Gabrielle v Abood (No 3)

[2023] NSWCA 29

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Gabrielle v Abood (No 3) [2023] NSWCA 29

Hearing dates:

21 February 2023

Date of orders:

23 February 2023

Decision date:

23 February 2023

Before:

Bell CJ at [1]
Kirk JA at [2]
Adamson JA at [24]

Decision:

(1) Leave to appeal is refused.

(2) The applicant is to pay the costs of the first to third respondents.

Catchwords:

APPEALS — Leave to appeal — Re decision to refuse application for an adjournment and consequent dismissal of cross-summons — Matter of practice and procedure — Decision reached not unreasonable or plainly unjust — No material consideration ignored — House v The King error not made out — Leave to appeal refused

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56(1)

Conveyancing Act 1919 (NSW), s 66G

Cases Cited:

Gabrielle v Abood [2022] NSWCA 250

Gabrielle v Abood (No 2) [2023] NSWCA 28

PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48

T & H Pty Ltd v Nguyen [2022] NSWCA 180

Category:

Principal judgment

Parties:

Chakib Carlo Gabrielle (Applicant)
Rima Abood (First Respondent)
Sean Magnus Wengel (Second Respondent)
Michael Craig Brereton (Third Respondent)

Representation:

Advocates:
N Kulkarni (First Respondent)
D Radman (Second and Third Respondents)

Solicitors:
Lane & O'Rourke Solicitors (First Respondent)
Grace Lawyers (Second and Third Respondents)

File Number(s):

2022/228004

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity

Citation:

[2022] NSWSC 912

Date of Decision:

8 July 2022

Before:

Hammerschlag CJ in Eq

File Number(s):

2021/233613

Judgment

1. BELL CJ: I agree with Kirk JA.

2. KIRK JA: The applicant and first respondent are brother and sister. In March 2002 they purchased a house in Condell Park in Sydney as tenants in common. They subsequently fell out. The first respondent applied to the Supreme Court for orders under s 66G of the Conveyancing Act 1919 (NSW) for the appointment of trustees for sale of the property. The applicant filed a cross-summons by which he sought to allege that the first respondent’s interest in the property was held on trust for him and she had no beneficial interest of her own. There was a second defendant below, being the applicant’s former trustee in bankruptcy, who had placed a caveat over the property in connection with unpaid costs and fees.

3. The matter was heard in the Supreme Court on Friday 1 July 2022, followed by Monday 4 and Tuesday 5 July 2022, in circumstances described below. Near the commencement of the hearing the applicant, who was then self-represented, sought a long adjournment, saying that for him to be prepared it was “going to take a few months, yes, but not weeks”. This application was refused, although the primary judge did grant a short adjournment till 2pm on the Monday in order to enable the applicant time to prepare to cross-examine his sister. That cross-examination took place on the Monday, over nearly 28 pages of transcript. The primary judge delivered judgment on 8 July 2022, dismissing the cross-summons and granting orders as sought by the first respondent. Those orders appointed the second and third respondents as the trustees for sale of the property.

4. The applicant seeks leave to appeal from the Court’s decision to refuse the application for an adjournment. In this Court the applicant was represented when the application was filed, and a written summary of argument prepared by counsel was filed on his behalf. In early December 2022 the applicant sought and was refused a stay of the orders made below: Gabrielle v Abood [2022] NSWCA 250. Subsequently, on 31 January 2023, the solicitor for the applicant filed a notice of intention to cease to act in this Court.

5. At the commencement of the hearing of the application Mr D Allen of counsel, instructed by Avondale Lawyers, appeared on behalf of the applicant for the purposes, only, of seeking an adjournment in this Court of the applicant’s challenge to the refusal of an adjournment by the primary judge. That application was refused by the Court for reasons which were given at the time: Gabrielle v Abood (No 2) [2023] NSWCA 28.

6. Mr Allen was excused, and the matter was then called three times outside the Court. There was no appearance for the applicant. The Court has taken the written summary of argument filed on behalf of the applicant into account in what follows.

7. The draft notice of appeal raises six grounds with respect to the adjournment decision, and four further grounds relating to the dismissal of the cross-summons. The applicant’s written summary of argument accepted that the latter set of grounds depended upon the former. The focus of the application was thus on the refusal of the adjournment application, being an interlocutory decision for which the applicant accepted he needed leave to appeal. The six grounds of appeal on that topic were variants on a theme of denial of procedural fairness. It is not necessary to address them individually.

8. No issue of principle or public importance is raised. The applicant in substance seeks to engage in a merits attack on a discretionary decision on a matter of practice and procedure. The decision made by the primary judge was well open to him, and no reasonably arguable case of House v The King error or procedural fairness has been made out. The application for leave to appeal should be refused with costs.

The primary judge’s reasons

9. The primary judge gave reasons for refusing the adjournment in his final decision. He first noted key steps in the history of the litigation, including the following (judgment at [18]-[34]):

1. The first respondent commenced the proceedings on 21 August 2021. The applicant’s former solicitor filed a notice of appearance on 7 September 2021.

