In the matter of Idylic Solutions Pty Ltd and ors - Australian Securities and Investments Commission v Hobbs - [2012] NSWSC 581

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Idylic Solutions Pty Ltd & ors - Australian Securities and Investments Commission v Hobbs [2012] NSWSC 581
Hearing dates: 28 May 2012
Decision date: 30 May 2012
Jurisdiction: Equity Division
Before: Ward J
Decision:
Application to vacate hearing date dismissed. Amended commencement date for hearing. Limited order for pro bono assistance. Other applications dismissed.

Catchwords: CASE MANAGEMENT - interlocutory applications regarding affidavit evidence, vacation of the hearing date and request for a referral for pro bono legal assistance - HELD - application to vacate dismissed but commencement date deferred - limited order for pro bono assistance - other applications dismissed.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Mental Health (Compulsory Assessment & Treatment) Act 1992 (New Zealand)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Allen Allen & Hemsley v DCT (NSW) (1988) 81 ALR 617
Allen Allen & Hemsley v DCT (NSW) (1989) 86 ALR 597
Aon Risk Services Aust Ltd v ANU (2009) 239 CLR 175
Baker v Campbell (1983) 153 CLR 52
Dafaalla v Concord Repatriation General Hospital [2007] NSWSC 602
Dick v Piller [1943] KB 497
Forster v Harvey [2006] NSWSC 1112
Matsen v Matsen [2008] NSWSC 226
Packer v DCT [1985] 1 Qd R 275
Phu v NSW Dept of Education and Training [2011] NSWCA 119
Watson v Watson [1968] 2 NSWR 647
Texts Cited: Cross on Evidence (6th ed)
Ritchie's Uniform Civil Procedure NSW
Category: Interlocutory applications
Parties: Australian Securities and Investments Commission (Plaintiff)
David John Hobbs (First Defendant)
Min Hua Li (Second Defendant)
David John Collard (Third Defendant)
Hui Min Wu (Fourth Defendant)
Con Koutsoukos (Fifth Defendant)
Brian John Wood (Sixth Defendant)
Jimmy Truong (Seventh Defendant)
Jacqueline Hobbs (Eighth Defendant)
Idylic Solutions Pty Ltd ACN 121 960 754 (Ninth Defendant)
888 Management Inc (Tenth Defendant)
Geneva Financial Ltd (Eleventh Defendant)
Barclaywest Ltd (Twelfth Defendant)
Preserved Investment Group Ltd (Thirteenth Defendant)
North Wave Ltd (Fourteenth Defendant)
G P Global Ltd (Fifteenth Defendant)
Representation: Counsel:
J R Clarke (Plaintiff)
Solicitors:
Georgina Hayden, Solicitor for Australian Securities and Investments Commission (Plaintiff)

File Number(s): 07/258119

Judgment

HER HONOUR: Pursuant to a Notice of Motion filed by ASIC on 2 April 2012, I have made various orders in relation to the conduct of these proceedings (on 11 and 17 April 2012 and 16 May 2012, respectively). When those applications were in part heard on 11 and 17 April 2012, the first, eighth and fifteenth defendants (collectively, the Hobbs interests) were represented by Counsel (Mr M Southwick) who was instructed by a firm of solicitors (Prime Lawyers). By 16 May 2012, the legal representatives on the record for and retained to act for the Hobbs interests had ceased to act for those parties and on 16 May 2012 I acceded to an application for Prime Lawyers to withdraw as solicitors on the record in these proceedings. The Hobbs interests are now unrepresented in the proceedings.

As at 16 May 2012, an application to vacate the hearing date (fixed to commence on 20 June 2012 for 8 weeks) had been foreshadowed on behalf of the Hobbs interests and an unfiled application for such relief had been forwarded by facsimile transmission to my chambers. I made directions on 16 May 2012 with a view to any such application being properly filed in the Court registry (although there is still some doubt as to whether it has been filed in accordance with the relevant rules) and returnable before me for hearing (together with various other applications that had been similarly foreshadowed) on 28 May 2012.

When the matter came back before me on 28 May 2012, there was no appearance as such for the Hobbs interests, although Mr Collard (the third defendant, who has filed a submitting appearance in these proceedings) attended in person and handed up on behalf of Mr Hobbs copies of various documents as well as a typed note that he informed me had been forwarded to him by Mr Hobbs in effect as his script for the occasion. That document has no evidentiary status and I read it as a submission on behalf of Mr Hobbs (or the Hobbs interests in general).

Notwithstanding the doubt as to whether any of the Hobbs' interests Notices of Motion forwarded by facsimile transmission both before and after 16 May 2012 (copies of which were handed up in Court by Mr Collard) had formally been filed, I proceeded to treat them as having been filed (though I note that there has been no waiver of the filing fees payable in connection therewith, for which the Hobbs interests would remain liable in the ordinary course) and to deal with the applications therein made. I did so because it seemed apparent from the affidavit material that had been forwarded by Mr Hobbs that Mr Hobbs (and his wife in relation to a separate Notice of Motion forwarded in similar fashion by her) was seeking to be excused from attendance on the hearing of his applications but not asking that the hearing of the applications be deferred. I had made it clear on 16 May 2012 (at which time the solicitor then with the conduct of the proceedings on behalf of the Hobbs interests was in Court) that any such applications would be dealt with on that day and, given that the application was to vacate the hearing fixed to commence on 20 June 2012, I considered it incumbent on me to proceed with the hearing of the application (together with the various other applications that had been made in relation to interlocutory matters) without delay, albeit in Mr and Mrs Hobbs' absence. (I note that I had received no notice of any application for the Notices of Motion to be heard via a telephone attendance by Mr Hobbs or by way of video-link.)

Accordingly, I proceeded to read the evidence before me and the submissions made both by ASIC and by or on behalf of the Hobbs interests (in the material that had been sent through to the Court in advance of the application and in the note handed up by Mr Collard) and ruled on the various applications. I concluded that the application to vacate the hearing date should be rejected but that the commencement of the hearing should be deferred until 4 July 2012. I gave only brief oral reasons and indicated that I would publish more complete reasons on that application (and the remaining matters raised in the Notices of Motion that had been forwarded by the Hobbs interests). What follow are those reasons.

(I also considered and made orders declining to set aside three subpoenas that had been issued to New Zealand witnesses, Ms Brenda Hobbs, Ms Suzanne Watson and Mr Grant Clements, respectively. I gave brief oral reasons at the time for so doing, which will be published separately in due course as will my reasons for dismissing an application by Mrs Hobbs for the proceedings against her and against Geneva Financial Ltd to be struck out for want of jurisdiction.)

Accordingly, these reasons deal only with the applications made by Mr Hobbs on his own behalf and on behalf of the Hobbs interests to vacate the hearing date and for other relief; and the similar application by Mrs Hobbs for a vacation of the hearing date.

Notices of Motion

As there was a plethora of material (some of it overlapping) forwarded by or on behalf of the Hobbs interests by facsimile transmission in the period from 17 April 2012, I list below the respective Notices of Motion with which these reasons now deal, together with the affidavits signed in support of one or other of the applications contained therein:

(i) Mr Hobbs' Notice of Motion dated 3 May 2012, seeking the following orders:

1. An order that the affidavit and evidence of Mr Jimmy Truong not be allowed "due to the short time frame to the trial and the amount of research required";

2. An order that the affidavit and evidence of Mr Brian Wood not be allowed "due to the short time frame to the trial and the amount of research required" (and noting that Mr Hobbs had not received that affidavit and supporting evidence as at that time);

3. An order that the affidavits and evidence of Mr Phillip Bellamy and Mr Nick Moore (both New Zealand lawyers) not be allowed (an order sought "under legal privilege" on the basis that both had represented Mr Hobbs); and

4. An order to vacate the 20 June hearing date (referring to letters from two medical professionals and reasons set out in an affidavit of 30 April 2012).

