Savage v Soloman

[2019] NSWDC 223

District Court

New South Wales

Medium Neutral Citation:	Savage v Soloman [2019] NSWDC 223
Hearing dates:	16 May 2019
Date of orders:	04 June 2019
Decision date:	04 June 2019
Jurisdiction:	Civil
Before:	Dicker SC DCJ
Decision:	(1) The Notice of Motion filed 29 March 2018 is dismissed. (2) The defendant is to pay the plaintiff's costs of the Notice of Motion as agreed or assessed.
Catchwords:	Practice and procedure – application to set aside judgment and final orders – Part 36.16(2)(b) of the Uniform Civil Procedure Rules – failure of defendant or legal representative of defendant to appear at the final hearing of the matter – adequacy of explanation for non-appearance – whether the defendant has an arguable defence on the merits – discretionary factors
Legislation Cited:	Uniform Civil Procedure Rules, Part 36.16(2)(b) Civil Procedure Act 2005 (NSW) Contracts Review Act 1980 (NSW)
Cases Cited:	Blue Badge Insurance Australia Pty Ltd v Farnan (No 2) [2017] NSWSC 1688 Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571 General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125 Integrated Growth Solutions Pty Ltd v Latesha Elizabeth Campbell (No 2) [2015] NSWSC 765 Li v Hanson Property Developments Pty Ltd [2016] NSWSC 1870 Northey v Bega Valley Shire Council [2012] NSWCA 28 O’Connor v Perry [2014] NSWSC 1386 Registrar of Aboriginal Corporations v Murkurni Women’s Aboriginal Corporation [1995] FCA 1413; (1995) 137 ALR 404; (1995) 58 FCR 125 Soloman v Savage [2018] NSWCA 249 University of Wollongong v Metwally (No 2) [1985] HCA 28 Van Gorp v Davy [2017] NSWCA 167
Category:	Principal judgment
Parties:	Robin Barry Savage Phillip Aziz Soloman
Representation:	Counsel: T J Davie (Plaintiff) A Moutasallem (Defendant)   Solicitors: Kennedy & Cooke Lawyers (Plaintiff) Kazi & Associates (Defendant)
File Number(s):	2016/00137741

Judgment

1. Before the Court is a Notice of Motion filed by the defendant/applicant on 29 March 2018, seeking an order pursuant to Part 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) setting aside or varying a judgment of this Court entered on 27 November 2017. Other orders are also sought including that leave be granted to the defendant to re-open the proceedings to adduce further evidence and/or to file an Amended Defence and/or Cross-Claim. The application is opposed by the plaintiff/respondent.

2. Part 36.16 of the Uniform Civil Procedure Rules provides as follows:

“36.16 Further power to set aside or vary judgment or order

(1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

(2) The court may set aside or vary a judgment or order after it has been entered if:

(a) it is a default judgment (other than a default judgment given in open court), or

(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or

(c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order.

(3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:

(a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or

(b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.

(3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.

(3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.

(3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).

(4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.”

The evidence before the court on the application

3. The defendant read the following affidavits in support of his application:

1. Affidavits of Phillip Aziz Solomon affirmed 28 March 2018, 20 March 2019 and 22 April 2019.

4. The plaintiff read the following affidavits on the application:

1. Affidavits of Robin Barry Savage sworn 20 December 2016, 22 February 2017, 29 June 2018 and 2 May 2019; and

2. Affidavits of Nola Gay Savage sworn 20 December 2016 and 2 May 2019.

5. In addition, the plaintiff relied on the following tendered material:

1. The transcript before Judge Blackmore DCJ of the hearing of the matter on 27 November 2017 – Exhibit 1;

2. Affidavit of Edmond El-Khoury (the defendant’s former solicitor) affirmed 21 November 2018 – Exhibit 2;

3. An open offer to settle the application – Exhibit 3.

6. The affidavit of Mr El-Khoury was filed on 22 November 2018 in Court of Appeal proceedings, being an appeal brought by the defendant Mr Soloman from the orders of Judge Blackmore made on 27 November 2017.

Background facts

7. It is important in this application to set out the background facts. These emerge from the affidavits relied upon on the Motion and also from documents filed and orders made on the court file. These background facts, unless otherwise indicated, constitute my findings in the matter. They are as follows:

1. On or about 3 May 2016, the plaintiff Mr Savage filed a Statement of Claim in the Bega Registry of the Court. In that Statement of Claim, the plaintiff asserted that an agreement in writing dated 9 August 2012 (“the Agreement”) was entered into by him with the defendant pursuant to which the plaintiff agreed to loan the sum of $60,000 to the defendant Mr Soloman for a period of three months from 9 August 2012. It was alleged that there was an express term for the payment of interest monthly. It was alleged that the defendant Mr Soloman had not repaid the loan to the plaintiff. A claim was made for the $60,000 plus interest.

2. On 21 June 2016, the defendant filed a “Notice of Appointment of Solicitor” appointing Mr Edmond El-Khoury as his solicitor for the purposes of the proceedings.

3. On 21 June 2016, the defendant, Mr Soloman, filed a Defence. In the Defence, Mr Soloman denied liability. In paragraph 2 of the Defence, Mr Soloman did not admit that the Agreement was binding on him or, that on the proper construction of it, it gave rise to the obligation alleged by the plaintiff.

4. On 31 July 2016, a Cross-Claim was filed by the defendant against the plaintiff. This Cross-Claim is in vague terms but in essence it alleges that there was an arrangement between the parties which Mr Savage withdrew from. It was alleged that that action of Mr Savage gave rise to a cause of action in the defendant. Paragraph 2 second appearing of the Cross-Claim (on page 3) provided:

“Due to the inconsistence and the last-minute withdrawal of the deal, in which time and effort was utilised in planning and arranging the agreement. We are suing to compensate for the irritable losses of $300,000 which is the approximate foreseen profit that would have been made if the deal completed”.

5. The defendant filed an Amended Defence on 15 August 2016. This included a new paragraph 8 which in substance repeated the allegations in the Cross-Claim. On 2 August 2016, there was a hearing before the Registrar in the District Court at Bega who granted leave to file the Amended Defence. Leave was not granted to file the Cross-Claim as it was held to have been filed out of time.

6. Paragraph 8(f) of the Amended Defence provided:

“As the Defendant’s Cross-Claim struck off as filed out of time, the Defendant will start new proceedings in District Court in Sydney to compensate for the irritable losses of $300,000 which is the approximate foreseen profit that would have been made if the deal completed.”

