In the matter of Australian Real Estate Relation Pty Limited [2023] NSWSC 78
Sullivan v Moody (2001) 207 CLR 562
Source
Original judgment source is linked above.
Catchwords
38 SCR 404
RatuI v IslamIn the matter of Australian Real Estate Relation Pty Limited [2023] NSWSC 78
Sullivan v Moody (2001) 207 CLR 562
Judgment (2 paragraphs)
[1]
Judgment
On 1 April 2023, the plaintiff filed a summons naming as a defendant Mitry Lawyers Pty Ltd t/as Mitry Lawyers Pty Ltd.
The relevant parts of the summons read as follows:
Fraud, Obstruction of Justice, Facilitation of witness tempering (sic), Significant Financial Loss, Physical and mental trauma. Obstruction and facilitate way of Justice, Dishonest practice, Mal Practice (sic). Incompetent and non-compliant. Not a fit and proper person to practice.
Relief claimed:
1. Liquidated damages of the sum of $50 million.
2. Future prevention of such behavior (sic) in the interest of all the citizens.
3. Negligence of duty of care - Plaintiff to be awarded.
4. Failed to act with due diligence - Plaintiff to be awarded.
5. Pay all the cost of the first proceeding of NSW Supreme court started by Mitry lawyers in their own financial interest and wasted significant time of the court.
On 21 April 2023 the defendant filed a Notice of Appearance, and on 31 May 2023 it filed a notice of motion seeking an order pursuant to r 13.4 Uniform Civil Procedure Rules 2005 (NSW) that the proceedings be dismissed, alternatively that an order be made under r 14.28 UCPR that the summons be struck out. This judgment concerns the defendant's notice of motion.
Prior to the filing of the motion, the summons came before the Registrar on 2 May 2023. The Registrar ordered that the plaintiff was to file and serve a statement of claim in place of the summons and including Commonwealth Bank of Australia as the second defendant by 8 May 2023. The Registrar stood the proceedings over to 17 May 2023.
No such statement of claim was filed, and the proceedings came before the Registrar again on 17 May 2023. On that occasion, the Registrar extended the time for the filing of the statement of claim to 22 May 2023 and stood the proceedings over to 29 May 2023.
On 29 May 2023, the proceedings were again listed before the Registrar. There was no appearance for the plaintiff and the Registrar directed that a letter under r 13.6 UCPR be sent to the plaintiff. She stood the proceedings over to 7 June 2023. That date was subsequently changed to 9 June 2023. On that day there was again no appearance for the plaintiff. The Registrar ordered that the plaintiff was to file and/or serve all evidence in answer to the notice of motion by 19 June 2023.
No such evidence was filed, and at my direction on 21 June 2023 my Associate emailed the plaintiff directing him to email all evidence to be relied upon by him by 4pm on 21 June 2023. No such evidence was forwarded, and no evidence has been filed in the Registry by the plaintiff.
The background to the present proceedings is this.
From around June 2017 till its liquidation by order of this Court on 10 February 2023, Australian Real Estate Relations Pty Limited ("ARER") operated a real estate agency business known as Raine and Horne Ingleburn. The two partners in the business were the plaintiff and Abu Ratul.
Disputes arose between the parties from around mid-2022. Following the breakdown of the relationship between the parties, two sets of proceedings were commenced. In proceedings 2022/277860, Mr Ratul brought proceedings which ultimately led to the winding up of ARER. In the proceedings Mr Ratul contended that the plaintiff engaged in misconduct associated with the management of ARER's business.
In proceedings 2022/325554, the plaintiff sought orders relating to what he claimed were his entitlements from the business. In both of those proceedings Mitry Lawyers acted for Mr Ratul and his wife Farha Diba who was an employee of the business.
On 10 February 2023 Black J made a winding up order in respect of ARER and dismissed the proceedings brought by the plaintiff: RatuI v Islam; In the matter of Australian Real Estate Relations Pty Limited [2023] NSWSC 78. The plaintiff sought leave to appeal to the Court of Appeal against both orders. On 13 June 2023, the Court of Appeal refused leave to the plaintiff to bring an appeal against the making of the winding-up order made by Black J and dismissed the summons for leave to appeal. The appeal in relation to the dismissal of the plaintiff's claim before Black J (for which leave was not required because of the amount in issue) was stood over before the Registrar, and is next listed before the Registrar on 3 July 2023: Islam v Australian Real Estate Relations Pty Ltd [2023] NSWCA 131.
In relation to the proposed joinder to the present proceedings of the Commonwealth Bank of Australia, the Bank's relevance is that it was the bank both for the trust accounts and the business accounts of ARER. As the judgment of Black J makes clear the Bank had a placed a stop on ARER's trust and trading accounts at the behest of the plaintiff, although by orders of this Court, those stops were removed. I am informed this morning by Ms Kastanias, who sought leave to appear as a potentially interested party, that the plaintiff has separate proceedings against the Commonwealth Bank which are listed before the Registrar tomorrow.