(ii) Mr Hobbs' Notice of Motion dated 21 May 2012, seeking the following orders (which largely overlap with the above) and in which Notice Mr Hobbs goes beyond outlining the relief sought and includes a number of matters which I have read as submissions and to which I will later refer:

1. An order for the exclusion of evidence of Mr Truong and Mr Wood (on the stated grounds that, at the time they filed their evidence they were co-defendants, and it was "procedurally impossible for ASIC to have them given evidence on its behalf" and that to allow ASIC to withdraw proceedings against them and use their evidence in this proceeding is unfair and prejudicial;

2. Alternatively to the above, an order that the proceedings should be "rescheduled" (on various grounds, including: that Mr Hobbs is physically unable to process the information served by ASIC after the hearing was set down; to allow Mr Hobbs to find finance to conduct the trial - a period of 12 months being sought in this regard; and on the basis of Mr Hobbs' mental health, the Notice referring to an expectation that this would improve over time "particularly if that means I am able to obtain representation rather than defending myself"); and

3. An order that the affidavits and evidence of Mr Phillip Bellamy and Mr Nick Moore (the New Zealand lawyers referred to above) not be allowed and that their outline of evidence not be used (this order again being sought "under legal privilege" as both had represented Mr Hobbs); and

(iii) Mr Hobbs' Notice of Motion dated 24 May 2012 in which he applies for pro bono legal assistance;

(iv) Mr Hobbs' Notice of Motion dated 24 May 2012, in which no relief appears to be sought but Mr Hobbs "seeks to inform the Court that he is unable to attend the Court on Monday 28th May because of health and financial reasons..."; and

(v) Mrs Hobbs' Notice of Motion dated 24 May 2012, seeking that the proceedings against herself and Geneva Financial Ltd be struck out (which application is the subject of separate reasons) and an order that the scheduled hearing date of 20 June be vacated (on the basis that Mrs Hobbs is unable to defend herself financially).

Affidavit evidence in support of the Hobbs' interests' applications

Read by me in support of one or more of the various applications referred to above were the following affidavits: affidavits sworn by Mr Hobbs on 30 April 2012, 3 May 2012, 21 May 2012 and 24 May 2012 (two); affidavits sworn by Mrs Hobbs on 14 May 2012 and 24 May 2012; an affidavit sworn 14 May 2012 by Robert Hobbs; and an affidavit sworn 21 May 2012 of Ms Doreen Andrews. I also admitted in evidence, subject to weight, a letter dated 2 May 2012 from a Consultant Psychiatrist in New Zealand (Dr Amanda King), though not as expert evidence.

ASIC raised what were well-founded objections to much of the affidavit material that had been forwarded to the Court. A large part of the material was inadmissible in form (containing broad conclusions without admissible evidence as to the basis for those conclusions; as well as statements which amounted to no more than argument or submission in relation to the application). Some (such as the assertions that evidence had been illegally obtained or that there had been 'entrapment' by ASIC) was of no apparent relevance to the applications at hand.

Objection was taken by ASIC to the admission into evidence of the two letters signed by doctors in New Zealand (if it was sought to be relied upon as expert evidence) as it had not been filed in compliance with the rules for the filing of expert evidence) and on the basis that ASIC was not in a position to test that evidence (as the doctors were not available for cross-examination). In relation to this issue, I had noted on the last occasion the matter was before me (17 April 2012) that if medical evidence were to be relied upon it would need to be adduced in proper form and the witnesses would need to be made available (if ASIC so required) for cross-examination. Mr Hobbs, in his affidavit evidence, deposed to an inability to ascertain what was required for medical evidence to be adduced in the proceedings (advice on which I would have thought Prime Lawyers could readily have assisted).

I ruled on the evidentiary objections (as will appear from the transcript). Those matters that were assertions, I read as such; those that were properly in the nature of submissions, again I read as such; in each case subject to weight. I rejected as irrelevant the assertions in relation to illegally obtained evidence and entrapment (matters which, if able to be established, would be open to be raised at the hearing) and did not read the doctors' letters as expert evidence but simply for the statements of opinion contained therein and, again, subject to weight.

ASIC read, on the application for an adjournment of the hearing, affidavits sworn on 14 May 2012 and 25 May 2012 by Ms Meredith Dodds, the solicitor at ASIC with the day-to-day conduct of the proceedings.

I set out below my reasons for the decisions made on 28 May 2012 in relation to the respective applications brought by the Hobbs interests in the Notices of Motion identified above. In one respect, on reflection, I propose to vary the orders made on that occasion. That is in relation to the ruling I made on Mr Hobbs' application for pro bono assistance. Having given that application (to which ASIC neither consented nor opposed) further thought I am of the view that, notwithstanding the inadequacies of the evidentiary material relied upon in support of that application, there would be merit in ascertaining (through a referral by the registrar to the pro bono panel for which provision is made in the rules) whether pro bono assistance could be obtained for the limited purpose of assisting the Hobbs interests in the conduct of cross-examination of ASIC's witnesses, provided that such referral does not prejudice the hearing date (which is now set to commence on 4 July 2012 for a period of 6 weeks). I have varied my earlier orders on that application accordingly.

(i) Leave to rely upon affidavit evidence of Messrs Truong and Wood

The first matter raised by Mr Hobbs' Notices of Motion of 3 May and 21 May 2012 was as to whether ASIC should be allowed to rely on the affidavits and evidence of two of the persons joined as the sixth and seventh defendants in the proceedings (Messrs Brian Wood and Jimmy Truong).

At the time of Mr Hobbs' first Notice of Motion, ASIC was still pursuing its claim for relief in the civil proceedings against them (which would presumably explain, though not support, Mr Hobbs' objection to their evidence on the basis that it would compromise their defence or his objection that, as defendants, the two could not be witnesses for ASIC). However, on 16 May 2012, ASIC foreshadowed an application for leave to discontinue the civil proceedings against the sixth and seventh defendants (on the basis that its criminal investigation team, separate from those conducting the civil investigation and these proceedings, was proposing to bring criminal proceedings against the two). (Hence, the tenor of the later objections by Mr Hobbs to the admission of their evidence.)

Initially, objection raised on behalf of the Hobbs interests by Counsel then acting for them (Mr Southwick) to the admission of this evidence was as to the lateness of the evidence and I address first this complaint.

Orders were made on 27 June 2011 by White J for ASIC to serve on the defendants the affidavit evidence on which it intended to rely at the hearing of the proceedings by 15 August 2011. On 24 October 2011, Barrett J extended the time by which ASIC was to serve the affidavit evidence and outlines of evidence to 18 November 2011.

In the period from 16 August 2011 through to November 2011, some 39 affidavits or outlines of evidence were served on Mr Hobbs (there being some issue in August as to whether his then solicitors had instructions to accept service or not). The manner of service was to serve a hard copy of the affidavits/outlines, together with an electronic copy of the affidavits and exhibits on DVD's. Ms Dodds, in her affidavit of 14 May 2012, deposes that in this fashion Mr Hobbs was served on 16 August 2011 with 20 affidavits, on 6 September 2011 with 5 affidavits (including that of Mr Koutsoukos, the fifth defendant), on 7 October 2011 with 2 affidavits/outlines of evidence (and a letter informing Mr Hobbs that ASIC was seeking to obtain an additional number of affidavits but that if those individuals would not agree to provide a signed affidavit, then ASIC would serve outlines of evidence from those witnesses on Mr Hobbs), on 14 October 2011, with 4 affidavits/outlines of evidence (again with a letter advising Mr Hobbs as to the position, as previously stated, in relation to the foreshadowed additional affidavits or outlines of evidence). (See [103]-[107] of Ms Dodds' affidavit.) A further 8 affidavits/outlines of evidence were served on Mr Hobbs, in the manner indicated previously, on 18 November 2011.

Ms Dodds further deposes (at [119]) that on 7 December 2011, Mr Hobbs was informed in writing, inter alia, that Mr Hobbs would be served with a further 3 affidavits (those being the 2 relied upon in due course for ASIC's application under s 50 to adduce evidence of the contents of underlying documents by way of summaries, on which application I ruled on 25 May 2012, and an affidavit of Mr Nicholas Moore, the last being the subject of relief sought in the present application) and that Ms Reisinger had declined to give evidence voluntarily in the proceedings and ASIC would seek to have examination transcripts of her evidence before the regulatory body in the US admitted as evidence in the proceedings (that being an application that I ruled on in April 2012).

The process undertaken to obtain (and hence the lateness in service of) the Wood and Truong affidavits was explained in Ms Dodds' affidavit. In essence, it appears that as early as November 2009, ASIC's civil team sought the cooperation of Messrs Wood and Truong to give voluntary interviews to discuss what each knew about the role played by Mr Hobbs in the set-up and operation of the Integrity Plus Unit Trust and the Super Save Superannuation Fund (see Ms Dodds' affidavit at [40]) and that initially they were prepared to cooperate and attended interviews (without legal representation) in December 2009 for that purpose (see the process outlined in [41] to [47]). Following the filing of ASIC's statement of claim in what are referred to as the PJCB proceedings (since consolidated and now part of the present proceedings), Ms Dodds met with each of Mr Wood and Mr Truong in May 2010 and invited them to consider acting as a witness for ASIC ([52]-[54]).

As at 2 June 2010, Mr Wood's position was that he had decided to cooperate with ASIC ([55]) but Mr Truong was undecided ([56]). Mr Truong later that month said that he was prepared to cooperate provided he could say to the Court that he did not know that what he did was wrong at the time ([58]). However, during August 2010, Messrs Wood and Truong obtained legal advice and both informed ASIC that they had decided not to assist ASIC with an affidavit ([60]-[63]).

