Commonwealth Bank of Australia v Rafidi
[2016] NSWSC 1931
•14 December 2016
Supreme Court
New South Wales
Medium Neutral Citation: Commonwealth Bank of Australia v Rafidi [2016] NSWSC 1931 Hearing dates: 14 December 2016 Decision date: 14 December 2016 Jurisdiction: Equity - Commercial List Before: Ball J Decision: The defendant’s amended notice of motion filed in court on 14 December 2016 dismissed.
Catchwords: PRACTICE AND PROCEDURE – notice of motion – application to set aside judgment – Uniform Civil Procedure Rules 2005 (NSW) – whether judgment by consent should be set aside Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) r 36.16 Cases Cited: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 Category: Procedural and other rulings Parties: Commonwealth Bank of Australia Limited ABN 48 123 123 124 (Plaintiff/Cross Defendant)
Iyad Rafidi (Defendant/First Cross Claimant)
Brick and Block Company Pty Limited (In Liquidation) ACN 106 002 162 (Second Cross Claimant to the Statement of 2nd Cross Claim)Representation: Counsel:
Solicitors:
A Leopold SC with Ms E Holmes (Plaintiff/Cross Defendant)
T Hall, Solicitor (Defendant/Cross Claimants)
Dentons (Plaintiff/Cross Defendant)
Trevor Hall Partners (Defendant/Cross Claimants)
File Number(s): 2011/251728 Publication restriction: None
Judgment
Introduction
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On 4 November 2016, I entered judgment by consent in this matter against the defendant, Mr Rafidi, in favour of the plaintiff, Commonwealth Bank of Australia Limited. By notice of motion filed on 17 November 2016 (which was amended on 14 December 2016), Mr Rafidi sought to have that judgment set aside. I dismissed the motion on 14 December 2016. At that time, I indicated that I would give reasons later if necessary.
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On 7 March 2017, the solicitors for the Bank sent to my Associate an email advising that Mr Rafidi had sought leave to appeal against my decision and asking whether in those circumstances I intended to publish reasons for my decision on 14 December 2016.
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It is unfortunate that the matter was not raised with my Associate before now. However, in light of the email I have concluded that it is appropriate that I should publish reasons for my decision. These are those reasons.
Background
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It is not necessary to set out the history of the proceedings in any detail. It is sufficient to observe that as a result of developments in the case, Mr Hall, who was then acting for Mr Rafidi, indicated to the court on 2 November 2016 that he had instructions to consent to entry of judgment on the Bank’s claim and Mr Rafidi’s cross claim in favour of the Bank. The court did not enter judgment at that time because Mr Rafidi was in the process of seeking the consent of insurers to that course of action. Instead, the matter was stood over until 4 November 2016.
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On 4 November 2016, judgment was entered in favour of the Bank. Before judgment was entered, Mr Leopold SC, who appeared for the Bank, produced lengthy submissions and three volumes of documents in support of an order that Mr Rafidi pay the Bank’s costs on an indemnity basis and in support of an application that the papers in the matter be referred to the appropriate authorities for investigation into the question whether criminal charges should be laid against Mr Rafidi, among others, in connection with the matters that were the subject of the proceedings.
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As I have said, the court entered judgment at that time. The judgment included an order for indemnity costs on the basis that the Bank was entitled to indemnity costs under a facility agreement that had been guaranteed by Mr Rafidi. The application for referral was stood over until 14 December 2016. Before dealing with that application, I dealt with the amended motion filed in court that day seeking to set aside the judgment that was entered on 4 November 2016. I dismissed that motion. After hearing submissions, I also concluded that the papers should not be referred.
Reasons
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It was not disputed that the court had power to set aside the consent judgment. Rule 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) relevantly provides:
(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.
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(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.
It was apparent that Mr Rafidi’s notice of motion was filed within the 14 days.
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The power to set aside a judgment “is a jurisdiction to be exercised cautiously, bearing in mind the public interest in the finality of litigation”: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6 at 317 per Dawson J; see also at 302 per Mason CJ; 308 per Brennan J.
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In the present case, the only reason advanced by Mr Rafidi for why the judgment should have been set aside was to give him an opportunity to clear his name in light of the application for the court to refer the papers to the appropriate authorities. I concluded that that was not a sufficient basis on which to set aside the judgment. I did so for several reasons.
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First, there was no evidence from Mr Rafidi that he had not appreciated that the papers could be referred, notwithstanding that he had consented to judgment or that that would have made a difference to his decision to consent to judgment. Indeed, at the time judgment was obtained, Mr Rafidi was legally represented and was on notice through his legal representative that an application would be made for the referral of the papers following entry of judgment.
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Second, I considered that the application to set aside the judgment was misconceived in any event. The question whether the court should refer the papers to the appropriate authorities involved an independent administrative decision by the court. Subject to giving Mr Rafidi an opportunity to be heard on the question of referral, it was always open to the court to refer the papers at the conclusion of the hearing irrespective of the outcome. It may be inferred that Mr Rafidi consented to judgment against him because, having regard to developments in the case, it was apparent that his prospects of success were poor. In my opinion, it was not in the interests of justice to permit Mr Rafidi to resile from the position he took previously, presumably on legal advice, to achieve a collateral benefit that he thought would arise from pursuing the court proceedings.
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Third, it was far from clear what further steps Mr Rafidi could have taken in the court proceedings to clear his name. Most of the witnesses he intended to call had given evidence. It was apparent that their evidence had gone badly for Mr Rafidi’s case. Mr Rafidi gave his evidence in chief through affidavits. He was cross-examined on those affidavits extensively, although that cross-examination was not completed because Mr Rafidi claimed to be ill and unable to attend court.
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Fourth, a continuation of the court proceedings was not the only means by which Mr Rafidi could have cleared his name. In the event that the papers were referred, it was open to Mr Rafidi to put whatever material he thought was appropriate before the relevant authorities to convince them that no prosecution was warranted.
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In light of these conclusions, it was my opinion that the public interest in the finality of litigation clearly favoured a refusal to set aside the judgment.
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Decision last updated: 14 March 2017
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