Health Management Systems (Australia) Pty Ltd v Transport for NSW

[2022] NSWSC 1516

Supreme Court

New South Wales

Medium Neutral Citation:

Health Management Systems (Australia) Pty Ltd v Transport for NSW [2022] NSWSC 1516

Hearing dates:

23 September 2022 and 4 November 2022

Decision date:

09 November 2022

Jurisdiction:

Equity - Commercial List

Before:

Ball J

Decision:

(1)   The application by the plaintiff to carry on these proceedings by Mr Guorgi is dismissed with costs;

(2)   The proceedings, including the balance of the notice of motion filed on 25 August 2022, are stood over until 2 December 2022.

Catchwords:

CIVIL PROCEDURE — Representation — By unqualified persons — Whether circumstances shown such that leave should be given to dispense with UCPR r 7.1 where corporation seeks representation by director

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law

Practice Note SC Eq 3

Public Works and Procurement Act 1912 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (No 2) (1986) 8 NSWLR 104

Damjanovic v Maley (2002) 55 NSWLR 149; [2002] NSWCA 230

Vintage Marine Art Pty Ltd v Henderson [2019] NSWCA 251

Category:

Procedural rulings

Parties:

Health Management Systems (Australia) Pty Ltd (Plaintiff)
Transport for NSW (Defendant)

Representation:

Counsel:
G Guorgi (Director of Plaintiff)
F Roughley (Defendant)

Solicitors:
Herbert Smith Freehills (Defendant)

File Number(s):

2022/25517

Publication restriction:

None

JUDGMENT

Background to the application

1. By a notice of motion filed on 25 August 2022, the plaintiff, Health Management Systems (Australia) Pty Ltd (HMS), seeks a number of orders including an order for “Leave of the Court to allow George Guorgi (Director) to self-represent his company, the plaintiff (HMS)”. It is the application for that order that is the subject of this judgment.

2. The application for an order in those terms was heard on 23 September 2022, at which time I reserved judgment.

3. On 29 September 2022, while I was on leave, Mr Guorgi sent an email to Stevenson J’s Associate raising concerns about events that occurred prior to and during the hearing on 23 September 2022. The concerns were said to fall into three broad categories (quoting from the email):

1   The timeliness of information provided to the plaintiff by the defendant, and;

2   Certain matters raised by the defendant during the hearing, and;

3   The Model Litigant Policy as it applies to this matter

4. Stevenson J’s Associate replied to that email stating that, since I was reserved in the matter, it was appropriate that all correspondence be directed to my chambers and that Mr Guorgi should ensure that any other parties to the proceedings are copied into any such correspondence.

5. On 25 October 2022, shortly after I returned from leave, Mr Guorgi sent to my chambers (with a copy to the solicitors for the defendant, Transport for NSW (TfNSW)) an email describing his concerns in a little more detail and saying that he wished to submit further evidence to address statements made by TfNSW, to respond to evidence and material submitted by TfNSW and in further support of the application that he be entitled to represent HMS.

6. At a directions hearing on 27 October 2022, I gave the following directions:

1   HH directs that Mr Guorgi have until 4PM Wednesday 2 November 2022 to serve and file an affidavit setting out the matters to be relied on in relation to the application to re-open the hearing of 23 September 2022.

2   HH directs that Mr Guorgi provide a short outline of written submissions setting out the issues to be raised with the Court in relation to the application.

3   HH directs that the matter be stood over to the motions list on Friday 4 November 2022.

7. In accordance with those directions, Mr Guorgi provided the affidavit, sworn on 2 November 2022, and written submissions. The submissions add little to what was said in the emails. However, Mr Guorgi’s affidavit set out in some detail the matters about which he complains. I return to that affidavit below.

8. Mr Guorgi made further submissions to the Court on 4 November 2022 which do not go beyond what was contained in his affidavit. At the end of that hearing, I indicated that I would grant HMS leave to reopen its case to read Mr Guorgi’s 2 November 2022 affidavit and would take that affidavit into account in relation to the application the subject of this judgment.

Background to the proceedings

9. The proceedings were commenced by summons filed on 28 January 2022 following an unsuccessful attempt to commence them by statement of claim in December 2021. The initial return date for the summons was 11 February 2022. At that time, Mr Guorgi acted for HMS.