7. There was no evidence before me that any new proceedings were commenced by the defendant.

8. On 21 December 2016, orders were made at the District Court in Bega for the filing of evidence by the parties. Affidavits were filed in the case by Mr Savage and Mrs Savage both dated 20 December 2016. I have referred to these two affidavits above.

9. The matter was listed for final hearing in the District Court sittings at Bega on 27 November 2017.

10. The evidence before the court from Mr Soloman states that he intended to attend the hearing with his solicitor Mr El-Khoury and counsel on 27 November 2017. In his affidavit affirmed 28 March 2018, Mr Soloman states:

“2  I did prepare for the hearing for 27 November 2017 with my solicitor who engaged counsel to attend Bega from Sydney which costs me over $15,000.

3  I did organise travelling from Sydney to Bega for three days for me, my solicitor and our counsel which will cost me an amount of money”;

11. Mr Soloman gives evidence that on 24 November 2017 he received an anonymous threatening text message on his telephone which is set out in his affidavit. He texted the sender of the text message asking who it was. He then received a further text message which was in threatening terms, referred to the hearing in Bega and had significant use of swearing language. Later, on 24 November 2017, Mr Soloman states that he sent a message to Mr El-Khoury forwarding the messages and stating:

“I'm very worried to go to Bega Court on Monday. Could you please do something for me for my safety and the safety of the people with me. This message has really scared me.”

12. Mr Soloman states that he was worried to go to the hearing in Bega with his legal team for their safety and that even if they did attend he was concerned that they would “not be able to concentrate” on the matter. He states that he instructed Mr El-Khoury to file a Notice of Motion to adjourn the matter and to transfer it to Sydney “for our safety”: 28 March 2018 affidavit, paragraph 10.

13. In his affidavit sworn 20 March 2019, Mr Soloman gives a much more detailed explanation for why he did not attend the District Court at Bega on 27 November 2017. His primary reason was because of the threatening text messages which he regarded as a “serious threat to my well-being”: paragraph 24.

14. In paragraphs 27 to 29 of his affidavit sworn 20 March 2019, Mr Soloman states as follows:

“27.  Between 25 November 2017 and 27 November 2017, I had requested for Mr Khoury to attend the District Court in Bega on 27 November 2017 without myself or to engage and send another legal representative to act on my behalf” if he feared his own safety because of the SMS threats received on 24 November 2017. Mr Khoury then advised me that he “will send documentation to the court to adjourn the court date and location from Bega NSW to Sydney NSW”. He stated words to the effect that “this would be sufficient and there was no need for a personal attendance at the court on 27 November 2017” on my behalf. As I did not understand much about legal procedure and trusted his advice, I believed that Mr Khoury's advice was correct.

28.  As a consequence, I accepted M Khoury's advice that there was no need for anyone to attend on my behalf the hearing on 27 November 2017 at Bega.

29.  I had full confidence in Mr Khoury as my practising legal representative as he stated that he was “aware of the appropriate legal infrastructure/proceedings that should occur and what documents should be issued to the court.””

15. Exhibit 2 on the application was an affidavit of Mr El-Khoury sworn for the purposes of the Court of Appeal matter. Paragraph 6 of that affidavit sets out a conversation in which Mr Soloman is alleged to have said to Mr El-Khoury not to go to Bega and that he wanted Mr El-Khoury to adjourn the matter or to try to transfer it to Sydney. There was no evidence in Mr El-Khoury's affidavit of the advice which Mr Soloman sets out in paragraph 27 of his 20 March 2019 affidavit which he claims he received from Mr El-Khoury.

16. On 26 November 2017, Mr El-Khoury filed electronically a Notice of Motion with an affidavit in support from Mr Soloman. The Notice of Motion sought orders adjourning the hearing scheduled to commence on 27 November 2017 in Bega and requesting a transfer of the proceedings from Bega to Sydney.

17. In paragraphs 7 and following of his affidavit affirmed 21 November 2018, Mr El-Khoury sets out attempts he made in Bega to obtain legal representation for the defendant for the hearing scheduled to commence on 27 November 2017, on Sunday 26 November 2017 and the morning of Monday 27 November 2017. Mr El-Khoury also notes that he could not travel himself to Bega because of health reasons relating to his wife who became stressed and unwell when she heard of the threats. Mr El-Khoury states that he honestly believed that the Notice of Motion filed by him in the court together with the affidavit in support “were appropriate explanation to the Court for non-appearance with the expectation that the Court would uphold the principle that legal practitioners are entitled to represent their client without fear or intimidation in the service of justice”: paragraph 13 of Exhibit 2.

18. The matter was called on for hearing before Judge Blackmore DCJ on 27 November 2017 in Bega. His Honour mentioned the matter at about 10am, 11am and later in the afternoon. There was no appearance on behalf of the defendant. Mr Thompson appeared for the plaintiff. The transcript of what occurred at the various hearings became Exhibit 1 on the application. As there was no attendance for or on behalf of the defendant his Honour proceeded to hear the matter. His Honour dismissed the Notice of Motion for want of prosecution, read the affidavits on behalf of the plaintiff and entered judgment for the plaintiff in the sum of $60,000 plus $113,400 in interest plus costs to be assessed.

19. The formal record of the proceedings as appears on JusticeLink is as follows:

“Judgment:

Phillip Aziz SOLOMAN, First Defendant

Is to pay

Robin Barry SAVAGE, First Plaintiff

The sum of

Claim amount: $60000.00

Interest claimed: $113400.00

Filing fees: $0.00

Service fees: $0.00

Solicitors fees: $0.00

Other costs: $0.00

TOTAL: $173400.00

And costs to be agreed or assessed.

No appearance of defendant at 10am, 11am, 12:30pm.

NoM made by defendant to vacate hearing date is dismissed.”

20. These orders were formally entered on 27 November 2017.

21. On 3 December 2017, a Notice of Motion was filed by the defendant to set aside what was regarded as a default judgment. However, the judgment was not a default judgment but a final judgment. According to the file, this Notice of Motion was “discontinued” in January 2018.

22. The court file shows that an Examination Order was issued in relation to the defendant at the request of the plaintiff on 14 February 2018.

23. On 21 March 2018, the defendant filed a Notice of Appeal in the Court of Appeal.

24. The current Notice of Motion before the court was filed on 29 March 2018. This was supported by the affidavit of Mr Soloman affirmed 28 March 2018 which has been read on the application and is referred to above.

25. The creditors’ examination was apparently to occur on 3 April 2018 but on that date was adjourned.

26. The defendant chose to prosecute his appeal in the Court of Appeal rather than to seek to have his Notice of Motion filed 29 March 2018 heard. Why that was so is unclear.

