Lewis v Martinez and the persons named in the Schedule (No 4)

[2024] NSWSC 308

Supreme Court

New South Wales

Medium Neutral Citation:

Lewis v Martinez and the persons named in the Schedule (No 4) [2024] NSWSC 308

Hearing dates:

25-27 March 2024

Date of orders:

25 March 2024

Decision date:

26 March 2024

Jurisdiction:

Equity

Before:

Elkaim AJ

Decision:

1. Pursuant to r 7.10(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW), the proceedings are to continue in the absence of a representative of the estate of the first defendant, Juan Martinez.

2. If judgment is entered against the estate of Mr Juan Martinez in these proceedings, and a representative of the estate of Mr Juan Martinez later seeks to set aside the judgment entered against the estate of Mr Juan Martinez, the plaintiff undertakes to consent to setting aside the judgment.

3. The plaintiff’s undertaking in order 2 is subject to circumstances where a valid defence could have been presented by a representative of the estate of Mr Juan Martinez in these proceedings.

Catchwords:

CIVL PROCEDURE – Parties – Representation – Appointment of person to represent defendant in proceedings – Where one defendant has died – Order made under UCPR rule 7.10 that proceedings continue in the absence of a representative of the deceased person’s estate

Legislation Cited:

Supreme Court (General Civil Procedure) Rules 2015 (Vic)

Uniform Civil Procedure Rules 2005 (NSW), rr 1.5, 7.10(2)(a)

Partnership Act 1958 (Vic), s 46

Cases Cited:

Steinecke v Wayne [2011] NSWSC 428

Category:

Procedural rulings

Parties:

Gregory William Francis Lewis (Plaintiff)
Juan Martinez and the persons named in the Schedule (Defendants)

Representation:

Counsel:
Mr F Douglas KC (Plaintiff)
Mr J Carter (Plaintiff)
Mr J Douglas (Plaintiff)
Mr D Williams SC (Defendant)
Mr A Barnett (Defendant)

Solicitors:
Bridges Lawyers (Plaintiff)
Gilchrist Connell (Defendant)

File Number(s):

2021/38379

JUDGMENT

1. When the proceedings were commenced, by the filing of a statement of claim, Mr Juan Martinez was named as a defendant representing himself and the rest of the partners in the legal partnership known as HWL Ebsworth (the firm).

2. Mr Martinez was the only defendant. The amended statement of claim, filed on 11 January 2022, renamed the parties so that Mr Martinez became the first defendant and the remaining partners, named in a schedule, the other defendants.

3. Mr Martinez died on 18 March 2024. The question that arose at the commencement of the hearing before me yesterday was how to deal with the case having regard to Mr Martinez’s death. It was too soon for any representative, such as an executor, to have been appointed to continue the interests of the estate.

4. Both the plaintiff and the remaining defendants wished the matter to proceed but differed on the mechanism to achieve this result. I first of all note that had the matter needed to be adjourned, it would have been for some considerable time before a representative of Mr Martinez could take part.

5. My initial view was that another of the defendants could step into his place. The defendants opposed this course asserting that there might be a conflict of interest between Mr Martinez’s estate and the rest of the defendants. The defendants suggested that the plaintiff discontinue the proceedings against Mr Martinez.

6. The plaintiff did not wish to follow the discontinuance path because “Mr Martinez’s estate might have an interest in the proceedings.” I was referred to s 46 of the Partnership Act 1958 (Vic) in this regard.

7. The solution put forward by the plaintiff was for the matter to proceed absent any representation on behalf of Mr Martinez’s estate. This course is sanctioned by r 7.10(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) which states:

(1)  This rule applies to any proceedings in which it appears to the court—

(a)  that a deceased person’s estate has an interest in the proceedings, but is not represented in the proceedings, or

(b)  that the executors or administrators of a deceased person’s estate have an interest in the proceedings that is adverse to the interests of the estate.

