Kaur v Kooner
[2013] VCC 1789
•6 December 2013
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
EXPEDITED CASES DIVISION
COMMERCIAL LIST
Case No. CI-12-04731
| BALWINDER KAUR | Plaintiff |
| v | |
| IQBAL KOONER | Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 11 and 22 November 2013 | |
DATE OF JUDGMENT: | 6 December 2013 | |
CASE MAY BE CITED AS: | Kaur v Kooner | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 1789 | |
REASONS FOR JUDGMENT
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Subject: PRACTICE AND PROCEDURE
Catchwords: Application to set aside judgment – Absence of the defendant at trial – Extension of time – Judicial discretion – Order 49.02(2) County Court Civil Procedure Rules 2008.
Legislation Cited: Civil Procedure Act 2010; County Court Civil Procedure Rules 2008.
Cases Cited:Adams v Cronin, Supreme Court of Victoria, unreported, 6 September 1996; Bourke v Kecskes & Ors, Supreme Court of Victoria, unreported, 11 November 1966; Brigid Foley Ltd v Elliott [1982] RPC 433; Conrea Nominees Pty Ltd v Doherty, Supreme Court of Victoria, unreported, 22 July 1992; Euroasia (Pacific) Pty Ltd v Michael [2008] VSC 153; Finnegan v Parkside Health Authority [1998] 1 WLR 411; Goldie v Johnston, Supreme Court of Victoria, unreported, 26 July 1967; Grimshaw v Dunbar [1953] 1QB 408; Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257; ICETV Pty Ltd v Ross [2007] NSWSC 1232; Jackamarra v Krakouer (1998) 195 CLR 516; Mortgage Corporation Ltd v Sandoes [1997] PNLR 263; Rosing v Ben Shemesh [1960] VR 173; Xiao v Perpetual Trustees of Victoria Ltd [2012] VSCA 316; Youngman v Melbourne Storage Co Ltd (1885) 7 ALT 53.
Judgment: The defendant’s application to set aside judgment is refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Snow | Malkoun & Co |
| For the Defendant | Mr M Bromley | George Rossis |
HIS HONOUR:
Introduction
1 After a trial at which the defendant failed to appear, the plaintiff obtained judgment against the defendant on 1 May 2013 in the sum of $109,033.48, together with interest of $22,223.17 and costs.
2 By a summons filed on 2 October 2013, the defendant sought the following orders:
(a)pursuant to Order 3.02 of the County Court Civil Procedure Rules 2008 (the “Rules”), time for making an application under Order 49.02(2) be extended;
(b)pursuant to Order 49.02(2), judgment given on 1 May 2013 be set aside;
(c)costs reserved;
(d)any other orders the court thinks appropriate.
Evidence
3 The defendant relied upon his initial affidavit sworn 18 September 2013, a supplementary affidavit sworn 8 November 2013, and a further supplementary affidavit sworn 11 November 2013. The plaintiff in response relied upon affidavits by her solicitor, Anthony Malkoun, sworn 28 October 2013 and her daughter, Preeti Singh, sworn 22 October 2013.
4 In addition, the parties agreed that the court should have before it evidence from the defendant’s previous solicitor, Barbara Kramer. In order to avoid the cost and inconvenience of Ms Kramer attending court, the parties produced by agreement a written statement which set out the evidence of Ms Kramer to the following effect:
(a)on 26 November 2012 in a 70 minute conference with the defendant to discuss the proceeding, she advised him, verbally, of, inter alia, the trial date being 29 April 2013;
(b)that on 18 April 2013 at 4.26pm, an email was sent by Melissa Morrow of Alpass & Associates to the email address of the defendant attaching a covering letter and, inter alia, a copy of the order of Judge Kennedy of 15 April 2013. The letter and enclosures, including the order of Judge Kennedy, were also mailed (on 18 April 2013) to the last known address of the defendant being factory 9, 26-32 Burgess Road, Bayswater, Victoria, 3153. Neither the email nor the letter was returned or “bounced back”.
Chronology
5 The court made the usual setting down orders for the proceeding on 24 October 2012. The orders were made in reliance upon consent minutes signed by the parties’ solicitors on 22 October 2012. The first minute of order was to the effect that the proceeding be set down for trial on 29 April 2013 as a cause before a judge sitting alone on an estimate of three sitting days.
6 In April 2013 the defendant’s then solicitors sought leave to cease to act. In an affidavit sworn on 28 March 2013, the solicitor with the care and conduct of the proceeding on behalf of the defendant, Barbara Kramer, swore an affidavit in which she made the following observations:
· On 26 November 2012, the defendant attended Kramer’s office and she informed him, among other things, of the direction orders and the hearing date of 29 April 2013.
· In a telephone call on 8 February 2013 with the defendant, Kramer advised the defendant that she was unable to take any further instructions in the matter until outstanding costs had been paid.
· By letter dated 27 February 2013, Kramer advised the defendant of the details of the outstanding monies owed to her firm, together with a request for payment in the sum of $2,000 as a retainer for future costs. Kramer advised the defendant that unless the monies requested were paid and further instructions provided, she would assume the defendant wished her to cease acting. In that event, she said that she would file and serve a notice of ceasing to act.
· On 6 March 2013, Kramer forwarded to the plaintiff’s solicitors an email advising that she was filing a notice of ceasing to act and requested information as to whether the plaintiff intended to maintain the trial date of 29 April. By email on 11 March 2013 the plaintiff advised that she intended to maintain the trial date.
· The defendant did not instruct Kramer about whether he intended to attend the trial and if so whether he was engaging legal representation.
· Kramer was not aware of any factors affecting the reliability of the last known address for service of the defendant.
