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[2009] FCA 303
Federal Court of Australia
2009-04-01
Gordon J
Original judgment source is linked above.
INTRODUCTION 1 Counsel for the Applicant once described this proceeding as having "a chequered history". That is an understatement. The proceeding was filed on 7 April 2005. It concerns events in late 1999. Trial of this proceeding commenced on 23 February 2009. 2 On 25 February 2009, on the third day of trial, the hearing was adjourned because the "principal" of the Applicant, a Mr Alan Jorgenson, had sacked Counsel and then subsequently, the Applicant's solicitors. The precise details or circumstances of these events were not and have not been explained. On that date, I listed the further hearing of the trial to be held on 23 March 2009, on an estimate of a further 5 days. 3 At 9:30am on 23 March 2009, the part-heard trial was called on for further hearing. Counsel for the Applicant, who had not previously appeared, announced his appearance and made an oral application for a further adjournment of the part-heard hearing. Counsel informed the Court, unsupported by any sworn evidence (whether by affidavit or viva voce evidence) that (1) Counsel that had been retained to appear for the Applicant at the resumed hearing had at about lunchtime on Friday, 20 March 2009 returned his or her brief to appear and (2) at 9:30am on 23 March 2009, no alternative Counsel was available. The application for adjournment was opposed by the Respondents. 4 Ultimately, the oral application for adjournment was refused. These reasons for decision record why the application for adjournment was refused and why the Court proceeded to hear the substantive proceeding the next day.
PROCEDURAL HISTORY 5 As I have noted, this proceeding was commenced in April 2005. Thirty seven separate Orders of the Court have been made in an attempt to manage the interlocutory aspects of this proceeding. On any view, management of the proceeding by the Court, the solicitors and the parties has been less than satisfactory. 6 The proceeding was placed in my docket in October 2008. Since then, the proceeding has been before me on 4 separate occasions prior to the application for adjournment the subject of these reasons for decision. I do not propose to set out in any detail what happened between 2005 and the date it was placed in my docket. It is sufficient for present purposes to note that the matter should have been heard and determined years ago. 7 The matter was listed for directions before me on 24 October 2008. At that stage, the parties had not complied with previous directions. Counsel briefed to appear for the Applicant at the directions hearing was not then briefed to appear at the trial. As a result, the matter was stood down to enable a legal representative of the Applicant to appear by telephone to discuss how the issues in dispute could best be managed. At that time, no affidavits in relation to the issues in the substantive proceedings had been filed and served. Although experts were intended to be called by the parties, the Respondents had not yet retained any particular expert and the Applicant's expert had completed only some preliminary work. After discussion with Counsel then retained by the Applicant to appear at trial, Orders were made on 24 October 2008 to address those and other issues including an Order that the trial would commence on 23 February 2009 on an estimate of 5 days. I re-listed the matter for further directions on 18 November 2008. 8 On 18 November 2008, mismanagement of the matter had continued. Critically, the Applicant had failed to comply with many of the Orders made on 24 October. In particular, it had failed to file and serve affidavit material from lay witnesses upon which it intended to rely at trial. As a result, Orders were made by the Court pursuant to O 35A r 3 of the Federal Court Rules in the following terms: 1. The application be dismissed with costs unless by 4:00pm on 9 December 2008, the Applicant file and serve all affidavit evidence, including any expert affidavit, upon which it intends to rely at trial, such evidence to be cross-referenced to documents in the court book to the extent possible. 2. The Applicant's notice of motion filed 12 September 2008 be adjourned sine die. 3. The matter be listed for directions at 9:30am on 15 December 2008 in Melbourne before Justice Gordon, provided that the Applicant may attend by videolink. 4. Costs reserved. 9 Technically, the Applicant complied with the Orders. Six affidavits were filed and served. 10 On 15 December 2008, the matter was listed for further directions. The Respondents submitted that the affidavits filed and served by the Applicant were of little, if any, utility and could not be relied upon by the Applicant as its evidence at trial. Having read the pleadings and the Applicant's affidavits it was simply not possible to understand the way in which the Applicant put its case and, in particular, which claims were made against which persons and entities. Accordingly, I directed the Applicant to file and serve a written opening. I informed Counsel for the Applicant that the trial would be conducted in accordance with its written opening. Orders were made at that directions hearing in the following terms: 1. By 4:00pm on 23 December 2008, the Applicant file and a serve its written opening submissions, cross-referenced to the witness statements, experts report(s) and pleadings. 