2. On 7 October 2021 consent orders were made requiring the applicant to file and serve any cross-summons or cross-claim by 12 November 2021. No such document was filed in compliance with the orders.

3. On 19 November 2021 the time for filing and serving any cross-summons or cross-claim was extended by the Court to 30 November 2021. No such document was filed in compliance with the orders.

4. On 10 December 2021 the Court directed the applicant to file and serve a cross-summons and serve evidence upon which he intended to rely by 28 January 2022, and for the first respondent to serve any evidence in reply by 18 February 2022.

5. The applicant, through his solicitors, finally filed and served a cross-summons on 24 February 2022. No evidence was filed.

6. On 25 February 2022 the Court ordered that the cross-summons proceedings continue on pleadings, with a cross-claim to be filed and served by 18 March 2022.

7. On 19 April 2022 the applicant’s solicitors filed and served a notice of intention to cease to act, which took effect on 3 May 2022.

8. On 21 April 2022 the applicant appeared personally at a directions hearing. Time for the applicant to file and serve his cross-claim was extended to 1 June 2022.

9. On 6 June 2022 there was a further directions hearing, at which the applicant did not appear.

10. On 10 June 2022 the matter was fixed for hearing on 1 July 2022.

10. It can be seen that orders were made on three occasions for the applicant to file a cross-summons or cross-claim, commencing on 7 October 2021, before he filed a cross-summons on 24 February 2022. Subsequently orders were made on 25 February 2022 and 21 April 2022 for the filing of a cross-claim, the latter being an occasion where the applicant represented himself after his solicitors had filed their notice of ceasing to act. The applicant never filed a cross-claim outlining the material facts on which he relied. Orders were also made on 10 December 2021 for service of evidence on which the applicant sought to rely. The applicant never served evidence in support of his position.

11. The primary judge’s reasons for refusing the adjournment application were as follows:

[38] Initially, there was no appearance for Chakib [the applicant]. However, after some time, he came on the line. He made an application for an adjournment, which was opposed by Rima [the first respondent] and the Trustee. After a somewhat lengthy discussion, during which I think it is fair to say Chakib did the bulk of the talking (a significant portion of what he said being devoted to impeaching the terms of his own cross-summons), I declined to vacate the fixture. I now give my reasons for having done so. Each of the following reasons would on its own, in my view, have warranted refusal of the application. Their cumulative effect compelled it.

1. The proceedings had been on foot for almost a year. To have delayed the matter substantially would have been inimical to the overarching requirement in s 56(1) of the Civil Procedure Act 2005 (NSW) to try the real issues in the proceedings justly, quickly and cheaply. Section 66G proceedings should be dealt with expeditiously. I add that it is a matter of public knowledge that interest rates have recently begun to rise. Delaying the sale (if there is to be one) may result in the price obtainable for the Property being reduced, for which there will be no compensation to Rima if the proceedings were to succeed.

2. Chakib did not embrace the possibility of an adjournment for a few weeks. His position was that he needed months to retain lawyers and prepare. Justice did not dictate acceding to such an adjournment.

3. Chakib had every opportunity to put on his cross-claim and serve his evidence. It is to be borne in mind that the evidence pertinent to his opposition to the summons would inevitably have overlapped substantially if not entirely with his evidence on the cross-claim.

4. Chakib repeatedly failed to comply with directions of the Court. For the bulk of the period in which he was default, he was represented by solicitors. He asserted that he was never told of any of the directions and that his lawyers overcharged him. He said he is in dispute with Osbornes about their fees and complained that they had not released his documents. However, he has known at the least since 19 April 2022, when Osbornes filed notice of intention to cease to act, that they would not be acting for him. He appeared himself before the Deputy Registrar on 21 April 2022 when the time for him to serve a statement of claim was extended to 1 June 2022, but he still failed to comply. Rima bears no responsibility for these circumstances.

5. Having regard to Chakib’s past behaviour in the proceedings, the Court could have no confidence that he would comply with any further directions timeously or indeed at all.

[39] I observe that Chakib made it clear that he would not, immediately or within a short space of time, be able to meet an order for the payment of the costs thrown away by any adjournment. It is to be recognised, however, that if Rima succeeds, and there is sufficient equity in the Property (which it appears there may be), this prejudice would be simply one of delay in recovery. If she lost, the delay in recovery of any such costs would be exacerbated.

[40] Having refused to vacate the fixture, I told Chakib that he had a right to cross-examine. He said he was not ready to do so. In my view, fairness dictated that he should have the weekend to prepare and to attempt to obtain documents which he said he needed but which he did not identify with any specificity. I stood the matter over to 2:00pm on 4 July 2022 for a live hearing.

The applicant’s arguments

12. The applicant accepted the following propositions (as to which, see eg PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [3]-[6]; T & H Pty Ltd v Nguyen [2022] NSWCA 180 at [16]): (a) the grant of leave to appeal generally requires the identification of an issue of principle, a question of public importance, or a reasonably clear injustice going beyond something that is merely arguable; (b) in relation to discretionary decisions, such as the adjournment decision, House v The King error must be established; and (c) appellate courts are cautious in granting leave to appeal on matters of practice and procedure.

