MILUTINOVIC v VARDAS

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 HIS HONOUR: On 18 May 2005, I heard applications in two somewhat associated matters. In one Coshott and Anor v Vardas, CL 20531/2002 I made orders and delivered reasons for them on the day. These reasons relate to two applications in the second matter. 2 The first of these applications arises pursuant to a Notice of Motion filed by the Defendant on 15 October 2004 in which orders were sought, inter alia:- 1. That the Statement of Claim be dismissed pursuant to Part 13 Rule 5 of the Supreme Court Rules. 2. That, alternatively, the Statement of Claim be struck out pursuant to Part 15 Rule 26 of the Supreme Court Rules. 3. That the Plaintiff's Notice to Produce dated 23 September 2004 be set aside. 3 The second of the applications was one made on behalf of the Plaintiff without filing a Notice of Motion for leave to amend the Statement of Claim in accordance with a document annexed to an affidavit of the Plaintiff's solicitor. That document includes a substantial number of changes to the Statement of Claim. Most are cosmetic or minor but where the changes are of substance I shall refer to them in addition to the allegations in the original document. 4 The Statement of Claim was filed on 13 April 2004. It alleged in effect that the Defendant was a solicitor, that in about July 1991 he had received from the Plaintiff's previous solicitor the file relating to some proceedings that the Plaintiff had commenced against his former employer, the Commonwealth of Australia and that on or about 17 May 1992 the Plaintiff first met Vardas, was told that the latter had taken over the file and the Plaintiff gave Vardas instructions to act on the Plaintiff's behalf. The document also included the following:- " Duty of Care 4 At all material times, Vardas owed the plaintiff a duty to exercise all reasonable skill, care and diligence in the provision of legal services to the plaintiff. Fiduciary Duties 5.1 Vardas owed to the plaintiff the following duties of a fiduciary nature: (a) To account promptly, properly and fully for all monies received by him from or on the Plaintiff's behalf; (b) To apply monies received by him from the Plaintiff as directed by the Plaintiff; (c) Not to prefer his own interests over those of the Plaintiff; (d) To act in good faith and with absolute fairness and openness towards the Plaintiff; (e) To inform the Plaintiff of everything of which he knew which would be of assistance to the Plaintiff in relation to the proceedings." 5 In the proposed Amended Statement of Claim the Plaintiff has added to the duties said to have been owed and of a fiduciary nature the following. (I adopt the renumbering adopted in the amended document.):- 5.1.6 To advise the Plaintiff to seek independent advice in relation to the outcome of the proceedings;

5.1.7 Not to place himself in a conflict of interest between himself and the Plaintiff 6 In paragraph 7 it is alleged that in breach of the duties owed to the Plaintiff and set out in paragraphs 4 and 5 of the Statement of Claim, Vardas:- (a) Failed to prosecute the proceedings properly, reasonably and diligently; (b) Failed to properly and diligently prepare the proceedings for hearing; (c) Failed to advise the Plaintiff adequately and properly or at all; (d) … (k) Failed to properly advise the Plaintiff or advise the Plaintiff at all that the evidence on liability and/or causality was such that the Plaintiff was at substantial risk of a verdict against him in the proceedings. 7 In paragraph 8 it is said that in February 1995 a verdict for the Defendant was entered in the proceedings and in paragraph 9 that Vardas "failed and neglected to properly and fully advise the Plaintiff of his right to appeal the decision …". Paragraph 10 alleges that as a consequence of the matters pleaded in paragraphs 7 to 9 the Plaintiff suffered loss including:-

(a) The loss of value of the claim against the Commonwealth of Australia $150,000

(b) The value of the loss of the opportunity to appeal the decision of Freeman DCJ $75,000

