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Judgment

1. By Notice of Motion filed by leave on 27 October 2017, the Plaintiff, Felan's Fisheries Pty Ltd ("Felan's") seeks an order vacating a hearing of these proceedings which is presently fixed for 3 November 2017 then for 7-10, 4-17 and 21-24 November 2017 that is, for a little more than three hearing weeks. I pause to note that that application is brought a week before the hearing is due to commence although I should note that Felan's foreshadowed the application when the matter was last listed for directions a week ago, on 27 October 2017.
2. I will, in dealing with this application, refer to the chronology of events in respect of the proceedings, the evidence on which the parties rely in respect of the application, and the applicable principles, before reaching a conclusion. Before doing so, I should emphasise that it seemed to me that, to some extent, all parties overstated the magnitude of the issues which had arisen in the preparation of the hearing for their respective rhetorical purposes. There has been a relatively short delay in discovery and there is also a dispute as to claims for legal professional privilege by the Defendants over a number of documents, which has only arisen recently. That dispute is of a kind that is perhaps not perhaps uncommon in commercial litigation, although I do acknowledge that it is perhaps unusual for a party to commercial litigation to take the course adopted by Felan's, of seeking to put the other parties to proof of privilege in respect of every document for which they claim privilege. An issue has recently arisen as to a Notice to Produce issued by Felan's. That issue may overlap to some extent with issues that have been addressed previously in respect of discovery and subpoenas, although I express no concluded view as to that matter. It may be, as will emerge below, that these issues are ultimately more issues of case management than, as Felan's would have it, matters that fundamentally affect its ability to have a fair hearing, or as the Defendants would have it, any "predicament" of Felan's own making.
3. I should say something about the chronology of events to put the submissions which have been made in this application in context. I have been assisted by a chronology provided by Felan's although, in some respects, that chronology is incomplete. The proceedings were commenced by Felan's in December 2015, nearly two years ago, by filing an Originating Process, and a Statement of Claim was subsequently filed on 17 February 2016 and amended on 10 March 2016. A caveat was then lodged by Felan's over the property occupied by the First Defendant, Sydney Fish Markets ("SFM") and an application for extension of the caveat and injunctive relief was heard over two days in early May 2016, and dealt with by my judgment delivered on 3 May 2016 ([2016] NSWSC 581). That matter is of some significance because Mr George, who appears with Mr Djurdjevic in this application, refers to the nature of Felan's claims as including allegations of breach of directors' duties, including statutory duties, and characterises that case as involving questions of some difficulty. Assuming, without deciding, that that is correct, the nature of that case and the matters which are alleged have been apparent for a considerable period, since May 2016, and Felan's has had the opportunity in that period to address the questions that it needed to prove at a final hearing.
4. Felan's chronology helpfully refers to further events in respect of security for costs and further directions, in circumstances that the matter was closely case managed by a series of successive directions hearings, and the process which has been taken for filing of evidence. Felan's will rely at the hearing on a very detailed affidavit of its director, Mr Deans; SFM relies on a single affidavit of its chief executive officer, Mr Skepper; and the non-executive directors of SFM who are joined as individual defendants rely on their respective affidavits. It appears that the exhibits to the directors' affidavits were served by early June 2017.
5. The matter was tentatively fixed for hearing for sixteen days commencing 31 October 2017, and that course is not unusual, where a matter is, as this one is, a relatively lengthy hearing. Mr George, in the course of submissions, expressed a degree of surprise that the matter had been fixed for hearing, albeit several months ago, in circumstances that discovery was not complete. That is, with respect, not surprising where Practice Note SC Eq 11 contemplates that discovery will be given, as it has been here, after the substantive evidence of all the parties has been filed, and where the ordinary practice of the Court is to list substantial hearings, involving commercial parties of sophistication, significantly in advance, on the basis that those parties can be left to conduct themselves in a manner that will have them ready for that hearing.
6. Felan's points to several aspects of the chronology that, I accept, have caused delays in the period since June 2017, although I do not accept that those delays have the significant consequences which Felan's now attributes to them. First, it appears that the parties attended mediation, the mediation between them was successful, but for reasons that have not been disclosed by the evidence, a condition precedent to the settlement they had agreed between them could not be satisfied and that settlement failed. Felan's submits that its preparation for the hearing was perhaps reasonably suspended during the period in which there was an anticipation of a settlement that was ultimately not realised. The failure of the settlement became apparent on 21 July 2017, over three months ago.
