· That the house was not a partnership asset . What I had indicated was that I did not see that it made any difference whether or not the house was a partnership asset; it had been sold by the s 66G trustees, and there did not seem to be any reasonable basis for contending that it was an asset of the restaurant partnership as distinct from property held in co-ownership. Any claim for an occupation fee or contribution in respect of the mortgage arose not on the taking of accounts in respect of the partnership, but as between co-owners. However, I had preserved the opportunity to agitate such claims, as issue 9.1. Moreover, as the balance proceeds of sale had been paid into Court, any claim to them could be agitated on a motion for payment out;
· That it was irrelevant whether or not there was a de facto relationship . What I had said was that evidence as to when the de facto relationship ended did not seem to be of any relevance in the absence of any application under the (NSW) Property (Relationships) Act 1984 . Although there does not seem much doubt that there was a de facto relationship at least for a period, the rights at issue in these proceedings are not dependent on the existence (or not) of any such relationship;
· That any complaint about the lease was a complaint against the receivers, not against Ms Suttor . Mr Grizonic complained that the restaurant business, including its leasehold, had been sold by the receivers at an undervalue to Ms Suttor. I expressed the view that a claim arising from the receivers' sale of the partnership asset was one that lay, if at all, against the receivers and not one which arose on the taking of accounts. Mr Grizonic wishes to contend that the undervalue was brought about by misrepresentation and concealment by Ms Suttor. I accept that that might found some claim against Ms Suttor, but it is not one that arises on the taking of partnership accounts. It remained open to Mr Grizonic to contend that this issue should be added to the list, but he did not (until 2 June 2008) do so.
· That falsification of the partnership records had not caused any loss to Mr Grizonic, because the receivers sold the business for what it was worth . What I had said was that establishing turnover and profit in any particular year was immaterial unless it were established that a party had received benefits which had not been brought to account. The starting point for the assets of the partnership was what had been realised by the receivership, whatever might have been turnover in the past. Mr Grizonic wishes to contend that Ms Suttor falsified the partnership records so as to conceal its true turnover and value. This falls into the same class as the previous point: while it might found some claim against Ms Suttor, it is not one which arises on the taking of partnership accounts, and it remained open to Mr Grizonic to contend that this issue should be added to the list, but he did not (until 2 June 2008) do so.
· In not setting aside the order for an account to be taken, when it was Ms Suttor who presumably destroyed the records that frustrated the taking of accounts . It was submitted that Mr Grizonic and not Ms Suttor should have the election between an account of profits or damages, and that if the account went ahead, the plaintiff's right to equitable compensation for breach of trust would be extinguished. This completely misconceives the nature of the proceedings: the taking of accounts between partners is not an account of profits, but simply seeks to establish what are or should be the partnership assets and liabilities, and the interest of each of the partners in them. It was precisely to enable Mr Grizonic's claims, that certain assets in Ms Suttor's hands should be regarded as assets of the partnership, to be pursued on the taking of accounts, that proceedings 2475/05 were transferred to Equity. Such issues are reflected, in particular, in issues 1, 3 and 6.
52 In any event, at the conclusion of the proceedings on 29 February, I informed Mr Grizonic, through Ms Wade, that if there were issues additional to those in the list that they wished to agitate, they should be specified, and I directed that by 14 March each party serve and lodge that party's proposed list of issues for determination, indicating what issues that party proposed be added to and deleted from the draft; it was in response to the document lodged by Ms Wade that issues 9.1 and 9.2 were added. It was manifest that my observations on 29 February were tentative views, and that the parties were permitted to contend that issues should be added to or deleted from the draft list. And even if I were in error in any of the respects alleged, that would not establish a reasonable apprehension of bias.
53 Mr Grizonic appeared in person on 3 July - he said because Ms Wade felt threatened by me, and in particular by my order directing that no further interlocutory applications be filed without leave, coupled with an indication that it was a contempt to do so when one such motion was presented without leave. I observed Ms Wade appear before me on several occasions, and she did not appear the slightest intimidated. Her litigious history does not suggest that she is easily intimidated by judges [In the Marriage of Trnka (1984) 10 Fam LR 213; (1984) FLC ¶91-535; Wade (formerly Trnka) v Trnka (1996) 135 FLR 198; (1996) FLC ¶92-711; Wade v Trnka [2006] NSWSC 1097].