(c) Costs wasted in the prosecution of the proceedings $14,000

(d) Costs awarded to the defendant against the plaintiff $21,000

(e) Interest on the above 8 Paragraphs 11 to 14 of the original Statement of Claim form the basis for a somewhat different claim. In paragraph 11 the Plaintiff alleges the delivery to Vardas of a cheque in the sum of $14,000 on 2 June 1997, which monies were to be applied in particular ways. Paragraph 12 claims that in breach of the duties, including fiduciary duties, owed by Vardas, he failed to deposit the monies into his trust account and use them as directed but appropriated them to his own benefit. 9 Paragraphs 13 and 14 make similar allegations in respect of a sum of $21,000 said to have been paid on 20 November 1998 to be applied in payment of the judgment for costs obtained by the Commonwealth. In the proposed amended Statement of Claim some additional allegations are made concerning these matters but they do not alter the substance of the allegations as I have summarised them. 10 Paragraph 15 is in terms:- "Vardas, in breach of his duties to the plaintiff pleaded above, including those duties pleaded in paragraphs 4 and 5 above, failed, between February 1995 and March 2001, to advise the plaintiff that the plaintiff had or may have had a cause of action for professional negligence and breach of duty, against Vardas arising out of Vardas' conduct of the proceedings, as pleaded and particularised above." 11 In a Defence filed on 22 September 2004, the Defendant, inter alia:- (i) contended that the claims made in the Statement of Claim were barred by ss14 and 23 of the Limitation Act, 1969; (ii) denied both any breach of retainer and the suffering of damage; and (iii) acknowledged receipt of the sums of $14,000 and $21,000, made a number of assertions as to the use of them in payment of various costs, and asserted that a balance was paid to the Plaintiff by a cheque which the Plaintiff cashed. 12 A consideration of the Limitation Act defence requires some reference to the facts. So far as I rely on them, they have not been the subject of challenge. In the Plaintiff's proceedings against the Commonwealth, judgment against the Plaintiff was entered on 10 February 1995. On that date, the counsel who had appeared wrote to Mr Vardas:- "On Thursday 9 and Wednesday 10 February 1995 [appeared for the plaintiff in the District Court before Freeman DCJ. Regattieri appeared for the defendant. His Honour gave a verdict and judgment for the defendant, and ordered that the plaintiff pay the defendant's costs of the matter. He declined to order that the plaintiff pay the costs of the arbitration. It was no matter of surprise that His Honour did not find for the plaintiff in respect of the injury of 30 January 1985, but I felt that the prospects were reasonable in respect of the injury of 1 October 1985, in respect of which we were successful at arbitration. His Honour took the view that the plaintiff's description of the circumstances in which the plaintiff suffered his second injury, as given in the witness box was sufficiently different from that given to Dr Stephen for the latter's opinion to be unhelpful. This was perhaps a little harsh; Dr Stephen's history was expressed very briefly, and was capable of encompassing the circumstances given in evidence. However my initial opinion is that an appeal would be unlikely to succeed. If you wish, I will give the matter further consideration on receipt of a transcript of the reasons for judgment. However the plaintiff now retains his rights to compensation under the Commonwealth act, which should be of value. The Commonwealth admitted liability for compensation in respect of each injury, and the plaintiff still suffers some restriction in respect of each. His tax returns show a loss from his business in each relevant year. Despite the fact that he accepted voluntary redundancy, his earning capacity is affected and his earnings are lower. Advice should be obtained on his prospects of compensation. I should think it unlikely that the Commonwealth will pursue costs, but it is not a thing of which one can be certain. The Plaintiff is naturally disappointed at the result, but I believe he understood the risks and understands the reasons for the result. I now return my brief, with thanks for your instructions, and enclose my memorandum of fees." 13 On 15 February 1995 the Defendant wrote to the Plaintiff. Inter alia the letter said:- "We confirm that this matter came on for hearing before Judge Freeman in the District Court on 9 and 10 February 1995. We further confirm that, following the conclusion of the evidence in your case, and following submissions made by both parties, the learned Judge was not satisfied that you had made out a case for negligence against the Commonwealth and accordingly entered a verdict for the Defendant and ordered that you pay the Defendant's costs. The basis for Judge Freeman's decision appears to be as follows:- 1. The Judge, as did the arbitrator in the earlier arbitration proceedings, was not satisfied the negligence was established in relation to the injuries suffered by you in the first accident on 30 January 1995. 2. In then analysing the circumstances leading to your second injury on 1 October 1985, the Judge did not appear to place great weight on the evidence which was presented on your behalf to the effect that you had been recommended to resume work on light duties and that the Commonwealth had ignored your request… 3. The Judge was not satisfied that the mechanism of your second accident as it came out in the evidence was such as to render the Commonwealth liable in negligence… 4. His Honour rejected the expert evidence of Colin Simpson, an engineer and ergonomist, as to how your accident occurred and whether the Commonwealth was liable… In the opinion of Mr Stone of Counsel and the writer, the Judge was somewhat harsh with his treatment of the evidence. However, having said that, we do not feel that this is a decision against which an appeal ought to be lodged with the Court of Appeal as the decision does not really demonstrate any major error of law which can be appealable. We confirm that the result of this case means that your workers' compensation rights remain intact…" 14 No appeal against the decision in favour of the Commonwealth was lodged. It is thus clear that any cause of action the Plaintiff had based on the Defendant's conduct of the Plaintiff's proceedings against the Commonwealth or the letter of advice accrued no later than February, or if one takes as the relevant date that when time expired for the lodging of such an appeal, in March 1995 - c.f. Cheney & Wilson v Duncan [2001] NSWCA 197 at [26 - 28]. Even if one takes account of a possibility that time for lodging an appeal might have been extended, it is unrealistic to think that that possibility would not have ceased to exist long before April 1998, i.e. 6 years before the current proceedings were commenced. 