27. In November 2018, Mr El-Khoury filed a Notice of Intention to Cease to Act.

28. The appeal was heard by the Court of Appeal on 18 October 2018. The primary appeal point raised was that there had been a breach of the rules of natural justice by Blackmore DCJ. It was also submitted that the defendant had a legitimate expectation of an adjournment of the hearing: Soloman v Savage [2018] NSWCA 249 at [24]-[25]. It was not in issue before the Court of Appeal that Blackmore DCJ had an obligation to accord natural justice to the defendant extending to an opportunity of presenting his case. However, the plaintiff alleged that the defendant did have an opportunity to present his case and there was no proper explanation as to why at the very least a representative of the defendant did not attend the court to seek an adjournment: at [26].

29. The Court of Appeal held that the District Court was obliged to accord procedural fairness to Mr Soloman, which extended “to his having an opportunity to be heard before the issues in the litigation were decided”: at [31]. However, the Court held that there could be no dispute that an opportunity had been given to him and that procedural fairness did not require a party affected by court order to actually be heard before it is made but merely to be given an opportunity to be heard: at [32]–[33]. The Court of Appeal held that the onus lay on Mr Soloman to establish that he was denied the opportunity to be heard to which he was entitled but the evidence presented did not go this far. In particular, the Court held that there was an opportunity for a lawyer to appear and advance the application including the barrister who was briefed to attend at the trial: at [35]–[36] and [46]. At that stage, the affidavit of Mr El-Khoury affirmed 21 November 2018 was not before the Court of Appeal. A similar point was made by Sackville AJA at [62]. Justice Leeming stated as follows:

“[46]  Today, almost a year later, there continues to be an absence of evidence explaining why no one was able to appear either then or in the 14 days following entry of the judgment.

[47]  That suffices to deal with the gravamen of the appeal. For completeness, the following matters may be noted.”

30. The Court of Appeal dismissed the appeal with costs.

31. On 29 January 2019, Mr El-Khoury filed a Notice of Ceasing to Act.

32. On 22 March 2019, a Further Amended Defence was “received” by the Registry of this Court. Paragraph 8(a) of that document, leave to rely on which has not been granted by the Court, pleads in answer to the whole of the plaintiff's claim that the defendant:

“…is not liable to pay the money as now claimed by the Plaintiff (“the alleged debt”) because he has already repaid the same in full either by payments made directly to the Plaintiff or alternatively, by way of set-off or adjustment of moneys which were already owing by the Plaintiff to the Defendant… Particulars of all such payments set-offs and adjustments are set out as Annexure “A” in the Defendant's Affidavit sworn 20 March 2019."

33. Since that time, the parties have filed a number of other affidavits which I have referred to above relating to the Notice of Motion before the Court.

Legal principles applicable

8. In Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571 Rich J stated as follows at 589:

It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside; and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside (Craig v. Kanssen). In such a case there has been no valid trial at all.”

9. As was held by the Court of Appeal in Soloman v Savage, above, the defendant was given a reasonable opportunity of appearing and presenting his case on 27 November 2017.

10. In circumstances where a party seeks to set aside an order that was regularly made, an applicant must contend with the proposition “that great value attaches to certainty in the outcome of litigation”: Northey v Bega Valley Shire Council [2012] NSWCA 28 at [14].

9. In that case, Barrett JA quoted what was said by Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ in University of Wollongong v Metwally (No 2) [1985] HCA 28 at [5] where their Honours stated as follows:

“5 It may be assumed, without deciding, that the Court has power to vacate its order of 22 November 1984, notwithstanding that it has been perfected. If such power exists, it must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation: see State Rail Authority of New South Wales v. Codelfa Construction Pty. Ltd. [1982] HCA 51; (1982) 150 CLR 29, at p 38.”

12. In Northey, Barrett JA stated as follows at [12]–[17]:

“12.  I turn, therefore, to rule 36.16(2)(b) which reflects what Griffith CJ, in Owners of SS Kalibia v Wilson [1910] HCA 77; (1910) 11 CLR 689 at 694, called "an elementary rule of justice".

13.  It is not disputed that Ms Northey was absent (and was not represented) on 21 March 2011 when the order was made. But that, of itself, is insufficient to justify setting aside of the order. There must be some added factor that makes it unjust for the order to stand.

14. In arguing that a court should set aside an order that was regularly made, an applicant under rule 36.16(2)(b) must contend with the proposition that great value attaches to certainty in the outcome of litigation. It is relevant to quote what was said by Gibbs CJ, Mason J, Wilson J, Brennan J and Dawson J in University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 482-3:

“It may be assumed, without deciding, that the court has power to vacate its order of 22 November 1984, notwithstanding that it has been perfected. If such power exists, it must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29 at 38. The present is not a case in which an order was made by mistake or as a result of fraud, or a case in which by some accident an order has been made against a party who was not heard.”

15.  This passage enjoins "great caution" in approaching applications of the kind that Ms Northey now presses. It also gives some examples of situations in which it may be found appropriate for the court to intervene in relation to a final order that has been perfected: where the order was made by mistake, where the order was made as a result of fraud and where, by some accident, an order has been made against a party who was not heard.

16.  The central question is whether it is unjust to let the perfected order stand. The matter was put thus by Jordan CJ (Davidson J and Roper J concurring) in Vacuum Oil Co Pty Ltd v Stockdale [1942] NSWStRp 31; (1942) 42 SR NSW 239 at 243-4:

“The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as it will minimise the possibility of injustice to the plaintiff. If not, we should not interfere.”

17.  Examples of cases in which such a factor indicative of injustice has been found to be at work are:

(a) where the applicant proceeded to obtain the order in the face of an agreement with the respondent not to do so: Double Bay Newspapers Pty Ltd v The Fitness Lounge Pty Ltd [2006] NSWSC 226; (2006) 57 ACSR 131;

(b) where the applicant proceeded to obtain the order despite the respondent's accountant having been told by the applicant that "nothing would happen" while negotiations continued: Deputy Commissioner of Taxation v Annesley Plant Hire Pty Ltd [2010] FCA 755;

(c) where the applicant proceeded to obtain the order after overlooking the fact that the basis for doing so had disappeared: Workers Compensation Nominal Insurer Pty Ltd; re Deli Glenbrook Pty Ltd [2010] FCA 380; and

(d) where solicitors instructed by the respondent in the proceedings failed to protect the respondent's interests: Registrar of Aboriginal Corporations v Murnkurni Women's Aboriginal Corporation (1995) 137 ALR 404.”