2. By 4:00pm on 30 January 2009, the respondents file and serve any expert evidence upon which they intend to rely at trial. 3. By 4:00pm on 6 February 2009, the respondents file and serve any evidence upon which they intend to rely at trial. 4. By 4:00pm on 13 February 2009, the parties exchange objections to the admissibility of each other's evidence. 5. Costs reserved. 11 A form of the written opening was filed on 23 December 2008. It was not filed by solicitors. The form and substance of the document reflected that fact. In any event, a further "Opening Statement" was filed and served on the same day and it was that document which summarised the Applicant's case ("the Applicant's Opening Statement"). 12 The opening paragraph of that Statement described the proceedings in the following terms: These proceedings concern the sale of a business by a mortgagee in possession to a company incorporated for that purpose by the sole director and shareholder of the mortgagee. The Applicant seeks order that would set aside the sale and as far as now possible put the parties in the position they would have been if the loan (the subject of the mortgage) had been repaid. The Applicant is entitled to these orders first, because of the mere fact of the relationship between the mortgagee and the purchaser, and secondly, because the conduct of the sale was in breach of the duties owed to the mortgagor by the mortgagee and the receiver whom appointed. At this point, it should be noted that the Applicant prosecutes these proceedings as an assignee of a cause of action. 13 On 10 February 2009, the matter was listed for mention at the request of the parties. One of the principal issues concerned a request for further discovery to be provided by the Respondents. The Respondents did not oppose such an Order but were concerned because they alleged that other documents provided by way of discovery to the Applicant, in breach of a confidentiality undertaking, had been seen by the Applicant's principal, Mr Alan Jorgenson. Management of the trial of the proceeding on 23 February 2009 was discussed and Orders were made in the following terms: 1. The Respondents make discovery by 11 February 2009 of the documents agreed to be discovered by them as set out in the two letters from B2B Lawyers to Lillas & Loel dated 5 February 2009. 2. The Respondents make discovery by 16 February 2009, of: (a) the personal taxation returns of the first respondent William Graham for the period 2000 to 2007; (b) stock sheets including finished goods, work in progress and raw materials at the date of acquisition by the fifth respondent Melbourne Gravity Pty Ltd of Lawrenson's assets. 3. Paragraphs 2 and 3 of the order made on 15 December 2008 be varied such that the Respondents file and serve any lay and expert evidence upon which they intend to rely at trial by 4 pm on 17 February 2009. 4. Paragraph 4 of the order made on 15 December 2008 be varied such that: (a) the Respondents provide to the Applicant their objections to the admissibility of Applicant's evidence by 4 pm on 13 February 2009; and (b) the Applicant provide to the Respondents its objections to the admissibility of respondents' evidence by 4 pm on 19 February 2009. 5. The Respondents have leave to file and serve a proposed amended defence as exhibited to Mr Walton's affidavit sworn on 5 February 2009 and as varied by the letter from B2B Lawyers to Lillas & Loel dated 9 February 2009. 6. Both parties are to meet and discuss the drafting of a Second Further Amended Statement of Claim that does not raise issues outside those contained in the Applicant's Opening Statement filed and served on 23 December 2008. If agreement is reached, the Applicant has leave to file and serve its Second Further Amended Statement of Claim. Should the parties be unable to reach agreement, they are to file and serve a draft, identifying the areas of disagreement and the reason(s) for that disagreement. 7. Subject to further order, the evidence of Graham Roberts be given by video link. 8. Costs reserved. 14 As paragraph 6 of the Orders makes clear, the Applicant informed the Court that it was contemplating enlarging the nature of the dispute. I informed Counsel for the Applicant that the Court had provided more than sufficient time for it to prosecute the proceeding and it was to be confined to its Opening Statement. In particular, it was too late for additional parties and causes of action to be added. 