Lezaja v Hannover Life Re of Australasia Ltd

Supreme Court of NSW|2016-02-22|Before: Hallen J, Mr J

Solicitors: NSW Compensation Lawyers (Plaintiff) Turks Legal (Defendants) File Number(s): 2015/48625

Judgment

HIS HONOUR: For reasons to which I shall come, the court pronounced a number of orders on 22 February 2016, including one dismissing the proceedings which were listed for hearing before me on that day and the following day with reasons to follow. These are the reasons. This course was taken because each of the legal representatives who were present in court considered that the publication of the reasons for judgement was not urgent. The Plaintiff, who, as will be read, was made aware of the hearing several times, was not present in court during the hearing or when the orders were made.

Events Prior to the Hearing

On 1 February 2016, the proceedings were listed before me for final pre-trial directions. The matter had been listed before me for hearing by Registrar Walton on 14 October 2015.
The directions that I made at the pre-trial directions hearing included one for the provision to the court by 15 February 2016, of a bundle of agreed documents, with which direction the parties' then legal representatives complied, and an order that an outline of submissions be filed and served by 4:00 p.m. on 17 February 2016.
On 17 February 2016, my Associate received an email, from counsel for the Defendants, which relevantly stated: "I appear for the defendants in these proceedings, which are listed for hearing before his Honour on Monday, 22 February 2016. Ms Nolan is counsel for the plaintiff. I send this email with her agreement. His Honour made directions on 1 February 2016 for, amongst other things, the delivery of outline submissions by 4:00pm on 17 February 2016 (today). The parties have been discussion regarding settlement of this matter. Those discussions are ongoing. Ms Nolan and I remain hopeful that a resolution of the proceedings may shortly be achieved. In the circumstances, we request that the time for compliance with this direction be extended until 9:00am on Friday, 19 February 2016."
At my request, my Associate forwarded the following email to both counsel: "Whilst his Honour does not wish to have the parties incur unnecessary costs, if the outline of submissions are delayed until Friday, his Honour will not have an opportunity to consider them before the hearing. In the circumstances, his Honour is prepared to extend the time for the outline of submissions until noon tomorrow. Of course, if the matter is resolved before then, it will not be necessary to comply. Please let me know as soon as possible if the matter is resolved."
However, prior to the time by which the submissions were due, the solicitor with the carriage of the matter for the Plaintiff, Mr Stephen Morgan, by telephone, requested, with the consent of the Defendants' legal representatives, that the matter be listed urgently at 2:00 p.m. on that day, a request that the court was able to meet.
The events that occurred subsequently, at 2:00 p.m., are referred to in a separate ex tempore judgment, the contents of which I shall not repeat. In broad summary, the need for the urgent application on 18 February 2016 was for the Plaintiff's solicitors to seek leave to file a notice of ceasing to act for the Plaintiff. The leave of the court to file the notice of ceasing to act was required because the Plaintiff's solicitors had not filed and served on the Plaintiff a notice of intention to file and serve the notice of change at least 28 days before, as required, since the date for the trial had already been fixed: Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), rule 7.29(2)(a) and they believed that the Plaintiff did not wish to instruct them further in the matter. (Since the hearing on 22 February 2016, a copy of the ex tempore reasons has been sent directly to the Plaintiff.)
I made no orders on that day but simply stood the matter over until the commencement of the hearing.

