NasaStones Pty Ltd v NKR Designer Stone Pty Ltd

[2025] NSWDC 57

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:	NasaStones Pty Ltd v NKR Designer Stone Pty Ltd [2025] NSWDC 57
Hearing dates:	11-12 March 2025
Date of orders:	14 March 2025
Decision date:	14 March 2025
Jurisdiction:	Civil
Before:	Newlinds SC DCJ
Decision:	Judgment for the Plaintiff, Cross-Claim dismissed (paragraphs [50] and [51])
Catchwords:	CONTRACTS – Proof of oral agreement for lease of goods – Post-contractual conduct admissible
Legislation Cited:	Uncollected Goods Act 1995 (NSW)
Cases Cited:	BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367
Category:	Principal judgment
Parties:	NasaStones Pty Ltd ACN 142 842 144 (Plaintiff/Cross-Defendant) NKR Designer Stone Pty Ltd 622 196 883 (Defendant/Cross-Claimant)
Representation:	Counsel: A Rizk (Plaintiff/Cross-Defendant) N Kulkarni (Defendant/Cross-Claimant) Solicitors: Sadek Lawyers (Plaintiff/Cross-Defendant) Ronayne Owens Lawyers (Defendant/Cross-Claimant)
File Number(s):	2022/222826
Publication restriction:	Nil

JUDGMENT

Introduction

1. In mid-2021, both the Plaintiff (“NasaStones”) and the Defendant (“NKR”) separately conducted businesses of stonemason fabrication and like activities. NasaStones had been operating its business for some time from premises at Bankstown, although activities in those premises had become dormant. NKR operated its business from premises at Sefton. NasaStones’ right to occupy the Bankstown premises was pursuant to an expired lease on a month-to-month basis.

2. NasaStones was owned and controlled by Mr Samer Abdul Amir (“Mr Amir”) and NKR was owned and controlled by Mr Nenad Raich (“Mr Raich”).

3. In about May 2021, Mr Raich had heard that NasaStones, whilst continuing to occupy the Bankstown premises, had in fact ceased to conduct its business and was perhaps looking to sell. At the same time, Mr Raich wished to find better or larger accommodation for his business. The Bankstown premises suited his needs. He contacted Mr Amir to explore that possibility.

4. In May 2021, there were a series of discussions between Mr Raich and Mr Amir about the possibility of NKR purchasing NasaStones’ business. The purchase of the business never came to fruition but what did occur was that some, but not all, of the plant and equipment owned by NasaStones was sold to NKR for $50,000, the lease of the Bankstown premises was brought to an end and a new lease entered into by NKR and, importantly for the purpose of this litigation, NKR agreed to “lease" from NasaStones at least one item of equipment – a waterjet machine – and perhaps another – a bridge crane.

5. The parties are in agreement that a lease was entered into but are at odds as to its payment term which is the central issue for determination in these proceedings. NasaStones contends that the lease arrangement was that a minimum amount would be payable each week ($3,250), together with an hourly charge, calculated by reference to $130 per hour for any hours above 25 hours usage per week. In other words, NasaStones contends that it was entitled each week to receive at least $3,250, and in the event that machine had been used for more than 25 hours during that week, an amount of $130 per hour for each of those extra hours.

6. On the other hand, NKR contends that the only obligation to pay money was on an hourly basis, calculated at $130 per hour.

7. More peripheral issues between the parties concerning the terms of the lease are who, as between them, was liable to maintain the waterjet machine for the duration of the lease, its expiry date, and/or whether the bridge crane formed part of the arrangement at all.

8. As a separate and distinct claim, NasaStones claims that, during the period from mid-2021 to the end of 2021, it did certain work at the request of NKR and/or supplied certain materials to NKR at its request, for which it has invoiced but has not been paid.

