Saade v Rahme

[2024] NSWSC 645

Supreme Court

New South Wales

Medium Neutral Citation:	Saade v Rahme [2024] NSWSC 645
Hearing dates:	27 May 2024
Date of orders:	27 May 2024
Decision date:	27 May 2024
Jurisdiction:	Equity - Applications List
Before:	Kunc J
Decision:	Default judgment and related relief granted
Catchwords:	CIVIL PROCEDURE — Default judgment — Defence struck out for failure to prosecute with due dispatch – No issue of principle
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW) Pt 12, r 12.7; Pt 16, r 16.6
Category:	Procedural rulings
Parties:	S Saade (Plaintiff) G Rahme (Defendant)
Representation:	Counsel: J Horowitz (Plaintiff) Solicitors: PCL Lawyers (Plaintiff)
File Number(s):	2022/143387

EX TEMPORE JUDGMENT (REVISED)

Summary

1. On 8 August 2018, the plaintiff (Dr Saade) and the defendant (Mr Rahme) entered into a facility agreement whereby Dr Saade lent Mr Rahme $650,000. Both the agreement and the advance of the funds was admitted by Mr Rahme in his defence to these proceedings. Dr Saade now applies by notice of motion filed on 13 May 2024 for default judgment against Mr Rahme. For the reasons which follow that relief will be granted.

2. The Court gratefully acknowledges the assistance it derived from the written submissions and efficient presentation of the application by Mr J Horowitz of Counsel, who appeared for Dr Saade.

Facts and procedural history

3. Mr Rahme made no repayments under the agreement.

4. In due course, Dr Saade commenced these proceedings against Mr Rahme. At lease initially, they were defended. They primarily proceeded by reference to an amended statement of claim filed on 22 May 2023 and a defence filed for Mr Rahme. Mr Rahme also filed a cross-claim against Dr Saade, which raised a set off by reference to amounts allegedly owed by Dr Saade to Mr Rahme in defence to the otherwise admitted debt under the agreement.

5. On 29 September 2023, Mr Rahme's solicitor filed a notice of ceasing to act. The matter came before the Court on 5 February 2024, when there was no appearance for Mr Rahme.

6. On 10 March 2024, Mr Rahme sent Dr Saade this WhatsApp message:

“As you can probably tell I am uninterested in the court case and refuse to give it any time".

7. Mr Rahme has since failed to appear at four directions hearings: 11 March, 4 April, 18 April and 14 May 2024.

8. On 14 May 2024, pursuant to one of the prayers in Dr Saade's motion, Registrar Walton dismissed Mr Rahme's amended statement of cross-claim pursuant to UCPR Part 13, r 13.6.

9. Mr Rahme's apparent indifference to these proceedings has continued up to and including today. When the matter came before me last Friday in the Applications List, I directed that steps be taken to inform Mr Rahme of today's hearing. Among other things that were done, Dr Saade's process server texted Mr Rahme to ensure that Mr Rahme had received earlier correspondence and gave details of the time and location for today's hearing. That text was responded to by Mr Rahme with two images which I can only assume were intended to be amusing, but which clearly sent the message that Mr Rahme had no interest in appearing today or in the proceedings at all. The Court finds accordingly, and that Mr Rahme was well and truly on notice of today's hearing.

Consideration

10. The application proceeds in two parts. The first is an application pursuant to UCPR Part 12 r 12.7(2):

12.7   Dismissal of proceedings etc for want of due despatch

(1)  If a plaintiff does not prosecute the proceedings with due despatch, the court may order that the proceedings be dismissed or make such other order as the court thinks fit.

(2)  If the defendant does not conduct the defence with due despatch, the court may strike out the defence, either in whole or in part, or make such other order as the court thinks fit.

11. I am satisfied by reason of the matters in [5] to [9] above that Mr Rahme has failed to conduct his defence with due despatch. In those circumstances, I will in due course make an order that his defence be struck out.

12. It will then follow that for the purposes of UCPR Part 16 r 16.2(1)(c), Mr Rahme will be in default for the purposes of Part 16 because the Court will have ordered his defence to be struck out.

13. The Court's discretion to enter a default judgment on Dr Saade's claim against Mr Rahme pursuant to UCPR Part 16 r 16.6 will be engaged:

16.6   Default judgment on debt or liquidated claim

(1)  If the plaintiff’s claim against a defendant in default is for a debt or liquidated claim or for a claim for unliquidated damages of the kind referred to in rule 14.13(2), judgment may be given for the plaintiff against the defendant for—

(a)  a sum not exceeding the sum claimed, and

(b)  interest up to judgment, and

(c)  costs.

(2)  The relevant affidavit in support—

(a)  must state the amount due to the plaintiff, in respect of the cause of action for which the proceedings were commenced, as at the time the originating process was filed, and

(b)  must give particulars of any reduction of that amount, and costs, as a consequence of any payments made, or credits accrued, since the time the originating process was filed, and

(c)  must state the source of the deponent’s knowledge of the matters stated in the affidavit concerning the debt or debts, and

(d)  must state the amount claimed by way of interest, and

(e)  must state whether costs are claimed and, if so, how much is claimed for costs, indicating—

(i) how much is claimed on account of professional costs (not exceeding the amount fixed by the regulations made for the purposes of section 59 of the Legal Profession Uniform Law Application Act 2014), and

(ii)  how much is claimed on account of filing fees, and

(iii)  how much is claimed on account of the costs of serving the originating process, and

(f)  must state when and how the originating process was served on the defendant

14. I find by reference to the affidavits that have been read by Mr Horowitz that all the necessary formalities for the purposes of entry of default judgment under r 16.6 have been satisfied.

15. Mr Horowitz has provided the Court with the necessary evidence of the calculations of the principal amount owed under the agreement and a related unitholders' agreement between the parties also sued on by Dr Saade. I am also satisfied that the order for costs should be on the indemnity basis by reference to the familiar provision in financing documents of this kind that the borrower is to indemnify the lender fully for any costs of enforcement.

Conclusion

16. Accordingly, the Court make these orders propounded by Mr Horowitz:

1. Order that the Defendant’s Amended Defence dated 19 May 2023 be struck out.

2. Order that there be judgment in favour of the Plaintiff against the Defendant for $2,295,551.45.

3. Save for the costs prescribed under Part 1, item 5, Schedule 1 of the Legal Profession Uniform Law Application Regulation 2015 (NSW), order that the Defendant pay the Plaintiff’s costs on an indemnity basis, of and incidental to the:

1. Plaintiff’s Statement of Claim dated 18 May 2022;

2. Plaintiff’s Amended Statement of Claim dated 22 May 2023;

3. Defendant’s Statement of Cross-Claim dated 17 October 2022;

4. Defendant’s Amended Statement of Cross-Claim dated 19 May 2023; and

5. Plaintiff’s Notice of Motion dated 13 May 2024.

4. Order that the Defendant pay the Plaintiff’s solicitor costs of applying for default judgment fixed under the Regulation in the sum of $1,755.60.

5. Liberty to the plaintiff to apply for the costs referred to in order 3 to be assessed on a gross sum basis.

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Decision last updated: 28 May 2024