Colin Biggers and Paisley Pty Limited t/as Colin Biggers and Paisley v McKenzie

[2017] NSWSC 1426

Supreme Court

New South Wales

Medium Neutral Citation:

Colin Biggers & Paisley Pty Limited t/as Colin Biggers and Paisley v McKenzie [2017] NSWSC 1426

Hearing dates:

16 October 2017

Date of orders:

16 October 2017

Decision date:

16 October 2017

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

Leave to cross-examine Mr Harkin is refused.

Catchwords:

EVIDENCE – Cross-examination – Leave to cross-examine in interlocutory proceedings – Leave refused

Category:

Procedural and other rulings

Parties:

Colin Biggers & Paisley Pty Limited (Respondent/Plaintiff)
Mr Mark McKenzie (Applicant/Defendant)

Representation:

Counsel:

 

R Lovas (Applicant)
J Anderson (Respondent)

 

Solicitors:

  Amanda Louise Farmer (Applicant)
Colin Biggers and Paisley (Respondent)

File Number(s):

2016/350694

Publication restriction:

Nil

EX TEMPORE Judgment (REVISED)

1. This is an application for a stay of enforcement of a judgment that the plaintiff/judgment creditor has obtained against the defendant/judgment debtor in respect of a substantial sum of legal costs incurred on acting on behalf of the judgment debtor in proceedings in the Equity Division relating to a building dispute.

2. The costs have been properly assessed under legal procedures and the certificate of assessment has been registered as a judgment of this Court. An application for review of the original assessment was refused.

3. Mr Lovas of Counsel, who appears for the applicant/judgment debtor, has applied for leave to cross-examine Mr Harkin who has sworn an affidavit on behalf of the judgment creditor who resists the application for the stay.

4. There are three topics which Mr Lovas wishes to investigate. The first relates to a single transaction in a trust account ledger annexed to Mr Harkin's affidavit which relates to a sum of $5,000 of a total sum of $155,000 that had been paid on account of the costs. I cannot understand how that matter is relevant to the question I have to decide as a matter of discretion about whether to grant the stay. The basis of the application for the stay is that there are pending professional negligence proceedings in the Common Law Division against the solicitors in relation to their handling of the proceedings in the Equity Division which were settled during the hearing, and I decline to grant leave in respect of that matter.

5. The second matter relates to the reason for delay in the professional negligence proceedings, if that is the right way of putting it. The proceedings were only commenced in July 2017. They have been stood over to 3 November 2017 and Mr Harkin says, I paraphrase, that there is an issue from the plaintiff's point of view as to the parties.

6. For most of the time the judgment creditor acted for the judgment debtor "the firm" was an incorporated legal practice; for part of the time it was a large partnership. It is a very well-known firm consisting of as many as 54 partners and there is an issue about whether the plaintiff has correctly identified the individual partners constituting the firm at all material times.

7. Mr Lovas submits that that matter is put forward by Mr Harkin to say that there has been delay on the plaintiff's part in the prosecution of the negligence proceedings. I did remark during the course of the argument that I thought that that was something that surely could be sorted out inter partes and I asked Mr Anderson of Counsel, who appears for the judgment creditor, about it. He indicated he was not instructed in the matter but obtained instructions from Mr Harkin who said that he is not the partner handling the professional negligence proceedings, he is in the insolvency department of the firm. Mr Moran is the relevant principal and Mr Harkin cannot give any information to me or any indication to me as to the ability of that matter to be resolved amicably.

8. Mr Anderson says that it is not going to be suggested that there has been, as I understood him, disentitling delay on the part of the judgment debtor simply, as a matter of fact, it is pointed out in the affidavit that the matter has been stood over. Clearly when one looks at this the professional negligence proceedings are in their infancy. The Court has powers requiring parties or persons to disgorge relevant information, including by way of what used to be called 'preliminary discovery'.

9. As it is not going to be submitted that the "delay" is disentitling, and as Mr Anderson says that matter is not the import of what Mr Harkin says, I think then the cross-examination is not relevant. It seems to me that lest my confidence about ability of a large reputable firm of solicitors to assist the plaintiff to sort this out is misplaced, then I will at the conclusion of these proceedings grant the plaintiff liberty to apply in respect of the professional negligence proceedings for appropriate orders.

10. The third issue relates to the means of the judgment debtor. He says effectively he is impecunious, he is unemployed and that the funds that were provided on account of costs were provided by his wife who is working and who is the source of the funds to purchase their home. He is concerned that the purpose of the defendant's notice for examination is to stultify those proceedings by bankrupting him.

11. Mr Harkin has said in his affidavit that the judgment creditor has no present intention to issue bankruptcy proceedings. I take it that is because at this stage they are not satisfied that they have a full picture of the judgment debtor's assets and liabilities and any source of income they may accept at face value. At the same time I appreciate that such an application may be made in due course if there is no other means of the judgment being satisfied.

12. I am of the view that Mr Lovas can make submissions related to the possible stultification of the other proceedings on the basis of the evidence as it presently stands and it is unnecessary to cross-examine or challenge Mr Harkin about his evidence in relation to the firm's present intention in relation to bankruptcy. As Mr Anderson points out in his submissions, even if such a step is taken in the circumstances, where there are proceedings that may be stultified by the making of an order relevant to the source of the judgment debt founding the bankruptcy, it does not follow, as a matter of course, that the bankruptcy order would be made and that the discretion lies with the Federal Courts in relation to making such an order in these circumstances.

13. Accordingly, I decline to permit cross-examination of Mr Harkin on that third topic and, in the circumstances, I will not permit any cross-examination given that I have rejected each of the matters Mr Lovas relies upon.

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Decision last updated: 23 October 2017