Provident Capital Ltd v Anderson & Ors

ex tempore Judgment 1This is an application by the plaintiff, Provident Capital Limited ("Provident"), to have the first defendant's solicitor, Mr Nicholas Coren, pay the costs of a notice of motion it brought seeking an injunction preventing the first defendant, Mr Ian Anderson, from entering upon property in respect of which it had an order for possession in its favour.

Background 2Some time in 2006 Mr Anderson granted to Provident a mortgage over property he owned, known as Barry Station (the "Property"). Barry Station appears to be a large rural property near or via Nundle. The mortgage secured repayments of a substantial amount advanced by Provident. Apparently a goods mortgage was also granted. 3As I understand it, in 2009 Mr Anderson went into default. In 2010 Provident commenced these proceedings seeking, inter alia, an order for possession of the Property. In April 2011 an injunction was granted preventing Mr Anderson from entering near or upon the Property. 4On 9 June 2011 consent orders were entered giving Provident possession of the property. It is not entirely clear what the effect of the order for possession was upon the injunction, but it does not matter. 5It appears that the balance of the litigation has until recently involved disputation concerning the goods mortgage (see Provident Capital Ltd v Anderson [2012] NSWSC 525). 6On 8 May 2013 Mr Coren advised the solicitors of Provident that he now acted for the defendants in the proceedings, which included Mr Anderson. His email advising this also made assertions as to Provident's compliance with the Farm Debt Mediation Act 1994 (the "Act") when it sought to enforce its security. He referred to the decision of the High Court of Australia in Waller v Hargraves Secured Investments Ltd [2012] HCA 4; 245 CLR 311. He asserted to Provident solicitors that "the proceedings are void by reason of Provident's breach" of the Act. Mr Coren's email enclosed an unfiled motion seeking summary dismissal of the proceedings. The unfiled motion did not expressly seek orders in relation to the consent orders that had previously been entered. The enclosing of an unfiled notice of motion was odd in that on 3 May 2013 Mr Coren had been sent filed versions of those documents. 7In any event, on 9 May 2013 the proceedings were listed for directions in this Court. There was no appearance on behalf of Mr Anderson or the other party for whom Mr Coren acted. The solicitors for Provident did appear. The proceedings were adjourned until 30 May 2013 in the Registrar's list. 8On 10 May 2013 the solicitors for Provident responded to Mr Coren's assertions concerning the Act. They provided reasons why, in their view, nothing that had occurred was contrary to its provisions. 9As at May 2013, and for some time, either Provident or its receiver had arranged for Robert Emerton to reside at Barry Station. He lived there with his fiancée, Ms Tara Bondarenko and their two young children. On Saturday 11 May 2013 at approximately 10.30am, Ms Bondarenko was walking towards the house on the Property when she saw a vehicle pull up outside the house. There were four men who came out of the vehicle, one of whom was Mr Anderson. One of them had a digital camera. Ms Bondarenko recalls the events that followed: "I had a conversation with Mr Anderson to the following effect. Anderson: You have to get off the property today. I'm getting back what's owed to me for the past four years. I'm now back in ownership of Barry Station. Mr Anderson passed me a laminated piece of paper at this time. I did not read the paper as I was watching Mr Anderson, the three men with him and my two children behind me. I felt concerned for my safety and the safety of my children. I continued to have a conversation with Mr Anderson to the following effect: Anderson: You're not to touch the cattle. Bondarenko: What about our horses and sheep? Anderson: You can take those but you're to be off the property by the end of the today or you will be in trouble with the law for trespassing. Are any of the gates locked? I am going to be driving around. Bondarenko: No." 10Ms Bondarenko stated that Mr Emerton came upon the scene. Mr Emerton recounts being handed the laminated letter by Ms Bondarenko. At the time it was handed to him she said words to the effect "He says we have to get off the property". He also recounts finding seven additional copies of the letter attached to various locations around Barry Station. 11The laminated letter in question was on the letterhead of Mr Coren's firm. It was dated 10 May 2013, and addressed to Henry Davis York. It stated as follows: "Henry Davis York Solicitors BY EMAIL: '' Dear Sir RE: Anderson and Coughlan [sic] ats Provident Capital (In Liquidation) Pty Limited We refer to our email dated 8 May 2013 and note that at the directions hearing on 9 May 2013, the proceedings were adjourned for further directions hearing on 30 May 2913 [sic]. As both the Supreme Court equity proceedings at common law proceedings are void under s 6 of the Farm Debt Mediation Act, for reasons as detailed previously, the consent orders entered into in the common law proceedings will be deemed never to have been entered into and our client's damages against your client are referable to the amount which will place him in the position he would have been in, if not for the plaintiff's conduct in breach of s 6 of the Farm Debt Mediation Act, will be significant. Of course, under the Corporations Act, our client's claim for damages will be set off, without any reduction which may apply to unsecured creditors in the liquidation, against any amount which it is alleged to be owing by him. Indeed, it may be that our client's claim exceeds the amount alleged owing to your client as he estimates the loss will be many millions of dollars is referable to many issues, such as, conversion of livestock and sale of machinery. Therefore, so as to crystallise our client's loss, we advise that or [sic] client will attend the property at 10.00 am on 11 May 2013 to enter into lawful possession of the property. Please ensure that any persons who may