9. Ultimately, by about March 2022, the parties were at loggerhead as to various matters, including, but not limited to, how much money each might be liable to pay the other, whether NKR was refusing to deliver up the waterjet machine and/or bridge crane, whether NasaStones was liable to NKR for damages suffered by NKR as a result of the waterjet machine allegedly not working, and whether NasaStones had failed to fulfil its obligation to maintain the machine.

10. Proceedings were commenced in the Supreme Court of New South Wales in August 2023 by NasaStones, seeking, amongst other things, the delivery up of the waterjet machine and the bridge crane. Those proceedings were ultimately settled in part, leaving only outstanding money claims and the matter was transferred to this Court.

Issues

11. Many of the issues that divided the parties at the time the Supreme Court proceedings were commenced have fallen away.

12. The issues that remain on the pleadings are:

1. What were the terms of the lease agreement, and in particular, was there a minimum charge of $3,250 per week for the lease of the waterjet machine and the bridge crane?

2. Did the lease of the waterjet machine and the bridge crane extend beyond December 2021, and if so, on what terms?

3. Further, or alternatively, is the Defendant liable for unlawful possession of the waterjet machine and/or the bridge crane? If so, what, if any, are the damages for that wrongful possession?

4. Is NKR liable to NasaStones for damages to the waterjet machine caused during the period that NKR was in possession of it? If so, what are the damages?

5. Did NasaStones carry out works for NKR under the “service agreement" as pleaded, for which it is not being paid? If so, how much does NKR owe NasaStones?

6. Was the cost of each porcelain slab supplied by NasaStones to NKR $250, $350, or $900?

7. NKR’s Cross-Claim for lost income due to the waterjet machine not working properly.

13. By the end of final submissions, issues numbers (2), (4), (7) and part of issue (3) had fallen away because, insofar as the claim is concerned, the parties are now in agreement that the lease agreement came to an end on or about 31 December 2021 – thus disposing of issue (2). It is conceded, on behalf of NasaStones by Mr Rizk of counsel, that the question of whether or not the bridge crane formed part of the lease agreement or not goes nowhere, because, whether it did or not, there is no evidence of any damage caused to NasaStones as a result of any wrongful withholding of delivery up of the bridge crane and the alleged obligation to pay a minimum amount per week is the same regardless – thus disposing of part of issue (3). Mr Rizk did not press the claim for damages to the waterjet machine caused during the period NKR was in possession of it – thus disposing of issue (4).

The real issues for determination on the claim

14. Accordingly, these reasons deal with the matter by reference to the following questions, which I consider to be the real issues:

1. What were the relevant terms of the lease agreement?

2. Is NKR liable for unlawful possession of the waterjet machine, and, if so, what are NasaStones’ damages?

3. Did NasaStones carry out works for NKR for which it has not been paid? If so, how much does NKR owe to NasaStones

4. What was the agreed cost of each porcelain slab?

The Cross-Claim (issue 7)

15. There is also on foot a Cross-Claim by NKR against NasaStones.

16. That claim sought damages for loss of profits consequent on alleged failures of the waterjet machine to properly work during the life of the lease.

17. An adjournment was sought by Mr Kulkarni, counsel who appeared for NKR, upon the basis that there was no evidence to prove any damages as alleged and the Cross-Claim would fail for lack of evidence.

18. I refused that adjournment application. I also refused leave to discontinue the Cross-Claim, so it remains on foot. My reasons for this refusal were delivered ex tempore and are now attached as “Annexure A” to this judgment. No submissions were made at the hearing of the matter to the effect that the result on the Cross-Claim should be anything other than its dismissal. It thus falls away and I will make orders disposing of it in in due course.

Resolution

19. Dealing then with the issues which remain live.

Was there a minimum charge or not?

20. The evidence comprised of affidavit and oral evidence from each of Mr Amir and Mr Raich, together with a small bundle of documents.

21. On the question of the actual terms of the agreement, Mr Raich gave evidence to the effect that there was a conversation wherein it was agreed that the amount payable would be referrable to how many hours the machine was actually used at $130 an hour.

