Listed before me are two notices of motion, in identical terms, filed on 12 March 2021 by the judgment creditors in the two sets of proceedings. Judgment was entered in favour of one judgment creditor against the judgment debtor for the sum of $2.5 million in one of those proceedings in September 2020 (McKenzie v Turnbull [2020] NSWSC 1328; see also Strange v Turnbull [2020] NSWSC 1327). Since that time, the judgment creditors in both sets of proceedings have taken efforts to enforce their judgments, including by the issue of various examination orders directed to the defendant. Allied with this was a concern, which is addressed in various judgments of Cavanagh and Ierace JJ, about the dissipation of assets by the defendant, including the sale of properties (Strange v Turnbull; McKenzie v Turnbull [2020] NSWSC 1923; Strange v Turnbull; McKenzie v Turnbull [2021] NSWSC 27; Strange v Turnbull; McKenzie v Turnbull (No 2) [2020] NSWSC 1924).
An examination before a Registrar of the Court was listed on 4 February this year. However, based on an application made the previous evening by the judgment debtor, the examination was adjourned.
After various steps were taken, a further examination date was set for 4 March 2021. However, they were again adjourned. In particular, at 4.42pm on 3 March, the solicitor for the defendant wrote an email to the Registrar seeking the adjournment of the examination. He raised a number of matters, including that he was waiting on documentation from the client, that his client wished to make a formal proposal for payment by instalments, that the solicitor would be out of the office due to "professional commitments" and that counsel was unavailable. That was followed up with a further email on the morning of 4 March sent by the solicitor for the defendant making various statements about the inability of their client to be examined that day, including her strong preference to have her solicitor present with her when she was examined given her age and personal circumstances.
The motions that were filed on 12 March sought, in effect, two substantive orders. Proposed Order 4 sought an order directed to the solicitor personally requiring him to file and serve an affidavit answering various questions about the statements he made in his emails that led to the adjournment of the examination on 4 March 2021. Proposed Order 2 sought the production, within five business days, of various financial documents. This order in effect replicated the examination order previously served on the defendant. The examination orders sought the production of documents on the day that she was due to attend to be examined. Proposed Order 2 also seeks some specific documents relevant to the sale of two particular properties.
The notices of motion were made returnable before the Registrar on 18 March 2021. On that day, the registrar made directions for the matter to be heard before the Duty Judge on 23 March 2021.
In an affidavit in support of an application to adjourn the notices of motion, the solicitor for the defendant says that on the day following the appearance before the Registrar he discovered there was a clash in his commitments for today between a defended criminal hearing at Moree Local Court and the hearing date for the plaintiff's motion. Thereafter, there was a substantial number of emails exchanged between himself and the solicitors for the plaintiff concerning that difficulty. A detailed affidavit from the solicitor for the defendant has been provided to me, setting out the course of that correspondence. He describes his commitment to appear at Moree Local Court for a two‑hour hearing.
Today, counsel was retained on behalf of the defendant. He sought an adjournment of the motions on the basis that the solicitor was unable to attend. He submitted that the matter should be adjourned until say Thursday 26 March to allow the solicitor to attend (although I note that date does not suit counsel for the plaintiff). He submitted that the application is well supported by the solicitor's affidavit and that there would be no real prejudice to the plaintiff in adjourning the matter.
So far as what is before me is proposed Order 4 in both notices of the motions, and because that seems to be directed to ultimately sheeting home responsibility for the adjournment of the examination order to the solicitor personally, then I am content to accept that submission, ie, I accept that the adjournment of the matter is warranted given the professional commitments of the solicitor and the absence of demonstrable prejudice to the plaintiff. This aspect of the motions does not have the same urgency as proposed Order 2 which concerns the preparation for the examination on 31 March.
However, with Order 2, there is prejudice to the judgment creditors if the matters are adjourned. A review of the history of the matter makes it absolutely clear that the judgment creditors have been pressing to obtain documents and records to aid in their examination of the defendant on 31 March. When the defendant's solicitor received the notices of motion containing proposed Order 2, he would have immediately understood that this was their objective. Despite that, and despite the fact that he is able to produce lengthy affidavits, there is no evidence that he has taken any step to either have the documents prepared or to provide instructions to counsel to set out a basis upon which the order for production should be resisted. It was not necessary for the solicitor to attend personally today or to appear to resist Order 2. It would have been just as easily open to him to prepare an affidavit or other material for his counsel to engage with that aspect of the application.
There is the real potential for prejudice to the plaintiffs if they are denied the opportunity to make an application for Order 2 in a timely way. The notices of motion were filed on 15 March 2021 and sought to have those documents produced in advance of the examination order. The common sense of this approach is obvious.
Accordingly, I decline to adjourn so much as both notices of motion that seek prayer 2 of the orders for relief. I will adjourn the balance of the notices of motion to a date suitable to the parties which I will discuss.
[Counsel addressed on proposed Order 2]
Having refused an adjournment in relation to so much of the notices of motion filed 12 March 2021 in both matters that sought production of documents, I now deal with the substance of that claim.
As I stated previously, the examination orders directed to the defendant require the production by her of various documents, as well as the completion of a financial statement concerning her financial circumstances.
Proposed Order 2 seeks the production of that material in advance of the examination hearing to assist in the preparation of appropriate questions.
The only matter of substance that has been raised in resistance during the course of argument, although in fairness to counsel for the defendant he only had limited instructions, was a concern that production of certain contracts for the sale of various rural properties was commercially sensitive. It was asserted that the consent of the potential purchasers was required before they could be agreed to be produced and that they were otherwise conditional. That issue has been agitated or at least raised for a couple of months now. There is no evidence as to whether consent has or has not been sought.
The fact is that the judgment creditors have been on notice of that alleged term and the potential sensitivity to the progress of the sale but have elected to seek production. In that sense they have assumed the risk of doing so. Equally, the defendant has been aware that the judgment creditors have been pressing for those documents but have declined to address in substance why they should not be produced. I think the best course is that, in ordering production of the documents, I will limit their distribution at this stage to solicitors and counsel appearing for the judgment creditors. This will enable them to prepare for the examination. They will be entitled to seek a relaxation of that condition on proper cause being shown. For abundance of caution, I make it clear that the Registrar who is conducting the examination may grant that relief if it is appropriate to do so.
In terms of timing, when the motion was originally filed, it was returnable on 18 March 2021. Proposed Order 2 sought production within five business days. Time has now marched on and the examination is due to take place on 31 March 2021. Allowing for all the various contingencies, I think the best course is to require the production of the material by 1.00pm next Monday, 29 March 2021. If the material is not then produced this will allow application to be made to the Duty Judge.
Accordingly, in both matters, I make the following orders:
(1) Pursuant to s 108(1) of the Civil Procedure Act, on or before 1.00pm on Monday, 29 March 2021, the Judgment Debtor is to produce, in electronic format, to Aptum Legal:
1. the documents listed in the categories in paragraph 2 of the Examination Order dated 11 December 2020.
2. a completed financial statement in the form that accompanied the Examination Order.
1. without limiting (i) and (ii), all Contracts for Sale of the rural properties known as North Yambin and Buckie Station.
(2) Until further order by the Court, including by a Registrar, the dissemination of the documents produced in response to Order 1 be limited to counsel and solicitors retained on behalf of the Judgment Creditors.
(3) Stand over the balance of the Notices of Motion filed 12 March 2021 to the Registrar's List at 9.00am on Friday, 9 April 2021.
(4) In respect of the orders made today, and the examination next Wednesday, grant either party liberty to apply on 8 hours' notice.
(5) Costs of today be reserved.
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Decision last updated: 26 March 2021