The basis for the defendant's motion is that the proceedings have been wrongly commenced by summons, that the plaintiff failed to comply with directions of the Registrar to file a statement of claim, and that, in any event, the claims being made, as far can be discerned\from what is in the summons, are hopeless and ought to be dismissed.
Rule 6.3 of the Uniform Civil Procedure Rules 2005 (NSW) relevantly provides:
6.3 Where statement of claim required (cf SCR Part 4, rule 2)
Proceedings of the following kinds must be commenced by statement of claim -
(a) proceedings on a claim for relief in relation to a debt or other liquidated claim,
(b) proceedings on a claim for relief in relation to a tort,
(c) proceedings on a claim based on an allegation of fraud,
(d) proceedings on a claim for damages for breach of duty (however arising) and the damages claimed consist of or include -
(i) damages in respect of the death of any person, or
(ii) damages in respect of personal injuries to any person, or
(iii) damages in respect of damage to any property,
…
(h) proceedings on a claim for relief in relation to the publication of defamatory matter,
…
To the extent that the causes of action the plaintiff relies upon can be discerned from the summons, all of the claims appear to fall within the requirements of rule 6.3. Ordinarily, an order would be made, as the Registrar did, requiring the filing of a statement of claim to regularise the proceedings. However, the defendant submits that it can be seen from the relief claimed in the summons that no reasonable cause of action is disclosed.
The defendant did not act for the plaintiff. It acted for the other party to the litigation.
Ordinarily, solicitors do not owe a duty of care to persons who are not their clients: Hill v Van Erp (1997) 188 CLR 159 at 167 and 187. The exceptions are limited, and where there is contentious litigation, a solicitor for one party does not owe a duty to the other party, not the least reason for which is that it would conflict with the solicitor's duty to his or her own client, and may well conflict with the solicitor's duty to the court: see also Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 at [53]; Maronis Holdings Limited v Nippon Credit Australia Pty Ltd [2001] NSWSC 448; 38 SCR 404 at [338]; Al-Kandari v J R Brown & Co [1988] QB 665 at 672 and 675; and see generally the commentary in Abadee, Zipser, Sirtes and O'Keefe, Professional Liability in Australia (4th Ed., 2023, Thompson Reuters) at [3.630].
In my opinion the present proceedings should be dismissed. I am satisfied, applying the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 that the proceedings are hopeless and manifestly groundless. The plaintiff has been given a number of opportunities to plead any cause of action he claims to have, but he has not done so. He has not appeared this morning, and that is the third time in a row he has failed to appear when the proceedings have been listed.
I delayed the commencement of these proceedings until ten past ten to enable him to be present. Mr Bolster of counsel, who appears for the defendant, has had text exchanges in the past with Mr Islam where Mr Islam has indicated whether or not he would attend court. Mr Bolster had sent a text to Mr Islam this morning in relation to the present proceedings and no text has been received in response. I note the time is now 10.41am. The affidavit of Joshua Mbakwe of 27 June 2023 proves that the plaintiff was given full notice of today's proceedings. In addition, the email from my associate to the plaintiff of 21 June 2023 gave him notice that the motion would be heard today.
This is not simply a case of the proceedings being commenced by the use of the wrong means, that is, a summons instead of a statement of claim. The plaintiff's failures to comply with the Registrar's orders endeavouring to regularise the proceedings, and his failures to appear when the proceedings are listed need also to be taken into account.
The last contact in relation to the filing of the statement of claim between those acting for the defendant and the plaintiff was an email from the plaintiff of 22 May 2023 indicating that he had received a draft statement of claim from attorneys that he has engaged, for some reason, in Tennessee in the USA. That was more than a month ago and no statement of claim has been filed in accordance with the Registrar's orders. I take into account the provisions of r 12.7, which provides that if a plaintiff does not prosecute proceedings with due dispatch the court may order that the proceedings be dismissed or make such other order as the court sees fit. I also take into account ss 56 and 58 of the Civil Procedure Act 2005 (NSW), noting the ongoing cost to the defendant of the plaintiff's failures.
In all of the circumstances, including the failures of the plaintiff to comply with directions already made by the Registrar and by the form of the summons filed, I consider that the defendant is entitled to have the proceedings summarily dismissed. Accordingly, I make the following orders.
Summons dismissed pursuant to r 13.4 Uniform Civil Procedure Rules 2005 (NSW).
Plaintiff to pay defendant's costs of the proceedings.
[2]
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Decision last updated: 27 June 2023