Kumar v Primes

Court of Appeal (NSW)|2024-05-28|Before: Bell CJ, White JA, Stern JA

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Leave to appeal

The relevant principles relating to leave to appeal in relation to interlocutory orders on questions of practice and procedure were conveniently set out in PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 (PPK Willoughby) at [3]-[6] in the analogous context of a challenge to a decision to order security for costs. What was there said in relation to security for costs applies equally to adjournment and amendment decisions: "[3] A decision to order security for costs is one pertaining to practice and procedure and, as such, is one in respect of which appellate courts have been directed to exercise particular caution in reviewing: see Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated [1981] HCA 39; (1981) 148 CLR 170 at 177. In that case, the members of the plurality endorsed the well-known observations of Sir Frederick Jordan in In the matter of the Will of F B Gilbert (dec) [1946] NSWStRp 24; (1946) 46 SR (NSW) 318 at 323: '... I am of opinion that ...there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.' [4] A decision to order security for costs is not only a matter of practice and procedure but is one which involves the exercise of the Court's discretion, at least after the Court has satisfied itself that there is reason to believe that, where the plaintiff is a corporation, it will be unable to meet the costs of a defendant if ordered to do so (Uniform Civil Procedure Rules 2005 (NSW) r 42.21(d) (UCPR)) or, in the language of s 1335 of the Corporations Act 2001 (Cth), "it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence". The breadth of the discretion is reflected in the language used in UCPR r 42.21: "such security as the court thinks fit, in such manner as the court directs." Considerations relevant to the exercise of that broad discretion are set out in the very well-known and frequently applied decision of Beazley J (as her Honour then was) in KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 196-198. [5] Discretionary decisions, whether in the context of substantive or procedural relief, also engage the strictures against over-ready appellate interference and the correlative need for "added restraint" associated with House v R (1936) 55 CLR 499 with the consequence that a "heavy burden" lies on an applicant seeking leave to appeal from a discretionary judgment on a question of practice or procedure: see, for example, Oswal v Burrup Fertilisers Pty Ltd (recs and mgrs apptd) [2011] FCAFC 117 at [8] and [11]; see also Warragamba Winery Pty Ltd v State of New South Wales [2010] NSWCA 174 at [6] where the task of an applicant seeking leave to challenge such a decision was described as a "difficult" one; see also Cicek v The Estate of the Late Mark Solomon [2014] NSWCA 278 at [69]-[70]; Dank v Cronulla Sutherland District Rugby League Football Club Ltd [2014] NSWCA 288 at [73]- [75]; Treadtel International Pty Ltd v Cocco [2016] NSWCA 360; 117 ACSR 176 at [29]; Mei Zhang v Ye Cheng [2018] NSWCA 299 at [12]. [6] Leave applications in this Court attract a general obligation on the applicant for leave to establish that there is an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; BE Financial Pty Ltd v Das [2012] NSWCA 164 at [32]- [38]; Age Co Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]."
In Hamod v State of New South Wales [2011] NSWCA 375 at [134]-[135], Beazley JA said: "As these authorities make clear, appeals from discretionary decisions on matters of practice and procedure raise particular considerations for an appellate court, regardless of whether an appeal is brought directly from an interlocutory decision, or from the court's final determination of the matter. The court at first instance must be free to exercise its discretion in matters of practice and procedure as the court considers necessary, having regard to the circumstances of the case. However, the discretion so vested in the first instance court is subject at all times to the primary obligation of ensuring a fair trial to the parties to the litigation. The court's concern with a fair trial is not divorced from the other considerations that the court has in the administration of justice. In particular, the concept of a fair trial is one that has regard to the interests of all parties to the suit. Nor, in this State, is it divorced from the court's statutory obligation to ensure the just, quick and cheap resolution of the real issues in the dispute or proceedings: the Civil Procedure Act , s 56(1). See also Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 at 182-183, 200-201, 205, 210-211, 217-218." (emphasis added)
Before turning to consider both grounds of appeal, the procedural background should be noted.