7. Subsequent steps occurred in respect of discovery, reflected in two published judgments. I declined Felan's first discovery application in its entirety, having held that it involved substantial non-compliance with the requirements of Practice Note SC Eq 11. Felan's second discovery application, made by leave shortly after its first failed, was successful in part. It does not seem to me to be either necessary or appropriate to seek to allocate fault in respect of those matters, although the Defendants fairly point to some observations in my judgments that were adverse to the manner in which those discovery applications had been framed by Felan's. I accept that a degree of delay in discovery that has resulted from those matters, but it must equally be recognised that discovery has now been given; the volume of documents involved is moderate, by the standards of commercial cases; and discovery has been given substantially in accordance with the timetable set by the Court, with a short delay that has been addressed by deferring the commencement of the hearing date, and which can be further addressed by a short additional delay in commencement of the hearing.
8. There have also been issues as to subpoenas to third parties and an issue has now arisen as to claims to legal professional privilege and the issue of a further Notice to Produce, to which I have referred above.
9. Felan's relies on the affidavit of its solicitor, Mr Fraser, dated 23 October 2017 which refers to the history of the proceedings, at least in the period since June 2017. That is, of course, a substantial time after the proceedings commenced but, in fairness to Felan's, and as Mr George submits, it is perhaps the critical period for the preparation of the proceedings for hearing. Mr Fraser refers to the matters which have to be completed between now and the commencement of the hearing, presently set for a week's time from today. They include review of documents discovered by SFM, for which no legal professional privilege has been claimed, of some nine folders. They also include issues as to claims for legal professional privilege in respect of documents produced by the Defendants and issues in respect of the production of documents on subpoena, as to which a third party which has been subpoenaed to produce documents has also claimed legal professional privilege.
10. Mr Fraser's evidence is that the steps which will need to be taken also include review of documents to be produced under a further Notice to Produce, to the extent that any documents are produced without objection, and dealing with any objections to production under the Notice to Produce. It is apparent that there will be such objections, since at least SFM contends that the Notice to Produce overlaps with issues which have already been resolved adversely to Felan's in the discovery applications and in respect of applications to set aside subpoenas to third parties. I express no view as to the ultimate outcome of any such dispute.
11. Mr Fraser also refers to the need to prepare for cross-examination of the Defendants' witnesses, by reference not only to the evidence already served in the proceedings, but also further documents "yet to be discovered and produced". The intent of the reference to documents "yet to be discovered" is not entirely clear, but may refer to the outcome of any disputes as to legal professional privilege, where discovery has apparently otherwise been completed, and the reference to further documents to be produced must refer to the Notice to Produce which has only recently been issued.
12. Mr Fraser does not say, and I would not infer, that Felan's has not already prepared for the hearing, and prepared for cross-examination by reference to the substantial volume of documents already exhibited to the Defendants' evidence. Mr Fraser also says that: "I verily believe [Felan's] and its solicitors do not have the time to be able to properly attend to the tasks outlined...above in a manner which would allow for the proceedings to be properly prosecuted or for the just determination of the proceedings to be possible."
13. That statement is conclusory, and not elaborated by explanation of the extent of the resources that Felan's proposes to devote to the proceedings in the week prior to their commencement and in the three weeks allocated to them. I do accept that plainly there will be a significant amount to be done in the preparation of and conduct of the proceedings, given that discovery was delayed by the difficulties with Felan's first discovery application. I do not, however, accept that the bare assertion of the proposition that Felan's and its solicitors do not have time to be ready for a hearing is conclusive. That plainly is, at least partly, a matter of priorities, and it will ordinarily be the case that much work can be done in the period immediately before a hearing and, in the case of a relatively lengthy hearing of this kind, during the hearing. As I noted in the course of submissions, in an exchange with Mr George, Felan's evidence-in-chief will be led first. Felan's could then be required to cross-examine SFM's chief executive at the end of the first week or the beginning of the second week of the hearing and it is likely to be the second week of the hearing, about two weeks away, before Felan's would be required to cross-examine the non-executive directors of SFM.