7 Exhibited to the affidavit was the letter to the defendant, dated 27 February 2013 which was sent by email to [email protected]. There is no evidence that the defendant did not receive this emailed letter. Also exhibited to the affidavit was the letter to the defendant, dated 21 March 2013, confirming that Alpass & Associates were no longer willing to act for the defendant in this matter and enclosing by way of service a notice of solicitor ceasing to act. These documents were sent to the same email address. There is no evidence that the defendant did not receive this emailed letter.
8 Kramer also swore, on 28 March 2013, an affidavit of service relating to the service on the defendant at the email address [email protected] of the notice of solicitor ceasing to act, and the covering letter and email confirmation dated 21 March 2013.
9 On 15 April 2013, Judge Kennedy made orders granting leave to Alpass & Associates to forthwith file and serve a notice of ceasing to act as solicitors for the defendant. Minutes 3 and 4 of those orders read in part as follows:
“3. The defendant will be unrepresented once his former solicitors file the required notice. He must either instruct other solicitors to act and they must file a notice that they are acting, or must represent himself in the proceeding. The defendant’s attention is directed to the Self Represented Litigants Information Kit which can be accessed at the court’s website …
4. The trial of the action will proceed on 29 April 2013. The trial can proceed in the absence of the defendant. If the defendant wishes to defend the action he must attend court on 29 April.”
10 Her Honour required that the defendant’s solicitor must, as soon as practicable, serve a copy of the order on the defendant and plaintiff by sending it by pre-paid mail. In his affidavit sworn 28 October 2013, Anthony Malkoun of Malkoun & Co Lawyers, solicitors for the plaintiff, deposed that on 18 April 2013 he received a copy of the order contained within a 4 page document by fax.
11 On 18 April 2013, the defendant’s solicitors sent by email at about 4.26pm to the defendant a covering letter and a copy of the orders of Judge Kennedy made on 15 April 2013. On the same day the defendant’s solicitors posted copies of those same documents to the defendant at his last known address being factory 9, 26-32 Burgess Road, Bayswater, Victoria 3153. The email did not bounce back and the letter was not returned to the sender.
12 On 18 April 2013, the plaintiff’s solicitor received by fax a four page document from the defendant’s solicitors comprising a cover letter, copy of Judge Kennedy’s orders of 15 April 2013 and a notice of ceasing to act.
13 In his affidavit of 8 November 2013, the defendant says that the email sent by the solicitors at about 4.26pm went directly to his “junk” folder. He did not see or read that email until early November 2013.
14 The trial of the proceeding took place on 29 and 30 April 2013. The defendant did not attend court on either day.
15 Her Honour Judge Lewitan gave judgment in favour of the plaintiff on 1 May 2013.
16 On about 26 June 2013 on the application of the plaintiff, a court registrar ordered the defendant to attend the court for oral examination on 25 July 2013.
17 On 19 July 2013, a sealed copy of the Registrar’s order was served on the defendant by a process server engaged on behalf of the plaintiff. The affidavit of service, sworn by Fiona Morgan, was filed at court.
18 On 25 July 2013, the defendant did not attend court. A warrant of apprehension for his arrest was sought. The oral examination was made returnable on 19 September 2013.
19 The oral examination took place on 19 September 2013, although Senior Registrar Alberico was dissatisfied with the manner in which the hearing proceeded and ordered that any further summons for oral examination be heard by a judge. Mr Malkoun’s office arranged for a Form 61M to be filed but the summons was rejected at the County Court Registry which required a general summons to be filed under Order 46.04(1). Before he lodged the further summons, Mr Malkoun received the defendant’s present summons filed in October 2013. Mr Malkoun received the summons on about 8 October 2013 and the balance of the material on or about 15 October 2013.
Issues
20 As previously noted, this case involves two issues: firstly, the extension of time for making the application under Order 49.02; and, second, the merits of the substantive application.
(a) Extension of time
21 The defendant accepted that he required an order for an extension of time in which to apply under Order 49.02. He contended that time could be extended even after the initial period had expired and that in considering such an application, the court should have regard to matters similar to those taken into account when deciding whether to set aside a judgment. The defendant referred specifically to Jackamarra v Krakouer.[1]
[1](1998) 195 CLR 516
22 In Jackamarra v Krakouer,[2] the appellant, Bronita Jackamarra, a legal minor suing by her mother as a “next friend” for the purposes of the proceeding, sued her father, William Krakouer, for damages for negligence. She alleged that she had been a front seat passenger in a motor car driven by her father when he braked suddenly, causing her to be thrown forward and strike her head on the dashboard of the car. The liability trial commenced in June 1995 and on 7 August 1995, the primary judge dismissed the claim because he did not accept that the appellant had suffered injuries as a result of Krakouer’s negligent driving of a motor vehicle.
[2]Ibid
23 On 14 August 1995, the appellant gave notice of appeal to the Full Court of the Supreme Court of Western Australia. The defendant’s insurer contended the appeal was not an appeal against a final order and was accordingly incompetent because no leave had been given. The appellant made an application for leave to appeal and for an extension of time within which to apply for leave. On 10 November 1995 the Full Court held that the judgment dismissing the appellant’s claim was a final judgment and leave to appeal was unnecessary.
24 The rules governing appeals to the Full Court of the Supreme Court of Western Australia, required that an appeal be entered for hearing before the expiration of 12 weeks from the institution of the appeal.
25 On 10 November 1995, the day on which the Full Court gave judgment on the question of competency of the appeal, the insurer’s solicitors agreed to extend the time for entering the appeal for hearing until 6 February 1996. Time expired before the necessary steps to settle the contents of the appeal book were taken. The appellant’s solicitor filed a draft appeal book index on 7 March 1996 and served on the insurer on 12 April 1996 a copy of the draft index and a notice of appointment to settle it.