In December 2010, each of Mr Wood and Mr Truong advised ASIC that he would not be filing a defence ([79]-[80]).

In December last year and January this year, ASIC again attempted to make contact with Messrs Truong and Wood in order to discuss whether they would be willing to provide affidavits in these proceedings. Ms Dodds deposes to the steps taken in this regard from [129]-[133]. [135]-[140], [143]-[145], [151]-[152], [155]-[170], [172]-[174], respectively. The upshot was that a measure of cooperation was ultimately achieved. A draft affidavit was prepared and sent to Mr Truong on 9 March 2012, after discussion with him as to the events relevant to facts in issue in the proceedings and an affidavit was prepared and sent to Mr Wood on the same basis on 14 March 2012.

In the circumstances, it is difficult to see that criticism can be levelled at ASIC for the delay in service of affidavits which (at the time the affidavit evidence was due to be served - in August 2011 and then extended to November 2011) the deponents thereof had not been prepared to prepare or sign.

At the directions hearing on 19 March 2012 before me (on which occasion there was no appearance for any of the defendants) Mr Clarke informed me that ASIC had recently obtained assistance from Messrs Wood and Truong and was in the process of preparing affidavits to be sworn by each of them (and on which, if they were sworn, ASIC would seek to rely at the hearing). Mr Hobbs was advised by ASIC of the orders made on 19 March 2012 on that day and was advised on 27 March 2012 of ASIC's intention in relation to the anticipated affidavits of Messrs Truong and Wood.

Following discussions with Mr Truong in relation to changes to his draft affidavit, Mr Truong signed an affidavit in these proceedings on 5 April 2012 and a copy of that affidavit was sent to Mr Hobbs by email on that date (with the exhibit to be sent by courier). Mr Wood's affidavit was not sworn until 14 April 2012. By that time, Mr Saad of Prime Lawyers had filed a Notice of Appearance in Court on behalf of the Hobbs interests. On 15 April 2012, Ms Dodds forwarded a copy of Mr Wood's affidavit by email to Mr Saad and arranged for a hard copy of the affidavit and DVD of the documents exhibited to that affidavit to be served on the defendants. Ms Dodds deposes that a hard copy of the exhibit to Mr Wood's affidavit was served on Mr Saad on 16 April 2012 and he was informed that ASIC would be seeking leave on 17 April 2012 to rely on the affidavits of Messrs Truong and Wood at the hearing.

I indicated when the matter was before me on 17 April 2012 that my inclination was to give leave in relation to the Truong and Wood affidavits (bearing in mind that they were defendants and would have been in a position had they chosen to adduce evidence at the close of the plaintiff's case in any event). However, the application for leave to rely on those affidavits was not determined on that date. It was stood over with ASIC's s 50 application to 16 May 2012, on the basis that the lawyers acting for the Hobbs interests had sought further time to review the materials served by ASIC.

When the matter came back before me on 16 May 2012, the position was that the Hobbs interests, for all practical purposes, no longer had legal representation (though Prime Lawyers were still on the record in the proceedings) though by then the Hobbs interests (if not their lawyers) had had a further month to consider the Wood and Truong affidavits.

In Mr Hobbs' affidavit of 30 April 2012 (at [3] and perhaps also at [4]), Mr Hobbs had set out the basis of his initial opposition to reliance at the hearing by ASIC on the affidavits that have now been served of Mr Truong and Mr Wood. At that time, as noted above, ASIC was pursuing claims against each of those witnesses in the current proceedings (it has since discontinued the civil proceedings against each). Mr Hobbs deposed (in a paragraph that I have read only as a submission) that "as the defendants position is very clear in the reconstruction of ASIC's banking and money trail for the above gentlemen's company, any affidavit that ASIC has prepared for Mr Wood and Mr Truong will only be self serving to ASIC, and worded entirely to suit ASIC" and went on to suggest that the ability of Mr Wood and Mr Truong to defend themselves would be difficult and any defences would be compromised "as ASIC is essentially writing its own claim" in the form of the affidavits prepared for them.

At [4], Mr Hobbs referred to the introduction of "voluminous copies of material and affidavits" which he asserted he was unable to have reviewed or examined by a lawyer before the 20 June hearing. Similar complaint as to the "copious amounts of paperwork" and "completely overwhelming and the sheer amount of documents" is made at D and E of his 24 May 2012 affidavit. I assume the reference to the voluminous material includes the Wood/Truong affidavits to which objection is taken (though there is other material, namely the material in support of the s 50 application to which Mr Hobbs had also made objection).

In his 21 May affidavit (at [8]) Mr Hobbs again asserts that the affidavits of these witnesses are self-serving to ASIC and submits that the fact that the two are now facing criminal charges "does not lend credence as a reliable witness",

In essence, when I came to consider the matter on 16 May 2012, I read the gravamen of Mr Hobbs' objection to the leave granted for ASIC to rely on this evidence at the final hearing of this proceeding as being that there was insufficient time (and/or resources in the sense of legal representation) available to Mr Hobbs to enable him to test or respond to the matters raised in those affidavits.

Whether or not those affidavits might have made it more difficult for Messrs Wood/Truong to defend the proceedings is not to the point when the objection thereto is being made by another defendant. (I note that there has been no objection by Messrs Wood or Truong to the admission of this evidence, whether before or after the decision of ASIC to commence criminal proceedings against them.)

Similarly, whether or not Messrs Wood and Truong are credible witnesses is a matter to be determined at the hearing and not a matter that goes to whether their affidavits should be relied upon (for whatever weight they may bear) by ASIC.

As to the complaint made as to the lateness of this evidence, ASIC relied on the history of the proceedings, as set out in the Ms Dodds' 14 May 2012 affidavit, as demonstrating that Mr Hobbs had had ample time properly to retain and brief legal representatives to act on his behalf in respect of the final hearing in this matter and it was submitted that the evidence of Messrs Truong and Wood did not substantially expand matters the subject of evidence that has already been served on Mr Hobbs (and therefore that he should have expected he would have to meet evidence of this kind in any event).

I formed the view, on 16 May 2012, that the fact that the affidavits were served outside the timetable for service of ASIC's affidavits was not in all the circumstances a basis for rejection of the affidavits outright and that the Hobbs interests had had (and would before the hearing commenced have) a reasonable time to consider the material therein and to respond thereto (at the appropriate time) if they wished. I therefore made orders for ASIC to have leave to rely thereon.

Insofar as Mr Hobbs now seeks an order contrary to that made on 16 May 2012 it would appear that he is seeking to have me revisit the order that has already been made. Mr Clarke submits that there is nothing in the affidavit material served since 16 May 2012 that in substance is new in relation to the application by ASIC to rely on the affidavits of those witnesses.

In order to illustrate the submission that had previously been made by ASIC (that the Wood/Truong affidavits in substance deal with matters already raised in the evidence served in compliance with the timetable for service of evidence) on 28 May 2012, Mr Clarke handed up (as aides memoire) schedules containing a comparison of the evidence contained in each of the said affidavits with that contained in evidence previously served. ASIC submits, for example, that of the issues and topics contained in the affidavit of Mr Truong approximately 82% are also discussed or referred to in the affidavits and outlines of evidence of one or more of Mr Con Koutsoukos, Mr Robert Diaz and Ms Suzanne Watson (the bulk being said to be contained in Mr Koutsoukos' affidavit). In the case of Mr Wood, it is said that approximately 83% of the issues and topics discussed in his affidavit are also discussed or referred to in the outlines of evidence already served of one or more of the above three people as well as Mr Craig Dent and Ms Emma Burnard.

Thus, it is submitted that the evidence of Mr Truong and Mr Wood does not give rise to entirely new allegations against Mr Hobbs; rather that their evidence largely overlaps with the affidavit of Mr Koutsoukos (and to a lesser extent that of Mr Diaz), with which Mr Hobbs was served with last year. This is relevant insofar as it counters any suggestion that Mr Hobbs is prejudiced by having to deal with new topics of evidence raised shortly before the trial. It seemed to me on 16 May 2012 (and I remain of the view) that the service of the affidavits of Messrs Wood and Truong more than 2 months prior to the commencement of the final hearing provided Mr Hobbs with a reasonable time to prepare the matter for final hearing (particularly since at the time they were served the Hobbs interests did have the benefit of legal representation).

I made orders on 16 May 2012 for leave for ASIC to rely on the Wood and Truong affidavits, having been satisfied that the reason for the lateness of the affidavits was due to matters beyond ASIC's control and that there was sufficient time for those affidavits to be considered prior to the hearing (noting that there was no obligation on the Hobbs interests to adduce any evidence in response to matters in those affidavits before the close of ASIC's case and it would then be a matter for the Hobbs interests whether they chose to do so).

