Koh & Anor v Murchison Metals Ltd

[2007] NSWSC 765

CITATION:	Koh & Anor v Murchison Metals Ltd [2007] NSWSC 765
HEARING DATE(S):	12 July 2007
JUDGMENT DATE :	12 July 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	12 July 2007
DECISION:	Hearing vacated; costs thrown away ordered on indemnity basis; Plaintiffs not entitled to file any further documents in Registry until costs paid.
CATCHWORDS:	PRACTICE AND PROCEDURE – VACATION OF HEARING DATE – INDEMNITY COSTS – Plaintiffs’ former solicitor misled the Court as to readiness of the Plaintiffs’ case for trial.
PARTIES:	Siew Hong Koh – First Plaintiff David Andrew Evans – Second Plaintiff Murchison Metals Ltd - Defendant
FILE NUMBER(S):	SC 1944/05
COUNSEL:	T.S. Hale SC, J.C. Giles – Plaintiffs C.R.C. Newlinds SC, A. Diethelm – Defendant
SOLICITORS:	Laurence & Laurence – Plaintiffs Whitfields Solicitors – Defendant

1944/05 Koh & Anor v Murchison Metals Ltd

JUDGMENT – Ex tempore
12 July, 2007

1    This matter has been fixed for hearing before me commencing on 8 August for three days. The Plaintiffs today, by Notice of Motion filed in Court, seek those hearing dates be vacated. Mr Hale SC, who appears with Mr Giles of Counsel for the Plaintiffs, says that the Plaintiffs' case is, to put it bluntly, in a hopeless state of preparation and that it will take considerable time for the Plaintiffs to put their case in order so that they are ready to proceed. For that reason, he seeks that the hearing dates be vacated.

2    The application is opposed by the Defendant, for whom Mr Newlinds SC and Mr Diethelm appear. They point to the number of occasions upon which the Plaintiffs have assured the Court that the matter was ready to proceed in order that hearing dates may be obtained.

3    The Defendant says that it is suffering considerable prejudice by the delay in these proceedings coming on for hearing because it is a publicly listed company and must make provision in its financial accounts for the very substantial claim which the Plaintiffs make against it, even though it says it has solid grounds for believing that the claim is without foundation.

4    However, Mr Newlinds realistically recognises that the Court is extremely reluctant to deny a plaintiff a proper opportunity of presenting its case fully in Court so that it may be determined fairly on the merits. I think for that reason he recognises that it is inevitable that the Court will, in this case, vacate the hearing dates. The question is, however, upon what terms will the Court do so?

5    As I had indicated to Mr Hale in the course of his submissions, I regard the manner in which this matter was given a date as demonstrating extremely unsatisfactory conduct on the part of the Plaintiffs' solicitor, Mr Karam. The circumstances, very briefly, are these.

6    Mr Karam, in an affidavit which has been filed in Court today, says that he first became involved in this matter on behalf of the Plaintiffs in late September 2006. The conduct of these proceedings was then in the hands of another firm of solicitors. Apparently the Plaintiffs were in dispute with those solicitors as to fees and the solicitors declined to give the relevant files to Mr Karam to enable him to take over conduct of these proceedings until proper arrangements had been made for the payment of their fees.

7    The dispute between the Plaintiffs and their former solicitors was not resolved until 10 May 2007 and the files relating to this litigation were not delivered to the Plaintiffs by the former solicitors until 16 May 2007. However, prior to that time, Mr Karam had on a number of occasions attended Court on behalf of the Plaintiffs for the purpose of progressing this matter towards a hearing date. He attended Court, for example, at a directions hearing on 16 November 2006. On that day, the matter was put into the call-over list on 14 March. On 14 March Mr Karam attended a call-over before the Registrar at which time the matter was set down for pre-trial directions on 2 May 2007 and a hearing date was allocated for three days commencing on 8 August 2007.

8    It is quite clear from Mr Karam's affidavit that he did not disclose to the Court nor to the Defendant that at that stage he had not received the files relating to the matter from the Plaintiffs' former solicitor, and that he had really no idea whatsoever about whether or not the matter was ready to proceed from the Plaintiffs' point of view. Nevertheless, the matter was given a hearing date and Mr Karam did not dissent to an estimate of three days for the hearing time.

9    Mr Karam attended pre-trial directions before me on 2 May 2007. On that occasion I asked the parties whether the matter was in all respects ready to proceed. I was assured that it was ready to proceed. Mr Karam did not inform me that in fact he had no idea whatsoever whether or not the matter was ready to proceed because at that stage he did not have any of the files relating to this litigation, and he did not even know whether the fees dispute between the Plaintiffs and their former solicitors would be resolved. The matter was confirmed for hearing on 8 August and I gave the usual pre-trial directions.

10    Even worse, when the files were actually delivered to the Plaintiffs on 16 May, they apparently did not consult with the new solicitor who was actually going to conduct the litigation, that is, Mr Laws, until late May and Mr Laws did not receive all of the files until 18 June. There is no explanation as to why it took from 16 May 2007 to 18 June 2007 for the files which had been received from the Plaintiffs' former solicitors to be delivered to the solicitor who was actually going to run these proceedings, that is, Mr Laws.

11    Mr Laws has sworn an affidavit which says that he had a meeting with Mr Karam and the First Plaintiff on 6 June 2007, at which time he had access to certain of the material contained in the Plaintiffs' files relating to this litigation, although not all of it. Nevertheless, Mr Laws says that he informed the First Plaintiff and Mr Karam at this meeting on 6 June that, in his view, the affidavit material filed for the Plaintiffs did not deal satisfactorily with all issues in the proceedings and was likely to be the subject of numerous objections. He says that after 6 June he continued to read the material and formed the opinion that the proceedings were not ready for hearing on the part of the Plaintiffs.

12    Mr Laws' affidavit sets out the extent of that unreadiness. It is very considerable. There is no explanation as to why the Plaintiffs did not approach the Court immediately after they received Mr Laws' advice on or shortly after 6 June to inform the Court that in their view the matter was far from ready. The first occasion on which the Court has been informed of the Plaintiffs' problems has been a month after Mr Laws formed his views as to the state of readiness of the proceedings and informed the Plaintiffs and Mr Karam.

13    The Court's time and resources and the Defendant's time and resources have been wasted without excuse. The conduct on the part of the Plaintiffs and their advisers causes grave concern as to the readiness and willingness of the Plaintiffs to prosecute their substantial claim against the Defendant diligently and appropriately. I think that this is a case which certainly warrants the visitation of an indemnity costs order against the Plaintiffs in respect of costs thrown away and wasted by reason of the vacation of the hearing date which I must, perforce, in the interests of justice, order.

14    However, my concerns warrant, in my view, the imposition of a further order, that is, that costs thrown away by reason of the vacation of the date, as assessed or agreed, be paid by the Plaintiffs before they be allowed to take any further step in the proceedings as far, at least, as filing of any material in Court is concerned. It seems to me that that order is necessary in the interests of justice to protect the Defendant from further dilatory and wasteful conduct on the part of the Plaintiffs in prosecuting their claim. The orders which I will make are as follows.

15    I vacate the hearing dates for this matter on 8 to 10 August 2007.

16    I order that the Plaintiffs pay the costs thrown away by reason of the vacation of the hearing dates and the costs of the motion today on the indemnity basis.

17    I order that the Plaintiffs not have leave to file in the Registry any further document relating to these proceedings unless and until they have paid the indemnity costs orders.

18    I stand the matter over for further directions in the Registrar's list on 12 October 2007. The parties have liberty to apply to me at any time through my Associate.

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