otherwise have been in occupation of the property under the consent orders or otherwise as anticipated by the unlawful possession by the plaintiff, have removed themselves from the property prior to this date. Should our client be prevented from entering into possession of the property on 11 May 2013, such conduct will be relied upon as a component of his claim for damage, aggravated dmages [sic] and exemplary damageds [sic] associated with your client's unlawful possession of the property. IF you have any enwuiries [sic], you may contact our office." (emphasis added) 12Later that afternoon, the solicitor for Provident became aware of what had happened at Barry Station that morning. He wrote an email to Mr Coren in effect complaining about what had happened. The solicitor wrote a further email on Monday 13 May 2013 reciting the course of events and requesting an urgent undertaking from Mr Coren that his client would not cause anyone to attempt to enter Barry Station. This email referred to the letter of 10 May 2013 from Mr Coren that had been presented to Ms Bondarenko on 11 May 2013 by Mr Anderson. The email noted that, although it was addressed to Henry Davis York, it had not been sent to the firm and requested Mr Coren to "check [his] records in order to confirm whether it was sent". 13Ms Bondarenko and Mr Emerton recount that, in the very early hours of the morning of Tuesday 14 May 2013, a vehicle came onto their Property with its lights on. There is obviously a basis for suspecting this conduct was connected in some way to Mr Anderson, but it is not necessary for me to make any finding to that effect. 14On the morning of Tuesday 14 May 2013 Mr Coren responded to the email that had been sent to him on 13 May 2013. The response asserted that the correspondence had been sent to Provident's solicitors, and asserted that "We received no reply to such correspondence whatsoever". The email further asserted that: "The property has been unlawfully occupied by your client and even though Supreme Court orders currently exist you have been on notice of our client's position that the proceedings were void since 7 May 2013 wherein we advised you of such position by email and no response was provided by you". 15Presumably the reference to 7 May 2013 is to the email of 8 May 2013, to which I have already referred. There was a response to that email provided by the solicitors for Provident (see [8]). Moreover, the solicitors for Provident, in their affidavits, have denied receipt of the letter of 10 May 2013. I am satisfied that Mr Coren did not send that letter to Henry Davis York on that day. I am satisfied that if a letter in those terms had been sent it would have raised sufficient alarm bells to warrant some form of preventive action being taken. 16Mr Coren's email of 14 May 2013 further recited that his client had no intention of breaching the current orders and was open to achieving "some amicable arrangement to allow him possession of his property". Not surprisingly this response did not satisfy Provident. Its solicitors and counsel approached me as Duty Judge on 14 May 2013 and filed a motion seeking an urgent ex parte injunction preventing Mr Anderson from entering upon the Property. Even though on one view such relief was already in place, I nevertheless granted it and stood the matter over to Thursday 16 May 2013. I made orders for service of the motion. 17When the matter returned on that day, Mr Coren appeared on behalf of Mr Anderson. After some brief discussion I extended the injunction until further order. Provident also advised the Court on that day that not only was it seeking costs of its motion from Mr Anderson, it was also seeking such costs from Mr Coren. Provident had placed Mr Coren on notice of that application on the previous day. I made orders facilitating the giving of appropriate notice of that application. In particular, I ordered that Mr Coren be notified within a short period of time of the precise basis for that application so as to allow him an opportunity to consider his position and, in particular, notify his insurer if he considered that was appropriate (see s 99 of the Civil Procedure Act 2005 ("CPA") and Practice Note SC Gen 5). 18Consistent with my orders, within a short period of time Provident filed a notice of motion expressly seeking an order that Mr Coren, as well as Mr Anderson, pay the costs of its earlier motion on an indemnity basis and provided a short outline specifying the precise reasons why those orders were sought. 19It should be noted that on 17 May 2013 Mr Coren wrote again to Provident's solicitors and, in effect, sought to reiterate the position as asserted in his letter of 10 May 2013 as to the alleged "voidness" of the proceedings and the Court's orders based upon the alleged failure to comply with the Act. 20The notice of motion seeking indemnity costs from Mr Anderson and Mr Coren was returnable before me today. A representative of the Law Society, Mr Savage, appeared and advised the Court that in the meantime Mr Coren's practising certificate had been revoked and a manager had been appointed to the affairs of his practice. 21Mr Anderson appeared at the hearing of this notice of motion, but sought an adjournment. He indicated that he had only became aware in the last day or two that Mr Coren's practising certificate had been revoked. It was clear he had no real idea of the basis for the application for costs. From the bar table he gave an explanation for his behaviour in entering the Property. I will not act on that as evidence before me. Nevertheless, I granted Mr Anderson's application to adjourn so much of the notice of motion as sought a costs order against him to enable him to obtain legal advice and alternative legal representation. 22However, I proceeded with the motion insofar as it sought relief against Mr Coren. Mr Coren had previously indicated that he would be appearing today. However, despite my standing the matter down, his being called three times, and it otherwise being clear that he knew the matter was listed for today, he did not appear. Accordingly the matter has proceeded in his absence