13. In Solomon v Savage, above, Leeming JA stated as follows at [38]–[40]:

“38. Mr Mando emphasised that the threats were received on the Friday afternoon, and said that there was no time to brief a local agent or new lawyers. Once again, there is no evidence of that. But let it be assumed, favourably to Mr Soloman, that for reasons entirely beyond his control, and involving serious criminality disclosed by the text messages, it was practically impossible for him or his legal team to take any step prior to lunch time on Monday 27 November. Even so, Mr Soloman had the right to make an application pursuant to UCPR r 36.16(2)(b), which permits a court to set aside or vary a judgment after it has been entered if “it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order”. There was no need for the trial to take place in Bega; the rules expressly confer power to change the venue of proceedings: UCPR r 8.2.

39.  Next, there was no evidence as to why steps were not taken that afternoon, or the following day, or the following week, to apply to set aside the judgment which had been obtained in Mr Soloman’s absence. The vulnerability of a judgment obtained ex parte to being set aside under UCPR r 36.16 is one reason why courts and plaintiffs are reluctant to proceed ex parte, even when it is clear that the defendant has knowledge of the hearing date.

40.  Indeed, this Court was told without objection that Mr Soloman had exercised a right to apply to set aside the judgment obtained against him by application filed in the District Court on 28 March 2018 (the same date as the notice of appeal was filed), and that the application was listed for hearing in November.”

14. In Van Gorp v Davy [2017] NSWCA 167, White JA with whom McColl JA agreed on this point, stated as follows at paragraphs [27]-[29]:

“27.  WHITE JA: I agree. The applicant has not demonstrated error in the primary judge’s exercise of his discretion to proceed under UCPR r 29.7 rather than to adjourn the proceeding in circumstances where there was no explanation for the applicant’s failure to appear. Such a decision cannot be characterised as unreasonable or plainly unjust (House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40). Particularly is that so given the procedure available to a party where an order is made in the party’s absence, to seek to have the orders set aside under UCPR r 36.16(2)(b). As McColl JA has said, that is a course that the applicant could have pursued and still can pursue. The availability of that course is also a material factor that judges can and do take into account when faced with a situation such as that faced by the primary judge.

28. In so saying I am not to be taken as encouraging such a course in the present case. On an application under UCPR r 36.16(2)(b) the applicant would not only be expected to adduce evidence as to the reasons for his non-appearance. He would also be expected to establish that his claim had arguable merit and was appropriately brought by way of an application for leave to appeal from the orders of the Local Court. Without deciding the question, which is not before us, it might be thought that an application to set aside the consent orders made in the Local Court on 31 March 2015 on the ground of fraud should have been brought in separate proceedings (Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697).

29.  McCOLL JA: I agree with White JA's additional remarks. The order of the Court therefore is that the application for leave to appeal is refused with costs.”

15. In O’Connor v Perry [2014] NSWSC 1386 Schmidt J noted at [18] that the general position that once an order disposing of proceedings is entered, it is beyond the Court’s recall, has been altered by exceptions under the Uniform Civil Procedure Rules.

16. At paragraph 20 of her Honour’s judgment, Schmidt J stated as follows:

“20. The Court's powers must also be exercised in accordance with the objects provided in s 56 of the Civil Procedure Act 2005 (NSW), the just, quick and cheap resolution of the real issues in the proceedings. Consideration of matters such as the timely disposal of proceedings at an affordable cost (s 57); the degree of difficulty or complexity to which the issues in the proceedings give rise and what the dictates of justice require (s 58); elimination of delay (s 59); and proportionality of costs (s 60) must also all be borne in mind.”

17. After finding that the applicant did not appear at the hearing on the day in question, Schmidt J followed the reasoning of Barrett JA in Northey and stated as follows at [32]-[38].

“32. Mr O'Connor's absence at the hearing, of itself, is not alone a proper basis for making an order in his favour under r 36.16. As Barrett JA discussed in Northey v Bega Valley Shire Council [2012] NSWCA 28 at [13]: "There must be some added factor that makes it unjust for the order to stand."

33.  That his misunderstanding of the hearing date and his need to appear was as Mr O'Connor submitted it to have been was undermined by Mr O'Connor's evidence, which makes clear he was aware that a hearing date was coming up in March. He did not take any steps to pursue an order for costs and did not appear at the hearing, with the result that no order as to costs was made, as Ms Perry had proposed in February, and the proceedings were finally dismissed.

34.  As discussed in Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 at [70], the Court's power to make an order such as that sought by Mr O'Connor:

“... ‘must be exercised with great caution, after weighing what might otherwise be irremediable injustice against the public interest in maintaining the finality of litigation: see State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29, at 38."

35.  Given that on his own case an order setting aside that made on 24 March would not address his real concern with the orders made on 5 February, I can see no just basis for exercising any discretion in his favour in relation to the 24 March orders.

36.  As Barrett J explained in Northey v Bega Valley Shire Council [at [16]:

“The central question is whether it is unjust to let the perfected order stand. The matter was put thus by Jordan CJ (Davidson J and Roper J concurring) in Vacuum Oil Co Pty Ltd v Stockdale [1942] NSWStRp 31; (1942) 42 SR NSW 239 at 243-4:

“The question is whether, upon the material that has been placed before us, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as it will minimise the possibility of injustice to the plaintiff. If not, we should not interfere.””

37.  In this case such injustice has not been established. The March hearing date and the timetable for filing evidence and submissions were fixed in Mr O'Connor's presence. That the defendants did not file any evidence on which they wished to rely at the costs hearing, provides no reasonable explanation for Mr O'Connor's failure to advance any evidence or submissions or to appear at the hearing, notwithstanding what Mrs O'Connor understood from her enquiry. He had a fair opportunity to press his application. His failure to avail himself of that opportunity does not establish a just basis for the exercise of the further discretion which he now seeks.

38.  That conclusion is reinforced by Mr O'Connor's motion not being filed until August, some five months afterwards and then only by way of response to service of an examination order in the Local Court proceedings. As Barrett JA considered in Northey v Bega Valley Shire Council at [38], the passage of that time weighs against the exercise of any discretion in his favour. Further, those proceedings are not concerned with the costs of these proceedings and in all of those circumstances, I am satisfied that justice does not permit that the orders sought in relation to the Registrar's orders of 24 March orders to be made.”