15 Section 14 of the Limitation Act provides:- "(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of 6 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:- (a) A cause of action founded on contract… (b) A cause of action founded on tort…" 16 Counsel for the Plaintiff sought to meet the contention that the statute meant that the Plaintiff's claim was bound to fail by contending that so long as the Defendant was involved in any way in the proceedings between the Plaintiff and the Commonwealth, obligations to the Plaintiff continued to exist, the obligations included those to which reference has been made and thus the Defendant's breaches occurred within 6 years before the proceedings were commenced. I have no difficulty with the first of these propositions. However, the second does not automatically follow. 17 Duties owed by a solicitor to his client reflect the nature of the retainer given, the work undertaken or particular circumstances. It is not the case that merely because a solicitor has some involvement with a piece of litigation, then so long as that involvement remains he has, as it were, a general obligation to advise on all its aspects. In this case, assuming that the Defendant's retainer to conduct the litigation at first instance placed him under an obligation to the Plaintiff to advise as to the prospects of appeal then, providing he exercised the appropriate care in doing so, the obligation was fulfilled when the advice was provided. He did not remain obliged, day after day, to reconsider the advice he had given in case it was in error, or against the possibility that there may have been some change in the law or the Plaintiff's circumstances. I have no difficulty accepting the proposition that if within a short time - defined probably by there being some practicality in doing so - he became aware of error in his advice or of changes in the law or circumstances which may have had some significant effect on the advice, there would have arisen an obligation at that stage either to change it, or at least notify the Plaintiff that the advice needed reconsideration. 18 However, any such obligation would have arisen because of the particular circumstances of the advice having been given and the Defendant becoming aware of the potential for it being erroneous. I see no basis for contending that so long as the Defendant was, or happened to become again, involved in assisting the Plaintiff in connection with the discharge of the liabilities arising in consequence of the proceedings - matters which may last or arise with varying degrees of intensity for years - the Defendant remained under an obligation to revisit a task which had, to all intents and purposes, been completed. That is the argument by which the Plaintiff in this application sought to support his claim in contract and tort to recover the loss of the value of his claim against the Commonwealth and the loss of opportunity to appeal the decision of Freeman DCJ and to overcome the fact that the events referred to in paragraphs 6 to 9 of the Statement of Claim seem clearly to have occurred prior to the April 1998. It is fallacious. 19 Putting aside the significance of any breach of fiduciary duty arising from the dealings with the $14,000 and $21,000, the Plaintiff is in no better position by seeking to rely on the existence of a fiduciary duty. In this connection is it appropriate to note that nothing is alleged to bring the situation within the test expressed by Young J in Marcolongo v Manattrusi [2000] NSWSC 834 whether "there has been an unconscientious use by the solicitor … of his or her position of advantage in circumstances where the person in the position of the client was reasonably expecting a person in the position of a solicitor to act solely on his or her behalf". In any event the Defendant's fiduciary duty imposed no greater or longer obligation on the Defendant to advise the Plaintiff as to the conduct of the original proceedings or on the topic of appeal. Furthermore, the same limitation period applies, s23 of the Limitation Act providing:- "Sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy, to a cause of action for specific performance of a contract or for an injunction or for other equitable relief." 20 The nature of the Plaintiff's claims in contract and tort on the one hand and for breach of fiduciary duty on the other, are such as to result in the Limitation Act being applied by analogy to a claim for damages or equitable compensation for any breach of fiduciary duty said to have result in the loss of the proceedings against the Commonwealth or of any chance to appeal in that regard - c.f. Cassis v Kalfus [2003] NSWSC 649.. 21 In any event, the claim that the Defendant, between February 1995 and March 2001, failed to advise the Plaintiff that the latter had or may have had a cause of action against (the Defendant) arising out of (the Defendant's) conduct of the proceedings and that his was productive of loss is answered by the decision of the Court of Appeal in Sampson v Zucker (unreported, CA, 11 December 1996) where, in a case having a deal of similarity in the facts, the Chief Justice, with the concurrence of the other members of the bench observed:- "This is not a case in which the tortious act for which the Respondent is sued effectively prevented the Appellant from doing anything. There is no suggestion of any relevant tortious act of the Respondent which occurred at any time later than 31 March 1988. There was nothing to preclude the Appellant at any time thereafter from doing that which he in fact did on 18 February 1992, that is, seeking and obtaining independent legal advice concerning the adequacy of the compensation that he had received as a result of his settlement with the Government Insurance Office." 22 That is the situation here. Following receipt of the letter of 15 February 1995, and presumably accepting the advice not to appeal, there was nothing to prevent the Plaintiff from consulting others as to the adequacy of the Defendant's conduct of the proceedings against the Commonwealth or the appropriateness of the advice not to appeal. Any failure of the Plaintiff to pursue an action against the Defendant during this time was the result of actions and decisions of the Plaintiff himself, not of the Defendant. 