National Australia Bank v Sayed

Supreme Court of NSW|2018-02-09|Before: Davies J

The application as a whole

There is a further reason that orders 1 to 3 should be refused.
Section 58 of the Civil Procedure Act 2005 (NSW) is relevant. In Sayed (No. 6) I discussed the application of s 58 to Mr Sayed's then application to amend the cross-claim. Everything that I said there at [44]-[48] is relevant on the present application to amend the cross-claim. It also relevant to a consideration of the application to remove Dibbs Barker as NAB's solicitors, and to the leave sought to amend to add a claim by Mr Sayed against Dibbs Barker.
All of this material was available to Mr Sayed at a much earlier time. Despite at times being advised and assisted by solicitors and senior counsel the present application is only now being made well after the time the matter was set down for final hearing and only a few months before that final hearing. No explanation is provided for the delay in making the present application: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [102]-[103].
As a matter of discretion, even if other matters were established, I would decline to permit the amendments and to order the removal of the solicitors.
The matter should go to trial on the second further amended cross-claim filed 28 April 2017 and the defence thereto.

Conclusion

The notice of motion filed 28 November 2017 should be dismissed. No further notices of motion are to be filed in the proceedings without my leave. Mr Sayed has been told twice in the past that where proceedings are being case-managed motions are not to be filed without leave. He was so informed in an email by my Associate on 28 August 2016 and by me at a directions hearing on 5 September 2016.
Accordingly, I make the following orders: (1) Dismiss the notice of motion filed 28 November 2017. (2) The cross-claimant is to pay the cross-defendant's costs of the notice of motion. (3) No further notices of motion are to be filed or served without my leave or without the leave of a judge of the Court.