22. Mr Amir gave evidence to similar effect, other than he said it was an express term of that same conversation that, if the machine was used for less than 25 hours during any week, then a minimum amount would be payable of $3,250.

23. Mr Rizk submits that I ought accept Mr Amir’s evidence, because he says it is more commercially plausible than Mr Raich’s version. He also submits that such documents as cast light on what the parties may or may not have agreed are equivocal.

24. I do not accept Mr Rizk's submissions to the effect that an analysis of the commercial likelihoods of what the parties agreed can lead with any confidence to a conclusion that it is more likely than not that the parties agreed to a minimum weekly amount. There is simply not enough evidence for me to try and make such a judgment. In any event, in the context of Mr Amir having a machine in a factory that was not operating and thus producing no income, I do not think it at all unlikely, let alone commercially implausible, that he might have agreed to an arrangement whereby he had the prospect of getting some money, rather than none. True it is that the negotiations between the parties started off with a suggestion that the machine be purchased by NKR, which came to nothing, and therefore it is conceivable that NasaStones might have chosen to try and sell the machine on the open market, but having heard all the evidence, I consider that is unlikely. Mr Amir gave no evidence that he considered that as an alternative.

25. I do not think it is safe to try and judge the matter by reference to what I think is the most commercially likely bargain that these parties might have struck at the time.

26. As far as the contemporaneous (or more accurately post-contractual) documents are concerned, firstly, there was on the pleading an issue between the parties on the affidavits as to whether the bridge crane formed part of the lease arrangement or not. I have already identified that goes nowhere in the case as an issue, but by reference to the surrounding documents, I do not think that Mr Amir’s evidence that the bridge crane was part of the deal is reliable. In particular, the text messages surrounding the negotiations, and indeed the words Mr Amir attributes to each of him and Mr Raich in his affidavit as forming the contract, just do not mention the bridge crane at all, rather the topic is obviously the waterjet machine. Mr Amir's answer to this in cross examination was that, in context, to refer to one without the other makes no sense. However, this is not consistent with his own version of the early conversations between the parties where they were talking about potential purchases of items of equipment, in particular paragraphs [13] and [14] of his affidavit, where both he and Mr Raich clearly draw a distinction between the waterjet machine on the one hand and the bridge crane on the other. This aspect of Mr Amir's evidence makes me doubt, if not his credibility, at least his reliability as a witness overall.

27. Secondly; as to the central question of whether there was a minimum charge or not, a fair reading of all of the text messages at around the time of the lease agreement and following it, as found between Court Book pages 137-178, is that they make no reference at all, express or implied, to any minimum charge. On the other hand, they are all consistent with the arrangement being based on an hourly rate. This is because Mr Amir on a number of occasions asks Mr Raich for the hourly readout from the machine for the purpose of him preparing an invoice. He makes it clear that, without that readout, he is unable to issue any invoice.

28. It was not until very late in the year when any invoice was issued at all in relation to the lease arrangement. Yet, NasaStones’ case and Mr Amir’s evidence is there was in place, during that period of more than 6 months, a weekly arrangement to pay at least $3,250. There was no reason not to issue invoices for that minimum amount, whilst at the same time asking for the hourly readings from NKR and issuing subsequent invoices if necessary. Instead of doing that, NasaStones made a number of requests for that hourly reading and did not issue any invoices, and indeed at CB 173, Mr Amir said in terms that he was unable to issue an invoice, unless and until he had seen the working hours. This occurred in the context of, in the same period, Mr Amir sending an invoice to Mr Raich of $50,000 for sale of equipment, which invoice was paid.

29. In BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367 at [69]-[70], Leeming JA made clear that, in the circumstances of an oral contract, post-contractual conduct by the parties is admissible as to the terms of any such contract. In my judgement, the conduct of NasaStones, in repeatedly seeking the hourly readings without sending any invoice at all, is inconsistent with the term of the contract it now propounds.