18. Accordingly, from these cases the following principles appear applicable. Absence by a party at a hearing of itself is not a proper basis for setting an order in favour of a party aside under Part 36.16(2)(b). There must be some added factor present that makes it unjust for the order to stand. A court must exercise great caution in any application because of the public interest in maintaining the finality of litigation. Some injustice has to be established and delay in the application to set aside is of relevance. At paragraph 38 in O'Connor, Schmidt J found that her conclusion that no injustice had been established was reinforced by the fact that the motion was not filed until some five months after the orders and then only by way of response to service of an examination order. In the present case, the Notice of Motion was filed some four months after the orders were made following the issue of an examination order. Schmidt J stated that the passage of time “weighs against the exercise of any discretion in [the applicant’s] favour."

19. In Integrated Growth Solutions Pty Ltd v Latesha Elizabeth Campbell (No 2) [2015] NSWSC 765, Kunc J followed the decision of Barrett JA in Northey. The application was made about one month after the final orders were made by the trial judge. There was no issue that the court had power to set aside the judgment entered against the applicant in his absence under Part 36.16(2)(b). At [22] Kunc J followed the statement of principles by Barrett JA in Northey as governing the exercise of the court's discretion and held that the court was not satisfied on the evidence that any additional factor over and above the fact that the applicant was absent when the judgment was entered against her, made it unjust for the perfected judgment to stand: at [23]

20. In Li v Hanson Property Developments Pty Ltd [2016] NSWSC 1870, Stevenson J stated as follows at [10]-[12]:

“10. UCPR r 36.16(2)(b) provides that the Court may set aside a judgment or order after it has been entered if it has been given or made in the absence of a party, whether or not the absent party had notice of the hearing.

11.  There is no dispute that the orders made by Lindsay J were made in the absence of Hanson Property and Mr Lau.

12.  However, as Barrett JA observed in Northey v Bega Valley Shire Council [2012] NSWCA 28 at [13]:

“But that, of itself, is insufficient to justify the setting aside of the order. There must be some added factor that makes it unjust for the order to stand.”

21. In Blue Badge Insurance Australia Pty Ltd v Farnan (No 2) [2017] NSWSC 1688, Parker J stated as follows at [14]-[18].

“14.  Recently, in Majak v Rose (No 5) [2017] NSWCA 238 the Court of Appeal considered an application under sub-r (1) where the applicant had filed a notice of motion within the time prescribed by sub-r (3A). The Court (Leeming JA, Simpson JA and Emmett AJA) said (at [12]):

The rule is, like all rules made under the Uniform Civil Procedure Act 2005 (NSW), subject to the “overriding purpose” of facilitating the “just, quick and cheap resolution of the real issues” between the parties to litigation (s 56). It does not give a licence to disgruntled litigants to re-agitate, in the hope of obtaining a more favourable outcome, issues that have been determined against them. Nor does it make of a court some sort of magic pudding from which unsuccessful litigants may take slice after slice, ever hopeful that the next will be more palatable than the last. The rule has a serious, but limited, purpose which is to permit readily identifiable, readily rectifiable, inadvertent errors to be corrected without the complication and expense of an appeal (or, in the case of this Court, an application for special leave to the High Court). Abuse of the rule is detrimental to the administration of justice in unnecessarily and unfairly (to other litigants) taking up the time of the court. Nor does abuse of the rules facilitate the just, quick and cheap resolution of the issues between parties. On the contrary, unwarranted reliance on r 36.16 is oppressive to the successful party and a drain on the Court’s resources.

15.  This statement of principle refers to sub-r (1) (including where it is properly engaged under sub-r (3A)), but, in my view, provides authoritative guidance as to the proper approach to the application of sub-r (2) as well. The general principle is that judgments, once given, are final. In the case of a judgment at first instance following a final hearing, such as that of Kunc J in the present case, any challenge to the decision must usually be pursued by way of appeal (in the present case, an application for leave to appeal).

16. The r 36.16 procedure is a summary one which is generally ill-suited to the resolution of contested challenges to the reasoning or the evidentiary basis for the trial judge’s conclusions, or to complaints of denial of natural justice based on the trial judge’s conduct of proceedings. This is especially so where, as here, the application comes before a different judge sitting at first instance. It would obviously be unworkable if a litigant dissatisfied with a trial judge’s judgment could, in effect, appeal to another trial judge by the simple expedient of making an application under r 36.16. All this underlines the Court of Appeal’s focus on “readily identifiable, readily rectifiable, inadvertent errors” being corrected as an alternative to appeal proceedings.

17.  When considering the application of sub-r (2)(b), it is important to remember that r 36.15 provides for the setting aside of a judgment which has been obtained “irregularly, illegally, or against good faith”. Default judgments (as referred to in sub-r (2)(a)) and judgments given where there is no appearance by the defendant (as in sub-r (2)(b)) are cases where such irregularities may arise. However, the power under sub-r (2) must not be exercised so freely that the restrictions on the Court’s power under r 36.15, and the general principle that appeal is the appropriate way to raise complaints, are subverted. In Northey v Bega Valley Shire Council [2012] NSWCA 28, Barrett JA, sitting as a single judge of the Court of Appeal on an application under sub-r (2)(b) said (at [13]) that the applicant’s absence from the hearing:

... is insufficient to justify setting aside of the order. There must be some added factor that makes it unjust for the order to stand.

18.  I respectfully agree with his Honour. Ordinarily, the proper remedy for a party who has suffered judgment where that party was not represented at the hearing but was on notice of the hearing must be an appeal rather than an application under sub-r (2)(b).”

22. In paragraph 17(d) of Northey, Barrett JA gave as an example of cases in which a factor indicative of injustice has been found to be at work, a situation “where solicitors instructed by the respondent in the proceedings failed to protect the respondent's interests”. His Honour referred to Registrar of Aboriginal Corporations v Murkurni Women’s Aboriginal Corporation [1995] FCA 1413; (1995) 137 ALR 404; (1995) 58 FCR 125. In that case, Nicholson J in the Federal Court of Australia set aside a winding up order where her Honour was satisfied of the explanation for non-appearance. The evidence showed that the Chairperson of the Aboriginal Corporation was served with a winding up application on 14 January 1995, took all reasonable steps to seek legal representation including seeing solicitors, gave clear instructions to a firm of solicitors that the application was to be opposed and following a winding up order where there was no attendance on behalf of the corporation, took prompt steps to give instructions to have the winding up order set aside. This was held to be both a satisfactory explanation of non-appearance and a satisfactory explanation for the delay: at [14]-[18].

