Hans Pet Constructions Pty Ltd v Cassar

Judgment - ex tempore 1A hearing of four days was set down to commence today in complex proceedings commenced by three individuals, Min Kyu Kim ("MKK"), Min Jae Kim ("MJK"), and Dong Woo Seo ("DWS") and two companies, BMJ Chocolata Pty Limited ("BMJ Chocolata") and MTK Chocolata Pty Limited ("MTK Chocolata"). The Defendants in the proceedings are Byung Sun (Eric) Song ("ES"), Jacob Jihoon Kim ("JK") and Oliver Brown Pty Limited (in liquidation) ("Company"). I interpolate that no question arises in the circumstances to which I refer below as to the grant of leave to bring proceedings against the Company under s 471B of the Corporations Act 2001 (Cth). 2When the matter was called today, initially at 10 am and again at 10.30 am, there was no appearance for any of the Plaintiffs, in circumstances that their solicitors have recently ceased to act for them, as I will note below. Mr Peter Liedtke, solicitor, appeared on behalf of the first Defendants, ES. There was no appearance for the Second and Third Defendants, whose solicitors had also previously ceased to act for them. 3Mr Liedtke read an affidavit dated 2 April 2013, which indicates that ES (presumably, subject to execution of terms of settlement as noted below) made an offer to the Plaintiffs, by their then solicitors, to settle the proceedings on 6 March 2013. The terms of that offer are not in evidence, since it was made on a without prejudice basis. A series of emails between ES's solicitors and the Plaintiff's solicitors followed in respect of execution of terms of settlement. By email dated 15 March 2013, the Plaintiffs' solicitors indicated that they were in the process of obtaining further instructions from the Plaintiffs. 4By letter dated 26 March 2013, the Plaintiff's solicitors served sealed copies of a notice of ceasing to act for the Plaintiffs. By email dated 27 March 2013, ES's solicitors, having received the notice of ceasing to act, noting that the proceedings were listed for trial today, referred to orders which had been made by the Court in respect of the preparation of the proceedings for hearing and requested contact telephone numbers or email addresses for the Plaintiffs. By email dated 27 March 2013, the Plaintiffs' solicitors indicated that "under the circumstances" (which were not further identified) it was not appropriate for them to provide authority to contact their former clients or contact details for their former clients. It appears that ES's solicitors have been advised of a street address for four of the Plaintiffs and another street address for another Plaintiff, but have no more immediate means of contact with them. As I have noted above, neither the Plaintiffs nor their former legal representatives appeared when the matter was called for hearing today. 5I now turn to the history of the proceedings, which were originally commenced by Originating Process and Statement of Claim filed on 14 September 2011. A Cross-Claim was filed on 2 November 2011. By judgment delivered on 22 February 2012, I declined an application to strike out the Statement of Claim and indicated I would grant leave to the Plaintiffs to amend the Statement of Claim and file an Amended Defence to the Cross-Claim. On 7 March 2012, the Plaintiffs filed an Amended Originating Process and also filed an Amended Statement of Claim. 6The Amended Statement of Claim pleads, inter alia, an agreement or understanding formed between several persons as to the conduct of a business of operating chocolate cafes under the name "Oliver Brown", that the Company would grant subleases of two of those cafes to BMJ Chocolata and MTK Chocolata respectively, and as to the issue of shares in the company. The Amended Statement of Claim also pleads representations made by ES and JK, breaches of the alleged agreement and understanding, misleading and deceptive conduct and oppression under section 233 of the Corporations Act 2001 (Cth). The Plaintiffs seek orders, inter alia, that the Defendants refund the amount of their capital contributions to the Company, BMJ Chocolata and MTK Chocolata; orders for the sale of the ordinary shares in the Company, BMJ Chocolata and MTK Chocolata owned by ES and JK to the Plaintiffs and damages. The fact that the Company is now in liquidation may affect utility of some of those orders. 7The solicitor representing the Second and Third Defendants, JK and the Company, ceased to act for them in July 2012 and they have taken no further part in the proceedings. By an Interlocutory Process filed in August 2012, MTK Chocolata sought orders in respect of premises previously occupied by the Company at Top Ryde; that Interlocutory Process was dismissed in a judgment delivered on 11 October 2012. On 2 December 2012, the proceedings were set down for hearing commencing today with an estimate of four days. The Plaintiffs' then counsel appeared on that occasion. 8I have referred above to the evidence of Mr Liedtke as to correspondence between the Plaintiffs' solicitors and ES's solicitors in respect of a settlement of the proceedings. The Court file also discloses that, on 25 February 2013, the solicitor acting for the Plaintiffs gave notice of intention to file a notice of ceasing to act. A notice of ceasing to act was in turn filed by that solicitor in respect of each of the five Plaintiffs on 26 March 2013. 