Procedural background

The procedural background to the dispute appears sufficiently from the following chronology: Date Event 2022 21.01.2022 Proceedings commenced in Local Court of New South Wales 10.03.2022 Appellant represented by Macquarie Law Group 10.03.2022 Defence and Cross Claim filed by appellant 24.06.2022 Proceedings transferred to District Court of New South Wales 07.07.2022 Defence to Cross Claim filed by respondents 18.07.2022 Orders first made for the appellant to file an Amended Defence and any Amended Cross Claim 09.08.2022 Amended Statement of Claim filed by respondents (pursuant to leave granted on 18.07.2022) 05.09.2022 Orders first made for the appellant to file and serve any evidence in the proceedings 2023 20.03.2023 Matter listed for hearing on 27.11.2023 07.07.2023 Amended Defence to the Amended Statement of Claim filed by appellant 31.07.2023 Proposed Further Amended Statement of Claim served on appellant 31.07.2023 Respondents filed and served evidence including in relation to the subject raised by the proposed amendment, noting that "we expect that your client will file and serve his evidence within 4 weeks of today's date, being 28 August 2023." 25.09.2023 Email from Judicial Registrar Howard regarding the appellant's failure to serve evidence, noting that if the defendant served no evidence, the hearing would proceed "and the presently served evidence will be before the trial judge". 29.09.2023 Appellant's solicitor confirms that defendant intends to file evidence in the proceedings 24.10.2023 Notice of Intention of Ceasing to Act filed by Macquarie Law Group 25.10.2023 Email from Macquarie Law Group to the respondents' solicitors that per the Notice of Intention of Ceasing to Act it no longer held instructions to be engaged in matter 16.11.2023 Appellant attends Leppington Medical Centre and obtains GP Mental Health Treatment Plan 20.11.2023 Letter from Macquarie Law Group (in relation to a separate matter) indicating that it still acted on behalf of SNS Group Pty Ltd, being a company in which appellant was sole director and secretary 21.11.2023 Notice of Ceasing to Act filed by Macquarie Law Group 23.11.2023 at 1111 hrs Notice of Motion and Supporting Affidavit of Shashwat Kumar filed by appellant seeking adjournment of proceedings 23.11.2023 at 1702 hrs Notice of Motion served by appellant 23.11.2023 Both parties obtain access to the Court Book, including the proposed Second Amended Statement of Claim 24.11.2023 Motion before Dicker SC DCJ. Motion adjourned to 27.11.2023 24.11.2023 at 1723 hrs Affidavit of Philip Noel Parker failed by respondents in opposition to the Notice of Motion 27.11.2023 Motion before Gibson DCJ to vacate hearing. Motion dismissed with costs. Hearing (day 1) before Waugh SC DCJ. Appellant sought leave to be excused: "HIS HONOUR: I can't give you legal advice but I can tell you the procedure. You asked for leave - if you say you don't want to be here and - there will be then - if you leave, it will be up to the plaintiff to decide whether or not they pursue the case in your absence. And if they do and their evidence is in order, they're probably likely to get a judgment against you. 27.11.2023 DEFENDANT: I understand, your Honour. HIS HONOUR: And then take whatever steps they can to enforce it. So, I can't make you stay if you decided that you wish to leave. But, if you leave it doesn't mean the case doesn't proceed in your absence. DEFENDANT: I understand, your Honour. HIS HONOUR: That will be up to the plaintiff to decide what they want to do." 27.11.2023 Further Amended Statement of Claim filed by respondents (pursuant to leave granted during hearing by Waugh SC DCJ) 28.11.2023 Hearing (day 2) before Waugh SC DCJ. Judgment for the plaintiffs (being the respondents) in the sum of $804,697 plus costs. The cross claim dismissed with costs. 30.11.2023 Judgment entered 22.12.2023 Notice of Intention to Appeal filed 2024 27.02.2024 Appellant legally represented by Karnib Law Group 27.02.2024 Notice of Appeal filed 24.04.2024 Respondents served with first proposed Amended Notice of Appeal 03.05.2024 Letter from Bridges Lawyers to Karnib Law Group regarding competency issues 07.05.2024 Respondents served with second proposed Amended Notice of Appeal (the Proposed Amended Notice of Appeal)