54 Mr Grizonic maintained that I had said that he could not use all the evidence he had assembled; this, of course, was incorrect: I directed that the submissions identify what evidence each party wished to rely on in respect of each of the issues to be heard on 3 July, and indicated several times that they would limited in chief to the affidavit and documentary evidence and not permitted to give additional oral evidence in chief, but never that evidence could not be used.
55 When I asked Mr Grizonic on what basis it could be said that a reasonable ordinary person sitting in the back of the court room would think he was not going to get a fair hearing, he answered "I don't know. That was alleged because you don't let me put all evidence in files, and files of evidence …". It was pointed out that I had rejected his opponent's application to have his case summarily dismissed for non-prosecution, acceded to his own application to transfer the common law proceedings to be heard with the Equity proceedings, rejected his opponent's application for security for costs, granted an injunction on his application restraining Ms Suttor from dissipating assets, granted an adjournment (on 2 May) when the matter had been fixed for hearing on the apparently tenuous grounds then advanced, and acceded to his application that Ms Wade be permitted to appear on his behalf; Mr Grizonic, when asked what decision I had made that would found a belief that he was not going to get a fair hearing, answered "I don't know. I don't understand".
56 I therefore refused to disqualify myself. Ms Wade's submissions, coupled with the announcement they contained of her intention to withdraw, demonstrated a calculated course of endeavouring to ensure that the matter could not proceed on 3 July. I concluded that the application for disqualification was not bona fide but a stratagem, to endeavour to deflect the Court from proceeding to hear the case.
57 I then embarked upon the hearing, indicating that I would proceed issue by issue, identifying the evidence relied on by each side on the issue, and then hearing cross-examination on that issue. At that point, Mr Grizonic said: "Your Honour, I can't represent myself. I don't know. You go ahead do whatever you want … you make an order against me whatever you want. That's all. Proceed". He then said: "I give you this. They told me to give you", and handed up two unfiled motions. One sought leave to amend his summons to include a declaration claiming a breach of trust (which is entirely superfluous, given the identified issues, in particular issues 1, 3, 4, 5 and 6) or leave to file a statement of claim for a declaration of breach of trust (which in substance is what his statement of claim in the common law proceedings already seeks). The other claimed "a stay of the orders made by Justice Brereton on 3 July 2008" pending the determination of an appeal to the Court of Appeal. This reinforced my conclusion that the disqualification application was a stratagem to defer any hearing.
58 Mr Grizonic then left the Court. Mr Jungwirth, for Ms Suttor, indicated that although, prima facie, the balance of account was in her favour (according to the evidence of Mr Hogden), she would not press for a substantive order in her favour (save as to costs) and was content that proceedings on the account be stayed pursuant to (NSW) Uniform Civil Procedure Rules, r 46.9, which provides as follows:
If it appears to the court that there is delay in the prosecution of any account, inquiry or other matter under a judgment, the court may make such orders as it thinks fit for staying or expediting the proceedings or for the conduct of the proceedings.
59 In In Re Cornish Tin Sands Ltd, Bastard v The Company [1918] WN 377, on a summons under the equivalent rule, for an order that the plaintiffs explain their delay in prosecuting the proceedings for three years following the appointment of a receiver, Peterson J stayed the proceedings.
60 In addition to that rule, (NSW) Civil Procedure Act 2005, s 56, expresses the overriding purpose of the Act and Rules as being to facilitate the just, quick and cheap resolution of the real issues in the proceedings, and commands the Court to give effect to that purpose when exercising any power given by the Act or Rules of Court. Parties are under a duty to assist the Court to further that purpose, and, to that effect, to participate in the processes of the Court and comply with directions and orders. Section 57 requires that proceedings be managed having regard to their just determination, 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 at a cost affordable by the respective parties. Section 58 provides that in deciding whether to make an order - including an order granting an adjournment or stay of proceedings - the Court must seek to act in accordance with the dictates of justice, for the purpose of determining which it must have regard to ss 56 and 57, and may have regard, inter alia, to the degree of expedition with which the respective parties have approached the proceedings, including timeliness in their interlocutory activities, the degree to which they have fulfilled their duties under s 56(3), the use that any party has made or could have made of opportunities available in the course of the proceedings, the degree of injustice that would be suffered by the respective parties as a consequence, and such other matters as the Court considers relevant. Section 59 requires that the Court implement its practice and procedure with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for interlocutory activities necessary for the fair and just determination of the issues in dispute in the preparation of the case for trial. Section 60 provides that the practice and procedure of the Court should be implemented with the object of resolving the issues between the parties in such a way that the costs are proportionate to the importance and complexity of the subject matter in dispute.