22. It seems from the above authorities that the following general propositions may be stated:

1. As part of the rules of natural justice, a party must be given an adequate opportunity to attend before the relevant court at a final hearing and to present their case;

2. If a final judgment has been entered in the absence of a party, that party may apply to set it aside under Part 36.16(2)(b) of the UCPR. This was described by Barrett JA in Northey as “an elementary rule of justice”;

3. That application to set aside may be made outside a period of 14 days after the orders have been entered. However, the period of delay in making the application after the orders are entered is relevant to the exercise of the discretion;

4. Great value attaches to certainty in the outcome of litigation. A court must exercise the power to set aside an order that was regularly made with great caution;

5. The main question is whether it is unjust to let the perfected order stand. Some additional factor in addition to a party having orders made against them in their absence, must be established to indicate injustice;

6. In any application, the applicant is expected to adduce evidence as to the reasons for their non-appearance. They are also expected to establish that the claim of the applicant has arguable merit: Van Gorp v Davy, above, at [28]. Various examples of the presence of a factor indicating injustice may be given, including where the order was made by mistake, where the order was made as a result of fraud and where by some accident, an order was made against a party who was not heard: Northey at [15];

7. Numerous other examples of factors indicative of injustice may be stated. Some of these were set out in paragraph 17 of the judgment of Barrett JA in Northey;

8. The Court's powers must be exercised in accordance with the objects in s 56 of the Civil Procedure Act 2005 (NSW) and the matters set out in ss 57-60 of the Civil Procedure Act: O'Connor v Perry at [20]. These include the just, quick and cheap resolution of the real issues in the proceedings, the timely disposal of proceedings at an affordable cost, the degree of difficulty or complexity to which the issues in the proceedings give rise, what the dictates of justice require, the elimination of delay and proportionality of costs.

9. The extent of any delay is relevant to the exercise of the court’s discretion;

10. Other factors may be relevant to the exercise of the court's discretion. Each case must be considered on its facts.

Submissions of the parties

24. The parties relied on extensive written and oral submissions on the Notice of Motion.

25. The defendant/applicant submitted, in general summary, as follows:

1. The evidence before the court provided an adequate explanation for the failure of the defendant and his legal representatives to appear at the hearing before Blackmore DCJ on 27 November 2017. There was no evidence before the court as to why counsel briefed at the final hearing did not attend;

2. As there was no hearing on the complete evidence served, none of the evidence of the plaintiff has been tested or ruled upon by way of admissibility and the evidence of the defendant was not before Blackmore DCJ;

3. The defendant believed from what he was told by Mr El-Khoury that he (Mr El-Khoury) would attend to seeking an adjournment/vacation of the trial, would file the relevant court documents, and would deal with the matter. It was reasonable for the defendant to accept this advice from his solicitor;

4. The evidence on the Motion establishes that the defendant has a triable defence on the merits which should proceed to trial. The defence as established on the evidence was better than a merely arguable defence;

5. The defendant’s evidence is that he had repaid the $60,000 owing through other payments and the earning of commission in acting for the plaintiff in various real estate transactions. This is confirmed by an email dated 31 July 2014 from the plaintiff;

6. The additional factor required of injustice existed in the present case. The application fell squarely within paragraph 17(d) of Northey, above: “Where solicitors instructed by the respondent in the proceedings failed to protect the respondent's interests”. This is precisely what occurred in the present case as Mr El-Khoury did not take proper steps to protect the defendant's interests in circumstances where he had indicated to the defendant that he would do so;

7. The fact that the defendant chose to proceed with his appeal to the Court of Appeal rather than bringing the current Notice of Motion on for hearing earlier was not relevant. The reasons for taking that course were not before the court in evidence;

8. Whilst delay is a relevant factor which the court can take into account in the exercise of its discretion, there was not excessive delay in the present case;

9. It is in the interests of justice to set aside the orders made on 27 November 2017 in order for the defendant to argue his case on the merits which are established. The judgment was for a considerable sum;

10. The defendant also has an arguable case under the Contracts Review Act 1980 (NSW) and in equity for unconscionability. Mr Soloman was acting under a relevant disadvantage by reason of his lack of experience, education and limited English.

26. The plaintiff/respondent submitted, in general summary, as follows:

1. The court had the power to set aside the orders made on 27 November 2017. The question is whether the court should do so in the exercise of its discretion;

2. There was no substance in the Contracts Review Act and unconscionability arguments. There was nothing in the Defences or Cross-Claim suggesting facts to support either of these arguments. On the evidence, the defendant was an experienced mortgage broker with good English;

3. The Court should exercise its discretion in light of the overriding purpose set out in s 56 of the Civil Procedure Act as well as the other matters in s 58;

4. The Court of Appeal held that the defendant was given a reasonable opportunity of appearing and presenting his case before Blackmore DCJ. There was no breach of the rules of natural justice;

5. The law places great value on certainty in the outcome of litigation. Great caution should be exercised before an order regularly entered is set aside;

6. Mere absence, of itself, is insufficient to justify setting aside an order. There must be some added factor that makes it unjust for the order to stand;

7. In order to set the judgment aside, the applicant must show that they have a good defence on the merits and also explain the default which occasioned the entry of judgment;

8. While it was conceded that the defendant’s proposed Defence satisfied the General Steel test, the Defence in the light of all of the evidence was not a strong Defence;

9. The explanation given on the evidence for non-attendance was incomplete and unsatisfactory. The evidence of the defendant in his affidavits was different to the evidence in Mr El-Khoury's affidavit. There is also no explanation as to why counsel did not appear on the day. There is no evidence that counsel saw the threatening emails or formed any view in relation to them;

10. Delay must be taken into account. This included the delay in the conduct of the proceedings before 27 November 2017 and after the orders were made. Appealing to the Court of Appeal was not conducive to resolving the proceedings justly, quickly or cheaply. The defendant should have proceeded with the current application. Arguing the case in the Court of Appeal has significantly delayed the hearing of the matter which must be taken into account and is a factor against the defendant;

11. The fact that the defence on the merits has only been raised in the affidavits and the proposed Further Amended Defence is “grounds for doubting the bona fides of the defence now sought to be raised, particularly in the absence of any explanation as to why the defence was not raised and supported by evidence, as required by the orders of the court, in the first place”: written submissions paragraph 16;

12. The defendant has not approached the proceedings with any degree of expedition. The delay is highly relevant: written submissions paragraph 17-19;

13. The defendant can, if he chooses, seek to recover any money owed to him in separate proceedings;

14. The application should be dismissed with costs.

27. In reply, the defendant submitted in general summary as follows:

1. The delay in question was not significant;

2. There was no evidence before the court as to why the defendant chose to proceed with the Court of Appeal hearing. Both options were available to him and this was a legitimate course to take;

3. The defence raises triable issues, particularly as to the genuineness and effect of the 31 July 2014 email from Mr Savage in evidence. Whether that email was sent by Mr Savage or not and the effect of the email is a significant issue to be determined by the court. There are also assertions by the defendant of oral agreements made for the payment of commission and the waiving of interest which must be taken into account;

4. The failure to protect the defendant's interest by Mr El-Khoury at the hearing on 27 November 2017 creates a clear injustice;

5. In the exercise of the court's discretion, the orders made on 27 November 2017 should be set aside.

Consideration

Power of the Court

28. As stated above, the application to set aside the orders made on 27 November 2017 by Blackmore DCJ is brought by the defendant under Part 36.16(2)(b) of the Uniform Civil Procedure Rules.