Adjournment decision

Gibson DCJ delivered clear reasons for her refusal to grant an adjournment of proceedings, having received and considered affidavit evidence from Mr Kumar as well as Mr Parker, the solicitor for the defendants. The transcript of argument on the adjournment application ran for some 22 pages.
In written submissions, although not in the Amended Notice of Appeal, it was submitted by Mr Wood that Gibson DCJ applied the "wrong test" in refusing to grant an adjournment. The passage relied upon to support this submission came near the very end of her Honour's reasons for judgment and was as follows: "Mr Bateman [counsel for the plaintiffs] tells me that this is a four day hearing, that the witnesses who have provided evidence in his case are witnesses who are either in court or in the immediate vicinity and are ready to give their evidence and/or be cross-examined as to the contents of their statements. The bringing of an application of this kind on the day of the hearing is always a position of last resort and requires compelling reasons for vacation."
Understood in its proper context, her Honour was not here, in the italicized words, stating the test for an adjournment of proceedings but simply making the unexceptional point that the later an application for an adjournment is brought, the more difficult it will be to obtain one. That may be for a number of reasons, including the likely adverse impact on other litigants, as well as the impact on witnesses and legal representatives for the instant case. Her Honour had earlier in her reasons referred to the High Court's decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon), a decision which considers both amendments and adjournment applications: see, for example, at [25] referring to the importance of adherence to trial dates "so far as possible and subject to overriding considerations of justice", quoting King CJ in Dawson v Deputy Commissioner of Taxation (1984) 71 FLR 364 at 366; see also at [30]. Her Honour also referred to the District Court's Practice Note DC (Civil) No 1 which in paragraph 13 refers to adjournments.
There is no basis for concluding that Gibson DCJ applied the wrong test in her disposition of the adjournment application.
The "particulars" in respect of the challenge to the refusal to grant an adjournment as set out in the Amended Notice of Appeal were as follows: (i) her Honour failed to take into account, or failed to give adequate weight to, the fact that the appellant had recently lost his legal representation; (ii) her Honour placed too much weight on the procedural non-compliance of the appellant; and (iii) there was insufficient evidence on which to conclude that the appellant was incapable of satisfying an order for the costs thrown away.
As to the claim that Gibson DCJ failed to take into account that Mr Kumar had recently lost his legal representation, that is demonstrably not the case as the following extract from her Honour's reasons makes plain (and indeed as Mr Wood conceded during oral argument): "Those solicitors appear to have done their best to look after Mr Kumar in that they continued to act for him and to write correspondence in his support as late as 20 November 2023 when they sent a letter which is annexed to the affidavit of Mr Parker (page 38). Mr Parker points out that those solicitors continued to act for the defendant in criminal proceedings in the Local Court of New South Wales and were also acting for - although it is uncertain if they still do, for a company of which the defendant is the sole director and secretary, namely a called SNS Group Pty Ltd. Mr Parker puts that the decision to cease to act in the District Court proceedings by this firm is some form of attempt by the defendant to delay the final hearing or to set up an adjournment application on the basis of having to obtain new legal representation right before trial. That is, at best a suspicion as opposed to a fact but nevertheless the circumstances in which this firm of solicitors has continued to act for the defendant in relation to other legal proceedings should be taken into account when considering the correspondence attached to Mr Kumar's affidavit. That correspondence includes a request by his solicitors on 28 September 2023 to deposit money into their trust account in readiness for the briefing of new counsel, the counsel who was briefed in the matter having returned the brief as he was unavailable. Although the plaintiff (as said) says in his affidavit that as at 23 November he was unable to find another barrister there is an email of 4 October 2023 in which the solicitor acting for the defendant enclosed documentation received from Mr Southwick of counsel including a fee agreement in relation to a possible engagement in the matter. And the following important sentence occurs in that letter: 'He intends to meet you this Thursday at his chambers to draft your evidence.' I see that as an indication