Grech v Deak-Fabrikant (No 2)
[2015] VSC 389
•6 August 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2009 04930
BETWEEN:
| STEPHEN PHILLIP GRECH and JELVIE GRECH | Plaintiffs |
| - and - | |
| LARISSA DEAK-FABRIKANT and REGISTRAR OF TITLES | Defendants |
| AND BETWEEN: | |
| LARISSA DEAK-FABRIKANT | Plaintiff by Counterclaim |
| - and - | |
| STEPHEN PHILLIP GRECH (and others according to the attached Schedule) | Defendants by Counterclaim |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22 July 2015 |
DATE OF JUDGMENT: | 6 August 2015 |
CASE MAY BE CITED AS: | Grech v Deak-Fabrikant (No 2) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 389 |
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PRACTICE AND PROCEDURE – Application by plaintiff by counterclaim to re‑open the trial after judgment reserved to complete cross‑examination of opposing parties’ witnesses – Whether application ought properly have been brought under rule 49.02(2) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Principles applicable to applications to re‑open and applications under rule 49.02 – Rosing v Ben Shemesh [1960] VR 173 considered – Xiao Hui Ying v Perpetual Trustees Victoria Ltd [2012] VSCA 316 applied – Reason for failure to attend court – Delay – Bona fide issue to be tried – Prejudice to the parties – AON Risk Services Pty Ltd v Australian National University (2009) 239 CLR 175 considered – Relevance of Civil Procedure Act 2010 (Vic) – Uncertain scope of issues to arise in resumed trial – Importance of finality of litigation – Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232 and CC Containers Pty Ltd v Lee (No 5) [2013] VSC 619 considered – Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the First and Second Plaintiffs/First and Second Defendants by Counterclaim | In person | |
| For the Defendant/Plaintiff by Counterclaim | Mr D Carlile | Altona Legal |
| For the Third Defendant by Counterclaim | Mr A G E Robinson | Clancy & Triado |
HER HONOUR:
In this proceeding, which was issued on 26 February 2009, the plaintiffs/first and second defendants by counterclaim, Mr Stephen and Ms Jelvie Grech (who are husband and wife), seek orders for the removal of caveats lodged by the defendant/plaintiff by counterclaim, Ms Larissa Deak-Fabrikant, over five properties of which the plaintiffs are either individually or jointly registered as proprietors.
On 16 June 2009, Ms Deak-Fabrikant filed and served a counterclaim, which joined to the proceeding Mr Paul Grech, her former de facto partner and the father of Stephen Grech. In her counterclaim, Ms Deak-Fabrikant seeks certain declarations regarding the ownership of the five properties over which she lodged caveats, including declarations that Paul Grech held two of the properties concerned (of which he had previously been the registered proprietor) on trust for her, and orders pursuant to section 45 of the Relationships Act 2008 (Vic) for an adjustment of interests in respect of the property of Paul Grech in her favour.
On 30 October 2014, the twenty-seventh sitting day of the trial, counsel for Paul Grech, supported by Stephen and Jelvie Grech, made an application that the trial proceed in the absence of Ms Deak-Fabrikant. The application was made after Ms Deak-Fabrikant, on 29 October 2014, after failing to attend Court on 27 and 28 October 2014, sent through a medical certificate from the Mt Waverley Clinic stating that she was ‘unfit for work’ from 29 October 2014 to 7 November 2014. She had, through communications with my associate, refused to comply with my direction, communicated through a letter from my associate dated 28 October 2014, that her treating doctor be available to the Court on 30 October 2014 in order to explain her failure to attend Court, to provide an opinion to the Court as to the capacity of Ms Deak-Fabrikant to continue the trial, and as to what measures the Court might adopt to alleviate the stresses the Court processes have upon Ms Deak-Fabrikant’s health, and thus the orderly progress of the trial. The application was granted.
In the reasons for my decision to proceed with the trial in Ms Deak-Fabrikant’s absence,[1] I noted that Ms Deak-Fabrikant had frequently failed to attend Court without first making an application for an adjournment with adequate evidence in support. Further, Ms Deak-Fabrikant had failed to comply with my direction that her treating doctor attend Court to provide details of her medical condition and the implications for the future conduct of the trial. I noted that the solicitors for Paul Grech had notified Ms Deak-Fabrikant two days prior to the application for leave to proceed in her absence that such an application would be made unless she made a formal application to adjourn the trial. I found that by reason of Ms Deak‑Fabrikant’s conduct she had breached her obligations under the Civil Procedure Act 2010 (Vic) (‘CPA’), namely, her obligation to cooperate with the parties to a civil proceeding and the Court in connection with the conduct of the proceeding pursuant to s 20 of the CPA; her obligation to use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute pursuant to s 24 of the CPA; and her obligation to use reasonable endeavours to act promptly and to minimise delay pursuant to s 25 of the CPA.
[1]My reasons for granting the application were published on 5 November 2014 (see [2014] VSC 558).
I observed that litigants disobey court orders at their peril and that the Court must be pro-active in promoting the overarching purpose of the CPA. While some allowances must be made for self-represented litigants, there comes a point when granting further allowances and indulgences creates an undue burden on the other parties to the proceeding and the Court, and there was ample evidence of prejudice to the other parties.
The evidence was concluded on 30 October 2014, and the trial was adjourned to 3 December 2014 to enable the parties to make final submissions. Once again, Ms Deak-Fabrikant failed to attend Court, having sent through to my associate a bundle of medical certificates the previous day. She also failed to avail herself of the opportunity to file and serve written submissions by 16 January 2015.
On 8 April 2015, while judgment was reserved, Altona Legal filed a notice that they had commenced acting for Ms Deak-Fabrikant. On 16 June 2015, Ms Deak-Fabrikant filed a summons seeking the following orders:
(a) that Ms Deak-Fabrikant have leave to re-open this proceeding; and
(b) further, or alternatively, Ms Deak-Fabrikant have leave to resume presentation of her evidence in the proceeding and her cross‑examination of Stephen and Paul Grech.