The Hearing

On 22 February 2016, the Plaintiff did not appear despite being called three times outside the court. He was called, initially, at 10:00 a.m., then at 10:17 a.m. again, and, finally, at 11:33 a.m. shortly prior to me announcing the orders that I proposed to make. No explanation has been provided for his non-appearance today.
However, Mr Morgan, the solicitor with the carriage of the matter on behalf of the Plaintiff again appeared and repeated his oral application for leave to cease to act for the Plaintiff.
He sought, and I granted, leave to file in court, an affidavit sworn on 18 February 2016, of Anthony Macri, solicitor. Regrettably, the letter from Mr Lezaja's solicitor dated 14 October 2015, a copy of which was annexed, informing the Plaintiff of the date and place for hearing, was inaccurate because it referred to the matter having been "listed for hearing at the District Court of New South Wales, John Maddison Tower, 86-90 Goulburn Street, Sydney commencing on 22 February 2016 and 23 February 2016".
There was also a letter dated 18 February 2016, a copy of which was annexed, addressed to the Plaintiff, that referred to the matter having been listed before "His Honour Hallen SCJ at 2:00 p.m. on the 18th February 2016". The letter went on to state: "We advise that His Honour Hallen SCJ was unwilling to grant us leave to withdraw in all the circumstances and stood that application over until the commencement of the hearing at 10.00am on 22nd February 2016. We confirm that your matter accordingly remains listed for hearing commencing on 22nd February 2016 and that your attendance at Court at that time will be required. We also confirm that we propose to renew our application to withdraw from representation of you at that time. We put you on notice that if you fail to attend the Court may then proceed to dismiss your case and may also order that you pay the defendant's costs. As a further matter we advise that the defendant has served us with a Notice to Produce and we enclose a copy of that Notice. You will note that the notice requires production of certain documents relating to your motor accident case. We confirm that we retain your file in respect of the motor accident case and [sic] our office. The time for the compliance with the Notice to Produce has been extended to 22 February 2016. We further advise that the defendant has indicated to us an intention to seek to amend their Defence. We enclose a copy of the proposed amended Defence for your attention. We anticipate that they will make a formal application for leave to amend the commencement of the trial on 22nd February 2016. In all the circumstances it is imperative that you attend your court hearing at 10.00am on 22nd February 2016. The details of the trial venue are as follows:- Supreme Court of New South Wales Court 2 Hospital Road SYDNEY NSW 2000"
There is no evidence that the Plaintiff responded to the solicitors following receipt of this letter.
The Plaintiff's solicitor also sought leave to file in Court a copy of an affidavit, affirmed 19 February 2016, of Adam Maguire, a licensed Process Server, who deposed that at 5:47 p.m. on 18 February 2016, he had served the Plaintiff with the letter dated 18 February 2016, to which reference has been made, a copy of the Notice to Produce, and a copy of the Defendants' proposed amended Defence. The affidavit stated: "At the time of service I had the following conversation: After ringing the plaintiff's intercom I said to the male who appeared on his first floor balcony "I have a letter addressed to Mr D Lezaja. Is that your name?" To which he replied "Yes. What do you want?" I said "I have a [sic] urgent letter for you from NSW Compensation Lawyers. Can you come down stairs and get if [sic] from me please ?" To which he replied "No. I have stopped dealing with them" He then continued to tell me about the matter in poor English. I then said "OK. If you will not come down stairs then I will serve you with the documents by placing them here on the ground" I then placed the documents in a sealed white envelope marked to his attention on the footpath under his balcony in his full view. I then left the premises as quickly as I believed the plaintiff's tone was becoming slightly aggressive. As I was standing beside my vehicle the plaintiff came up to me and took photographs of myself, my vehicle and my registration plates. I departed the premises without saying anything further to him."