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: 15 February 2018

Evidence Act 1995(NSW)ss 117,118

Judgment

These proceedings commenced on 28 May 2010. The National Australia Bank claimed judgment for possession of a property owned by Mr and Mrs Sayed in Gahans Lane, Woonona. On 22 August 2011 Mr Sayed filed a defence and cross-claim against the Bank.
By an amended first cross-claim filed 18 August 2015 Mr Sayed sought declarations; first, that NAB breached its duty to act in good faith in exercising a power of sale over another property he owned, consisting of two adjoining lots, in Rothery Road, Corrimal that also secured NAB's debt; and secondly, that NAB acted unconscionably in relation to the Corrimal loan and mortgage. The substance of the claim was that the Corrimal property had been sold at an undervalue.
The proceedings were listed before Adams J on 20 August 2012. Negotiations took place between the parties and their lawyers to settle the proceedings. Those negotiations led to the signing of what was called an In Principle Agreement dated 23 August 2012. An issue arose as to whether the Agreement included a settlement of the cross-claim concerning the sale of the Corrimal property. In National Australia Bank v Sayed (No. 5) [2016] NSWSC 669 I noted the Court of Appeal's decision that the In Principle Agreement excluded the claim that Mr Sayed was making in respect of the Corrimal property but included matters concerned with the Woonona property: Sayed v National Australia Bank Limited [2013] NSWCA 304.
By a notice of motion filed 4 March 2016 Mr Sayed sought leave to file a further amended cross-claim and sought the supply of unredacted versions of certain bank documents. The first issue I had to determine was the extent of the claims in the proposed amended cross-claim Mr Sayed wished to file. In Sayed (No. 5) I refused leave for the proposed cross-claim to be filed because it did not comply with r 19.5 Uniform Civil Procedure Rules 2005 (NSW) and because it sought to plead a number of matters that, for reasons I there gave, could not be pleaded. The result was that Mr Sayed could claim in respect of an alleged sale at an undervalue of the Corrimal property, but not in relation to the loan or security associated with the Woonona property. However, I did not preclude Mr Sayed from advancing a properly pleaded further amended cross-claim.
I also held that privilege had not been waived over the documents which were otherwise protected from disclosure by client legal privilege.
On 5 September 2016 I heard a further application from Mr Sayed for leave to file a further amended first cross-claim. I did not require Mr Sayed to file a further notice of motion to do so, and I identified that the proposed further amended first cross-claim was the document behind Tab 1 in the court book handed up at the hearing of the application: National Australia Bank v Sayed (No. 6) [2016] NSWSC 1253.
I held in Sayed (No. 6) that Mr Sayed should not be permitted to claim in relation to his assertion that one of the blocks of land in Rothery Street, Corrimal was sold as landlocked land when in fact it was not so landlocked. My reasons for doing so can be briefly stated. If Mr Sayed was permitted to argue such a claim and was successful in doing so, NAB would be likely to have causes of action against its agent, MERC and MMJ. However, those claims would now be statute barred. Further, I held that Mr Sayed was aware of the landlocking issue by August 2012. Despite being so aware, he did not apply to amend his cross-claim until 4 March 2016. Any claims NAB might have had against MERC and MMJ needed to be commenced prior to 19 February 2016. There was no evidence of fraud or mistake that would extend the limitation period. Finally, no satisfactory explanation was provided by Mr Sayed for the delay in making the claim based on the landlocked land.
On 25 October 2016 Mr Sayed filed a further amended first cross-claim. In that pleading Mr Sayed included words in paragraph 32 that referred to landlocking and included particular (k) under paragraph 33 which similarly dealt with landlocking. Those matters were drawn to my attention at a directions hearing. I ordered that they be struck out for the reasons I there gave: National Australia Bank v Sayed (No. 8) [2017] NSWSC 89.
Mr Sayed filed a further notice of motion seeking leave to amend his cross-claim on 28 March 2017. I had given Mr Sayed leave to file this notice of motion limited to a clarification of the matters determined in Sayed (No. 8). However, Mr Sayed's notice of motion sought amendments beyond those for which I had given leave. I gave judgment in respect of that notice of motion on 13 April 2017 and by that judgment I gave leave to Mr Sayed to file a second further amended cross-claim with the amendments specified in the judgment: National Australia Bank v Sayed (No. 9) [2017] NSWSC 389. The Second Further Amended Cross-Claim was filed on 28 April 2017.
On 30 June 2017 I was satisfied that the proceedings were sufficiently prepared to permit the parties to obtain a hearing date. The parties were directed to approach the Listing Manager for a hearing of the cross-claim by no later than 4 July 2017, with an estimated hearing time of seven days. The parties subsequently obtained a date for hearing commencing 30 April 2018.
Without any leave to do so, Mr Sayed filed a notice of motion on 28 November 2017 seeking the following orders: 1. An order removing Dibbs Barker as acting solicitor for the cross respondent. 2. An order for the cross respondent to provide un-redacted documents as scheduled in the affidavit of Alexandra Felicity Kirby sworn 10 May 2016. 3. An order granting leave to the cross claimant to further amend the cross claim statement to include pleadings of 'Land Locking': a. The cross respondent proceeded in the Corrimal sale under the belief that lots 41 and 42 were and/or would become landlocked therefore having a lower market value and could also not be sold separately 4. Leave granted to issue subpoena on: a. Dibbs Barker b. Allmain Pty Ltd 5. Any other order the court deems fit.
By reason of my conducting a criminal trial in December 2017 I was unavailable to hear the notice of motion. I directed that it be listed before the Duty Judge, particularly as the matter of any amendment to the pleadings needed to be resolved at a sufficient time before the substantive proceedings were listed for hearing. The Bank submitted to the Duty Judge, Walton J, that the Motion would take approximately a day to hear and, in any event, the matter was more appropriately dealt with by me because I had case-managed the proceedings to that point. For those reasons, the motion ultimately came before me for hearing on 9 February 2018.
