State Bank v Mitchell-Paterson

[1999] NSWSC 1106

CITATION:	State Bank v Mitchell-Paterson [1999] NSWSC 1106
CURRENT JURISDICTION:	Equity Division Commercial List
FILE NUMBER(S):	50046/99
HEARING DATE(S):	12/11/99
JUDGMENT DATE:	17 November 1999
PARTIES :	State Bank of New South Wales Limited - Plaintiff Ross William Mitchell-Paterson - Defendant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr G. Lucarelli - Plaintiff Defendant in Person
SOLICITORS:	Minter Ellison - Plaintiff Defendant in Person
CATCHWORDS:	Judgment for the plaintiff in default of the filing of a Defence by the defendant within times specified.
DECISION:	Judgment for the Plaintiff

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

WEDNESDAY, 17 NOVEMBER 1999
50046/1999 - STATE BANK OF NEW SOUTH WALES LIMITED v ROSS WILLIAM MITCHELL-PATERSON

JUDGMENT

HIS HONOUR:

The Plaintiff’s Case

1    The plaintiff, State Bank of New South Wales Limited, for which Mr G. Lucarelli of Counsel appeared, brought proceedings against the defendant, Mr Ross William Mitchell-Paterson, by a Summons filed on 12 April 1999, which sought orders that the defendant pay to it $998,556.01, interest thereon and costs on an indemnity basis.

2    The Summons pleaded that by written lease agreements entered into between the plaintiff and Power Distribution (Australia) Pty Limited, as hirer, (“the hirer”), it agreed to lease certain goods to it, which it did, and that the hirer agreed to pay rental instalments under the terms of those agreements. It pleaded that the defendant gave a written guarantee to it of the hirer’s obligations under each lease; that the hirer fell into arrears in payment of the rental instalments due under those agreements; that, on 27 January 1999, an amount of $1,088,691 was owed by the hirer to the plaintiff; and that on that date the plaintiff made written demand on the defendant for the payment of it, which was not met. It further pleaded that as at 7 April 1999 the amount owing by the defendant to the plaintiff, pursuant to the guarantees, was that for which it sued.

Judgment For The Plaintiff

3    The proceedings came before me for directions on 30 April 1999. Ms Rowe, Solicitor, appeared for the plaintiff and Mr S. McAnulty of Counsel appeared for the defendant. I was informed that discussions were proceeding in an attempt to resolve the matter, and, by consent, I stood it over until 7 May 1999. On that day Ms Rowe mentioned the matter on behalf of both parties and I was asked, by consent, to direct that the defendant file and serve a Defence and an Affidavit of Facts and Circumstances by 4 pm on 20 May 1999. The defendant thus assumed, by consent, an obligation, on 7 May 1999, to file and serve these documents within thirteen days. I listed the matter for further directions on 21 May 1999, on which day Ms Rowe appeared and I granted leave to the plaintiff to sign judgment in the Registry, subject to compliance with the Rules of Court and notwithstanding that the proceedings were commenced by way of Summons. The circumstances in which that occurred appear in the judgment I gave on that date. Put shortly Ms Rowe informed me that she had been told by Mr McAnulty that the defendant would not be filing a Defence or further defending the proceedings. The defendant did not appear, as I had noted. I have no doubt that what Ms Rowe told me was the truth, the contrary has never been suggested and she has subsequently verified by an affidavit her conversation with Mr McAnulty. Mr McAnulty has given no evidence denying that conversation or casting any doubt or qualification on it. The defendant, however, has denied that he gave Mr McAnulty any such instructions, but Mr McAnulty has not been called to support that denial.

Application To Set Aside Judgment

4    On 22 June 1999 the defendant filed a Notice of Motion to set aside the judgment entered on 21 May 1999 and for an order that pending the determination of the Notice of Motion the proceedings be stayed.