26 On 15 April 1996 the insurer filed and served a notice of motion to dismiss the appeal for want of prosecution. Then on 15 July 1996, the appellant filed and service a notice of motion seeking an extension of time within which to enter the appeal for hearing.
27 The appellant’s solicitor acknowledged that the delay in prosecuting the appeal was entirely her fault. She had not properly attended to the matter because of pressure to work on other files.
28 On 7 August 1996 the Full Court dismissed the application for an extension of time and dismissed the appeal for want of prosecution.
29 The appellant appealed against both the order refusing an extension of time and the order dismissing the appeal. The High Court granted the appeal by a majority.
30 In their joint judgment, Brennan CJ and McHugh J noted that this case was concerned with a purely procedural application to extend time for doing an act in respect of an appeal already lodged.[3] They noted that the factors which the Full Court took into account derived from a case where another Full Court of the Supreme Court of Western Australia had approached the exercise of discretion as if it were dealing an application to extend the time for lodging an appeal. They said that such a situation was different because in such a case, the application to extend time for lodging the appeal was against a judgment determining the substantive rights of the parties. Those decisions related to applications which sought to put at risk the substantive rights of the respondent. Accordingly, they said it was understandable that where the applicant’s right of appeal had gone, the court should insist that the time for appealing would not be extended unless the proposed appeal had some prospects of success. However, once the appeal had been lodged within time, different considerations applied.
[3]Ibid at [4]
31 In his separate judgment, Kirby J summarised the applicable principles for applications concerning procedural time defaults. His Honour stated as follows:[4]
[4]Ibid at [66]
“I take the following principles to apply:
1. The first rule is that there are no rigid rules. Procedural discretions, such as those in question here, are typically expressed in very wide language. In the exercise of such discretions, courts should not be trammelled by a rigid set of rules, whether called guidelines or principles, which would impede the application of rules of court with the flexibility needed to do justice in the particular case. This is why it is impossible to lay down fixed and binding rules for the exercise of discretions to enlarge time. Of necessity, each case must depend upon its own particular circumstances.
2. Nevertheless, it is useful to keep in mind a number of considerations which have commonly been taken into account. The starting point for the exercise of any power granted under legislation is the ascertainment of the terms of the grant and a consideration of the purposes for which the power has been afforded. Thus, if a rule requires that “special reasons” or “special circumstances” be shown as a pre-condition to a procedural indulgence, this will indicate a need to demonstrate circumstances out of the ordinary. But where, as is usually the case (and is the case here), the discretion is conferred in unlimited terms, the question for the decision-maker is whether it would be just in all the circumstances to grant or refuse the application. Necessarily, the indulgence is not granted as of course. It is for the party seeking to persuade the decision-maker to show that it should be granted. Such persuasion will usually depend upon the provision of an acceptable explanation of how the time default occurred. Neither a party nor its legal advisers may simply assume that a request for an extension of time will always be acceded to. Inherent in the grant of a discretionary power is the assumption that it will sometimes be refused.
3. … it cannot be doubted that the requirement under the Rules of the Supreme Court of Western Australia, that an appeal be entered for hearing within a specified time, is one of a procedural character and not one touching the substance of a party's appellate rights.
4. The party seeking indulgence bears the burden of persuading the decision-maker to grant its request. A consideration relevant to that exercise is whether the case is arguable. If it is hopeless, unarguable or bound to fail, the request for an extension of time will be refused. However, this is basically because to grant it would be futile. The practice ordinarily adopted in judging the arguability of a point was described by Lord Denning MR for the English Court of Appeal in R v Secretary of State for the Home Department; Ex parte Mehta. It ordinarily involves consideration of ‘the outline of the case’:
‘We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time.’
This description accords with my own experience of Australian practice…
5. Judicial attitudes to the grant of an indulgence under procedural rules of court have changed somewhat since the rather rigid approach which formerly marked such decisions. The change came about as it was realised that such rules were themselves only intended to contribute to the attainment of justice. That object necessitates a flexibility which accepts ‘the fallible world in which legal disputes arise and in which they must be resolved’. Judges have warned against permitting the rules of court, particularly those relating to time, to become ‘an instrument of tyranny’. This judicial attitude produced a less ‘draconian’ practice which tended to focus attention on the need for a measure of flexibility, the avoidance of undue technicality and the consideration of whether there was any actual prejudice to a party if the indulgence were granted, beyond that inherent in the continued prosecution of the proceedings.
6. In the cyclical way of these tendencies, the close of the century has seen something of a revival of insistence upon a stricter adherence to rules and practices. The source of the strictness is a larger judicial concern to ensure the efficient despatch of court business…
More recently, this rhetoric has been converted into action in Australia as courts have come to appreciate that they have their own interest in ensuring compliance with time limits. Court lists are typically more congested today. This fact and a growing awareness about the needs for efficiency in judicial administration help to explain a somewhat diminished inclination, recently, to extend procedural indulgences. Yet even today, rules and efficient case management must not be seen as ends in themselves. The ultimate obligation of a court is the attainment of justice as the law requires.