Finally, the Plaintiff's solicitor sought leave to file in court his affidavit sworn 18 February 2016, to which he had adverted on that date when the matter was before me and which I did not then read. On this occasion, however, Mr Morgan only sought to read Paragraphs 1 and 11-15 of the affidavit, which are in the following terms: "1. I am a solicitor in the employ of NSW Compensation Lawyers and until my instructions were withdrawn I had carried [sic] of this matter on behalf of the Plaintiff. … 11. I then attended the conference with the barrister on the afternoon of 12 February 2016. Mr Lezaja had been advised of this conference at the time it had been organised in late 2015 and he was reminded of the conference my [sic] text message and attempted phone call. Mr Lezaja did not attend the conference. My discussions with counsel during the conference confirmed my belief that settlement of the claim might be possible and that settlement might be achieved at a level above the best figures put by the defendants at the settlement conference some months earlier. 12. The conference with the barrister concluded shortly before 5pm on Friday, 12 February 2016 and immediately after the conference concluded I phoned by [sic] staff asking them to contact Mr Lezaja to arrange a conference for the following Monday so that I could discuss the barrister's opinion with him. I am advised by my staff that they then contacted Mr Lezaja who indicated that he might be able to make it to a conference but that he could not commit at that point. A tentative time for a conference was set for Monday, 15 February 2016 with Mr Lezaja to confirm his availability early on Monday morning. 13. Mr Lezaja did not attend the conference organised for 15 February 2016 and did not return telephone calls wherein my staff attempted to confirm his availability. 14. I [sic] further conference was tentatively organised for Tuesday, 16 February 2016 and when Mr Lezaja was contacted by my staff he was again non committal as to whether her [sic] would attend. He subsequently did not attend that conference. My staff then continued to contact Mr Lezaja in order to have him attend a conference. I am informed by Mr Ned Gavric, Practice Director of NSW Compensation Lawyers that on 17 February 2016 he had a telephone conversation with Mr Lezaja to the following effect: He said: "Mr Lezaja, Mr Morgan needs to see you. He and the barrister think that they can settle your case. He needs to meet with you to tell you what the barrister has said and to obtain your instructions. Can you come in to see him?" He said: "I don't know why you keep calling me, you are harassing me." "I don't trust you." "I don't know why you want me to negotiate." 15. Upon being advised of this telephone conversation, I formed the view that Mr Lezaja had clearly indicated that he had lost confidence in me and that he was withdrawing all instructions. In these circumstances I seek to withdraw from representation of Mr Lezaja."
Following the grant of leave to file and then read the affidavits to which I have referred, the Defendants' counsel sought leave to file in court and read an affidavit of his instructing solicitor, Michael Iacuzzi. I granted leave to file the affidavit in Court and read it.
The Defendant's counsel also stated that he wished to read the affidavit on the application to have the proceedings dismissed under UCPR rule 29.7 or upon the basis that even if the matter proceeded, notice had been given to the Plaintiff to attend for cross-examination on his affidavit, if that affidavit was to be relied upon. Since he was not present, leave should not be given to read the affidavit, with the result that there was no evidence to be read in the proceedings and they should be dismissed accordingly.
There was evidence from Narelle Wendy Smith, an investigator engaged by Arkley Tuckwell Risk Management Pty Ltd, that on 19 February 2016 she served the Plaintiff with the following documents (which it is not necessary to otherwise refer to in any detail): (i) Letters to NSW Compensation Lawyers dated 16 and 18 February 2016 along with notices to produce (ii) Copy of email from Turks Legal to NSW Compensation Lawyers dated 18 February 2016 with the defendant's proposed Amended Defence (iii) Copy of judgement by Justice Adams dated 14 July 2015 (Allianz Australia Insurance Limited v Dragan Lezaja (unreported 14 July 2015) (iv) Copy of written submissions prepared on behalf of the Defendants (v) Copy of letter from Turks Legal to NSW Compensation Lawyers dated 14 January 2016, requesting that Dragan Lezaja, Dr Todorovic, Dr Dixon and Dr Giblin attend Court during the hearing to give evidence
Although counsel for the Defendant had informed the court, on 18 February 2016, that an application to amend the defence would be sought to be filed to add an allegation that the Plaintiff acted in breach of its (bilateral) duty of good faith and fair dealing owed to the first Defendant, by reason of the fact that the Plaintiff had failed to provide to the first Defendant material that was adverse to his claim (described as "the undisclosed material") and that the undisclosed material was said to comprise a series of reports of one Dr Gibson, an occupational physician, and also surveillance footage (on which Dr Gibson had commented in her 10 November 2013 report), it was unnecessary to proceed with this application given the events that occurred.

