Bechara v Bates (No 3) - [2015] NSWSC 1588

Supreme Court

New South Wales

Medium Neutral Citation: Bechara v Bates (No 3) [2015] NSWSC 1588
Hearing dates: 6 October 2015
Decision date: 29 October 2015
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Summons dismissed.

(2) Unless an application for a different order is made in writing to my Associate within seven days, order the plaintiff to pay the defendant’s costs of the proceedings.
(3) The stay granted by Bellew J on 17 April 2015 and continued by McCallum J on 23 April 2015 is hereby dissolved.
Catchwords:
APPEAL – appeal from Local Court – whether Magistrate erred in granting leave to apply for default judgment as a consequence of failure to comply with notice to produce – ample opportunity provided to remedy defaults – no error in Magistrate’s decision identified

APPEAL – jurisdiction – notice of motion dismissed after hearing of the merits - whether Magistrate erred in refusing to set aside dismissal of notice of motion – application to set aside previous orders was in the nature of an appeal – no error shown in Magistrate’s refusal of application due to lack of jurisdiction
PRACTICE AND PROCEDURE – party’s entitlement to final hearing on merits not indefeasible – weight to be given to administration of justice and compliance with court orders – importance of sanctions against non-compliance
Legislation Cited: Civil Procedure Act 2005 (NSW), Pt 6, ss 56, 57, 58, 59, 60, 61
Legal Profession Act 2004 (NSW), ss 302, 310, 311, 312, 315, 316, 317
Local Court Act 2007 (NSW), ss 38, 40, 41
Uniform Civil Procedure Rules 2004 (NSW), rr 10.14, 12.7, 16.2, 16.3, 21.10, 36.16
Cases Cited: Aon Risk Services Australia Ltd and Australian National University [2009] HCA 27; 239 CLR 175
Autodesk Inc v Dyason (No. 2) 176 CLR 300
Bechara v Bates [2014] NSWSC 1935
Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 200
Category: Principal judgment
Parties: Maria Bechara trading as Bechara and Company (Plaintiff)
Philip Bates (Defendant)
Representation:
Counsel:
Plaintiff in person
P Bates (Defendant in person)
Solicitors:
Maria Bechara, Bechara and Company (Plaintiff)
Bannister Law (Defendant)

File Number(s): 2015/115082 Local Court of New South Wales Civil 18 March 2015 and 2 April 2015 Keogh LCM 2014/159095

Judgment

Introduction

By summons filed on 17 April 2014, the plaintiff, Maria Bechara, sought leave to appeal against two decisions of Magistrate Keogh of the Local Court at the Downing Centre made on 18 March 2015 and 2 April 2015 respectively. Leave to appeal was granted by McCallum J on 1 May 2015.
I shall refer to Ms Bechara, who was the defendant in the Local Court proceedings and the plaintiff in these proceedings as “the solicitor”. I shall refer to Mr Bates, who was the plaintiff in the Local Court proceedings and the defendant in these proceedings, as “the barrister”.
The grounds of appeal, as set out in the summons, are:

“1.   Her Honour refused to exercise jurisdiction when she refused to hear Ms Bechara’s Notice of Motion filed 23 March 2015 before dismissing it.
2.   Her Honour failed to hear and determine the Notices of Motion on their merits and in particular failed to have regard to:
a.   Ms Bechara’s arguable defence;
b.   The reason why Ms Bechara had been in default of previous orders;
c.   The nature of and reason for the defaults; and
d.   That Ms Bechara had remedied any previous defaults.
e.   Her Honour’s reasons for judgments and orders made were not supported by evidence.”

Procedural history

Because the orders ultimately made by Magistrate Keogh resulted, in part, from the procedural history which was known to her Honour (through the Court file and the circumstance that she had presided over the hearings on 17 February 2015, 12 March 2015, 18 March 2015 and 2 April 2015), it is necessary to set it out in some detail in order to appreciate the context in which the orders were made.
The following procedural history is taken from the Court book as well as from the evidence of the barrister (which was given in the Local Court but which the solicitor did not include in the Court book) and the transcripts of the proceedings in the Local Court on 6 November 2014, 17 February 2015, 12 March 2015, 18 March 2015 and 2 April 2015.

The pleadings in the Local Court

The barrister commenced proceedings against the solicitor in the Local Court by statement of claim filed on 27 May 2014 for fees said to be outstanding in various matters in which the solicitor had instructed the barrister. In her defence filed on 27 June 2014 the solicitor alleged that the barrister would be entitled to be paid his fees only if she was paid by the clients. The solicitor further alleged that the barrister failed to make the requisite costs disclosure, as required by ss 311, 315, 316 and 317 of the Legal Profession Act 2004 (NSW) (now repealed).
On 6 August 2014 the barrister filed in Court, with leave of Registrar McTegg, a reply to the defence in which he alleged that he had made sufficient disclosures to the solicitor in her capacity as a “sophisticated client” (within the meaning of ss 302, 310(2) and 312(c)(i) of the Legal Profession Act). The barrister further alleged that the solicitor was estopped from denying that she was obliged to pay his fees because she had admitted that she owed the monies and further that she had obtained judgment in the District Court against a client which included monies due to the barrister. Paragraph [5] of the reply, which is of present relevance, alleged:

“5. In answer to par 4(e) of the said Defence, the plaintiff is not barred from recovering the defendant’s debts to him, as claimed in the SOC [statement of claim], and the plaintiff is not barred from instituting, maintaining and prosecuting the present proceedings against the defendant, and plaintiff is not required to apply for costs assessment, and s 317 of the Legal Profession Act 2004 (NSW) is inapplicable, as:
(i)   The plaintiff made relevant disclosures (par 4 above of this present Reply);
(ii)   The present proceedings were commenced more than 60 days after each of the respective tax invoices (identified in pars 3, 4, and 5 of the SOC) was given by the plaintiff to the defendant: Legal Profession Act 2004 (NSW) ss 331, 332, 351(3)(a);
(iii)   The defendant has previously admitted, in writing, that she owes the plaintiff each of the debts claimed by the plaintiff and the defendant is estopped from denying each of the said debts, as:
(aa)   The defendant has prepared, lodged one or more verified and sworn proofs of debt with the Cross’ bankruptcy trustee in the Cross’ matter in which the present defendant admitted her debt to the present plaintiff for the unpaid debt claimed at par 3 of the present SOC;
(bb)   The defendant filed and served sworn evidence in the District Court of NSW at Sydney in the Cross matter (in case no. 2011/334416 in earlier proceedings Maria Bechara v Rosabelle Cross & Gabrielle Cross) in which Maria Bechara (the present defendant) admitted her debt to the present plaintiff for the unpaid debt claimed at par 3 of the present SOC;
(cc) The present defendant obtained judgment from Levy DCJ in her favour for $198,397.16 in the District Court of NSW at Sydney (in case no. 2011/1334416 in earlier proceedings Maria Bechara v Rosabelle Cross & Gabrielle Cross in General List in the Civil Jurisdiction) in which the said $198,397.16 included, inter alia, the amount of the present defendant’s unpaid debt to the plaintiff in par 3 of the present SOC; this was affirmed by the NSW Court of Appeal in Bechara v Cross [2014] NSWCA 175 (decided on 4 April 2015);
(dd)   The present defendant has prepared, lodged one or more verified and sworn proofs of debt with the Haratsaris’ bankruptcy trustee in the Haratsaris’ matter in which the present defendant admitted her debt to the present plaintiff for the unpaid debt claimed at par 4 of the present SOC;
(ee)   It is unconscionable that the defendant, as an officer of the Supreme Court of NSW (namely an admitted solicitor with current practising certificates at all material times) denies her debts to the plaintiff in her present Defence, in view of the earlier admissions and judgment as aforesaid.”

The notice to produce to the plaintiff dated 15 August 2014

On 6 August 2014 (the day the reply was filed) consent orders were made in the Local Court granting leave to the barrister to issue and serve a notice to produce addressed to the solicitor, which was made returnable on 10 September 2014.
On 15 August 2014 a notice to produce was issued, which sought production of the following documents from the solicitor:

“1.   A copy of the notice to produce;
2.   All originals and copies of any and all proofs of debt lodged with the trustee (David Kerr) by Maria Bechara to evidence and/or prove any and all debts claimed, asserted, verified, acknowledge or admitted by the said Maria Bechara in the bankruptcies of Gabrielle Cross and/or Rosabelle Cross in relation to any and all counsel’s fees of Philip W Bates, Barrister allegedly owed by the said Maria Bechara &/or by Gabrielle Cross &/or by Rosabelle Cross;
3.   All originals and copies of any and all proofs of debt lodged with the trustee (David Kerr) by Maria Bechara and Company Lawyers to evidence and/or prove any and all debts claimed, asserted, verified, acknowledge or admitted by the said Maria Bechara in the bankruptcies of Gabrielle Cross and/or Rosabelle Cross in relation to any and all counsel’s fees of Philip W Bates, Barrister allegedly owed by the said Bechara and Company Lawyers &/or by Gabrielle Cross &/or by Rosabelle Cross;
4.   All originals and copies of any and all proofs of debt lodged with the trustee (Antony De Vries) by Maria Bechara to evidence and/or prove any and all debts claimed, asserted, verified, acknowledge or admitted by the said Maria Bechara in the bankruptcies of Theodoros Haratsaris and/or Denise Haratsaris in relation to any and all counsel’s fees of Philip W Bates, Barrister allegedly owed by the said Maria Bechara &/or by Theodoros Haratsaris &/or by Denise Haratsaris.
5.   All originals and copies of any and all proofs of debt lodged with the trustee (Antony De Vries) by Bechara and Company Lawyers to evidence and/or prove any and all debts claimed, asserted, verified, acknowledge or admitted by the said Bechara Company Lawyers in the bankruptcies of Theodoros Haratsaris and/or Denise Haratsaris in relation to any and all counsel’s fees of Philip W Bates, Barrister allegedly owed by the said Bechara and Company Lawyers by Theodoros Haratsaris &/ or by Denise Haratsaris.
6.   All originals and copies of any and all affidavits, annexures and exhibits and submissions which were sworn and/or or affirmed by Maria Bechara and which were filed and/or served by the said Maria Bechara (or on her instructions) in the District Court of New South Wales at Sydney, Civil Jurisdiction in or as part of, (a) the referrals to the costs’ referee(s), and/or (b) the proceedings general, in case no. 2011/3344416 Bechara v Cross, in which the said Maria Bechara identified any counsel’s fees allegedly owed by any of the parties in the said District Court proceedings to Philip W. Bates, Barrister.
7.   Copies of all Statements of Claim, including all amendments thereto, filed and served by Maria Bechara and/or by Bechara and Company Lawyers in case no. 2011/334416 Bechara v Cross in the District Court of New South Wales at Sydney, Civil Jurisdiction.
8.   Copies of all interlocutory and final judgments (including reasons for judgment and orders made) of Levy DCJ in case no, 2011/334416 Bechara v Cross in the District Court of New South Wales at Sydney, Civil Jurisdiction.
9. Copy of all Notices of Appeal of Notices of Contention filed by Maria Bechara and/or by Bechara and Company Lawyers in the appeal proceedings in the New South Wales Court of Appeal now known as Barbara v Cross [2014] NSWCA 175.
10. Copies of all submissions filed and served by Maria Bechara and/or by Bechara and Company Lawyers in the appeal proceedings in the New South Wales Court of Appeal now known as Bechara v Cross [2014] NSWCA 175.
11.   Copies of and all reports provided by the Costs’ referee to the Court in the District Court of New South Wales at Sydney, Civil Jurisdiction in, or as part of, (a) the referral(s) to the costs’ referee(s), and/or (b) the proceedings generally, in case no. 2011/334416 Bechara v Cross.