Insofar as Mr Hobbs has now made a submission as to the credence to be attached to evidence from persons against whom criminal proceedings have been commenced, that is a matter for submission in due course at the hearing not a matter that suggests that the leave already granted for ASIC to rely on such evidence should be set aside. Similarly, the assertion that such evidence (because prepared in draft affidavit form by ASIC or otherwise) is self-serving is a matter for submission in due course.

I remain of the view that the timing of service of these affidavits is not such as to warrant an adjournment of the final hearing.

The second basis on which Mr Hobbs bases his application for the rejection of this evidence is the stress he says it has caused him in relation to the preparation for hearing. As to the stress under which Mr Hobbs claims he to be suffering as a result of the late timing of the evidence, this is largely a matter of assertion on his part. I note that annexed to his affidavit was a copy of a letter dated 2 May 2012 from Dr Tim Ewer (a doctor at the Mapua Health Centre in Nelson New Zealand) in which Dr Ewer attributes the "exacerbation" of Mr Hobbs' "condition" to "an influx of affidavits and extra information for him to process prior to the hearing".

It is impossible for me to assess (or for ASIC to test, as it would be entitled to do) the basis on which Dr Ewer has formed that opinion. It is not clear precisely what affidavits or information he is referring to as having exacerbated Mr Hobbs' condition, nor is the condition identified other than as multiple sclerosis. It is not clear what has led Dr Ewer to express the view as to the causal effect of the said "influx" of affidavits and information (though it might be inferred that this is at least part as a result of whatever information he has been given by Mr Hobbs).

Moreover, Dr Ewer expresses the opinion that the deterioration in Mr Hobbs' condition (described as Mr Hobbs having "recently become increasing depressed and overtly anxious despite full doses of appropriate medication") is directly related to "the stress of his imminent court appearance in Australia". There is nothing to enable me to assess whether that stress is any greater than will be felt whenever the proceedings are due to commence.

While Dr Ewer recommends that Mr Hobbs be given "extra time" to attend to the task of understanding and responding to the new information that has been given to him, there is no indication of the length of time so recommended by Dr Ewer.

Dr Amanda King's letter of the same date is to the following effect:

In my opinion it would greatly assist Mr Hobbs' mental state and ability to cope with the Court hearing if he could be allowed further time in which to prepare and secure legal representation.

Although Dr Ewer describes Mr Hobbs as having been regularly reviewed with regard to "both his multiple sclerosis and depression with anxiety", Dr King does not identify the mental state or condition for which Mr Hobbs may be being treated by her. Neither doctor gives any indication as to the prognosis for any such condition or state, so that there is no way of knowing when, if ever, Mr Hobbs might be in a mental state or condition able to withstand the stress of a hearing or attend to the preparation of the hearing.

I was not persuaded that the leave granted on 16 May 2012 in relation to the affidavit evidence of Messrs Wood and Truong should be varied, particularly in circumstances where the substance of their evidence goes to matters that Mr Hobbs would already be aware were the subject of evidence in the proceedings (and therefore might need to be tested or the subject of a response by him) having been the subject of discussion in affidavits (such as the Koutsoukos affidavit) served some months ago.

Accordingly, I dismissed the application for relief in orders 1 and 2 of the 3 May Notice of Motion and order 1 of the 21 May Notice of Motion.

(ii) Privilege claim in respect of the evidence of Messrs Bellamy/Moore

ASIC has filed (and intends to rely at the final hearing upon) an affidavit of Nicholas Peter Moore sworn on 2 December 2011. It has also served an outline of evidence of Mr Phillip Bellamy on which it seeks to rely. On 11 and 17 April respectively, I gave leave for ASIC to serve out of the jurisdiction, in New Zealand, subpoenas to give evidence addressed to each of those potential witnesses.

Mr Hobbs objects to reliance by ASIC on the evidence of Mr Moore and Mr Bellamy on the basis that each of Mr Moore and Mr Bellamy has previously acted for Mr Hobbs. Both Mr Moore and Mr Bellamy were at the relevant time lawyers with the New Zealand firm Fletcher Vautier Moore. It appears that the basis on which Mr Hobbs seeks to resist the adducing of evidence by those solicitors on the basis that this would breach Mr Hobbs' legal professional privilege or that this would otherwise amount to a breach by the respective solicitors of fiduciary duties owed by them.

ASIC's principal position on this issue is that the appropriate course is to rule upon any such objection at the final hearing. There is considerable force to that submission. It is by no means apparent that this is a matter that should be determined in advance of the hearing.

ASIC further submits that when regard is had to the nature of the evidence sought to be adduced from Mr Moore and Mr Bellamy it is apparent that it does not comprise communications that would be the subject of a valid claim for legal professional privilege, not being evidence of any confidential communication for the dominant purpose of Mr Hobbs (or any other person or entity) being provided with professional legal services relating to an anticipated or pending proceeding, for the purposes of s 119 of the Evidence Act, or a confidential communication between the legal representative and client for the dominant purpose of the legal representative providing legal advice to the client, for the purposes of s 118 of the Act.

In that regard, I was taken through the affidavit of Mr Moore. In that affidavit he deposes to various matters, including" a company incorporation project on which Mr Bellamy and he had acted for Mr Hobbs, explaining the information recorded under the relevant heading in the firm's business records of time recorded to that project; discussions in which instructions to incorporate a new company (Legend of Bathurst Ltd) were received from Mr Hobbs and the purchase of land in relation to that project; details in relation to the incorporation of the company and the purchase of the land; records of bank statements or trust account ledgers of the firm; payments into the firm's trust account; discussions with Mr Hobbs as to Mr Moore's concerns as a director and shareholder of the company; a loan agreement with Destiny Holdings Ltd; other entries into or out of the firm's trust account; and the commencement of interpleader proceedings in New Zealand in which Legends of Bathurst and Mr Moore's firm have sought the Court's assistance to determine what claim competing claimants may have to funds held in the firm's trust account on behalf of the company.

Mr Bellamy's outline of evidence (not signed by him) similarly goes to the operation of the firm's trust account; payments into that account; the fact that he performed work for a company (Tasman Business Consultants Ltd) and that when he did so this was the only time he received instructions from Mr Hobbs; the incorporation of Legend of Bathurst and instructions received in relation thereto and to the purchase of property by it; and some correspondence received from Cadent Financial Services LLC to which he was instructed to prepare a reply.

Other than perhaps the making of an observation that "the form of the [loan] agreement could do with some clarification", it is not apparent on the face of Mr Moore's affidavit that it communicates the substance of any privileged advice or information. Similarly, there is nothing in the Bellamy outline of evidence that on its face appears to be privileged.

As Mr Clarke notes, the name of a lawyer's client is not privileged (citing Cross on Evidence (6th ed) at p706, ); a trust account ledger is not privileged (Packer v DCT [1985] 1 Qd R 275; Allen Allen & Hemsley v DCT (NSW) (1989) 86 ALR 597) and legal professional privilege is not attracted by documents which constitute or evidence transactions and are not themselves the giving or receiving of advice (Baker v Campbell (1983) 153 CLR 52 at 86-87 and 122-123; Allen Allen & Hemsley v DCT (NSW) (1988) 81 ALR 617). Mr Clarke submits that, in the same way that the name of a lawyer's client is not privileged, neither would the name of the person from whom instructions are received be privileged (although what those instructions are may well be privileged).

It is noted that ordinarily, in order to maintain a claim for legal professional privilege, the party making that claim must provide evidence as to the basis on which privilege attaches to the particular communication(s) or advice.

Mr Clarke submits that evidence by Mr Moore and Mr Bellamy that they agreed to become the directors and shareholders of a company and to hold the shares on trust for Mr Hobbs, or that they allowed the company to run by Mr Hobbs, does not involve evidence of communications that could properly be the subject of a claim for legal professional privilege. As to the material in Mr Bellamy's outline of evidence in relation to dealings between Mr Hobbs and Cadent (which I am informed is a company in the United States to which some of the funds in various of the Hobbs schemes went), again it is submitted that nothing in the nature of material that is the subject of a proper claim for legal professional privilege.

Mr Clarke informed me (and says that this has already been stated to Mr Hobbs and Mr Hobbs' previous lawyers) that an alternative to reliance upon Mr Bellamy's outline was that ASIC would seek, as it did with Ms Reisinger, to seek leave to rely upon the transcript of Mr Bellamy's examination conducted in accordance with the applicable regulatory procedures. Mr Clarke informed me that in the course of those examinations Mr Bellamy claimed privilege on various occasions (including in respect of instructions received after the first commencement of these proceedings) which indicates that Mr Bellamy was well aware of his ability to claim privilege on behalf his then client (Mr Hobbs) and I was informed that ASIC had not sought to examine Mr Bellamy on matters that might trespass upon that privilege.