7. In Esther Investments, the Full Court of the Supreme Court of Western Australia embraced, as relevant to applications for an extension of time, the four ‘major factors’ which had been identified in Palata Investments Ltd v Burt & Sinfield Ltd, viz, the length of the delay, the reasons for the delay, whether there is an arguable case and the extent of any prejudice to the respondent. It was those principles which the Full Court applied in the present case. I would point out that Palata Investments was concerned with an application for an extension of time for appealing, not for extending the period within which an appeal, already lodged within time, might be entered for hearing. The distinction is important. In the latter case, the scope for review of the merits is necessarily more limited. The main object of the scrutiny is to obviate a hearing which would clearly be futile or to reinforce a preliminary view that a time default should be cured because of the apparent merits or arguability of the matter. I do not doubt that the four considerations mentioned in Esther Investments are relevant. But they are by no means exhaustive. Several others have from time to time been thought relevant. These include whether the delay was intentional or contumelious; or merely the result of a bona fide mistake or blunder; and whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled. It may also be relevant, where the default is that of a party's legal representatives, to take into account any considerations personal to the party which might have affected its ability to safeguard its own interests, for example, by applying pressure to its lawyers. Similarly, the extent to which any such prejudice may be remedied by an appropriate costs order is another consideration that has sometimes been treated as relevant.”
32 Where a defendant makes application for an extension of time in which to bring an application under Order 49.02, a significant issue is whether the defendant knew before the date of trial that the proceeding had been fixed for hearing.
33 Southwell J dealt with such an application in Conrea Nominees Pty Ltd v Doherty.[5] His Honour there found that the appellant’s state of knowledge was a critical issue. That case concerned a solicitor who stopped acting for a client, but the solicitor failed to seek leave from the court to cease acting. His Honour noted that there was clear authority that one of the purposes of the rule regarding the obtaining of leave to file a notice of ceasing to act, was to ensure that litigants were not left unrepresented without proper notice. Upon an application for leave, the judge would require some proof that the litigant knew of the date and place of trial. Southwell J said that in his opinion, the crucial issue was whether the applicants knew of the hearing date:[6]
“If the applicants were left in ignorance of the hearing date, they would have a strong case in an application under r49.02(3) to have the order set aside. But they could not succeed if it be shown that they knew of the hearing date and chose to be absent themselves.”
[5]Supreme Court of Victoria, unreported, 22 July 1992
[6]Ibid at 5
34 This case was later referred to in Adams v Cronin,[7] a decision of the Victorian Court of Appeal comprising Winneke ACJ, JD Phillips and Hayne JJA. There, the court dealt with an appeal from a decision dismissing the appellant’s action for failing to appear where the dismissal order followed a series of adjournments.
[7]Victorian Court of Appeal, unreported, 6 September 1996
35 In his judgment, Winneke ACJ, with whom Phillips and Hayne JJA agreed, said:[8]
“Secondly, a party who has judgment entered against him or her, in his or her absence, is given a right to move the court to set aside the judgment within 14 days (see O.49.02 (2) and (3)). However, the court, in the exercise of its discretion under this rule, will rarely set a judgment aside which has been properly entered against an absent party where that party, being aware of the date of the trial, has failed to attend at court (see Conrea Nominees Pty Ltd v Doherty Supreme Court, Victoria, Southwell, J, unreported, 22 July 1992).”
[8]Ibid at 7
36 I note that even if (which was not the case here) the defendant acknowledged that he had been told the trial date and forgotten it, the Court of Appeal said that the rules of court are:[9]
“ ... made to enable the orderly and expeditious disposition of the court's business to the advantage of all parties. The rules would be completely frustrated if trial processes can be set at nought because a party claims to have forgotten a trial date.”
[9]Ibid at 9
37 Having regard both to the position of the Court of Appeal in the Victorian hierarchy of courts and the standing of the three judges comprising the Court, I attach considerable weight to their views while remaining aware that my role is to do justice between the parties in the particular circumstances of this case.
38 In his initial affidavit of 18 September 2013, the defendant swore that he was never informed of the trial date by Ms Kramer. He said that he never knew of the trial date by any other means. He said that if he had been informed of the trial date he would have attended the trial as he believed that he owed no money to the plaintiff. Hence, the defendant’s evidence and case was that the only reason he did not appear at the trial was because he was never informed of the date. In his later affidavit of 8 November 2013, the defendant acknowledged that he attended a conference on 26 November 2012 at the office of Alpass & Associates with his former solicitor Barbara Kramer, but said that in the course of the conference, he was not advised of an actual trial date. In his oral evidence, the defendant repeated his statement that Ms Kramer never told him of the trial date at the conference.
39 While the defendant did not dispute that Barbara Kramer sent material relating to the notice of ceasing to act in April 2013, he said that he was not aware of the email because it went to the “junk” section of his emails and he did not receive the hard copy of the documents which was posted in the mail.
40 In his submissions, counsel for the defendant referred to the defendant’s ignorance of the trial date. Presumably by way of an alternative argument, he also contended that it was quite likely that in the context of a 70 minute conversation about the case, even if he had been told the trial date, the defendant did not remember being told of a date which, at the time, was some six months away. It was argued that the reference to the trial date might constitute 15 seconds of a 70 minute conversation dealing with the proceeding generally. I note that this argument was speculative and had no basis in the evidence. The defendant’s evidence was not that he forgot the date but, rather, that he was never informed of the trial date. Plainly, the defendant could not forget something he was not informed of.
41 Given Kramer’s evidence that the defendant was informed of the trial date orally, by mail and email, I conducted a hearing at which the defendant’s former solicitor, Barbara Kramer, and the defendant gave evidence (and were cross-examined). In my opinion, it was only through these witnesses giving evidence and being cross-examined that I could decide whether or not the defendant was informed in advance of the trial date. This factual dispute could not be determined merely by reading the affidavits. It was necessary to resolve the issue of “knowledge” because it was relevant to the substantive Order 49 application.