29. In my view, and I find, the requirements of the rule are clearly satisfied in the present case. First, an order was made by the court on 27 November 2017. Secondly, the court file and the evidence before the court establish that the orders made by the court on that date have been entered. Thirdly, I am satisfied from the evidence including the transcript of the hearing (Exhibit 1) and the affidavits of Mr Soloman, that the orders were made in the absence of Mr Soloman who is the defendant.

30. I also find, as established on the affidavit evidence of Mr Soloman, that he had notice of the relevant hearing being the scheduled final hearing of the Statement of Claim brought by the plaintiff against him.

31. Therefore, the court has power to make the orders sought in the Notice of Motion. The question turns to whether the court should make those orders in the exercise of its discretion.

The proposed defences

32. I now turn to the question whether the defence of the defendant which he proposes to maintain if the orders made on 27 November 2017 are set aside, has “arguable merit” and that there is a triable defence: see Van Gorp v Davy, above at [27]; Integrated Growth Solutions, above, at [23]. There is no injustice to a party in allowing orders made in their absence to stand if they do not have an arguable defence to the claim of the other party who has the benefit of orders regularly entered. In Integrated Growth Solutions Pty Ltd, above, Kunc J considered whether the applicant in that case “had evidence or has any prospect of obtaining evidence in support of her case”: at [23].

33. In the course of submissions, Mr Davie, counsel for the plaintiff, conceded that the evidence put forward on behalf of the defendant on the application satisfied the test stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125 at 129. There, Barwick CJ considered whether proceedings should be summarily dismissed and held that a matter should be allowed to go to trial unless it was so obviously untenable that it cannot possibly succeed and was manifestly groundless, disclosing a case which the court is satisfied cannot succeed. Mr Davie submitted, however, that the defendant’s defence in the present case was weak and this was a factor to take into account in the exercise of the court’s discretion.

34. Mr Moutasallem, on behalf of the defendant, submits that the case of the defendant is clearly arguable and in particular there is a central question as to the applicability and genuineness of the email dated 31 July 2014 apparently from the plaintiff which suggests that the $60,000 had been substantially or totally repaid. He also relies on the affidavits of Mr Soloman sworn 20 March 2019 (particularly paragraphs 6-17) and 22 April 2019 (paragraphs 3-6).

35. I have various concerns in relation to the defence proposed by the defendant in the present case for the following reasons:

1. The defence of the defendant as pleaded in the Amended Defence filed 15 August 2016 is different in substance to the proposed Further Amended Defence received by the court on 22 March 2019 (compare paragraph 8 of the former document to paragraph 8 of the latter document);

2. There was no evidence before the court as to the evidence proposed to be read if the defendant had attended the final hearing of the matter on 27 November 2017. Any affidavits filed and served by the defendant prior to that date were not before the Court on the application;

3. The allegation of payment by the defendant of $14,500 in relation to the plaintiff's rent (see paragraph 5 of Mr Soloman's 22 April 2019 affidavit), is directly inconsistent with the affidavits of Mr and Mrs Savage sworn 2 May 2019 which were read on the application. Those affidavits had supporting documents annexed;

4. The allegation that the 31 July 2014 email establishes that the $60,000 had been substantially or totally repaid appears to be inconsistent with the later email from Mr Soloman to Mr Savage dated 27 November 2015 which is Annexure A to the affidavit of Mr Savage sworn 22 February 2017 which was read on the application;

5. In paragraph 3 of Mr Soloman's 22 April 2019 affidavit, Mr Soloman asserts that it was his practice in arranging various loans for the plaintiff that he would obtain the plaintiff’s agreement and acknowledgment to commission being paid to him. Mr Soloman states in paragraph 3(e) of his affidavit:

“I seek this Honourable Court's leave to produce copies of the relevant letters of referral which I had executed with the various banks appointing me as a Finance Broker as well as copies of documents which the Plaintiff has sent me in confirmation of his agreement as the amount of commission I was to be paid."

No such documents were tendered on the application. There was no signed documentation from the plaintiff before the court agreeing to the alleged commission;

6. The defendant also claimed an entitlement to commission in relation to real estate transactions where he was not a licensed real estate agent at the time (his wife was) and the relevant contracts in evidence did not disclose him or his wife as acting for the plaintiff as the plaintiff's real estate agent on the real estate sales.

36. These various matters raise concerns for me in relation to the strength of the defendant's case. However, taking all of the evidence into account, particularly the content of Mr Soloman's 22 April 2019 affidavit, in my view there is a triable issue before the court including in relation to the proper meaning behind the various emails that were exchanged between the parties in 2014-2015. Mr Soloman claims in his 22 April 2019 affidavit to have had numerous conversations with the plaintiff agreeing to commission and waiving interest on the loan. These matters, in my opinion, raise a triable issue and arguable defence for the court.

37. The submissions of the defendant also refer to possible defences under the Contracts Review Act and in equity for unconscionability. The Amended Defence and the proposed Further Amended Defence do not refer to these potential defences. They also do not raise facts which would suggest the application of either defence.

38. The defendant was a mortgage broker. In that role he dealt with financial institutions and with customers, including the plaintiff. It is difficult to accept, even taking into account that English was not the defendant’s first language, that he was at a serious disadvantage in relation to the plaintiff, in entering into the Agreement which the plaintiff sought to enforce in the proceedings. In my view, on the current evidence, either of those defences is not reasonably arguable. That is not to say that evidence may not exist which would support the application of the defences. The Agreement, which was in evidence, is reasonably clear on its face.

39. Taking into account all of the matters referred to above, in my view the defendant has an arguable defence and there is a triable issue but on an interlocutory basis the defence raised does not appear to be a strong one which is a factor to take into account.

