Krich v Hadid

[2019] NSWSC 1346

Supreme Court

New South Wales

Medium Neutral Citation:

Krich v Hadid [2019] NSWSC 1346

Hearing dates:

3 October 2019

Date of orders:

03 October 2019

Decision date:

03 October 2019

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1) Direct the first defendant/cross-claimant to serve all evidence on which he proposes to rely in defence of the claim and in support of the cross-claim on or before 31 October 2019.

 

(2) Order that the first defendant/cross-claimant not be permitted to rely on any evidence which has not been served in accordance with order (1) without leave of the court.

 

(3) Stand over the plaintiff's notice of motion filed 12 September 2019 for hearing on 7 November 2019 but note that the notice of motion is to be dismissed if the first defendant confirms that he has complied with order (1), in which case, there is to be a directions hearing before the Registrar on that date.

 

(4) Direct that consideration be given by the parties as to whether this Court should order a mediation of this dispute, such matter to be considered by the court, if thought appropriate, on 7 November 2019.

 (5) Order that there be no order as to the parties’ costs to date of the plaintiff's notice of motion filed on 12 September 2019, with the intention that each party bear his own costs.

Catchwords:

CIVIL PROCEDURE – plaintiff failed to give adequate notice of application to have first defendant’s defence struck out for repeated non-compliance with directions – motion resolved except as to costs – appropriate order that there be no order as to costs

Category:

Procedural and other rulings

Parties:

Mustafa Krich (Plaintiff and Cross Defendant)
Albert Hadid (First Defendant and Cross Claimant)
Robert John Lynch (Second Defendant)

Representation:

Counsel:
E Glover (Plaintiff and Cross Defendant)
M Einfeld QC/D Rayment (First Defendant and Cross Claimant)

  Solicitors:
Grove Lawyers (Plaintiff and Cross Defendant)
Mahony Law (First Defendant and Cross Claimant)

File Number(s):

2016/241190

Judgment – ex tempore

Introduction

1. The plaintiff's notice of motion filed on 12 September 2019 for orders that the first defendant's defence be struck out and judgment be entered in favour of the plaintiff was listed before me as Duty judge today. After some time had been permitted for discussions, the parties indicated to me that they have resolved some issues between them. They informed me that they had agreed that it was appropriate for me to direct the first defendant/cross-claimant to serve his evidence by 31 October 2019, that he not be permitted to rely on any evidence served after that date unless the court otherwise orders, and that the motion be stood over for hearing on 7 November 2019. The intention is that the motion would be dismissed if the first defendant/cross-claimant had complied with the direction to serve all of his evidence. The principal outstanding matter between the parties was the costs to date of the plaintiff’s notice of motion.

Submissions on costs

2. Ms Glover, who appears on behalf of the plaintiff/cross-defendant, has submitted that it is appropriate that the first defendant pay the plaintiff's costs of the motion since it was the first defendant's considerable default which brought about the notice of motion.

3. Ms Glover has referred me to the circumstance that the plaintiff had completed service of his evidence-in-chief by 21 September 2018. She submitted that, notwithstanding directions made on 18 February 2019 and 11 June 2019, the first defendant still has not served a single word of evidence in favour of its defence or cross-claim.

4. On 10 September 2019 the first defendant’s solicitor, Mr Mahony, contacted the Registrar and requested that the matter be re-listed for directions. A listing date of 12 September 2019 was allocated. On that occasion there was no appearance by the first defendant, notwithstanding that his solicitor had been the practitioner who had sought that it be relisted.

5. On 12 September 2019, the court was informed of the plaintiff's intention to file a notice of motion seeking that the defence be struck out for default. The motion was filed and made returnable today.

6. Ms Glover submitted that in circumstances where the first defendant has been so manifestly and consistently in default for the past year, it would be appropriate that the first defendant be ordered to pay the plaintiff's costs of the notice of motion. She submitted that the appropriate figure for costs was the figure of $9,339, that being the figure which represented the plaintiff's costs up to Wednesday 25 September 2019.

7. Mr Einfeld QC, who appears with Mr Rayment on behalf of the first defendant, resists a costs order against the first defendant. He submitted that it would be inappropriate to order the first defendant to pay the plaintiff's costs of the motion in circumstances where no proper notice had been given to him that such an application would be brought. He relied on the circumstance that it was only on the morning of 12 September 2019 that such a motion was first foreshadowed by the plaintiff in an email to his solicitor sent at about 8am.

8. Mr Einfeld referred to decisions of this Court in which the well-established principle was enunciated, namely, that, before a party files a notice of motion of this sort, the party is both required and expected by the court to give adequate notice to the party in default to give the latter an opportunity to remedy the default.