Determination

I am satisfied that the Plaintiff, for some time, has not instructed the solicitors on the record and that even though he has not terminated the solicitors' retainer in writing, he has done so by his words and by his conduct. The statements made to Mr Maguire, the licensed Process Server, by the Plaintiff on 18 February 2016, sufficiently demonstrate that he did not wish to retain the solicitors any longer.
In addition, it is clear that despite the events on 18 February 2016, and the importance of him attending the hearing, all of which appear to have been explained, in writing, to him, the Plaintiff has not been in contact with the solicitors, at any time, since then, and he did not appear at the hearing.
Furthermore, despite being informed that the solicitors' application would be made again at the hearing, and the consequences of the application being granted, the Plaintiff has not appeared and has provided no explanation for not having done so,
I have borne in mind the lateness of the solicitors' application and the obligation of the solicitors to give reasonable notice of the intention to cease to act as evidenced by UCPR rule 7.29. Solicitors should not leave it to the last minute to make such an application and, thereby, leave a party, being the client, in a situation where that client may be forced to seek an adjournment or otherwise defend the proceedings on his own. This involves a consideration of fairness to the Plaintiff. I have also borne in mind the importance of considerations of the due administration of justice in granting the solicitors' application
In this regard, I refer to Investec Bank (Australia) Limited v Mann [2012] VSC 81 at [7], in which Pagone J wrote: "Solicitors seeking the exercise of the court's discretion to grant leave carry the burden of satisfying the court that leave should be granted in all of the circumstances which are particular to the case in which they make the application. Solicitors making such applications must be particularly mindful of their duties to the court, the administration of justice, to their client (or former client) and to opposing or other litigants and to their legal advisers. Usually the only possible controverter to such an application will be the solicitors' own (former) client, and often the application will be unopposed and untested although the inconvenience that may be caused in granting leave may be substantial. It has been held that such applications need not be served upon the other party to the proceedings but only upon the party for whom the solicitors act. However, that the impact of granting leave upon the court and upon other parties to a proceeding may be a relevant factor in whether to grant leave…"
Yet, in the present case, the position of the solicitors for the party seeking leave of the court cannot be forgotten either. They act upon instructions and when a client refuses to, or chooses not to, give instructions to enable the solicitors to act, the solicitors cannot be obliged to do so. Certainly, the solicitors should not be obliged to conduct the trial on behalf of a client who provides no instructions and states, explicitly, that he has "stopped dealing with" the solicitors. The solicitors also would have no obligation to retain counsel to appear.
I have also borne in mind the failure by the Plaintiff to appear before the court at the hearing. From the correspondence personally delivered to him on 18 and 19 February 2016, the Plaintiff could not have reasonably entertained any doubt that the solicitors were going to make the application that they be permitted to cease to act again, and that it was possible the court might grant the application.
Had he appeared, the Plaintiff could have made, and the court would have considered, an application to adjourn the trial. On such an application, the court would have been mindful of the difficulties that he would have faced in representing himself, particularly in circumstances where an application to amend a defence was to be made. The Plaintiff did not, at any time, make any such application.
In all the circumstances, I am satisfied that the Plaintiff's solicitors are justified in ceasing to act for him and that I should grant the application and give leave to file a notice of ceasing to act for the Plaintiff. I have made that order.

