Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins

1. The plaintiff's application for an adjournment dated 19 April 2021 be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 This matter came on for hearing in January this year. At that time it was apparent that there was insufficient time for all issues raised by the claim and the cross-claim to be heard. In those circumstances and where both parties were pressing for the matter to be heard, I made orders for the hearing of all issues raised by the claim and the cross-claim save for certain aspects of the cross-claim which I will refer to as the property claims. 2 In the result, evidence was received from both parties and closing oral submissions were made for the third and fifth defendants, but there was insufficient time for the hearing of closing submissions from the plaintiff, Goldus Pty Ltd (Goldus). There were also certain issues to be addressed as to amendments of the pleadings and leave was given for short written submissions to be provided on one issue. 3 The matter was then adjourned to deal with those outstanding matters and then to go on and hear and determine the property claims in the circumstances. Four days were reserved commencing on 19 April 2021. On 15 February 2021, detailed orders were made by consent as to the conduct of the hearing which was scheduled to commence on 19 April 2021. Those orders allowed for some amendments to the pleadings that had been the subject of the hearing in January and they allowed leave to Goldus to file certain limited further evidence as to one aspect of the issues that had been heard in January 2021. 4 In early March 2021 the solicitors on the record for Goldus ceased acting and filed a notice to that effect. When the matter came on for hearing, Goldus sought to adjourn the hearing for at least eight weeks. An unsworn affidavit of Mr John Hillam was provided in support of the application. Mr Hillam is the sole director of Goldus. Counsel provided an undertaking that a sworn version of the affidavit would be filed later today. In the course of the application a further short affidavit was provided appending certain documents by reason of issues that arose in the course of the application for the adjournment. 5 The affidavit material deposes to Mr Hillam's medical condition. On the evidence, he is seriously unwell and has been for some time; his medical condition is deteriorating and on the evidence there are plainly difficulties that he would face in providing instructions as director. However, I also note that he has been director of Goldus for some time and his medical condition has been unfolding since 2019 and Goldus, the company, remains under his sole directorship, notwithstanding those matters. 6 The basis for the application of the adjournment is that Goldus does not have legal representation by reason of events that are said to have unfolded leading up to the hearing. Mr Hillam says that on or about 1 March 2021 he terminated the retainer of the lawyers who had been acting on his behalf at the earlier hearing. He has deposed to the termination of the retainer being by mutual agreement and, as I have said, those lawyers have since filed a notice of ceasing to act. 7 Goldus was previously represented in this matter by other lawyers who terminated their retainer and in separate reasons on an interlocutory application, I dismissed an application by Goldus that those lawyers be required to continue to act: Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins [2020] FCA 959. Mr Hillam's affidavit is to the effect that until recently there were new lawyers engaged to brief counsel and to have conduct of these proceedings for Goldus. However, I note that those lawyers have never filed a notice that they act in these proceedings for Goldus and no supporting documentation is provided to indicate that they have unconditionally accepted instructions to that effect. 8 Mr Hillam says that on the Friday before the hearing was to due recommence (being the following Monday) - although his affidavit says 15 April 2021, it is accepted that it refers to 16 April 2021 - he received a telephone call from the solicitor at the firm for the new solicitors and he attributes the following words to the solicitor: I have not had enough time to prepare this case for hearing on Monday. Sorry I'm not going to represent you. 9 Plainly, a claim that a solicitor made a statement to that effect and that was the course adopted by the new lawyers is a most serious claim. If those lawyers had been retained, as Mr Hillam says, it would be a serious breach of their obligations to simply withdraw on the eve of a four day hearing in this Court. 10 As I have said in the course of this application, a further affidavit was produced in response to the issues that were raised as to whether there had been attempts to contact the new lawyers in the course of the preparation of the application for the adjournment and whether there were documents which supported the matters stated by Mr Hillam in his affidavit. 11 In response to those matters, the further affidavit was provided. The documents that form annexures to that affidavit indicate that, contrary to Mr Hillam's affidavit inquiries were made with the firm of the new solicitors in mid-February and those communications produced, in effect, an offer to accept a retainer on terms that required a substantial amount to be paid into a trust account. There is no evidence that that amount was paid; indeed, that aspect of the communications with the new lawyers was not the subject of any reference in the affidavit of Mr Hillam. 12 In his affidavit in support of the application, Mr Hillam has deposed only that he received an invoice which was paid and that he signed the retainer agreement. To the extent that there is evidence now provided in the further affidavit about any payment being made to the new lawyers, it is evidence of a payment of an amount of $524.70. Therefore, there is no indication at all that the terms upon which the retainer was to be undertaken have been met by depositing the required amount into the trust account of the new lawyers. 13 Further, the retainer as signed bears a date of 15 April 2021 being Thursday of last week, shortly prior to the hearing. Therefore the suggestion that there were solicitors who were engaged and there was a reasonable basis to accept that they might appear and instruct counsel to appear today is not made out on the evidence that is before me. 14 In opposition to the application, reliance is placed on an email that was sent by Mr Hillam to the Court on last Friday 16 April 2021. The email has been received on the application subject only to a submission for Goldus that any privilege in relation to the making of an offer is maintained. 15 What is plain though is that what was sought by that email was an adjournment not based upon difficulty with obtaining legal representation but on the basis that some proposal might be put by which a settlement of an underlying dispute as to the amount due might be presented by Goldus for consideration by the parties and that otherwise the issues in the proceedings would not need to be dealt with. This evidence is also inconsistent with the affidavit material provided by Mr Hillam and is a further reason that causes me not to accept that evidence. 16 So in those circumstances and for the following particular reasons I refuse the application for an adjournment. 17 Firstly, the reasons that Goldus terminated its former lawyers are unexplained beyond the statement that the termination was by mutual agreement. That explanation means that the situation which Goldus finds itself is of its own making. 18 Secondly, for reasons that I have already given, the affidavit material in support of the application does not demonstrate the factual basis upon which the application for an adjournment is made. 19 Thirdly, the claim that the lawyers ceased acting at the last minute is inconsistent with the content of the email that was provided to the Court. 20 Fourthly, there is no evidence that lawyers have actually been engaged or might be expected to be able to be engaged by Goldus and the history of legal representation does not suggest any confidence that they will be engaged. 21 Fifthly, the hearing of this matter is part-heard. It has already been adjourned for a considerable period for some time in the course of the interlocutory steps. Goldus maintained that the matter needed to be dealt with urgently. It plainly relates to claims in relation to the administration of a receivership. The defendant parties are entitled to expect that the matter should proceed without further delay, including as to the matters the subject of the property claim. 22 Finally, there will be obvious prejudice if the matter were to be adjourned in the form of both costs thrown away and delay. This matter is proceeding on the basis of an order for security for costs and no further security is offered for the costs that will inevitably be thrown away by reason of the adjournment. 23 For those reasons I dismiss the interlocutory application to adjourn the proceedings. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.