This case is listed for hearing on 7 March 2016 with an estimate of three days. It is an action by the plaintiff in debt and for possession of land based upon an acknowledgment of debt contained in a deed of settlement of previous litigation and mortgages then provided by the defendants to secure compliance with the terms of that deed.
The matrix of fact is that one of the defendants, Dr Azam, is a legally qualified medical practitioner who sold his practice to the plaintiff for the consideration of $800,000. Other obligations were undertaken in a series of written agreements implementing the sale including the obligation of the doctor to continue to provide his professional services to the practice. Not long after the sale, the plaintiff took the view that the doctor was in breach of the sale agreement and brought proceedings to enforce its rights. Those proceedings were settled by entry into the deed of settlement to which I have referred, which also, as it were, revived obligations under the other contractual documents creating the various obligations of the parties in respect of the sale and the ongoing conduct of their relationship in the continuing practice. I have put things rather broadly, as I am dealing simply with an application for an adjournment.
The validity of the provisions sued upon by the plaintiff was the subject of a separate determination by Hidden J. His Honour's decision on 9 September 2015 was that the provisions were valid, not penalties. An appeal to the Court of Appeal which was decided on 18 December 2015 upheld his Honour's decisions. I am informed by Mr Hyde-Page of counsel who appears for the defendants, that an application for special leave has been filed in the High Court of Australia and that document is an annexure to the affidavit of Ms Ashley Richards sworn on 26 February 2016, which he reads in support of this application. Mr Hyde-Page assures me and I accept that this application is not an indirect application for a stay in support of the pending special leave application which is yet to be fixed for hearing.
The orders sought in the notice of motion are not only that the hearing date be vacated, but that the defendants have until 30 March 2016 to file and serve their evidence in the proceedings.
The matter was set down for hearing by orders made on 6 October 2015. At that time it was ordered that the plaintiff was to file and serve evidence by 29 October; the defendants by 26 November; and the plaintiff in reply by 18 December, all of 2015. The plaintiff did not comply with those orders. The Court fixed the hearing no doubt in the expectation that those outstanding evidential steps would have been strictly complied with by both parties. But amendment to the timetable were required by 12 November 2015. The plaintiff was required to file and serve its evidence by 3 December; the defendants by 14 January; and evidence in reply by 18 February, the latter two dates of 2016, of course. The matter was listed for directions on 25 February 2016 to check compliance, and, doubtless, readiness.
The defendants' complaint is that the new timetable was not complied with in that the evidence was not filed until about 10 December 2016 and even then, it was defective in as much as a large exhibit to the affidavit of a Mr Brewer was not served.
I interpolate that Mr Hyde-Page points out that yet further evidence has been served this month, placing him in a position, no doubt, of some difficulty as his instructing solicitors have taken steps to cease to act. This put Mr Hyde-Page in the position where it was necessary for him to communicate directly with the plaintiff's solicitor. He wrote by email to the solicitor on 15 December pointing out that the exhibit to Mr Brewer's affidavit had not been provided. He received no reply. He wrote again by email by 17 December asking for the same courtesy. He said:
"In order for the defendants in the first instance proceedings to comply with the Court deadline for preparation of their evidence, it is necessary for us to have a copy of the exhibit. It would be appreciated if you can serve the exhibit as soon as possible."
Still there was no reply. I interpolate that the reference to the first instance proceedings is a reference to the balance of proceedings listed for hearing on 7 March to distinguish them from the separate question that is working its way up to the appellate process.
Allowing for the Christmas and holiday period, Mr Hyde-Page wrote again by email on 15 January. He makes some reference to the filing of the special leave application but he also again refers to the fact that he has not received the exhibit to Mr Brewer's affidavit, and he points out that his clients would not be in a position to prepare their evidence until they received it. A copy was not in fact provided to Mr Hyde Page until 20 January 2016, six days after the deadline for the defendants to file their evidence.
It must be pointed out that it is not suggested before me that the defendants have in any way defaulted in any of their prehearing obligations under timetables fixed in the course of case management.