5    On 2 July 1999 Mr A.Houen of Counsel, who appeared for the defendant, mentioned the matter on behalf of the parties and, by consent, I stood the Notice of Motion over to 16 July 1999. On that date Mr P.T. Sweney, who appeared for the plaintiff, mentioned the matter on behalf of both parties and, by consent, I stood it over until 6 August 1999.

6    On 6 August 1999 the matter came before Einstein J. The defendant applied to his Honour for an adjournment to enable him to file additional evidence in support of his Notice of Motion. His Honour noted the circumstances in which that occurred, and acceded to his application for further time:-

“.. but only to the extent of a direction that the further evidence be filed and served by 19 August 1999.”

His Honour gave further directions for the conduct of the matter.

7    On 20 August 1999 the matter came before me. Mr Lucarelli appeared for the plaintiff and the defendant appeared in person. I stood the Notice of Motion over for hearing to Friday, 27 August 1999 and directed the defendant to file any further evidence upon which he wished to rely in support of it.

8    On 27 August 1999 the hearing of the Notice of Motion commenced, the defendant appearing in person. He applied for a further adjournment on several grounds, which I have set out in my reasons of 27 August 1999 in which I referred to the fact that both Einstein J, on 6 August 1999, and I, on 20 August 1999, had made it clear that if the defendant wished to proceed with his Notice of Motion he must be ready to do so “so far as Einstein J was concerned, last week, and so far as I was concerned, to-day”. I continued:-

“Nothing which has been put before me satisfies me that there should be any further adjournment of the Notice of Motion and the application is refused.”

9    The defendant conducted the hearing of the Notice of Motion on 27 August 1999. Towards the conclusion of the hearing on that day I suggested to the parties that they take certain matters to which I referred at Tp.29 into consideration:-

“.. because I am not going to allow this hearing to become in effect a trial of the action, although it seems to me that there are certain issues, triable issues which are emerging and perhaps the quickest way of resolving this would be to have an early hearing of the whole of the proceedings. That, of course, would involve my setting aside the judgment. What I have just said is not to be taken as a concluded view, but as a view on which I would like the parties to reflect between now and 1 October 1999.”

The Need For A Defence

10    The matter came back before me on 24 September 1999 when I was presented with Short Minutes of Order whereby the plaintiff consented to the judgment’s being set aside. The Short Minutes also sought directions to ready the substantive matter for hearing. I made directions, once again by consent, that the defendant file and serve a Defence, an affidavit of facts and circumstances giving rise to the Defence and any draft Cross-Claims by 4 pm on 14 October 1999, and I stood the matter over for directions to 15 October 1999. The plaintiff had originally pressed for the date 8 October 1999 for the filing by the defendant of the documents to which I have just referred, but I acceded to the defendant’s request that it be extended to 14 October 1999 to give him the time he was seeking, and stood the matter over to 15 October 1999. I stress that the defendant was given the time he sought to file the documents, which it was not in issue were required from him.

11    On 15 October 1999, the defendant was represented by Ms N. Mikhael of Counsel, who made a further application for an adjournment to allow the defendant to file and serve his Defence, an affidavit of facts and circumstances and any Cross-Claims. The application was supported by an affidavit of the defendant in which he relied, substantially, on the inability to obtain legal assistance. This was the essential basis of his previous request for further time, which had been granted. However, it did not alter the simple fact that the defendant was in breach of directions given by the Court at his request.

12    In reasons I gave on that day I set forth the history of the proceedings, and I said:-

“So far as I am concerned, the matter has now reached a stage where the Court is going to have to take some fairly drastic action. I say that because the defendant has had since May of 1999 to prepare any Defence and Cross-Claims upon which he wishes to rely. If I may say so, his cross-examination of the witness before me and the way in which he generally dealt with the matter showed that he has a lively appreciation of the issues which are involved and, whilst it has been said on a number of occasions that they are complex, as I have just said, it appeared to me, at least prima facie, that the defendant has a good grasp of the factual and some of the legal issues involved in the matter.”

