Donyette Pty Ltd v Toplodge Nominees Pty Ltd [No 2] - [2011] WASC 141

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DONYETTE PTY LTD -v- TOPLODGE NOMINEES PTY LTD [No 2] [2011] WASC 141

CORAM: CORBOY J

HEARD: 21 APRIL & 12 MAY 2011

DELIVERED : 13 MAY 2011

PUBLISHED : 26 MAY 2011

FILE NO/S: CIV 2156 of 2007

BETWEEN: DONYETTE PTY LTD
First Plaintiff
DONALD WILLIAM BRIDGER
LYNETTE JOY KARLOVSKY-BRIDGER
Second Plaintiffs
AND
TOPLODGE NOMINEES PTY LTD
First Defendant
MATTHEW VICTOR HARSLEY
KATHRYN ANN HARSLEY
Second Defendants

Catchwords:

Practice and procedure - Application to vacate trial - Representation of a corporate entity - Turns on its own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiff                :     No appearance
Second Plaintiffs           :     In person (Ms Karlovsky-Bridger)
First Defendant             :     Mr S J Davis
Second Defendants       :     Mr S J Davis

Solicitors:

First Plaintiff                :     No appearance
Second Plaintiffs           :     In person
First Defendant             :     Jackson McDonald
Second Defendants       :     Jackson McDonald

Case(s) referred to in judgment(s):

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178
HPM Pty Ltd v Fear [2002] WASCA 249
Miorado v Miorado [2005] WASC 105
Pollard v Endale Pty Ltd [2009] WASCA 189
Re Hoffman [2004] WASCA 238
Smith v McCusker [2000] WASCA 320

CORBOY J: (This judgment was delivered orally on 13 May 2011 and has been edited from the transcript.)

The application and the result

This action is listed for a 10‑day trial commencing 7 June 2011. The second plaintiffs, who are the directors and shareholders of the first plaintiff, have applied to vacate the trial.
I have concluded that the application should be allowed.