No documents were produced in answer to the notice to produce on the return date of 10 September 2014. On 11 September 2014 the barrister sent emails to the solicitor regarding the notice to produce. At a call-over of the matter on 24 September 2014 before the Registrar, Mr Hiramanek, who appeared as agent on behalf of the solicitor, sought an extension of ten days of the order that she comply with the notice to produce. The Registrar ordered the solicitor to comply with the notice to produce by 29 September 2014 and ordered her to pay the barrister’s costs of $440 within seven days. On 29 September 2014 the solicitor, once again, failed to comply with the notice to produce. The Local Court ordered that she pay the costs of that day.

The barrister’s notice of motion for default judgment filed on 2 October 2014 and the solicitor’s application for review of the Registrar’s orders

On 2 October 2014 the barrister filed a notice of motion seeking default judgment against the solicitor on the grounds that she had twice failed to comply with the notice to produce. On 13 October 2014 the solicitor filed a notice of motion seeking review of the Registrar’s orders made on 24 September 2014 (to extend the time for compliance with the notice to produce to 29 September 2014). Both notices of motion were listed for hearing before the Local Court on 30 October 2014 but, as they were not reached, they were stood over to 6 November 2014 for hearing.
On 6 November 2014 Magistrate Buscombe heard both notices of motion. The solicitor was represented at the hearing by Mr McCrudden of counsel; the barrister appeared in person. The barrister drew the Magistrate’s attention to the fact that what he sought in the notice to produce corresponded with the allegations in paragraph [5] of the reply (set out above) which specifically referred to documents which had been created by the solicitor or which she had relied upon in other proceedings or by way of proofs of debt. The barrister referred the Magistrate to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 21.10(1)(a) which provides that documents referred to in a pleading may be the subject of a notice to produce. The barrister also relied on the definition of the term “pleading” in the Dictionary to the UCPR, which includes a reply.
The barrister referred Magistrate Buscombe to Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 200 on the question of what orders ought be made if the defence were struck out. The barrister accepted that, if the solicitor’s defence were struck out, the appropriate course would be for the Court to give the solicitor a further limited time to produce the documents, with provision for default judgment if she did not comply within that time. In the following exchange the Magistrate invited Mr McCrudden to respond to the barrister’s submissions:

“HIS HONOUR. . . If I am against you, is there anything further you want to say in relation to the plaintiff’s motion? I’m sorry, I’m going to pressure you now to put to me whether there’s anything else you want to say. In light of what I’ve understood effectively to be a concession that if I’m against you and I happen to be with the plaintiff on the strike out, that Mr Bates is not pressing for default judgment but that I make certain directions.
MCCRUDDEN: That would seem to be a very reasonable proposition to me, your Honour, and I have nothing that I can put against it if you rule against me.”

In ex tempore reasons given later that day (6 November 2014) Magistrate Buscombe said:

“I turn then to the plaintiff’s notice of motion.
No explanation by the defendant as to why the orders were not complied with has been forthcoming. Neither has any explanation as to the delay in the filing of the notice of motion seeking of the review of the registrar’s decision and the delay in the raising of issues not raised in the motion which were not raised in the correspondence between the parties. That delay has not been explained either. I also note in that regard, as I have noted before, the defendant is a legal practitioner and therefore should be very conscious of the need to promptly perform steps in a litigious process. Having regard to those matters, for the reasons I have explained, I make the following orders:
(1)   The defendant’s notice of motion filed on 13 October 2014 is dismissed;
(2)   The defendant is to comply with the plaintiff’s notice to produce dated 15 August 2014 by 5 pm on 13 November 2014. If the defendant fails to comply with order number 2, the defence is struck out and the plaintiff may apply without notice to the defendant for default judgment.
(3)   The defendant is to pay the plaintiff’s costs of both the defendant’s motion filed on 13 October 2014 and the plaintiff’s motion filed on 2 October 2014 on the ordinary basis.
I consider that it is appropriate that I make an order that those costs be paid forthwith, given it is a dispute about legal fees between legal practitioners, that is, the ultimate proceedings, the primary proceedings, and the motions have dealt with a discrete issue.”

The Magistrate assessed the costs in the sum of $2,178 including GST.

The solicitor’s appeal from the decision of Magistrate Buscombe made on 6 November 2014

On 13 November 2014 the solicitor filed a summons in this Court seeking leave to appeal against the orders made by Magistrate Buscombe on 6 November 2014. The solicitor also applied to this Court for a stay of the Magistrate’s orders, which was granted by Button J on 26 November 2014. When the matter was mentioned in the Local Court on 9 December 2014, it was stood over pending determination of the solicitor’s application for leave to appeal to this Court.
On 10 December 2014 the solicitor’s application for leave to appeal from Magistrate Buscombe’s orders was heard by McCallum J. Mr McCrudden appeared on behalf of the solicitor; the barrister appeared in person. Her Honour, in an ex tempore judgment, refused leave to the solicitor to appeal from Magistrate Buscombe’s orders and dismissed the summons: Bechara v Bates [2014] NSWSC 1935. Her Honour ordered that the stay granted by Button J on 26 November 2014 of the Magistrate’s orders made on 6 November 2014 be extended until 4pm on 15 December 2014.

Production of documents to the Registry on 17 December 2014

The solicitor did not produce documents on 15 December 2014.
On 17 December 2014 the solicitor paid the amount of $2,178 as required by the costs order made on 18 November 2014. She also produced some documents to the Court on that date (under cover of a letter dated 16 December 2014) which were said to be an answer to the notice to produce. The barrister (by his solicitors) acknowledged receipt of the payment and reiterated his request for payment of $440, being the costs of 24 September 2014 which were ordered to be paid by 1 October 2014.
The documents produced included:

four pages of a report dated 4 March 2013 (of eleven pages, comprising seven pages of the report and four pages of annexures) of Mr Taperell, a referee (the Taperell report);

a letter dated 28 February 2014 from the solicitor to Mr Reidy with attachments that comprised a total of 38 pages was produced.

The Taperell report was a report by Mr Taperell to Levy DCJ following a reference ordered in proceedings in the District Court which the solicitor had brought against former clients, Rosabelle and Gabriel Cross. Pursuant to the reference, Mr Taperell was required to assess the fair and reasonable amount of costs for the work the subject of the bills referred to in the pleading. The barrister had been instructed by the solicitor to perform work for the Cross clients. The proceedings brought by the solicitor against Rosabelle and Gabriel Cross are expressly referred to in paragraphs 5(iii)(bb) and (cc) of the reply, which is set out above. The barrister’s fees for that work were included in the amounts he claimed in the Local Court proceedings.

In her letter dated 28 February 2014 to Mr Reidy, the solicitor said:

“RE:   Bankruptcy Estate of Theodoros Haratsaris
I refer to your letter dated 12 February 2014 and enclose the following:
1.   Completed and signed proof of debt together with Annexure “A”
2.   Completed and signed Statement of Claim and Proxy together with annexure “A”.
3.   Schedule of calculations of interest claimed on the District Court Judgment entered in the sum of $174,752.41 from 1 October 2010 to 28 February 2014.
I note that on 22 November 2013 I lodged with you a Proof of Debt and a Statement of Claim and provided to you in a folder [a] copy of all relevant documentation including the judgments and itemised Bill of Costs together with supporting documentation of the disbursements claimed.
In support of the additional costs and disbursements claimed by me since I lodged my last proof of debt with you on 22 November 2013, I enclose the following:
1.   Letter addressed to you attaching itemised Bill of Costs dated 28 February 2014 claiming additional total costs and disbursements in the sum of $38,363.31.
2.   Invoices in support of third party disbursements claimed in the invoice dated 28 February 2914.
You will note from Annexure “A” attached to my Proof of Debt and Statement of Claim that the total amount claimed by me to date is $652,320.96.
Any queries please contact me on [phone number].”