In her affidavit in support of the application, Ms Deak-Fabrikant deposed, in summary, as follows:
(a) she last appeared in Court on 29 October 2014, following which she became ill and was unable to participate in the proceeding after that date;
(b) she has provided the Court with a number of medical certificates relating to her unfitness to prosecute this matter until after 31 January 2015;[2]
[2]A bundle of medical certificates was provided to the Court under cover of a letter dated 2 December 2014.
(c) owing to her medical condition, she was unable to comply with the order I made on 3 December 2014 extending the time for the filing of submissions to 16 January 2015;
(d) she noted that orders were made on 3 December 2014 that the solicitors for Paul Grech deliver to the Court copies of various bank statements of Paul and Stephen Grech which had been discovered in the proceeding (‘the bank statements’);
(e) she was awaiting notification from the Court of a listing of the resumption of the proceeding, as she had not concluded the presentation of evidence in her case, and was yet to complete cross‑examination of Paul Grech or commence cross‑examination of Stephen Grech; and
(f) she instructed her current solicitors after receiving medical advice that she ought not continue the proceeding as a self-represented litigant, and was subsequently informed by her solicitors that the respective cases of the parties have closed and the parties are awaiting judgment.
Paul Grech swore an affidavit in opposition to Ms Deak-Fabrikant’s application on 14 July 2015. In his affidavit, Paul Grech summarised the history of the proceeding. He referred to the legal costs incurred by him in briefing counsel and having his solicitor attend court on the six days that Ms Deak-Fabrikant failed to attend Court and the trial was adjourned. He asserted that on the twenty days Ms Deak-Fabrikant did attend Court, a substantial amount of Court time was wasted owing to Ms Deak-Fabrikant’s conduct of the trial. He asserted that Ms Deak-Fabrikant’s affidavit in support of her application to re-open the proceeding failed to provide any proper explanation of the state of her health during the trial, failed to provide proper medical evidence supporting her claims of ill-health, and failed to provide any proper explanation of her repeated failure to follow judicial directions, chamber’s instructions and Court orders.
Paul Grech noted that since their separation in September 2008, Ms Deak-Fabrikant has been living at the Altona property rent and mortgage free, and he believes that she has no interest in concluding these proceedings. He deposed that his solicitors, Clancy & Triado, have billed him the sum of $270,536.00 since they commenced acting in early 2014, of which $192,258.87 remains outstanding. He is a pensioner and has been relying upon the support of friends and family, and in particular, Stephen and Jelvie Grech, to pay the amounts he has to date. However, they are unable to raise any further funds because of the caveats over the five properties. If Ms Deak-Fabrikant is successful in applying to re-open the proceeding, he will have to instruct Clancy & Triado to withdraw and represent himself, despite not having the skills to represent himself effectively.
The affidavit sworn by Stephen Grech on behalf of him and Jelvie Grech largely mirrored that sworn by Paul Grech insofar as it related to the conduct of the proceeding, the evidence relied upon by Ms Deak-Fabrikant in support of her application and the difficulties that Paul Grech will have in retaining solicitors if the case is re‑opened. However, Stephen Grech also deposed to the following matters:
(a) for the past seven years he and Jelvie have met all costs and expenses for the Altona property, the Sanctuary Lakes property, and the Errol Street property, of approximately $6,000, $6,200 and $2,100 per annum respectively;
(b) these properties are unlettable, because Ms Deak-Fabrikant lives in the Altona property, the Sanctuary Lakes property is incomplete, and the Errol Street property requires repairs to make it habitable for a tenant;
(c) he and Jelvie are unable to raise finance from the bank to complete the Sanctuary Lakes property, repair the Errol Street property, or to fund Paul Grech’s legal costs owing to the caveats lodged by Ms Deak-Fabrikant over the five properties;
(d) the total amount of legal costs incurred by him, Jelvie and Paul Grech to date total $478,780.43, including solicitor’s costs, hearing fees and transcript fees; and
(e) he and Jelvie no longer have the funds to assist his father with payment of any future legal fees, or to pay for ongoing court and transcript fees.
At paragraph 34 of his affidavit, Stephen Grech deposed as follows:
If Larissa is successful in seeking to re-open these proceedings, I have advised my father that Jelvie and I will no longer be able to pay for any additional legal fees that he will incur. My father is a pensioner and does not have the funds to pay for a solicitor on his own, which will result in my father instructing Clancy & Triado to cease acting for him.
At the hearing of the summons on 22 July 2015, Ms Deak‑Fabrikant also relied upon an affidavit sworn by Dr Eva Herold on 21 July 2015, a general practitioner practising from the Mount Waverley Medical Clinic, upon whom Ms Deak-Fabrikant attended on a number of occasions from 27 October 2014. Dr Herold deposed that Ms Deak-Fabrikant presented with labile hypertension (with increased blood pressure), severe headaches, chest pain, exertional shortage of breath, and significant situational anxiety. She deposed that Ms Deak-Fabrikant had two hospitalisations during this period, on 27 October 2014 and 1 November 2014, and outpatient investigations on 31 October 2014, 18 November 2014 and 26 November 2014. In the final paragraphs of her affidavit, Dr Herold deposed as follows:
It is my opinion that at the time of these consultations, admissions and investigations, Larissa’s (sic) was suffering significant situational anxiety and was not able to either continue to represent herself in any court proceedings or give proper instructions to her legal advisors due to a combination of her physical and mental state.
I am of the view that Larissa’s health has now improved.
Counsel for Paul Grech applied for orders that Dr Herold be required to attend for cross‑examination. I rejected the application, on the basis that the medical records annexed to Dr Herold’s affidavit were clear on their face as to Ms Deak-Fabrikant’s medical condition, and that the matters that counsel wished to question Dr Herold about could be a matter for submissions. In summary, the consultation notes and discharge summaries annexed to the affidavit showed that while Ms Deak-Fabrikant experienced elevated blood pressure on some occasions, probably owing to situational anxiety associated with this proceeding, this was brought under control with medication, and testing showed there were no cardiac abnormalities.
Counsel for Ms Deak-Fabrikant confirmed at the commencement of the hearing of the application that Ms Deak-Fabrikant did not seek to re-open her case, but rather to have the opportunity to complete the cross-examination of Paul Grech, and cross‑examine Stephen Grech and possibly the other witnesses called by the defendants by counterclaim on 30 October 2014, being Jelvie Grech, Elysabeth Pangalila, Paul De Gilio, and Christine Grech.