The history of the proceedings

The circumstances relating to the application and the reasons why the second plaintiffs have applied to have the trial vacated are best explained in the context of a chronology of the proceedings. The brief outline of the history of the proceedings that follows is drawn from my review of the court file.
The action was commenced by a writ of summons dated 15 November 2007. The writ was indorsed with a claim for damages allegedly caused by the first defendant's breach of contract, negligent misrepresentation or misleading or deceptive conduct in connection with the sale of land and a business known as 'Donnelly River Wines'. The land and associated business was sold by the first defendant (Toplodge) to the first plaintiff (Donyette). I will detail the plaintiffs' claims in respect of the sale later in these reasons.
It appears that the writ was not served until some time in about late May 2008. On 23 May 2008, an amended writ was filed. The indorsement was deleted and replaced by a statement of claim. I infer that the writ was served in its amended form. Conditional appearances were entered in early and mid‑June 2008.
The matter progressed through the interlocutory phase with reasonable diligence. The only period in which there appeared from the court file to have been a hiatus in the proceedings was between August and November 2009. It seems that a mediation conference was conducted on 19 August 2009. A status conference was to have been held on 31 August following termination of the mediation. However, on 28 August 2009 an order was made by consent vacating that conference and providing for a further conference to be held on 23 November 2009. No other order was made at that time.
On 23 November 2009, various orders were made for the filing of amended pleadings. Those pleadings were filed and in April 2010, further orders were made by consent adjourning a status conference to late June 2010. I infer that the purpose of that adjournment was to enable the parties to confer over the defendants' proposal that the matter be admitted to the CMC list. The action was entered into that list on 22 June 2010.
The pleadings were further amended in July and August 2010. In September 2010, the defendants applied to strike out certain amendments that had been made to the statement of claim. That application was heard on 16 November 2010 and a reserved decision was delivered on 3 December. On 21 December 2010 the matter was entered for trial and directions were made for the preparation and conduct of the trial. Those directions were varied in minor respects by an order made on 14 January 2011. On 21 January 2011, the plaintiffs filed an amended statement of claim. On 16 February 2011, the defendants filed an amended defence.
The first indication that there were difficulties in completing the timetable set by the trial directions emerged in mid‑February 2011. Bennett & Co and following a merger of firms, Lavan Legal, had appeared on the record for the plaintiffs from the commencement of the proceedings. A partner in that firm, Mr Bruce, had the conduct of the matter for the plaintiffs, assisted by Ms Sedic. Mr Bennett had appeared as counsel. The plaintiffs had first consulted Mr Bennett about their claim in mid‑2003.
On various dates in early to mid‑February 2011, Mr Bennett, Mr Bruce and Ms Sedic left Lavan Legal and after a short period, Mr Bennett, Mr Bruce and others formed a new firm.
In mid‑February 2011, the defendants' solicitors were advised by a solicitor at Lavan Legal that the plaintiffs wished to instruct Mr Bennett and Mr Bruce following their departure from that firm. It was said that discussions were being held with the plaintiffs for the purpose of transferring the conduct of the matter (see the affidavit of Matthew David Reid sworn on 8 March 2011).
It was also said that it was unlikely that the plaintiffs would be able to comply with the timetable for completing the next steps in the trial directions. Consequently, in early March the defendants sought a directions hearing in the matter. It is to be noted that they have consistently stated since that time that they wish to maintain the trial listing and were willing to accept reasonable modifications to the trial directions to accommodate the plaintiffs' position.
On 11 March 2011, Lavan Legal applied to be removed from the court record as appearing for the plaintiffs. The plaintiffs consented to the application and on 24 March 2011 an order was made removing that firm from the court's record.
The second plaintiffs reside in the Northern Territory. They were in Bali in mid‑March 2011. They dealt with Lavan Legal and that firm's application to be removed from the record while in Bali. The second‑named second plaintiff, Ms Karlovsky‑Bridger, also spoke to Mr Bruce at this time in an attempt to arrange for him and Mr Bennett to assume conduct of the plaintiffs' instructions. However, they were unable to reach an agreement with Mr Bruce on the terms on which he and Mr Bennett would act.
On 1 April 2011, orders were made vacating the previous trial directions and providing for alternative steps to be undertaken to prepare the matter for trial. However, those directions were expressed in a tentative form as, at that time, the plaintiffs had not secured legal representation.
On 8 April 2011, Ms Karlovsky‑Bridger sent an email to my associate advising that the plaintiffs would have to ask for 'an extension of time' due to an illness that Ms Karlovsky‑Bridger had contracted. The email stated that she had been unable to progress negotiations to obtain legal representation and completion of the steps that had been ordered on 1 April 2011 due to her illness. On 20 April 2011, Ms Karlovsky‑Bridger advised my associate that her health had not improved and that the plaintiffs had no alternative but to seek to vacate the trial. On 21 April, I made directions for the hearing of that application.