30. I therefore consider the objective material to be consistent with the evidence of Mr Raich and inconsistent with the evidence of Mr Amir on this point. Upon that basis, I prefer Mr Raich’s evidence.

31. If I am wrong in that regard, the best that could be said about that surrounding material is that it is equivocal.

32. If all that I was left with is the competing oral evidence of the two witnesses, I would conclude that I am just not sure as to whether there was a minimum weekly amount agreed or not, in which case, NasaStones, who bears the onus of proof, fails on this point. Both witnesses presented well, and each seemed as sure as the other as to their recollection of what was said, although I do have my doubts as to the reliability of Mr Amir’s evidence concerning the bridge crane.

33. NKR admits that, if an hourly rate of $130 is applied to the hours the machine was used between August 2021 and 31 December 2021, that it is liable to NasaStones in an amount of $36,400.

Is NKR liable for unlawful possession of the waterjet machine?

34. Again, there is a direct clash of oral evidence as between Mr Amir and Mr Raich. Although there is some commonality as to context.

35. Mr Raich’s position is that, in September 2021, he offered to return the machine, and Mr Amir did not take him up on that. Come December, his position is that the machine was still available for collection. On the other hand, Mr Amir says that, despite repeated requests, Mr Raich refused to deliver up possession because he was insisting as a condition of return of the equipment for payment of what he alleged were outstanding invoices, which are the subject of other issues in this case.

36. There is a trail of text messages between the parties, followed by solicitor’s correspondence on this topic. It is fair to say that evidence points in both directions. The text messages are hard to follow because, at Mr Amir’s end, they are often written in a shorthand way. From time to time, it does appear that NKR made it a condition of return of the waterjet that outstanding invoices were paid. However, at other times it does appear that NasaStones was itself refusing to come and get the waterjet because it said it was NKR's responsibility to clean out the “sludge" which was in its holding tanks. The solicitors correspondence looks a lot like “ships passing in the night", with various proposals being put by one side then ignored by the other in a response, but in that correspondence there is at least support for the proposition that, sometime early in 2022, NKR agreed to the return of the machines and invited NasaStones to come and collect them and indeed threatened that failure to do so would result in action under the Uncollected Goods Act 1995 (NSW). Finally, objectively, the Supreme Court proceedings included a claim for the delivery up of the waterjet machine, which was not immediately consented to by NKR, but rather resulted in the partial settlement to which I have referred.

37. It is for NasaStones to demonstrate that NKR, without lawful reason, refused to return its waterjet machine. As between the competing oral evidence of the witnesses, I am left in a state of uncertainty, so as to not be satisfied. I think a fair review of the text messages and solicitor’s correspondence tends to suggest that there was overall no such refusal, however, it is to say the least confusing, contradictory, and perhaps incapable of founding a confident conclusion one way or the other.

38. In all the circumstances, I am not satisfied that NasaStones has demonstrated that NKR unlawfully retained the waterjet machine for any period of time.

39. Mr Rizk took a pleading point on this issue, but I do not need to consider it at length. Ultimately, the question whether there was a refusal to return the goods over a period of time was clearly in issue. I am not satisfied that NasaStones, who bears the onus of proof on that issue, has proved the fact on the balance of probabilities. This aspect of the claim fails for that reason.

Other work – services agreement

40. NasaStones alleges this work was done at the request of NKR in May/June 2021. However, that work was not invoiced until January 2022.

41. Mr Amir gave evidence to explain why no invoices were issued until such time as the parties were in dispute about the lease of the waterjet machine. That evidence was to the effect that he was in no rush to invoice NKR because of “the broader commercial relationship that was being developed between it and NasaStones.”

42. Mr Kulkarni submitted that Mr Amir's evidence is inadequate to establish that the work, the subject of the unpaid invoices, was actually done, I agree. The sum total of that evidence is paragraph [17] of Mr Amir's affidavit, and an invoice issued sometime in January 2022. The affidavit evidence and the description of work in the invoice replicate each other.