The document marked “Annexure ‘A’” to the proof of debt included the following item (as item 4):

“Legal Costs Supreme Court proceedings- itemised bill of costs/ tax invoice dated 28 February 2013 $38,363.31”

Documents annexed to the proof of debt included the solicitor’s party/party bill of costs against Theodoros and Denise Haratsaris for assessment in this Court. The bill of costs included an itemised list of disbursements which indicated the figures that comprised the total of $38,363.31. Item 10 was:

“14/1/2014 Philip W Bates [the barrister] Counsel fees $3,300.00”

Also annexed to the proof of debt was a memorandum of fees from the barrister dated 14 January 2014 in the sum of $3,300. The memorandum of fees also included the following:

“Updated Statement of account (including inter alia the above tax invoice)
17.8.13 Tax invoice rendered (inc GST) $53,460.00
Updated total (inc GST) $56,760.00”

The barrister’s inspection on 6 January 2015 of the documents produced

On 6 January 2015 the barrister attended the Local Court Registry with Isabelle Dufour, a paralegal employed by his solicitors, and inspected the documents that the solicitor had produced to the Court on 17 December 2014. The barrister made a detailed file note of what had been produced.
As a result of his inspection, the barrister considered that two categories of documents had not been produced. Later that day the barrister’s solicitor emailed the solicitor to notify her of the documents said to be missing. The email read in part:

“It appears that there are two important documents that you should have produced but that they are not amongst the documents that we [sic] have been inspected today namely:
1. The report of the Referee, Mr Taperell dated 27 May 2013 in the matter of yourself v Rosabelle Cross and Gabriel Cross has not been produced by you.
2. Your covering letter to Mr Geoffrey Reidy dated 22 November 2013 together with your proof of debt and Statement of Claim and your folder that accompanied them of all relevant documentation including the judgments and itemized bill of costs together with supporting documentation of disbursements claimed in the Haratsaris matter (we note that you have produced a supplementary proof of debt in the Haratsaris matter dated 28 February 2014 but that you have not produced the earlier and initial proof of debt of 22 November 2013).”

No response to the email of 6 January 2015 was forthcoming, notwithstanding that the request was repeated by emails sent on 15 and 22 January 2015.
On 30 January 2015 the solicitor was served with a letter from the barrister of the same date in which he informed her that she had not complied with the notice to produce and notified her that if she did not comply with the notice to produce by 3 February 2015 he would apply for default judgment without further notice. Because of the importance of the letter to later events, I propose to set it out in full:

“We refer to our emails to you dated 6 January 2015, 15 January 2015 and 22 January 2015, copies of which are attached.
We have not had any response by you and we have not been supplied by you with the missing documents which still have not been produced. We have checked the Local Court’s on line file today and the Registry has not recorded any further production by you.
We are instructed that in the circumstances you have not complied with the orders made by McCallum J on 10 December 2014 which are recorded by in the Supreme Court of NSW’s on line file as follows:
“The stay granted by Button J on 26 November 2014 of the orders of the magistrate made on 6 November be extended until 4 pm on 15 December 2014.”
We note that on 16 December 2015 [sic, 2014], you forwarded a covering letter to the Registry which purported to produce documents in answer to the Notice to Produce that was served on 15 August 2014.
However, as we have recorded in our emails to you dated 6, 15 January 2015 and 22 January 2015, you have not actually produced two of the key documents that should be produced in answer to the Notice to Produce.
We note that our emails of 6, 15 and 22 January 2015 were sent to your usual email address as listed just under your letterhead on the 1st page of your letter to the registry dated 16 December 2014 namely [email protected]. We note that at page 2 of the same letter, you have requested that all correspondence b[e] forwarded by email and to PO Box 424 Drummoyne NSW 1470.
However, we also note that you did not file an Appearance in the Local Court, but that you did file a Defence on 27 June 2014 and that at page 3 of that Defence you specified your practice address in your capacity as solicitor and defendant in this matter to be 2G Auburn Road, Auburn NSW 2144.
In the interests of abundant caution, we are providing further copies of our emails of 6, 15 January and 22 January 2014 to both your Auburn Street address and your Drummoyne post office box address.
We also note that you have still failed to comply with your obligation to pay the earlier costs order of $440.00 in accordance with the orders made by Registrar McTegg on 24 September 2014.
We are instructed that unless you have produced the two missing documents by 4pm on Tuesday 3 February 2015, that our client, the plaintiff, will file a fresh Notice of Motion asking the Court to confirm that your Defence has been struck out and entering default judgment for the full amount claimed in the Statement Claim plus interest and costs.”

The second motion for default judgment filed on 4 February 2015

No answer having been received to the letter of 30 January 2015, the barrister, on 4 February 2015, filed a notice of motion in which he sought the following orders:

“1.   The Court confirms that the Defence filed on 27 June 2014 is struck out.
2.   Default judgment to be given and entered for the plaintiff forthwith for the principal sum of $78,540.00 (as claimed in the Statement of Claim) together with interest in the sum of $6,331.68 calculated up to 4 February 2015 (and continuing to accrue at daily rate).
3.   The defendant is to pay the plaintiff’s costs of filing fee (of $222.00) and legal costs (of $602.00) in addition to interlocutory special costs orders already made earlier in the proceedings of $440.00 (ordered on 24 September 2015) and $2,178.00 (ordered on 6 November 2014).
4   Further or other orders as the Court deems fit.”

The barrister’s notice of motion dated 4 February 2015 was supported by an affidavit of his solicitor, Charles Bannister, sworn 4 February 2015. The documents which were annexed to the affidavit included a full print out of all the orders made to that date by the Local Court and this Court, including the orders made by McCallum J on 10 December 2014 extending the stay until 15 December 2014. An affidavit of a process server, Joseph Khoury, (who had served the solicitor with the letter dated 2 February 2015) was also filed in support of the notice of motion.

The directions hearing on 17 February 2015

On 17 February 2015 the matter was listed for directions before Magistrate Keogh of the Local Court. The barrister and solicitor both appeared in person. The barrister informed the Court that no documents had been produced on 15 December 2014, as provided for in the orders made by McCallum J but that documents had been produced to the Registry on 17 December 2014, by which time the self-executing order (to strike out the defence) had already taken effect. The barrister also informed the Court that he and his solicitor had inspected the documents produced and considered that there were “some critical documents that had not been produced [which] went to the heart of the notice to produce”. The solicitor told the Court that she had complied with the notice to produce.
The barrister referred to a notice of motion and affidavit in support which he had filed on 4 February 2015 (referred to above) and provided a copy to the Magistrate and to the solicitor on that day, 17 February 2015 (although he also referred to an affidavit of service which related to earlier service on the solicitor of those documents).
Magistrate Keogh informed the solicitor that, since she had not, on her own admission, produced documents by the deadline of 4pm on 15 December 2014, she would need to put on evidence in support of her application for an indulgence from the Court to reinstate her defence that had been struck out by the operation of the self-executing order. The solicitor explained that she had been on leave for the whole of January 2015 and had returned to work in the first week in February. She informed the Court that, as she understood that she had complied with the order for production, she had not been aware that there was any urgency associated with the matter. The solicitor reiterated her position that she had complied with the notice to produce in the following terms:

“I’m saying to your Honour I’m an officer of the Court, your Honour, and I’m saying to your Honour that as far as I understood I have complied with the orders.”

There being a dispute about whether the solicitor had complied with the notice, the Magistrate indicated that the solicitor would have to apply by notice of motion supported by an affidavit for an order to prevent the barrister applying for a default judgment on the basis of the operation of the earlier orders made. The barrister then foreshadowed the three contentions he proposed to make at the hearing of the motion as follows:

For whatever reason, the solicitor did not comply with the self-executing order by producing documents in answer to the notice by the time it came into effect, with the result that her defence was struck out;

In any event, when the solicitor purported to comply with the notice to produce, she omitted critical documents so that, in substance, she had not complied with the notice to produce in the manner detailed in the correspondence from the barrister dated 6, 15, 22 and 30 January 2015;

She had not yet paid the $440 in costs which the Registrar ordered her to pay.

The Magistrate confirmed that the matters the barrister was relying on were to be answered by the solicitor in an affidavit to be sworn by her and read at the hearing of the motion on the next occasion the matter was before the Court. The solicitor sought 14 days to put on such an affidavit; the barrister contended that 7 days would be sufficient. Ultimately, as reflected in order 2 below, the solicitor was allowed 10 days to put on such an affidavit.
Magistrate Keogh made the following directions:

The barrister’s application by notice of motion filed on 4 February 2015 is stayed until further order.
The solicitor is to file and serve a notice of motion and affidavit in response to the barrister’s application for default judgment by 27 February 2015.
The barrister to file and serve any response by 8 March 2015.
If the solicitor does not comply with order 2, order 1 is dissolved and the barrister may proceed with his application for default judgment.
The solicitor’s notice of motion is listed for hearing in the motions list on 12 March 2015.
The costs of 17 February 2015 are reserved.

Following the making of directions, the following exchange took place between Magistrate Keogh and the solicitor:

“HER HONOUR: Costs of today are reserved. Ms Bechara, I’ve got to just say that the matter was always going to be in the list for review today, but you really should have come prepared, and you didn’t, with a notice of motion. But I note you have worked something out, but you must file your notice of motion by the 27th, and then if you’ve done that, obviously if you want to avoid arguments on 12 March, the most appropriate course to take is to ensure that the notice to produce has been complied with properly. I know if there’s some argument about it, then it will still be to be argued on 12 March, but if there’s not then you can avoid a lot of heart ache by complying with it appropriately.
DEFENDANT: Of course, your Honour, and I intend to actually inspect the Court file with a view to ascertaining what, if any, documents are missing.”

The solicitor’s notice of motion filed 27 February 2015 and affidavit in support sworn 26 February 2015

On 27 February 2015 the solicitor filed a notice of motion in the Local Court seeking an injunction to restrain the barrister from filing any application for default judgment and served an unsealed copy on the barrister. She swore an affidavit on 26 February 2015 in which she asserted that she had produced all documents required to be produced in answer to the notice to produce (notwithstanding that, as the evidence disclosed, she had not attended the Registry as at that date to ascertain what, if any, documents were missing and whether the barrister’s contention that she had not fully complied was correct). She annexed to her affidavit a letter from Mr McCrudden dated 10 December 2014 in which he reported to her that McCallum J had extended the stay “until Wednesday next by [sic] 5.00pm”. The following Wednesday was, in fact, 17 December 2014.
The copy of the letter from Mr McCrudden which was annexed was an expurgated copy in that certain parts were missing and different paragraphs were in different typefaces, a matter which Magistrate Keogh drew to the solicitor’s attention at the hearing on 12 March 2015 (see further below).
The barrister’s solicitor served a letter on the solicitor dated 27 February 2015 responding to the matters raised and correcting factual errors. Of present relevance, the letter said:

“The defence was in fact struck out immediately after 5pm (not 4pm) on 15 December 2015 [sic, 2014].
. . .
The proposed affidavit of Ms Bechara served today does not address all issues of default identified in Mr Bannister’s affidavit of 4 February 2015.”