The affidavit in support of the motion consisted only of the annexing of an email from Mr Sayed to the Bank's solicitors, Dibbs Barker, and that firm's reply. The email from Mr Sayed said this: On 28 June 2016 by email I wrote to Ms Hodgman of Dibbs Barker, Melissa Thomas and Peter Fieldhouse of NAB in reply to an offer made by the NAB to settle proceedings, in my reply I identified and made an allegation of a conflict of interest between your firm Dibbs Barker and NAB; I continue to hold both NAB and Dibbs Barker responsible for all the errors made during the Corrimal Possession & subsequent Sale at an undervalue which resulted in these proceedings, further it is my opinion that Dibbs Barker has and always had a conflict of interest with NAB in relation to this litigation and Dibbs Barker should withdraw immediately. I note that your firm did not withdraw and also did not provide me with a reply to that allegation. I still hold the strong view that there lies a conflict of interest because the evidence at hand clearly shows that Dibbs Barker provided advice to NAB for matters of access between the Corrimal lots and offers received which in turn affected the outcome of the sale, I believe that the advice given was defective and will be tested at the cross claim hearing in April 2018. If during the cross claim hearing the evidence before the court shows that Dibbs Barker was negligent in its advice to NAB, then NAB may have a claim of professional negligence against Dibbs Barker and here lies the problem. Dibbs Barker cannot ethically represent NAB in this matter when it also has an interest in the outcome of these proceedings which is (sic) not been sued by NAB. I seek your urgent reply by way of affidavit from Ms Hodgman that no conflict exists, please be advised that unless an adequate reply is not (sic) received then I intend to file a notice of motion seeking an order that Dibbs Barker be removed as acting solicitor. I am attaching a copy of the Affidavit of Alexandra Felicity Kirby sworn 10 May 2016 and a copy of the Journal Entries from MERC for your reference. (emphasis in original)
The reply from Dibbs Barker said that the firm was not aware of any facts or circumstances creating any conflict of interest between the firm and NAB. They required Mr Sayed to set out in detail including by reference to documents, the facts, matters and circumstances that he asserted gave rise to an alleged conflict of interest.
When the matter came before Walton J as the Duty Judge, his Honour made procedural directions that required Mr Sayed to identify the matters on which he relied to support the removal of Dibbs Barker as NAB's solicitors. In a document dated 12 December 2017 Mr Sayed identified the following four affidavits on which he relied: 1. Murray Smith - 24 November 2015; 2. Alexandra Felicity Kirby - 10 May 2016; 3. Affidavit of Emma Jane Hodgman - 19 July 2016; and 4. Danielle Catherine Kuti - 5 September 2012. Mr Sayed identified three judgments upon which he relied being the Court of Appeal's judgment, already referred to, concerning specific performance of the agreement reached, the judgment of Harrison AsJ in relation to specific performance of the In Principle Agreement: National Australia Bank v Sayed (No. 4) [2015] NSWSC 420, and my judgment in Sayed (No. 6).
Mr Sayed thereafter set out what he described as "Facts" and "Allegations" as follows: Facts 1. Dibbs Barker Solicitors acted as an agent in roles as "Solicitor" and "Property Conveyancer" for the National Australia Bank "NAB" on the Corrimal repossession and sale between May 2009 and April 20 providing professional advice. 2. A shortfall occurred in the Corrimal sale. 3. Dibbs Barker Solicitors advised on the strategy and filed proceedings against the Sayed's in the Supreme Court in May 2010 on behalf of "NAB". 4. NAB are on record stating that legal proceedings would have not been filed if no shortfall existed. 5. Dibbs Barker Solicitor continue to represent "NAB" in these proceedings. Allegations 1. Dibbs Barker Solicitors played a major role providing NAB with professional advice during the course of the Corrimal possession and sale which led NAB and its principle (sic) agent MERC to believe that the Corrimal Lots were "land-locked", could not be sold separately therefore rejecting an offer for the sale of one lot, that advice was defective. 2. Dibbs Barker Solicitors redacted documents and is claiming privilege on behalf of NAB whereby it can be shown that they are professional (sic) negligent when they acted as an agent during the course of the Corrimal possession and sale. 3. Dibbs Barker solicitors have abused its position acting as NAB's solicitor, steering the proceedings in directions to conceal its errors, not accepting amendments to clause 7a (2012) is one example, objecting to land-locking pleadings is another. 4. That Dibbs Barker solicitors recklessly and unethically continue to represent the National Australia Bank in this matter knowing haven (sic) provided defective professional advice during the course of the Corrimal possession and sale causing the Corrimal sale at undervalue to the detriment of the Sayed's.
Mr Sayed informed Walton J that orders 2 and 3 sought in the notice of motion were dependent on order 1 first being made. However, when the matter was argued before me, Mr Sayed said he was seeking all four orders in the notice of motion.
On 5 February 2018, the motion then having been fixed before me for hearing on 9 February 2018, Mr Sayed forwarded an email to Dibbs Barker saying that, if I made order 1 sought in the notice of motion, Mr Sayed would be seeking to amend the cross-claim to include Dibbs Barker as a second cross-defendant. He provided a proposed draft cross-claim seeking a declaration that Dibbs Barker was professionally negligent and engaged in unethical and unlawful conduct, and an order that they pay him damages arising from those matters. The pleading, apart from inserting two early paragraphs identifying Dibbs Barker, simply added some 13 paragraphs at the end asserting negligence by Dibbs Barker in the advice they gave to NAB in relation to the sale of the Corrimal land. The pleading asserted that if a shortfall had not occurred, such shortfall being the fault of Dibbs Barker, NAB would not have begun legal proceedings against Mr Sayed to recover further monies.