The finality of orders

40. As is stated by the High Court in Metwally, above, great caution should be exercised by the court in setting aside orders which were regularly obtained, in the absence of injustice. These orders have been in place for 18 months. An appeal to the Court of Appeal in relation to them was unsuccessful. This, in my view, is a factor to be taken into account by the court.

Delay

41. The plaintiff strongly relies on the delay in making the application by the defendant. It is clear on the authorities that delay may be a significant factor to take into account in the exercise of the discretion. In O'Connor v Perry, above, Schmidt J relied on a delay of “some five months” in the making of the application and noted that it was then only by way of response to service of an examination order. An examination order was similarly issued in the present case. In Northey, above, Barrett JA noted that the application was filed more than eight months after the making of the order and the applicant becoming aware of it. His Honour said:

“The strength of any claim a party may have to have a perfected order set aside necessarily diminishes with the passage of time. This is a very important aspect of the great value attached to certainty in the outcome of litigation. It is one thing for a party who feels aggrieved to apply within a few days or perhaps a few weeks after learning of an order made in the party's absence. A party who does not apply for eight months must, of necessity, present a much more compelling case to disturb the finality of the order in question.”

42. Mr Davie, counsel for the plaintiff in the present case, relied on delay in the conduct of the proceedings by the defendant both before 27 November 2017 and after it. He pointed to the alleged withdrawn application made in December 2017 to set aside the orders. He also pointed to the decision made by the defendant to prosecute the appeal rather than proceeding with the application to set aside.

43. In my view, the conduct of the matter by the defendant prior to 27 November 2017 as emerges from the file, is not sufficiently of concern for this to be a relevant factor.

44. However, there is no satisfactory explanation in the evidence as to why an application was not made promptly by the defendant to set aside the orders made on 27 November 2017 soon after 27 November 2017. Even assuming that the December 2017 application was misconceived as it was on the basis that there had been a default judgment, this does not explain why the present application was not brought more promptly. Some four months passed before the current Notice of Motion was filed. It appears unusual to me that the defendant chose to prosecute the appeal rather than proceed with the Notice of Motion filed which would, in the normal course, have been heard much earlier. As it was, the appeal was unsuccessful and this has resulted in very significant further delay to the parties.

45. In my view, the delay of the defendant in the present case is a relevant factor in the exercise of the discretion. In particular, the fact that at the time the application was heard some 18 months had passed since the orders were made, is a relevant factor to take into account in considering the application, especially in circumstances where the defence put forward does not on its face appear to be a very strong one but would require a contested hearing with extensive cross examination of relevant witnesses.

The excuse for the non-attendance

46. Mr Moutasallem, counsel for the defendant, placed significant weight in his submissions on the examples given in paragraph 17 of the judgment of Barrett JA in Northey and, in particular, on the example given by Justice Barrett of a factor indicative of injustice being “where solicitors instructed by the respondent in the proceedings failed to protect the respondent's interests”. His Honour quoted the Murnkurni case, above. I have set out the facts of that case which establish that the Chairperson of the relevant Corporation did everything reasonably expected to instruct lawyers and to give instructions for an application to be made promptly to set aside the winding up order made in that case.

47. It is submitted on behalf of the defendant that this is directly applicable to the present case.

48. I accept Mr Soloman's evidence and find that he reasonably felt threatened by the texts and decided that he did not wish to appear at the final hearing in Bega. I also accept the evidence of Mr El-Khoury that he was instructed by Mr Soloman not to attend in person and that he decided not to attend partly because of the position of his ill wife. I take into account the fact that the advice set out in Mr Soloman's affidavit is not replicated in Mr El-Khoury's affidavit.

49. However, there is no evidence before the court explaining the failure of the counsel briefed in the proceedings from appearing or even establishing that the counsel briefed was aware of the threatening texts or had received instructions not to attend.

50. Mr Soloman's affidavit affirmed 28 March 2018 clearly states that Mr El-Khoury had engaged counsel to attend Bega from Sydney and Mr Soloman organised travelling to Bega for himself, his solicitor and counsel. There is no further evidence about why the barrister briefed to attend on 27 November 2017 did not attend. This matter is expressly referred to in the decision of the Court of Appeal in Solomon v Savage at [33]-[37], [46] and [62]. In paragraph [46] of Solomon, Leeming JA noted that at the date of the judgment, “there continues to be an absence of evidence explaining why no one was able to appear either then or in the 14 days following entry of the judgment.” There still remains, in my view, a significant gap in the evidence as to why the Counsel retained in the matter did not appear. There is no evidence that he or she was told of the threats or given any instructions not to appear.

51. In my view, this is a major and unsatisfactory gap in the evidence on the application as to the explanation for non-appearance. It is, in my opinion, a significant factor against the exercise of the discretion in the present case.

Importance of the matter to the defendant

52. I take into account the size of the amount ordered to be paid by the defendant and that this is a considerable sum particularly having regard to the fact that costs were also ordered to be paid by Blackmore DCJ.

Decision in relation to the discretion

53. Having regard to the fact that the proposed defence of the defendant is arguable and triable but on its face is not strong or overwhelming, the lack of proper explanation on the evidence as to why the counsel briefed in the proceedings did not attend court on 27 November 2017 (there being no evidence that counsel saw the threats or received instructions not to appear), the delay of the defendant in filing the Notice of Motion and the decision to proceed with the appeal rather than seeking to have the Notice of Motion determined expeditiously, the public interest in the finality of judgments and the length of time that the orders have existed, in my view I should not exercise my discretion to set aside the orders made on 27 November 2017. In reaching that decision, I take into account the significant amount involved, the importance to the defendant of having his defence run in the proceedings and the evidence relied upon by the defendant on the Motion. The matter involves the balancing of these matters with the earlier matters I have referred to above. In my opinion, the earlier factors referred to point to the discretion not being exercised in favour of the application.

54. The Notice of Motion also seeks leave to be granted to the defendant to re-open the proceedings or to file an amended Defence and/or Cross-Claim. Having regard to the reasons for my decision in relation to the exercise of the discretion, in my view it is inappropriate to grant the leave sought. In relation to the Cross-Claim, orders were made by the Registrar not to grant leave to the defendant to rely on the Cross-Claim filed. The Cross-Claim raises matters different to the current proposed defence. The defendant is at liberty to file fresh proceedings in this court or another court seeking the amounts and making the claims in the Cross-Claim.

55. Accordingly, I make the following orders:

1. The Notice of Motion filed 29 March 2018 is dismissed.

2. The defendant is to pay the plaintiff's costs of the Notice of Motion as agreed or assessed.

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Decision last updated: 04 June 2019