The plaintiffs' claims

It is necessary to briefly summarise the plaintiffs' claims before turning to consider the evidence relied on by the second plaintiffs in support of their application and the reasons why the application was opposed by the defendants.
By their statement of claim, the plaintiffs alleged that by a contract made on 1 May 2001, Donyette agreed to purchase and Toplodge agreed to sell land situated at Pemberton together with the business known as 'Donnelly River Wines' and the plant, equipment and trading stock forming part of that business. The contract was varied by deeds made between August and November 2001, including a deed dated 16 November 2001 (the Option Deed) that provided for settlement of the sale on 30 November 2001.
Toplodge agreed to provide vendor finance in an amount of $1.7 million, repayable by 30 November 2002. Toplodge was to remain the registered proprietor of the land until the vendor finance was repaid in full but Donyette would be entitled to possession of the land and business from the date of settlement. Donyette granted an irrevocable option to Toplodge to purchase Donyette's interest in the land and the stock of the business for $1.7 million if Donyette did not repay the amount advanced as vendor finance by 30 November 2002.
Donyette did not repay the vendor finance by 30 November 2002 and on 12 December 2002, the parties entered into a further deed (the December Deed) by which it was agreed that the land would be sold by an auction to be arranged by the defendants. Powers of attorney were granted by the plaintiffs to enable the defendants to act as their agents for the purpose of the sale.
Shortly prior to when the auction was scheduled to be conducted, the first‑named second defendant, Mr Harsley, contacted Ms Karlovsky‑Bridger to advise that Toplodge would extend the time for repayment of the vendor finance until 31 July 2003 provided that Donyette entered into a further deed with Toplodge. On the following day, Donyette and Toplodge entered into another deed (the 28 March Deed) that deferred and varied the terms of the option that had been granted pursuant to the Option Deed. The 28 March Deed provided that on the exercise of the option granted by Donyette, Toplodge would acquire the business and its plant and equipment, as well as the land and the trading stock. The option price was not varied. The 28 March Deed did not extend the period for repayment of the vendor finance.
The plaintiffs make a number of allegations concerning the terms of the 28 March Deed and the circumstances in which it was made. It is alleged that the deed is unenforceable as a penalty; that the terms of the deed amounted in substance to no more than an agreement to agree; that there was no consideration provided for the promises made by Donyette in the deed and that the deed was procured by representations concerning its effect and about Toplodge's intentions in respect of the option granted by the deed that were misleading or deceptive or likely to mislead or deceive.
It is further alleged that Toplodge and Mr Harsley acted unconscionably in procuring the deed, a plea that is supported by a number of allegations concerning the circumstances of the plaintiffs when they entered into the deed, what the defendants knew about those circumstances, what occurred immediately prior to the execution of the deed, the effect of the deed and Toplodge's intentions at the time that the deed was made. It is also said that Donyette was at a special disadvantage at the time that the deed was made because of its financial position and the financial circumstances of the second plaintiffs. A number of those allegations are also relied upon to attack the exercise of the option by Toplodge. That is alleged to have occurred shortly after the 28 March Deed was made, at which time, Toplodge took possession of the business, its plant, equipment and stock.
It is then alleged that the day after the option was exercised a meeting was held between Mr Bridger and Ms Karlovsky‑Bridger and Mr Harsley and the second‑named second defendant, Ms Harsley (the 8 April Meeting) at which a further agreement was made by which Toplodge granted an option to Donyette to re‑acquire the land, the business, the plant and equipment and stock, on payment of the amount outstanding on the vendor finance that had been provided by Toplodge. It was a term of that agreement that Donyette transfer a liquor licence associated with the business to Ms Harsley; that a caveat over the land be removed; that the business name of the business be released by Donyette and that the debtors of the business be transferred to Toplodge. It is alleged that Toplodge and Mr Harsley acted unconscionably in procuring that agreement.
The second defendants are said to have been knowingly concerned in the alleged contraventions of the Trade Practices Act 1974 (Cth) by Toplodge. It is also said that the defendants were in a fiduciary relationship with Donyette as a result of the powers of attorney that had been granted to enable the land to be sold pursuant to the December Deed. It is alleged that the defendants breached their duties as fiduciaries and there is also a claim for known receipt made against Ms Harsley.
Finally, there is a claim by Donyette in conversion in respect of the business, plant, equipment and stock.
It is alleged that Donyette suffered loss and damage as a consequence of the matters alleged against the defendants. Although relief is claimed on behalf of all of the plaintiffs, the allegations of loss and damage relate solely to Donyette.
It is not necessary to review the defence other than to note that I have been advised by counsel for the defendants that there are matters that are alleged in the defence that may require expert evidence.