Counsel submitted that the medical evidence relied upon by Ms Deak-Fabrikant provided an explanation for her conduct which resulted in the orders I had made on 30 October 2014. Ms Deak-Fabrikant has now formed the view that she is unable to represent herself, has engaged solicitors and counsel, and the necessary arrangements are in place to ensure that the legal representatives will not have to withdraw for financial reasons. Counsel submitted that it is a fundamental right of a party to litigation to question and challenge the parties and witnesses on the opposing side, and having an opportunity to exercise that right is fundamental to a fair trial. While he accepted that there would be prejudice to the other parties if the application was acceded to by reason of further delay and cost, this prejudice was outweighed by Ms Deak-Fabrikant’s right to a fair trial. Further, now that Ms Deak-Fabrikant is represented by solicitors and counsel, the Court could be assured that cross‑examination would be conducted efficiently, and would focus only upon the real issues in dispute. While he was not able to commit to an estimate, counsel considered that the trial could be concluded within a few days, although Ms Deak-Fabrikant’s legal team would require a few weeks to prepare for a resumed hearing.
Counsel for Ms Deak‑Fabrikant conceded that at this stage it was not entirely clear what issues the cross‑examination would canvass, and that it would be ‘at large’. However, there is a need to focus upon the contributions made to the purchase of the relevant properties (other than the Altona property), and the circumstances of the transfers of the Altona property and the Sanctuary Lakes property warrant investigation. He described the threat of the solicitors for Paul Grech to withdraw from the case as ‘a bit of a bluff’, and, in any event, if Paul Grech was unrepresented, I could ensure that any of the cross‑examination of witnesses was fair.
I raised two issues with counsel for Ms Deak-Fabrikant during the course of his submissions: first, whether, given Ms Deak-Fabrikant’s strong personality and passionate views about this proceeding, there was a risk the relationship of trust and confidence between her and her legal team might break down during the course of a resumed hearing. Further, I indicated that one of the means by which at least part of the financial prejudice to the other parties of re‑opening the case could be at least partially alleviated, would be if the caveats be removed over some of the five properties, and in particular, the properties which had always been in the name of Stephen and/or Jelvie Grech. Counsel for Ms Deak-Fabrikant conceded that it may well be appropriate to impose some conditions on the grant of leave to re-open. In relation to the first matter, counsel stated that he had discussed fully and frankly with Ms Deak-Fabrikant the fact that counsel had obligations over and beyond being a mouthpiece for their client, and that she fully understood that position.
Unsurprisingly, the application to re-open the case was vigorously opposed by Paul, Stephen and Jelvie Grech.
In his written and oral submissions, counsel for Paul Grech noted that the proceeding commenced in February 2009, and the trial commenced in July 2014 and concluded in December 2014. Counsel submitted that Ms Deak-Fabrikant has not provided a full and proper explanation as to her failure to make an application to the Court on or about 30 October 2014 to adjourn the proceeding, her failure to provide proper medical evidence on affidavit, and her delay of some seven months before bringing the application.
Counsel for Paul Grech submitted that the authorities provide that a Court should only grant leave to re‑open a proceeding where judgment has been reserved in exceptional cases. He referred to the decision of the Court of Appeal in Spotlight Pty Ltd v NCON Australia Ltd where the Court observed:[3]
There are good reasons why the circumstances must be exceptional before a court may allow a case, having been closed and judgment reserved, to be reopened. The need for finality in litigation is one. It is no answer to this point to say that the further evidence sought to be adduced by the respondent in this case is confined to the quantum of damages. Were applications to reopen to be allowed almost as of course, such applications would be regularly made. That would add enormously to inefficiencies in the administration of justice, even if the reopened hearing was strictly confined. The discipline which ought to attend the conduct of litigation by highly competent litigators would also inevitably decline.
The very strict rule that, subject to any applicable process of appeal or review, the presentation of their cases by parties to litigation must conclude with the end of the trial, has another important justification. It is that, very often, the boundaries of the reopened issues would be hard to define and as difficult to protect. The reopened hearing would then be bedevilled by arguments about whether one party or the other was seeking to take advantage of the reopening to polish parts of its case which were more or less within the scope of the reopened proceeding but not clearly on one side or the other of the prescribed limits.
[3][2012] VSCA 232 [17]-[18].
Further, the Court referred to Kenny J’s decision in Inspector-General in Bankruptcy v Bradshaw,[4] where her Honour stated that there were four recognised classes of case in which a court may grant leave to reopen, being: (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law.
[4][2006] FCA 22 [25]–[26].
Counsel for Paul Grech also referred to the decision of Ferguson J (as she then was) in CC Containers Pty Ltd v Lee (No 5)[5] where her Honour refused leave to the defendant to re‑open his case while judgment was reserved. Her Honour observed:
Counsel submitted that if the Court was not satisfied that the third category gave a basis for reopening in this case, nevertheless, the application should be granted because this would be in the interests of justice. Counsel was not able to articulate any new category into which this application may fall. However, this may be of no real moment as I accept that the Court must apply the overriding principle that leave will be granted where, taken as a whole, the justice of the case favours reopening.
[5][2013] VSC 619 [11].
After considering in detail the evidence proposed to be led and the relevance to the facts in issue in the proceedings as a whole, her Honour concluded:
Fourthly, this is a case where the application has not been made until after judgment has been reserved. It is not in the interests of justice to permit reopening unless there is a very good reason to do so, and here there is not. This case is distinguishable from the cases such as Urban Transit Authority of New South Wales v Nweiser, where the application was made during the course of the trial, and where counsel has had a change of heart overnight. Here, Kain Chong had closed his case. Mr Neale had then presented his case (albeit by the tender of documents without calling any witnesses, such that Kain Chong was the last witness in the case). There was then a short break of a few days, closing submissions by each of the parties were made and judgment was reserved.
Fifthly, the scope of the reopening would be difficult to confine. Whilst it might be expressed in words, when it came time for evidence to be restricted to remain within the confines of the permitted reopening, I have little doubt that significant difficulties would be encountered in practice.[6] (footnotes omitted)
[6]Ibid [31]-[32].