that not only the plaintiff but his former solicitors were all well aware that no evidence in these proceedings had ever been filed on the defendant's behalf. In addition I note that a brief had also been provided to another barrister, a Mr Lonergan, and that they were in the course of obtaining his fee agreement. While there has been a degree of waiver of privilege in relation to this material, that does not extend to information about whether in fact the moneys were advanced. But whether the moneys were advanced by the defendant or not, the position is that as at 4 October 2023 there were at least two barristers who were ready, willing and able to accept a brief to appear in these proceedings and who had had sufficient time to identify, at least in the case of Mr Southwick, some of the plaintiff's problems. I also note that the barrister who returned the brief indicated to the defendant that the cross-claim needed a major redraft."
Insofar as Mr Kumar contended that her Honour failed to give adequate weight to his recent loss of legal representation, questions of weight given to relevant factors in the context of a discretionary decision are classically matters for the primary judge in accordance with House v The King (1936) 55 CLR 499; [1936] HCA 40. Moreover, as Latham CJ observed in Lovell v Lovell (1950) 81 CLR 513 at 519; [1950] HCA 52: "If completely irrelevant considerations have been taken into account and they have really affected the decision the case is clear, and the order, though made in the exercise of a discretion, should be set aside. Similarly, if relevant considerations are plainly ignored the same result follows. But when the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge. In the absence of exclusion of relevant considerations or the admission of irrelevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion ... unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court."
This passage applies equally to the second "particular" relied upon by Mr Kumar under this ground of appeal: see [18] above. It is not in doubt that Gibson DCJ placed some weight on Mr Kumar's procedural non-compliance in considering whether to grant his adjournment application. Quite properly, it is not suggested that it was not open to her Honour to do so and, as her Honour observed, this was a case where there had been serious non-compliance: "The circumstances of this litigation are of concern because this is a case which despite careful case management by the judicial registrar and these matters being raised by the plaintiff, the defendant not only took more than a year to file a defence but has never filed evidence in support of the claim, despite timetables in the online court to do so. In addition, the cross-claim that has been filed is self-evidently defective and has been acknowledged to be such in some of the correspondence I have seen from his solicitors and from advice he received from counsel."
As to the third particular, there was a proper basis for her Honour's assumption that Mr Kumar would not be able to meet an adverse costs order in the event that an adjournment had been granted: he had volunteered to her Honour that he was under financial pressure; his lawyers had ceased to act for him in circumstances where there was evidence before her Honour that he had been requested to deposit funds into their trust account; and he had himself led no evidence as to his ability to satisfy an order for costs thrown away. Moreover, as observed by French CJ in Aon at [5], "whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings."
The decision to refuse an adjournment was not only open to Gibson DCJ but, in my opinion, clearly correct. Moreover, the challenge to that decision does not meet any of the criteria warranting the grant of leave to appeal in an appropriate case, namely it does not involve "an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable": see PPK Willoughby at [6].
Nor was it shown to have given rise to a miscarriage of justice or "some substantial wrong": see [7] above. In this context, it is relevant to recall that, for more than 3 months after service of the plaintiffs' evidence, and while Mr Kumar was legally represented including, it would appear from correspondence, by counsel, no evidence was filed in support of any defence or the Cross-Claim which had been filed on Mr Kumar's behalf. Nor, in either written or oral submissions before this Court, was any evidence referred to or outlined which would support a conclusion that the failure to grant an adjournment of proceedings had resulted in a miscarriage of justice or substantial wrong. Evidence could have been led in this regard: Whall v Stamp [2019] NSWCA 163 at [11]-[12], [82]. It was not. In analogous cases, a party complaining of procedural unfairness bears the onus of demonstrating the materiality of any such unfairness: Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123; [2018] HCA 34.

