On 4 October 2019, these proceedings were set down for hearing for 10 days commencing on 25 May 2020. Earlier today, I dismissed with costs a notice of motion filed on 15 May 2020 by the defendants seeking to have the hearing date vacated.
These are my reasons for coming to that decision.
The proceedings were commenced on 9 November 2016.
The claims of the plaintiff, Ms Danusia Giam, arise out of her relationship with the first and second defendants, Ms Melinda and Mr Robert Patterson. That relationship commenced in 2013. The other defendants are companies associated with Mr and Ms Patterson.
Between 2013 and 2015, Mr and Ms Patterson carried on business as accountants, wealth advisers and financial planners under the name of "8888 Group".
The nature of Ms Giam's case is summarised by the following passage from an affidavit made by her solicitor, Mr Charles Ciappara, on 29 April 2020:
"The plaintiff's Further Amended Summons and Further Amended Commercial List Statement filed on 17 March 2020 include claims by the plaintiff that the defendants fraudulently misappropriated her funds by taking control of her bank accounts. At the time of swearing this affidavit, the total amount of funds that the plaintiff contends have been fraudulently misappropriated from her by the defendants is approximately $1.4 million.
The plaintiff also claims losses against the defendants in respect of certain property transactions that are detailed in the plaintiff's Further Amended Commercial List Statement. These losses have been calculated by the plaintiff's expert Nicole Adamson in the amount of $1,348,870.
The plaintiff's case is that the defendants won her trust by posing as her friends, pretending to involve her in their business (including as an employee) and making her feel part of the luxury lifestyle that they appeared to enjoy. The plaintiff's association with the defendants lasted from about mid 2013 until August 2015, when the plaintiff and her son, Adam Giam, uncovered some of the defendants' fraud and quickly broke off the relationship."
This is, in effect, a fraud case. Ms Giam alleges that she has been defrauded by Mr and Ms Patterson. In turn, Mr and Ms Patterson contend that they gave no advice to Ms Giam and that she entered all of the transactions complained of willingly.
The parties have served extensive evidence in relation to the transactions the subject of Ms Giam's claim.
In particular, Ms Patterson swore an affidavit on 23 May 2018, comprising 61 pages and an exhibit comprising 1742 pages, in which she engages in great detail with the allegations that Ms Giam makes against her and against Mr Patterson.
The defendants' 15 May 2020 application was based upon a diagnosis very recently made by a consultant psychologist, Mr Watson-Munro, as to Ms Patterson's mental state. I will return to this.
This is the second application made by the defendants to vacate the 25 May 2020 hearing.
By notice of motion filed 28 April 2020 the defendants sought to have the hearing date vacated on the basis of the defendants' stated apprehension that, by reason of the current restrictions on personal appearances in court arising from the COVID-19 pandemic, effective cross-examination of Ms Giam, and fair cross-examination of Mr and Ms Patterson would not be possible.
Ms Patterson swore an affidavit in support of that application on 28 April 2020. She deposed the difficulty she anticipated encountering in participating in the hearing by audio-video link and asked "the Court to adjourn the hearing dates to a date when we can all attend in person". Ms Patterson did not suggest in that affidavit any other difficulty associated with her participation in the proceedings.
I heard that application for adjournment on 30 April 2020. The application was resolved on the basis of an agreed protocol whereby cross-examination of Ms Giam and Mr and Ms Patterson would be deferred to the second week of the hearing and that, should the Court not then be in a position to permit cross-examination in court in the usual way, the cross-examiner and witness could "co-locate" so that cross-examination proceed remotely from the Court.
As I have said, the current application to vacate the date was supported by a report from Mr Watson-Munro. Mr Watson-Munro first saw Ms Patterson on 7 May 2020 when she "self-referred" to his practice against, Mr Watson-Munro said, "a backdrop of an escalating Depressive Disorder and features of an Anxiety Disorder, dating back to the breakdown of her marriage [to Mr Patterson] in 2015".
Mr Watson-Munro's report was, on this application, admitted without objection.
Mr Watson-Munro said that he administered Ms Patterson with "the Beck Depression Inventory, a self-reporting questionnaire which canvases psychological and physiological symptoms of depression and anxiety experienced by the respondent over the past fortnight".
Mr Watson-Munro said that his testing confirmed his "clinical impressions" of Ms Patterson "referable to a Depressive Disorder (severe & recurring) (296.33) according to the DSM-5 criteria".