Counsel submitted that without reference to the content of the proposed cross‑examination, it is difficult for the Court to draw any conclusion as to whether there would be any injustice occasioned to Ms Deak-Fabrikant if she was not allowed to re-open her case. On the other hand, there is ample evidence of the prejudice which will be caused to Paul Grech (and Stephen and Jelvie Grech). The length of the proceeding has been financially and emotionally devastating for them. Paul Grech cannot afford further legal representation. The maintenance of the caveats over the five properties has prevented the family from paying their legal bills, developing their property interests, and getting on with their lives.
Counsel submitted that the lack of specificity of the scope of the cross-examination not only makes it difficult to assess whether the interests of justice require the re‑opening of the trial, but also makes it difficult to confine the scope of the re‑opened trial. The costs of the extensive written submissions filed before the hearing on 3 December 2014 may well be substantially thrown away. There is also a real risk that during the course of the re-opened trial Ms Deak-Fabrikant and her legal team will part company, leaving her to continue with cross-examination unrepresented, with predictable consequences for the length of the resumed trial.
Counsel stated that counsel for Ms Deak-Fabrikant had misapprehended the position with regards to the question of Paul Grech’s legal representation: it is not the evidence that the legal team will seek leave to withdraw if the trial is resumed: rather, Stephen and Jelvie Grech have said they will no longer continue to fund Paul Grech’s legal representation.
Finally, counsel for Paul Grech submitted that breaches of the CPA by Ms Deak-Fabrikant should be taken into account when determining this application, and that granting this application would be contrary to the overarching purpose of the CPA in that it would not facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
Stephen and Jelvie Grech both made oral submissions opposing the application. Their submissions emphasised the financial and personal costs of this proceeding and the trial upon them and their young family, and their relief upon the conclusion of the trial, and in particular, how the conclusion of the trial had enabled them for the first time in many months to focus upon their work and the needs of their three young children.
While the authorities relied upon in opposition to Ms Deak-Fabrikant’s application are clearly relevant, the circumstances of the current case differ somewhat from the proceedings with which the abovementioned authorities were concerned. This is not a situation where a trial has been conducted with full participation by all parties and one of the parties has an afterthought and seeks to re-open the case to make further submissions or adduce further evidence on specific issues which, inadvertently or otherwise, had not been addressed at trial. Rather, in the current proceeding, we have a litigant who has in effect abandoned the trial.
In effect, what Ms Deak-Fabrikant is seeking to do is to set aside my order of 30 October 2014, where I acceded to the application to have the trial proceed in her absence under rule 49.02. Rule 49.02(2) provides that: ‘The Court may set aside or vary any judgment, order or verdict obtained where a party is absent at the trial’. Rule 49.02(3) requires that any application made under the above rule shall be made within 14 days after the trial.
The principles governing the disposition of an application under rule 49.02 were subject to detailed consideration by the Court of Appeal in Xiao Hui Ying v Perpetual Trustees Victoria Ltd[7] (‘Xiao’). Ms Xiao was the defendant in a proceeding brought by the respondent to the Court of Appeal, Perpetual Trustees Victoria Ltd (‘Perpetual’) seeking recovery of funds and possession of her home. Ms Xiao alleged in defence that her signatures on the relevant loan documents were forged. The proceeding had been issued in 2009 and was listed for trial in November 2011. The judge to whom the trial was allocated adjourned the proceeding for two weeks to enable her to obtain legal representation and the assistance of an interpreter. Three days prior to the adjourned hearing date, Ms Xiao filed a summons seeking a further adjournment on health grounds. I will go into some detail regarding the events giving rise to the decision of the Court of Appeal, as the comparison between this case and the current proceeding is instructive.
[7][2012] VSCA 316.
The summons filed on 2 December 2011 was ‘overtaken by events’, as on 4 December 2011, Ms Xiao was admitted to hospital. She received a medical certificate from the hospital which stated that she was unfit for work or to attend the trial until 12 December 2011. As a result, the judge before whom the case was listed adjourned the matter until 12 December 2011.
On 12 December 2011, Ms Xiao sought a further adjournment to the following year. Her ill-health was again cited as the reason for the adjournment. A medical certificate had been issued by the appellant's general practitioner, Dr Paul Hancock. The judge thus stood over the hearing until the following day. He made an order that if Ms Xiao ‘were to seek any further adjournment there be evidence on oath from a medical practitioner and that such practitioner be available for cross-examination’.
The case resumed on 14 December 2011. Pro bono counsel appeared for Ms Xiao, and Dr Hancock attended to give evidence. Dr Hancock gave evidence that Ms Xiao had been suffering over a long period of time with migraine, chronic tension headache and stress. Dr Hancock further testified that he had seen Ms Xiao on 1 December 2011, and he declared her unfit for work from 15 October 2011 to 15 January 2012. When admitted to hospital on 4 December 2011, Ms Xiao was suffering from hypokalaemia (low blood potassium). Dr Hancock gave evidence that she would have difficulty concentrating and following the proceedings, and might have some difficulty moving. He also said that he had prescribed the appellant potassium pills. After Dr Hancock gave evidence and submissions were made concerning the application for an adjournment, the trial judge immediately indicated to the parties that the application for an adjournment was refused. When the case resumed at 2.15 pm, neither Ms Xiao, nor anyone representing her, appeared. Perpetual’s case commenced in Ms Xiao’s absence, and judgment was granted in favour of Perpetual.
On 6 January 2012, Ms Xiao issued a summons to set aside the orders and the judgment. The application was heard by the trial judge, who refused the application on the basis that Ms Xiao had not given an adequate reason for not appearing at the trial, and that there was no adequate way to compensate the prejudice to be suffered by the other parties. The Court of Appeal found that the trial judge had correctly identified the principles to be applied in an application under rule 49.02 as being those set out by the Full Court in Rosing v Ben Shemesh (‘Rosing’),[8] being:
[8][1960] VR 173.
(a) the reason why the party failed to appear when the case was heard;
(b) whether there had been any delay by the absent party in launching the application for a new trial;
(c) whether there was a bona fide issue to be tried; and
(d) whether the other party would be prejudiced by a new trial in any respect which could not be adequately compensated by a suitable award of costs and the giving of security.