14. Felan's also relies on correspondence with the parties in respect of claims for legal professional privilege. As I have noted above, it does not seem to me that that issue is out of the ordinary, although I also noted above that it is a little surprising that Felan's contests the Defendants' claims for privilege in respect of every single document for which legal professional privilege has been claimed. It seems to me that the question of legal professional privilege is readily addressed as a matter of case management, rather than raising any wider issue. The Court can adopt the usual process of determining any such claim on a motion for production brought prior to or in the course of the hearing, which would likely be referred to another judge in the usual way. It is not necessary to address the interesting question, to which Mr George referred in the course of submissions, whether that matter will be determined by reference to the affidavits in support of the claim for privilege alone, or whether the judge who is hearing the matter would inspect the documents. Although that question has been addressed in recent case law, the practice to be adopted will be a matter for the judge hearing the application and not for me.
15. SFM in turn relies on the affidavit of its solicitor, Mr Webster, dated 25 October 2017 which sets out the history of discovery. I need not address that matter in any detail. As I noted in the course of submissions, it seems to me that the question for the Court in an application of this kind is what the interests of justice, and the just quick and cheap resolution of the matters in dispute require. That decision is not to be made in any punitive way, or by reference to any past failures of any party, but by reference to the matters in ss 56-58 of the Civil Procedure Act 2005 (NSW) to which I will refer below. Mr Webster does, however, refer to one matter that may have some significance, so far as there was a delay in discovery, namely that an offer had been made by SFM, at a relatively early point, and well before the discovery disputes were ultimately resolved, to produce a substantial volume of documents in an effort to compromise those discovery disputes. I do not proceed on the basis that there was any fault on the part of Felan's in not accepting that offer, and it is merely a fact to be noted that the offer was an opportunity available to Felan's, which was not accepted, presumably because Felan's sought wider discovery. I express no view, and have undertaken no comparison, as to whether the discovery ultimately obtained by Felan's after some delay was wider or narrower than that which had been offered to it.
16. Mr Webster points to another matter that is of some significance in the issues the Court has to address, namely that there are a number of witnesses in this case, including individual directors who are Defendants, who have been required to set aside time to attend for cross-examination in this hearing. Mr Webster points to the fact that Counsel have been retained for SFM since after the proceedings were commenced in December 2015, and that, if the hearing date is lost, the next availability of Senior Counsel for SFM would be the third week of August 2018. I accept that it would be open to the Court to set a further hearing date without regard to the availability of Senior Counsel for SFM, although I equally accept that that might seem a somewhat harsh course to take if a hearing date has been vacated without fault of SFM. That emphasises, however, the difficulty which would arise, had I reached the conclusion (which I do not) that the hearing should be vacated on other grounds. In that event, the hearing would either have to be deferred for a substantial further period, or a party that was not at fault in the loss of the hearing date would be shut out from use of Senior Counsel who has been retained for it for a considerable period.
17. Mr Webster also refers to another matter which should be noted, but which is ultimately of limited significance given the conclusions that I have reached on other grounds. It appears that Felan's has granted a charge over its assets in favour of its solicitors, and further security in favour of an entity associated with its director. Those matters, combined with my earlier findings in the security for costs application, suggest that Felan's is unlikely to be able to meet an order for costs against it, including an order to pay the costs thrown away by vacating the hearing date. However, Mr George indicates, on instructions, that Felan's could make payment under an order for costs thrown away by the vacation of a hearing date in a relatively substantial amount, presumably because a third party will fund it to do so. I will assume, without deciding, that that is the case, although I recognise the real difficulty that would arise if it ultimately emerged, after a hearing date had been vacated, that the instructions given to Mr George had been unduly optimistic.
18. The individual director Defendants in turn rely on the affidavit of their solicitor, Mr Harding, who refers to a range of prejudices which they consider they would suffer from vacating the hearing date. They point, in particular, to the existence of potential reputational harm to the directors, where they are the subject of an allegation of breach of duty under s 181 of the Corporations Act 2001 (Cth) in these proceedings, which involves an allegation that they failed to act in good faith in the best interests of a corporation and for a proper purpose. Mr Harding refers to the fact that at least one of those directors has been obliged to disclose those allegations to other boards on which that director sits, and to show cause why that director should be reappointed as a director of other companies of which that director is a director. I accept that that is a significant disadvantage to a director, and that that disadvantage would be prolonged by a deferral of the hearing, consequent on the vacation of this hearing date. Mr Harding also refers to the likelihood of costs thrown away by vacating the hearing date, the fact that security for costs previously provided by Felan's to the individual director Defendants has, on the evidence of costs incurred given by Mr Harding, likely been exhausted, and to the security over Felan's assets to which I have referred above. As I have noted above, I assume, without deciding, that Felan's would be able to provide a substantial payment of costs, within the period specified, because that is what I have been told by Mr George from the bar table, on his instructions.
