Gazzard v Hekeik

[2022] NSWSC 670

Supreme Court

New South Wales

Medium Neutral Citation:

Gazzard v Hekeik [2022] NSWSC 670

Hearing dates:

22 March 2022

Date of orders:

22 March 2022

Decision date:

22 March 2022

Jurisdiction:

Common Law

Before:

Bellew J

Decision:

(1) Judgment for the plaintiff in the sum of $2,321,675.67.

(2) The Defendant is pay the costs of the plaintiff in respect of the statement of claim on the ordinary basis, as agreed or assessed.

(3) The amended cross-claim dismissed.

(4) The defendant/cross-claimant to pay the costs of the first and second cross-defendants in respect of the cross-claim, up to and including 21 March 2022 on an indemnity basis, and of 22 March 2022, on the ordinary basis.

(5) The Court notes that the plaintiff reserves his rights with respect to the enforcement of the security interest granted to him in respect of the 1 share held by Simon Charbell Hekeik in Badajoz Property Pty Limited ACN 603 705 095 pursuant to the Deed of Loan dated 1 June 2018.

Catchwords:

PRACTICE AND PROCEDURE – Application for adjournment – Repeated failures on the part of the defendant to comply with orders of the Court requiring the filing of pleadings and evidence – Application for adjournment refused – Judgment entered – No point of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Category:

Principal judgment

Parties:

Richard Gazzard – Plaintiff
Anthony Hekeik – Defendant

Representation:

Counsel:
S Aspinall – Plaintiff
B Levet – Defendant

Solicitors:
LAS Lawyers – Plaintiff
Spectrum Legal Group – Defendant

File Number(s):

2021/40040

Publication restriction:

Nil

Judgment – EX-TEMPORE (REVISED)

INTRODUCTION

1. Before the Court are two applications. The first application is brought by the defendant for an adjournment of the hearing which is listed today. The second application is brought by the plaintiff, by a notice of motion filed in Court today, seeking a dismissal of an amended cross-claim which has previously been filed by the defendant.

2. In respect of his application for an adjournment, the defendant read the affidavit of David Leon Rod, solicitor, of 22 March 2022, along with his (the defendant’s) affidavit of 8 September 2021. The plaintiff read the affidavit of Dion Manca, solicitor, of 21 March 2022 in support of his notice of motion. Those affidavits were read without objection, and none of the deponents were cross-examined.

3. In order to determine these applications, it is necessary to set out the history of the proceedings.

4. On 13 October 2021, the proceedings came before Hamill J (as Duty Judge) for the purposes of hearing a notice of motion brought by the plaintiff seeking an order for summary judgment. For reasons which are not necessary to expand upon for present purposes, the matter did not proceed on that day and his Honour made a number of case management orders bringing the matter back before the Court today for hearing. Those orders included an order that the defendant file and serve any amended cross-claim on or before 12 November 2021, along with any evidence in support of such cross-claim by the same date.

5. In his reasons, Hamill J recorded the fact that counsel for the defendant, who also appeared as counsel for the defendant before the Court today, had indicated that the amended cross-claim could be filed in less than a month. When his Honour asked if counsel undertook to the Court that that would be so, counsel replied in the affirmative. For the reasons that follow, that is obviously a matter of some significance in determining the present application, although I accept that such undertaking was given by counsel on instructions. I should also make it clear, as I did in the course of an exchange with counsel earlier this morning, that no criticism that I may make in this judgment of those on his side of the bar table, is intended, in any way, as a personal criticism of him.

6. Bearing in mind the orders made by Hamill J, nothing was filed by the defendant on or before 12 November 2021. That represents the first of the defendant's breaches of the Court's orders.

7. That breach resulted in the solicitor for the plaintiff re-listing the matter on 22 November 2021. When the matter came before the Registrar on that day, a number of further orders were made which required, amongst other things, that any amended cross-claim and evidence be filed by 24 November 2021. Although I do not have a copy of the transcript of what took place before the Registrar on that day, it is reasonable to infer that the Registrar set the date of 24 November 2021 on the basis of an indication being given that the defendant would be in a position to file an amended cross-claim and evidence by that date.