10. On 31 January 2022, Mr Guorgi sent an email to the Associate of Hammerschlag J attaching a notice of motion, explanatory letter and affidavit. After setting out what is described as a “brief background”, the motion sought the following orders:

10   The removal and subsequent suppression of the case from publication on the Court Lists at this time and until any approved interlocutory action is completed.

11   Additional time for the Plaintiff to prepare to apply to the court for interlocutory discovery of a limited set of documents, prior to discovery of further documents on commencement of the case.

12   The causes of action took place between June 2015 and April 1 2016, with possible further causes of action after this time. The plaintiff respectfully asks the court to recognise the original application date of December 6 2021 as the originating process date to avoid the 6 year limitation on this matter.

11. The covering letter relevantly gave the following explanation for the orders sought:

Keeping the case suppressed from publication is particularly important to my case because I intend to seek leave for interlocutory discovery of a very limited set of documents and emails, and issue interrogatories that I believe will assist with critical elements of my case.

I understand that under the current UCPRs, the court requires self-represented litigants to seek leave on several matters, and this would take some time, but I did not want to risk the limitation period of 6 years to expire for my case. I have also read and understood the need for quick, cheap and just determination of cases.

12. The proceedings concern a request for tender issued on 11 May 2015 by TfNSW for a centralised trip allocation and booking system. Although shortlisted, HMS was an unsuccessful tenderer.

13. Hammerschlag J listed the proceedings before him on 2 February 2022. Shortly before the hearing, Mr Guorgi sent his Honour’s Associate an email attaching a Commercial List Statement that Mr Guorgi said he had intended to file with the summons.

14. Hammerschlag J vacated the listing on 11 February 2022 and stood the matter over for directions until 8 April 2022 to give Mr Guorgi time to file any application he wished, including an application for leave to represent HMS and an application for what was described as “preliminary discovery”.

15. On 5 April 2022, HMS filed a notice of appointment of solicitor and on 6 April 2022 the matter was stood over at its request to 20 May 2022. On that date, it was stood over again until 29 July 2022.

16. On 1 June 2022, HMS filed a notice of removal of solicitor and since that time Mr Guorgi has appeared for HMS.

17. On 27 July 2022, Mr Guorgi sent an email to my Associate saying that his flight back to Australia had been delayed and that consequently he would not be able to appear on 29 July 2022. Accordingly, I stood the matter over to 5 August 2022.

18. In the meantime, on 27 July 2022, HMS filed its Commercial List Statement. It served the proceedings on that same date. On 4 August 2022, on TfNSW’s application, the matter was stood over until 26 August 2022 to give it time to consider its position. The day before that directions hearing, HMS filed the motion which is currently before the Court which was made returnable on 2 September 2022. The directions hearing was adjourned until that time.

19. The notice of motion seeks the following orders:

•   Recognise the original filing date of December 6 2021

•   Leave of the court to apply for early discovery of documents

•   Leave of the court to allow George Guorgi (Director) to self-represent his company, the plaintiff (HMS)

•   Leave of the court for the sole Director (George Guorgi) not to file as a plaintiff

•   A Protective Costs Order for the matter that the plaintiff argues is of significant public interest and needs to be tried.

20. On 2 September 2022, the Court directed that the question whether Mr Guorgi could represent HMS be decided before the other issues raised by the motion. The Court gave directions for HMS to serve any additional evidence on which it relied by 16 September 2022 and stood the motion over until 23 September 2022. During the course of that directions hearing, Mr Guorgi said the following:

I have asked for a legal costs order to cap the costs in this matter and I have been preparing that information. So they were in agreement. They would agree to an extension of a week or two to do that and I think if I had at least two weeks to get that financial information, it would enable the Court to see the financial background and the capacity for any adverse costs order.

Relevant legal principles

21. Uniform Civil Procedure Rules 2005 (NSW) r 7.1 (UCPR) relevantly provides:

(2)   A company within the meaning of the Corporations Act 2001 of the Commonwealth—

(a)   may commence and carry on proceedings in any court by a solicitor or by a director of the company, and

(b)   …

(3)   In the case of proceedings in the Supreme Court, subrule (2)(a) authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings.