On 9 March 2015 the barrister swore an affidavit in opposition to the solicitor’s notice of motion. Much of what was contained in that affidavit was a recitation of the procedural history of the matter as well as an outline of the submissions the barrister proposed to make at the hearing on 12 March 2015.

The solicitor’s response to the barrister’s allegation of incomplete production: her visit to the Registry on 10 March 2015

Notwithstanding the emails sent by the barrister to the solicitor (on 6 January 2015, 15 January 2015, 22 January 2015, 22 January 2015 and 30 January 2015), and what transpired at the hearing on 17 February 2015 (which is set out above), the solicitor did not visit the Registry to check what she had produced until 10 March 2015 (she having kept no record of what she had produced). Nor did she respond to any of the barrister’s emails sent in January 2015 until 11 March 2015.

The events of 11 March 2015

On 11 March 2015, the written form of the judgment which McCallum J had delivered ex tempore on 10 December 2014 was published. It was apparent from the terms of her Honour’s orders that the date for production and for payment of the costs was 15 December 2014, rather than, as had been reported to the solicitor by Mr McCrudden, 17 December 2014. However, as is apparent from what transpired before Magistrate Keogh on 17 February 2015, the solicitor was aware on 17 February 2015 of her non-compliance by the time specified by McCallum J.
On 11 March 2015 the solicitor sent a letter attached to an email to the barrister’s solicitor in which she asserted that she had complied with the notice to produce and proposed that she pay the outstanding $440 on the following day when the matter was before the Court. She informed the barrister in the letter that she had, the previous day, inspected the documents she had produced. She also annexed a complete copy of the Taperell report which she asserted had been produced to the Local Court on 17 December 2014 (the barrister contended that only four pages of the report had been produced on that day). She also contended:

“In relation to the Reidy documents they do not in my view fall within the scope of the documents.”

The barrister disputed the allegations made by the solicitor in this letter and said that: production was not complete; and the referee’s report had not been produced to the Court when he attended the Registry with Ms Dufour on 6 January 2015 (and therefore had not been produced when other documents were produced on 17 December 2014). The barrister continued to maintain that the “Reidy documents” fell within the notice to produce.

The hearing on 12 March 2015 before Magistrate Keogh

On 12 March 2015, at the hearing in the Local Court of the solicitor’s notice of motion filed on 27 February 2015, the solicitor and barrister both appeared in person.
At the commencement of the hearing the solicitor sought leave to file an amended motion with a lengthy affidavit in support which she had sworn on 12 March 2015 and not previously served on the barrister. The amendment proposed to the motion (which in its original form had been filed on 27 February 2015) was the addition of prayers for an order that her defence be reinstated and an order that the barrister’s motion filed on 4 February 2015 be dismissed with costs.
In her affidavit sworn on 12 March 2015 the solicitor annexed:

her letter of 11 March 2015 referred to above (to which was annexed the full referee’s report and in which she took the point, for the first time, that “the Reidy documents” did not fall within the notice to produce);

emails between her and the barrister’s solicitor regarding access to the documents produced (which indicate that, although access was granted, photocopy access was refused as the solicitor resisted photocopy access);

an email to McCallum J’s Associate dated 11 March 2015 regarding the date of 15 December 2014 and asserting that she believed that the extension was until 17 December 2014; and

an email dated 11 March 2015, recorded as having been sent at 11.43pm from Mr McCrudden, in which he apologised for having provided the solicitor with the incorrect date.

In that affidavit (sworn 12 March 2015) the solicitor deposed:

“The parties were provided with a copy of the Judgment of Justice McCallum on 11 March 2015. Prior to that date it has always been my understanding and belief that the stay was granted until 17 December 2015 [sic, 2014].”

She also deposed (in part):

“I also rely on the matters detailed in the letter forwarded to the solicitors for the Plaintiff namely annexure “A” to this my affidavit [dated 11 March 2015] in relation to the assertion made by the Plaintiff that I have not complied with the orders of the Court and the Notice to Produce.

I say I have a bona fide Defence and should be allowed by the Court to prosecute my Defence in the interest of justice.
I say that the Plaintiff has not suffered any prejudice and that any issue of alleged non-compliance by me (which I deny) in relation to the Notice to Produce should have been dealt with when the proceedings were listed for a Pre-trial on 17 February 2015.”

The Magistrate heard from the parties about the additional matters that were contained in the amended motion and the affidavit of 12 March 2015. The barrister addressed the Magistrate about the matters raised by the solicitor in her letter of 11 March 2015 and submitted that the solicitor had agreed that she had not supplied documents relating to the Haratsaris bankruptcy but had, as of 11 March 2015, contended that they did not fall within the notice to produce. In answers to the Magistrate’s questions, the barrister informed the Court that he knew that the solicitor had lodged proofs of debt in the Haratsaris bankruptcy because, when inspected the documents that had been produced, he found other letters that referred to the fact that she had lodged the documents. The barrister confirmed, in response to the Magistrate’s enquiry, that the proof of debt included monies that the solicitor owed the barrister.
The barrister then outlined what had occurred. He told the Magistrate that, before the formal point was taken about the late production of the documents (17 December 2014 rather than 15 December 2014), he inspected the documents and found that there were two categories of documents missing: the complete referee’s report in the Cross matter, which was subsequently provided on 11 March 2015; and proofs of debt in the Haratsaris bankruptcy. He also referred to the fact that the letter of 11 March 2015 was the first response she had made to the correspondence which commenced on 6 January 2015 regarding deficiencies in her production of documents. The barrister concluded this aspect of his submission by saying:

“She’s known since at least 9 February when she got back to work that we were taking issue about the production of documents yet apparently, according to her affidavit, it was only in the last day or so that she actually bothered to make this trip to the registry to check the documents. I mean in my submission it’s quite extraordinary.”

Magistrate Keogh then heard from the solicitor as to why she should allow her to amend her notice of motion and rely on the additional affidavit. The solicitor’s immediate response was that it was only on 11 March 2015 that she had received McCallum J’s written judgment. Magistrate Keogh raised the form of the letter from Mr McCrudden dated 10 December 2014 which was annexed to her affidavit of 26 February 2015, including the different typefaces; the blank spaces; and the fact that it was not signed. In answer to a specific question from the bench, the solicitor said that McCallum J’s judgment was the first time she became aware of the relevance of 15 December 2014 and that this was why she needed to amend her notice of motion and rely on the further affidavit. Magistrate Keogh reminded her that on “the last occasion”, being 17 February 2015, the solicitor had informed the Court that she had believed the due date was 17 December 2014, not 15 December 2014. There was also a lengthy discussion about the fact that the print-out of the orders of this Court that was attached to Mr Bannister’s affidavit of 4 February 2015 also included the correct date of 15 December 2014.
Because of the time taken by the matter and the other matters in the list, the matter was stood in Magistrate Keogh’s list. When it was called again, the Magistrate heard further from the solicitor as to why she should be permitted to amend her notice of motion and rely on the further affidavit of 12 March 2015. After hearing from the solicitor, the Magistrate asked her whether she continued to believe, until 11 March 2015 when she received McCallum J’s judgment, that the due date was 17 December 2014, notwithstanding the following:

The letter from the barrister’s solicitor dated 30 January 2015;

The official print out from this Court of the orders made by McCallum on 10 December 2014 which recorded that the due date was 15 December 2014 (which was annexed to Mr Bannister’s affidavit of 4 February 2015); and

What had occurred at the review hearing on 17 February 2015.

The solicitor’s response was that she did not understand (possibly until 11 March 2015) that her defence had actually been struck out. The Magistrate then heard from the barrister, who made submissions about why the solicitor ought not be granted a further indulgence. He referred to the Civil Procedure Act 2005 (NSW) and, in particular, ss 56, 57, 58, 59, 60 and 61, as well as UCPR 12.7(2), 16.2(1)(c) and 16.3. He submitted that, whatever the position prior to 17 February 2015, the solicitor realised when she left the court room on that day that she needed to address, in her affidavit which was to be filed by 27 February 2015, the matters raised by the barrister to that date. He concluded by submitting:

“In my respectful submission, enough is enough and it’s time for this Court to say, ‘No, Ms Bechara, you’ve had enough time.’”

Her Honour refused the solicitor leave to rely on the amended notice of motion and her affidavit of 12 March 2015 and informed the parties that the matter would be determined on the basis of the motion as filed and the evidence that was filed in accordance with the timetable.
At the conclusion of the hearing Magistrate Keogh reserved her decision, ordered a transcript of the hearing on 12 March 2015 and listed the matter for delivery of reasons on 18 March 2015.

The appearance before Magistrate Keogh on 18 March 2015 and the delivery of reasons

When the matter came before Magistrate Keogh on 18 March 2015 for delivery of reasons, the solicitor and the barrister both appeared in person. The solicitor inquired of her Honour whether she had seen two emails that the solicitor had sent to the Registry, including one that was sent that morning, to which an unsworn affidavit of Mr McCrudden (who had appeared on her behalf before McCallum J on 10 December 2014) was attached in pdf form. His unsworn affidavit contained statements that he had informed the solicitor that she had until 4 pm on 17 December 2014 (instead of 15 December 2014 as her Honour had ordered) to produce the documents and to pay costs. He accepted that this was an error on his part.
Magistrate Keogh asked the solicitor what application she was making. The solicitor asked for leave to re-open to adduce evidence from Mr McCrudden to explain her non-production of documents on 15 December 2014. The Magistrate confirmed the nature of the application in the following exchange:

“HER HONOUR: Just so I understand, you’re asking for me not to deliver judgment in relation to the notice of motion on the evidence I heard and the submissions – on the evidence I received and submissions I heard last week but instead to return to the matter and allow you leave to file further evidence and amend your notice of motion.
DEFENDANT: I do, your Honour.”