8. The defendant failed, at least in part, to comply with that order, in the sense that although an amended cross-claim was filed, no evidence was filed in support of it, as had been ordered by the Registrar. That was the second of the defendant’s breaches of the Court orders.

9. The Registrar also ordered the defendant to file written submissions by 15 March 2022. Those submissions were not filed. That is the third of the defendant’s breach of the Court’s orders.

10. The circumstances in which those second and third breaches occurred are, to a limited extent, illuminated by the affidavit of Mr Rod which was read in support of the defendant’s application for an adjournment of today’s hearing. In paragraph 3 of his affidavit, Mr Rod deposed to a conversation with the defendant which is said to have taken place "shortly after” 6 October 2021 when Hamill J made the original orders. It is surprising that the affidavit is not more definitive as to the date on which that conversation took place. It is reasonable to think that the conversation would have been recorded in a memorandum or file note of some nature but, in any event, the best I can do is to conclude that the conversation took place after 6 October. Paraphrasing what was said, the defendant told Mr Rod on that occasion that he did not want to incur unnecessary expense and therefore did not want to retain a valuer to prepare any expense evidence to support the cross-claim. That approach completely ignored the Court’s previous orders.

11. Mr Rod reminded the defendant that there was a necessity to obtain valuation evidence, although he explained to the defendant that such necessity arose, not from the Court's orders, but because of advice from counsel that the cross-claim could not succeed without it. The defendant responded by telling Mr Rod that he was "sure" that the matter could be resolved and that Mr Rod was not to do anything to progress the matter until such time as he was directed to do so.

12. On 17 February 2022, which was approximately five weeks ago, the defendant told Mr Rod that he had been unable to resolve the matter. Mr Rod's affidavit is entirely silent on what (if any) other conversations had taken place between himself and the defendant between 6 October 2021 and 17 February 2022. Mr Rod informed the defendant on 17 February that he was "out of time to file valuation evidence". In circumstances where he had been ordered to do that three months before, the suggestion that he was out of time at that point was something of an understatement.

13. Mr Rod informed the defendant that he would require funds to be paid into his trust account in order to continue to act in the matter. The defendant responded by saying that he could not afford legal fees. He told Mr Rod to "hold everything" and that he would "get another lawyer who could take on the matter for (him)". Mr Rod informed the defendant that in those circumstances, he needed to cease to act in the matter. The defendant responded by urging him not to do so, and said that he would “get somebody else”. As I remarked in the course of an exchange with counsel earlier this morning, those last two statements by the defendant appear to me to be somewhat inconsistent.

14. Why Mr Rod did not terminate his retainer with the defendant at that point is unexplained on the evidence. He certainly had a clear basis on which to do so, a fact which is confirmed by the contents of paragraph 5 of his affidavit in which he deposed to the fact that during the weeks that followed the conversation of 17 February 2022, he had a number of conversations with the defendant in which the defendant had indicated that he was in the process of getting alternate legal representation.

15. On 15 March, a week ago, the defendant informed Mr Rod that he had not been able to secure alternative representation and asked Mr Rod to act for him. What happened between 17 February and 15 March in relation to Mr Rod's continuing retainer is entirely unexplained on the evidence. In paragraph 7 and following of Mr Rod's affidavit he deposed to the fact that on 18 March he was assured by the defendant that he had raised money to cover counsel's fees. The deposit of that money was then confirmed.

16. Mr Rod then wrote to the solicitor for the plaintiff. Having recounted, in very broad terms, some of the correspondence which had taken place between himself and the defendant, Mr Rod said:

“We seek an adjournment on terms to remedy this deficiency. Could you please respond as a matter of urgency.”

17. The plaintiff's solicitor responded a short time later, indicating that the plaintiff did not consent to an adjournment of the proceedings, and indicating further that a motion would be filed seeking an order dismissing the amended cross-claim.