He also said that Ms Patterson was "well oriented in time, place and person with no indications of major psychiatric disturbance".
On a number of occasions in his report, Mr Watson-Munro expressed the opinion that Ms Patterson is "Presser fit" in relation to the criteria set out in R v Presser. [1]
So far as concerns these proceedings, Mr Watson-Munro concluded:
"As noted, she is Presser fit but nonetheless, in my opinion, her cognitive capacity is compromised by virtue of her psychological state and the overarching issues referable to her health. I note that the proceedings are listed for a 10 day hearing in the Supreme Court of New South Wales and beyond the requirement of providing evidence and being cross-examined, which she will no doubt find extremely onerous, if not overwhelming, Ms Patterson will be required to participate and observe what is occurring in terms of other evidence. Given her presentation at interview, I believe that these tasks are currently beyond her in terms of being able to effectively and fairly equip herself in terms of her defence."
Mr Watson-Munro was made available for cross-examination on this application, in the course of which he said that, in expressing this opinion, he was not aware, because Ms Patterson did not tell him, that she had sworn the affidavit to which I have referred. [2]
I find that Mr Watson-Munro's opinion that Ms Patterson is "Presser fit" to be of high significance on this application.
R v Presser sets out the minimum standards with which an accused must be able to comply before he or she can be tried without injustice.
Those standards require the ability to:
1. understand the nature of the charge;
2. plead to the charge and exercise the right to challenge;
3. understand the nature of the proceedings;
4. follow the course of the proceedings;
5. understand the substantial effect of any evidence that might be given in support of the prosecution; and
6. make a defence or answer the charge. [3]
The application of Presser in a civil context was recently considered by the Court of Appeal in Moubarak by his Tutor Coorey v Holt. [4]
That case was concerned with the question of whether a conclusion that a defendant was not fit to face a criminal trial had the consequence that he was not fit to face a civil trial arising out of the same circumstances.
In that regard, Bell P (with whom Leeming JA and Emmett AJA relevantly agreed) agreed with observations earlier made by Campbell J (as his Honour then was) in Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd [5] that:
"That test [the Presser test] while it cannot be transposed directly to the circumstances of civil proceedings, still lists the factors of mental capacity which it is necessary for someone who is a defendant in civil proceedings to have." [6]
The President continued:
"Coherence is a quality that the common law values. An incoherent legal system is one that is apt to undermine respect for the rule of law and bring the administration of justice into disrepute. It would, in my opinion, tend towards incoherence to maintain that what constitutes a fair trial should differ in cases involving identical factual allegations. If the defendant was not fit to face criminal charges in respect of the plaintiff's complaint to police because "the minimum requirements for a fair trial" … would not be present, it would, in my opinion, offend common sense simultaneously to maintain that the defendant could secure a fair civil trial in relation to identical factual allegations.
In my opinion, the primary judge erred in dismissing the relevance of Presser out of hand. It provides powerful insight into matters going to the very essence of a fair trial, including the ability to give instructions, to decide what defence will be relied on, and to make the defendant's version of facts known to the court and his counsel."
The circumstances here are the opposite of those before the Court in Moubarak. Here, the question is whether, given that Ms Patterson is "Presser fit" and could thus, according to that criteria, stand trial for criminal charges arising out of the events with which these proceedings are concerned, Ms Patterson has the necessary capacity to deal with civil proceedings arising out of the same matter.
In my opinion, Mr Hutton, who appeared for Ms Giam, was correct to submit that the considerations to which Bell P referred in Moubarak in circumstances where a person failed to satisfy the Presser test apply equally where, as here, a person satisfies the Presser test.
It would equally offend common sense if Ms Patterson, who by the estimate of her own psychologist is fit to stand trial for criminal fraud, was regarded as not being able fairly to participate in a civil trial involving the same or similar allegations. I agree that there is no reason to apply a stricter standard to a civil trial involving allegations of fraud than would apply in a criminal trial of the same or similar allegations.
In my opinion, this conclusion when coupled with the fact that Mr Watson-Munro's opinion that participating in the forthcoming hearing was "currently beyond [Ms Patterson] in terms of her being able to effectively and fairly equip herself in terms of defence" was made in ignorance of the very significant preparation that Ms Patterson has already engaged in for this case, was sufficient to refuse the application for vacation of the hearing date.
There are, however, other matters to consider.