The barrister handed up written submissions to the Magistrate in which he set out the history of the matter; the solicitor’s knowledge of the correct date in McCallum J’s orders; the issues raised by him about non-compliance; and her failure to deal with the allegations of non-compliance. He also relied on the solicitor’s admissions made in Court on 12 March 2015 that she was aware that she had read the correspondence sent by him in January 2015; that she had returned to work in early February 2015; that she had not attended the Registry to inspect the documents she had produced until 10 March 2015; and that she had not produced the proofs of debt in the Haratsaris bankruptcy. The barrister contended that judgment ought be given in his favour on the notice of motion for default judgment filed on 4 February 2015; that the solicitor’s notice of motion filed on 27 February 2015 should be dismissed; and that he should have costs on the ordinary basis to 16 February 2015 and on an indemnity basis thereafter.
Magistrate Keogh delivered her decision orally in open Court. Her Honour dismissed the solicitor’s notice of motion; decided that the barrister was entitled to apply for default judgment on the ground that the solicitor had not complied with the notice to produce; and ordered that the barrister was at liberty to apply for default judgment. In the judgment, the Magistrate also gave her reasons for refusing the solicitor’s application for leave to amend the notice of motion ([14]- [17] of the judgment).
The Magistrate also ordered that the solicitor pay the barrister’s costs on an indemnity basis as agreed or assessed. The operative reasons for decision appear from the following paragraphs of the reasons:

“Determination
25.   I am satisfied that Ms Bechara was made aware, as a result of the correspondence she had received from Mr Bates legal representatives on a number of occasions, that she had to comply with the Notice to Produce by the 15th December and that she had not fully complied with the Notice to Produce by the 15th December and that she had not fully complied with the Notice to Produce even if she had until the 17th December, 2014 and I am satisfied that she was and should have been aware that consequently her defence had been struck out.
26.   I am satisfied that she also knew before the 17th of February, when the matter first came before me, that she had until the 15th December not the 17th to comply with the Notice to Produce and that her defence had been struck out.
27.   Consequently it was apparent that to avoid default judgment she must address these issues and in particular her non-compliance with the production of documents, in her Notice of Motion and any evidence in support of that Notice of Motion. She did not.
28.   I am satisfied that the Notice to Produce has still not been complied with.
29.   Accordingly the defendant’s Notice of Motion is dismissed and the Plaintiff may apply for default judgment.”

After the delivery of reasons, the solicitor applied for a stay of the decision to permit her to “either proceed in this [the Local] Court to reinstate [her] defence or to appeal [the] order in the Supreme Court”. She relied on “rule 36”. The barrister opposed the stay. The Magistrate refused the stay. The barrister also asked the Court to deal with the outstanding default judgment rather than have it done in the Registry. Her Honour declined the barrister’s application and said:

“I’m not prepared to meet [sic, make] a default judgment that your solicitors need to prepare in certain form.”

On 19 March 2015 the barrister applied for default judgment by notice of motion supported by an affidavit of Mr Bannister, the barrister’s solicitor. On 20 March 2015 default judgment against the solicitor was entered in the Local Court registry for $87,628.38 plus costs.

The solicitor’s notice of motion filed on 23 March 2015

On 23 March 2015 the solicitor filed at the Registry of the Local Court a notice of motion for a stay of the default judgment together with an affidavit sworn that day in which she alleged bad faith and a denial of procedural fairness. She deposed that she intended to appeal the Magistrate’s decision of 18 March 2015. She also filed a sworn version of the affidavit of Mr McCrudden sworn 17 March 2015 referred to above.
By letter dated 24 March 2015 the solicitor wrote to the Duty Registrar of the Local Court at the Downing Centre in the following terms:

“I refer to my attendance at the Registry yesterday to file a notice of motion to set aside default judgement.
I understand that the motion is yet to be processed by the Registry.
The motion seeks an immediate stay of the default judgement entered.
I understand that you had concerns are [sic] in relation to stay of the default judgment because of the lack of ‘new material.’
The ‘new material’ relied upon is the affidavit sworn by me on 23 March 2015 and the amended notice of motion and affidavit sworn by me on 12 March 2015 and the affidavit of my Counsel Rory McCrudden sworn on 17 March 2015. None of these documents were considered by Her Honour Keogh LCM who refused to allow me to file them. In any event Her Honour did not enter default judgment; the Registry made such an order. I am seeking to set aside the order.
It is my view that Her Honour failed to take into account relevant matters and in fact made findings when she had no evidence other than assertions made by the plaintiff.
I confirm that I am seeking an immediate stay of the default judgement as set out in the motion. If you are minded to refuse the stay please provide your reasons. If a stay is refused I confirm my discussions with the Registry that the motion will be listed this Thursday.
If you have any queries, please do not hesitate to contact the writer on [mobile telephone number].”

On 26 March 2015 the barrister’s solicitors wrote to the solicitor contending that the notice of motion she had filed on 23 March 2015 was an abuse of process. They proposed that the motion be dismissed by consent with no order as to costs and stated that the offer remained open for acceptance up to 5pm on 27 March 2015. The letter also said:

“In substance, your motion is asking the Local Court to hear an appeal against final orders made after a fully contested hearing and determination. The Local Court has no jurisdiction to hear such an appeal. Your applications for a stay and your applications to adduce the evidence you now seek to adduce were already heard and rejected. This is different from the more common situation of a debtor who was not served with process and default judgment was entered against such person after an ex parte hearing. That is not the situation here. In the present case, you are simply cavilling with the decision made against you, repeating the same arguments, and the matter is res judicata so far as the jurisdiction of the Local Court is concerned. Your motion is a futility.”

On 30 March 2015 the barrister’s solicitors wrote to the solicitor informing her that they had become aware that she had applied ex parte for a stay of the default judgment on 23 March 2015 but that the stay had been refused. They noted that they should have been served with the application.
On 31 March 2015 the barrister filed an affidavit sworn by him on that date to which he annexed various documents relating to the proceedings as well as correspondence between the parties. He also set out, in the form of submissions, his response to the orders sought by the solicitor in her notice of motion filed on 23 March 2015. He said, in part:

“3. I say that the current motion is: (a) an abuse of process; (b) a futility; (c) simply cavilling with the reasons and decision of Magistrate Keogh in her judgment of 18 March 2015; (d) repeating the same arguments that were already advanced unsuccessfully by the defendant on 18 March 2015, and were rejected by Magistrate Keogh.
…
5. The default judgment entered against the defendant by the Local Court on 20 March 2015 was entered after a fully contested hearing where both parties were heard and made their submissions, and Magistrate Keogh decided the issues against the defendant, which the defendant now seeks to raise here again.
6. In effect, the defendant is asking the Local Court to hear an appeal against final orders and judgment made and given after a full hearing. The Local Court has no such appellate jurisdiction. The Matter is res judicata.
7. I refer to the five numbered prayers for relief set out in page 2 of the orders sought in the current motion.
8. As to prayer 1 (‘That the default judgment entered by the Court on 20 March 2015 be set aside’), the Local Court has no jurisdiction to do that, as this was not a default judgment which has been entered in circumstances where a defendant has not been served and the judgment was entered against her without a hearing. The current motion is in effect seeking to appeal against a judgment given after a full hearing.
9. As to prayer 2 (‘That the defence filed by the defendant which has been struck off by the Court be reinstated’), that application has already been heard and rejected by Magistrate Keogh at paragraphs [14]-[17] of her judgment of 18 March 2015.
10. As to prayer 3 (‘The orders made by her Honour Keogh LCM on 18 March 2015 be set aside’), the Local Court does not have appellate jurisdiction to set aside final orders made following a fully contested hearing on the merits.”

The hearing on 2 April 2015

The motion was ultimately referred to Magistrate Keogh for hearing on 2 April 2015. On that date, the solicitor and the barrister both appeared in person. The solicitor sought an order that the default judgment that had been entered be set aside.
The solicitor submitted that the orders could be set aside as the barrister had misled the Court and that the orders had been made “in circumstances of bad faith”; she also contended that the Local Court had power to set aside a default judgment pursuant to UCPR 36.16 on the basis that her motion (being the one filed on 23 March 2015) had been filed within 14 days after the judgment or order had been entered, and that, accordingly, the Court could determine the matter as if it had not been entered: UCPR 36.16(3A).
The barrister filed written submissions and contended that the matter was res judicata.
Magistrate Keogh stood the matter in the list to deal with other matters. When she returned to it, the solicitor addressed the Court on UCPR 36.16. She confirmed that her submission was that it provided an independent jurisdiction to set aside the default judgment. The solicitor said:

“I’m actually now submitting that it is my right to make a fresh application to set aside the default judgment and to put before the Court, whether it’s the same issues that arose before your Honour and/ or new issues in support of that application to set aside the judgment.”

The solicitor contended further, before Magistrate Keogh, that her Honour had denied her procedural fairness by deciding that she ought to have known that the stay only extended to 15 December 2014. She also submitted that there was no evidence before her, other than the barrister’s assertion about the documents that were in fact produced in answer to the notice to produce and no consideration of the terms of the notice to produce. The solicitor referred to the fact that there was no reference to Mr Reidy in the notice to produce.
The barrister submitted that the solicitor’s application was not one that could be heard in the Local Court since it amounted to an appeal from the Magistrate’s decision. He contended that UCPR 36.16 did not apply as the basis for the order permitting him to apply for default judgment was a decision following a contested hearing in open court and therefore, although the default judgment was entered in the Registry, it may as well have been made in open court. The barrister reminded the Magistrate that, on 17 February 2015, directions were made to give the solicitor an opportunity to file her motion and evidence in opposition to his application for default judgment. The barrister also submitted that, although the default judgment was ultimately applied for and entered in the Registry rather than made in open Court, he asked that it be ordered at the conclusion of the hearing on 18 March 2015 but, for administrative reasons, the Magistrate determined that it occur in the Registry. He submitted that, for those reasons, the judgment was a final judgment of the Local Court pursuant to s 38 of the Local Court Act 2007 (NSW) and that the Magistrate did not have jurisdiction to set it aside.
Magistrate Keogh asked the solicitor whether she wanted to say anything in response to the barrister’s submissions. Her response was as follows:

“I just want to know if Mr Bates is going to concede to your Honour that he’s misled your Honour in relation to the notice to produce and if there’s any reference to Mr Reidy in that notice to produce, but he does not wish to answer that, so I take it it’s on the record and we’ll move forward.”