42 In the course of her evidence in court, Ms Kramer made some salient points:
(a) she had successfully contacted the defendant before April 2013 by email at the address [email protected] and by mail at the address of factory 9, 26-32 Burgess Road, Bayswater;
(b) she specifically recalled the conference in November 2012 with the defendant. At that time, she told the defendant of the directions orders made by His Honour Judge Shelton and showed him a copy of the orders, including the first minute which provided for the setting down for trial;
(c) the defendant attended the conference in November 2012 with his sister;
(d) she, and two secretaries from her office (including Melissa Morrow), had sent emails to the defendant at the address [email protected] before April 2013 and the defendant had received those emails, as evidenced by his response to them.
43 Ms Kramer had her file in court and answered questions where appropriate by reference to her file and the notes and documents contained in it.
44 For his part, the defendant, in his evidence in court:
(a) said that he recalled the conference with Ms Kramer in November 2012 but that she did not tell him about the trial date at the conference;
(b) could not recall receiving an email from Melissa Morrow of his former solicitors;
(c) could not explain why the email from Melissa Morrow sent on 18 April 2013 at 4.26pm went to the “junk” folder of his computer. Nor did he produce any evidence of that allegation, such as a screenshot;
(d) said that apart from the April 2013 correspondence involving Ms Kramer, he had no other problems with undelivered mail.
45 Having seen both Ms Kramer and the defendant give evidence and be cross-examined, and also taking into account the documentary support for Ms Kramer’s evidence, I prefer her evidence to the defendant’s. Ms Kramer was assured, measured and credible. The defendant was evasive, unimpressive and not credible. His evidence seemed inherently unlikely insofar as it suggested that:
· he was never told of the trial date;
· he did not get either in email or by mail the papers regarding Ms Kramer’s firm ceasing to act;
· he did not ask about the trial date.
46 The defendant’s evidence about the trial date was unlikely because, on the evidence, this was the only litigation he was involved in and one would expect him to be interested in the trial date, to ask about it and to know it. The evidence about receipt of the papers from Ms Kramer was unlikely because he had received previously emails and other mail at the respective addresses used by the solicitor.
47 I do not accept that Ms Kramer failed to inform the defendant of the trial date. I find the defendant was told of the date and knew the trial date. I do not accept the defendant’s evidence about the non-receipt of the email from Melissa Morrow and the mail from Ms Kramer. Even if, as Ms Kramer said, the defendant was upset or agitated at the conference, it is significant that his sister was at the conference as well and was not upset like the defendant. The sister has not sworn any affidavit supporting her brother’s version of events.
(b) The application under Order 49.02(2)
48 The Victoria Court of Appeal in Xiao v Perpetual Trustees of Victoria Ltd[10] recently said that in an application under Order 49.02(2) the principles to be applied were those set out by the Full Court in Rosing v Ben Shemesh.[11] In that case, the Full Court, following Grimshaw v Dunbar,[12] held that the relevant considerations on such an application were:
(a) the reason why the party failed to appear when the case was heard;
(b)whether there had been any delay by the absent party in launching the application for a new trial;
(c)whether there was a bona fide issue to be tried;
(d)whether the other party would be prejudiced by a new trial in any respect which could not be adequately compensated by a suitable award of costs and the giving of security.[13]
[10][2012] VSCA 316
[11][1960] VR 173
[12][1953] 1 QB 408
[13][2012] VSCA 316 at [39]
49 The appellant in Xiao v Perpetual Trustees of Victoria Ltd[14] also contended that Order 49.02(2) did not in its terms fetter the manner in which the discretion of the court is to be exercised. While the appellant accepted that the factors identified in the case of Rosing v Ben Shemesh[15] were relevant considerations to be taken into account, he further submitted that those considerations should not be regarded as an exclusive or closed list of considerations. He contended that the rule did not fetter the exercise of discretion and that the discretion should not be circumscribed by criteria laid down by judges. The Court of Appeal accepted that there was force in those submissions.[16] Indeed, Kirby J in Jackamarra identified other considerations which from time to time have been thought relevant, namely:[17]
[14][2012] VSCA 316
[15][1960] VR 173
[16][2012] VSCA 316 at [66]-[67]
[17](1998) 195 CLR 516 at [66]
· whether the delay was intentional or contumelious;
· whether the delay was the result of a bona fide mistake or blunder;
· whether the delay was that of the litigant or of the lawyers; in the latter case the litigant should not be made to suffer for the actions of his legal representatives.
50 In the present case the defendant made submissions about relevant considerations to take into account in dealing with an application like this. The defendant contended, and the plaintiff agreed, that a relevant consideration was why the defendant did not appear at the trial – was it due to ignorance, or error, or was it intentional? This issue has been addressed above. I have found that the defendant’s former solicitor, contrary to the defendant’s assertion in his affidavit material and oral evidence, did inform the defendant of the trial date and that the defendant was aware of the trial date. I also found that his sister attended the 70 minute conference with the solicitor at which Ms Kramer informed them both of the trial date.
51 Further, I do not accept the defendant’s assertion that he did not receive and read the email of Melissa Morrow on or about 18 April 2013 when it was sent. Nor do I accept the defendant’s assertion that he did not receive the mail from Ms Kramer containing her letter informing him about her firm ceasing to act and providing a copy of Her Honour Judge Kennedy’s orders made in April 2013.
52 In the circumstances, I find the defendant’s failure to attend the hearing was not due to ignorance, or bona fide error, or failure by the solicitors to inform the client. Given that the defendant swore the only reason he did not attend the trial was because he had not been informed of the trial date, I find his decision not to attend was very likely an intentional and considered decision and not one brought about by the defendant’s ignorance or error or the action or inaction of the defendant’s solicitors. Quite simply, the defendant decided not to attend.[18]
[18]I note in passing from the chronology that the defendant also failed to attend the court for the oral examination on 25 July 2013 and has offered no explanation for this. (This fact is irrelevant to the point made in paragraph 52.)
