Pridham v Archer

[2012] NSWSC 752

Supreme Court

New South Wales

Medium Neutral Citation:	Pridham v Archer [2012] NSWSC 752
Hearing dates:	25/06/2012
Decision date:	25 June 2012
Jurisdiction:	Common Law
Before:	Garling J
Decision:	Order the defendants to pay the plaintiff's costs of and occasioned by the adjournment on an indemnity basis.
Catchwords:	PRACTICE AND PROCEDURE - adjournment application - application based on psychiatric disability of defendant - right to defend proceedings - adjournment granted
Category:	Procedural and other rulings
Parties:	Andrew Pridham Anita Archer
Representation:	G M Watson SC / J Hogan-Doran (P) S T Pitt (D) Greenwich Legal (P) Mills Oakley Lawyers (D)
File Number(s):	2011/00236676

EX TEMPORE Judgment

1. This is an application by notice of motion by the defendants seeking an adjournment of the proceedings listed for hearing today. The application is opposed.

The Proceedings

1. The proceedings involve a claim relating to the sale by the defendants to the plaintiff and the purchase by the plaintiff of an artwork said to have been painted by the late Brett Whiteley entitled "Lavender Bay". The painting was sold by the defendants to the plaintiff in late 2007 for the sum of $2.5 million.

1. The plaintiff claims that, contrary to representations made at the time by the defendants, the artwork is in fact a forgery and is not by Brett Whiteley at all. In support of his claim, the plaintiff adduces evidence from an expert that, the plaintiff submits, leads to the inevitable conclusion that the painting is a forgery.

1. The plaintiff claims that because the painting is a forgery he has lost a considerable sum of money which represented the purchase price and various associated costs which have been wasted including insurance, transport and the like.

Procedural History

1. Proceedings were commenced in this Court by Statement of Claim filed 22 July 2011. A defence was filed on behalf of the defendants by solicitors then retained by the defendants on 19 September 2011. The defence puts in issue each of the causes of action pleaded by the plaintiff and disputes that the artwork is a forgery.

1. In accordance with directions of the Court, evidence has been filed on behalf of the plaintiff. Directions were given for the defendants to file evidence upon which they intended to rely.

1. On 16 December 2011, by consent, the defendants were ordered to serve any lay evidence upon which they intended to rely on or before 9 February 2012 and to serve any expert report in reply to that of the plaintiff by 29 February 2012. No evidence was served in compliance with those orders, except for a relatively short statement of the first defendant.

1. When the matter returned to court on 21 March 2012 for further directions, there was no appearance by the defendants. On 4 April 2012, when the matter was next before the Court for directions, it appears that the first defendant appeared in person on her own behalf and on behalf of the second defendant, and consented to an order that she was to serve any expert report in reply to that of the plaintiff on or before 11 April 2012. The order to which she consented also noted that if she failed so to do, she would not be entitled to rely on any expert evidence at the hearing of the matter without leave of the court.

1. On that day, 4 April 2012, the matter was also fixed for final hearing for a period of three days commencing today.

1. Since that time it appears that the defendant, until about two weeks ago, has acted for herself. About two weeks ago it appears she instructed her present lawyers, who made a telephone call to counsel at that time seeking assistance. A week ago, on 18 June 2012, her present lawyers wrote to the lawyers for the plaintiff informing them that they were instructed to make application for an adjournment.

Adjournment Application

1. The evidence in support of the application for the adjournment makes it plain to me that what is intended, should an adjournment be granted, is for the lawyers now instructed to act for the defendants, to take complete instructions from their client, to consider whether the defence presently filed requires amendment, to consider whether cross-claims should be filed joining other parties to the proceedings, to consider whether the existing lay evidence needs to be supplemented and to consider whether they wish to adduce any further expert evidence and make application for leave, if so advised. Putting it simply, the present lawyers for the defendant say, in effect, the case is not ready to proceed, it is not adequately prepared and they wish on behalf of their clients, the defendants, to prepare it properly.