(2)  The court—

(a)  may order that the proceedings continue in the absence of a representative of the deceased person’s estate, or

(b)  may appoint a representative of the deceased person’s estate for the purposes of the proceedings, but only with the consent of the person to be appointed.

(3)  Any order under this rule, and any judgment or order subsequently entered or made in the proceedings, binds the deceased person’s estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings.

(4)  Before making an order under this rule, the court may order that notice of the application be given to such of the persons having an interest in the estate as it thinks fit.

8. In support of its position the plaintiff referred me to the decision of Brereton J in Steinecke v Wayne [2011] NSWSC 428, at [11]:

“UCPR r 7.10 applies in any proceedings in which it appears to the Court that a deceased person's estate has an interest in the proceedings, but is not represented in the proceedings. UCPR r 7.10(2) provides that the Court may order that the proceedings continue in the absence of a representative of the deceased person's estate - or may appoint a representative of a deceased person's estate for the purposes of the proceedings, but only with the consent of the person to be appointed. Circumstances in which the Court may proceed in the absence of a representative include where there are other parties to the proceedings who have the same interests as the estate, where the interest in question is small or contingent, or where the deceased had no practical beneficial interest in the property involved in the proceedings [Curtis v Caledonian Fire & Life Insurance Co (1881) 19 Ch D 534; Crossley v City of Glasgow Life Assurance Co (1876) 4 Ch D 421].”

9. I think it clear that Mr Martinez’s estate might have an interest in the proceedings. It is an interest which at least to the extent of defending the plaintiff’s claim is equally shared by the remaining defendants. I cannot, on the pleadings, conceive of a result in which liability might have been established on the part of Mr Martinez personally but not against the rest of the defendants. I also struggle with the existence of a conflict of interest, at least on the current pleadings, between Mr Martinez’s estate and the other defendants. Until his death, all of the defendants had the same representation.

10. It seemed to me however that the only means by which the matter could proceed was in the manner suggested by the plaintiff. I did however, remain concerned about the matter proceeding in the absence of any representative for Mr Martinez, in particular as his affidavit is the sole affidavit relied upon by the defendants.

11. This concern was addressed by an undertaking given by the plaintiff in the following terms:

“2. If judgment is entered against the estate of Mr Juan Martinez in these proceedings, and a representative of the estate of Mr Juan Martinez later seeks to set aside the judgment entered against the estate of Mr Juan Martinez, the plaintiff undertakes to consent to setting aside the judgment.

3. The plaintiff’s undertaking in order 2 is subject to circumstances where a valid defence could have been presented by a representative of the estate of Mr Juan Martinez in these proceedings.”

12. The safeguard provided by the undertaking allayed my fears of unjustly proceeding in the absence of a representative of Mr Martinez’s estate.

13. A separate safeguard that I think exists is that my decision will be limited to liability. If a finding, or declaration, is made against Mr Martinez his estate will have the opportunity to set aside the judgment against him before quantum is heard, and also, if considered appropriate, to take part in the quantum hearing.

14. Finally, I note that the Partnership Deed at the centre of the proceedings requires the application of Victorian law. The Supreme Court (General Civil Procedure) Rules 2015 (Vic) does not seem to contain an equivalent rule to r 7.10 in the UCPR. I do not see this as an impediment to making an order under r 7.10 because the UCPR remains applicable to these proceedings (as per r 1.5).

Orders

15. I make the following orders including the noting of the undertaking given by the plaintiff:

1. Pursuant to r 7.10(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW), the proceedings are to continue in the absence of a representative of the estate of the first defendant, Juan Martinez.

2. If judgment is entered against the estate of Mr Juan Martinez in these proceedings, and a representative of the estate of Mr Juan Martinez later seeks to set aside the judgment entered against the estate of Mr Juan Martinez, the plaintiff undertakes to consent to setting aside the judgment.

3. The plaintiff’s undertaking in order 2 is subject to circumstances where a valid defence could have been presented by a representative of the estate of Mr Juan Martinez in these proceedings.

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