23 I turn then to the allegations concerning the $14,000 and $21,000. There are a number of issues that arise. However, it may be said at the outset that there seems to be little or no factual dispute. In his affidavit and documents annexed thereto Mr Vardas detailed his dealings with the moneys and acknowledged impropriety in those dealings which seem to have been investigated by the Law Society. There has been no challenge to the accuracy of Mr Vardas' account. 24 In the filed Statement of Claim the Plaintiff seeks recovery of the $35,000 and interest thereon. Mr Vardas' account leads to the conclusion that the Plaintiff has not suffered loss in consequence of the former's dealings with those monies and one is compelled to the conclusion that as formulated in the original pleading, the claim will fail. 25 In the proposed amended pleading the Plaintiff asserts that by the Defendant's dealings with the sums of $14,000 and $21,000 the Defendant has been unjustly enriched by "the amount by which the interest paid by the defendant (whose office account was said to have then been in overdraft) was reduced by the deposit of the said sum of $14,000" to that account. There is a similar, although somewhat more convoluted, claim in respect of interest on the $21,000. The amounts claimed in this manner are said, in an affidavit of the Plaintiff's solicitor of 18 May 2005, to total $12,527.66. Although that amount is, by comparison with the amounts which generally concern this Court, small and is made up of a number of separate items, there is no practical way in which the claim, and the application to amend to make that claim, can be dealt with except by condescending to the detail. Given that the matter has, as an incident of the other issues before this Court been canvassed here, it would not be proper to simply send it off to another court to be re-argued there. 26 The $14,000 was the total of some smaller amounts and arose this way: On 25 April 1997 Mr Vardas sent to the Plaintiff an itemised Memorandum of Costs and Disbursements, the substance of which was as follows:- (a) Counsel (Peter Stone) fees $6,300.00 (b) Carrier fees $7.26 (c) RG Coshott's costs and disbursements $4,670.45 (d) Mr Vardas' costs $6,513.00 Total $16,590.71 27 Subsequently, as confirmed in a letter of 3 June 1997, Mr Vardas agreed to accept, in full settlement of his account, a cheque for $14,000 received on that day or shortly earlier. In these circumstances it is appropriate to regard the $14,000 as including the amounts nominated for Mr Stone and Mr Coshott and a balance of $3,029.55 for Mr Vardas. 28 The $14,000 was not deposited into Mr Vardas' trust account as it should have been but into his office account which was then in overdraft, thus saving him interest. However, had Mr Vardas deposited the $14,000 into his trust account, he would have been entitled to immediately withdraw the sum of $3,029.55 and pay it into his office account. To the extent of the use of and interest on this sum there has been no unjust enrichment. 29 The $6,300 owing to Mr Stone should have been paid immediately following its receipt from the Plaintiff or, at least within a reasonable, and in the circumstances, short time thereafter. In fact Mr Vardas paid Mr Stone $6,300 on 22 December 2003, the cheque being presented for payment on 24 February 2004. Thus Mr Vardas had, improperly, the use of that money from 3 June 1997 to 24 February 2004 and has, prima facie, been unjustly enriched by that use. There is nothing to suggest that Mr Vardas compensated Mr Stone for the undue delay in payment of the latter's fees and therefore, putting aside any discretionary considerations, the Plaintiff should be allowed to pursue a claim for the value of the unjust enrichment Mr Vardas enjoyed by improper use of the Plaintiff's money. 30 The $4,670.45 has not been paid to Mr Coshott and constitutes one of a number of amounts for which Mr Coshott is suing Mr Vardas in proceedings where there are numerous claims and counter-claims. On the material before me there is no reason to think that Mr Coshott will not recover the $4,670.45 paid by the Plaintiff on account of Mr Coshott's costs and disbursements and interest thereon. Of course it may be that Mr Vardas will be allowed to set off against this sum moneys owing to him by Mr Coshott in respect of counter claims but these do not affect the basic proposition that Mr Coshott will enjoy the benefit of the principal sum and interest thereon. Thus it seems to me that there is insufficient likelihood of Mr Vardas being unjustly enriched by this sum that an amendment to claim it should be allowed. 31 The interest rates apparently paid by Mr Vardas on his office account for most of the period since he received the $4,670.45 are set out below. At least at times they exceed those provided for under the Supreme Court Rules and upon Mr Coshott's entitlement to interest is as almost certain to be calculated. In these circumstances the Plaintiff may well have a claim for unjust enrichment to the extent of this difference although until the appropriate calculations are made, this cannot be determined. 32 In summary, so far as the $14,000 is concerned, the Plaintiff has at least an arguable case for unjust enrichment arising from the use of $6,300 for a period and may well have a similar and ongoing claim for the use of the further $4,670.45 but nothing more. 33 The history of events relevant to the claim of unjust enrichment in respect of the benefits derived by Mr Vardas in consequence of the $21,000 payment are as follows:- (i) 20.11.98 The Plaintiff paid $21,000 to Mr Vardas for payment to the Commonwealth in satisfaction of a costs order against the Plaintiff. (ii) 20.11.98 Mr Vardas deposited $21,000 into his trust account. (iii) 24.11.98 Mr Vardas improperly used the $21,000 to pay Mr Biscoe QC, counsel in other proceedings. (iv) 27.4.00 Mr Vardas negotiated an agreement whereby the Commonwealth agreed to accept $17,000 on account of the Plaintiff's costs liability. (v) 18.5.00 Mr Vardas paid $10,000 from his own funds to the Commonwealth. (vi) 5.6.00 Mr Vardas paid $7,000 from his own funds to the Commonwealth. (vii) 17.12.03 A solicitor for Mr Vardas sent a letter to the Plaintiff acknowledging failure to account for the difference between $21,000 and $17,000 and enclosing a cheque for that difference and a further sum of $4,586.85 on account of interest calculated on sums of $21,000 and $4,000 for different periods at the rate of 10%. (viii) 20.2.04 The Plaintiff presented the cheque for $8,586.85 for payment and it was paid.