1. The basis advanced to excuse the lack of adequate preparation is the psychiatric state of the defendant Ms Archer and as well, her financial state and that of the company.

1. The financial state can be addressed quickly. The company does not have sufficient assets to meet the judgment, nor any assets which seem to exceed about $30,000. Ms Archer says that she is unable to work full-time, she has limited work capacity, her only asset, which is a property in Perth, is mortgaged for more than it is worth, she has no cash and has personal debts which well exceed her asset position. She is in receipt of a disability payment from an insurance policy. The financial position of the company and Ms Archer is not disputed by the plaintiff.

1. As well, Ms Archer relied upon a psychiatric condition which she says has affected her ability to consider rationally what her defence is and how she might go about defending her position. In support of that condition, she relies upon the report of Dr Anthony Sheehan, a consultant psychiatrist, who assessed Ms Archer on 29 May 2012. The court has been provided with a copy of that report, the contents of which have been partly redacted without objection by the plaintiff.

1. Dr Sheehan concludes, based upon the symptoms reported to him by Ms Archer and confirmed by both a written report and oral discussions with her general practitioner, Dr Stokes, that Ms Archer's symptoms meet the current psychiatric criteria for a diagnosis of Adjustment Disorder. He records that her Adjustment Disorder has been ongoing since February 2012. He reports that the Adjustment Disorder has resulted in the prescription of antidepressant medication and precludes Ms Archer working on a full-time basis. The report of Dr Sheehan does not specifically address the capacity of Ms Archer to engage in this litigation, nor to prepare her defence.

1. The report of Ms Archer's general practitioner, Dr Stokes of 4 April 2012, reports that Ms Archer has become depressed and that she is anxious with episodes of crying, anxiety, social withdrawal, depression, sleep and appetite disturbances. She has been unable to talk to clients and has had no motivation to find new clients or artworks for her current clients. This is apparently associated with poor memory and concentration. Dr Stokes records that since receiving the Statement of Claim in these proceedings, Ms Archer's symptoms have been exacerbated and that she has been significantly unwell since that time.

1. In her own affidavit, Ms Archer says that she has found that these proceedings and associated negative publicity has had an impact on her ability to function in everyday life, as well as her ability to secure employment. She records in her affidavit that the stress associated with the allegations by the plaintiff, and the defence of these proceedings puts her under considerable public scrutiny and pressure. She also records that since March 2012 she has had feelings of hopelessness. It is necessary for the Court to consider that the context in which these symptoms are to be found is that Ms Archer is married and is the mother of three children aged seven years or under.

1. Senior counsel for the plaintiff submits that the court ought not grant an adjournment because, given the financial position of the defendants, neither would be in a position to meet any costs order imposed, that the application has been made so late in the proceedings that other litigants in the Court would be disadvantaged, that there is no utility in granting an adjournment because the defence propounded cannot succeed and also because there is a public interest in correcting the register of Brett Whiteley artworks which outweighs the interest of the plaintiff in having a fair trial.

1. Whether or not an adjournment should be granted is ultimately a matter of discretion for the court. It is necessary that any order that is made is one which is in the interests of justice. Section 56 of the Civil Procedure Act 2005 provides that when making an order of a kind such as this that the court needs to keep in mind that the overriding purpose of the Act and the Rules of Court is to facilitate the just, quick and cheap resolution of the real issues in dispute.

1. Section 58 of the Act requires that the court, in deciding whether to grant an adjournment of proceedings, act in accordance with the dictates of justice. It further provides that the dictates of justice, in any particular case, may include the degree of difficulty or complexity to which the issues in the case give rise, the degree of expedition with which the respective parties have approached the proceedings, the degree to which the respective parties have fulfilled their obligations under the Act and the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction.

1. That the application has been made late is not of itself a sufficient reason in this case, in my view, why it should be refused. It is not uncommon that applications for adjournments are made late, such as this is, at the start of a hearing, but that is one factor which is to be weighed in the balance of whether or not an adjournment ought be granted.

