Robust Builders Pty Ltd v Barai

[2023] NSWDC 371

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Robust Builders Pty Ltd v Barai & Anor [2023] NSWDC 371

Hearing dates:

22 August 2023

Date of orders:

22 August 2023

Decision date:

22 August 2023

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph 19

Catchwords:

CIVIL PROCEDURE – application by director of plaintiff to carry on proceeding – where plaintiff previously legally represented – where hearing has been adjourned on previous occasion – whether requirement to acknowledge prospective liability to pay some or all of the company’s costs should be waived

Legislation Cited:

Civil Procedure Act 2005 (NSW) rr 14, 98

Uniform Civil Procedure Rules 2005 (NSW) rr 7.2, 7.36

Cases Cited:

May v Christodoulou (2011) 80 NSWLR 462

Category:

Procedural rulings

Parties:

Robust Builders Pty Ltd (plaintiff/cross-defendant)
Mr P Barai (defendant/cross-claimant 1)
Mrs F Mahjabeen (defendant/cross-claimant 2)

Representation:

Mr D Lambley (solicitor) for the defendants/cross-claimant
Mr R Mehndiratta (as director of and for the plaintiff/cross-defendant)

File Number(s):

2018/00259451

Publication restriction:

Nil

JUDGMENT

1. This proceeding concerns a contest between a builder or building company suing for invoices which are said to be unpaid (and the value of equipment not restored) under a written contract entered into with the owners in 2016 and the owners cross claim for the damages associated were allegedly incomplete and defective works.

2. The proceeding commenced nearly five years ago to the present day.

3. The proceeding was fixed for hearing in the May 2023 sittings of the Parramatta Civil List. On 8 May 2023, the hearing was vacated, and the matter was again fixed for hearing with an estimate of a (single) day plus in the August 2023 sittings.

4. Last week, at the call over of the hearings for the August 2023 Civil Sittings in Parramatta, a director of the builder, Mr Mehndiratta purported to appear. I explained to him that he would need to file an affidavit that complied with r 7.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Indeed, I arranged, through my Associate, to provide him with a hard copy of that rule.

5. On or about 18 August 2023, Mr Mehndiratta purportedly provided that affidavit. However, omitted from that affidavit was the statement required by sub-rule 7.2(2)(a)(iv), namely that:

"the director is aware that he or she may be liable to pay some or all of the costs of the proceedings".

6. I note, however, that there is nothing in r 7.2 which would empower the Court to actually make a costs order against the director, even though it is a procedural precondition to a director carrying on the proceeding for the company. There is, however, a power under s 98(1) of the Civil Procedure Act 2005 (NSW) to order costs against a non-party: see the discussion in May v Christodoulou (2011) 80 NSWLR 462.

7. Virtually, at the commencement of today's hearing, I asked Mr Mehndiratta whether he was verbally prepared to acknowledge that he may be liable to pay some or all of the costs of the proceeding. He was not prepared to acknowledge this and indicated that his position was that he did not wish to expose himself to a personal costs order at the conclusion of the proceeding.

8. He indicated that he would want some more time to ring around lawyers in order to find out whether any legal representative would be willing to act for him. This inevitably would require a vacation of the hearing.

9. The position of the defendants/cross claimant would be to oppose any adjournment.

10. I note that the builder was legally represented when it filed an Amended Statement of Claim in May 2020. It is not clear when his legal representation ceased. It is not apparent whether, from the point when the builder ceased to be legally represented, any application was brought by the defendants/cross claimant for security for costs for its future costs of the litigation. The owners did not give any undertaking that it would not seek some or all of its costs against the builder .

11. These developments have left the Court in a difficult position.

12. Mr Mehndiratta had not complied with the procedural precondition to exercising a director’s right to carry on the proceeding for the builder. He needs time to try his luck as to whether he can obtain representation. The owners would deny him that opportunity. Given his admitted inability to pay and the circumstance of the cessation of earlier legal representation, it would he highly doubtful whether any legal practitioner would wish to retain him as a client.

13. There is the possibility of a referral for legal assistance under r 7.36 of the UCPR. There are certain considerations in r 7.36(2). It is not obvious that Mr Mehndiratta would be unable to satisfy the criteria. It would also spare me the task of dealing with, with no disrespect, a self-represented litigant.

14. Against that course, however, there would be certain delay of an already protracted proceeding and although an estimate has been given of this matter of only a day plus, given that it is a construction dispute, it would be rare that such cases could be heard within that time limit. The Court needs to be mindful of the finite resources of the solicitors and barristers who are willing to act on Pro Bono panels.

15. As with all procedural matters, I have to take into account the case management objects.

16. There is no obviously attractive course for the Court to follow.

17. In my opinion, the appropriate course is for the Court to exercise it is power under s 14 of the Civil Procedure Act 2005 (NSW) to dispense for the requirement in sub-rule 7.2(2)(a)(iv) that the director state his awareness that he may be liable to pay some or all of the costs of the proceeding. Whether he states that awareness or not would not be a precondition to the defendants applying for an order of costs against him under s 98 of the Civil Procedure Act; although I should not be taken to be suggesting that that power might be exercised against him at the conclusion of the proceeding.

18. This proceeding has gone on long enough with earlier vacations of hearings. It would be inapposite to grant an adjournment, resulting in further costs being incurred and delay. Mr Mehndiratta has been effectively representing the builder without the owners’ objection: it was only the Court who raised the issue of his authority. The parties are ready to proceed.

19. Accordingly, whilst permitting Mr Mehndiratta to carry on the proceeding for the builder, the Court waives compliance with the requirement that he make the statement in sub-rule 7.2(2)(a)(iv).

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Amendments

15 September 2023 - judgment added.