(1) Should the solicitors be removed?

In Kallinicos v Hunt [2005] NSWSC 1181 Brereton J said: [33] As Young CJ in Eq pointed out in Belan v Casey, [15], until Prince Jefri [Prince Jefri Bolkiah v KPMG [1999] 2 AC 222] three bases were advanced for granting injunctions restraining solicitors from acting in proceedings. The first was a breach of confidence, where to permit the solicitor to continue to act (usually, though not invariably, against a former client) would involve a risk that the solicitor might use, or be bound to use, information which he or she held subject to a duty of confidence to the former client. The second was breach of a duty of loyalty, where acting against a former client was said to be inconsistent with the solicitor's fiduciary obligation of loyalty to that former client. The third was the court's inherent supervisory jurisdiction over solicitors. [34] The first basis - breach of confidence - involves a claim to enforce a contractual or equitable right, namely, the protection of a confidence which the solicitor was bound, by the contract of retainer and/or in equity, to maintain, even after termination of the retainer. It depends on ordinary contractual and equitable principles. The second was also framed as depending on ordinary equitable principles, said to be derived from a solicitor's fiduciary duty. Thus each of the first two bases involved the assertion of legal rights which might as easily arise in relationships other than between solicitor and client (for example, as in Prince Jefri, between accountant and client). The third basis was quite different, depending not at all upon equitable (or other) rights of the parties, but on the court's inherent supervisory jurisdiction over its officers, including its solicitors. It is that third basis for intervention that the plaintiffs seek to invoke in this case.
His Honour then examined the cases to see if Prince Jefri denied the availability of the court's supervisory jurisdiction to restrain a solicitor from acting against a former client other than where confidences were put in jeopardy. His Honour concluded: [76] The foregoing authorities establish the following:- … • … [T]he court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode; Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt]. Prince Jefri does not address this jurisdiction at all. Belan v Casey and British American Tobacco are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to acknowledge its continued existence. • The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications]. • The jurisdiction is to be regarded as exceptional and is to be exercised with caution [Black v Taylor; Grimwade v Meagher; Bowen v Stott]. • Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause [Black v Taylor; Grimwade v Meagher; Williamson v Nilant; Bowen v Stott]. • The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief [Black v Taylor; Bowen v Stott].

(2) Redacted documents

In Sayed (No. 5) I dealt with the question of whether documents that had been redacted and produced in answer to a Notice to Produce should be provided in an unredacted form. I held that there had been no waiver of client legal privilege attaching to the documents. The matter was argued for Mr Sayed by Mr Hall SC.
Nothing in the evidence now relied upon by Mr Sayed provides any basis for a claim that privilege has been waived. Nor is there any other reason why those documents should be disclosed.
The present application amounts to an application under r 36.16(3) UCPR to set aside or vary any judgment or order. Especially where such a judgment or order has been made after a contested interlocutory application, it is necessary for the person seeking a variation of the order to show a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the court on the hearing of the original application: Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46; Levy v Bablis [2012] NSWCA 77; Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82 at [11]-[12].
Mr Sayed submitted that a reading of the affidavit of Alexandra Kirby shows that the documents over which privilege is claimed were not communications between Dibbs Barker and NAB but, rather, were diary notes. The relevant documents are described in this way: Diary note [date]. Communication between client, agent and legal adviser containing advice concerning [subject matter].
Section 118 of the Evidence Act 1995 (NSW) provides: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or (b) a confidential communication made between 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. Section 117 defines confidential communication and confidential document as follows: confidential communication means a communication made in such circumstances that, when it was made: (a) the person who made it, or (b) the person to whom it was made, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. confidential document means a document prepared in such circumstances that, when it was prepared: (a) the person who prepared it, or (b) the person for whom it was prepared, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

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