Abbas v M H Affordable Homes Pty Ltd

[2020] NSWDC 516

District Court

New South Wales

Medium Neutral Citation:

Abbas & Anor v M H Affordable Homes Pty Ltd [2020] NSWDC 516

Hearing dates:

24-25 August 2020 and 8 September 2020

Date of orders:

8 September 2020

Decision date:

08 September 2020

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraphs 35-36

Catchwords:

PRACTICE AND PROCEDURE – plaintiffs’ claim for rescission of contract for purchase of property ‘off the plan’ – claim depends upon proof that special condition enlivened – condition is whether a party to the contract was mentally ill under Mental Health Act2007 (NSW) – allegation that first plaintiff was mentally ill in requisite sense – first plaintiff outside jurisdiction at date the proceeding commenced – second plaintiff unable to prosecute claim in absence of first plaintiff – unlikely prospect first plaintiff will return to jurisdiction within next 2 years – second plaintiff in default of direction to serve evidence – whether proceeding should be dismissed for want of despatch – degree of injustice if order for dismissal made – consideration of prospects of success of action

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 58, 61

Mental Health Act2007 (NSW), ss 4, 14

Uniform Civil Procedure Rules 2005 (NSW), rr 12.7, 14.23

Category:

Principal judgment

Parties:

Mr K Abbas (First Plaintiff)
Ms A Hassan (Second Plaintiff)
M H Affordable Homes Pty Ltd (Defendant)

Representation:

Counsel:
Plaintiffs appeared in person
Mr H Elachkar for the defendant

Solicitors:
Birchgrove Legal for the defendant

File Number(s):

2019/396337

Publication restriction:

Nil

Judgment

INTRODUCTION

1. By a Statement of Claim filed on 5 December 2019, the plaintiffs, who bought a property ‘off the plan’ at Austral, seek repayment of monies paid under the contract for purchase entered into on 11 October 2016 as a result of what they say was a valid rescission of the contract. The defendant was the vendor of the property.

2. The plaintiffs had paid the deposit and, thereafter, monthly instalments, apparently, from October 2016 to December 2017. By their Statement of Claim, they have indicated that because of certain financial and other personal circumstances, they are unable to pay the balance of the purchase price. They say that they have sought the defendant’s consent to rescission, but that has been refused.

3. The plaintiffs invoke what they say was a special condition in the contract for purchase, being cl 53, by which if one of the purchasers became mentally ill, the purchasers had the option of rescinding the contract by written notice.

4. By its Defence dated 13 January 2020, the vendor denies that it is liable to refund the deposit and other monies paid under the contract. The defendant points out that the circumstances in which a party had a right to rescind under the contract were limited in two respects, neither of which assisted the plaintiffs. The first circumstance was the vendor’s own right to rescind if there was a change of circumstances (cl 49). The other circumstance, which is more pertinent, is if either of the purchasers became mentally ill, as defined under the Mental Health Act2007 (NSW). The defendant disputed that either of the purchasers developed such mental illness.

PROCEDURAL BACKGROUND

5. This matter was fixed for hearing in the August 2020 sittings of the Parramatta Civil List.

6. In terms of its case management, following the commencement of the proceeding, the matter came before a Registrar of the Court on 23 January 2020, soon after the Defence was filed. The second plaintiff appeared. The matter was listed for hearing in the sittings commencing 27 April 2020 with a one day estimate.

7. Before the April 2020 sittings commenced, an email was sent by the second plaintiff, Ms Hassan, to the Associate to Norton SC DCJ in the early hours of a Sunday morning (19 April 2020). In Ms Hassan’s email, she sought the ‘help’ of the Court and explained that she was in extreme financial difficulty. She said she relied upon Centrelink payments to support herself and her 3 children. She was not good at English and could not afford an interpreter.

8. She asserted also that the vendor had taken her and her husband’s ‘life savings’ and had not performed any development on the land. She asserted that her husband had an injury at his workplace when he was in Australia, did not make a recovery and developed a severe mental illness. No particulars have been supplied as to the nature of such mental illness, although there is a report I will refer to later. He is now living in Pakistan and, according to what Ms Hassan told the Court today, has been living there since at least prior to the proceeding. Ms Hassan complained that she and her husband were tricked into entering into the contract.

