The Trust Company (PTAL) Pty Ltd v Romeo

Judgment 1I yesterday refused an application made without motion or supporting evidence, as the Uniform Civil Procedure Rules 2005 require, for the hearing of this matter to be adjourned, in order that Mr Romeo, the first defendant, could engage new legal representatives. These are the reasons for that refusal. 2Mr Romeo's wife, the second defendant, Mrs Anna Romeo is a bankrupt. Orders have already been made against her. Mr Romeo both defends the plaintiffs' claim for possession and pursues a cross-claim, by which he seeks orders under the Contracts Review Act 1980 and the Competition and Consumer Act 2010 (Cth), to have the mortgage and loan agreements declared void. Other relief is pressed as to the repayment of certain interest. 3In July 2013, the matter was listed for a five day hearing to commence on 30 September, both parties agreeing that it was ready. The adjournment application was made for Mr Romeo by Mr Mattiussi, a solicitor engaged only for that purpose yesterday, after I had granted Mr Romeo's former solicitor, Mr Phair, leave under Rule 7.49 of the Uniform Civil Procedure Rules 2005, to file a notice of ceasing to act and to withdraw (see The Trust Company (PTAL) Pty Ltd v Romeo (No 4) [2013] NSWSC 1447). 4While there was no dispute as to the Court's wide powers under s 66 of the Civil Procedure Act 2005 to grant an adjournment, the plaintiffs, who had been put on notice of the application only on Friday and had then advised that it would be opposed, resisted the application pressed. They did not, however, oppose an adjournment of the hearing to the following day, so that Mr Romeo could obtain from Mr Phair the Court Book, which they had prepared with considerable difficulty, the Court's directions as to its preparation having not been complied with by Mr Romeo. It had, however, been available to him from Mr Phair, since 24 September. Why he had not availed himself of the opportunity to collect it, was not explained. 5Mr Romeo did not instruct Mr Mattiussi until after Mr Phair's application had been granted, even though he had conferred with Mr Mattiussi and a principal of his firm last Friday. Despite then not being instructed, they had written, foreshadowing both to the plaintiff and the Court, that the adjournment application would be made, if Mr Phair's application was granted. At the hearing Mr Romeo instructed Mr Mattiussi that unless he was granted the adjournment he required, that he would not further appear in the proceedings. 6In the circumstances, I was satisfied that neither that instruction, nor the case advanced for Mr Romeo in support of his application, provided a just basis on which the adjournment could be granted, consistently with the requirements of s 56 of the Civil Procedure Act, which requires the Court to exercise its powers to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Nor did it accord with what the provisions of s 57 and s 59 dictated, they providing: "57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 59 Elimination of delay In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial." 7I reached that conclusion in the following circumstances. 8The matter has had an unfortunate procedural history. Mr Romeo and his wife live in a property at Elanora Heights, over which they granted the first plaintiff a mortgage, to secure borrowings approaching some $3.6 million, advanced to them in 2006 and 2008. Some $1.6 million was used to discharge a pre-existing mortgage. The proceedings were commenced in 2010, after the loan fell into arrears. The first plaintiff obtained default judgment against both defendants in September 2010. On 16 September 2011, McCallum J ordered that the default judgment be set aside upon the defendants paying $1.6 million into Court and making interest payments on that sum. Her Honour later refused to vary that order (see Perpetual Trustee Australia Limited v Romeo (No. 2) [2011] NSWSC 1190) and the defendants successfully appealed from that refusal (see Romeo v The Trust Company (PTAL) Ltd [2012] NSWCA 62). There it was observed: "11 Counsel for Mr Romeo accepted, for the purpose of this application only, first that $1.6 M of the debt claimed by the respondents represented an amount paid by the respondents at the direction of Mr and Mrs Romeo out of the loan proceeds to discharge an existing mortgage and secondly that Mr Romeo did not have any arguable defence in relation to that portion of the claimed debt. 12 However counsel submitted that if Mr Romeo's Contracts Review Act defence succeeded, the most likely order that the Court would make would be an order under s 7 of the Contracts Review Act requiring the execution of a varied mortgage, limiting the amount secured to $1.6 M. He submitted further that if this Court regarded this as a likely outcome, it could not conclude, at least at this stage, that there had been any default by Mr and Mrs Romeo in the payment of interest in respect of the prospectively varied mortgage. To put it shortly, and somewhat simplistically, he contended that the interest Mr and Mrs Romeo had paid on approximately $3.6 M for three years, in part unnecessarily if the Contracts Review Act defence succeeded, was likely to have exceeded the interest that Mr and Mrs Romeo would have been liable to pay on $1.6 M for five years, with the result that Mr Romeo's Contracts Review Act defence, held by the primary judge to be arguable, would negate the respondents' right to possession of the property." 