19. Mr George rightly drew my attention to ss 56-58 of the Civil Procedure Act, which require close attention in an application of this kind. Section 56 of the Civil Procedure Act provides that the overriding purpose of the Civil Procedure 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 that overriding purpose when it exercises any power given by the Act which would include, in this case, making an order to vacate the hearing date. Section 57 requires the Court to manage proceedings having regard to specified objects, including the just determination of the proceedings, the efficient disposal of the business of the Court, the efficient use of available judicial administrative resources, and the timely disposal of the proceedings and all other proceedings in the Court at a cost affordable by the respective parties. Mr George refers to the adverse impact upon Felan's of declining to vacate the hearing date, and submits that that will affect the Court's ability to undertake a just determination of the proceedings. It seems to me that that submission overstates the likely impact of the short delay in discovery against the timetable which has occurred in this matter, and the magnitude of the issues, and also rests on a somewhat fragile foundation, so far as it depends upon Mr Fraser's conclusory statement of his inability to undertake the work that is required in the time that remains before the hearing.
20. The second matter noted is the efficient disposal of the business of the Court and the efficient use of judicial and administrative resources. Mr George submits that, although the hearing date being vacated would leave some twelve or thirteen hearing days unoccupied, the Court is likely to be able to use those days in a busy list late in the court term. Regrettably, experience teaches that that is unlikely to be the case because, however busy a list may be, and however many parties are in fact waiting for hearing dates, few of them are able to be ready for hearing when told, shortly before, that a hearing date has just become available. That is, of course, why the Court's usual practice is to allocate hearing dates in advance so that parties may arrange their affairs accordingly. Section 57 also refers to the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties. I will refer to the significance of that matter below.
21. Section 58 in turn refers to other matters that are relevant, requiring the Court to have regard to the provisions of ss 56-57, and indicating that the Court may have regard to other matters to the extent to which it considers them relevant. I proceed on the basis that the case has a degree of difficulty or complexity about it, notwithstanding that ultimately the case, as formulated by Mr George, may turn upon a relatively narrow question as to whether the directors of SFM exercised particular powers for a proper purpose, or not, and whether the exercise of power was within the scope of the powers open to them under SFM's constitution.
22. The Civil Procedure Act also draws attention to the degree of expedition with which the parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, and the degree and the use which a party has made of any opportunity made available to it in the course of the proceedings. I do not draw any conclusion that is adverse to Felan's, in the sense of attributing blame to it or its advisers, in respect of any step which has been taken over the last several months. It remains that there were steps available to Felan's that, if they had been taken, would have reduced the pressures under which it perceives itself now to be operating. I put that proposition that way because, as I have noted, it seems to me that those pressures were to some degree overstated in this application, having regard to the reality that they involve the need to inspect documents that have already been produced, and resolve a privilege dispute which is not of substantial scope, and a debate as to a Notice to Produce, in circumstances where there is a relatively lengthy period of hearing in which that can occur.
23. The Civil Procedure Act also requires me to have regard to the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, and I have regard, on the one hand, to the possibility that Felan's preparation for the hearing will be conducted under some time pressure because of the matters to which it refers if the hearing is not vacated and on the other, the injustice to which the Defendants refer, if the hearing is vacated, and the risk that there would now be a substantial deferral of the hearing, and that individual directors will be left under continuing threat to their reputations.
24. I also have regard to the Court of Appeal's important judgment in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36], where Allsop ACJ observed that the provisions of the Civil Procedure Act to which I have referred above are intended to bring about: "[A] new statutory balance among various factors in litigation including court and party efficiency and delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering just, they corrode the ability of the courts to provide individual justice...The reforms that have taken place under the Civil Procedure Act...can thus be seen not really to reflect worthy governmental and judicial efforts for efficiency, but also to be vital for the provision of timely individual justice. To these salutary ends significant powers of case management have been placed in the hands of judicial officers which, if exercised, can often be seen to have sharp, and sometimes detrimental effects on the claims of parties."