9. After expressing other complaints, the thrust of her email was to indicate that without education, language skills or legal assistance, she essentially left herself at the mercy of the Court to “do justice”.

10. She indicated again in an email to Norton SC DCJ’s Associate that she would not attend the scheduled hearing date on 27 April 2020. On 27 April 2020, Norton SC DCJ adjourned the matter to 1 May 2020.

11. On or about 1 May 2020, directions were made by Wilson SC DCJ for vacation of the matter in the then Parramatta civil sittings and, amongst other things, the service of evidence, and the matter was adjourned for a callover on 30 July 2020 before the Registrar for the expected listing for hearing. It was noted by his Honour that Mr Abbas was “currently in Pakistan and unwell”. The plaintiff was directed to file and serve any lay or medical evidence by 12 June 2020.

12. On 30 July 2020, the Registrar listed the matter for hearing in the sittings commencing on 24 August 2020.

13. The plaintiffs have not complied with the direction made on 1 May 2020 that they serve their evidence (including medical evidence) by 12 June 2020.

14. Plainly, the critical issue in the case is whether the plaintiff can establish that, at the very least, Mr Abbas had a mental illness of a certain kind. Later in these reasons I will look more closely at this requirement. It appears from a document within the Court’s file that on 22 March 2018, Mr Abbas was notified that his application for a ‘Partner (Temporary) (class UK) Partner (subclass 820) visa’ had been refused and he sought review of that decision. He had earlier obtained a Bridging Visa (class WC) pending the application for the former category of visa, which was conditional upon his not working. It appears that his application for review was refused.

15. I noted that a Statement of Claim was filed on 5 December 2019. I also note, however, that only the second plaintiff verified the pleading. By r 14.23 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), Mr Abbas was also required to verify the pleading, but did not do so. I infer, and it was confirmed this morning by Ms Hassan, that at the time the proceeding was commenced, Mr Abbas was already outside of the jurisdiction.

16. In circumstances where Mr Abbas is out of the jurisdiction, there are obviously formidable difficulties in the plaintiffs being able to prove that he had such illness. Be that as it may, the direction required service, also, of expert medical evidence.

17. The matter was mentioned before me on both 24 and 25 August 2020 as part of the August Parramatta civil list sittings. Hearings in that list were conducted by the Court’s ‘Virtual Courtroom’ mode of procedure. On 24 August 2020, there was no appearance for the plaintiffs, which was why the matter was adjourned to 25 August 2020.

18. On 25 August 2020, Ms Hassan (but not Mr Abbas) did appear, albeit only by audio link. After some discussion with Ms Hassan about the desirability of her making enquiries of the Law Society of NSW and NSW Bar Association to ascertain whether she might obtain pro bono assistance and representation, I adjourned the matter for 2 weeks to enable her to make enquiries as to whether she could obtain such representation. At the same time, I warned Ms Hassan that she was at risk that the proceeding could be dismissed for want of prosecution if she was unable to provide a satisfactory indication that such enquiries had been made and that the plaintiff was in a position to further the progress of this proceeding.

19. I also note that back on 24 June 2020, the defendant’s solicitors had suggested (apparently not for the first time) to the plaintiffs by an open letter attached to an email that they obtain legal representation to assist them in the proceeding. That letter invited the plaintiffs to discontinue their claim on the basis that the parties would be responsible for their own costs. The letter threatened an application for summary judgment.

20. The matter returned to the Court again today.

21. Ms Hassan has not supplied any indication that she can obtain such assistance in the 2 weeks since the matter was last before the Court.

22. The Court’s power to dismiss a proceeding is sourced in s 61(3)(a) of the Civil Procedure Act 2005 (NSW) and r 12.7 of the UCPR.

23. This matter has not progressed in any substantial way since the Defendant filed its Defence last January. Certainly, Ms Hassan is in no better position now to prosecute the case than she was when she left the matter for the Court’s determination (without her foreshadowed involvement) back in April 2020. She is, as indicated, in default of an existing court direction to serve her evidence. There is no indication that this situation will change. There is no indication, for example, that Mr Abbas will be able to return to the country and give evidence in the proceeding. Indeed, this morning Ms Hassan suggested he may not be able to obtain a visa in the next year or two. Without his evidence, the second plaintiff is impeded in her capacity to prove her claim.