On 2 April 2015, after hearing from the barrister and the solicitor, Magistrate Keogh dismissed the notice of motion and gave oral reasons which were recorded in the transcript as follows:

“In this matter Ms Bechara seeks to set aside default judgment which was entered, as I understand it, on 20 March. She also seeks by the notice of motion for her defence to be reinstated, and she also seeks that orders made by me on 18 March are set aside, and of course she seeks costs. It seems to me that no order can be made by this Court in relation to setting aside the default judgment entered on 20 March or considering any reinstatement of defence without considering or reconsidering the decision that was made on 18 March. So in effect what is being required is for that decision to be reopened and re-agitated because if that is not set aside, then the foundation or the basis of any reconsideration, or the consideration of any application to set aside default judgment or reinstate the defence just is not possible.
The Court order made on 18 March was made by me. It was after hearing considerable argument and submissions, and after considering affidavits that had been provided in support. The history of how it came before me is contained in the written decision that I handed down, and as I understand it this would now be the third time that Mr Bates has sought to have default judgment entered, and it would be the third time that the matter is sought to be set aside.
Ms Bechara says that I should deal with this application. However, I do not consider that it is appropriate either that I deal with it, or that any other magistrate deal with it. I do not believe that it is appropriate for this Court to entertain the notice of motion because it is clear that what it is in the nature of an appeal against the decision of 18 March. Ms Bechara seeks to re-agitate the very matters I considered when I determined the matter on 18 March. She alleges, as I understand it, denial of procedural fairness.
I note on this occasion there is an affidavit from Mr McCrudden, but my decision was predicated on a number of bases. I noted that if the defendant was in fact unaware of the date on which the Supreme Court had extended the date by which she had to comply with the notice to produce, then she had still not complied with that, and I also note that, one, she should have been aware, and this if she wasn’t, she had still the difficulty of the issue of the defence having been struck out because of the order made by her Honour McCallum J, so that her ignorance of the date did not in fact, it seems to me, change those matters that I had to consider. There was still noncompliance as at even the extended date as she understood it.
All of these matters were matters that I considered, that I took into account in my decision, and now, as I understand it, Ms Bechara seeks to utilise r 36.16 to set aside the order that was made on 18 March. My view is that she cannot seek to re-agitate the very issues that I considered on that day, and whether I determine this matter or somebody else did, it would be in effect I would be sitting in appeal, or someone else would be sitting in appeal in relation to that decision. I note the case of Autodesk Inc v Dyason (1993) 176 CLR 300, and in effect Ms Bechara is requiring, as I said, me or another magistrate to deal with the very issues that were determined on the previous occasion, and all of those matters have previously been heard. She was heard, her arguments were considered, her evidence was considered, and this is in the nature of an appeal. I REFUSE THE NOTICE OF MOTION.”

Following delivery of the reasons, the barrister applied for costs which were ordered on an indemnity basis and set at $1,808.40 inclusive of GST to be paid within seven days.
On 14 April 2015 the barrister applied for a bankruptcy notice to be issued against the solicitor on the basis of the judgment.

The proceedings in this Court

On 17 April 2015 the solicitor filed in Court the summons by which the present proceedings were commenced in which she sought leave to appeal the orders made by Magistrate Keogh on 18 March 2015 and 2 April 2015. On that day, 17 April 2015, she also applied, ex parte, for a stay of the default judgment. Justice Bellew, who was the duty judge, granted the stay.
On 17 April 2015 the Local Court issued the judgment regarding costs.
On 23 April 2015 McCallum J ordered that the stay be continued on condition that the solicitor prosecute the appeal with expedition. On 1 May 2015 McCallum J granted leave to the solicitor to appeal to this Court pursuant to s 40 of the Local Court Act.
Directions were made by consent by the Registrar on 11 June 2015 which provided for the filing of evidence and submissions.
The matter was listed for hearing before me on 29 September 2015. At 6.05am on that day the solicitor sent an email to my Associate and to Ms Dufour informing them that her mother had just been admitted to hospital and that she intended to have an agent appear for her at 10am to have the matter “stood in the list”. Mr Hiramanek appeared as agent on behalf of the solicitor at 10am and sought an adjournment of the hearing. After consulting the parties, I granted an adjournment and listed the matter for hearing on 6 October 2015.
During the hearing on 29 September 2015 the barrister sought photocopy access to certain documents which had been produced by the solicitor and tagged by the barrister during his earlier inspection of those documents. Rather than have the documents uplifted, I arranged for my tipstaff to copy the tagged documents and provided the barrister with a photocopy. The document copied was a letter dated 28 February 2014 from the solicitor to Mr Reidy and annexures, which together comprised 38 pages.

The hearing in this Court on 6 October 2015

The evidence of what occurred at previous hearings in the Local Court

Although the barrister had asked the solicitor to include in the Court Book the transcript of all relevant hearings in the Local Court, the solicitor refused to do so. It was her obligation, as plaintiff, to include such transcripts in the material provided to this Court: UCPR 50.14(1)(b). Ultimately, the barrister, over the solicitor’s objection, tendered the transcripts of the hearings in the Local Court on 6 November 2014; 17 February 2015; 12 March 2015; 18 March 2015; and 2 April 2015. The transcripts of proceedings on each of those days were germane to the appeal as, apart from other considerations, the solicitor had alleged that she had been denied a fair hearing before the order for default judgment was made.

Additional evidence in this Court

At the hearing before me both the barrister and solicitor adduced evidence which went beyond the material usually before this Court in proceedings of this nature since it went to the issue whether the solicitor’s production in response to the notice to produce had been complete (an issue of fact that was determined by the Magistrate against the solicitor) and included some material which was not before the Magistrate. The barrister pressed the evidence on the footing that the power under s 41 of the Local Court Act was discretionary and that, if I was satisfied that the solicitor was otherwise entitled to relief, the evidence ought incline me to exercise my discretion against the grant of relief. He sought (and was granted) leave to cross-examine the solicitor, who, in turn, cross-examined him in this Court.
For the reasons given below, I am not satisfied that the solicitor is entitled to relief since I am not satisfied that there was any error such as would warrant the orders challenged being set aside, or varied. However, I am obliged to make all relevant findings. Accordingly I propose to address the additional evidence adduced before me (which was not before the Magistrate) and make findings accordingly.
The additional evidence was largely relevant to the ambit of the notice to produce and the documents produced by the plaintiff to the Local Court on 17 December 2014. It was ultimately conceded by the solicitor that she may not have produced a complete version of the Taperell report on 17 December 2014 because she printed out her own copy for the purposes of providing a complete version under cover of her letter dated 11 March 2015. However, she maintained that she believed that she had produced a complete copy to the Local Court.

The letter from the solicitor to Mr Reidy dated 28 February 2014

The solicitor’s letter to Mr Reidy dated 28 February 2014 was also tendered (extracts of which are set out above). I am satisfied that this is the letter to which the barrister referred on 12 March 2015 (and which had been referred to in correspondence, commencing with the email sent to the solicitor on 6 January 2015) when he was addressing the Magistrate about his knowledge that the plaintiff had lodged proofs of debt which included his outstanding fees in the Haratsaris bankruptcy.
The barrister annexed to his affidavit of 16 July 2015 (which was read in this Court) the notes he had taken when he inspected the documents with Ms Dufour on 6 January 2015. On page 5 of the notes, the barrister recorded notes made of the four pages only of the incomplete Taperell report that had been produced on 17 December 2014. These four pages were tendered as evidence before me.
On page 14 of the barrister’s handwritten notes, he recorded that the letter dated 28 February 2014 (which was in evidence before me but not before the Magistrate as photocopy access had not been granted) comprised two pages and referred to a proof of debt that was lodged on 22 November 2013 with a statement of claim and itemised bill of costs. He noted and recorded on page 15 of his handwritten notes that the solicitor had made a declaration on the proof of debt attached to the letter of 28 February 2014 as follows:

“I declare that the bankrupt/debtors owe the amount claimed by the creditor named above in Annexure A.”

The barrister noted in his handwritten notes that an itemised bill of costs dated 19 August 2013 had not been produced.
The wording of the letter of 28 February 2014 corresponds with the description of its contents in the email dated 6 January 2015 to the solicitor drawing her attention to the deficiencies in production.
For the reasons given above, I am satisfied that the solicitor produced the letter dated 28 February 2014 and its attachments to the Local Court on 17 December 2014 when she produced the other documents.

The National Personal Insolvency Index

The barrister also tendered before me the National Personal Insolvency Index which was extracted on 10 July 2015 in respect of Theodoros Haratsaris which records that the date of bankruptcy was 21 August 2013 and the trustees were Antony De Vries and David Solomons. There is no record that the trustees changed at any time over that period or any suggestion from the solicitor that Mr De Vries had not been the trustee throughout.

The affidavit of Ms Dufour sworn 16 July 2015

Ms Dufour, who was not required for cross-examination, deposed that she and the barrister had inspected the documents produced to the Local Court Registry in answer to the notice to produce. She had observed the barrister making a file note in the course of the inspection. She deposed that the referee’s report was incomplete and that no proofs of debt lodged by the solicitor in the Haratsaris bankruptcy dated 19 August 2013 or 22 November 2013 were produced.

The affidavit of the barrister sworn 16 July 2015

The barrister largely deposed to the procedural matters set out above. He also deposed that only an incomplete copy of the referee’s report had been produced and that the letter of 28 February 2014 with attachments had been produced.

Oral evidence of the solicitor in this Court

The solicitor conceded in cross-examination that she had lodged proofs of debt in both the Cross and the Haratsaris bankruptcies. She admitted that the proofs of debt lodged in the Haratsaris bankruptcy related to her fees for acting as the solicitor for Mr and Ms Haratsaris, as well as associated disbursements, including counsel’s fees.
In the course of her cross-examination the solicitor accepted that:

she had read the letter dated 30 January 2015 and the preceding emails sent in January 2015 when she returned from holidays in early February 2015, and, in any event, prior to the review hearing on 17 February 2015;

as a result of reading those documents, she became aware of the two issues the barrister had raised with her compliance with the notice to produce (the referee report and the original proof of debt in the Haratsaris bankruptcy);

she had made no response at all to these two issues prior to 17 February 2015; indeed, her only response to the barrister’s solicitor was the letter dated 11 March 2015 as neither issue was addressed in her affidavit sworn 26 February 2015 which was filed on the following day;

she informed the Local Court on 17 February 2015 that she had complied with the notice to produce notwithstanding that it was not until 10 March 2015 that she first attended the Registry to inspect what she had produced and consider it in light of the two deficiencies the barrister had raised;

she had not produced the proof of debt dated 22 November 2013 lodged in the Haratsaris bankruptcy (referred to in her letter to Mr Reidy dated 28 February 2014) in answer to the notice to produce.

