HM&O Investments Pty Limited v Ingram

Judgment - (ex tempore) 1HIS HONOUR: This is an application to vacate a date for further hearing of proceedings presently fixed for 5 days commencing 6 February 2012. The hearing commenced before me on 6 June 2011 with an estimate of 8 days. It became clear that the matter had no hope of finishing in 8 days or any number close to 8. I directed that an issue in the proceedings be referred out, and ultimately set a date for further hearing on 28 November 2011, by which time it was expected the referee's report would be available. Unfortunately, the further hearing on 28 November could not proceed, for reasons that do not need to be stated. Accordingly, I refixed the further hearing for five days commencing 6 February 2012. 2The defendants manufactured and sold playground equipment for use in kindergartens, play centres and the like. They sold their business to the plaintiff. The plaintiff alleges that the defendants have been guilty of misleading or deceptive conduct in connection with the sale and in connection with both the products manufactured by the business and the way in which those products were manufactured. 3The plaintiff alleges that the defendants represented that their products complied with a then applicable Australian standard, and that the method of manufacture of the products was such that compliant products would be produced thereby. In fact, the plaintiff alleges, some 30 different products did not and could not comply. 4It was the question of compliance that I referred out. The referee's report looked at the 30 products in respect of which non-compliance was alleged. He found that of those 30 products, some 23 were not shown to be non compliant and some 7 were shown to be non-compliant, in some respects and on some conditions. The report has been adopted by consent. 5In essence, the case is simple. Were the representations made? Were they misleading or deceptive? Did the plaintiff rely on them? If so, and the necessary causal link is demonstrated, what if any loss has the plaintiff sustained? 6That relatively simple case has been complicated prodigiously by the labyrinthine and repetitive way in which it has been "pleaded". That labyrinthine and repetitive structure has been reflected in the plaintiff's evidence, which of necessity the defendants have been required to meet. I have been informed that the plaintiff has expended approximately $1.5 million dollars on conducting the matter to date. If that refers only to legal costs and disbursements for counsel, experts witnesses and the like, then it represents in my view a scandalous state of affairs. It is impossible to understand how the proper and efficient preparation of the proceedings, which as I have said are simple in structure if complicated in the way that they are advanced, could involve anything like that amount of money. I accept that, the case having been pleaded and prepared in the way that it has, there has been a knock-on costs effect to the defendants. 7The basis on which the application for adjournment is sought is that counsel who was briefed in the proceedings when the hearing commenced before me in June last year, Mr Simon Gregory, is unavailable. I accept that Mr Gregory has been retained at all material times and has directed the preparation of the plaintiff's case. I accept that he has knowledge which is now in substance irreplaceable. However, the problem with reliance on his unavailability is clear. When, on 17 June 2011, I fixed the matter for further hearing on 28 November 2011, I was informed that Mr Gregory was unavailable for that time by reason of a commitment which would occupy the whole second half of last year and was expected to continue at least until June of this year. I fixed the further hearing date regardless. The point is, of course, that Mr Gregory's unavailability can hardly have come as a surprise to the plaintiff. It was known from June last year, and that is plain from the affidavit of the plaintiffs solicitor, Mr Howard. 8There is no explanation given as to why alternative counsel was not briefed last year for the further hearing which was expected to commence on 28 November 2011. On any view, there was more than ample time for alternative counsel to be briefed and for that counsel to come up to speed on the matter. 9That, it seems to me, is the real problem that the plaintiff now faces. It is a problem which is compounded by the utter lack of any explanation. 10When I refixed the hearing for 6 February 2012 I did so in the knowledge that Mr Gregory would be unavailable. That was confirmed at the directions hearing on 11 November 2011, when the date of 28 November was vacated and the date of 6 February was fixed. Again, the date was taken in the knowledge of Mr Gregory's continuing unavailability and on the basis that there was more than ample time for other counsel to be briefed and to get up to speed. 11The reason why other counsel was not then briefed is said to be "issues with the plaintiff's cash flow ability to continue funding the matter". However, despite those issues being apparent on or shortly after 11 November 2011, neither the court, nor, it seems, the defendants were informed of those "cash flow issues". That happened, so it was said, because of the prospect of the plaintiff's being able to stabilise its cash flow issues, and therefore being able to retain Mr Gregory. How the plaintiff could have expected, or had any prospect, of retaining Mr Gregory in circumstances where it had known at all material times from June that he would be unavailable until June 2012, is unexplained. 12It was not until late November or early December, that Mr Howard was instructed that the plaintiff was in a financial position to proceed with the matter. On 21 December, he sent a brief to other counsel. On 28 December, that counsel, having looked at the material forwarded, said that he could not accept the brief because in his view there was insufficient time for him to understand the evidence and the issues and to be in a position to present the plaintiff's case in the week commencing 6 February. There can be no criticism of that counsel having regard to the time of year. He acted promptly and responsibly. 