34 The above account indicates that, except to the extent that reparation has been made, Mr Vardas improperly had use for a time of the whole, and for a time of part, of the $21,000 paid to him by the Plaintiff on 20 November 1998 from that date until 20 February 2004. True it is that it was two months earlier the cheque $4,586.85 had been forwarded by Mr Vardas' solicitor but in light of the impropriety which had occurred, the Plaintiff was clearly entitled to a reasonable time to decide whether to present the cheque then provided for payment. 35 The evidence does not establish what otherwise Mr Vardas would have done by way of paying Mr Biscoe QC fee's of $21,000 had Mr Vardas not had available to him that amount from the Plaintiff. However, given that he paid when he did and that his office account was in overdraft, it seems to me that it was not unreasonable to infer that he benefited to the extent of the interest he would otherwise have had to pay by further borrowing to the extent of $21,000 from that account. In these circumstances it seems to me that, again subject to the extent to which reparation has been made, the Plaintiff has a good, and certainly an arguable, claim against Mr Vardas calculated at the interest rates applying from time to time on Mr Vardas' office account during the following periods and on the following principal sums:-

$21,000 20.11.98-18.05.00 $11,000 19.05.00-05.06.00 $4,000 06.06.00-20.02.04

36 An affidavit from the Plaintiff's solicitor sets out the interest rates applying on the Plaintiff's office account as follows:-