The evidence in support of the plaintiffs' application

The evidence relied on by the second plaintiffs in support of their application comprised affidavits sworn by Ms Karlovsky‑Bridger on 29 April and 11 May 2011. In summary, Ms Karlovsky‑Bridger stated that:
(a)She and her husband were in Bali for nine days, returning on 21 March 2011.
(b)Two days after her return she started to feel unwell. She felt increasingly ill over the next few days. Her symptoms included a sore throat, nausea, severe migraine‑like headaches and a very stiff neck. She endeavoured to treat the symptoms herself but on 30 March 2011 she attended her general practitioner. Her blood pressure was elevated.
(c)Although she was feeling unwell when she participated by telephone in a directions hearing held on 1 April 2011, she did not mention her illness as she thought that her symptoms would resolve in the near future. However, the next day she attended a general practitioner and later, the accident and emergency department of the Royal Darwin Hospital. She was admitted to hospital, where she remained for three days. She was told that she was suffering from a viral infection that could not be completely identified.
(d)Although some of her symptoms have abated slightly, she continues to experience headaches, diarrhoea, fever, stiff neck, disorientation and an inability to concentrate. She needs a substantial amount of rest. She does not expect to recover for approximately another six to eight weeks.
(e)She and her husband first contacted Mr Bennett about the subject matter of their claims in this action in June or July 2003. Advice was given at that time, as a consequence of which the second plaintiffs concluded that they had insufficient funds to be able to commence proceedings. They again consulted Mr Bennett in about mid‑2007 and proceedings were commenced.
(f)Mr Bennett requested that Mr Bruce have day‑to‑day conduct of the plaintiffs' instructions. As previously indicated, Mr Bruce continued to manage those instructions from that time until about early 2011.
(g)In about February 2011, she and her husband were told that Mr Bruce and 'his entire team' were leaving Lavan Legal and joining a new firm with Mr Bennett. There were communications between herself and representatives of Lavan Legal regarding the future representation of the plaintiffs in this matter prior to her and her husband departing for Bali. As a result of those communications, the plaintiffs eventually agreed that Lavan Legal could withdraw from acting for them.
(i)At the time that the plaintiffs consented to Lavan Legal's application to withdraw from the court record, the second plaintiffs understood that there would be no disruption in the preparation of this matter for trial. Ms Karlovsky‑Bridger has deposed to the fact that she had been 'naive enough not to understand that any new personal case manager would have to become familiar with the matter, whether they were from within Lavan Legal or from another legal firm'. She understood that the only difference would be that the plaintiffs would be obliged to pay new solicitors for their representation rather than Lavan Legal.
(j)While in Bali, she spoke with Mr Bruce about the possibility of his new firm acting for the plaintiffs in this matter. A proposal was put to Mr Bruce but that proposal was rejected for reasons that are unknown to her.
(k)On returning from Bali, she spoke to another solicitor about the possibility of him acting for the plaintiffs in this action. The files were transferred from Lavan Legal to his office. However, negotiations for engaging that solicitor have not been completed due to her illness.
(l)The first‑named second plaintiff, Mr Bridger, operates a plumbing business in the Northern Territory and, according to Ms Karlovsky‑Bridger, works approximately 70 to 80 hours per week in that business. Further, Mr Bridger is not computer literate and Ms Karlovsky‑Bridger has been responsible for managing the plaintiffs' instructions from the inception of the proceedings. Mr Bridger is not in a position to be able to meaningfully assist in the preparation of this matter for trial for those reasons and the plaintiffs have been unable to substantially progress the preparation of their action for trial. The plaintiffs have also not been able to complete the arrangements necessary to obtain alternative legal representation since the second plaintiffs returned from Bali as a consequence of Ms Karlovsky‑Bridger's illness. However, since returning from Bali they have had the benefit of some limited assistance from the solicitor that they are currently negotiating with to assume conduct of this matter.
In addition to Ms Karlovsky‑Bridger's affidavits, I received into evidence a letter dated 3 May 2011 from Dr Beaumont, who is Ms Karlovsky‑Bridger's general practitioner. Dr Beaumont states that Ms Karlovsky‑Bridger is still unwell due to fevers, lethargy, diarrhoea, headaches and general malaise, and that she continues to have difficulty concentrating and experiences clouded thinking. Dr Beaumont states that Ms Karlovsky‑Bridger's medical condition has been ongoing for about five weeks and there is no end in sight.
The defendants made a number of detailed submissions concerning Ms Karlovsky‑Bridger's evidence. In summary, it was submitted that:
(a)Evidence as to the nature of Ms Karlovsky‑Bridger's illness and her prognosis ought to have been given in the form of a report from a medical practitioner who qualified his or her expertise to provide an opinion on those matters. Little or no weight should be accorded to Ms Karlovsky‑Bridger's secondary evidence of what she had been told by her medical practitioners concerning her illness.
(b)The second plaintiffs knew of the problems concerning their legal representation at the time that they departed for Bali and they had chosen to go on holiday rather than to resolve those problems. This was said to be one of several instances that indicated that the plaintiffs were not prepared to give priority to preparing their action for trial.
(c)The plaintiffs' position regarding engaging alternative representation had been inconsistent and, in any event, the process of obtaining representation had become unreasonably protracted. The plaintiffs were at fault in allowing the question of their representation to remain unresolved since mid‑February 2011.
(d)The plaintiffs had consulted another solicitor in late March 2011 about the possibility of him acting in the matter. Ms Karlovsky‑Bridger has stated in her evidence that the lawyer concerned had provided some advice to the plaintiff since that time, including most recently in relation to the preparation of the affidavits sworn in support of her application. She had been able to deal with the lawyer to prepare her affidavits despite her illness. An inference was to be drawn that the plaintiffs were using Ms Karlovsky‑Bridger's illness as an excuse for inactivity and delay.