13Mr Howard says that in that affidavit that he spoke to Mr Gregory on 3 January 2012 and that Mr Gregory confirmed that he was unavailable for the hearing commencing in February. That does nothing to leave me in any way satisfied that a responsible attitude has been taken to the progress of the plaintiffs case. I am left with the uncomfortable impression that the plaintiff is seeking to delay the further hearing of the matter, for reasons that I presently do not understand. Whether or not the collapse of three-quarters of its case on non-compliance has anything to do with this I do not know. 14The situation is completely unsatisfactory. Time has been allocated to the further hearing of this matter which could have been allocated to other litigants. It was allocated in the knowledge that counsel previously briefed was unavailable and in the expectation, which surely the court was entitled to hold, that, having regard to the long-known unavailability of Mr Gregory, other counsel had been or would be briefed. It appears that the expectation was not well founded. 15The defendants are individuals. It cannot be doubted that the proceedings have been a substantial drain on them mentally as well as financially. 16It was put that the proceedings have been bitterly fought. That is apparent to the court, without the need for further evidence, from the way in which the trial was run and from the court's observation of interlocutory applications that have been made. 17To vacate the date will increase the strain on the defendants and extend the period under which they must languish in ignorance as to what, if any, liability they may incur. 18I regard it as seriously unsatisfactory that the plaintiff's case has staggered along in the way that I have outlined, on the basis of the unavailability of counsel, when that unavailability has been known at all material times. 19Nonetheless, I am faced with the fact that, as the plaintiff says and I understand, it is now not practicable to brief counsel who can get up to speed in the matter in time for the hearing on 6 February. Although the remaining issues of fact to be dealt with in evidence are issues as to quantum, there will nonetheless be addresses on all the issues in the case, as I have outlined them above. Thus, counsel will need to get on top of the real issues and to understand the evidence relevant to each. That is of particular significance in relation to the representations, except in so far as they appear from the publications to which I have referred, and in relation to the question of reliance. 20I am unable to express an opinion as to the complexity of the case on damages, because I do not know how it is to be put having regard to the substantial diminution in the case on non-compliance. 21I accept that what is left is much simpler than it might have been, having regard to the adoption of the referee's report. But, nonetheless, there is a lot of material to be absorbed and understood. 22In those circumstances, notwithstanding the matters to which I have referred as to non-financial prejudice to the defendants, I conclude, reluctantly, that the interests of justice require that the further hearing date be vacated. 23There is a question of financial prejudice. Clearly, the plaintiff must meeting the defendants costs of this application. Clearly, it must meet the defendants' costs thrown away by reason of the vacation of the date. What those costs may be I do not know, but it is clear that, counsel having been briefed, the defendants have a liability to meet counsel's fees for the five days in question. I have no doubt that there will be other costs in relation to wasted or duplicated preparation which would be recoverable on an assessment on the indemnity basis. 24I should say that when the hearing for 6 February was confirmed, Mr Curtin of Senior Counsel, who had been briefed with Ms English of Counsel for the defendants, indicated that he had another brief for that week and that he would return it. I am informed that he has done so. That may affect his attitude to the fees to which, by reason of his retainer, he is entitled. 25Balancing the considerations as best I can, I conclude that the date should be vacated but that it should be done on the terms as to costs to which I have referred. Further, I propose to fix, admittedly on an arbitrary basis, a lump sum on account of those costs which is to be payable before any further hearing date is allocated, without prejudice to the right of either party to contend for a different amount on assessment. 26I make the following orders: (1) vacate the further hearing of the matter presently fixed to commence on 6 February 2012. (2) order the plaintiff to pay the defendants' costs of the application to vacate the date and of and incidental to and thrown away by reason of the vacation of the date, in each case on the indemnity basis. (3) order that the plaintiff pay to the defendants, within fourteen days, the sum of $40,000.00 on account of those costs, without prejudice to the right of any party to contend for a different amount to be allowed on assessment. (4) list the proceedings for directions on 6 February 2012 to consider whether a further hearing date should be allocated. 27In the course of argument I indicated a disposition to refer these reasons to the Legal Services Commission. I remain inclined to do that but, in fairness to those who may be affected, I should give them the opportunity to be heard on that before I make any such orders. Notwithstanding the vacation of the date, I will list the matter on 6 February 2012 for any response to be made in respect of that proposed referral. 28I add to the orders I made an order vacating the directions given on 9 December 2011 as to notification in relation to cross-examination and written submissions. 29FURTHER HEARING ADJOURNED