However, the Court of Appeal found that, in the circumstances, the trial judge did not give sufficient weight to the prejudice to Ms Xiao against other relevant considerations, in particular, the fact that Ms Xiao may well have been the victim of a ‘substantial and carefully orchestrated fraud’ and stood to lose her property as a result. Further, the Court of Appeal stated:[9]
It must be borne in mind that this is a most unusual case. The appellant cannot read or write English. Had she turned up to attend on the afternoon of 14 December 2011, she would have been unrepresented during the course of the trial. In practical terms, despite the judge’s duty to assist an unrepresented litigant, her attendance would have been pointless.
Additionally, there was medical evidence to the effect that she was seriously unwell, and unfit to attend Court between, at least, 5 December 2011 and 12 December 2011. That evidence must have been accepted because the trial was adjourned to 13 December 2011. The appellant sought a further adjournment to February or March 2012, but that was denied. In the context of this entire proceeding, the adjournment sought was not unreasonable. After all, in March 2011, the matter was set down for hearing in November 2011, and there had only been a relatively short delay, largely brought about by the appellant’s medical condition.
[9]Xiao [59]–[60].
The Court also agreed that the matters specified in Rosing are not inflexible rules, or a complete list of relevant criteria for the exercise of discretion under rule 42.02(2), but merely proper matters to take into account.[10]
[10]Ibid [68].
In my view, the principles in Rosing provide a useful framework within which to consider Ms Deak-Fabrikant’s application. However, as accepted by the Court of Appeal in Xiao, they do not provide a complete code. In the circumstances of the current case, where Ms Deak-Fabrikant failed to appear in Court not on the first day of the trial, but at a stage that the trial was well advanced, there are other relevant considerations which need to be taken into account, not the least of which is the desirability of the finality of litigation in the interests of the parties to the proceeding and the administration of justice, as emphasised in the authorities concerning whether leave should be granted to re‑open a trial. Further, while neither the Court of Appeal or the trial judge in Xiao made any reference to the overarching purpose and other relevant provisions of the CPA, there is no doubt in my mind that these provisions ought to be well and truly at the forefront of my mind when determining this application.
The reason for Ms Deak-Fabrikant’s failure to attend Court on 30 October 2014
Ms Deak-Fabrikant’s evidence, which is supported by the evidence of her general practitioner, is that from 27 October 2014, and in the weeks thereafter, she was too unwell to attend Court.
There is no doubt that Ms Deak-Fabrikant was experiencing significant stress during the course of the trial, and that the stress manifested itself by way of physical symptoms, as shown by the evidence of Dr Herold. Indeed, Dr Herold’s evidence is precisely the type of evidence that one would have been expected to be forthcoming had it been available (or, more accurately, had Dr Herold been available), on or around 30 October 2014. But this evidence provides only part of an explanation as to the events of the last week of October 2014.
Ms Deak-Fabrikant’s ill-health does not explain why she openly defied my orders and directions with regard to the provision of medical evidence. As can be seen from the directions made by the trial judge in Xiao referred to at paragraph 34 above, directions of such a nature are not unknown. Accordingly, while the evidence in support of the application goes some way towards providing an explanation for her absence, the explanation is not entirely satisfactory. While this of itself would not be a complete bar to relief, it is a significant matter. In Shocked v Goldschmidt,[11] Leggatt LJ of the English Court of Appeal stated that the predominant consideration in an application to set aside a judgment after trial ‘is the reason why the party against whom judgment was given absented himself’.
[11][1998] 1 All ER 372, 381.
Ms Deak-Fabrikant’s judgement may have been affected by stress and illness. However, it is difficult to explain her failure to make Dr Herold available to the Court on 30 October 2014 to provide the evidence she now gives as anything other than wilful defiance of the directions of the Court.
Accordingly, consideration of this factor tells against granting Ms Deak-Fabrikant’s application.
Delay
There has been a significant delay in making the application. While the application was not brought under rule 49.02(2) (as it probably should have been), and in any event, I can dispense with the requirements of the Rules if appropriate to do so, adherence to the Rules would have required an application to be made by 30 January 2015 at the latest, being 14 days after the date by which Ms Deak-Fabrikant was entitled to file and serve any further written submissions. Ms Deak-Fabrikant’s application was brought four and a half months after that date.
Only a limited explanation has been provided for the delay in making the application. The date of the most recent consultation note exhibited to Dr Herold’s affidavit was 1 December 2014. In her letter to the Court dated 2 December 2014, Ms Deak-Fabrikant stated as follows:
I will be grateful if her Honour would able (sic) to consider relisting the hearing of the final submission to the end after the date after the end of January 2015. As my doctor concluded, I would be able to continue my duties to representing myself in the Supreme Court and I will file and serve on the other parties an affidavit in support of medical evidence in according (sic) with ‘Other Matters’ General Form of Order dated 11 April 2014.
Notwithstanding the above, no application was made until 16 June 2015, and no medical evidence was filed until the afternoon of 21 July 2015, the day before the hearing of the application. No meaningful explanation was provided for the delay, including the delay between Ms Deak-Fabrikant’s solicitors notifying the Court that they had commenced to act on 8 April 2015 and the making of the application.
Further, I have some difficulties in accepting Ms Deak-Fabrikant’s evidence that she did not know that the trial had come to an end and judgment reserved. My associate had been in regular written and telephone communication with Ms Deak-Fabrikant during the week commencing 27 October 2014. She was sent copies of the orders made on 30 October 2014 and 3 December 2014, and the Reasons published on 5 November 2014. The Reasons have also been accessible online since around that date.
Accordingly, while the delay in making the application would not, of itself, be fatal to the application, it is a factor which weighs against the granting of the application, particularly given the lack of explanation for the delay. As can be seen from the evidence and submissions of Stephen and Jelvie Grech, the delay in making the application has, of itself, caused prejudice to the other parties.