15 On 23 February 2009, Counsel and instructing solicitors announced their appearances at the start of the trial of the proceeding. Senior Counsel for the Applicant applied for an adjournment of the hearing of the trial because the Respondents had filed and served material after the date specified in the Orders made on 10 February 2009. At that time, Senior Counsel for the Applicant informed the Court that the substance of the Applicant's case was the same as that set out in the Applicant's Opening Statement, that if he intended to make application to further amend the claim he would do so by 24 February 2009 (the next day) and that he would also be in a position to deal with the valuer that was to be called by the Respondents on 24 February 2009. The short adjournment was granted to enable the Applicant's Senior and Junior Counsel further time for preparation. At that time, the hearing was expected to proceed the next day. 16 On 24 February 2009, a valuer was called by the Respondents and cross-examined by Senior Counsel for the Applicant. During the course of that afternoon, my Chambers were informed that Senior and Junior Counsel for the Applicant would no longer be appearing in the matter, and the next day (25 February 2009), the Applicant terminated the retainer of his instructing solicitors. On 25 January 2009, I granted leave to Lillas & Loel Lawyers to withdraw as solicitors on the record for the Applicant. Later that afternoon, new solicitors were appointed by the Applicant. Later on 25 February 2009, the Applicant's new solicitors applied for an adjournment of the trial. This application to delay the further hearing of the trial was solely because the "principal" of the Applicant had terminated the retainer of its Counsel and solicitors. I ultimately granted the adjournment sought by the Applicant and made the following Orders : 1. By 4.00pm on 13 March 2009, the Applicant provide further security in the amount of $31,825.00 to the satisfaction of the Victorian District Registrar of the Federal Court of Australia. 2. The security for costs referred to in paragraph [1] above will be further security for the Respondents' costs up to the end of the fifth further day of trial. 3. The Applicant pay to B2B Lawyers in cleared funds the Respondents' costs thrown away by reason of the adjournment fixed in the sum of $23,765.00. 4. Unless the Applicant: (a) Provides the further security referred to in paragraph [1] above by 11 March 2009 in conformity with that paragraph; and (b) Pays the Respondents' costs thrown away by 11 March 2009 in the amount and manner provided in paragraph [3] above the proceeding be dismissed. 5. By 4.00pm on 11 March 2009, the Applicant file and serve: (a) Any application to further amend its application and its statement of claim; (b) Any additional affidavits upon which it intends to rely; and (c) Any amended opening submissions. 6. The further trial of the proceeding be adjourned to 9.30am on 23 March 2009. 17 The Applicant complied with paragraphs 1 and 3 of the Orders. The Applicant did not comply with paragraph 5 of the Orders. In fact, contrary, to O 4 r 14 of the Federal Court Rules, the Applicant itself sought to file and serve three documents which were headed "Third Further Amended Statement of Claim", "Further Amended Application" and "Applicant's Amended Opening Submissions". No other documents were filed or sought to be filed by the Applicant. 18 This was the position as it stood on the morning of 23 March 2009. At that time, the trial was to resume. Ultimately four applications were made in the course of two hours by new Counsel retained by the Applicant. As will become clear, however, that Counsel was not briefed to appear at the trial. First, an application was made to further adjourn the hearing of the trial, according to a statement from the Bar Table, because of the prejudice to the Applicant given the lack of Counsel to appear to prosecute its case ("the First Application"). No evidence was adduced in support of the adjournment. I refused that application. It is to that refusal that these reasons are directed, the substance of which appear from [22] to [28] below. 19 Having refused that adjournment application, Counsel for the Applicant then sought leave for the Applicant (Mijac Investments Pty Ltd - a company) to represent itself without a solicitor ("the Second Application"). As I understood the Second Application, the principal of the Applicant, Mr Alan Jorgenson, was intending to appear and conduct the trial: cf O 4 r 14(2) of the Federal Court Rules, Simto Resources Ltd v Normandy Capital Ltd (1993) 10 ACSR 776, 781-783; Pacific Air Freighters (Qld) Pty Ltd v Toller (2000) 171 ALR 519, [3]-[9]; Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2002] FCA 1002, [13]-[20]. Again, that application was not supported by any evidence. During the course of that application, the Applicant's Counsel informed me that it might be preferable if Mr Jorgenson made the application himself. That did not occur. In any event, during the course of hearing that application, I asked the Applicant's Counsel how the Court could entertain such an application when the Applicant had solicitors on the record and Counsel appearing for the Applicant. At that moment, the Applicant's Counsel informed the Court that in order to be able to entertain the application for leave under O 4 r 14(2) of the Federal Court Rules, the Applicant's solicitors on the record sought leave to withdraw as solicitors on the record ("the Third Application"). Then, without warning and without really starting to prosecute either of the Second or Third Applications, the Applicant's Counsel informed me that the Applicant no longer wished to pursue those applications but a fourth - an adjournment for 24 hours on the basis of the "hoped anticipated availability of Counsel" ("the Fourth Application"). 