The solicitor alleged that she was not obliged to produce the earlier proof of debt (lodged on or about 22 November 2013) because:

it was not the most current proof of debt; and

“Mr Reidy” was not referred to in the notice to produce.

She did not advance any reason which I regard to be rational as to the basis of the first assertion. As to the second assertion, it is not to the point as the notice to produce required production of proofs of debt.

Oral evidence of the barrister before me

There was no evidence adduced in the cross-examination of the barrister that was germane to the exercise of my discretion or any matter that called for my determination.

Other matters arising in the hearing before me

For completeness I record that the solicitor placed substantial reliance in her submissions on the reasons given by McCallum J on 23 April 2015 for granting a stay of the judgment pending determination of this appeal. Her Honour’s reasons, which I apprehend were given in the course of a busy duty list immediately following argument, are detailed and considered. However, her Honour was hearing an application for a stay and was not hearing the matter finally. Moreover, the evidence that was before me was not before her Honour. Accordingly, her Honour’s reasons are to be read in that context. In so far as her Honour could be regarded as expressing a view, it was not a final view; nor do her Honour’s reasons bind me in the determination of the appeal.

The applicable rules

This Court’s jurisdiction to determine the appeal is relevantly provided for by ss 40 and 41 of the Local Court Act 2007 (NSW). Section 40 makes provision for appeals by leave (which was granted by McCallum J on 1 May 2015). Section 41(1) provides:

(1) The Supreme Court may determine an appeal made under section 39(1) or 40:
(a) by varying the terms of the judgment or order, or
(b) by setting aside the judgment or order, or
(c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court’s directions, or
(d) by dismissing the appeal.

The provisions which are relevant to the proceedings and orders made in the Local Court are contained in Part 6 of the Civil Procedure Act, which is entitled “Case management and Interlocutory matters” and the UCPR. So far as is relevant for present purposes they provide as follows.

56 Overriding purpose
(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.
(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.
. . .
(5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs.
. . .
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).
58 Court to follow dictates of justice
(1) In deciding:
(a) whether to make any order or direction for the management of proceedings, including:
(i) any order for the amendment of a document, and
(ii) any order granting an adjournment or stay of proceedings, and
(iii) any other order of a procedural nature, and
(iv) any direction under Division 2, and

(b) the terms in which any such order or direction is to be made,
the court must seek to act in accordance with the dictates of justice.

(2) For the purpose of determining what are the dictates of justice in a particular case, the court:
(a) must have regard to the provisions of sections 56 and 57, and
(b) may have regard to the following matters to the extent to which it considers them relevant:
(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case.

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.
60 Proportionality of costs
In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.

61 Directions as to practice and procedure generally
(1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings.
(2) In particular, the court may, by order, do any one or more of the following:
(a) it may direct any party to proceedings to take specified steps in relation to the proceedings,
(b) it may direct the parties to proceedings as to the time within which specified steps in the proceedings must be completed,
(c) it may give such other directions with respect to the conduct of proceedings as it considers appropriate.

(3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following:
. . .
(c) it may strike out any defence filed by a defendant, and give judgment accordingly,
. . .
(g) it may make such other order or give such other direction as it considers appropriate.

(4) Subsection (3) does not limit any other power the court may have to take action of the kind referred to in that subsection or to take any other action that the court is empowered to take in relation to a failure to comply with a direction given by the court.

The UCPR relevantly provides:

Part 16 Default judgment
16.1 Application of Part
This Part applies to proceedings commenced by statement of claim.
16.2 Definition of “in default”
(1) A defendant is in default for the purposes of this Part:
. . .
(c) if, the defendant having duly filed a defence, the court orders the defence to be struck out.

. . .
16.3 Procedure where defendant in default
(1) If a defendant is in default, the plaintiff:
(a) may apply for judgment to be given under this Part, according to the nature of his or her claim for relief, against the defendant in default, and
. . .

(1A) Unless the court otherwise orders, an application under this rule:
(a) may be dealt with in the absence of the parties, and
(b) need not be served on the defendant.

(2) Unless the court orders otherwise, an application for judgment to be given under this Part must be accompanied by:
(a) an affidavit of service of the statement of claim (the affidavit of service), and
(b) an affidavit in support of the application (the affidavit in support).

. . .
(4) Unless the court orders otherwise, an affidavit in support is valid for the purposes of an application only if it has been sworn within 14 days before the date on which the application is filed.
Division 2 Notice to produce before hearing
21.9 Definitions
(1) In this Division:
notice to produce means a notice to produce referred to in rule 21.10.
party A means a party to whom another party is producing, or being asked to produce, documents or things for inspection.
party B means a party who is producing, or being asked to produce, documents or things for inspection.
(2) For the purposes of this Division, a document or thing is to be taken to be relevant to a fact in issue if it could, or contains material that could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or thing would be admissible in evidence.
21.10 Notice to produce for inspection by parties
(1) Party A may, by notice served on party B, require party B to produce for inspection by party A:
(a) any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by party B, and
(b) any other specific document or thing that is clearly identified in the notice and is relevant to a fact in issue.

(2) A notice to produce may specify a time for production of all or any of the documents or things required to be produced.
21.11 Production under notice to produce
(1) Unless the court orders otherwise, party B must, within a reasonable time after being served with a notice to produce:
(a) produce for party A’s inspection such of the documents or things referred to in the notice (other than privileged documents) as are in party B’s possession, and
(b) serve on party A, in respect of any document that is not produced, a notice stating:
(i) that the document is a privileged document, or
(ii) that the document is, to the best of party B’s knowledge, information and belief, in the possession of a person identified in the notice, or
(iii) that party B has no knowledge, information or belief as to the existence or whereabouts of the document.

(2) For the purposes of subrule (1):
(a) unless party B establishes to the contrary, 14 days or longer after service of the notice is to be taken to be a reasonable time, and
(b) unless party A establishes to the contrary, less than 14 days after service of the notice is to be taken to be less than a reasonable time.

Division 4 Setting aside and variation of judgments
36.15 General power to set aside judgment or order
(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.
(2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent.
36.16 Further power to set aside or vary judgment or order
(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.
(2) The court may set aside or vary a judgment or order after it has been entered if:
(a) it is a default judgment (other than a default judgment given in open court), or

. . .
(3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:
(a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or
(b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.

(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.
(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.
(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).
(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.

In the Dictionary to the UCPR, “pleading” includes a reply.

The grounds of appeal

The grounds of appeal are set out at the commencement of these reasons. The solicitor refined her submissions orally before me and contended that, in substance, she was entitled to have the Magistrate’s orders and the default judgment set aside for the following reasons:

the matter had not been determined on the merits;

the Magistrate refused to entertain her motion to set aside default judgment on 2 April 2015; and

the Magistrate refused to permit her to adduce relevant evidence and found, without any evidentiary basis, that she had not complied with the notice to produce and was therefore in breach of the order.

The barrister contended that default judgment had been entered as a result of the solicitor’s failure to produce documents on 15 December 2014. He accepted that, if she had produced documents by 17 December 2014 in compliance with the notice to produce, he would not take any point about compliance and would not rely on the self-executing order to support the default judgment. However he contended that, by the time the matter was heard on 12 March 2015, the solicitor had still not produced the documents he had identified as missing and, in those circumstances, the Magistrate was correct to find that she had not complied with the notice to produce and correct to permit him to apply for default judgment.

Ground 2: alleged failure to deal with the notices of motion on their merits on 18 March 2015

As ground 2 relates to the decision made on 18 March 2015, I propose to address it before addressing ground 1, which relates to the decision made on 2 April 2015. In ground 2, the solicitor makes a general allegation that the notices of motion were not determined on their merits and specific allegations that certain matters were not taken into account.
The question for the Magistrate on 12 March 2015 was whether the solicitor’s defence, which had been struck out by operation of the orders made by McCallum J on 10 December 2014, ought be reinstated, or whether the barrister ought be permitted to apply for default judgment on the basis that the solicitor’s defence had been struck out. In this context, the solicitor was seeking an indulgence; the onus was on her to persuade the Court that the discretion ought be exercised in her favour.

Matters to which the solicitor alleges the Magistrate failed to have regard

The solicitor’s arguable defence (ground 2(a))

The question whether the solicitor had an arguable defence was not the subject of express reasons. The reason for this is that the solicitor’s defence had been struck out because she had failed to comply with the notice to produce, not because of any judicial determination that her defence was unarguable or should be summarily dismissed on that basis. Accordingly, the Magistrate was not in error in not specifically addressing whether the solicitor had an arguable defence since this was not a matter that her Honour was required to take into account.
Nonetheless, the barrister’s submissions made clear that the question whether the solicitor had included his fees in her proof of debt in the Haratsaris bankruptcy was highly relevant to whether her defence was arguable. There is a prima facie inconsistency between, on the one hand, her defence (that she had no obligation to pay the barrister) and her conduct in proving for his fees in the bankruptcy of the relevant client, Haratsaris (which required her to declare that the sums, including disbursements owing to the barrister were owed by the debtor). In the email of 6 January 2015 the barrister had raised the letter of 28 February 2014 with the solicitor and referred to her having proved (by way of supplementary proof of debt) in the Haratsaris bankruptcy.
The solicitor did not address the substantive point raised at all; she did not take the point that the documents were not covered by the notice to produce until 11 March 2015 (the day before the hearing); and at no time did she provide to the Magistrate (or indeed, to this Court) any rational reason why she produced the letter of 28 February 2014 and not the proof of debt of 22 November 2013.