24. As I have indicated, however, it appears that Mr Abbas was outside the jurisdiction even at the time the proceeding commenced. That means that, by design or effect, at least for the subsistence of this proceeding, Ms Hassan has not, viewed objectively, been in a position to have a hearing conducted with her husband in Pakistan.

25. Further, I would add, the situation that litigation has been commenced during which a party (and critical witness for another party) is overseas and is not and has no imminent prospect of returning to the jurisdiction presents an intolerable problem for the Court. Further, the problem cannot be attributed to international border restrictions imposed as a result of the COVID-19 Pandemic, since the first plaintiff’s absence appears to have preceded that phenomenon.

26. Accordingly, there is no demonstrable utility in further adjournments of the proceeding in the hope that the second plaintiff is in a position to serve evidence and the matter can be allocated to the next sittings in Parramatta.

27. An important consideration on procedural disputes of kind is the degree of injustice that might be sustained if a procedural order is made (s 58(2)(vi) of the Civil Procedure Act). Although this is not an application for summary disposal, in my opinion, it is relevant to assess, albeit in a preliminary fashion, the plaintiffs’ prospects of success.

28. To make good their reliance upon the special condition in the contract said to be enlivened, so as to give rise to the right to rescission, one or both of the plaintiffs, as purchasers to the contract, needed to demonstrate that they were ‘mentally ill, as defined in the Mental Health Act’.

29. ‘Mental illness’ is defined in s 4 of the Mental Health Act to mean;

“a condition that seriously impairs, either temporarily or permanently, the mental functioning of a person and is characterised by the presence in the person of any one or more of the following symptoms--

(a) delusions,

(b) hallucinations,

(c) serious disorder of thought form,

(d) a severe disturbance of mood,

(e) sustained or repeated irrational behaviour indicating the presence of any one or more of the symptoms referred to in paragraphs (a)-(d).”

30. A ‘mentally ill’ person is defined in s 14 of the Mental Health Act to be someone:

“… if the person is suffering from mental illness and, owing to that illness, there are reasonable grounds for believing that care, treatment or control of the person is necessary –

(a) for the person's own protection from serious harm, or

(b) for the protection of others from serious harm.”

31. Documents on the Court’s file indicate that Mr Abbas, a labourer, was involved in a workplace accident on 18 May 2016 (before the subject contract was entered into), in which he suffered physical injuries to the neck, and the middle and lower regions of his back and right shoulder. More pertinently, in February 2018, he was referred by a general practitioner to Dr Rastogi, a consultant psychiatrist. Following an examination on 16 April 2018, Dr Rastogi diagnosed Mr Abbas as suffering from an ‘Adjustment Disorder with anxiety’ which Dr Rastogi associated with the workplace accident. Some of the more intense symptoms which were described by Dr Rastogi included panic and fears for the future and a depressed mood. Dr Rastogi had suggested a range of management strategies, including medication, counselling and 6 further sessions with Mr Abbas.

32. There is an initial question of construction whether the onset of the mental incapacity must arise after the contract was entered into – the clause speaks of the situation where a person “become(s)” mentally ill.

33. There is a further question of construction whether, for the purpose of the special condition in cl 53 of the Special Conditions, it is necessary to prove that a party simply suffers from a ‘mental illness’ as the expression is defined, or whether it is required to prove that the person is a ‘mentally ill person’, within the meaning of that expression.

34. These questions need not be resolved since, on the most beneficial construction to Mr Abbas, there is, in my opinion, substantial doubt whether even if he developed an Adjustment Disorder with anxiety, consequent upon physical injuries he suffered in May 2016 prior to entry into the subject contract, he could be said to have suffered a ‘mental illness’ under the Mental Health Act.

ORDERS

35. In the circumstances, I am satisfied that it is in the interests of justice for the proceeding to be dismissed for want of despatch.

36. After hearing from the defendant and the second plaintiff, the plaintiffs are to pay the defendant’s costs on the ordinary basis as agreed or assessed.

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Decision last updated: 08 September 2020