I understand that in the course of the examinations, Mr Bellamy gave further evidence which ASIC intends to adduce at the final hearing (going beyond that contained in the outline) to the effect that Mr Hobbs gave certain instructions in relation to some of the entities relevant to these proceedings. However, Mr Clarke submits that any such evidence would not be the subject of legal professional privilege - rather it would relate to whether Mr Hobbs was the person who gave instructions to Mr Bellamy in respect of various corporate entities (such as Tasman Business Consultants) or in relation to the building of websites in relation to all of the relevant companies, whether Mr Hobbs gave the relevant instructions from Magny-Cours Ltd, and from whom instructions received on behalf of Geneva Financial Ltd from Ms Brenda Hobbs and Mrs Jacqueline Hobbs were to Mr Bellamy's knowledge based on instructions from Mr Hobbs.

I am of the view that the material contained on the face of the affidavit and outline of evidence in question seems unlikely to be privileged but that in any event that is a matter to be considered if and when it arises in the course of the final hearing and in the context of proper evidence as to the basis on which the privilege is claimed. I do not make any final ruling in relation to the matter at this stage. (It was made clear by Mr Clarke that if a further application for this material not to be adduced on the basis of a claim for privilege by Mr Hobbs at the final hearing, ASIC accepts that Mr Hobbs would still be entitled to make that application.)

On that basis I declined to grant the relief sought in paragraph 3 of the 3 May 2012 Notice of Motion and 3 of the 21 May 2012 Notice of Motion.

(iii) Adjournment Application

There is no dispute that the Court has the power (whether pursuant to s 66(1) of the Civil Procedure Act or in its inherent jurisdiction to control the processes of the Court), to adjourn the hearing of matters that have been listed for hearing. Mr Clarke notes that this power must be exercised in accordance with the overriding purpose specified in s 56(1) of that Act and in accordance with s 58(1) and that whether or not an adjournment should be granted is dependent upon the dictates of justice in the particular circumstances of the case at hand.

In Aon Risk Services Aust Ltd v ANU (2009) 239 CLR 175 at [111], the High Court noted that on such an application regard must be had to the simultaneous statutory objectives of the just, quick and cheap resolution of the real issues in dispute, which requires that due and proper consideration be given to efficient judicial administration and the desirability of avoiding delay. In particular, it is noted by Mr Clarke, having regard to what was said in Aon, that late and inadequately explained applications which necessitate adjournment of the hearing may be readily refused.

The bases on which the adjournment of the hearing is sought may be summarised as being the complaints made as to the lateness of service of evidence by ASIC (particularly, the Wood and Truong statements but also the admission into evidence of the Reisinger examination transcript, to which I have referred in previous reasons in this matter, and also, as I apprehend it, the material the subject of the summary evidence for which leave was given by me pursuant to s 50 of the Evidence Act 1995 (NSW)); Mr Hobbs' health; and the financial position of Mr and Mrs Hobbs (which is said to have resulted in their lack of representation for the hearing). I consider each of those matters in turn.

Volume of material served since February 2012 when hearing date was allocated

Mr Clarke concedes that late service of evidence may provide a proper basis for seeking an adjournment (citing Ritchie's commentary at [s 66.5], particularly where the other party is unrepresented), but submits that the considerations provided for in ss 56(1) and 58(1) of the Civil Procedure Act warrant the conclusion in this case that where proceedings have been regularly fixed for hearing, with due notice to the affected parties, they should commence on the appointed date and continue until their completion.

In particular, it is submitted that this is a case where the adjournment application is occasioned by matters such as delay in properly briefing counsel, the late withdrawal of legal representatives due to a fee dispute, inadequate preparation of proceedings for hearing, foreseeable difficulties in preparing for a hearing or obtaining or providing proper instructions, and the stated need to investigate the availability of additional evidence (where such investigations should have already taken place), those being examples of situations in which an application for adjournment may be refused (Mr Clarke referring to the cases noted in Ritchie's at [s 66.5] in this context).

I have referred above to some of the history of these proceedings set out in the affidavit of Ms Dodds sworn on 14 May 2012. In that affidavit, Ms Dodds notes, relevantly, that: a Notice of Appearance was first filed for Mrs Hobbs and Geneva Financial in February 2008 in the PCJB proceedings; that Notices of Change of Solicitor were filed on their behalf in May 2008 (appointing Mr Van Aalst of Murphy's as their solicitor); that Mr Southwick of Counsel appeared on a number of directions hearings in these proceedings (which were consolidated into the present proceedings in due course); that in July 2008 Mr Hobbs was joined as a defendants to the PCJB proceedings, though a Notice of Appearance on his behalf was not filed in those proceedings until 26 November 2008; that Mr Southwick appeared for Mr Hobbs on a number of occasions in the Secured Bond proceedings (in which a solicitor from Murphy's filed a Notice of Appearance on Mr Hobbs' behalf on 8 September 2008) and that he indicated to the Court on more than one occasion that he did not appear for Mr Hobbs in the PCJB proceedings due to a potential conflict of interest; that the then separate Idylic and Secured Bond proceedings were consolidated into the PCJB proceedings in August 2010 and that Mr Southwick appeared for (among others) Mr Hobbs at directions hearings in the consolidated proceedings (in which in November 2012 Mr Van Aalst filed a Notice of Appearance on behalf of each of the Hobbs interests); and that it was not until June 2011 that Murphy's informed Ms Dodds that they were no longer acting for the Hobbs interests and would be filing a Notice of Ceasing to Act.

Notwithstanding the service of such a Notice, Ms Dodds deposes that in August 2011 Mr Hobbs advised ASIC that arrangements had been made for Murphy's to continue to act in the proceedings and requested that affidavits be served on Mr Southwick and Mr Bellamy. (Murphy's denied that they had instructions to accept service and indicated that they did not intend to file a fresh notice of appearance in the matter.)

From August 2011, therefore, the Hobbs interests were not represented in the proceedings (although it is not clear whether advice was still being received from Mr Bellamy). It was not until 9 or 10 April 2012 (after the matter had in February 2012 been set down for hearing) that ASIC was informed that Prime Lawyers would be representing Mr Hobbs. On 11 April 2012, a Notice of Appearance was filed in Court on behalf of the Hobbs interests.

In the affidavit sworn 11 April 2012 from Mr Saad (filed in connection with ASIC's Notice of Motion then before the Court), Mr Saad deposed that his firm had first been asked whether it was willing to act in the matter for Mr Hobbs on 27 March 2012 ([2]). Mr Southwick then appeared, instructed by Mr Saad, when the matter was before the Court on 11 and 17 April 2012. On 3 May 2012, Prime Lawyers sent a Notice of Ceasing to Act in relation to the matter and since then, for all practical purposes, ceased to act in the matter.

The Hobbs' interests' legal representation was not confined to the retention of lawyers in Australia. Mr Bellamy swore an affidavit on 17 April 2012 (read on the application for leave to serve a subpoena to give evidence on him) in which he deposed that he had acted for Mr Hobbs from 2004; became aware of the PCJB proceedings in February 2008; continued to act for Mr Hobbs in those proceedings during the "five" years to June 2011 ([6]); had read the pleadings and evidence in detail, discussed the issues with solicitors and Counsel for Mr Hobbs in Australia, drafted the defence, and "lately" read the evidence and assisted counsel for Mr Hobbs with initial trial preparation ([6). Mr Bellamy deposed that he had "considerable insight and knowledge of the claims being made and great familiarity with the documentation" ([8]). He also deposed to Mr Southwick having been reengaged some time prior to 17 April and having travelled to New Zealand to review 32 affidavits and some 1900 exhibits ([11]. Mr Bellamy estimated that if he were required to bring some other solicitors up to speed on the proceedings in his place that would take six weeks ([12]).

Clearly, Mr Bellamy's affidavit as at 17 April 2012 can only be read as consistent with him then having had not only "familiarity with the long standing history of this file" but with him having an ongoing involvement in the matter. There is nothing from Mr Bellamy or Mr Hobbs to suggest that this involvement has ceased, although Mr Hobbs asserts that he is unrepresented. Enquiries by ASIC of the firm with whom Mr Bellamy now works in New Zealand (Duncan Cotterill) on 8 May 2012, however, produced the response that the firm is not currently providing legal services to Mr Hobbs in relation to the proceedings and does not anticipate that in future it will be representing Mr Hobbs in relation to the proceedings "unless circumstances change substantially".

Ms Dodds has also deposed to information from the liquidator appointed to wind up the Integrity Plus and Super Save schemes as to Mr Hobbs representation by solicitors at a settlement conference in connection with the New Zealand interpleader proceedings.