53 The defendant contended the second factor to consider was whether there had been a delay in applying to set aside the judgment. According to the defendant, he became aware of the judgment against him on 7 May 2013 when he received a letter from the County Court in the mail. The defendant said that, having been told by the Court Registry to consult Alpass & Associates as to the document, he visited the firm and Allan Alpass gave him an explanation. The defendant was not happy with the way he was treated and represented by those solicitors, and shortly thereafter engaged George Rossis. Rossis told the defendant that setting aside the judgment would cost thousands of dollars and, if such an application was successful, the matter would go back to trial. Rossis said that this would cost possibly tens of thousands of dollars. Rossis said that even if the defendant were successful at trial the defendant would still likely be out of pocket to some degree. The defendant said that as a result of this information, he thought he should attempt to settle the matter. He said that since May 2013 he has attempted to negotiate a settlement with the solicitors. Because the defendant was unable to reach a settlement, he now seeks leave to set aside the judgment.
54 In his submissions, counsel for the defendant referred to section 22 of the Civil Procedure Act which requires litigants to use reasonable endeavours to resolve a dispute by agreement. While I accept that section 22 imposes an obligation upon those to whom the overarching obligations apply, and that by virtue of section 10 of the Civil Procedure Act the overarching obligations apply to any person who is a party, purporting to comply with requirements of section 22 will not necessarily provide an excuse for not complying with other aspects of the rules of court. It should be borne firmly in mind that, where an application is to be made pursuant to Order 49 of the Rules, such application is, absent special circumstances, to be brought within 14 days.
55 In a context where civil litigation is governed by the Civil Procedure Act, proper recognition must be given to one of the main purposes of the Act, namely, to facilitate the just, efficient, timely and cost effective resolution of the real issue in dispute between litigants.
56 Further, before the introduction of the Civil Procedure Act, the court’s attitude to the rules of court was that such rules were devised in the public interest to promote the expeditious dispatch of litigation and, accordingly, had to be observed. As noted by Sir Thomas Bingham MR, with whom Stuart-Smith LJ and Simon Brown LJ agreed, in Costellow v Somerset County Council:[19]
“The prescribed time limits are not targets to be aimed at or expressions of pious hope but requirements to be met.”
[19][1993] 1 WLR 256, 263
57 This statement of principle regarding compliance with time limits in the rules conflicts with a second principle, namely, that a party should not, in the ordinary way, be denied an adjudication of its claim on its merits because of procedural default unless the default causes prejudice to that party’s opponent for which an award of costs cannot compensate.
58 Neither of the principles is absolute. If the first principle were rigidly enforced, procedural default would lead to dismissal of actions without any consideration of whether the plaintiff’s default caused prejudice to the defendant. The court’s traditional practice has been to treat the existence of such prejudice as a crucial and often decisive matter. If the second principle were followed without exception, a financially strong plaintiff willing and able to meet orders for costs would flout the rules with impunity, confident in the knowledge that
"[it] would suffer no penalty unless or until the defendant could demonstrate prejudice.”[20]
[20]Costellow v Somerset County Council [1993] 1 WLR 256, 264. The Court of Appeal later approved the Costellow decision in Mortgage Corporation Ltd v Sandoes [1997] PNLR 263; see also Finnegan v Parkside Health Authority [1998] 1 WLR 411.
59 In Hughes v National Trustees Executors & Agency Co of Australasia Ltd,[21] McInerney J said that one object of fixing times under the rules was to achieve finality of judicial determinations. His Honour said that a successful litigant had an interest in knowing that a claim against it had been determined and that the successful litigant was no longer at risk. His Honour referred to earlier decisions of the Victorian Supreme Court in Bourke v Kecskes & Ors[22] and Goldie v Johnston[23] and said that the significance of the fact that a litigant had been kept at risk often depended upon the extent to which that risk was a personal one. His Honour then referred to Youngman v Melbourne Storage Co Ltd[24] regarding the interest of litigants in achieving finality of determination, where Higginbotham J said:
“When the time has been allowed to elapse that gives the defendant a vested interest in the judgment, this vested interest ought not be disturbed unless there is some good reason for disturbing it.”
[21][1978] VR 257, 263
[22]Supreme Court of Victoria, unreported, 11 November 1966
[23]Supreme Court of Victoria, unreported, 26 July 1967
[24](1885) 7 ALT 53, 54
60 For her part, the plaintiff contended that the application was filed 141 days late (on 2 October 2013 as opposed to 14 May 2013). In the context of the rules of court, the magnitude of the delay was said to be extreme. The plaintiff contended that the interests of justice include the plaintiff being able to depend upon the finality of the Court’s judgment once the time for appeal of making any such Order 49 application has passed. It was said that the interests of justice are not served if extreme delay is tolerated.
61 The defendant also referred in his submissions to the judgment of Robson J, in Euroasia (Pacific) Pty Ltd v Michael,[25] where reference was made to his Honour’s comments at paragraphs 163 and 165 of the judgment. The thrust of the comments was to the effect that if the defendant against whom judgment had been entered had an arguable defence, then notwithstanding delay by the defendant and prejudice to the plaintiff, the defendant would have received leave to defend.
[25][2008] VSC 153
62 While I accept that having a bona fide or arguable defence on the merits is important in applications of this kind, it cannot be said as an invariable rule that such a factor must take precedence over other considerations which the Court can take into account in deciding whether or not to set aside the judgment. As has been noted in cases over many years, each case depends upon its own particular facts. I certainly do not regard the observations of Robson J, however appropriate they might have been to the matter before him, as somehow binding upon me or otherwise determining how my discretion ought be exercised.