9The loan was for a fixed term. It was repayable in October 2011. It was not then repaid. The cross-claim was not in fact filed until December 2012. In April 2013, Button J refused to give the plaintiffs' summary judgment, even as to the $1.6 million used to repay the earlier borrowings, despite an "implicit offer" in the defence, to buy out the mortgage for $1.6 million (see The Trust Company (PTAL) Pty Ltd v Romeo (No 3) [2013] NSWSC 347). His Honour was not able to be satisfied that the defence and cross-claim were doomed to failure, although he observed: "51 Having said that, it does appear remarkable that a man who, according to his own cross claim, had, at one stage, built up with his wife a property portfolio with equity in the sum of $15 million could rely upon the Contracts Review Act. But although on the very limited information available to me it might seem that the case of the defendant has very serious difficulties, I cannot say that it is doomed to failure. 52 Fifthly, whilst it is true that it is most unusual for a defence under the Contracts Review Act to result in a borrower not being liable to repay a principal, of some of which he or she has had the benefit, I cannot rule out completely the possibility of that occurring as a result of this litigation." 10Despite other procedural hiccups, in July the matter was listed for hearing. 11Yesterday the plaintiffs resisted the adjournment application in circumstances where, they submitted, on Mr Romeo's affidavits, it appeared that he had no funds with which to meet any costs order made against him and where bankruptcy proceedings have now been brought against him. This was not disputed for Mr Romeo. 12Mr Romeo's case was that it was unfair that he be expected to appear at the hearing unrepresented. He did not have a sufficient command of English and was not in a position to advance the complex case raised on his cross-claim, which, he submitted, required that he be represented by counsel. 13Mr Mattiussi was not, however, able to explain why, in these circumstances, the obviously necessary steps had not been taken to make the required funds available to Mr Phair. It was not suggested that there had been any dissatisfaction with his representation, or that earlier provided by counsel who had been retained. To the contrary, Mr Romeo has to this point had considerable success, with their assistance. Nor was Mr Mattiussi put in a position where he could assure the Court that either his firm, or any other legal representative, would be engaged by Mr Romeo to represent him at any adjourned hearing. 14Nor was he in a position to submit that the necessary funds to pay for such representation would be forthcoming. Nor could he explain why it was that Mr Romeo had not availed himself of the opportunity offered by Mr Phair, to collect the Court Book which the plaintiffs had prepared, or why no earlier notice had been given of these difficulties and the potential adjournment application. Despite his ongoing discussions with Mr Phair, as to his difficulty in funding his legal representation, he continued acting in the matter, presumably on instructions, which included advice given to the plaintiffs on 10 September, that all of the witnesses would be required for cross-examination at the hearing. 15That approach certainly did not appear to accord with the obligations which s 56 of the Civil Procedure Act imposed on Mr Romeo and appears to have unnecessarily increased costs, with arrangements having been made for witnesses to attend the hearing fixed for this week for cross-examination. 16In the circumstances it was apparent that justice could not permit the adjournment so belatedly pressed for Mr Romeo. The interests of the plaintiffs could not be overlooked. That Mr Romeo would be in any different position at any adjourned hearing was not apparent. He had led no evidence to explain the circumstances in which the adjournment application came to be made and so could not be cross-examined as to the circumstances. The obvious inference was that his evidence would not have assisted his case. 17As Davies J recently discussed in Australia and New Zealand Banking Group Ltd v Mio Amico Pty Ltd [2013] NSWSC 716 at [60] - [62]: "60 The general rule is that when a case is brought on for trial by the proper process the Plaintiff is entitled to have it heard and determined: Short v Short [1960] 1 WLR 833 at 849; Watson v Watson (1968) 70 SR (NSW) 203 at 206. 61 An adjournment for the purpose of obtaining additional evidence that should have been obtained earlier will ordinarily not be allowed: Watson at 206-207; Kingsway Group Ltd (Formerly Known As Willis and Bowring Mortgage Investments Ltd) v Belramoul and Ors [2009] NSWSC 345 at [12]-[15]. That is the more so where the nature of the further evidence is not disclosed: EG & H Nominees Pty Ltd v General Mutual Insurance Co Ltd (in liq) (1976) 50 ALJR 460. 62 An adjournment will not normally be granted simply because there has been a late withdrawal of legal representatives, especially where the withdrawal relates to a fee dispute: Squire v Rogers (1979) 27 ALR 330 at 333, 337-338; or where there is a late retaining of legal representatives even for the reason of an inability to pay for them earlier: Dawson v Deputy Commissioner of Taxation (1984) 56 ALR 367 at 368-370; Kingsway Group at [11]." 18In the result, I was satisfied that justice could not permit the adjournment sought. I did consider that Mr Romeo should have an adjournment to the following day, so that he could take steps to ensure that he had practical access to the Court Book at the hearing. 19Whether Mr Romeo instructed solicitors then to represent him, appeared himself, or withdrew from the proceedings, as had been foreshadowed, was a matter for him to determine. I was satisfied in the circumstances that he would then have been given a fair opportunity to put his case at the hearing, which was fixed by consent, months ago. Whether Mr Romeo wishes to avail himself of that opportunity, is a matter for him and not the Court.