Mr Clarke submits that this history demonstrates that Mr Hobbs has had ample time properly to retain and brief legal representatives to act on his behalf in respect of the forthcoming final hearing in this matter and to take proper steps to prepare this matter for hearing and obtain evidence in the matter.

In relation to the volume of material, Mr Clarke points out that: Mr Hobbs was given the right to seek access to ASIC's documentary material in early 2011 (whilst still represented by his lawyers) but he did not take up that opportunity; Mr Hobbs was served with all of the lay affidavits on which ASIC relies in this proceeding between August and November last year, with the obvious exception of those not then sworn by Mr Wood and Mr Truong; the affidavits of Mr Wood and Mr Truong, while late, were not late due to any fault of ASIC, were served on Mr Hobbs as soon as available and to a large extent overlap with existing significant affidavit evidence already served by ASIC.

It is submitted that the s 50 application, rather than creating an additional burden on Mr Hobbs, sets out precisely what conclusions ASIC intends to make based on the underlying documents, whether or not such documents are ultimately tendered. Insofar as Mr Hobbs suggests that this is expert evidence, ASIC made clear at the hearing of its Notice of Motion that the affidavits of Mr Taylor and Mr Connor were only being read in support of the s 50 application and would not be relied upon at the hearing. The suggestion that Mr Taylor was giving expert evidence was denied.

As to the time that Mr Hobbs suggests would be necessary properly to prepare for the hearing (and in this context he seems to envisage the retainer of an expert; the need to travel to the United States to carry out investigations there in relation to Ms Reisinger's position; and more generally to review the material served to date), the estimate initially given was 4-6 months, though in some of the later material he suggest that a 12 month period is necessary. (I note that Mr Bellamy's evidence on the subpoena application was that a 6 week period would what would be necessary for hand-over and that, as at 3 May, when the Notice of Ceasing to Act was served, there remained sufficient time for that to occur before the hearing date.)

Health concerns of Mr Hobbs

In Mr Hobbs' affidavit of 21 May 2012 (at [9]) he deposes (in a sentence that I have read as a submission), that he does not want the Court to take the belief that he will not be well enough to attend the Court in the future. It seems that there Mr Hobbs was seeking to address a matter I raised when the matter was before me on 16 May 2012, namely the suggestion in the authorities that if it is unlikely that a party or witness will recover his or her health so as ever to be in a better position in relation to a hearing, this may be a factor weighing against the grant of an adjournment. If that was the intention of Mr Hobbs, when deposing as he has in the affidavit of 21 May 2012, then the difficulty is that I have nothing other than his assertion that this will be the case.

That highlights the difficulty with the medical evidence on which he relies - it is incapable of being assessed in any meaningful way. The letters have simply been annexed to Mr Hobbs' affidavit or forwarded direct to the Court. There has been no compliance with the Rules in relation to the service of expert evidence (and nothing to suggest that either Dr Ewer or Dr King is aware of or has undertaken to comply with the Expert Witness Code of Conduct).

In Dr Ewer's case, he describes "increasing" anxiety or depression likely to affect Mr Hobbs' cognitive ability or, in the case of Dr King, to refer to his "mental state and ability to cope with the Court hearing" without an indication of what the underlying condition is (apart from a broad description of multiple sclerosis). Both doctors do no more than recommend some "extra" or "further" time for preparation of the hearing without indicating what that might be. The weight that can be placed on both seems to me to be very limited.

There is some confirmation in Dr Ewer's letter that Mr Hobbs is suffering from multiple sclerosis, though nothing to tell me of the likely progression of the illness or its effect now or likely effect in the future of Mr Hobbs' ability to give instructions in relation to or prepare for a hearing.

(I have assumed, though there is nothing in the evidence to tell me that this is the case, that any diagnosis of mental health issues would be separate from, although perhaps linked with, a diagnosis of multiple sclerosis. ASIC, for its part, does not accept the mere assertion that Mr Hobbs suffers from progressive multiple sclerosis and says that this has not been established on the evidence. Whether or not that is the case, I have no way of determining whether one or both of the afflictions referred to in Dr Ewer's letter is likely to progress at any particular rate or to improve under any particular conditions.)

Mr Hobbs, in his affidavits, has asserted that the stress of this case and the "tight time frame" has caused him to have to be assessed under the Mental Health (Compulsory Assessment & Treatment) Act 1992 (New Zealand) (to which Dr Ewer's letter, as noted by Mr Hobbs, makes no reference) and says that he is currently under the "Mobile Community Mental Health" team monitoring his mental health daily, and has started a 6 week programme of "no work" on 1 May 2012. Apart from the fact that this is no more than an assertion, I have nothing to tell me what this involves and, to the extent that it appears to be a voluntary programme, why it is that this affects anything likely to be happening in the conduct of the proceedings. (Indeed, as Mr Clarke points out, the treatment has clearly not prevented Mr Hobbs from preparing a number of affidavits (some of which cite US and other legal authorities) or from giving instructions to others, such as Ms Andrews and Mr Collard, as to steps to be taken in the proceedings.)

Neither of the doctors was available to be tested on the opinions expressed in their letters (and I would infer from the reference in Ms Dodds' affidavit to searches which have been undertaken on the basis of which ASIC believes that Dr Ewer may have had some role as an investor in one or other of the Schemes in issue in the proceedings that ASIC might well have sought to challenge Dr Ewer's independence had he been made available for cross-examination as to the medical opinion contained in his letter.)

In her 14 May 2012 affidavit, Ms Dodds has chronicled the past history of occasions on which Mr Hobbs has relied on various claims related to his health (including multiple sclerosis, partial paralysis, depression and anxiety) and it is submitted that on each occasion that Mr Hobbs has been required to prepare a significant step in this proceeding (such as his attendance for compulsory examination; preparation of a defence; and preparation for final hearing), claims of this kind have been made. It is submitted that the coincidence of the timing of the claims of ill-health support an inference that Mr Hobbs may never be ready for this matter to proceed to a final hearing.

When compounded with the difficulty faced by Mr Hobbs in retaining legal representation due to his alleged financial constraints, Mr Clarke submits that it can be inferred that Mr Hobbs' present position will most likely be unchanged in the future.

Mr Clarke submits that the real reason for the present adjournment application is that Mr Hobbs has failed to take steps to be ready for the final hearing in this matter (having known since February 2012 of the listing of the matter and since December 2011 of the intention of ASIC to seek hearing dates in June this year).

Lack of Legal Representation - Financial Position

I have referred above to the time during which Mr Hobbs and the Hobbs interests have had the benefit of legal advice.

There is no explanation as to why there was no attempt to involve legal representatives at an earlier time (other than the assertion as to financial difficulties - yet Mr Hobbs' Notice of Motion dated 21 May 2012 contains a submission that a significant sum of money had been set aside to retain lawyers and Mr Hobbs seemingly was prepared to instruct Prime Lawyers to file a Notice of Appearance and to retain Mr Southwick at a time when he had been advised that the costs of the hearing would be in a substantial amount).

In that regard, the evidence of Mr and Hobbs' financial position is largely a matter of assertion (including that their house is owned by a company of which they are not directors or shareholders). It is supported to some extent by the withdrawal of Prime Lawyers on the basis of unpaid fees (as Mr Saad advised when the matter was before the Court on 16 May 2012). However, there is no explanation as to how moneys said to have been budgeted for the hearing have since been expended or become unavailable or as to the basis on which it is confidently asserted that if there is an adjournment for 12 months then Mr Hobbs will be able to "find finance" for the litigation. There is nothing to give me any confidence that Mr Hobbs will not be in the same position in relation to his stated finances if the hearing is adjourned for 4-6 or even 12 months, as has been sought.

Mr Clarke submits that the difficulties Mr Hobbs claims in providing proper instructions in preparing for the hearing were foreseeable and ought to have been duly taken into account by Mr Hobbs (citing Watson v Watson [1968] 2 NSWR 647 at 652) and that insofar as the difficulties claimed by Mr Hobbs in providing proper instructions are, on the evidence, also likely to arise in preparation for any future hearing date (were the present hearing to be adjourned) this counts against an adjournment.

In Mrs Hobbs' affidavit in support of the strike-out application Mrs Hobbs has asserted that she and her then legal advisors were under the impression or of the understanding that the trial was to be held in 2013 and "had budgeted for this".

Tendered by ASIC is a letter (which I have marked exhibit B) dated 8 December 2011 in which Mrs Hobbs was advised of certain steps in relation to the conduct of the proceedings. It was clearly stated in that letter that ASIC intended to ask the court at the then forthcoming directions hearing on 12 December 2011 for the matter to be set down for trial for dates in June 2012 or later. That should have alerted Mrs Hobbs to the fact that any expectation that the trial would not take place until 2013 may have been ill founded. A similar letter was sent to Mr Hobbs. There can have been no doubt on their part that there was a risk that the matter would be set down for hearing before 2013.