43. Mr Kulkarni submitted that Mr Amir's evidence as to why he did not invoice earlier is not credible and is inconsistent with his other conduct during the relevant period. I consider this submission has considerable weight. As I have already observed, he sent an invoice on 14 July 2021 for the sale of the equipment, which sale occurred after the alleged work. That invoice was paid and there does not seem to be any rational reason why Mr Amir thought it appropriate to issue that invoice and to politely chase its payment up in a text message, but not to invoice for the alleged work.

44. I am not satisfied that the work, the subject of the unpaid invoices, other than the porcelain slabs which I will shortly come to, was carried out.

The porcelain slabs

45. The issue here is narrow.

46. Again, there is a contest between the witnesses as to an oral arrangement. There are only two text messages about the porcelain slabs. One on 19 September 2021 and the other on 21 September 2021. They do not cast light on the agreed amount to be paid.

47. The invoice for $19,800 was not issued until January of the next year, many months after the alleged work and it is invoiced upon the $900 per slab as contended for by NasaStones.

48. I am not satisfied to the requisite standard that NasaStones has demonstrated entitlement to payment for the porcelain slabs of any more than $250 per slab, being the amount admitted by NKR.

Conclusion

49. For those reasons, I am satisfied that NasaStones is entitled to judgment in an amount of $36,400, being unpaid rent under the lease agreement for the period 18 August 2021 to 31 December 2021. NasaStones is entitled to interest on that amount from the date it sent the invoice for unpaid rent. NasaStones is also entitled to judgment for an unpaid invoice for the supply of porcelain slabs of $5,000, together with interest on that amount calculated from 28 days from the date of the invoice for those porcelain slabs, being 18 January 2022.

49. I propose to enter judgment for NasaStones in an amount of $36,400 plus $5,000, which equals $41,400, together with interest calculated at the Court rates from the dates I have mentioned. The Cross-Claim will be dismissed.

50. As to costs, both parties asked to be heard separately on the question of costs once they have these reasons and for that purpose the matter is listed at 9:30am on 19 March 2025 to resolve any outstanding issues, including the calculation of interest and any disputed questions as to costs. On that day, I will make final orders disposing of the matter.

“Annexure A”

2022/00222826 - NASASTONES PTY LIMITED v NKR DESIGNER STONE PTY LIMITED

Application to adjourn

JUDGMENT – Ex-Tempore (Revised)

Before Newlinds SC DCJ

Tuesday 11 March 2025

1. This is an application by the Defendant to adjourn the hearing of this matter which was originally scheduled to commence last Thursday, 5 March 2025, but on the application of the Defendant and over the opposition of the Plaintiff, it was adjourned, firstly, to Friday, 6 March and then until today so as to allow the Defendant to, firstly, arrange adequate legal representation and, secondly, to allow those new lawyers to get properly up to speed so as to make a sensible application, which is what has occurred today.

2. The fundamental basis for the application is that the Defendant who, on 2 October 2024 by leave of the Court, consequent on an agreement between the Plaintiff and the Defendant, filed and served a Cross-Claim, has not since then put on any evidence which proves any aspect of that Cross-Claim.

3. Mr Kulkarni of counsel, who has appeared for the Defendant today, quite frankly has conceded that absent an adjournment of the matter, the Cross-Claim is bound to fail for lack of evidence. On the other hand, he submits that on the limited evidence that has been put before me on this application, the Cross-Claim can be said to have reasonable prospects of success if the adjournment is granted.

4. The Plaintiff, who is represented by Mr Rizk of counsel, opposes the application, fundamentally submitting that any prejudice caused to the Defendant by not being ready for the hearing scheduled for last week, is entirely due to the Defendant's own fault or to the fault of others for whom the Defendant must take responsibility, that being the Defendant's previous lawyers.