9. Although Mr Einfeld properly accepted that “it is not a competition”, he also pointed to various instances of default by the plaintiff since these proceedings were commenced by the filing of the statement of claim on 10 August 2016 over three years ago. Mr Einfeld also relied on the offer made by the first defendant to resolve the notice of motion. The first defendant offered to pay the plaintiff's costs in the sum of $9,339, being the plaintiff's costs as at 25 September 2019, and to consent to a guillotine order in respect of his evidence on the basis that the plaintiff’s notice of motion would be dismissed. He submitted that, although not accepted, the offer was a reasonable one and that, had it been accepted by the plaintiff, the hearing today could have been avoided, and none of the costs incurred since last Wednesday would have been incurred. Further, Mr Einfeld submitted that if I were inclined to order the first defendant to pay the plaintiff's costs in that sum of $9,339, then justice would require that I also order the plaintiff to pay the first defendant's costs incurred since that time. He submitted that, in these circumstances, it would be appropriate for me either to reserve the costs of the motion or to order that the costs of the motion be costs in the proceedings.

10. Ms Glover responded by reverting to a chronology of the proceedings which showed that the first defendant's explanation or excuses for the delay were first offered on 1 October 2019 in his solicitor’s affidavit sworn in opposition to the motion. She submitted that it was inappropriate that the plaintiff be deprived of his costs in circumstances where the first defendant had been so dilatory not only in complying with the court's directions but also in explaining to the plaintiff his own personal circumstances which appear to be at least part of the explanation for his substantial and longstanding defaults.

11. Ms Glover submitted that it would not be appropriate for me to reserve the question of costs since all that would do would be to put the parties in effect to the trouble of reiterating their submissions to a further judicial officer at a further date, and that it would be preferable that I determine the issue of costs today.

Consideration

12. As is apparent from my recitation of some of the matters by the parties, the matter has a long and unfortunate history. The defaults of the first defendant in 2019 have been sustained and egregious. Nonetheless, the court expects that practitioners, before they bring a motion of the type listed for hearing today, foreshadow the motion, for the reasons I have already explained. It is not simply a matter of professional courtesy. Such prior notice also serves the interests of justice that costs be expended in furthering the matter for hearing rather than in interlocutory disputes such as the present one.

13. One can understand the plaintiff's annoyance at the dilatoriness of the defendant. As at the time the motion was filed, the plaintiff was not privy to any of the personal matters recorded in Mr Mahony's affidavit of 1 October 2019 which explain, but do not excuse, the difficulties he has had as a sole practitioner in conducting a practice and the reasons for priority having been given to other matters in Mr Mahony’s life and in his practice.

14. However, I am not satisfied that it is appropriate to order the first defendant to pay the plaintiff's costs or that the costs be reserved. The plaintiff is not entitled to the costs of the motion since no notice was given of the application. The difficulty with an order that the costs of the motion be costs in the proceedings is that there is no necessary relationship between the merits of the proceedings as a whole and the merits of the notice of motion. To make an order in those terms would be to administer a form of rough justice which would not necessarily accord with the interests of justice.

15. Having regard to the submissions of the parties and the evidence tendered, as well as the lengthy procedural chronology, I am satisfied that the appropriate order to make in relation to the plaintiff's notice of motion filed on 12 September 2019 is that there be no order as to the costs of the notice of motion to date. Whilst that might seem to be an unsatisfactory outcome, I am persuaded that it suitably reflects, on the one hand, the plaintiff's failure to provide adequate notice to the first defendant, and on the other hand, the first defendant's dilatoriness as well as his attempts, rather late in the piece, to resolve the notice of motion.

Orders

16. For these reasons and in order to further what I hope will be the progress of the matter, I make the following directions:

1. Direct the first defendant/cross-claimant to serve all evidence on which he proposes to rely in defence of the claim and in support of the cross-claim on or before 31 October 2019.

2. Order that the first defendant/cross-claimant not be permitted to rely on any evidence which has not been served in accordance with order (1) without leave of the court.

3. Stand over the plaintiff's notice of motion filed 12 September 2019 for hearing on 7 November 2019 but note that the notice of motion is to be dismissed if the first defendant confirms that he has complied with order (1), in which case, there is to be a directions hearing before the Registrar on that date.

4. Direct that consideration be given by the parties as to whether this Court should order a mediation of this dispute, such matter to be considered by the court, if thought appropriate, on 7 November 2019.

5. Order that there be no order as to the parties’ costs to date of the plaintiff's notice of motion filed on 12 September 2019, with the intention that each party bear his own costs.

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Decision last updated: 04 October 2019