The nature and reason for the solicitor’s defaults (grounds 2(b) and (c)) and whether the solicitor had remedied any previous defaults (ground 2(d))

The Magistrate’s reasons, though adequate, contain a summary of the procedural events which is necessarily shorter than the extensive summary set out above. However, it was not necessary for the Magistrate to spell out all that had gone before as long as her reasons were sufficient to explain the basis for her orders. Having regard to the background of the matter, including the previous hearings in the Local Court (which, in the case of the hearings on 17 February 2015, 12 March 2015, 18 March 2015 and 2 April 2015, all took place in front of Magistrate Keogh) and in this Court, the Magistrate’s decision is, in my view, to be understood on the following bases: the solicitor was in default in several respects; had not explained the various defaults (except as to production on 17 December 2014 rather than 15 December 2014); and had not rectified at least one of the defaults identified.
There were two relevant categories of default:

the solicitor had failed to produce any documents in answer to the notice to produce on the various dates ordered by the Court: 10 September 2014 (as stated in the notice to produce and as agreed in orders made on 6 August 2014); 29 September 2014 (the extended date imposed on 24 September 2014); 13 November 2014 (in accordance with the orders of Magistrate Buscombe on 6 November 2014; and, finally, on 15 December 2014 (in accordance with the orders made by McCallum J on 10 December 2014); and,

the solicitor had not fully complied with the notice to produce in that:

she had produced an incomplete copy of the referee’s report of 4 March 2013 on 17 December 2014 and had not produced a full copy until 11 March 2015;

she had not produced the proof of debt referred to in her letter dated 28 February 2014 to Mr Reidy which had been lodged on 22 November 2013, although she had produced a later proof of debt (lodged under cover of letter dated 28 February 2014).

The Magistrate did not have evidence of the reasons for the defaults prior to 15 December 2014; accordingly, they were unexplained. It was open to the Magistrate to find that solicitor was aware, at least by 17 February 2015, at the review hearing, that the due date for production (without which the defence would automatically be struck out) was 15 December 2014 and not 17 December 2014, since this matter had been amply raised and addressed at the hearing on 17 February 2015. Indeed, any finding that she was not aware of the default at least by 17 February 2015 would not have been reasonably open in light of her admissions and the correspondence that she admitted that she had received which addressed the question and attached the relevant Court orders. Accordingly, it was incumbent on the solicitor to provide evidence of, and reasons for, that default by the hearing on 12 March 2015 if she wanted the Magistrate to rely on her explanation and take it into account in her favour at the hearing as a reason to permit her to rely on a defence in the proceedings.
Moreover, the barrister had raised in correspondence throughout January 2015, two substantial deficiencies in the solicitor’s compliance with the notice to produce. The solicitor had rectified one default by providing the complete copy of the Taperell report under cover of letter dated 11 March 2015 but had given no explanation as to why a complete copy had not been produced when the other documents were produced on 17 December 2014, or at any time prior to 11 March 2015.
Her answer to the second matter was to assert merely that “the Reidy documents” did not, in her view, fall within the notice to produce. This assertion was made for the first time on 11 March 2015. The solicitor did not explain why, as alleged by the barrister in his email of 6 January 2015, she had produced a supplementary proof of debt in the Haratsaris matter dated 28 February 2014 but had not produced the proof dated 22 November 2013 referred to in the letter. The documents were, as the barrister had explained to the Magistrate, plainly relevant to the reply and accordingly, whether the solicitor had any defence to the barrister’s claim.
The Magistrate’s conclusion was influenced, if not determined, by the solicitor’s failure to explain these various matters as appears from the conclusion of her reasons in which she said:

“Consequently it was apparent that to avoid default judgment she must address these issues and in particular her non-compliance with the production of documents, in her Notice of Motion and any evidence in support of that Notice of Motion. She did not.”

Allegation that the Magistrate’s reasons for judgments and orders were not supported by evidence

For the reasons given above, there was evidence to permit the Magistrate to draw the following inferences:

The solicitor was aware by 17 February 2015 at the latest that the date in McCallum J’s order was 15 December 2014, not 17 December 2014, and that she had been informed of the latter date as a result of an error by her then counsel.

The solicitor had not complied with the notice to produce since, notwithstanding ample time, warning and notice, she had not:

established that the proof of debt lodged on 22 November 2013 was not covered by the notice to produce; or

addressed the substantive matters raised by the barrister in the email of 6 January 2015.

Allegation that the Magistrate had failed to hear and determine the notices of motion on their merits

I consider this allegation to be without foundation. The detailed exposition of the various stages of the proceedings and the opportunities given to the solicitor to obtain the Court’s indulgence to protect her from the consequences of her defaults is sufficient to show that the Magistrate, on 12 March 2015, heard and determined the notices of motion “on their merits”. What the Magistrate was not required to do, and what she did not do, was determine the case on its merits. It was not a final hearing on the merits; it was an interlocutory application, the result of which had the potential to dispose of the proceedings.

Ground 1: alleged refusal to exercise jurisdiction

On 2 April 2015 the Magistrate heard from the parties and considered the solicitor’s application. Her Honour had, and exercised, jurisdiction to determine whether she had jurisdiction. Her Honour determined that, in substance, the solicitor sought to re-agitate matters that were determined against her on 18 March 2015. Her Honour referred to Autodesk Inc v Dyason (No. 2) 176 CLR 300 and found that the solicitor was effectively requiring her to deal with issues that had been determined.
As the narrative set out above indicates, the Magistrate heard and considered the solicitor’s application and, before determining the matter, heard from the solicitor and the barrister as to what jurisdiction, if any, she had to determine the matter. I discern no error in her Honour’s approach. It was open to her Honour to dismiss the solicitor’s notice of motion. In all the circumstances it was a proper exercise of her Honour’s discretion. I am not persuaded that the discretion miscarried in any way, or involved a wrongful refusal to exercise jurisdiction.
The first ground has not been made out.

Summary and conclusion

The solicitor failed to comply with the notice to produce as directed. Accordingly, a self-executing order was made which resulted in her defence being struck out by operation of that order on 15 December 2014. Thus, the solicitor was in default pursuant to UCPR 16.2 and the barrister was entitled to apply for default judgment under UCPR 16.3. Because of the Court’s orders, the barrister was not entitled to apply for default judgment in the absence of the solicitor prior to the orders made by Magistrate Keogh in his favour to that effect on 18 March 2015: UCPR 16.3(1A). However, once the orders were made by Magistrate Keogh on 18 March 2015, the barrister was entitled to apply for default judgment in the Registry. It was open to Magistrate Keogh to refuse to allow the solicitor to re-open her case on 18 March 2015 to adduce further evidence of issues relating to her non-compliance, the matter having been dealt with on 12 March 2015 and having been listed for decision and publication of reasons on 18 March 2015.
Although UCPR 36.16(2)(a) did not strictly apply because the default judgment was not “given” in open court, it is apparent from the narrative set out above, that all relevant arguments about whether default judgment ought be given were canvassed in open court. The Magistrate did not “give” or enter judgment in open court because her Honour preferred that it be done in the Registry. However, for the reasons given by her Honour on 2 April 2015, it was open to her Honour to refuse to set aside the default judgment, when the solicitor applied for that to be done.
The present appeal demonstrates that, as the High Court found in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175, and as is apparent from the terms of Part 6 of the Civil Procedure Act and the UCPR referred to in these reasons, no party has, irrespective of the nature and extent of that party’s procedural defaults, an indefeasible right to a final hearing on the merits. The interests of justice require weight to be given to the administration of justice, compliance with court orders and the importance of sanctions against non-compliance, particularly where ample opportunity has been given to the defaulting party to rectify earlier defaults. No error such as would warrant relief in this Court has been demonstrated in the orders of the Local Court which are sought to be set aside; in the approach taken by Magistrate Keogh; or in her Honour’s reasons.

The discretion

As I have not found any of the grounds relied upon to have been made out, it is not necessary to consider either whether relief ought be granted (if the grounds were made out) or the ambit of any discretion in that regard. However, for completeness, I should record that the additional evidence relied upon before me weighed heavily against the grant of any relief. It showed that the solicitor had proved in the Haratsaris bankruptcy for all the barrister’s fees, which were included in her claim for costs against the client. In these circumstances there would appear to be no real basis for her allegation that she did not owe the barrister the fees he had charged for work conducted in the matter.

Orders

I make the following orders:

Summons dismissed.

Unless an application for a different order is made in writing to my Associate within seven days, order the plaintiff to pay the defendant’s costs of the proceedings.

The stay granted by Bellew J on 17 April 2015 and continued by McCallum J on 23 April 2015 is hereby dissolved.

**********

Decision last updated: 29 October 2015

Medium Neutral Citation:	Bechara v Bates (No 3) [2015] NSWSC 1588
Hearing dates:	6 October 2015
Decision date:	29 October 2015
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) Summons dismissed. (2) Unless an application for a different order is made in writing to my Associate within seven days, order the plaintiff to pay the defendant’s costs of the proceedings. (3) The stay granted by Bellew J on 17 April 2015 and continued by McCallum J on 23 April 2015 is hereby dissolved.
Catchwords:	APPEAL – appeal from Local Court – whether Magistrate erred in granting leave to apply for default judgment as a consequence of failure to comply with notice to produce – ample opportunity provided to remedy defaults – no error in Magistrate’s decision identified APPEAL – jurisdiction – notice of motion dismissed after hearing of the merits - whether Magistrate erred in refusing to set aside dismissal of notice of motion – application to set aside previous orders was in the nature of an appeal – no error shown in Magistrate’s refusal of application due to lack of jurisdiction PRACTICE AND PROCEDURE – party’s entitlement to final hearing on merits not indefeasible – weight to be given to administration of justice and compliance with court orders – importance of sanctions against non-compliance
Legislation Cited:	Civil Procedure Act 2005 (NSW), Pt 6, ss 56, 57, 58, 59, 60, 61 Legal Profession Act 2004 (NSW), ss 302, 310, 311, 312, 315, 316, 317 Local Court Act 2007 (NSW), ss 38, 40, 41 Uniform Civil Procedure Rules 2004 (NSW), rr 10.14, 12.7, 16.2, 16.3, 21.10, 36.16
Cases Cited:	Aon Risk Services Australia Ltd and Australian National University [2009] HCA 27; 239 CLR 175 Autodesk Inc v Dyason (No. 2) 176 CLR 300 Bechara v Bates [2014] NSWSC 1935 Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 200
Category:	Principal judgment
Parties:	Maria Bechara trading as Bechara and Company (Plaintiff) Philip Bates (Defendant)
Representation:	Counsel: Plaintiff in person P Bates (Defendant in person) Solicitors: Maria Bechara, Bechara and Company (Plaintiff) Bannister Law (Defendant)
File Number(s):	2015/115082 Local Court of New South Wales Civil 18 March 2015 and 2 April 2015 Keogh LCM 2014/159095