Amendment decision

The ground of appeal relating to the amendment decision was as follows: "To the extent that his Honour gave Judgment for $50,000.00 arising from the second assignment, his Honour erred in granting leave, at the hearing, to the Plaintiffs to file a further amended statement of claim raising that question for the first time." (emphasis added)
One fundamental issue with this ground of appeal is that it was not during the hearing that the question of the amendment was raised "for the first time". Indeed, as pointed out by the Respondents: "On 31 July 2023, being almost four months before the hearing, the appellant's lawyers, Macquarie Law Group were served with the proposed Second Amended Statement of Claim and formally put on notice that the respondents intended to seek leave of the Court to file at the hearing the proposed amendment. In their covering letter, the respondents' solicitors explained and identified the proposed amendments and appropriately marked up the proposed amendments in double underline in the pleading."
The letter of 31 July 2023 explicitly stated that "[w]e put your client on notice that the Plaintiffs' [sic] intend to seek leave of the Court to file the Proposed Second ASOC at the hearing of the Proceeding on 27 November 2023." On the same day, the plaintiffs served evidence in support of their proposed additional claims as well as their other claims.
As refined in Mr Kumar's written submissions on appeal, criticism was made of the fact that there was an implicit decision to dispense with the requirement to file and serve a notice of motion under r 18.2(2)(c) of the UCPR in the circumstances of the case, as well as of the ultimate decision to grant leave to file a Second Amended Statement of Claim at the hearing.
As to the first point, Mr Kumar, through his then solicitors, had been squarely put on notice of the proposed amendment for many months prior to the hearing, and there was no surprise or procedural unfairness in the manner in which the amendment was foreshadowed or pressed. As the primary judge observed in his reasons for judgment: "I might record the reason again why I granted leave to make that application without the filing of a notice of motion was on the basis that the defendant had been notified in July 2023 at a time when he had solicitors acting for him about the intention to make an application at the hearing to amend the statement of claim in the manner set out in a letter of 31 July 2023 to the defendant's then solicitor and by reference to an attached proposed second amended statement of claim."
A perusal of the transcript also shows that the primary judge satisfied himself that adequate notice of the proposed amendment had been flagged to Mr Kumar through correspondence with his then solicitors.
It is entirely appropriate to infer that they had drawn the proposed amendment to his attention. As was also pointed out in written submissions on appeal, Mr Kumar also had access to a soft copy of the Court Book four days prior to the hearing on 23 November 2023, and that included a copy of the proposed Second Amended Statement of Claim.
It is also important to note that the amendment application had also been flagged in the adjournment application before Gibson DCJ and, prior to seeking to be excused by the primary judge, the appellant was in Court when counsel for the Respondents had expressly referred the Court and the appellant to the fact that leave would be sought to file the Second Amended Statement of Claim in the course of the hearing.
In all the circumstances, it must be concluded that the appellant was on notice of the proposed amendment. Moreover, no indication is given in his written submissions as to what defence, if any, he would have raised in relation to what was described as the second assignment claim in respect of $50,000. No evidence had been filed on his part during the whole of the time he was represented in relation to the first assignment claim which, as the respondents pointed out, arose from the same series of transactions or payments as the second assigned debt, being payments made from the account in which all parties previously had an interest, namely Bads Developments Pty Ltd, to the appellant. The only difference between the first and second assignments was that the respondents had taken the assignment of the $50,000 debt from a third party.
No miscarriage or substantial wrong has been demonstrated.
I would dismiss this ground of appeal.

Conclusion and orders

To the extent leave to appeal was required, such leave should be refused with costs. The appeal should otherwise be dismissed with costs.
WHITE JA: Subject to the observations below on whether leave to appeal is required, I agree with the Chief Justice.
Notwithstanding the concession of senior counsel for the appellant, in my view leave to appeal is not required.
Save as to a sum of $27,000, the notice of appeal challenges the order of Waugh SC DCJ entering judgment for the respondent for $804,697 plus costs. That was a final order. In support of that challenge the appellant challenged two interlocutory orders. The first was the order of Gibson DCJ dismissing his notice of motion for an adjournment of the hearing. The second was the order of Waugh SC DCJ allowing the respondent's amendment to the statement of claim.
As the Chief Justice explains, for the appellant to succeed on the first ground, he needed to establish that Gibson DCJ's discretion miscarried and her Honour's dismissal of his adjournment application occasioned a substantial wrong or miscarriage of justice. If he had established those matters then that would have affected the final result (Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22 at [6]). The final judgment would have been set aside and a new trial ordered.
In Nobarani v Mariconte (No 2) [2017] NSWCA 124 and on appeal Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36, the appellant complained that he had been denied procedural fairness by interlocutory decisions of the trial judge to fix the substantive claim for hearing at very short notice and to decline requests for adjournment. His appeal was upheld by Simpson JA in this Court. Her Honour's judgment was upheld in the High Court. It was not suggested that leave to appeal was required. The denial of procedural fairness vitiated the final decision.
For the reasons the Chief Justice has given, Gibson DCJ's decision to refuse the requested adjournment was plainly correct, as was the decision of Waugh SC DCJ to allow the amendment.
As the appellant conceded that leave to appeal is required, I agree with the orders proposed by the Chief Justice.
STERN JA: I agree with the Chief Justice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 May 2024

(Uniform Civil Procedure Rules 2005(NSW)r 42.21(d)

Uniform Civil Procedure Rules 2005(NSW)rr 18.2(2)(c), 51.53

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