Transpacific Pty Ltd v Prudential Retirement Insurance and Annuity Company

The application to vacate the hearing dates in October 2011 24 Transpacific's application to vacate the October hearing dates was supported by an affidavit sworn on 17 October 2011 by its new solicitor, Evangelos Patakas. Mr Patakas was retained to act for Transpacific on 10 October 2011. He described the difficulties he had in familiarising himself with the case and with obtaining instructions. He deposed that Mr Nicholas Leach, a director of Transpacific had been in the United States attempting to raise finance for the company and had been delayed in returning to Sydney because his flights were cancelled or rescheduled as a result of industrial problems. He also described difficulties he experienced in obtaining Transpacific's files from its former solicitor. 25 In his affidavit of 17 October Mr Patakas indicated that, in his opinion it might be necessary to bring proceedings in the Supreme Court of New South Wales for orders under s 728 of the Legal Profession Act 2004 (NSW) in order to obtain the files. 26 Mr Patakas deposed that having reviewed affidavits filed by Prudential he considered that it was necessary for Transpacific to file both lay and expert evidence in reply, in particular in relation to Prudential's expert evidence about relevant New York law. Mr Patakas gave details of his efforts to retain US experts and the likely timeframe within which the evidence could be expected to be available. He also referred to the difficulty of retaining counsel to appear at the hearing. 27 In his affidavit and also in his oral submission Mr Patakas said that he was not sufficiently apprised of the details of the case to allow him to represent Transpacific if the hearing was not vacated. If the hearing was to proceed as scheduled he would have to terminate his retainer in which case Mr Leach would seek leave to appear for the company personally. 28 It was not in dispute that Mr Patakas had been retained by Transpacific only from 10 October 2011. Given the short time he had been involved in the matter and his evidence as to the difficulty he has had in obtaining the files from Transpacific's former solicitor it is no reflection on Mr Patakas that he was not in a position to proceed with the hearing on 19 October. Although the legal issues may not be complex the procedural history is confusing. Attempting to unravel that history would not have been helped by the fact that Mr Leach did not return to Australia from overseas until 17 October. 29 Although the difficulties confronting Mr Patakas may be accepted it is nevertheless the case that since March the matter has been listed as described above, there has been extension after extension to the timetable. The imminence of the hearing has been mentioned in directions hearings on a number of occasions, in particular on 30 August 2011. It was the reason a guillotine order was imposed in relation to Transpacific's evidence: see [20] above. 30 In referring to Transpacific's need to put on expert evidence in relation to New York law, Mr Patakas submitted that Prudential's evidence on this issue was evidence in chief and that Transpacific was entitled to have time to reply to that evidence. Prudential's evidence on the point was contained in an affidavit sworn on 4 October 2011 of Clayton P Gillette who is the Max E Greenberg Professor of Contract Law at New York University School of Law. That affidavit was served on Transpacific on 6 October 2011 and filed on 7 October. As the orders made on 30 August required Prudential's evidence to be filed and served by 29 September the evidence was about a week late. Mr Patakas complained that this factor should be taken into account in weighing the impact of Transpacific's failures to meet deadlines however while the formal filing of the affidavit was late, I accept Mr Newlinds assurance that scanned copies of the affidavit were provided to the solicitors for Transpacific well before the deadline. 31 Clearly the evidence of Professor Gillette is of critical importance. Both Mr Patakas and Mr Newlinds expressed the view that unless his evidence was contradicted then the inevitable result would be that Transpacific would be unable to prove its case. This was not news to Transpacific. As can be seen from the account of the directions hearing on 30 August 2011 the notion that evidence on New York law would be required did not come as a surprise to Transpacific's solicitor. In fact Mr Hansen admitted that he had been aware of this issue from the outset of the proceeding. 32 Despite this, it appears from the submissions made by Mr Patakas that, as at 19 October, quite apart from the difficulties occasioned by the change of solicitors, no relevant expert has been retained and counsel have not been briefed. It appears that an expert has been identified however it is necessary for possible conflicts of interest to be ruled out before the gentleman can be formally retained. While Mr Patakas has been in contact with US lawyers he has been advised that there will be some delay, in part occasioned by the imminence of the Thanksgiving Day celebrations (24 November) and the need for Mr Patakas to be fully conversant with the issues so that he can brief the expert. 33 Prudential submitted that the adjournment should not be granted and that the delay envisaged by Transpacific would be significantly to the prejudice of Prudential. In relation to prejudice, Prudential referred to the affidavit of Angus Mackay, a professional senior aircraft appraiser. In his affidavit of 18 October 2011, Mr Mackay gave an estimate of the present value of the aircraft which is the subject of the dispute between the parties and of its likely value in the next 6-24 months. 34 Mr Patakas objected to the admission of Mr Mackay's affidavit into evidence on a number of bases. The most telling of his objections was that the opinion was unsubstantiated by reference to facts and therefore could be accorded no weight. Examples of unsubstantiated statements included a comment that the valuation of the aircraft was based in part on Mr Mackay's "understanding of the present maintenance status" of the aircraft without any indication of the basis of the understanding. 35 In relation to the aircraft's future value Mr Mackay asserted that "in the next 6-24 months Qantas and Malaysian Airlines are expected to place an estimated 50 737-400 passenger aircraft on the global market" and that this would have a significant effect on the value of the aircraft in question. For this reason Mr Mackay's estimate of the future value of the aircraft was considerably less than its present value. 36 I admitted Mr Mackay's evidence over the objections of Mr Patakas and said that I would take into account his submissions in attributing weight to the evidence. On further consideration I find that Mr Mackay's evidence is so lacking in substantiation that the weight I can attach to it is negligible. 37 Ultimately, Prudential's objection to the adjournment was that Transpacific had had ample time to prepare its case and that its need for further time was attributable to choices it had made as to how to conduct its case rather than to unexpected issues arising, the change of solicitors or the lack of funds. In particular it submitted that: already considerable latitude had been extended to the applicant which had taken over seven months to serve its evidence; while complaining that lack of funds had affected its ability to prepare for the hearing the applicant had expended copious legal resources on disputing the issue of Prudential's right to refuse consent to the lease to NAC; when Mr Hansen appeared for the last time on 5 October, he had advised the Court that Transpacific wished to preserve the hearing date yet only days later it appears that Transpacific is far from ready to proceed; the assurance that if the adjournment were granted preparation of the matter would proceed expeditiously is inconsistent with the assertion that lack of funds has been a major limiting factor to date; Transpacific's failure to prepare the case for hearing can be attributed in large part to its failure to focus on the fundamental issue of the validity of the appointment of the Receivers and Managers and to it being diverted by the secondary consideration of the consent to lease; and Prudential would be considerably prejudiced by delay in the hearing as, the terms of the injunction prevent it from selling the aircraft and minimising its loss. 38 At the hearing Mr Patakas said that he was confident that Transpacific could be fully prepared for the hearing in 2012 and that he was looking for dates towards the end of February. It was submitted by Prudential that, given the history of the matter, the Court can have no confidence in this assurance. Unless the Court is of the opinion, at least on the balance of probabilities, that Transpacific will be in a position to argue its case if the requested adjournment is granted then there can be no utility in the adjournment and no benefit to offset any prejudice occasioned by the adjournment.