9ES now seeks an order, which the Court would have power to make under rule 29.7(4) of the Uniform Civil Procedure Rules 2005 (NSW), that the proceedings be dismissed and, so far as ES is concerned, an order that the Plaintiffs pay his costs of the proceedings. That rule applies where a trial is called on for hearing and a party is absent and permits the Court to dismiss the proceedings if the defendant appears but the plaintiff does not. Such an order was made, for example, in Vogt v Vaughan [2006] NSWSC 1003, in circumstances where Campbell J there noted that it was inevitable that a Plaintiff's case would be dismissed with costs where no evidence would be led to support it. Similarly, the relief sought by the Plaintiffs in these proceedings, in terms of claims arising from an oral agreement or understanding, alleged misrepresentations and oppression arising from non-compliance with that alleged oral agreement or understanding, could only succeed if the Plaintiffs led evidence to establish the agreement or understanding which is its basis. In the absence of that evidence, the Plaintiffs' case cannot succeed. 10I am conscious, of course, that the Court could here take two approaches, which were fairly identified by Mr Liedtke at the commencement of this application. The first would be to further adjourn the proceedings so as to allow the Plaintiffs a further opportunity to appear. The second is to dismiss the proceedings under rule 29.7(4) of the Uniform Civil Procedure Rules. In determining whether to adjourn the proceedings, I should be conscious that, on the one hand, the purpose of rule 29.7 is to secure the efficient dispatch of the Court's business, but there is also a fundamental principle that a party affected by a court order has the right to be heard: NSW Trustee and Guardian as executor of the will of Michael Robert Walsh (deceased) v Gregory [2012] NSWSC 681 at [18]. Here, the Plaintiffs have had the right to be heard on this occasion, although they have not appeared at the hearing to take advantage of it, and have not communicated any explanation for their non-appearance to the Court or, it appears, to the Defendants beyond the filing of the notice of ceasing to act by their legal representatives. It seems to me that there would be no utility in the further adjournment of the proceedings, in the absence of such an explanation, where there is no reason to think that the Plaintiffs would be more likely to appear on the next occasion than when the matter was set down for the trial than on this occasion. 11In determining whether to adjourn the proceedings or exercise the power to dismiss them under rule 29.7 of the Uniform Civil Procedure Rules, I should also have regard to the obligations imposed by sections 59-60 of the Civil Procedure Act 2005 (NSW). Section 56 of the Civil Procedure Act emphasises that the overriding purpose of the Act and the rules of Court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings. The Court is required to give effect to the overriding purpose when it exercises any power given to it by the Act or by the rules of Court. Section 57 in turn requires the Court to have regard to specified matters. Section 58 requires the Court, in deciding whether to make any order or direction for the management of the proceedings, to act in accordance with the dictates of justice, and the Court must have regard to the provisions of sections 56 and 57. As Allsop ACJ (as his Honour then was) noted in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [37], these provisions recognise the fact that delay and case backlog are matters which affect not only the public cost in delivery of justice, but the Court's ability to provide individual justice, and that the reforms introduced by the Act promote the provision of individual justice notwithstanding that they may have adverse effects on the claims of individual parties in particular circumstances. The terms and importance of ss 57 and 58 should nonetheless be borne in mind when exercising the powers under the Act. 12In the present case, it seems to me that orders should be made dismissing the proceedings in default of the Plaintiffs' appearance, under rule 29.7 of the Uniform Civil Procedure Rules, and an order for costs should be made in favour of ES. ES has not sought to pursue the Cross-Claim before me, so far as he was party to it, and the other Defendants have not appeared so as to pursue the Cross-Claim in respect of themselves. I take the course of dismissing the proceedings because there is no reason to think that an adjournment would secure the Plaintiffs' appearance on the next occasion; the non-appearance on this occasion has put the Defendants to wasted costs; and has also deprived other members of the community of the opportunity to have their matters heard over the four days allocated for the hearing of these proceedings, so that the loss of the hearing dates impacts not only upon ES, but also upon the community and upon access by members of the community to justice. 13For those reasons, I make the following orders.