20 The Applicant's Counsel called Mr Needham (the principal of the firm of solicitors engaged by the Applicant at the time of these four applications) to give viva voce evidence about the "hoped anticipated availability of Counsel". It must be noted that Mr Needham's firm has been solicitors on the record from 25 February 2009 (though the name of the firm had recently changed to Melbourne Legal Partners). Mr Needham gave evidence that a "[Mr] Delaney [of Lillas & Loel Lawyers] [was] to fly down … and take conduct of the action, on the basis that he … had been in charge of the matter for a long time, and was fully aware and able to proceed with the matter"; see also [16] above. Upon cross-examination, the following facts were revealed: - there was still some dispute as to a discharge of the lien maintained by Lillas & Loel Lawyers over the file; that dispute had been the subject of discussion for some weeks; fees were still to be paid before that lien could be discharged; Mr Delaney was not a partner in the firm; Mr Needham had not talked to Mr Delaney but his employer as to his availability; Mr Needham had no knowledge of Mr Delaney's past experience in prosecuting cases at trial and Mr Needham could not answer whether Mr Delaney would seek to engage Counsel. The only thing that Mr Needham was able to offer in support of the application was that Mr Delaney, upon the basis that he had previously been engaged, was in a better position to run the case. 21 At that point in time, the only application being prosecuted by the Applicant was the fourth - an adjournment of 24 hours. I stood the matter down until 3:00pm and directed the Applicant's Counsel to arrange for Counsel who were to prosecute the case the next day to appear and explain to the Court how the case would proceed. There was some discussion about the fact that Mr Delaney was from Queensland. I said that, if necessary, Mr Delaney could appear by video link or telephone. At that time, I was told that a solicitor of Lillas & Loel Lawyers, the firm previously engaged by the Applicant, would be available by telephone at 3:00pm. The hearing resumed at 3:00pm. The Applicant's Counsel then informed the Court that neither Mr Delaney nor Lillas & Loel Lawyers for whom he worked would be appearing or would become solicitors on the record and that new Melbourne based Counsel was available to prosecute the case the next day. The matter proceeded the next day.
ANALYSIS 22 As I have noted, the First Application made on 23 March 2009 for adjournment of the part-heard trial was refused. The basis for the application for adjournment (unsupported by any evidence) was that if an adjournment was not granted the Applicant would be prejudiced and any prejudice to the Respondents could be met by an order for costs. During the course of reply, the Applicant's Counsel referred to the often-cited judgment of Dawson, Gaudron and McHugh JJ in The State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154: Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim for a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. 23 That passage from JL Holdings does not state and should not be taken as stating some general or universal proposition that a party is entitled to an adjournment so long as the opposing party is looked after by an award of costs. As many decisions since JL Holdings have stated, the "attainment of justice" is a goal that is not achieved without a proper consideration of the facts in any given case: Black & Decker (Australasia) Pty Ltd v GMCA Pty Ltd [2007] FCA 1623, [2]; Cassar v Hans Pet Constructions Pty Ltd [2008] NSWSC 1386, [18]-[24]; Chameleon Mining NL v Murchison Metals Ltd [2009] FCA 137, [9]-[15]; Finerty v Deputy Commissioner of Taxation [2008] FCA 1136, [29]-[31]; Smolle v Australia and New Zealand Banking Group Ltd [2008] FCA 1065, [68]; Williams v Calivil Park Holsteins Pty Ltd [2009] NSWSC 31, [20]-[21]. The basic premise was clearly enunciated by Lindgren J at [52] in Thoo v Kelly (2008) 169 FCR 470: The refusal of an adjournment may amount to a denial of procedural fairness if it is likely to deny a party a reasonable opportunity to present his or her case (Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at [40] per Gaudron and Gummow JJ (Bhardwaj); Touma v Saparas [2000] NSWCA 11 at [27]). The procedure that will satisfy the demands of procedural fairness may differ in order "to meet the particular exigencies of the case" (Kioa v West (1985) 159 CLR 550 at 615 per Brennan J). As I stated in Ali v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 41 AAR 410 at [27]: Ultimately, each complaint of a failure to accord procedural fairness by reason of the refusal of an adjournment turns on its own facts. Whether an adjournment should be granted is a matter within the discretion of the trial Judge (or Tribunal), to be resolved according to the overall requirements of justice in the particular circumstances [citation omitted]. 