My reference to “May of 1999” was, of course, a reference to the consent directions for filing a defence. I referred to the fact that I was aware that the defendant should have a reasonable opportunity to put forward his defence, and that I considered that he had had such an opportunity, but that I thought there was “just sufficient evidence” in his affidavit of 15 October 1999 “to indicate to me that he has been taking some steps to obtain legal advice without success, but this is not the type of excuse which can be used on any sort of a permanent basis to prevent the matter going forward. Indeed, I think it should be borne in mind that one matter which may have operated upon the plaintiff in agreeing to the judgment being set aside was the prospect of a reasonably early hearing, and I am not going to have that expectation thwarted by continued delay on the part of the defendant”.

13    I noted that the defendant was then seeking a further three weeks and that I proposed, with the minor exception of one day, to grant that. I continued:-

“If there is non-compliance with these orders, I propose to grant leave to the plaintiff on the next occasion to move for judgment in consequence of the defendant’s default.
I note that the defendant is in Court and I am sure, firstly, that he has heard what I have said and, secondly, that he fully understands what I have said. If he does not, I have no doubt that Miss Mikhael, who appears on his behalf, will explain it to him.”

14    In the course of discussion, at a time when the defendant was present, I said:-

“Miss Mikhael, what I propose, subject to anything further Mr Lucarelli seeks to do, is to give your client the three weeks he is seeking. If the Defence and Cross-Claim are not on then, if there is to be a cross-claim, I will grant the plaintiff leave to move without formal motion for summary (sic). On that occasion it has got to be understood that the type of matter referred to in Mr Mitchell-Paterson’s affidavit will not necessarily be a sufficient excuse for further delay and something has to be done about this matter. He has obtained a large indulgence from the Court, or from the parties really, but the matter is far from satisfactory and it is starting to get to the stage where it is totally unsatisfactory.”

I am then recorded as noting that the defendant was in Court and was making a note of what was being said, and that I had no doubt that he understood what I was saying. These statements of my observations were not challenged. The transcript concluded with Counsel stating that she would explain it “all once again to Mr Mitchell-Paterson”.

15    The effect of the orders I made on 15 October 1999 was to extend the time within which the Defence and affidavit of facts and circumstances was to be filed to 4 pm on Thursday, 11 November 1999. I stood the matter over until Friday, 12 November 1999. Once again, save for one day, the Court had acceded to the defendant’s application.

16    The various matters to which I have referred are set forth in the judgments of 21 May 1999, 6 August 1999, 27 August 1999 and 15 October 1999. There is a complete transcript of the various proceedings.

Should The Defendant Be Afforded A Further Opportunity?

17    It is difficult to conceive of a case in which a defendant has obtained a greater opportunity from the Court to defend the proceedings. Firstly, having had judgment signed against him by default and after he had consented to directions to file his Defence, he was successful in having the plaintiff agree to its being set aside, on the basis that a regime was put in place for a speedy hearing. It therefore became incumbent upon him to file a Defence and, if he wished, a Cross-Claim. He has had ample opportunity to do that, all the times he has sought, to date, being granted to him in the face of the plaintiff’s opposition.

18    On 12 November 1999, the defendant appeared in person and made a further application for an adjournment of two weeks, so that he could prepare his Defence and the affidavit of facts and circumstances. It was supported by his affidavit of 12 November 1999. That traced the history of his attempts to obtain legal representation, a theme which had run through much of his earlier evidence, and submissions in support of an application for extensions of time to comply with the directions of the Court. It also set forth the problems being occasioned to him and various members of his family, and submitted that he had made “every reasonable effort” to comply with the orders. He submitted that:-

“.. it is simply the result of a litany of failure to obtain the right legal advice due to no fault of my own.”

One might add that none of this was the fault of the plaintiff.

