because she submits that she has commenced proceedings in the Court of Appeal by way of an appeal to challenge Bellew J's decision, and that the merits favour the success of her appeal, and that as a matter of substance her claim against the four defendants is a meritorious one to which they have no valid defence. 42As things presently stand, Dr Ghosh has not filed a Notice of Appeal. She has material merely filed a Notice indicating her intention to appeal. Accordingly, it is not possible in the absence of any grounds of appeal for me to form any conclusion as to whether her appeal has any prospects of success. It may be it has good prospects of success. It may be that it does not. I am quite unable to form any opinion about its prospects of success unless and until I see a Notice of Appeal. 43The orders for costs made by Bellew J seem to me on their face to be uncontroversial. Costs follow the event, and his Honour saw fit that they be paid on an indemnity basis for reasons which he gave. 44The ordering of a stay on a costs order is a matter of discretion. I am required to take into account the interests of justice and I am required to take into account all of the usual factors with respect to the exercising of a discretion. Ordinarily, a party to litigation ought have the benefit of the orders which they have obtained. On the other hand, where an appeal is on foot, it is appropriate to order a stay where the subject matter of the order being challenged would be nugatory if the appeal succeeded. 45None of the defendants have as yet moved to enforce the orders for costs. They have not served any claim for costs on Dr Ghosh. They have not sought an assessment of the costs nor have they obtained a certificate of the costs. No-one is as yet incurring any legal costs with respect to the costs order. That may or may not change. As indeed, may Dr Ghosh's intention to pursue an appeal change. In my view, the application for a stay on the order for costs is premature. It is not merited by the material put before me and no good reason has been shown for this court to order a stay at this time on the order for costs made by Bellew J.

Conclusion 46In all of those circumstances the only relevant order is to dismiss the entirety of the Notice of Motion of 24 December 2013. 47I see no reason to make any order about costs other than the usual order, namely costs follow the event.

Orders 48I make the following orders: (1)Notice of Motion of 24 December 2013 is dismissed. (2)Order Dr Ghosh to pay the costs of the defendants of the notice of motion of 24 December 2013.

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: 07 March 2014

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