61 These proceedings have now been before the Court for more than 110 adjudications. A final hearing has been appointed three times, and although the vacation of the first cannot be attributed solely or even primarily to fault on the part of Mr Grizonic, the case was obviously not then ready to be heard on either side. Mr Grizonic's repeated applications for adjournment of the second and third - on 2 May and now on 3 July 2008 - and his continuing opposition to the taking of accounts, in a context where the Court had earlier refused an application for dismissal for want of prosecution, and done what it can to facilitate the identification of precise issues for resolution, demonstrate that Mr Grizonic will not cooperate in the process of addressing what the Court has, with input from the parties, identified to be the real issues of substance in dispute, although he has been afforded ample opportunity to do so. In Mr Jungwirth's words, the case has been "micro-managed" by identifying and making directions for evidence and argument on discrete issues, in "bite-sized chunks", to facilitate the process, largely for Mr Grizonic's benefit. He is either unwilling or unable to understand that this is the appropriate process for agitating at least many of the issues he wishes to pursue.
62 Mr Hogden's affidavit established a starting point from which the process of taking accounts, and resolving objections, surcharges and falsifications could proceed. The prima facie position it established is that, on balance of accounts between the partners, Mr Grizonic is liable to Ms Suttor. I appreciate that Mr Grizonic contends that the accounts prepared and conclusions reached by Mr Hogden are wrong, including in particular by reason that Ms Suttor should bring to account funds "misappropriated" by her from the partnership (including those paid by way of consultancy fees, and cash receipts not accounted for). However, those were issues to be resolved on the taking of accounts - see issues 2, 3 and 6 - which Mr Grizonic has failed to prosecute.
63 The financial position of Ms Suttor appears to be modest indeed, and that of Mr Grizonic destitute. Moreover, as Campbell J pointed out on the security for costs application before him - and notwithstanding my acceptance that security should not be ordered in respect of proceedings 6141/03 - the probability of there being any surplus that would benefit Mr Grizonic personally, after payment of creditors pursuant to the personal insolvency arrangement, is slight, and the utility of the proceedings dubious in the extreme. This is moreso now that the proceedings against Maurice Blackburn Cashman have been dismissed. In that context, the injustice to Mr Grizonic occasioned by staying the account is slight. The protraction of the proceedings would involve costs disproportionate to what is in issue, and would be a grossly inefficient use of Court and judicial resources, in circumstances where the prima facie state of the accounts, and the respective financial positions of the parties, indicates little utility in the exercise. Given Mr Grizonic's financial position, costs orders against him are no antidote to the prejudice his defaults occasion.
64 This is a case in which the complexity and cost - not only to the parties but to the Court - of the litigation, the difficulties which beset it, the prima facie state of the accounts established by Mr Hogden's affidavit, the apparent inutility of the proceedings, and the repeated failure of Mr Grizonic to pursue them in a manner which could facilitate their resolution, combine to make it one which ought not be permitted to proceed any further [cf Schellenberg v British Broadcasting Coorporation [2000] EMLR 296; Wallis v Valentine [2002] EWCA Civ 1034; [2003] EMLR 8; Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946, [67]-[76]].
65 Mr Grizonic having declined to participate, and Ms Suttor abandoning any claim to an order in her favour other than as to costs, I determined to stay the taking of accounts. The issues as against Ms Suttor in proceedings 2475/05 overlap those in the account, as do those in 1960/08; accordingly, they too will be stayed.
66 That will not entirely dispose of the proceedings; in 6141/03, the net proceeds of the East Ryde property have been paid into Court to the credit of the proceedings, and upon either party making an application for payment out of Court, it will remain open to them to agitate questions relating to their respective contributions to the property, and any entitlement of Mr Grizonic to an occupation fee after he quit the property.
67 For those reasons, on 3 July 2008 I made the following orders:
A. In proceedings 6141/03:
1. Pursuant to UCPR , r 46.9, order that further proceedings under order 11 made on 5 February 2004 be stayed.
2. Order that the plaintiff pay the defendants' costs of the proceedings on the account and inquiry to date, save insofar as any special costs order otherwise provides.