Vicinity Bankstown Pty Limited in Its Capacity as Trustee of the Vicinity Bankstown Trust v Kassem

[2024] NSWDC 595

District Court

New South Wales

Medium Neutral Citation:

Vicinity Bankstown Pty Limited in Its Capacity as Trustee of the Vicinity Bankstown Trust v Kassem [2024] NSWDC 595

Hearing dates:

15 August 2024

Date of orders:

15 August 2024

Decision date:

15 August 2024

Jurisdiction:

Civil

Before:

Montgomery DCJ

Decision:

I make orders in accordance with the Notice of Motion filed by the Plaintiff on 10 July 2024:

(1)   The Defendant’s Defence filed on 3 November 2023 be struck out.

(2)   Judgment for the First and Second Plaintiffs against the Defendant for the liquidated amount in the sum of $130,184.23.

(3)   The Defendant pay the First and Second Plaintiffs’ costs of and incidental to the motion and costs of the proceedings so far.

Catchwords:

CIVIL PROCEDURE — Hearings — Ex parte

CIVIL PROCEDURE — Originating process — Liquidated claim

CIVIL PROCEDURE — Pleadings — Striking out — Abuse of process

CIVIL PROCEDURE — Summary disposal — Dismissal of proceedings — Want of due despatch — Failure to conduct the defence with due despatch

Legislation Cited:

Uniform Civil Procedure Rules 2005, 12.7(2), 14.28, 29.7

Category:

Principal judgment

Parties:

Vicinity Bankstown Pty Limited in Its Capacity as Trustee of the Vicinity Bankstown Trust (Plaintiff)
Lorraine Kassem (Defendant)

Representation:

Counsel:
NM French (Solicitor Advocate for Plaintiff)
No appearance (Defendant)

Solicitors:
JKR Lawyers (Plaintiff)
Future Legal (Defendant)

File Number(s):

2023/00297122

Judgment

1. By Notice of Motion filed 10 July 2024, the Plaintiff seeks that the Defence filed 3 November 2023 be struck out and for judgment in the liquidated amount of $130,184.23, an order that the Defendant pay the Plaintiff’s costs of and incidental to the Notice of Motion and costs of the proceedings to date. The Notice of Motion is supported by the affidavits of Mr Edward Paynter of 9 July 2024, which annexes his affidavit in the principal dispute made 15 March 2024, and the affidavit of Ms French, solicitor for the Plaintiff who appears in Court today. Her affidavit is dated yesterday, 14 August 2024.

UCPR 29.7 - Leave to Proceed Ex Parte

2. When the matter was called on today after 10am there was no appearance in the Court for the Defendant. The evidence and the record of the Court shows that throughout the history of the matter, the Defendant has been legally represented, a solicitor remains on the record as the legal representative of the Defendant. By way of update, I was informed by Ms French from the bar table, and I accept, that since this matter was last before the Court she has attempted, indeed as recently as about a week ago, to contact the solicitor for the Defendant and her efforts have been unsuccessful in that the phone has rung out. Voicemail messages cannot be left.

3. When this matter was last before the Court on 29 July 2024, the List Judge, Dicker SC DCJ, made orders on 29 July 2024, including that today the Defendant is to show cause why her Defence should not be struck out due to breach of the Court’s orders made 16 May 2024. The Court’s Notice of Listing was forwarded to the Defendant’s solicitor by email.

4. For the purposes of r 29.7, I am satisfied that the Plaintiff is entitled to proceed ex parte, reasonable efforts having been made to achieve the Defendant’s representation in Court today, and the Defendant being absent.

UCPR 12.7 - Due Dispatch

5. I turn to the related matter of the continuing failure to proceed with the Defence with due despatch. This is considered with my determination of absence of the Defendant today.

6. The Statement of Claim was filed on 18 September 2023, and the Defence on 3 November 2023. Across that period and up until 29 July 2024, legal representatives for the parties communicated. On 17 January 2024, the Court ordered a timetable granting leave to the Defendant to file and serve a Cross Claim by 26 January 2024 and to serve affidavit evidence in opposition to the Plaintiff’s claim, and in support of the Cross Claim by 22 March 2024.

7. In the interim, the affidavit of Mr Paynter of 15 March 2024 was filed and served by the Plaintiff, but no evidence or any Cross Claim has been filed on behalf of the Defendant. The Defendant’s failure to file a Cross Claim is consistent with her ongoing failure to proceed with due despatch. Obviously, the cross claim would not join issue in the proceeding pleaded by the Statement of Claim and Defence, being the Plaintiff’s claim.

8. On 14 May 2024, orders were made for the parties to attend a timetable, and on 16 May 2024 the Defendant’s legal representative sent an email to the Plaintiff’s solicitors confirming the Defendant intended to seek leave for the Defendant to file and serve her Cross Claim by 30 May 2024. I repeat, for the purposes of considering due despatch, a Cross Claim has not been filed.