1. The final ground advanced by senior counsel for the plaintiff, namely, that the public interest in having a clear finding of the fact that this artwork is a forgery, is not a matter which finds any weight with me. Mr Watson submitted that it is his client's intention, should a finding of forgery be made, to have the artwork destroyed so that it could not "leak back on to the Australian art market". Since the plaintiff has possession of the artwork presently, I very much doubt that there is much chance of that leakage occurring simply because this case continues for a further period of time. I disregard that submission.

1. Senior counsel puts that the adjournment can't be corrected by a costs order because the financial position of the defendants means that neither can afford to meet a costs. It is clear that the financial position of the defendants is presently hopeless, and does not enable any costs order to be paid forthwith, but that does not mean that a costs order might not be of value to the plaintiff. If, for example, the plaintiff was not to succeed in his claim and was to receive a costs order against him, he would be entitled to set-off the costs order made in his favour as a result of any adjournment, and in that limited circumstance there would be some value in that costs order. Senior counsel is right to submit, and I accept, that the costs order could not be met forthwith.

1. The fundamental objection of senior counsel to the adjournment is to be found in his proposition that there is no utility in granting the adjournment because the defence cannot succeed. This submission is based upon the fact that no challenge has been articulated to the evidence which consists of the statement of the witnesses to be called by the plaintiff other than the limited issues joined between the parties by the statement of Ms Archer when compared with the statement of the plaintiff. But, as senior counsel points out correctly, no witnesses have been required for cross-examination and accordingly his client was entitled to come to this hearing upon the basis that it would be conducted shortly, that there would be some crossexamination of Ms Archer and otherwise the matter would proceed promptly to a conclusion. Senior counsel submits that there is no reasonably arguable defence, and that an adjournment would accordingly be futile.

1. In my view, there is much merit in what senior counsel puts. The principal document containing representations is an email from Ms Archer to the plaintiff of 27 November 2007. Both the plaintiff and Ms Archer intend to tender that email and rely upon it. The terms of it are clear. They will require interpretation in due course and submissions may be made with respect to the contents of it, but there does not seem to be room for a factual dispute about the representations contained in that document.

1. I have not come to any conclusion about that email or the arguments about it, but it does support senior counsel's submission that representations were made that the painting was by Brett Whiteley and was "... of impeccable provenance". However, accepting senior counsel's submission that the case in its present state is a strong one, I do not think that dealing with an application for an adjournment is an occasion, in effect, to engage in a debate about whether a summary judgment application would or would not succeed. I am certainly not persuaded that there is no argument open at all on the pleaded case to Ms Archer which would be sufficient to justify summary judgment.

1. In those circumstances I am not prepared to hold, as senior counsel submitted I should, that there is no utility in the granting of an adjournment. Even if the case is strong, an opposing party is entitled to have an adequate opportunity to put forward a defence. Ultimately, as I have said, I need to determine where the interests of justice, or the dictates of justice, lie.

1. The plaintiff, on the material before me, has a strong case, but Ms Archer is entitled to defend it. She has not done so adequately, but that is because she hasn't had any lawyers for three months and she has been suffering from a psychiatric disability which has had a significant impact on her capacity to defend the proceedings without assistance from a lawyer. The plaintiff will suffer the disadvantage of having paid out costs to his lawyers for having come along today for a three day hearing, but on the other hand, since none of his witnesses are required for cross-examination, those witnesses have not had their time wasted.

1. I need to balance up all of these competing considerations. I am persuaded, doing the best I can, that the right of Ms Archer to have a fair hearing of her defence ought outweigh the submissions that senior counsel has put, entirely properly, on behalf of the plaintiff.

1. In those circumstances I propose to grant an adjournment, but it will be on strict conditions as to the preparation of the case which will remain with me for case management.

1. What I propose to do is to indicate that I will grant the adjournment. I will make an order that the defendants pay the plaintiff's costs thrown away by the application for the adjournment on an indemnity basis, and then I will invite the parties to prepare some short minutes of order about the further preparation of the matter

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Decision last updated: 05 July 2012