Mrs Hobbs also in her affidavit refers to her financial position and inability to defend herself in view of that financial position. There is no evidence to support the assertions that have been made in relation to Mrs Hobbs' financial position and I have read that simply as an assertion to that effect to which little weight can be given.

Conclusion

As to the bases on which an adjournment has been sought, the difficulty adverted to in relation to the documentation is one which seems in part to have been of the Hobbs interests' own making. They have had the benefit of legal advice from the commencement of the proceedings and up until at least August 2011 (and in the case of Mr Bellamy I would infer up until only recently before his 17 April 2011 affidavit). They have been on notice of the matters that would be in issue in the proceedings for some time and, by reference to the material served in August/September 2011, including Mr Koutsoukos' affidavit, of most of the matters raised by the Wood/Truong affidavit. They have had the opportunity to have access to the documents produced on discovery and have had the electronic transcript of Ms Reisinger's examination. Their solicitor in New Zealand has deposed to a longstanding familiarity with the matter. I am not persuaded that the Hobbs interests have not been in a position properly to prepare their defence within the time available to them. The question is as to how they have chosen to make use of that time (and the legal resources that were and have been available to them for that purpose). (I note, however, that ASIC was not opposed to a short delay to the commencement of the hearing so as to give Mr Hobbs some extra time for preparation.)

As to Mr Hobbs' health, the evidence as to which is largely based on assertion, I accept that an imminent hearing is likely to be stressful for any litigant defending proceedings of this kind and that it may exacerbate any existing mental or other condition from which the litigant suffers. However, not only has Mr Hobbs apparently been aware of the condition for some time (and hence it was for him to take steps to prepare in advance for the hearing to avoid any unnecessary or additional stress) but there is also a concern that the position will be no different when any adjourned hearing date approaches. There is certainly no medical evidence to support the proposition that at an adjourned hearing date Mr Hobbs would not be suffering from similar stress.

There is certainly authority to support the proposition that where a party whose presence is of sufficient importance is prevented by illness from attending, then that would weigh heavily on the exercise of discretion to grant an adjournment (see Dick v Piller [1943] KB 497 per Scott LJ at [499]). However, the need for Mr Hobbs physically to be present in Court throughout the hearing (as opposed to the fact that it might be desirable for him to be there) has not been established (particularly if he were able to obtain assistance in the conduct of the case from others such as his wife, who is also a defendant, or lawyers such as Mr Bellamy who has professed such a depth of familiarity with the matter).

Further, I have had regard to what was said by Young CJ in Eq, as his Honour then was, in Forster v Harvey [2006] NSWSC 1112. There, his Honour (noting that the power to proceed with a trial, if a party is absent when the trial is called on, is exercised sparingly because, generally speaking, if a person is genuinely ill or unable to take part in the proceedings, the court should adjourn the matter with the appropriate order for costs) went on to say (at [8]):

However, there are two situations where the court takes another course. The first is the situation where a party is so ill that it is unlikely even if the case is adjourned that he or she will be in any better position on the next occasion. The second is where there have previously been delays due to alleged illness of a party, the court makes it quite clear that if there is to be an application for an adjournment that must be by motion supported by affidavit yet the relevant party does not attend either with or without a medical certificate. One of the reasons for making that order is that unfortunately medical certificates appear to be very easily obtained. A party whose case is delayed by a medical certificate from the other side should have the opportunity of cross-examining the doctor concerned to ensure that the other party is as sick as she says she is. It is quite useless in that situation for the person who is not going to attend to write a letter to the court enclosing a common form medical certificate containing a very vague assertion as to the disability and not turn up herself and/or make the doctor available for cross-examination. (my emphasis)

That seems to me to be apposite in the present case, where the matter has been set down for hearing for some time and where there is nothing to persuade me that Mr Hobbs will be any better able to cope with the stress of a hearing if it were to be at a later date.

Finally, as to the question of representation, I am left with the impression that the lack of representation (and, in particular, the timing of the withdrawal of Mr Hobbs' legal representation) is a matter linked to the imminence of the hearing. Mr Hobbs says that he set aside a substantial sum for the hearing; it is said that the hearing was budgeted for 2013 (but the difficulty with that is that from December 2011 the Hobbs interests have been on notice of ASIC's intention to press for an earlier date); and there is nothing to suggest that if the extensive exercise of appointing an expert and travel to the United States were not to be undertaken there would be insufficient funds to permit representation at the hearing (at least for the purpose of cross-examination of witnesses).

In Aon, the plurality said, in the context of an amendment to the pleadings that had the consequence of causing the hearing to be vacated, (at [98]):

Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.

At [114], their Honours said:

Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. (my emphasis)

In the present case, the matter has been listed since February 2012. A not insignificant block of Court time was allocated to the matter (necessarily meaning that the hearing of other litigants' cases was affected by the fact that a judge of the division was dealing with the present case and not others that might have been listed in that time). There have been numerous statements in the authorities as to the prejudicial effect of delay on the outcome of a hearing in terms of the deterioration of witnesses' memory and the like. I am not satisfied that an adjournment will result in Mr Hobbs being any the better prepared at a later date for the hearing (whether in terms of his health or in terms of his substantive preparation for the hearing).

Balancing the matters I have referred to above, I was not persuaded that there should be a vacation of the hearing date (though I did reschedule the hearing to commence instead on 4 July with a listing for 6 and not 8 weeks, to accommodate some extra time for the Hobbs interests).

(iv) Pro Bono Legal Representation

Finally, there was an application by Mr Hobbs for pro bono assistance. While not stated in the application I have proceeded on the assumption that the application is made pursuant to Part 7 Rule 36 of the Uniform Civil Procedure Rules, which relevantly provides that:

7.36

(1) If satisfied that it is in the interests of the administration of justice, the court may, by order, refer a litigant to the registrar for referral to a barrister or solicitor on the Pro Bono Panel for legal assistance.

(2) For the purposes of subrule (1), the court may take into account:

(a) the means of the litigant, and

(b) the capacity of the litigant to obtain legal assistance outside the scheme, and

(c) the nature and complexity of the proceedings, and

(d) any other matter that the court considers appropriate.

...

(4) If a litigant is referred for assistance under this rule, the registrar must attempt to arrange for legal assistance to be provided to the litigant by a barrister or solicitor on the Pro Bono Panel.

(4A) If the registrar is unable to arrange legal assistance for a litigant who is referred under this rule within 28 days after the litigant's referral, the registrar may make an order terminating the litigant's referral.

(5) The registrar may refer a litigant to a particular barrister or solicitor only if the barrister or solicitor has agreed to accept the referral.

Rule 7.37 gives an indication of the kinds of assistance that may be provided under a referral of this kind:

7.37

A referral may be made for the following kinds of assistance:

(a) advice in relation to the proceedings,

(b) representation on directions hearing, interlocutory or final hearing, arbitration or mediation,

(c) drafting or settling of documents to be filed or used in the proceedings,

(d) representation generally in the conduct of the proceedings or of part of the proceedings.

In the script provided to Mr Collard to submit to the Court, there is an assertion that Mr Hobbs has previously attempted to obtain legal aid but was refused on the basis that he is a New Zealand resident. There is nothing but Mr Hobbs assertion to that effect, though I have no particular reason to doubt it.

ASIC has taken the position that it is not a matter for ASIC to oppose, or make submissions in relation to, such pro bono assistance, but that ASIC would take the position that any referral to pro bono assistance should not prejudice the commencement date of the hearing.

The matters that the Court may take into account in the determining whether it is in the interests of the administration of justice for such a referral to be made are set out in Rule 7.36(2) as set out above. As to those matters, I note as follows:

Other than the information provided from Mr Saad when seeking leave to withdraw (as to the non-payment of legal fees by the Hobbs interests), there is nothing more than an assertion as to the financial inability of the Hobbs' interests to retain lawyers to conduct their defence of the proceedings. Therefore, as to the means of Mr and Mrs Hobbs I am left with the broad assertion from Mr Hobbs and Mrs Hobbs as to their financial position (and Mr Hobbs' assertion as to his likely ability in the future to find funds to conduct the proceedings).

As to the capacity of the litigant to obtain legal assistance outside the scheme, again I have no more than an assertion from Mr Hobbs that he has made enquiries and he has been told as a New Zealand resident he is not eligible for legal assistance outside the scheme. (Though I would infer from the fact that Prime Lawyers have sought leave to withdraw from the proceedings on the basis indicated by Mr Saad that they, and by inference perhaps Mr Southwick as well, are not prepared to provide pro bono legal assistance in this matter. The position of Mr Bellamy is unclear, although it seems his firm is not prepared so to act.)