Mr Lucarelli of Counsel who appears for the plaintiff, relevantly, has tendered a volume as Exhibit 1 which contains the exhibits to the affidavits of both principal witnesses relied upon by the plaintiff. He has taken me through selected parts of those documents to demonstrate what appears to be accepted by Mr Hyde-Page that in substance, the exhibits are the same. I should pause to say that a condition of the plaintiff's entitlement to recover the debt and possession of the security is the demonstration that Dr Azam, in particular, has failed to comply with the stipulations he undertook in the various deeds, including the deed of settlement.
Two things are relied upon in that regard, as I understand the argument before me. One is that at page 255 of Exhibit 1 the right to practice was made subject to a condition that he not examine or treat female patients at all, him having already been subject to a condition at the time the deed of settlement was entered into, requiring a chaperone in those circumstances. And that in any event he has not complied with his promise as to minimum standards of performance of his obligations to actually practice medicine as required by the deed.
Mr Hyde-Page has argued before me that the difficulty his client faced was that, first, it disputes that the proper interpretation of the deed puts him in breach because of the imposition of the more stringent condition and, secondly, it was necessary to have access to the, I will call them, timesheets, which are at pages 250 and 96 of the respective exhibits, in order to obtain instructions from Dr Azam as to whether the contents of those documents, which may prima-facie be accepted as accurate, were compliant or not with his obligations. Dr Azam currently resides or is present in Pakistan, although he was in Australia in January. Mr Hyde-Page points out had the material been provided then a statement could have been prepared in compliance with the timetable.
Mr Lucarelli's substantive point I think is that the defendants had the material which would have enabled them to see what the plaintiff's case was and to answer it if they could, given that they had the exhibit to Ms Bailey's affidavit. In response to that Mr Hyde-Page says you cannot know what is in the exhibit until it is received and one could not assume that the exhibits were substantially the same or that, more to the point, there was not something else in Mr Brewer's document which had to be dealt with. That position I think is somewhat enhanced, as he argues, by the fact, or the consideration, that he received no response to his first two emails and a response to the third only after the time for compliance had expired. I accept this argument. I find it somewhat surprising that despite knowing that the defendants' solicitors were in the process of ceasing to act, the solicitors for the plaintiff continued to correspond with them and serve documents upon them when they were not responding to Mr Hyde-Page.
It may well be in substance that what Mr Lucarelli says is correct, that now we have the benefit of hindsight Mr Hyde-Page and the doctor had available the relevant material that he was seeking. However, it was not unreasonable looking at matters from the point of view of Mr Hyde-Page, acting on behalf of Dr Azam, and viewed from the prospect when the timetable was required to be complied with, for him to be unaware of that. I did ask Mr Hyde Page about the requirement that litigants had to be proactive and not purely reactive.
Having said that, the failure to serve the material and the failure to even respond to Mr Hyde-Page's emails put the defendants in a position where it was for practical purposes not possible for them to comply with their obligations under the timetable and provide the evidence they proposed to rely upon. That task is made harder now because Dr Azam is not readily available but is in the Islamic Republic of Pakistan and instructions will now be so much harder to obtain.
I am conscious of the fact that the plaintiff's action seems strong. I bear in mind what Mr Lucarelli says about the perhaps diminishing capacity of the security to cover the debt. However that may be it seems to me, and notwithstanding the importance of ensuring so far as one fairly can that hearings proceed, the defendants have been put at a significant forensic disadvantage by the non‑service of Mr Brewer's exhibit. Hindsight may show that it perhaps contains nothing startling or even revelatory but that factor was not to be known at the time when Mr Hyde-Page was required to comply with the previous timetable.
Perhaps this case and other cases that come before the court for adjournment on similar grounds demonstrate that it may not always be wise to fix hearing dates in the expectation that the parties will comply with detailed timetables for the exchange of evidence. I will say no more about that.
Acknowledging the overriding purpose I am of the view that the defendants have demonstrated that the interests of justice, and of the administration of justice, require that the hearing dates fixed to commence on 7 March 2016 be vacated.
My orders are:
1. Vacate the hearing to commence on 7 March 2016.
2. The defendants have until 30 March 2016 to file and serve evidence in the proceedings.
3. The plaintiff has until 13 April 2016 to file evidence in reply.
4. Fix the proceedings for further directions at 9 am on 19 April 2016 before the common law case management registrar and, if ready, to fix a further date for hearing.
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Decision last updated: 18 March 2016