03.06.97-29.06.97 12% 30.06.97-28.08.97 11.5% 29.08.97-16.02.98 11% 17.02.98-14.01.99 7.95% 15.01.99-18.05.05 7.75% 37 To see the significance of this data I have had my tipstaff prepare a calculation of compound interest using the information in the immediately preceding paragraphs. It should obviously be checked by the parties but it would seem that the gross benefit to the Plaintiff up to 18 May 2005 appears in Schedule 2 attached to these reasons to be $8,834.52. When one makes allowance for the amount of $4,586.85 interest paid to the Plaintiff in December 2003, the Plaintiff's claim up to 18 May 2005 would seem limited to $4,247.67. 38 A similar exercise by way of a calculation of the extent of any unjust enrichment flowing from use of the $6,300 results, according to Schedule 1 to these reasons to be $4,699.22. 39 I have not carried out such an exercise in respect of the $4,670.45 but the differences between the Supreme Court rate payable, if he succeeds, to Mr Coshott and the above-mentioned bank rates are so low that any amount payable in respect of Mr Vardas' unjust enrichment in connection with this sum seems likely to be less than $1,000. 40 As I have indicated above the Defendant has pleaded the Limitation Act by way of answer to the Plaintiff's present claims relating to the $14,000 and $21,000 and it may be anticipated that the Defendant will do the same if the amendment to Statement of Claim is allowed. In considering whether there is any point in the amendment I should accordingly direct attention to the impact of the Act on the new claims referable to those sums. 41 The Defendant's breaches of duty constituted by the misappropriations occurred, in relation to the $14,000, on or soon after 3 June 1997 and, in relation to the $21,000, on or about 24 November 1998. RSH CHECK WORDING Although the proposed amendment is itself outside the limitation period, if it is allowed, for the purposes of the Limitation Act, it will very probably operate from the date of commencement of proceedings - see Uniform Civil Procedure Act, s65. Hence the Limitation Act provides no reason why amendment relating to the $21,000 should not be allowed. Furthermore, while 3 June 1997 is more than 6 years prior to the commencement of these proceedings there is much to be said for the view that any cause of action the Plaintiff had in relation to the Defendant's dealings with the $14,000 was fraudulently concealed so that the limitation period would not have commenced to run until substantially later than April 1998. Thus I would not refuse to allow the amendment upon the ground that the Limitation Act would make it pointless doing so. 42 One other issue that arises is whether there is any possibility the Plaintiff could recover, as an incident of his claims relating to the $14,000 and the $21,000, the loss which he claims flowed from the Defendant's conduct of the proceedings against the Commonwealth or the advice, or absence of advice, that he said occurred in relation to those proceedings. I see no grounds upon which this could occur. 43 In summary, the Plaintiff's claims to recover the loss of the value of his claim against the Commonwealth and the loss of opportunity to appeal the decision of Freeman DCJ are doomed to be defeated by the Limitation Act. The claims in the present Statement of Claim for loss of the $14,000 and $21,000 are also bound to fail but the Plaintiff does have an arguable case based on the unjust enrichment of the Defendant flowing from breach of his fiduciary obligations relating to those sums. However any entitlement the Plaintiff may have in this regard is limited to the value of the Defendant's use of the sums of $6,300, possibly $4,670.45 and the $21,000, less some credit for interest paid. The parties should have an opportunity to consider the calculations above referred to but the claim maximum amount the Plaintiff seems able to achieve seems to be of the order of $4,247.67 + $4,699.22 + $1,000 - in round figures $10,000. Having regard to the jurisdictional limits of the District and Local Courts, it is not obvious that the case should be allowed to remain in this Court much longer. 44 That said, it may be that the decisions and remarks I have made above will enable the parties to resolve the outstanding issues. 45 Before I conclude these Reasons, it is appropriate that I refer to the following. Putting aside a notation that my decision was reserved, the last paragraph of the transcript of proceedings on 18 May records:- "I note the parties are going to exchange written submissions on matters left outstanding within 7 days and supply to my chambers within 14 days those submissions and any in response." 46 On behalf of the Defendant submissions were provided by letter dated 1 June 2005. The letter indicated that a copy of them had been sent to the Plaintiff's Solicitors on 25 May and observed that "the timetable ordered by his Honour was for the parties to exchange submissions within seven days … and any submissions in reply 7 days after that …" and said that none had been received from the Plaintiff. On 7 June the solicitors for the Plaintiff wrote advising that the Defendant's submissions raised fresh matters which required amendment of the Plaintiff's written submissions, counsel had been in a lengthy trial and expected to be able to lodge the submissions "this week". The letter proceeded:- "Counsel seeks the Court's indulgence by extending the time for filing of submissions." 47 At my instigation my Associate replied by letter on 16 June 2005:- "Mr Justice Hulme has requested that I inform you, absent consent of all parties for a hearing, he is not able to extend the time for the provision of Mr Wasilenia's submissions. However, the delay in those submissions is not presently creating a problem because his Honour is carrying out other work which has priority." 48 Nothing further was heard from either side. It is obvious once regard is had to the transcript of proceedings that all three letters show misapprehension of the situation which prevailed at the conclusion of the hearing as in fact no orders limiting the time for the making of submissions were made. 49 On 1 September I had my Associate write again adverting to the fact that no order had been made and expressing concern that the absence of submissions from the Plaintiff may have been contributed to by the letter of 16 June and affording the Plaintiff a further opportunity to provide submissions. On 29 September a Notice of Change of Solicitor on the part of the Plaintiff was filed. I was then on leave and on 15 November my Associate wrote to the new Solicitors for the Plaintiff enclosing a copy of my letter of 1 September. Of course a copy of this letter was also sent to the Solicitors for the Defendant. On 22 November 2005 the new Solicitor for the Plaintiff wrote drawing attention to Walmsley v Cosentino [2001] NSWCA 403. 50 That letter recorded that a copy of it was sent to the solicitors for the Defendant. I do not suggest they should have done so but I record that they have not communicated with my Associate since and I have not felt it necessary to either communicate or to delay this judgment further. 51 I should also record that, so far as I can recall, there was no attempt during the course of proceedings before me to deal with the topic of the Notice to Produce referred to in the Notice of Motion. 52 I set out below the orders which seem to me appropriate. However, in some of their aspects and in their detail these were not the subject of argument and before formally making the orders, it seems to me that the parties should have an opportunity of considering what I propose. To that intent, having published these reasons. I will stand the proceedings over for a short time on which occasion any other outstanding issues can be dealt with. 53 The orders I have in mind are: 1. Strike out the Statement of Claim. 2. Dismiss the Plaintiff's application to amend in accordance with the draft Amended Statement of Claim annexed to the Affidavit of Peter James Ryner sworn 18 May 2005. 3. Stand over the proceedings to February 2006 to the intent that an order will then be made permitting the Plaintiff to file an Amended Statement of Claim which accords with these Reasons. 4. Transfer the proceedings to the Local Court at the Downing Centre, Elizabeth Street, Sydney.