22. Despite UCPR r 7.1, the Court may grant leave to any person to appear on behalf of a litigant: see Civil Procedure Act 2005 (NSW) s 14; see also Vintage Marine Art Pty Ltd v Henderson [2019] NSWCA 251 at [5] per Brereton JA citing Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (No 2) (1986) 8 NSWLR 104. In considering whether to exercise that power in favour of a director of a plaintiff company, the Court will consider, among other things, the complexity of the case, the nature and difficulties of the plaintiff obtaining representation, the efficient administration of the proceedings, the risk that the defendant will be prejudiced if the leave is granted and the interests of justice: see Damjanovic v Maley (2002) 55 NSWLR 149; [2002] NSWCA 230 at [69]ff per Stein JA. Also relevant is the fact that these proceedings have been commenced in the Commercial List, which has specific procedures which are designed for the efficient and quick disposition of commercial cases and which can place considerable burdens on the representatives of the parties.

Consideration

23. I have concluded that it is not appropriate to grant leave to Mr Guorgi to represent HMS. There are a number of reasons.

24. First, no real explanation has been given for why HMS cannot retain a solicitor. It did so for a period but terminated the retainer. Although at the directions hearing on 2 September 2022, Mr Guorgi indicated that he intended to serve evidence of HMS’s financial position, no evidence of that type was served or filed. During the course of the hearing, Mr Guorgi explained that he thought the evidence was only relevant to other orders that are sought in the notice of motion. But if that is the case, it illustrates one of the difficulties in Mr Guorgi representing HMS. Mr Guorgi seeks to advance a complicated case on behalf of HMS without having sufficient knowledge of the legal principles relevant to the case and the material that should be presented to the Court in relation to it. Moreover, since the hearing, as I have explained, Mr Guorgi has filed a further affidavit drawing the Court’s attention to matters that he submits are relevant to the application before the Court. No information concerning his or HMS’s financial position is included in that affidavit.

25. Consequently, there is nothing before the Court to suggest that HMS does not have the financial resources to engage a solicitor. During the course of the hearing, Mr Guorgi did say that he had been advised that the legal costs would be in the order of $800,000. There is no evidence before the Court to that effect, although, given the nature of the case, that estimate does not seem to be surprising. Mr Guorgi’s position appears to be that he would rather represent HMS himself than incur costs of that amount.

26. Second, the case is complex. It appears that HMS relies on three causes of action. First, it claims damages for what is said to be a breach of statutory duty arising from s 176 of the Public Works and Procurement Act 1912 (NSW). That section relevantly provides:

(1)   A government agency is to exercise its functions in relation to the procurement of goods and services in accordance with—

(a)   any policies and directions of the Board that apply to the agency, and

(b)   the terms of its accreditation (if any) by the Board, and

(c)   the principles of probity and fairness.

(1A)   …

(2)   A government agency is also to ensure it obtains value for money in the exercise of its functions in relation to the procurement of goods and services.

(3)   A government agency is, at the request of the Board, to provide information to the Board about its activities in relation to the procurement of goods and services.

Second, it claims damages for misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law. Third, it claims damages for unconscionable conduct.

27. The first cause of action raises a question whether s 176 gives rise to any private rights. The second and third causes of action raise complicated factual questions concerning the conduct of TfNSW and reliance on that conduct by HMS. The causes of action also raise the question whether any limitation defence is available. The second and third causes of action raise questions concerning whether TfNSW’s alleged conduct was in trade or commerce and whether TfNSW can be liable for unconscionable conduct. All causes of action raise issues in relation to damages. It appears that HMS claims as damages both costs it incurred in participating in the tender process and damages assessed by reference to the position it would have been in if its tender had been successful. It may well be necessary to obtain expert evidence on those questions. That will require Mr Guorgi to give proper instructions to an expert and assist the expert to complete his or her report in accordance with UCPR Pt 31 Div 2 Subdivs 2–3.

28. Third, I am not satisfied that Mr Guorgi will be able to assist the Court in any meaningful way.

29. Mr Guorgi gives evidence that he has some experience in conducting proceedings in the Fair Work Commission and the Victorian Civil and Administrative Tribunal. He also says that he has familiarised himself with the UCPR, Practice Note SC Eq 3 and has read the Civil Trials Bench Book and articles by former judges that identify the challenges facing the courts when dealing with self-represented litigants.

