Su v Kamal (No 3)

The order of mine referred to in that prayer for relief is explained in two judgments published by me in 2022, Su v Kamal [2022] ACTSC 161 and Su v Kamal (No 2) [2022] ACTSC 239. In the second of those judgments, in circumstances where the plaintiff had repeatedly failed to give proper disclosure to the sixth defendant in the proceedings, I made the following orders: (1) Pursuant to rule 1404 of the Court Procedure Rules, dismiss the proceedings; (2) The plaintiff is to pay the sixth defendant’s costs; (3) Pursuant to rule 1616 of the Court Procedure Rules, the funds paid to the Court by the sixth defendant are to be paid out to the sixth defendant. (4) Stay the operation of Order 3 for 30 days.

The plaintiff appealed or else sought leave to appeal from those orders and, I am informed, was unsuccessful. In the result, pursuant to order (3) made by me on 2 September 2022, the fund of $480,000 paid into court by the sixth defendant ought to have been paid out to him within 30 days after 2 September 2022. The fund represented the proceeds of sale of two properties provided as security for the loan sought to be enforced by the plaintiff in the proceedings.

According to the affidavit relied upon in support of the present application, following the dismissal of the proceedings by me for default of compliance with orders of the court, on 17 November 2022 Mr Chen, the solicitor for the plaintiff, was instructed by the plaintiff to commence proceedings against the sixth defendant in the District Court of New South Wales arising from the same facts. The affidavit states that the plaintiff chose to commence the proceedings in New South Wales instead of the ACT because, at that time, the relevant mortgaged properties, which are located in the ACT, had been sold and accordingly the Territory was no longer an appropriate forum in circumstances where both the plaintiff and Mr Chen’s offices are based in Sydney.

Also on 17 November 2022, the NSW District Court evidently made a freezing order, upon the plaintiff giving the usual undertaking as to damages, in respect of the assets of “the defendant”, being the sixth defendant in the previous proceedings in this Court. The restraining order restrains the defendant from seeking the release of or transferring the amount of $480,000 held in this court.

On 21 November 2022, Judge Dicker of the NSW District Court vacated that order and made a freezing order, again upon the plaintiff giving the usual undertaking as to damages, that if the defendant obtained the amount currently held by this Court, he forthwith pay that amount into the District Court where it was to remain until further order of that Court.

I cannot know from the material before me whether, on either of those occasions, sufficient information was disclosed to the court to enable the judge in question to turn their mind to the proposition that, in seeking to wrest control of the fund paid into this Court into the control of NSW courts, the plaintiff may be seeking an order that would defeat the intent or operation of the orders of this court made on 2 September 2022. In any event, after some time and in circumstances where he was concerned as to the likelihood that the fund held by the court was not earning an appropriate or commercial rate of interest, the sixth defendant took steps to have the fund held by this court paid out, whereupon the plaintiff took steps to obtain the order now sought in the application.

The order sought by the plaintiff was initially consented to by the sixth defendant. Consent orders were provided to my Chambers without the supporting information that I now have. I declined to make the orders because I considered the matter more appropriately dealt with by an application determined in open court and I wanted to know why the parties were agreeing to defeat or vary an order I had made some years earlier. That application is the one that has now been made and is before me this afternoon.

During the course of argument on the application, I have endeavoured to explain to Mr Hopkins, counsel for the plaintiff, why I have a concern about the order being sought in circumstances that do not appear to provide any protection to the sixth defendant for his costs. My concern is this. Had the plaintiff sought to commence proceedings again in this Court, after having had the proceedings dismissed for default of compliance with orders of the court but without prejudice, the likelihood is that either the sixth defendant or the Court of its own motion would have been concerned to ensure that the costs order in favour of the sixth defendant was first met. Mr Hopkins does not accept that that is a valid concern. Indeed, upon my expressing it, he accused me of “entering the fray”. At one point during the argument, he stated that he would have to consider asking me to recuse myself if I were to enter the fray in that way but, when pressed, did not pursue any such application.

I do not think I can explain the issue any more plainly than I have and it is this. If a party puts another party to the cost of proceedings and, by its own conduct in failing to comply with orders of the court, has those proceedings dismissed, ordinarily there should be some protection of the party that was unnecessarily put to those costs, regardless of the underlying merits of the proceedings (or any contractual indemnity for costs).

In any event, after some discussion, the parties reached agreement that the issue can be dealt with satisfactorily to each of them if I simply vary the order I made on 2 September 2022 so as to provide that the funds that have been paid into court by consent on 21 November 2021, and which were ordered to be paid to the sixth defendant by my order made 2 September 2022, instead be held by this Court until further order. I will make that order. I will make a further direction that, if practicable, any application for an order for release of the funds be listed before me as I have the history of the matter. I will further direct that a copy of these reasons, when available, be provided to Justice McGrath of the New South Wales Supreme Court, who has reserved his decision in the proceedings in that jurisdiction.