MONTH PRINCIPAL RATE INTEREST 3/6/1997 - 29/6/1997 6300.00 12% 53.85 Jun-1997 6353.85 11.50% 2.00 Jul-1997 6355.85 11.50% 62.07 1/8/1997 - 28/8/1997 6417.92 11.50% 56.61 29/8/1997 - 31/8/1997 6474.53 11% 3.90 Sep-1997 6478.43 11% 58.57 Oct-1997 6537.00 11% 61.07 Nov-1997 6598.07 11% 59.65 Dec-1997 6657.72 11% 62.19 Jan-1998 6719.91 11% 62.78 1/2/1998 - 16/2/1998 6782.69 11% 32.70 17/2/1998 - 29/2/1998 6815.39 795% 17.81 Mar-1998 6833.20 7.95% 46.13 Apr-1998 6879.33 7.95% 44.95 May-1998 6924.28 7.95% 45.24 Jun-1998 6969.52 7.95% 45.54 Jul-1998 7015.06 7.95% 47.36 Aug-1998 7062.42 7.95% 47.68 Sep-1998 7110.10 7.95% 46.45 Oct-1998 7156.55 7.95% 48.32 Nov-1998 7204.87 7.95% 47.07 Dec-1998 7251.94 7.95% 48.96 1/1/1999 - 14/1/1999 7300.90 7.95% 22.26 15/1/1999 - 31/1/1999 7323.16 7.75% 26.43 Feb-1999 7349.59 7.75% 45.25 Mar-1999 7394.84 7.75% 48.67 Apr-1999 7443.51 7.75% 47.41 May-1999 7490.92 7.75% 49.03 Jun-1999 7540.22 7.75% 48.03 Jul-1999 7588.25 7.75% 49.94 Aug-1999 7638.19 7.75% 50.27 Sep-1999 7688.46 7.75% 48.97 Oct-1999 7737.43 7.75% 50.92 Nov-1999 7788.35 7.75% 49.61 Dec-1999 7837.96 7.75% 51.59 Jan-2000 7889.55 7.75% 51.93 Feb-2000 7941.48 7.75% 47.21 Mar-2000 7988.69 7.75% 52.58 Apr-2000 8041.27 7.75% 51.22 May-2000 8092.49 7.75% 53.26 Jun-2000 8145.75 7.75% 51.88 Jul-2000 8197.63 7.75% 53.95 Aug-2000 8251.58 7.75% 54.31 Sep-2000 8305.89 7.75% 52.09 Oct-2000 8358.79 7.75% 55.01 Nov-2000 8413.80 7.75% 53.59 Dec-2000 8467.39 7.75% 55.73 Jan-2001 8523.12 7.75% 56.01 Con't 8579.13 7.75% 52.82 Feb-2001 Mar-2001 8631.95 7.75% 56.81 Apr-2001 8688.76 7.75% 55.34 May-2001 8744.10 7.75% 57.55 Jun-2001 8801.65 7.75% 56.06 Jul-2001 8857.71 7.75% 58.26 Aug-2001 8195.97 7.75% 58.68 Sep-2001 8254.65 7.75% 52.58 Oct-2001 8307.23 7.75% 54.67 Nov-2001 8361.90 7.75% 53.26 Dec-2001 8415.16 7.75% 55.39 Jan-2002 8470.55 7.75% 55.75 Feb-2002 8526.30 7.75% 52.50 Mar-2002 8578.80 7.75% 56.46 Apr-2002 8635.26 7.75% 55.00 May-2002 8690.26 7.75% 57.20 Jun-2002 8747.46 7.75% 55.72 Jul-2002 8803.18 7.75% 57.94 Aug-2002 8861.12 7.75% 58.32 Sep-2002 8919.44 7.75% 56.81 Oct-2002 8976.25 7.75% 59.08 Nov-2002 9035.33 7.75% 57.55 Dec-2002 9092.88 7.75% 59.85 Jan-2003 9152.73 7.75% 60.24 Feb-2003 9212.97 7.75% 54.77 Mar-2003 9267.74 7.75% 61.00 Apr-2003 9328.74 7.75% 59.42 May-2003 9388.16 7.75% 61.79 Jun-2003 9449.95 7.75% 60.19 Jul-2003 9510.14 7.75% 62.59 Aug-2003 9572.73 7.75% 63.00 Sep-2003 9635.73 7.75% 61.37 Oct-2003 9697.10 7.75% 63.82 Nov-2003 9760.92 7.75% 62.17 Dec-2003 9823.09 7.75% 64.65 Jan-2004 9887.74 7.75% 65.08 Feb-2004 9952.82 7.75% 61.28 Mar-2004 10014.14 7.75% 65.91 Apr-2004 10080.05 7.75% 64.20 May-2004 10144.25 7.75% 66.77 Jun-2004 10211.02 7.75% 65.04 Jul-2004 10276.06 7.75% 67.63 Aug-2004 10343.69 7.75% 68.08 Sep-2004 10411.77 7.75% 66.32 Oct-2004 10478.09 7.75% 68.96