Whether there is a bona fide issue to be tried
Prior to the commencement of the trial, a list of agreed issues was circulated and agreed at trial. The key issues were further distilled and refined as the trial proceeded. An extract from the draft judgment, which is underway, follows:
As can be seen from the above narrative, there are areas of common ground, and areas of disagreement. The common ground between the parties is that Paul Grech and Ms Deak‑Fabrikant met at the Family Court, that they were in a long term domestic relationship, and were recognised as a couple by family and friends. However, there are some key areas of disagreement, being:
(a)when the relationship commenced, and whether the parties were in a domestic relationship between 1991 and 1994;
(b)the nature of the commitments and promises made by Paul Grech to Ms Deak‑Fabrikant, particularly with respect to marriage and financial matters;
(c)the nature and quality of the relationship between Ms Deak‑Fabrikant and Paul Grech, and Ms Deak-Fabrikant and Stephen Grech;
(d)the extent of the financial and non‑financial contributions made by Ms Deak‑Frabrikant to the five properties (or any of them) and the welfare of Paul and Stephen Grech and other family members;
(e)the events which took place during and immediately after the separation, and the consequences of those events;
(f)the circumstances and events surrounding the purchase and development of the Errol Street and Sanctuary Lakes properties;
(g)whether the conduct of Paul Stephen and/or Jelvie Grech have caused or contributed to the deterioration of either or both of the Errol Street and Sanctuary Lakes properties; and
(g)the level of financial assistance provided by Paul Grech to Stephen and Jelvie Grech (and its relevance to the issues in this proceeding).
These issues require adjudication, and as such, it could not be said that there is no bona fide issue to be tried. Indeed, counsel for Paul Grech in his final submissions conceded that Ms Deak-Fabrikant did have an entitlement to an adjustment in her favour, and that, for the purposes of calculating that entitlement, it would be appropriate to include the Altona and Sanctuary Lakes properties in the asset pool to be considered.
Accordingly, the existence of a bona fide claim and disputes about the factual matters relevant to Ms Deak-Fabrikant’s claim, weighs in favour of granting the application. Ms Deak-Fabrikant has called her witnesses and closed her case. She and her witnesses have been cross-examined. However, apart from Joe Grech, Paul Grech’s brother, the extensive affidavit evidence relied upon by Paul and Stephen Grech, and tendered during the course of the trial on 30 October 2014 remains largely untested. As noted by counsel for Ms Deak-Fabrikant in his submissions, a litigant is ordinarily entitled to test, by cross-examination, the allegations made against them and their claims. But this is far from an ordinary case.
Prejudice
As noted above, this proceeding is replete with triable issues. It goes without saying that Ms Deak-Fabrikant will suffer prejudice if she is deprived of the opportunity to cross-examine the opposing witnesses in the usual way. The question is, how much? The prejudice to Ms Deak-Fabrikant also needs to be weighed against the prejudice to the other parties acceding to the application, having regard to the fact that the situation in which Ms Deak-Fabrikant finds herself is largely of her own making, and the legitimate expectation of the parties (and the Court) that all that remained to be done was to prepare and await judgment.
In order to properly evaluate the relative prejudice to each of the parties, it is necessary to consider in some detail what is likely to occur if I was to grant the application. I do so on the basis that Ms Deak-Fabrikant would seek to cross-examine each of the witnesses called on 30 October 2014, with the possible exception of Paul De Gilio, the valuer, and on the basis that Ms Deak-Fabrikant would continue to be represented by her legal team. I also do so on the basis that the other parties would renew their offer to withdraw those paragraphs of their affidavits which I indicated during the course of the trial went to matters which were largely trivial in nature, and likely to distract the parties from the real issues in dispute and prolong the trial.
Counsel for Ms Deak-Fabrikant, understandably, was either unable to or reluctant to commit to a firm estimate as to how long a resumed trial would take. I am perhaps in a better position to do so. My best estimate is that the cross-examination and re‑examination of the witnesses could take up to three days, all going smoothly, and a further day would be required for submissions. My estimate is based upon the following:
(a) the cross-examination of Paul Grech may take a full day, given that it is likely that various documents in evidence as well as the bank statements will need to be put to him, and this is likely to be a cumbersome process. If he is self-represented, which on the current evidence is likely to be the case, I will need to assist him in re-examination, as I did with Ms Deak-Fabrikant, and would need time to prepare a list of topics for his re‑examination, as I did with Ms Deak-Fabrikant;
(b) the cross-examination of Stephen Grech is likely to be shorter, in part because he is less likely to have difficulty in comprehending questions and documents, and need less assistance in re‑examination, but a number of bank statements and other documents may need to be put to him;
(c) it will be difficult to confine the scope of the cross‑examination of both Paul and Stephen Grech, owing to the length of the domestic relationship, the range of issues in the proceeding, and the fact that the issue of credit looms large in the proceeding; and
(d) the cross-examination of Jelvie Grech, Christine Grech and Elysabeth Pangalila is unlikely to be lengthy, but I note that Elysabeth Pangalila will require an interpreter, and if the parties are unrepresented, some assistance may be required in re-examination.
Of course, if the Grech parties are unrepresented, which I have to assume they will be, given that Stephen Grech has given evidence that he and Jelvie Grech are no longer in a position to fund Paul Grech’s representation, and will not do so, these estimates have to be approached with some caution. Further, I cannot discount the possibility, despite the assurances from the Bar table to the contrary, that Ms Deak-Fabrikant will once again represent herself, which would substantially lengthen the duration of the trial. As for the timing of any resumed hearing, counsel for Ms Deak-Fabrikant indicated he would need a few weeks to prepare, which is understandable. In any event, pending Court commitments means that I would not be able to re‑list the trial until the week commencing 31 August 2015, noting that is some thirteen months after the commencement of the trial. Of course, finalisation of the judgment, preparation of which was well under way at the time the application was made, will be further delayed. The application itself has caused delay, in that the time I have needed to hear and determine the application has consumed a number of days which could have otherwise been occupied with preparing and finalising the judgment.
Of course, if the Grech parties remain unrepresented, the financial burden to them of a resumed trial is likely to be less, but there are still Court fees and transcript costs to be taken into account. If there is a change of heart, and Paul Grech maintains his legal representation, then based upon the evidence given in earlier affidavits, the additional legal costs which would be incurred by Paul Grech are likely to be in the order of $30,000 to $40,000. Further, there is no evidence as to the quantum of any loss, Stephen Grech may lose further income given that he is self-employed.
