McDonagh v Huxley

Supreme Court of NSW|2018-08-20|Before: Lonergan J

Solicitors: Firths The Compensation Lawyers (Plaintiffs) JML Rose (First, Eighth and Ninth Defendants) Mullane & Lindsay Solicitors (Third, Fifth and Eleventh Defendants) Fourth Defendant/Applicant (self-represented) Kent Attorneys (Seventh and Tenth Defendants) File Number(s): 2014/311738

EX TEMPORE Judgment

HER HONOUR: The applicant, the fourth defendant to these proceedings, filed a Notice of Motion via his then solicitor, on 20 June 2018 seeking various orders, significantly including an order that default judgment entered against him in February 2016 be set aside. This morning he has sought a 14 day adjournment of this application.
The background to this application needs to be stated in short detail to understand the multiple difficulties associated with the fourth defendant's late and largely unmeritorious application.
The plaintiffs claim that they were duped by a series of financial advices and transactions in 2013. This led to a statement of claim being filed on 23 October 2014 and an amended statement of claim on 21 November 2014. The statement of claim was served on McDonnell in November 2014.
Having been case managed for a period, and various orders and applications having been made and dealt with by the Court, a hearing proper commenced before me on 26 March 2018.

Judgment entered against McDonnell

The Court file shows that on 19 February 2016, after a series of timetables associated with it, default judgment was entered against McDonnell (as well as Mrs Huxley the second defendant) in an assessed sum of $1,098,183.60.
The court file and the affidavit material before the Registrar at that time indicated that no appearance and no defence was ever filed on behalf of McDonnell, nor had there been any attendance by or on behalf of him at any of the many listings of the matter leading up to that time.
An Affidavit by the plaintiff's solicitor was filed in court today (20 August 2018) which outlines some background to the matter and its proceedings before the court. In respect of the entry of the judgment on 19 February 2016 (although the affidavit says it was 16 February 2016), the following is said, paragraph 46: "On 16 February 2016 judgment was made (and entered) in open Court against Mr McDonnell. That judgment was made in open court after the Court's registry assigned the matter to be dealt with in open court. For all liquidated sums judgment was for the liquidated amount deemed admitted. The quantum determined was supported by the evidence and indeed there was no evidence to the contrary. As to the exemplary damages Registrar Bradford considered all the admitted conduct and awarded half the sum claimed."
There is then reference in the Affidavit to the paragraphs in the statement of claim that refer to liquidated damages of $600,000, interest in the sum of $96,324.50, and a sum of $250,000 exemplary damages claimed by each plaintiff.
A transcript of that hearing was not available on the court file and none was provided by the parties.
There is no evidence before me that formal notice of the default judgment was ever provided to McDonnell, or that the orders were formally taken out and entered, or that there was any pursuit against McDonnell for the damages or for the costs that were ordered against him at that time.
Regardless of that, it is evident that McDonnell was aware by a date in late March 2018, if not before, that judgment had been entered, and the hearing was then proceeding on its merits without him in respect of the other defendants.

20 June 2018 and 20 August 2018

On 20 June 2018 a Mr Foley, solicitor, presented to court whilst oral submissions were being heard and sought, without any affidavit or application before the court, to set aside the judgment entered in February 2016 against McDonnell. As the transcript for that day shows, Mr Foley was encouraged to attend to relevant written material because without an application or affidavit, there was no application extant before the court to entertain.
For reasons which remain unexplained, Mr Foley only managed to attend to that after court was finished for the day, shortly after 4.10pm. The application to be brought on behalf of McDonnell was then given the benefit of a generous timetable laid down by the Registrar.
On 28 June 2018, clear directions were made by the Registrar as to the time by which certain matters must be attended to. Due to default on the timetable, the motion before me for hearing had only one affidavit in support, being an affidavit of Mr Foley. That affidavit did not in any way deal with the matters that would have to be shown to set aside the default judgment.
Affidavits in support of the application were required to have been filed and served by 26 July 2018 and were not.
On 25 July 2018, my chambers received an email from McDonnell writing on his own behalf, noting his awareness of the timetable requiring him to have filed his evidence by 26 July 2018, referring to discussions with Mr Foley, and referring to having received a Notice of Ceasing to Act from him on 25 July 2018. The email refers to Mr McDonnell "immediately" seeking alternate lawyers to assist, referring to being "in negotiations" with a firm of lawyers who were reviewing the file and his evidence, and that he expected within the next few days for the affidavits to be completed. The email also referred to an intention to advise my chambers as to the progress "by close of business tomorrow".
No further material was received from or on behalf of McDonnell until a series of emails that arrived between 3.12 and 3.32am this morning, 20 August 2018.