As to the nature and complexity of the proceedings, in that regard there is no doubt from a review of the Second Further Amended Statement of Claim, that the issues in the proceedings may well be complex. They certainly appear to cover a broad number of transactions and I note that the proceedings were initially set down for 8 weeks which indicates that it was anticipated that the evidence would take some time to adduce (although that estimate seems to have been based in part on Mr Hobbs' adamance that he would require all of the ASIC witnesses for cross-examination). That said, Mr Hobbs' own affidavit on this application (setting out his understanding of the background matters) seems to reflect an understanding of the particular transactions and the nature of those transactions in respect of which allegations are made against him.

The nature of the proceedings, involving as they do alleged breaches of civil penalty provisions, is clearly serious and warrants careful consideration.

As to other matters to be taken into account, I note (as has been explored above) the difficulty occasioned by Mr Hobbs' claimed ill health as well as the suggestion that the shortness of time in which he may be called upon to prepare for the hearing without legal representation, does seem to me to be a matter which is, to some large extent or no little extent, of Mr Hobbs' own making.

As noted in Ritchies commentary to the rule, referral for pro bono assistance is conditional on satisfaction that the referral is in the "interests of the administration of justice" and mere satisfaction that a litigant cannot otherwise obtain legal assistance for the proceedings is not of itself a sufficient reason to refer a litigant under the present rule, it being relevant also to consider the actual availability of voluntary pro bono legal assistance (as to which there is no evidence in the present case other than an inference to be drawn from the withdrawal of Prime Lawyers, the weight that could be placed on this being limited). Reference is made in this regard to Matsen v Matsen [2008] NSWSC 226 at [16]).

Further, as noted in Ritchie's, account must be taken of the nature of obligations that are assumed by lawyers accepting such a referral for pro bono assistance.

When giving consideration to this matter on 28 May 2012, I indicated that I would have been inclined to refer the matter for pro bono legal assistance, if what was sought was simply legal advice as to Mr Hobbs' position and as to whether he should defend the claim (that being a discrete matter the provision of which might well shorten or obviate the need for a hearing depending on what advice was given). However, I would infer from the extensive involvement of lawyers to date that Mr Hobbs has already had the benefit of some such advice.

It seemed to me that there was likely to be a difficulty in referring for pro bono assistance a limited portion of the conduct of the hearing, in circumstances where in order for legal representatives properly to be in a position to represent Mr Hobbs and the Hobbs interests, and to cross-examine witnesses in the ASIC case, it would likely be necessary for them to have at least the level of understanding of the proceedings that it seems Mr Bellamy already has (and that Mr Southwick, to some extent, and Mr Saad, perhaps to a lesser extent, may already have). I note this in the context that Mr Bellamy had foreshadowed a 6 week "hand-over period" if new lawyers were to be engaged.

It seemed to me that, if Mr Hobbs had been unable to persuade those lawyers to provide pro bono assistance, it might well be that the likelihood of the Registrar receiving a favourable response to a referral for pro bono assistance under Rule 7.36 might not be great and I was concerned that the making of such a request for referral would delay the commencement of the proceedings in circumstances where I was not otherwise minded to vacate the hearing date.

For those reasons (and to a large extent because of the unsatisfactory nature of the evidence in support of the application and its lateness) I was not inclined to refer the matter for pro bono assistance under the Rules.

However, on further reflection I have come to the view that if the Hobbs interests were to receive, on a pro bono basis, advice or assistance as to the conduct of the hearing and, in particular, as to the cross-examination of ASIC witnesses, that might encourage sensible decisions to be taken as to who should be required for cross-examination and might minimise the time required for cross-examination (and thus be consistent with the objectives of s 56 of the Civil Procedure Act). I noted that in Dafaalla v Concord Repatriation General Hospital [2007] NSWSC 602 Brereton J observed that appropriate early legal advice might avoid unnecessary and futile litigation (see [5], [9]).

(Further, insofar as it is said that a court should ordinarily be reluctant to order referrals where the claim appears to be without merit - Phu v NSW Dept of Education and Training [2011] NSWCA 119, there is no basis on which I could at this stage form any view as to the ultimate merits of the claims made against the Hobbs interests, nor have I been asked to do so.)

I do not underestimate the difficulty of the limited provision of assistance that I now have in mind might pose (and that, for example, a barrister so retained might wish to stipulate limits on the material to be reviewed or the extent of the issues properly to be explored in such cross-examination). That, of course, will be matters that members of the pro bono panel whose assistance is requested will no doubt take into account. However, provided the referral does not prejudice the commencement of the hearing (as now rescheduled) it seems to me that it would be in the interests of the administration of justice to order that there be such a referral.

That said, it should be appreciated by the Hobbs interests that under the rules if the registrar is unable to arrange legal assistance for a litigant referred under Rule 7.36 within 28 days, the registrar may make an order terminating the litigant's referral. Therefore, no assumption should be made that the effect of such a referral will lead to any such assistance during the hearing and in the meantime the Hobbs interests should proceed on the basis that they must continue to prepare for the hearing which will commence on 4 July 2012.

Orders

For the reasons set out above, on 28 May 2012 I made orders dismissing the applications made in relation to the Wood/Truong evidence; the Bellamy/Moore evidence (though this is without prejudice to the ability of the Hobbs interests to raise claims of legal professional privilege at the hearing); and as to the vacation or adjournment of the hearing date, though I rescheduled its commencement to 4 July 2012.

While I also on that date dismissed the application for a referral for pro bono assistance, I will now vary that order and instead order as follows:

(1) Pursuant to Rule 7.36 I refer the first, eighth and fifteenth defendants to the Registrar for referral to a barrister on the Pro Bono Panel, as a matter of urgency, for legal assistance limited to advice as to the conduct of the hearing listed to commence in these proceedings on 4 July 2012 and for assistance as to the cross-examination of those witnesses called in the plaintiff's case that, in the reasonable opinion of Counsel, should properly be cross-examined in the defence by the said defendants of the plaintiff's claim.

In accordance with the views expressed above, acceptance of such a referral for pro bono assistance should be on the basis of an understanding that the hearing will commence on 4 July 2012 for a period of up to 6 weeks.

I consider that the orders made as to costs on the last occasion should stand.

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Decision last updated: 30 May 2012

Medium Neutral Citation:	In the matter of Idylic Solutions Pty Ltd & ors - Australian Securities and Investments Commission v Hobbs [2012] NSWSC 581
Hearing dates:	28 May 2012
Decision date:	30 May 2012
Jurisdiction:	Equity Division
Before:	Ward J
Decision:	Application to vacate hearing date dismissed. Amended commencement date for hearing. Limited order for pro bono assistance. Other applications dismissed.
Catchwords:	CASE MANAGEMENT - interlocutory applications regarding affidavit evidence, vacation of the hearing date and request for a referral for pro bono legal assistance - HELD - application to vacate dismissed but commencement date deferred - limited order for pro bono assistance - other applications dismissed.
Legislation Cited:	Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW) Mental Health (Compulsory Assessment & Treatment) Act 1992 (New Zealand) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Allen Allen & Hemsley v DCT (NSW) (1988) 81 ALR 617 Allen Allen & Hemsley v DCT (NSW) (1989) 86 ALR 597 Aon Risk Services Aust Ltd v ANU (2009) 239 CLR 175 Baker v Campbell (1983) 153 CLR 52 Dafaalla v Concord Repatriation General Hospital [2007] NSWSC 602 Dick v Piller [1943] KB 497 Forster v Harvey [2006] NSWSC 1112 Matsen v Matsen [2008] NSWSC 226 Packer v DCT [1985] 1 Qd R 275 Phu v NSW Dept of Education and Training [2011] NSWCA 119 Watson v Watson [1968] 2 NSWR 647
Texts Cited:	Cross on Evidence (6th ed) Ritchie's Uniform Civil Procedure NSW
Category:	Interlocutory applications
Parties:	Australian Securities and Investments Commission (Plaintiff) David John Hobbs (First Defendant) Min Hua Li (Second Defendant) David John Collard (Third Defendant) Hui Min Wu (Fourth Defendant) Con Koutsoukos (Fifth Defendant) Brian John Wood (Sixth Defendant) Jimmy Truong (Seventh Defendant) Jacqueline Hobbs (Eighth Defendant) Idylic Solutions Pty Ltd ACN 121 960 754 (Ninth Defendant) 888 Management Inc (Tenth Defendant) Geneva Financial Ltd (Eleventh Defendant) Barclaywest Ltd (Twelfth Defendant) Preserved Investment Group Ltd (Thirteenth Defendant) North Wave Ltd (Fourteenth Defendant) G P Global Ltd (Fifteenth Defendant)
Representation:	Counsel: J R Clarke (Plaintiff) Solicitors: Georgina Hayden, Solicitor for Australian Securities and Investments Commission (Plaintiff)
File Number(s):	07/258119