Finally, there is the non‑financial prejudice which will be caused to the Grech parties by having to participate in a resumed trial, and the necessary delay caused by the resumption of a trial in some four weeks’ time. The financial, personal and family stresses caused to the Grech parties were the subject of emotional submissions by Stephen and Jelvie Grech, and cannot be discounted. In AON Risk Services Pty Ltd v Australian National University,[12] the plurality accepted the proposition that non‑compensable inconvenience and stress on individuals are matters which may properly be taken into account when considering whether to grant an adjournment. This proposition is equally applicable to applications of the current kind.
[12](2009) 239 CLR 175, 214.
There are ways in which prejudice can be alleviated. An order could be made for costs thrown away by reason of the grant of leave. However, any costs order against Ms Deak-Fabrikant could only realistically be satisfied by setting off an amount against any money sum or other property awarded to Ms Deak-Fabrikant as a result of the proceeding. They could not be recoverable any other way.
Some of the prejudice could also be alleviated, as suggested by me during the course of the hearing of the application, by ordering that the caveats over some of the properties, in particular the Errol Street property, the Braybrook property, and the Speakman Street property, be removed. This would at least enable Steven and Jelvie Grech to pay their outstanding debts and re-arrange their affairs as they see fit. However, in circumstances where they have given evidence that they are no longer prepared to fund Paul Grech’s legal representation, this does not alleviate the potential prejudice to Paul Grech of a resumed trial.
I agree with counsel for Paul Grech that it is difficult to assess with any precision the prejudice to Ms Deak-Fabrikant of refusing the application in the absence of a clear articulation of the issues sought to be canvassed, the evidence sought to be challenged upon cross‑examination and its relevance to the issues in the proceeding. That is in some respects understandable, given the large volume of affidavit evidence, exhibits, and transcript which would be required to be reviewed prior to commencing any cross‑examination, but one would have expected at least some indication of what issues and evidence that were sought to be addressed, to assist me to evaluate the potential unfairness to Ms Deak‑Fabrikant of not being able to pursue those matters in cross‑examination.
Doing the best I can from my own knowledge of the issues in the proceeding and the evidence given to date, a significant focus of any cross-examination is likely to be upon what might be described as the ‘trust’ claim to an equitable interest in the five properties. Put simply, Ms Deak-Fabrikant alleges that she and Paul Grech agreed that they would pool their assets and income for their common benefit, and that he promised to her that he would hold a half share of his properties (which she believed included the Errol Street property as well as the Altona and Sanctuary Lakes properties) on trust for her. Further, she alleges that Stephen could not have afforded to purchase the Errol Street property on his own, and that Stephen and Jelvie could not have afforded to pay off the mortgage over the Speakman Street property without substantial financial assistance from Paul Grech using their combined funds, which were provided to Stephen and Jelvie Grech without her knowledge and consent.
It is not clear how much can be achieved during the course of cross‑examination in respect of this matter. There is evidence from some of Ms Deak-Fabrikant’s witnesses about what Paul Grech told them about the Errol Street property and the Sanctuary lakes property, but no doubt Paul Grech will maintain his denial of any agreement with or promises to Ms Deak-Fabrikant about financial matters. As for the claims with respect to the Errol Street, Speakman Street, and Ballarat Road properties, during the course of the trial I pointed out to Ms Deak-Fabrikant the evidentiary hurdles facing a party seeking to prove that the registered proprietor of a property holds the beneficial interest in that property on behalf of another, particularly given that, by reason of the parent‑child relationship between Paul and Stephen Grech, the presumption of advancement applies. My understanding is that Ms Deak-Fabrikant sought to prove her allegations in relation to Paul Grech’s contributions to the relevant properties by presenting her analysis of the bank statements of Paul and Stephen Grech, and in fact wished to do so during the course of her re‑examination. It was at my direction that this analysis was held over to cross‑examination of Paul and Stephen Grech and final submissions.
If Paul and Stephen Grech were to be cross‑examined on each and every non‑routine transaction disclosed by the bank statements, any resumed trial would take weeks, not days. However, given that this is a matter of some significance to Ms Deak-Fabrikant’s case, I am prepared to allow the bank statements into evidence as business records, and to provide Ms Deak-Fabrikant’s counsel with the opportunity to make submissions about what inferences might be drawn from the information in the bank statements, and, indeed the other issues in this proceeding.
Other issues which might be the subject of cross‑examination of Paul Grech include the question of whether the relationship commenced in 1991 or 1992, and the parties’ relationship status and living arrangements between 1991 and 1994. There are some documents in evidence which contradict Paul Grech’s evidence that he did not live at the Queen Street property before 1992 which remain unexplained, and which could be put to him in cross‑examination, but otherwise this issue has been the subject of extensive evidence, including documentary evidence and oral evidence, at the trial. If there are additional documents that Ms Deak-Fabrikant wishes to put before the Court in relation to this issue, they should have been discovered and put before the Court in the course of this application.
Other issues which might be the subject of cross‑examination include the alleged assault by Paul Grech upon Ms Deak-Fabrikant, where no doubt he will maintain his denials, and the financial contributions made by Ms Deak-Fabrikant to the household, about which there has been ample evidence adduced at trial.
Accordingly, while I accept there will be some prejudice to Ms Deak-Fabrikant if I refuse to allow her to re‑open the case in order to cross‑examine Paul and Stephen Grech and the other witnesses, I am not convinced that the probative value of the evidence likely to be adduced is of such significance as to amount to overwhelming prejudice if the application was refused.
Other relevant matters
As noted above, other factors relevant to the determination of the application are the interests of the parties and the administration of justice of there being finality in litigation, and the obligations imposed upon litigants and the Court under the CPA. In my view, the desirability of finality in litigation is reinforced in circumstances where the proceeding was commenced in 2009, was set down for trial in 2013, the trial commenced over twelve months ago, consumed 29 sitting days, and where the parties, at the time of making the application, would have had a reasonable (and realistic) expectation that the delivery of judgment would occur within a matter of weeks. Also, the fact that the scope of the resumed trial is uncertain, and it would be practically difficult to prescribe the ambit of issues to be addressed, tells against allowing the application.