Material provided by McDonnell on 20 August 2018

The material sent between 3.12 and 3.32am comprised an Affidavit dated 19 August 2018, apparently sworn on 19 August 2018 before a JP, which refers to some background matters. It does not explain why the timetable set down by the court has not been met or why there was a delay between late March 2018 and 20 June 2018 before any application was made, nor why no material in support of the application was completed before 19 August 2018, other than references to Mr Foley solicitor having ceased to act for him.
Also filed was a bundle of material, the relevance of which is unclear and an unsworn affidavit dated 20 August which seems to include material directed to the merits of the plaintiffs' case against McDonnell.
Given the unsworn nature and/or lateness of the provision of the material, objection was taken by all legal representatives present.
There was also provided a lengthy, largely incomprehensible document headed "Defence" which contains many paragraphs that refer to persons, financial institutions, properties and circumstances that bear absolutely no relevance to the current proceedings.

Submissions

Oral and written submissions were provided on behalf of the plaintiff and a number of the defendants who provided the Court with the courtesy of written submissions and appearance by senior solicitors or counsel with good knowledge of the proceedings. The parties have been prejudiced by the extremely late provision of lengthy complex, largely incomprehensible affidavit material.
Nevertheless, those legal representatives put forward the following matters for my consideration in opposing the adjournment sought by McDonnell. Mr Goodridge submitted first, these proceedings have been before the court for a lengthy hearing, and opportunities have been provided to McDonnell repeatedly, even recently in June 2018, where emphasis was placed on the urgency, that McDonnell file material before the court to pursue any application he wished to make. Second, the Defence provided does not make any sense. Third, today is yet a further attempt to prolong the proceedings. The proceedings and delays are causing added stress to the plaintiff (and her company) as she is a person without assets. The case has been on foot for four years and the plaintiffs are entitled to a verdict in resolution of it. Fourth, providing affidavits at 3.25am on the day of hearing, well out of the time provided for in the timetable, is unacceptable.
Ms Nunn on behalf of the third, fifth, and eleventh defendants joined with Mr Goodridge in the criticism of the late provision of the affidavit evidence, emphasising that the proceedings have been on foot for a long time. McDonnell was aware that the proceedings were going ahead in March this year, and yet still has failed to provide proper material until the last minute or at all.
Mr Kent solicitor, appearing on behalf of the seventh, eighth and tenth defendants opposed any further adjournment, noting that the parties have continued to incur costs to appear today, including the preparation of written submissions, and that the Civil Procedure Act requires, by s 56 and s 58, that proceedings be dealt with in a fashion that brings just, quick and cheap justice to the parties, and this application flies in the face of that requirement.
In respect of the purpose to be served by any adjournment, Mr Kent submitted that I ought not accept from the Bar table from Mr McDonnell that he had "potential" solicitors who may act, or barristers who may act for him, nor should I have any confidence that he would, within 14 days, secure appropriate legal representation.
Mr Kent also emphasised that material being provided at 3am in an attempt to derail today's proceedings and the proceedings generally, indicates a distinct lack of regard for the Court and its orders, and indeed, shows almost a contempt with which Mr McDonnell holds this court and its processes.
McDonnell in response said that his position of difficulty is related to Mr Foley ceasing to act, that he (McDonnell) has been unwell with the flu for a short period, that the timetable was not adhered to because "he put his trust in the wrong people", and that he firmly undertakes that delays will not happen again.

Decision

Unfortunately, I do not accept what Mr McDonnell says. He is a person who has been given a number of opportunities by this court, particularly since June this year, to properly prepare an application which has a potential to cause a huge amount of delay and costs to other parties in these proceedings who have conscientiously attended to prosecute and/or defend the proceedings.
In the circumstances, I refuse Mr McDonnell's request for an adjournment of his Notice of Motion filed 20 June 2018.

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 August 2018

At a glance

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