13. The applicant’s core complaints were as follows:

1. At the commencement of the hearing he was without legal representation, his former solicitors’ notice of intention to cease acting having been filed on 19 April 2022. He had not filed a cross-claim outlining the material facts of his cross-summons, as he had been directed, and he had not filed any evidence in support of his cross-summons.

2. He told the primary judge from the bar table that he had fallen out with his former solicitors over costs, and they had refused to provide him with his file which contained his documents relevant to the case. He needed a significant period of time to attempt to gain access to these documents.

3. The dismissal of his Cross-Summons was more or less inevitable in circumstances where there was no evidence to support it. Conversely, the application under s 66G was more or less guaranteed to succeed.

4. The applicant had given an explanation for his previous non-compliance with timetabling orders and for his delay, which he was not permitted to substantiate by affidavit. The consequences for him of not permitting the adjournment (being practically inevitable failure) were out of proportion to the consequences for the first respondent, which could be met by either an order for costs or through the adjustment of the parties’ interests in the property.

5. Those consequences were also “disproportionate to the level of his non-compliance with the Court’s orders, noting the high threshold for the dismissal of proceedings for want of prosecution”.

14. The complaint about want of prosecution is not to the point, as the cross-summons was not dismissed on that basis. The hearing continued after the adjournment application had been refused. The applicant’s main substantive point was that his sister was never intended to have any beneficial interest in the property. As noted, the applicant cross-examined his sister. She “denied that there was any agreement that she did not have a full half interest in the Property”: judgment [41]. Her evidence was accepted, leading to the rejection of the applicant’s main claim: judgment [41]-[43].

15. The complaint that the applicant should have been given an opportunity to substantiate his explanation for the delay is also not to the point. The primary judge did not say that the explanation was not accepted because it was not contained in an affidavit. Rather, the explanation was seen as insufficient to warrant an adjournment. As regards the claim that he had not known of the various due dates, the primary judge referred to this at [38(4)] but noted that the applicant had appeared himself on 21 April 2022. On that date the time for him to serve a claim was extended to 1 June 2022 but he still failed to comply.

16. The applicant’s primary complaint seems to be that the judge gave insufficient weight to the prejudice that would be caused to the applicant by refusing an adjournment, and gave excessive weight to the prejudice to the first respondent that would arise from granting an adjournment. Yet it is apparent in his Honour’s reasons that he weighed up these considerations.

17. Moreover, as is implicit in the judgment at [39] and made clear by the transcript, his Honour had raised the possibility of a three and a half week adjournment to 25 July 2022 on the basis that the applicant pay the costs thrown away within seven days. The applicant did not embrace this suggestion, both because of his opposition to paying costs and because he wanted a delay of months not weeks. The primary judge expressly acknowledged at [39] that if the applicant could not pay costs forthwith, the matter had been adjourned, and if the first respondent then succeeded in her claim, then any prejudice to her on the costs front would likely just be delay in recovery (on the assumption that there was sufficient equity in the property to cover her costs, which there appeared to be). His Honour also took judicial notice of movements in the property market, and no complaint is made about that. It is plain that his Honour did not give excessive weight to the prejudice to the first respondent. And there is no reason to doubt that his Honour weighed that carefully against the prejudice to the applicant of proceeding.

18. It was significant for his Honour that even if an adjournment was granted, “the Court could have no confidence that [the applicant] would comply with any further directions timeously or indeed at all” (at [38(5)]). In the context outlined this conclusion was well-founded. His Honour referred to other material factors, including the length of the adjournment sought, the time the proceedings had been on foot and the importance of seeking to resolve the matter expeditiously.

19. Although put in terms of procedural fairness, in substance, the applicant’s argument is that the judge should have reached a different conclusion. The decision on the adjournment application was a quintessential discretionary judgment, weighing up various factors, on a matter of practice and procedure. Given the matters referred to by the primary judge it cannot be said that the decision reached was unreasonable or plainly unjust. Nor is there a basis for saying that some material consideration was ignored. No arguable House v The King error has been made out.

Conclusion

20. For the reasons given, leave to appeal should be refused.

21. The second and third respondents – the trustees for sale – sought an order to the effect that their costs of this appeal be taken from the costs of sale of the property. The first respondent opposed that application, noting that order 3(d) made below provided that the trustees were to pay out of the proceeds of sale “the reasonable fees and costs for the Trustees for sale”.

22. The first respondent did not dispute that the second and third respondents had a legitimate interest in appearing in this application to seek to protect their position with respect to costs already incurred in the event that the application and appeal were successful. It is appropriate that the applicant should be ordered to pay their costs, following the ordinary course. But that interest does not warrant this Court making a specific order of the kind sought by the second and third respondents to alter the terms of, or predetermine the effect of, the regime put in place by the primary judge.

23. The orders of the Court should be as follows:

1. Leave to appeal is refused.

2. The applicant is to pay the costs of the first to third respondents.

24. ADAMSON JA: I agree with Kirk JA.

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Decision last updated: 23 February 2023