30. However, Mr Guorgi’s experience is unlikely to provide much assistance in running a complicated commercial case in this list. Some examples are apparent from what has already occurred in the proceedings. As I have explained, Mr Guorgi first attempted to commence these proceedings by statement of claim. He appears to have thought that it was possible to progress these proceedings without first serving them on the defendant. The notices of motion he has filed contain a combination of the orders he seeks together with other information which ought not to be included in notices of motion. Mr Guorgi says that he did not appreciate that his and HMS’s financial position were relevant to the current application, although they plainly are because they are relevant to HMS’s ability to obtain legal representation.

31. Although Mr Guorgi is obviously an intelligent person who is seeking to do his best to comply with court procedures, like many litigants in person, he has difficulty in addressing the precise issues that are before the Court at any particular time. That is likely to lengthen the hearing and place additional burdens on TfNSW and the Court.

32. Moreover, on the face of it, there appear to be serious difficulties with the Commercial List Statement served by HMS that was apparently drafted by Mr Guorgi. The Commercial List Statement does not identify clearly the representations or other conduct that TfNSW is alleged to have engaged in that was misleading or deceptive. Nor does it identify with any clarity the precise facts and matters on which HMS relies for the assertion that TfNSW engaged in unconscionable conduct. Rather, the Commercial List Statement contains a litany of complaints about the way in which TfNSW went about conducting the tender process.

33. It is quite possible that if the matter proceeds, there will be an application to strike out the Commercial List Statement. Indeed, at the first directions hearing Hammerschlag J raised questions with Mr Guorgi concerning the form of the list statement. Although it is no criticism of him personally, Mr Guorgi is likely to struggle to make submissions on the appropriateness of the list statement and to redraft it if it is struck out.

34. Fourth, it appears that Mr Guorgi will be a critical witness in HMS’s case. It is unclear whether HMS intends to call evidence from other witnesses. However, if it does, Mr Guorgi will not be an appropriate person to assist in the preparation of those witness statements. It will be difficult for Mr Guorgi to give evidence and at the same time conduct the case properly.

35. Fifth, it is likely that TfNSW will lead evidence from its own witnesses. Cross-examination of those witnesses could be important where there is contested evidence concerning what occurred. Cross-examination in complicated commercial cases requires skill and experience, which Mr Guorgi does not have.

36. Sixth, the case is likely to involve a substantial number of documents. The usual order for hearing requires the plaintiff to prepare court books. The preparation of those court books and other material for trial is likely to be beyond Mr Guorgi’s personal capacity.

37. Seventh, if Mr Guorgi is permitted to represent HMS, that is likely to contribute to a delay in the case being heard and is likely to impose additional costs on TfNSW. Little has occurred in the proceedings since they were commenced on 28 January 2022 this year. Much of that delay can be explained by Mr Guorgi’s inexperience. Although Mr Guorgi says that he has learnt a lot since HMS commenced these proceedings, further delays are to be expected as Mr Guorgi grapples with other aspects of the court process.

38. Nothing raised in Mr Guorgi’s affidavit sworn on 2 November 2022 or submissions made on 4 November 2022 affects the position.

39. Mr Guorgi raises two main complaints.

40. First, he says that he was not provided with material in a timely manner. In particular, he points to the fact that he was not provided with TfNSW’s list of authorities until sometime after 8.00 pm the night before the hearing on 23 September 2022 and with copies of the (two) judgments on which TfNSW relied on the morning of the hearing when he was in court. He also says that he was only provided with the affidavit relied on by TfNSW, which was affirmed by Ms Rebekah Gay on 1 September 2022, shortly before the hearing on 2 September 2022, which was said to be a breach of TfNSW’s obligations as a model litigant.

41. Neither of these matters is significant. The list of authorities referred to two authorities dealing with the principles to be applied by the Court in deciding whether to grant a non-lawyer a right to appear for a company. Mr Guorgi had notice well in advance that that was the issue to be dealt with at the hearing on 23 September 2022. He must have understood that it was necessary for him to familiarise himself with the relevant principles before the hearing. He could not have been caught by surprise by submissions made by reference to those principles. At the hearing on 2 September 2022, the matter was stood over until 23 September 2022 to give HMS an opportunity to file any further evidence in response to the evidence given by Ms Gay. HMS was given until 16 September to file that evidence. It is not suggested that that time was inadequate.