These matters would have assumed significance even in the absence of the CPA: their importance has only been magnified by the passage of the CPA and judicial pronouncements as to the importance and effect of the overarching obligations. In Eaton v ISS Catering Services Pty Ltd,[13] the Court of Appeal dismissed an appeal from a judge of the County Court who refused a number of applications made during the course of a trial to adjourn the trial to enable the plaintiff to obtain further expert evidence. The Court of Appeal in a joint judgment stated as follows (omitting footnotes):[14]
[13][2013] VSCA 361.
[14]Ibid [48]-[50].
The importance of case management principles in guiding the Court’s discretions in exercising case management powers has been reinforced by recent pronouncements of the High Court and this Court. In Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategies Management and Marketing Pty Ltd & Ors, the High Court explained the importance of the ‘overriding purpose’ under the Civil Procedure Act 2005 (NSW) in the exercise of its powers under that Act or Court rules. The High Court referred with approval to the doubts expressed by Lord Woolf MR in Biguzzi v Rank Leisure PLC, that ‘authorities decided under the old procedure could continue to be binding or even persuasive’. Later, the High Court summarised the purpose of the Civil Procedure Act 2010 in the following terms:
The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose.
That purpose may require a more robust and proactive approach on the part of the courts…
In Yara Australia Pty Ltd v Oswal, this Court gave similar emphasis to the importance of the overarching purpose, and to the overarching obligations on parties and their lawyers under the Civil Procedure Act 2010.
Acceding to Ms Deak-Fabrikant’s application would not promote the efficient conduct of the business of the Court, or the efficient use of judicial and administrative resources. This trial has consumed an extraordinary amount of Court time on sitting days and in chambers. Setting aside the time taken from the date of issue and the date the trial commenced, and the time over which it took to conduct the trial, acceding to the application will delay the determination of this proceeding even further. Finally, while the value of the five properties is not insignificant (between $2.5 and $3 million), and Ms Deak‑Fabrikant seeks a half share of the value of the properties and more, the factual and legal issues in this proceeding are not unduly complex: they simply required ventilation and determination, and the trial, properly conducted, should have been able to have been completed within 10 to 12 days.
Of course, the obligations imposed upon the Court and litigants do include an obligation to ensure that there be a just determination of the issues in the proceeding. In circumstances where Ms Deak‑Fabrikant has a bona fide claim, depriving her of the opportunity to cross‑examine the opposing witnesses is a significant matter. However, all of the other relevant considerations weigh against the granting of the application. Her abandonment of the trial after consuming many weeks of Court time and hundreds of thousands of dollars of the other parties’ resources, and her unexplained defiance of my directions in the week commencing 27 October 2014, along with the unexplained delay in making the application to re‑open the trial weigh against the granting of the indulgence sought by her. The prejudice to the other parties, while capable of being alleviated in some respects, is significant, given the inevitable lack of certainty about the scope of a re‑opened trial and the estimate of the time required to complete the trial.
As previously noted, there will be prejudice to Ms Deak‑Fabrikant in not having the opportunity to cross‑examine the opposing witnesses. However, she has had ample opportunity to present her case. She has called twelve witnesses in addition to giving lengthy evidence herself. Some of that evidence does indeed cast doubt upon the accuracy of some of the affidavit evidence of Paul and Stephen Grech, in particular, the unrelenting negativity of the evidence about the quality of the relationship between Ms Deak-Fabrikant and Paul Grech.
Further, as indicated above, I am prepared to allow the bank statements to be tendered into evidence, and afford Ms Deak-Fabrikant the opportunity to make submissions regarding the inferences which can be drawn from them, and indeed, regarding the proceeding as a whole. Ms Deak-Fabrikant’s legal team will have the benefit of the extensive written submissions filed on behalf of the Grech parties, and of course, the Grech parties will have an opportunity to reply. However, in the circumstances, no adverse inferences will be drawn if Ms Deak-Fabrikant chooses not to avail herself of that opportunity, or indeed if the Grech parties choose not to appear to make submissions in reply.
The current case can be contrasted with the circumstances confronting the Court of Appeal in Xiao. First, in Xiao the trial had not commenced, although it had been adjourned on a number of occasions in rather questionable circumstances. Significantly, Ms Xiao made available her treating doctor to give evidence at Court. Ms Xiao could not speak or read English, and had made serious allegations of fraud which were ultimately borne out at trial.[15] The proceeding had been on foot for two years at the time the original trial proceeded (compared with over six years in the current case), and Ms Xiao’s application to set aside the judgment under r 49.02(2) was made promptly. Further, while the Court of Appeal did not refer to this as a relevant consideration, unlike the current case, the respondents to the application and the appeal were largely well resourced litigants, either on their own account, or were funded by insurers. Perpetual is an established financial institution and the other active parties were a solicitor, a mortgage broker, and the Registrar of Titles. In those circumstances, the Court of Appeal determined that the justice of the case required that Ms Xiao be permitted to defend the claims against her at trial.
[15]see Perpetual Trustees Victoria Ltd v Xiao [2015] VSC 21, where the trial in fact proceeded on the agreed premise that Ms Xiao’s signatures on the relevant loan documents were forged.
Accordingly, I will refuse the application. However, I will give Ms Deak‑Fabrikant and her advisers seven days to determine whether they wish to avail themselves of the opportunity to make closing submissions, either orally or in writing, on a mutually convenient date in the week commencing 31 August 2015.
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SCHEDULE OF PARTIES
| STEPHEN PHILLIP GRECH and JELVIE GRECH (also known as JELVIE PANGALILA) | Plaintiffs |
| - and - | |
| LARISSA DEAK-FABRIKANT | First Defendant |
| REGISTRAR OF TITLES | Second Defendant |
| LARISSA DEAK-FABRIKANT | Plaintiff by First Counterclaim |
| STEPHEN PHILLIP GRECH and JELVIE GRECH (also known as JELVIE PANGALILA) | Defendants by First Counterclaim |
| PAUL GRECH | Defendant by First Counterclaim |
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