63 Viewed in isolation, I do not regard the defendant’s delay in issuing the summons from May until October as being of such duration as to disentitle the defendant from bringing the application. However, in a context where the usual time within which the application should be brought is 14 days, it cannot be denied that the defendant was slow to take effective action in initiating the application. It appears from the defendant’s affidavit material that he was aware of the judgment on about 7 May and, within a short time thereafter, retained a new solicitor. Given that the new solicitor gave him advice about the cost of setting aside the judgment and re-running the trial, it is highly likely that the defendant was also advised about the procedure for setting aside the judgment and the time within which such application ought be made.
64 Again, viewed in the context of the time limit prescribed by the rules, the defendant could reasonably seek to negotiate a settlement with the plaintiff in the period until the end of May but it seems to me the process dragged on considerably longer than it ought to have. The defendant’s material does not provide any detail about the negotiation process, if or when the defendant made offers and if or when the plaintiff responded to any such offers. In the circumstances, I consider that it ought to have been apparent to the defendant that, while he might choose in the first instance to attempt a negotiated resolution, the time would shortly come where he had to take decisive action and either settle or apply for a re-trial. Indeed, it was open to the defendant to file the notice to initiate the appeal within the prescribed period. He could then have continued his efforts to effect a settlement between the filing and the hearing date.
65 Although the defendant’s evidence was far from compelling in explaining the delay, I do not consider that the period of delay alone would justify refusal of the application. On the material there is no basis for finding that the lack of action between May and October alone caused any irreparable harm to the plaintiff.
66 The third matter which the defendant referred to was the existence of the arguable issue to be tried or a prima facie defence on the merits. The defendant said in his affidavit that:
(a) he did not believe he owed the plaintiff any money; and
(b) each fact, denial and non-admission set out in his defence was true and had a proper basis.
67 Usually, a party in the defendant’s position is expected to swear an affidavit containing sufficient detail for the court to form a view regarding the existence of an arguable or prima facie defence. The defendant’s statement in paragraph 65(a) is no more than a personal belief which lacks any disclosed factual basis. The comment in paragraph 65(b) appears to be an almost formulaic statement based upon the terms of the Civil Procedure Act. Again, it is a belief or conclusion expressed by the deponent. Such a statement does not set out in any detail the facts from which the conclusion or opinion can be derived.
68 If one takes the view most beneficial to the defendant, one might infer that each fact alleged in the defence is true and has a basis in fact. On this basis, one might find that the defendant’s position is that the monies received from the plaintiff were either the repayment of monies previously advanced to her by the defendant (or his father) or a gift in recognition of the care and support the defendant rendered the defendant and her children from 2006 to 2008 and the love and affection which the plaintiff felt towards the defendant. Although this inference might be warranted, it is far from satisfactory that a party seeking to have the court exercise its discretion in his favour fails to produce a detailed affidavit which addressed the factual and/or legal issues which support a finding that the defendant has an arguable defence. If it could be said fairly and probably that the issue between the parties was whether the monies received by the defendant from the plaintiff should be characterised as a loan or a gift, that would raise an arguable defence. A determination on such an issue could be made only after a hearing and not on the basis of competing affidavits.
69 While I regard the defendant’s approach to his supporting affidavit material as defective and unsatisfactory, I would not regard that issue alone as warranting a refusal of the application.
70 The final factor to which the defendant referred was whether the plaintiff would be prejudiced in some way which could not be adequately compensated by a suitable award of costs.
71 The defendant conceded that the plaintiff would rather not give evidence again in this matter. Counsel suggested that the plaintiff’s evidence in chief in the initial trial could stand as her evidence in the new trial. This was an acknowledgment of the impact which the trial had on the plaintiff’s health. The affidavit of Preeti Singh, the plaintiff’s daughter, dealt partly with this issue. Ms Singh said that the trial was extremely stressful for her mother and giving evidence upset her very much. During the trial, Ms Singh was allowed to sit with her mother in the witness box to reassure her but the plaintiff nonetheless cried a lot in court and had to take regular breaks from giving evidence.
72 Ms Singh said that her mother has a nervous and anxious personality and was much intimidated by the formality of the courtroom. The plaintiff was brought up in a village in India. She speaks Punjabi and only very limited English. She never went to school or received any education and cannot read or write. Ms Singh said that in the Punjabi culture, a courtroom is seen as a place for wrongdoers and is entirely a man’s domain. As a result, the plaintiff struggled giving evidence. Moreover, the plaintiff was sick for the duration of the trial, vomiting regularly and sleeping and eating very little. On the morning of the second day of the trial, when she had to return to the witness box, she was banging her head against the wall at home and saying to her daughter that she could not do this.
73 Ms Singh says that the matter is especially distressing for the plaintiff because the money which the plaintiff says was lent to the defendant was money which the plaintiff received when her husband died. Conducting the trial forced the plaintiff to relive the experience of her husband’s death. This was distressing and adversely affected the plaintiff’s mental health.
74 In addition, Ms Singh referred to the financial difficulties being experienced by the plaintiff. Ms Singh is a student who works for the maximum 20 hours a week permitted to a student in order to generate some income to cover her expenses. The plaintiff’s son also lives at home. He works at Lockheed Martin as a receptionist and earns about $36,000 a year gross. The family has no significant savings. As the plaintiff said in evidence at the trial, the defendant has taken a large proportion of the money left to her by her husband, as well as her own savings. The plaintiff is in no position to fund further litigation. If that be correct, then setting aside the judgment and requiring a re-trial (which the plaintiff cannot afford to conduct) would cause the plaintiff irreparable prejudice.