18. As far as Mr Rod’s letter is concerned, I am compelled to observe that it is not for parties to negotiate, between themselves, the adjournment of cases which are listed for hearing. Even had Mr Rod secured the agreement of the plaintiff to his proposal the adjournment of proceedings which are listed for hearing is a matter for the Court. The notion that parties can somehow negotiate an adjournment between themselves, and that the Court will simply accept that position and adjourn proceedings without question, is one that should be firmly dispelled.

19. Against this background, counsel for the defendant submitted that the proceedings should be adjourned so as to give the defendant yet another opportunity to file another amended cross-claim. I should say that counsel articulated that application with commendable candour. He explained that any timeframe which might be required for the defendant to file further material was obviously dependent upon the defendant having the necessary funds. He also informed me that whilst Mr Rod was prepared to continue to act in the matter, that preparedness, not unreasonably, was based upon the fundamental understanding that the defendant would put Mr Rod in funds. Counsel also candidly accepted that he would not be in a position to resist an order that the present amended cross-claim be dismissed.

20. The projected timeline, in the event of an adjournment, was that a further amended cross-claim could be filed in approximately four weeks, and that expert valuation evidence would likely be available within six weeks. I should say that those time estimates were provided by counsel only after he had been granted a short adjournment to obtain instructions from Mr Rod and the defendant, neither of whom were in Court at the commencement of today’s hearing. Given the background which I have outlined, and the position faced by the defendant on the present application, I regard their absence as discourteous in the extreme.

21. Counsel for the plaintiff submitted that in the light of the history I have outlined (about which there was no dispute) an adjournment would simply give the defendant the opportunity to repeat defaults of the kind which had already occurred. Counsel submitted that the defendant had a track record of failing to comply with the Court's orders such that a further adjournment of the proceedings would, given the background I have outlined, be the antithesis of the just, quick and cheap determination of the issues as required by the provisions of the Civil Procedure Act 2005 (NSW).

22. It was submitted in all of these circumstances that the application for the adjournment should be refused, that the amended cross-claim should be dismissed, and that orders finalising the proceedings and entering judgment for the plaintiff should be made. It should be noted that although he did not consent, counsel for the defendant did not actually oppose the making of final orders in favour of the plaintiff the event that I concluded that the adjournment he had sought should not be granted.

23. As I remarked in the course of hearing submissions from counsel this morning, the defendant in these proceedings has demonstrated what could only be described as a contumelious disregard of the Court's orders. At the risk of stating the obvious, compliance with orders of the Court is not an option. The defendant has failed to comply with substantive orders on no less than three occasions. In my view it would be entirely unfair to the plaintiff, in the light of that history, to allow the proceedings to be further adjourned for the purposes of enabling the defendant to be given yet another opportunity to file material that was ordered to be filed three months ago. Such a course would be antithetical to the just, quick and cheap resolution of issues between the parties.

24. For all of those reasons I propose to make orders refusing the application for an adjournment of the hearing. In the light of the position taken by counsel for the defendant, I also propose to make an order dismissing the existing cross-claim and entering judgment for the plaintiff. In that regard, I have read the affidavits filed by the plaintiff, whose cause of action is essentially based upon monies loaned to the defendant. In light of that affidavit material, I am satisfied that the plaintiff is entitled to an order for summary judgment pursuant to r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW).

ORDERS

25. I make the following orders:

1. Judgment for the plaintiff in the sum of $2,321,675.67.

2. The Defendant pay the costs of the plaintiff in respect of the statement of claim on the ordinary basis, as agreed or assessed.

3. The amended cross-claim is dismissed.

4. The defendant/cross-claimant to pay the costs of the first and second cross-defendants in respect of the cross-claim, up to and including 21 March 2022 on an indemnity basis, and of 22 March 2022, on the ordinary basis.

5. The Court notes that the plaintiff reserves his rights with respect to the enforcement of the security interest granted to him in respect of the 1 share held by Simon Charbell Hekeik in Badajoz Property Pty Limited ACN 603 705 095 pursuant to the Deed of Loan dated 1 June 2018.

Decision last updated: 27 May 2022