25. In Re Elsmore Resources Ltd [2016] NSWSC 884 at [13], I in turn noted that one of the matters to which s 57 referred, and which I raised with Mr George in the course of submissions, was the efficient disposal of the Court's business and the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings and all proceedings in the Court at a cost affordable by the respective parties. I do not, in that respect, treat the Court's convenience, for the Court's sake, as a matter of any significance. What is, however, of great significance, as I noted in Re Elsmore Resources Ltd above at [13], is that the community both funds the justice system and depends upon access to the justice system. It seems to me that vacating a hearing of over three weeks, a week before it is due to commence, where the practical likelihood is that other litigants could not be ready for hearing in sufficient time to have their cases listed over that period, would be significantly disadvantageous to the public interest in the proper administration of justice. In particular, the difficulty is that other members of the community will in fact have been deprived of hearing dates which could have been allocated in that period and the lateness of the application to vacate the hearing date will significantly exacerbate that matter.
26. I have regard to the matters to which Mr George has referred in submissions, including the suggestion of prejudice to Felan's, if it is left to prepare a hearing in a shorter time than is desirable, from its perspective, a matter which I have addressed above. I also have regard to the fact, which it seems to me does follow from the evidence led by Felan's, that the substantial part of Felan's preparation for the hearing will have been done over the period since July 2017, when the mediation failed, although I also recognise that the shape of Felan's case has been in its present form for a very significant period, at least since its earlier injunction application. Equally, I have regard to the fact that there will, it seems to me, be significant prejudice to the Defendants by vacating the hearing date at this point, and that prejudice is particularly significant where, although one of the Defendants is a corporate entity, many of them are individuals who are subject to an attack on their reputation. I do not place great weight on the costs thrown away, because of the suggestion, to which I have referred, that Felan's could find funds, notwithstanding the security over its assets, to pay an order for costs thrown away if it were made.
27. I also place some weight upon submissions made by Mr George as to the prejudice that would follow for Felan's from an order vacating the hearing date, notwithstanding that there is something of an oddity in that respect, where that is the order which Felan's seeks. Mr George pointed out that it may be that Felan's will ultimately primarily seek a mandatory order for the grant of a new lease at the Sydney Fish Markets to Felan's, now two and a half years after it vacated the premises which are the subject of the proceedings, and in circumstances where, if this hearing is vacated, it is now not likely to be allocated a new hearing date for at least six months, and potentially longer than that if the convenience of the Defendants' Counsel is taken into account. Mr George fairly recognised that, where Felan's may face existing difficulties with delay, that position may be exacerbated by a further delay of that magnitude. That difficulty may be worsened if that delay is of Felan's making, although that is not a matter that I need decide for the purposes of this application. That submission tends to undermine, rather than advance, Felan's submission that the interests of justice will be advanced by deferring the hearing date, to the extent that to do so may prejudice, or at least make more difficult, Felan's attempt to obtain the relief that it primarily seeks. Mr George also points to other prejudice that he apprehends Felan's may suffer, from an order vacating the hearing date, including the likelihood that it will be ordered to pay the costs thrown away and the potential that it will be exposed to further security for costs applications. It seems to me that the significance of these matters is not that they "even the scales", as Mr George suggested, but that they reduce the weight to be given to any benefit that Felan's perceives it will obtain from vacating the hearing date.
28. I do not underrate the difficulties of preparing a case for hearing under time pressure. The fact is, however, that this case was commenced in December 2015; it has been set down for hearing for three weeks, initially in a tentative and then on a final basis, since the middle of this year; and individual Defendants face serious allegations made in it. It seems to me that, weighing all of the matters to which I have referred, the just, quick and cheap resolution of the real issues in dispute, having regard to all of the matters specified in ss 56-58 of the Civil Procedure Act, does not support a vacation of the hearing date, which may have some benefit for Felan's, but also has the other disadvantages for it which Mr George has fairly identified; has plain disadvantages for the Defendants, including substantial disadvantages for those individual Defendants who would be exposed to the continuing strain and reputational risk of litigation for a further six months or more; and involves a substantial detriment to the public interest in the prompt delivery of justice and in the use of court hearing time, so far as many other persons who might have had hearings in this period would not now have them by reason of the fact that this hearing, which had been set down for a considerable period, would be vacated so late.
29. For these reasons, I will not vacate the hearing date. I will, however, hear the parties briefly as to those steps that can be taken by way of case management to minimise any difficulty to Felan's and to ensure that the case runs smoothly on the dates that are allocated for it.