5. The history of this claim is that it was originally commenced by the Plaintiff in July 2022 in the Supreme Court of New South Wales at a time when it principally concerned an urgent application for a return of the Plaintiff's goods and chattels.

6. On 5 July 2023 the Supreme Court ordered the matter continue by way of pleadings, and on 29 August 2023 the Plaintiff filed a statement of claim.

7. On 7 November 2023 after receiving a number of extensions of time from the Court, the Defendant filed a defence. On 7 February 2024 the Supreme Court made timetabling orders for the service of evidence.

8. On 20 June 2024 by consent the matter was transferred to this Court, and on 16 July 2024 Registrar Howard of this Court made what is sometimes erroneously referred to as a "guillotine order", providing that the Defendant file its evidence by a particular date and the matter was listed for further directions on 7 August 2024 for the purpose of allocating a hearing date.

9. On 2 August 2024 a Cross-Claim was mentioned for the first time when the solicitor then acting for the Defendant proposed an order seeking to file and serve a Cross-Claim. This was the first the Plaintiff had heard of a Cross-Claim.

10. There was then correspondence between the parties which resulted in what for all intents and purposes looks to me like an agreement which was on terms that the Plaintiff would agree to the Cross-Claim being filed as long as the Defendant agreed that no further evidence other than what had already been filed in support of the defence was to be adduced in support of the Cross-Claim.

11. An order was then made by consent granting the Defendant leave to file a Cross-Claim. Consistent with the agreement between the parties, that being no direction sought for the filing of any further evidence in support of the Cross-Claim.

12. There is evidence from Mr Sadek, the solicitor for the Plaintiff, which is uncontested, and I accept, that if not for the agreement he would have opposed the filing of the Cross-Claim and would have made the following submissions in opposition:

1. By October 2024 the proceedings had already been on foot for over two years and the Defendant had had ample time to put on a Cross-Claim, noting that any losses claimed under the Cross-Claim arose out of the same contract the subject of the Plaintiff's claim and must have crystallised in 2021;

2. That any filing of further evidence for the purpose of the Cross-Claim would result in a delay in obtaining a hearing date of about three to six months; and

3. No explanation had been put forward by the Defendant to explain why the Cross-Claim was being brought so late.

13. I cannot, of course, decide what the outcome, if there had been a contested application to file that Cross-Claim, may have been, but I can say that I do consider the submissions that would, obviously, have been made in opposition to be powerful and cogent, and there was a real prospect that the Cross-Claim would not have been allowed over the opposition of the Plaintiff in those circumstances.

14. On 2 October 2024, the matter was set down for hearing in March 2025. There was no suggestion that the matter was not ready for a hearing. On 10 October there was a request for particulars made by the Plaintiff to the Defendant's then solicitor. On 17 October that request was followed up. It was, again, followed up on 4 November 2024.

15. On 12 November 2024 the Defendant's then solicitor filed a notice of intention of ceasing to act. There was then further correspondence between the solicitors wherein the Defendant's former solicitor advised the Plaintiff's solicitor that the Defendant's former solicitor had ceased to act following which the Plaintiff's solicitor corresponded directly with Mr Raich of the Defendant about the conduct of the matter, and on 22 November 2024 Mr Raich wrote to the Plaintiff's solicitor in the following terms:

"My previous solicitor had advised me that within the District Court the cap is limited to $750,000. However, there are additional losses that we will include as soon as I provide you with my new solicitor's detail. I will hand everything over to them."

16. Nothing then happened as between the parties or between either party and the Court until shortly before the hearing last week when Mr Sadek, having advised Mr Raich that he was required for cross examination at the hearing of the matter, Mr Raich advised him by email that he was not aware of the hearing date which then provoked the application for an adjournment, which has culminated in today's hearing.

17. I should say that as at the time the Cross-Claim was filed, the only evidence in the material then filed that could have supported it was in an extremely inadmissible form at para 43 of Mr Raich's affidavit of 26 July 2024, but did, as a matter of arithmetic, add up to an amount in excess of $750,000.