27. The second issue or group of issues raised by Mr Guorgi is that he says Ms Roughley, who appeared for TfNSW, misstated factual matters relevant to the application and that Ms Gay gave an incomplete account of the relevant facts. I do not accept those submissions. It is not necessary to deal all of the points raised in Mr Guorgi’s affidavit. Indeed, it is not easy to understand some of them. However, there are some that I should refer to.

28. Mr Guorgi says that he did not understand that costs would be relevant to the present application. As I have said, he made that point at the hearing on 23 September 2022. In addition, Mr Guorgi says that Ms Roughley mischaracterised what he said from the bar table on the question of costs. In particular, Ms Roughley said that so far as the evidence goes HMS and Mr Guorgi had made a positive election not to use lawyers, whereas Mr Guorgi says that he made it clear in his affidavit evidence that “I will seek legal advice as needed as an unbundled approach to the proceedings”. However, the question whether HMS has the capacity to pay the legal costs of the proceedings is clearly relevant to the application and if it did not have that capacity it is to be expected that that is a matter that would be the subject of evidence from HMS. Ms Roughley was simply making the point that there was no such evidence. When Ms Roughley referred to an election not to use lawyers, she was plainly referring to an election not to have lawyers acting for HMS in the proceedings.

29. Ms Roughley made the submission that it would be difficult to engage with Mr Guorgi in relation to amendments to the List Statement. It is not easy to understand Mr Guorgi’s complaint about this submission. He says that he has foreshadowed an intention to amend the List Statement, but that multiple amendments may be a waste of time. He also says that no requests for better particulars were made, nor was any request made to explain the pleadings. How this response is an answer to Ms Roughley’s point is unclear. It is a response that could have been made at the time of the hearing. The response does not undermine the point that the List Statement appears to be defective, the case that HMS wants to advance appears to be complicated and Mr Guorgi’s lack of legal training is likely to impede progress of the matter.

30. Ms Roughley made the point that if HMS intended to call other witnesses, it was difficult to see how Mr Guorgi could be involved in the preparation of that evidence, since he was HMS’s principal witness. Mr Guorgi says in his affidavit sworn on 2 November 2022 that he has had no requests from TfNSW on this matter and that the point overlooks his evidence that he intends to seek legal advice as needed. Again, these points could have been made at the hearing. Moreover, they do not provide an answer to the point made by Ms Roughley, which I have accepted. As things stand, it appears that the proceedings are largely being conducted by Mr Guorgi and that that has the problems I have referred to. In addition, if HMS proposes to engage legal advisors to assist it to prepare evidence, that raises the question why those legal advisors should not be on the record.

31. Mr Guorgi says in his affidavit that TfNSW made submissions about delay and costs without drawing the Court’s attention to relevant correspondence in the evidence. But again, to the extent that Mr Guorgi thought that that correspondence was relevant, that is something that he could have done at the hearing and has done in his most recent affidavit. The correspondence does not alter the fact that relevant to the question whether the order sought by HMS should be granted is whether HMS can afford legal representation and whether the proceedings will be delayed if Mr Guorgi continues to represent HMS. HMS has chosen to lead no evidence on the first question and nothing Mr Guorgi says in his affidavit of 2 November 2022 alters the fact that if he is permitted to represent HMS that is likely to add to the delay in the proceedings being heard. That conclusion appears to be borne out by the experience to date, including the application to reopen the hearing that occurred on 23 September 2022.

Orders

47. The application for HMS to carry on these proceedings by Mr Guorgi should be dismissed with costs. The proceedings should be stood over for three weeks to enable HMS to consider its position in the light of this judgment.

48. Accordingly, the orders of the Court are:

1. The application by the plaintiff to carry on these proceedings by Mr Guorgi is dismissed with costs;

2. The proceedings, including the balance of the notice of motion filed on 25 August 2022, are stood over until 2 December 2022.

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Decision last updated: 09 November 2022