The relevant principles

As the Chief Justice has emphasised in various interlocutory decisions, O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA) are central to the management of actions in this court. Order 1 r 4(b)(1)(a) reflects the core principle that interlocutory procedures and decisions on contested interlocutory matters are concerned with achieving justice between the parties. That, of course, necessarily involves balancing conflicting interests and objectives.
Order 1 r 4B(1)(b) and (d) reflect the interests of litigants generally in the efficient disposition of the court's business and O 1 r 4B(1)(c) expresses the public interest in the efficient allocation of the court's resources. In my view, there is little need to travel beyond those rules in search of the principles relevant to the second plaintiffs' application in this matter. Other cases generally illustrate the outworking of the principles encapsulated in the Rules in the particular circumstances under consideration.
In the course of argument counsel for the defendants referred to Smith v McCusker [2000] WASCA 320 [211], Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, particularly [5], [35] and [95] ‑ [103] and Pollard v Endale Pty Ltd [2009] WASCA 189 [43] ‑ [44]. There is in my view nothing said in those cases that adds to or further develops the principles that underpin O 1 r 4A and r 4B. That observation should not be taken as indicating that I have not had regard to what was said by the courts in each of those cases; I have. Rather, it is to emphasise the force of what is expressed in the Rules.

The representation of Donyette

There is a further aspect of the Rules that must be mentioned before the application of the relevant principles to the circumstances of this matter can be considered. Order 4 r 3(2) of the Rules of the Supreme Court provides that a corporation must be represented by a solicitor. Order 12 r 1(2) provides that a body corporate may not enter an appearance otherwise than by a legal practitioner.
The effect of those rules has been considered in several cases. They establish that:
(a)A corporation must commence and carry on proceedings by a solicitor. That requirement is not affected by s 236 and s 237 of the Corporations Act 2001 (Cth): HPM Pty Ltd v Fear [2002] WASCA 249 [24] (Steytler J).
(b)The court does not have inherent jurisdiction to dispense with the requirement of O 4 r 3(2), and O 12 r 2(1): Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178 [47] (Hasluck J) and Re Hoffman [2004] WASCA 238.
(c)The court can, however, in its inherent jurisdiction, give leave for a person to appear before it to advocate on behalf of a company. Eastern Metropolitan Council, Miorada v Miorada [2005] WASC 105. Leave will only be granted in exceptional circumstances. The distinction between advocating on behalf of a corporate entity and acting for the corporation is necessarily strict given that the court has no power to dispense with the requirements of the rules. So, for example in Eastern Metropolitan Council, Hasluck J gave leave for the sole shareholder of the respondent company to appear at the hearing of an application for security for costs and removal of an arbitrator to argue the matter on behalf of the respondent company but he refused leave for the shareholder to be able to rely on two affidavits that he had sworn in opposition to the application. His Honour concluded that to have allowed the shareholder to rely on the affidavits would have permitted the respondent company to defend the application, 'in the sense of taking a step in the proceedings, contrary to the prohibition contained in O 12 r 1(2)' [50].