The Defendants' Application

During the course of the hearing of the applications, the Plaintiff was called several times outside the court. As previously stated, he did not appear.
UCPR rule 29.7 relevantly provides: "(1) This rule applies when a trial is called on. (2) If any party is absent, the court: (a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or (b) may adjourn the trial. … (4) If, in relation to any proceedings, the defendant appears, but the plaintiff does not appear, the court may dismiss the proceedings. (5) Subrules (3) and (4) do not limit the court's powers under subrule (2)."
In relation to UCPR, rule 29.7, I wrote, in NSW Trustee and Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681 at [18]-[20]: "The clear purpose of UCPR rule 29.7 is the efficient dispatch of court business. However, in dispatching court business, I cannot ignore the right of a defendant to be informed, or, at least, to be made aware, of a trial date. It is a fundamental principle that a party who may be adversely affected by the making of court orders has a right to be heard: Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571, in which Rich J said (at 589): 'It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside, and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside. ... In such a case there has been no valid trial at all.' In the circumstances, the first issue to address is whether I am satisfied that it is appropriate to proceed in the absence of the Defendant or of anyone representing her. A party is 'absent' within the meaning of the rule, when the trial is called on, only if it can be shown that he, or she, has knowledge, or notice, of the date of the trial, and is not physically present, or not represented. In other words, before the rule can be relied upon, there should be proof that the absent party has been given reasonable notice of, or has knowledge of, the date of the trial."
Of course, I must also have regard to the obligations imposed by s 56 to s 60 of the Civil Procedure Act 2005 (NSW). Section 56 emphasises that the overriding purpose of the 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 the overriding purpose when it exercises any power given to it by the Act or by the rules of court. Section 57 in turn requires the court to have regard to specified matters. Section 58 requires the court, in deciding whether to make any order or direction for the management of the proceedings, to act in accordance with the dictates of justice, and the court must have regard to the provisions of ss 56 and 57. These sections recognise the fact that delay and case backlog are matters which affect not only the public cost in delivery of justice, but the court's ability to provide individual justice, and that the reforms introduced by the Civil Procedure Act promote the provision of individual justice notwithstanding that they may have adverse effects on the claims of individual parties in particular circumstances: Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230 at [37] (Allsop P).
Having read the evidence of service, some of which I have set out, I am satisfied that all reasonable attempts have been taken to notify the Plaintiff of the Defendants' intention to obtain orders when the matter came on for hearing. Overall, I am satisfied that more than reasonable attempts have been made, fruitlessly, to have the Plaintiff participate in the proceedings.
I did, of course, consider whether I should adjourn the proceedings to give the Plaintiff a further opportunity to appear. However, it seems to me that there would be no utility in doing so, in the absence of an explanation why the Plaintiff did not appear at the hearing. There is simply no reason to believe that he would be more likely to appear on the next occasion than on this occasion.
I am satisfied that the Plaintiff has chosen to disengage from the litigation that he, himself, commenced. The Court is not required to indefinitely delay the completion of the hearing in the hope that he might change his mind and appear: Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 at [182]-[186], [189]-[191]; Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1 at [4]. The Plaintiff, proved to be on notice of the proceedings, has been afforded the opportunity to appear and to be heard. He has chosen not to do so. It follows that it is appropriate for the proceedings to be determined in his absence.
Clearly, on the evidence, some efforts have been made to resolve the proceedings, which efforts the Plaintiff does not appear to have appreciated. If an adjournment were granted, the Defendants would incur additional costs which may, or may not, be able to be recovered from the Plaintiff.
I also considered whether to proceed with the trial generally. The result would have been the same. No evidence would have been read by, or on behalf of, the Plaintiff. The Defendants, then, would not have had to rely upon any evidence, with the result that the proceedings would have been dismissed.
Finally, as the court was reminded by counsel for the Defendants, s 91 of the Civil Procedure Act, provides that dismissal of (a) any proceedings, either generally or in relation to any cause of action, or (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. I have made no order preventing the Plaintiff from commencing fresh proceedings.
In view of these facts, the appropriate course was to dismiss the proceedings pursuant to UCPR rule 29.7(4) and I made that order.
There is no reason why the Plaintiff should not pay the Defendants' costs of the proceedings.
For completeness, I repeat the orders that I made orally on 22 February 2016:
Upon the application of the Plaintiff's solicitor, pursuant to UCPR rule 7.29, grant leave to the Plaintiff's solicitor to file a Notice of Ceasing to Act dated 18 February 2016.
Order that the Notice may be filed forthwith.
Order, upon the application of the Defendants, pursuant to UCPR rule 29.7(4), the Defendants having appeared but the Plaintiff not appearing, that the Plaintiff's proceedings be dismissed.
Orders that the hearing date of 23 February 2016 be vacated.
Orders that these orders be entered forthwith.
Orders that the Defendants' solicitors personally serve the Plaintiff with a sealed copy of the orders made today by 5:00 p.m. on Wednesday, 24 February 2016.
Orders that the Plaintiff pay the Defendants costs of the proceedings.
Orders that the Agreed Bundle of Documents be returned to the Defendants' solicitors.

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: 03 March 2016

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