18. From that I infer that the advice Mr Raich says he received from his earlier solicitor about the limit to the jurisdiction (which I think is wrong in any event because I think it had gone up by that date, but I infer the solicitor was not aware of that) was probably given at around the time that earlier affidavit was sworn in July 2024.

19. Mr Raich has given sworn evidence before me to the following effect. First, that he did not know because his solicitor did not tell him about the hearing date in March 2024, the first he knew about it was when he received the email from the Plaintiff's solicitor shortly before the hearing date, and, secondly, that his previous solicitor did not have instructions to agree to the filing of the Cross-Claim on terms that no further evidence would be relied upon.

20. The Defendant has also put before me an affidavit of the Defendant’s current solicitor deposing to a conversation she had with the previous solicitor where she very fairly put those propositions to the previous solicitor and he emphatically denied them; in other words, the Defendant’s previous solicitor's position is that Mr Raich did know about the scheduled hearing date and did give instructions for the term of the agreement for the filing of the Cross-Claim.

21. The submission made by Mr Kulkarni is that I should either not accept the previous solicitor's statement because I would conclude that it was implausible because when asked to provide evidence of any instructions in writing (and at least in relation to the hearing date he did say that there was an email), he refused to provide a copy of that email.

22. It seems to me that the Defendant having called both the Defendant Mr Raich and the Defendant's previous solicitor on a topic about which they gave diametrically opposing evidence of fact really can expect no finding from me better than it has been demonstrated that there is a serious question to be determined between the Defendant and its previous solicitor as to what instructions were or were not given.

23. On behalf of the Defendant Mr Kulkarni submits in support of the exercise of discretion in favour of an adjournment as follows. Firstly, he says that there is an adequate explanation for the Defendant not being ready to proceed on the due date. Secondly, he says that realistically an adjournment would involve the matter being delayed by about six months and no more. Third, that the limited evidence that has been put before me on this application shows that an adjournment has utility in the sense that there is some prospect of the Cross-Claim being successful if there is a final hearing, and fourth, that any prejudice to the Plaintiff, and it is accepted that there is prejudice to the Plaintiff, can be cured by an appropriate order as to costs.

24. On behalf of the Plaintiff, Mr Rizk has made the following submissions which, as always in these type of applications, covered the same topics, but with a different emphasis.

1. He says that an adjournment will involve a delay of at least six months which amounts to significant prejudice to his client.

2. He submits that any prejudice to the Defendant is either entirely self-induced by the Defendant's own dilatory conduct through Mr Raich, or, if it is not as clear as that, is the combined fault of both the Defendant and its previous solicitor.

3. He points to the significant delay in the proceedings already to date, including the delay in the Cross-Claim being foreshadowed in the first place and its lack of adequate prosecution since leave was granted.

4. He submits that there is no real explanation for the predicament the Defendant finds itself in or that if there is an explanation, it is not a satisfactory one.

5. He relies on recent cases such as Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (“Aon”).

6. Even though there was a discussion as to whether I could hive off as a separate question various aspects of the case so as to allow the Plaintiff's claim to, effectively, run today, with the Cross-Claim to proceed at a later date. He made submissions which I found persuasive to the effect that none of those possibilities were satisfactory, and each had in built procedural risks which could, indeed, add to the cost and delay to the parties.

7. He submits that as between the parties, there was an agreement to the effect that the price of the consent to the Cross-Claim being filed was that there would be no further evidence filed, and if I was to accede to this application, I would be acceding to an application by the Defendant to breach that agreement in circumstances where the only reason put forward for me to do so is that the Defendant's then solicitor made that agreement without the Defendant's instructions. Ordinarily, parties to litigation are bound by agreements reached by their solicitors in connection with the litigation. The solicitor either has actual authority to make such agreements, but most certainly has ostensible authority to do so.

