Madsen v Darmali

[2024] NSWSC 1147

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Madsen v Darmali [2024] NSWSC 1147

Hearing dates:

6 September 2024

Date of orders:

6 September 2024

Decision date:

06 September 2024

Jurisdiction:

Equity - Applications List

Before:

Kunc J

Decision:

Proceedings dismissed. Orders stayed until 20 September 2024.

Catchwords:

CIVIL PROCEDURE — Summary disposal — Dismissal of proceedings — Want of due despatch — No issue of principle

Cases Cited:

Madsen v Darmali (No 2) [2024] NSWSC 268

Texts Cited:

None

Category:

Principal judgment

Parties:

Barry Reinhardt Madsen (Plaintiff)
David Darmali (First Defendant
Chu Li (Second Defendant)

Representation:

Counsel: MA Friedgut (First and Second Defendants)

Solicitors: TEP Legal (First and Second Defendants)

File Number(s):

2024/5024

Publication restriction:

None

EX TEMPORE JUDGMENT (REVISED)

1. By motion filed on 7 August 2024, the first and second defendants (applicants) seek orders including that these proceedings be dismissed on the grounds of the plaintiff’s failure to prosecute the proceeding with due dispatch. The plaintiff was called at 10.40am this morning, and there was no appearance.

2. I am indebted to the thorough written submissions of Mr M A Friedgut of Counsel who appeared today for the applicants. What follows by way of chronology is drawn from those submissions.

3. The proceedings were commenced urgently during the Court vacation on 5 January 2024 by summons, making serious allegations of undue influence and equitable fraud against the defendants. Ex parte orders were made against the defendants.

4. The matter came before Rees J sitting as the Expedition Judge on 2 February 2024. The plaintiff was directed on that occasion to file and serve a statement of claim by 8 February 2024. That was not done. The defendants were successful in setting aside the ex parte orders that had been made against them.

5. On 9 February 2024, her Honour directed the plaintiff to circulate a proposed amended summons. That also has never occurred. No statement of claim or other form of amended originating process has ever been filed or served by the plaintiff notwithstanding the Court’s orders requiring that to occur.

6. In a directions hearing on 16 February 2024, Senior Counsel for the plaintiff sought a four week period to prepare any amended summons. On that occasion, he indicated that he would be “spending the next few weeks trying to work out if, in fact, there is a valid money claim [against the defendants] and, if so, how it is to be presented.”

7. Her Honour acceded to the plaintiff’s request for a further four weeks to bring in an amended originating process. Her Honour made a further costs order in this matter on 19 March 2024 (for reasons published in Madsen v Darmali (No 2) [2024] NSWSC 268) which included an order that the plaintiff pay the defendants’ costs of a motion filed on 30 January 2024 on the indemnity basis payable forthwith. On 22 March 2024, Senior Counsel for the plaintiff told the Court that experts had been briefed in relation to what were described as “money parts of the claim” and the matter was listed before the registrar for directions on 18 April 2024.

8. The indemnity costs order to which I have referred has now been assessed (that having occurred on 20 August 2024) and on 21 August 2024 a duly issued sealed costs certificate was served on the plaintiff, together with a demand for payment within seven days. No part of those costs has been paid.

9. I accept the applicants' submission that three matters justify the orders sought today:

1. Nothing of substance has been done by the plaintiff to progress these proceedings for some eight months. The plaintiff has not complied with directions to file either an amended summons or a statement of claim to identify whatever action he wishes to prosecute against the defendants.

2. Nor has there been any explanation from the plaintiff for why nothing has been done to progress the case over the last eight months.

3. There has been no response to the request for payment of the indemnity costs order.

10. In those circumstances, I am satisfied that the defendants are entitled to the orders they seek in the notice of motion.

11. However, Mr Friedgut has quite properly drawn to the Court's attention that there may be an issue with the email address to which notice of today's hearing was sent to the plaintiff or the plaintiff's legal representatives. In those circumstances, and in the event that after the passage of so many months the plaintiff wishes to rouse himself to persuade the Court as to why the proceedings should not be struck out, I will stay the orders that I am making today for 14 days with a direction that if the plaintiff wishes to move to set aside today's orders, he or his legal representatives should notify my associate by email no later than 13 September 2024. I will then hear the application in the Applications List on 20 September 2024. If that occurs, applicants will bear the onus of satisfying the Court that today’s orders should stand.

CONCLUSION

12. The Court:

1. Makes orders in accordance with paragraphs 1, 2 and 3 of the defendants’ notice of motion filed 7 August 2024:

Notice of motion

(1) Order pursuant to rule 12.7(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), and/or pursuant to sections 56 to 59 of the Civil Procedure Act 2005 (NSW) (CPA), that the proceedings be dismissed on the grounds of the plaintiff's failure to prosecute the proceedings with due despatch.

(2) Order pursuant to rule 42.20(1) of the UCPR, and/or pursuant to sections 56 to 59 and/or 98 of the Civil Procedure Act 2005 (NSW) (CPA), that the plaintiff pay the defendants' costs of the proceedings.

(3) Order pursuant to rule 12.10 of the UCPR, and/or pursuant to sections 56 to 59 and/or 67 of the CPA, that if the plaintiff commences further proceedings against the defendants, or against either of the defendants, on the same or substantially the same cause of action, or for the same or substantially the same relief, as that on or for which the plaintiff commenced these proceedings, the further proceedings are to be stayed until the costs of these proceedings have been paid by or on behalf of the plaintiff.

2. Stay the orders referred to in the preceding order up to and including 20 September 2024.

3. Direct the defendants’ solicitors to notify the plaintiff’s solicitors of today’s orders no later than 9 September 2024.

4. Direct that if the plaintiff wishes to set aside the orders in (1) above, the plaintiff’s legal representatives are to notify the Associate to Kunc J and the defendants’ solicitors by email no later than 13 September 2024 of that intention.

5. If the plaintiff gives the notification in the preceding order, then any application by the plaintiff to set aside the orders made today is fixed for hearing in the Applications List on 20 September 2024.

6. Direct that at any hearing of an application by the plaintiff, the defendants will bear the onus of satisfying the Court why today’s orders should be allowed to stand.

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Amendments

10 September 2024 - parties amended

23 September 2024 - Legal representatives included

Decision last updated: 23 September 2024