Nov-2004 10547.05 7.75% 67.18 Dec-2004 10614.23 7.75% 69.86 Jan-2005 10684.09 7.75% 70.32 Feb-2005 10754.41 7.75% 63.93 Mar-2005 10818.34 7.75% 71.20 Apr-2005 10889.54 7.75% 69.36 1/5/2005 - 18/5/2005 10958.90 7.75% 41.88 11000.78

MONTH PRINCIPAL RATE INTEREST 20/11/1998 - 30/11/1998 21000 7.95% 45.73 Dec-1998 21045.73 7.95% 142.1 1/1/1999 - 14/1/1999 21187.83 7.95% 64.6 15/1/1999 - 31/1/1999 21252.43 7.75% 72.2 Feb-1999 21324.63 7.75% 126.77 Mar-1999 21451.4 7.75% 141.19 Apr-1999 21592.59 7.75% 137.54 May-1999 21730.13 7.75% 143.03 Jun-1999 21873.16 7.75% 139.32 Jul-1999 22012.48 7.75% 144.89 Aug-1999 22157.37 7.75% 145.84 Sep-1999 22303.21 7.75% 142.06 Oct-1999 22445.27 7.75% 147.73 Nov-1999 22593 7.75% 143.91 Dec-1999 22736.91 7.75% 149.65 Jan-2000 22886.56 7.75% 150.64 Feb-2000 23037.2 7.75% 141.85 Mar-2000 23179.05 7.75% 152.56 Apr-2000 23331.61 7.75% 148.61 1/5/2000 - 19/5/2000 23516.22 7.75% 94.87 20/5/2000 - 31/5/2000 13611.09 7.75% 31.79 1/6/2000 - 5/6/2000 13642.88 7.75% 14.48 6/6/2000 - 30/6/2000 6657.36 7.75% 35.33 Jul-2000 6692.69 7.75% 44.05 Aug-2000 6736.74 7.75% 44.34 Sep-2000 6781.08 7.75% 43.19 Oct-2000 6824.27 7.75% 44.91 Nov-2000 6869.18 7.75% 43.75 Dec-2000 6912.93 7.75% 45.5 Jan-2001 6958.43 7.75% 45.8 Feb-2001 7004.23 7.75% 41.64 Mar-2001 7045.87 7.75% 46.37 Apr-2001 7092.24 7.75% 45.17 May-2001 7137.41 7.75% 46.97 Jun-2001 7184.38 7.75% 45.76 Jul-2001 7230.14 7.75% 47.59 Aug-2001 7277.73 7.75% 47.9 Sep-2001 7325.63 7.75% 46.66 Oct-2001 7372.29 7.75% 48.52 Nov-2001 7420.81 7.75% 47.26 Dec-2001 7468.07 7.75% 49.15 Jan-2002 7517.22 7.75% 49.47 Feb-2002 7566.69 7.75% 46.59 Mar-2002 7613.28 7.75% 50.11 Apr-2002 7663.39 7.75% 48.81 May-2002 7712.2 7.75% 50.76 Jun-2002 7762.96 7.75% 49.44 Jul-2002 7812.4 7.75% 51.42 Aug-2002 7863.82 7.75% 51.76 Sep-2002 7915.58 7.75% 50.42 Oct-2002 7966 7.75% 52.43 Nov-2002 8018.43 7.75% 51.07 Dec-2002 8069.5 7.75% 53.11 Jan-2003 8122.61 7.75% 53.46 Feb-2003 8176.07 7.75% 50.34 Mar-2003 8226.41 7.75% 54.14

Apr-2003 8280.55 7.75% 52.74 May-2003 8333.29 7.75% 54.85 Jun-2003 8388.14 7.75% 53.43 Jul-2003 8441.57 7.75% 55.56 Aug-2003 8497.13 7.75% 55.92 Sep-2003 8553.05 7.75% 54.48 Oct-2003 8607.53 7.75% 56.65 Nov-2003 8664.18 7.75% 55.18 Dec-2003 8719.36 7.75% 57.39 Jan-2004 8776.75 7.75% 57.77 1/2/2004 - 20/2/2004 8834.52 7.75% 37.51

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.