One matter advanced in support of the application to vacate the date was evidence from Mr Peter Poulos, the solicitor for the defendants, in an affidavit sworn yesterday:
"I have not had any further communications with Mrs Patterson since 5 May 2020. Counsel and I have been progressing these proceedings on the part of the First to Fifth Defendants as far as we are able to without Mrs Patterson's continuing involvement, including in relation to complying with the directions previously made by the Court for preparation for the hearing, and also in relation to progressing without prejudice correspondence with the Plaintiff's solicitor. Our dealings from 6 May 2020 onwards have been with Mr Patterson."
What Mr Poulos did not explain was that no attempt had been made by the defendants' legal representative to contact Ms Patterson between 5 and 14 May 2020 because, on the instructions of Mr Patterson, they had refrained from doing so. This only emerged last night when Mr Poulos wrote to Ms Giam's solicitor, Mr Charles Ciappara:
"I did not try to contact Mrs Patterson between 6 May 2020 and 14 May 2020. This was based on information being provided during that period from Robert Patterson as to Mrs Patterson's progress/condition and with the intent that she be allowed to consult with Tim Watson-Munro."
During the period 5 to 14 May 2020 it appears Ms Patterson was able to contact Mr Watson-Munro, who described her as "cooperative" and having "no difficulty in understanding and responding to test items". She was also able to contact Mr Patterson on 12 May 2020 to forward an earlier draft of Mr Watson-Munro's report which was evidently prepared for the purpose of this adjournment application.
Further, Mr Poulos deposed, and Mr Salama who appeared for the defendants before me today confirmed, that Mr and Ms Patterson had participated in a conference call with Mr Salama and Mr Poulos last Friday 15 May 2020 during which, to adopt Mr Salama's words, they "spoke at length". As legal client privilege has been claimed in relation to that conversation, I would infer that amongst the matters that were discussed was this litigation.
Further, apart from attending court during Ms Giam's cross-examination, and actually participating in her own cross-examination, most of the tasks requiring Ms Patterson's involvement must surely by now be completed to an advanced stage.
It must also be borne in mind that there are two defendants, Mr and Ms Patterson, who have evidently worked cooperatively to mount their defence. Thus, Mr Watson-Munro reported that the relationship between Mr and Ms Patterson is "amicable" due to their need to "work together" in relation to the current proceedings.
In any event, there is the position of the plaintiff, Ms Giam, to be considered.
Of course, the defendants must be given an opportunity adequately to present their case. But that does not mean that they must be afforded every opportunity to attempt to put themselves in the best position to win their case no matter what the implications are for Ms Giam.
The proceedings have been on foot for more than three years and were set down for hearing more than six months ago.
I accept Mr Hutton's submission that in this case there are more than the usual reasons to avoid prolongation of this litigation. As Mr Hutton submitted:
"Ms Giam is 64 years of age and has incurred substantial legal and expert costs in preparing her claim for hearing. Those costs have placed a significant strain on Ms Giam's finances. The conduct of the defendants the subject of the proceedings, if established, will have produced real and substantial financial hardship for Ms Giam, essentially depriving her of her life savings. The claims, if resolved in favour of Ms Giam, will permit her to resume living a more comfortable life and reduce the financial pressure that she is currently under."
Mr Salama proposed that, were the 25 May 2020 hearing to be vacated, a further hearing date in September or October 2020 be now allocated in the hope that, by then, the medication that Ms Patterson has recently been prescribed will have had the effect of tempering the depression and anxiety to which Mr Watson-Munro has opined.
I would not be prepared to take that step.
The practical effect of vacating the current hearing is that a further hearing date could not appropriately be allocated until later this year with the distinct possibility that the hearing not take place until late this year or perhaps early next year.
That would wreak a grave injustice to the plaintiff.
It is for these reasons that I refuse to vacate the hearing date.
[3]
Endnotes
[1958] VR 45.
At [9] above.
Summary drawn from Kesavarajah v The Queen (1994) 181 CLR 230; [1994] HCA 41 at 245 (Mason CJ, Toohey and Gaudron JJ).
[2019] NSWCA 102.
[2003] NSWSC 618.
ASIC v Australian Investors Forum, supra note 5 at [33]; Bell P in Moubarek, supra note 4 at [108]-[109].
[4]
Amendments
20 May 2020 - Minor typographical error in para 30, line 3 ("have" changed to "has").
21 May 2020 - Added the words "Ms Patterson" in last line of para 30.
22 May 2020 - corrected minor typographical error in coversheet
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Decision last updated: 22 May 2020