The reasons for granting the application

There are essentially three reasons why I consider that the second plaintiff's application should be allowed and the trial vacated.
(a)I accept Ms Karlovsky‑Bridger's evidence concerning her illness and the effect that it has had, and will have in the immediate future, on the plaintiffs' ability to prepare for and appear at a trial held next month.
(b)There is a real likelihood that the plaintiffs would have no option but to abandon their action if the trial is not adjourned. There has been nothing in their conduct of the proceedings or in the making of this application that would justify such an outcome. I am mindful of the prejudice that vacating the trial will cause the defendants. I accept that they are in a position to proceed and that they have not contributed to the reasons why the trial listing is to be vacated. However, I think that the interests of justice favour acceding to the application on terms that address, so far as the court is able, the prejudice suffered by the defendants. I am also mindful of the public interest in the efficient administration of justice. However, the likely effect of refusing the application would, in my view, be disproportionate in all of the circumstances and would not strike a fair balance between the interests of each of the parties and the public interest.
(c)I accept that the plaintiffs are in the process of engaging a solicitor in order to appear on the court's record and to act for them and that there is now insufficient time, prior to the present trial listing, for that solicitor to prepare for the trial, including completing the remaining steps required to enable the plaintiff's case to be properly presented at trial. In particular, expert evidence is yet to be obtained both in support of Donyette's claim for loss and damage and in answer to allegations made by the defendants.
By way of elaboration on those reasons, I regard the following matters as being relevant to the conclusion that I have reached.
First, the plaintiffs' claims involve matters that occurred in December 2002 and the first half of 2003. Central to the issues to be determined at trial are meetings that occurred in December 2002, and March and April 2003. It will be necessary to make findings about what occurred at those meetings and also in various telephone calls made between the parties around that time. Obviously, memories fade and become clouded by reconstruction through the litigation process. However, adjourning the trial for a limited period is most unlikely to further impair the ability of the parties to give their best evidence of the relevant events.
Second, there was a considerable delay in proceedings being commenced by the plaintiffs. Ms Karlovsky‑Bridger has explained the delay and I accept that explanation. Nevertheless, the authorities make it clear that where there has been delay in commencing proceedings it is especially incumbent on a plaintiff to prosecute its claim expeditiously.
It cannot be said that this action has been progressed with remarkable speed and there is some force in the criticism made by the defendants' counsel about the number of amendments that have been made to the statement of claim. However, as I have already indicated, the matter has been progressed with reasonable diligence. This is not a case with an unnecessarily protracted interlocutory history or where there is evidence that the plaintiffs have progressed their claims according to their priorities and without regard to the position of defendants or the requirements of the court and its rules of practice and procedure.
Third, I accept that the application has been made by the second plaintiffs in good faith. In particular, I do not consider that the plaintiffs have used Ms Karlovsky‑Bridger's illness as an excuse, in a pejorative sense, for inactivity and for delay. I have taken into account the defendants' criticisms of how the plaintiffs have managed the problems they have encountered since February 2011 in reaching that conclusion. However, I do not think that the second plaintiffs can be criticised for going to Bali when they did or for focusing on their business immediately on their return. Their hope that they would have been able to reach an agreement to secure continuing representation by Mr Bennett and Mr Bruce is understandable given that they first consulted Mr Bennett in 2003 and Mr Bennett and Mr Bruce had the conduct of the action for the plaintiffs from the inception of the proceedings.