25. Dealing with that last point first, there is a line of cases to the effect that when Court orders have underpinning them a contractual agreement between parties, it is necessary for a court to exercise that jurisdiction, any jurisdiction, to set aside those orders, to also be satisfied that the contract underneath those orders ought be set aside: see, for example, Harris v Caladine (1991) 172 CLR 84 and Harvey v Phillips (1956) 95 CLR 235.

26. It seems to at least be arguable, that if the order the product of such an agreement is an interlocutory-type order, then, perhaps, that principle is not applied so rigorously. Nonetheless, Mr Rizk was not inviting me to resolve that question, and has submitted that it is, at the very least, a powerful discretionary factor that the Cross-Claim was filed by consent, effectively, induced by the promise going the other way and that there does appear, on the face of things, to have been a strong argument available to the Plaintiff to oppose the filing of the Cross-Claim which it lost the opportunity to make as a result of the agreement.

27. Whilst accepting that the consequences of this decision are extreme from the Defendant's point of view in that, effectively, I am shutting the Defendant out from prosecuting a Cross-Claim, which I am not in a position to say does not have prospects of success, I have decided that when I take into account what I consider to be all of the relevant factors, the proper exercise of discretion is to refuse the application.

28. My reasons boil down to the following:

1. There was considerable delay, indeed significant delay, in the life of the litigation long before the Cross-Claim was even mentioned. That delay appears to have been entirely the fault of the Defendant. There is no explanation at all that I can see in any of the material or that I can infer for that period of delay.

2. There was a promise made by the Defendant's earlier solicitor that no further evidence would be relied upon, and it is clear that the Plaintiff in reliance on that promise consented to the Cross-Claim being filed and gave up the opportunity to oppose it, which I think was a valuable opportunity.

3. The explanation for why the case is not ready, whilst it exists, is to my mind not satisfactory. The simple fact is on Mr Raich’s own evidence he knew that his solicitor was no longer acting in November last year. He was corresponding with the Plaintiff's solicitor, and he was telling the Plaintiff's solicitor that he would shortly advise him of the Defendant's new solicitor's details. That never happened. Indeed, it did not happen until sometime early this week after I told Mr Raich on his first application for an adjournment that he needed to get legal representation. Whilst there is no evidence in the material before me, Mr Raich did tell me on the first occasion before he was legally represented, from the Bar table and when I asked him directly why he did not then retain new solicitors in November, that it was either the pressure of work or "Work commitments got the better of me". Whilst that is an understandable explanation, and I accept it, I am afraid to say that in the context of a party involved in litigation, it is not an acceptable explanation.

4. I cannot resolve as between Mr Raich and his former solicitor whether instructions were or were not given for various matters and whether Mr Raich was told about the date. Even if I assume Mr Raich's version of events, ultimately, it seems to me in the circumstances, as between the Plaintiff and the Defendant, it is the Defendant who has to take responsibility for the previous solicitor's conduct.

5. I am conscious that long gone are the days where courts accepted that prejudice to parties can always be cured by orders for costs. That is not the case. The Plaintiff is not a large corporation. There will be management delays, distractions and stress caused to individuals as a result of any adjournment which can never be cured or compensated for by a costs order. Finally, as is pointed out in cases like Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 and Aon, this question has to be determined not just by me balancing the justices between the two parties before me, but also taking into account that what I am being asked to do is to re allocate scarce public resources which must inevitably be, if there is to be an adjournment, causative of prejudice to other litigants who are waiting in the queue of cases to get their hearing date.

29. When I balance all those factors together, I have concluded that the interests of justice require me to refuse the application, which is what I do.

30. The application for an adjournment is refused. That is the order. I order the Defendant to pay the costs of the application for adjournment.

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Amendments

19 March 2025 - "Annexure A" attached

25 March 2025 - Reset paragraph numbering of Annexure A.

Decision last updated: 25 March 2025