75 The plaintiff’s general practitioner for the past 10 years also supported the evidence of Ms Singh to the effect that:
(a) since the death of her husband in 2007, the plaintiff has suffered a depressive illness which continues to the present day;
(b) the trial in April and the revisitation of events connected with her husband’s death was deeply traumatic and troubling for the plaintiff. It exacerbated her psychological condition and negatively affected her mental and physical wellbeing to a significant degree;
(c) the plaintiff’s mental and physical health would benefit if she did not have to appear in court and give evidence again. Conversely, if the plaintiff did have to do those things, it is likely to have a significant negative impact upon her mental and physical health.
76 I note that the trial in April 2013 was unopposed so the plaintiff was not subjected to hostile questioning. If there were to be a re-trial, the defendant would, in all likelihood, seek to cross-examine the plaintiff.
77 Having regard to the evidence about the mental and physical health of the plaintiff and the impact of further litigation, I consider that the prejudice to the plaintiff in having a re-trial cannot be adequately compensated by the payment of costs.
78 Also, if the plaintiff cannot fund another trial, ordering a re-trial will cause significant prejudice to the plaintiff – effectively, the plaintiff will have wasted the money spent on the first trial and will never recover the moneys allegedly lent to the defendant. Even if an order for costs is made against the defendant and assuming such order is satisfied (which is an assumption not supported by any factual material from the defendant), the nett result is that the defendant’s resources and ability to meet a judgment is correspondingly depleted.
79 Even if I were satisfied (which I am not) that payment of costs was adequate compensation for the setting aside of the judgment (and the wasted efforts at enforcement) I am not satisfied the defendant has the capacity to meet such an order. Although the defendant accepted that if an order were made to set aside judgment, then he would be liable for costs thrown away, the defendant failed to file any material informing the court of his financial circumstances or capacity to meet such an order.
80 In my opinion, the situation is analogous to a plaintiff seeking an interlocutory injunction. There, the court is entitled to take into account the ability of the plaintiff to honour the undertaking as to damages so that the defendant is properly protected in the event that at trial, the court finds that the plaintiff was unsuccessful on the merits and the injunction ought not to have been ordered.[26] The plaintiff’s situation in this case is substantially stronger because she has accrued or vested rights under a judgment and not just the hope or expectation of obtaining a judgment. I would not consider it appropriate to order the setting aside of the judgment and to subject the plaintiff to the upset and expense of a new trial unless satisfied that the defendant has the funds to compensate the plaintiff for her wasted expenditure.
[26]See Spry, Equitable Remedies (Carswell, 5th edition, 1999) 481-8; Brigid Foley Ltd v Elliott [1982] RPC 433, 435 per Sir Robert Megarry; Ice TV Pty Ltd v Ross [2007] NSWSC 1232 at [4]-[10] per Brereton J.
81 Further, on the assumption that costs was adequate compensation, not only would I require payment of the costs thrown away but I would require the payment within a fixed period. Given the effect of the litigation upon the plaintiff, I would not wish the litigation to be conducted over any longer period than is necessary. Accordingly, the defendant would have to act expeditiously and pay promptly in order to bring about the new trial.
82 In my view, another relevant factor to consider (although not raised by or on behalf of the defendant) is the prejudice to the defendant if the judgment is not set aside. The defendant will remain a judgment debtor and the plaintiff will be entitled to take whatever action is available to enforce that judgment. One could imagine that such an outcome, with its potential to force the sale of the defendant’s assets and possibly even bankrupt him, would be damaging to the defendant. However, in none of his three affidavits has the defendant addressed the issue of prejudice in any detail. The defendant swears to a belief that he does not owe the plaintiff any money. But he does not state that repaying the judgment debt would cause him any specific difficulty. Given the defendant’s silence on the matter, I find that the plaintiff’s maintenance of the judgment would not cause the defendant any particular prejudice over and above the continuation of the judgment.
Conclusion
83 Making a discretionary judgment about how best to balance competing considerations is a subject upon which reasonable people can differ. In this case, I consider that justice is best served by refusing the defendant’s application to set aside the judgment entered on 1 May 2013.
84 Ms Kramer informed the defendant and his sister about the trial date in November 2012. I do not accept the defendant’s evidence to the contrary or his evidence that he did not receive and read the material sent to him by Ms Kramer (by email through Melissa Morrow and the post) in April 2013. Where the defendant has chosen not to attend court, I do not consider, when taken with the other circumstances of this case, that there is sufficient reason to undo the vested rights of the plaintiff and set aside the judgment against the defendant. As a general rule, I do not think that the court should permit or encourage exploitation of the court process by informed litigants who decide upon and execute a course of action, and then later renege and seek to pursue a different and inconsistent course when their initial action proves unsatisfactory in some respect. Relative to the 14 day period allowed to initiate an appeal, the defendant was slow to act and he failed to provide much detail explaining the delay. The defendant’s affidavit was weak, on one view, because it did not provide sufficient factual detail to establish an arguable or prima facie defence. Finally, in terms of relative hardship, if the existing judgment is set aside, then the plaintiff is faced with a new trial which, the medical evidence says, will have a significant negative impact on her mental and physical health. In addition, she cannot fund another trial. Even if the defendant pays (and there is no evidence of the defendant’s capacity) all costs thrown away in relation to the first trial and the enforcement of the judgment, an adversarial trial is highly likely to await the plaintiff. The defendant for his part swore at least three affidavits regarding his application under Order 49 but none detailed any particular prejudice to the defendant if the judgment remained on foot. In summary, it is my view that the preponderance of factors is against the defendant’s application.
85 Accordingly, subject to hearing from the parties regarding the form of order, I propose to order that:
(a) the defendant’s summons filed 2 October 2013 be dismissed;
(b) the defendant pay the plaintiff’s costs of and incidental to the summons including any reserved costs.
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