Fourth, it was rightly accepted by the defendants that it would take more than the time available for a solicitor appointed now to act for the plaintiffs to prepare for a trial commencing on 7 June 2011. That is obviously a relevant factor once it is found that the second plaintiffs' application was made in good faith.
Fifth, there would be very significant consequences for Donyette if the application is refused. It is the party that claims to have suffered loss and damage. Proof of that loss requires expert and non‑expert evidence directed to that issue. Assuming, without deciding, that evidence adduced by the second plaintiffs as part of their case could stand as evidence on matters alleged by all of the plaintiffs, I do not see how the second plaintiffs can lead evidence of the loss and damage allegedly suffered by Donyette or that Donyette can lead such evidence even if one of the second plaintiffs is given leave to appear at the trial as its advocate. Such an approach would be contrary to what was held by Hasluck J in Eastern Metropolitan Council, a decision that was approved by the Court of Appeal in Re Hoffman. Consequently, Donyette's case would fail at trial unless it appears by a solicitor - completely in respect of claims such as that made in tort for conversion and in a real and practical sense when the question of monetary relief is considered in relation to other claims such as those made under the Trade Practices Act. However, the position has been reached that there is insufficient time for effective representation to be arranged and most likely, the expert evidence required to be obtained.
I would be strongly inclined to the view that Donyette, and through it the second plaintiffs, should suffer those consequences had I concluded that they had deliberately engineered such a position. However, I have not made that finding and so the likely consequences of refusing the application to vacate the trial appear to be disproportionate.
Sixth, it will be apparent from the summary that has been given that the plaintiffs' claims involve issues of some legal and factual complexity (as does the defence of the defendants). It is obvious that they would be at a significant disadvantage if they had to prosecute their claims in person, assuming that this was possible in a meaningful way given Donyette's position. Similarly, a solicitor briefed at this stage would be at a significant forensic disadvantage given the magnitude of the case, assuming that the matter could otherwise be prepared in the time available to 7 June 2011.
Seventh, I accept Ms Karlovsky‑Bridger's evidence as to her role in giving instructions on behalf of the plaintiffs and in the management of their case generally. It is consistent with matters that appear from the court's file, such as that she has been the deponent of the various affidavits of discovery filed and served by the plaintiff and the fact that she has appeared at the directions hearings and communicated with the court on behalf of the plaintiff since Lavan Legal were given leave to withdraw. I also note that most of the telephone conversations that are pleaded in the statement of claim are said to involve Ms Karlovsky‑Bridger, consistent with an apparent division of responsibility between herself and her husband about the conduct of their business affairs.
Eighth, I further accept Ms Karlovsky‑Bridger's evidence concerning (a) her husband's business commitments and the difficulties that she and her husband would confront if he was forced to assume the conduct of preparing this matter for a trial in June and (b) her inability to have taken more effective steps to resolve the question of representation and/or to have prepared the matter for trial since she became ill.
Ninth, Ms Karlovsky‑Bridger's prognosis is uncertain but I am content to rely on her evidence as to what she has been told by her medical practitioners. In any event, the fixing of a new trial date will largely depend on balancing the time required by the plaintiffs to complete trial preparation, with a need to minimise the prejudice caused by the adjournment of the trial. Reasonable expedition will be required.
Tenth, the prejudice caused to the defendants by vacating the trial can, in substance, be ameliorated by an order for costs thrown away and by setting the matter down for trial with directions to insure that the matter is expeditiously brought to a hearing.
For those reasons I will allow the application but on terms that the plaintiffs pay the defendants costs thrown away.