19    The defendant said that he had prepared a draft Defence or, more accurately, portion of a draft Defence, and he tendered that as Exhibit A. That does not disclose anything like a defence to the fairly straightforward claim which has been brought by the plaintiff. The defendant said, essentially, that he relied upon the material in the affidavit and Exhibit A in support of the application to further extend the time for two weeks. That would take the time being sought by the defendant to 26 November 1999.

20    It is to be borne in mind that the defendant was aware, at least from 22 June 1999, that there was judgment against him and, I have no doubt, he was aware that in order to have the judgment set aside it would be necessary for him to file a Defence. He had, of course, consented in May 1999 to file a Defence within thirteen days. On 24 September 1999 I gave the defendant the three week period he sought to file his Defence and affidavit of facts and circumstances and, on 15 October 1999, I gave him the period which he had sought to do that. I made clear on that occasion that any further opportunity may well not succeed. His then counsel assured me that this would be further explained to the defendant, although even without such an explanation I have not the slightest doubt the defendant understood the obligations on him. All his submissions acknowledge that. In my view the Court has extended every opportunity to the defendant to put forward a Defence, which he has failed to do. I should add that not only has the defendant been dilatory in relation to the matters to which I have just been referring, but also in respect of the prosecution of the Notice of Motion to set aside the judgment.

21    I am acutely aware of the requirement that due process and procedural fairness should be accorded to all litigants. However, in considering that concept, one must have regard to the rights of all parties. As I have said it is difficult to imagine any greater indulgences that the Court could have offered to the defendant than those which it has in this case. I accept that he has had difficulties in obtaining legal advice. However, that does not detract from the fact that he has had, at least from 24 September 1999, in which to file his Defence and affidavit of facts and circumstances. That accords with the period he has requested. To take 24 September as the starting date is to take the view most favourable to the defendant, in the sense that from the time he moved to set aside the judgment he must have been aware, if not earlier, that he would be required to file a Defence. I am also aware that the plaintiff, if put to proof, must prove its case. However, the defendant has not sought to deny that he signed the guarantees; that the hirer leased and used the goods; that the hirer failed to pay the leasing charges; that demand for payment has been made; and that payment has not been paid. Nor has the defendant raised any other defence. In those circumstances, the only matters to be proved by the plaintiff are the amount outstanding, the interest payable and the entitlement to costs on an indemnity basis.

22    In my view the time has now come when the Court must, in fairness to the plaintiff and in the due administration of the justice, bring an end to the situation. It is one in which the defendant has consistently failed to comply with directions of the Court for which he has asked. There is no guarantee that a Defence and affidavit of facts and circumstances will be filed within a further two weeks and, in so far as the draft document, which is Exhibit A, is said to be part of the Defence it is quite clear that it does not deal with the basic matters in issue between the parties. I appreciate that it is only part of the Defence and that it is only a draft, but it does not seek to grapple with the fairly basic propositions pleaded by the plaintiff and, in my opinion, there can be no feeling of reasonable satisfaction that if further time is allowed that will occur.

23    In the result I am of the view that the application for the adjournment must be refused.

24    The consequence of that is that there is no defence and, in my opinion, the failure by the defendant to comply with the various directions of the Court, which have been given to ensure the efficient and due administration of justice, must be that the plaintiff is entitled to judgment and I propose to so order.

Costs Of The Notice Of Motion Filed On 19 August 1999

25    On 19 August 1999 the defendant filed a Notice of Motion seeking to join not only the plaintiff but Australian and New Zealand Banking Group Limited, Group and General Finance Proprietary Limited, Avco Financial Services Limited and St George Bank Limited. Subsequently he acknowledged that that Notice of Motion must be dismissed and it was. I reserved, however, the question of costs to see whether the matters raised in the Notice of Motion would find any articulation in any Cross-Claim he saw fit to file. This has not occurred and, in these circumstances, I am of the view that the defendant must pay the costs of all respondents to that Notice of Motion in so far as orders have not already been made to that effect.

Last Modified: 11/18/1999