24 The requirements of justice in this particular case do not, on any view, require the Court to grant the Applicant's oral application for an adjournment. The proceeding has been on foot since April 2005. The substantive events occurred in 1999. The Applicant has continually failed to comply with directions made by the Court. The trial is part-heard and only part-heard because the Applicant dismissed its Senior and Junior Counsel and solicitors respectively on days 2 and 3 of the hearing, events which had occurred approximately 4 weeks earlier and which had necessitated the need for the trial to be adjourned to the current hearing dates. The allegations raised against the Respondents are serious. The Respondents have a right to have those allegations heard and determined. It is not in the interests of justice in relation to this proceeding, or in the administration of justice generally, for this Court to delay the hearing and determination of this matter any further. Moreover, the cost of these proceedings to the Court and to the parties is disproportionate to the nature of the proceedings and the allegations raised in these proceedings. In light of those facts, a Court is entitled to expect that any application for adjournment would be for good reasons. 25 What then were the reasons for the application and what was the "prejudice to the Applicant" if the part-heard hearing was not adjourned again? I acknowledge that if I refused the application for adjournment and the Applicant did not have Counsel briefed to appear at the trial, the Applicant would probably be prejudiced in the further conduct of the proceedings. However, except for statements from the Bar Table, no evidence was adduced by the Applicant in support of the oral application for adjournment. In the circumstances described above and in the absence of any material in support of the application for adjournment of a part-heard trial at this late stage, the application must fail. In fact, it was only during the hearing of the Fourth Application, for an adjournment of the part-heard trial for 24 hours, (and after I had refused the First Application) that the Applicant's instructing solicitor, Mr Needham, was called to give viva voce evidence that on Friday 20 March 2009, Counsel had returned the brief to appear at the resumed trial on behalf of the Applicant. However, the submission from Counsel for the Applicant, and supported by the evidence of Mr Needham, was that the brief had only been delivered to Counsel on Wednesday 18 March 2009. Why the brief was not delivered before 18 March and why Counsel returned the brief on 20 March was never explained. It was apparent that it was not because the brief fees had not been paid. Mr Needham's evidence was that fees for the trial had been placed in the barrister's trust account. Apparently, one other barrister was given the brief at some point on Friday 20 March 2009 who returned it later that day. 26 Finally, at the hearing of the First Application, the Applicant's Counsel did not state for how long an adjournment was sought and, consequently, what would be done if an adjournment had been granted. No attempt was made to suggest an alternate way in which the case could or should be managed to final hearing and determination. 27 As Counsel for the Respondents submitted, not only did JL Holdings not support the granting of the adjournment in the circumstances of the present proceeding but there is a vast body of authority in this Court where applications for adjournments have been refused where the Applicant for the adjournment was in a far better position than the current Applicant: for example, in Salfinger v Niugini Mining (Australia) Pty Ltd [2008] FCAFC 102 at [13]-[20] per Finkelstein J (giving the judgment of the Court on the grounds of the application) an application for adjournment was refused where there was evidence of lack of funds and lack of necessary documentation to prosecute the appeal. See also AMI Australia Holdings Pty Ltd v Bade Medical Institute (Aust) Pty Ltd [2008] FCA 1783; Australian Securities and Investments Commission v Forestview Nominees Pty Ltd [2006] FCA 1628; Perpetual Trustees WA Ltd v Elderslie Finance Corporation Ltd [2008] FCA 1045; Priestley v Godwin [2008] FCA 1179; Vescio v Hon Kristina Keneally [2008] FCA 589; Westpac Banking Corporation v Tsatsoulis [2003] FCA 406. By way of contrast, an adjournment was granted in Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd [2006] FCA 920, where substantial evidence was led that thousands of pages of documents were provided to the Applicant on the eve of the trial as annexures to affidavits in circumstances where the Applicant could not reasonably have read these documents or be certain that relevant discovery had been completed. That is a long way removed from this case: see [22] to [26] above. 28 It is for those reasons that I refused the Applicant's First Application - the oral application for an adjournment of the part-heard trial. Although not relevant to the reasons for refusing the application, not only did the matter proceed to final hearing the next day but it proceeded with two Counsel appearing for the Applicant including Counsel who had made the four applications on behalf of the Applicant referred to above. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.
Associate: Dated: 1 April 2009 Counsel for the Applicant: Mr McKenna
Solicitor for the Applicant: Melbourne Legal Partners
Counsel for the Respondents: Mr Cawthorn SC and Ms Maud
Mijac Investments Pty Ltd
Graham
(2000) 171 ALR 519
(1997) 189 CLR 146
(2008) 169 FCR 470
(2002) 209 CLR 597
(1985) 159 CLR 550