9. On 16 May 2024, the parties appeared at a directions hearing, and the proceedings were listed for hearing of one day on 4 September 2024. Standard orders for hearing were made. Specific orders were made that the Defendant file and serve her Cross Claim by 30 May 2024, and serve its affidavit evidence by 30 May 2024 (I note the typographical error in the orders made “May” for “March”). In breach of those orders, the Defendant, as I have said, has not filed evidence or a Cross Claim.

10. Following the service of the Notice of Motion, the matter was returned before the List Judge on 26 July 2024 when the orders I have referred to were made. Specifically, it then falls to the Court to determine whether or not the Defence be struck out in circumstances of the Defendant having not taken up the opportunity to show cause why her Defence should not be struck out. The Plaintiff has not left matters lie. Before proceedings the Plaintiff wrote to the Defendant with the demand articulated in these proceedings, including a schedule as to the calculation of the debt.

11. On 2 May 2024, the Plaintiff’s legal representatives emailed the Defendant’s legal representative referring to the Defendant’s failure to proceed with due despatch and specifically referring to the orders earlier made for service of evidence, by the Court. That letter stated:

“Due to your client’s non compliance with the Court’s orders, we consider that your client has not been conducting her Defence with due despatch and our client is being seriously prejudiced by the delay caused by your client’s conduct.

We request you immediately confirm that you continue to act for the Defendant. Further, that your client intends to defend the proceedings and will be serving evidence in opposition to the Claim.

In the event we do not hear from you, we will seek our client’s instruction to apply for the Defence be struck out for want of due despatch and for judgment to be entered against your client.”

12. On 16 May 2024, the Defendant’s legal representatives emailed the Plaintiff’s legal representatives informing that due to a death in the family, the Defendant had not complied with the orders of the Court, and “as such, on a final basis, I will be seeking the following orders”. There below, the Defendant’s solicitor sought the timetable, and as I have said, the Defendant was permitted by orders made in Court that day further time to file and serve any evidence in contest of the Plaintiff’s claim, to file a Cross Claim and any evidence in support of a Cross Claim. It has not done so. This evidence plainly shows that the Plaintiff’s solicitors have prudently pursued the prosecution of the matter, and that the Defendant is aware that the orders made on 16 May were on a “final basis”.

13. On 10 June 2024, the Plaintiff’s legal representative emailed the Defendant’s legal representative referring to the orders made 16 May 2024, and the Defendant’s breach by failure to have complied. Again reference was made to the Defendant not conducting her Defence with due despatch, and the letter provided notice that unless the Defendant’s evidence in chief was served by close of business 12 June 2024, the Plaintiff would file the Notice of Motion to strike out the Defence for judgment. The inevitable conclusion in the circumstances is that the Defendant has been provided adequate notice of the consequences of not complying with the orders as required by the List Judge.

14. I turn now to the substantive proceedings. By their Statement of Claim, the Plaintiffs sue for recovery of rent. The lessee to the lease of which the Plaintiffs are lessors is a corporation in liquidation. They proceed against the Defendant on her personal guarantee of performance of the lessee under the lease. The Defence admits the lease and the personal guarantee. I observe, and a fact confirmed by Ms French for the Plaintiff today, that the Defendant is the sole director and shareholder of the lessee corporation.

15. Paragraph 7 of the Statement of Claim pleads:

“Subsequent to execution of the Lease, the Land was duly transferred by the Original Landlord to the Plaintiff and, immediately upon transfer, all rights, entitlement and interest in the enforcement of the covenants contained in the Lease vested in the Plaintiff with the reversionary estate in the land pursuant to the Real Property Act 1900 (NSW).”

16. And in paragraph 8:

“Immediately upon transfer of the Land by the Original Landlord to the Plaintiff, all rights, titles and interest in the enforcement of the covenants contained in the Guarantee vested in the Plaintiff and the reversionary estate in the Land. Alternatively, all rights, title and interest in the enforcement of the covenant contained in the Guarantee were duly assigned to the Plaintiff by the Original Landlord immediately upon transfer of the land.”

17. The only factual issue raised by the Defence is in relation to those paragraphs.

18. The Defence at paragraph 7 pleads:

“In relation to paragraphs 7 and 8 of the SOC, the Defendant cannot admit or deny such and further states that such date of transfer has not been noted.”

19. Attached to the affidavit evidence of Mr Paynter is the lease and title searches showing that the property is, indeed, in the title of the landlords, the Plaintiffs in the action. In the circumstances, I am unable to understand the non admission, and on the face of the evidence it would appear to be frivolous. Otherwise, the Defence does not admit or disputes the quantum. I note that the Defendant has not filed a Cross Claim disputing quantum.

20. The affidavit of Mr Paynter in compliance with UCPR 29.7 explains the liquidated debt, and Ms French from the bar table today has updated the situation to confirm that the debt remains undiminished by payment or compromise.

21. In her helpful written submissions, Ms French indicates that the Plaintiff relies on both UCPR 12.7(2) which provides that:

“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.”

22. And on UCPR 14.28 which provides that:

“The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading-discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the court.”

23. On the evidence available to me, the Plaintiff is entitled to succeed under both UCPR 12.7(2), and 14.28. The Plaintiff seeks the Defence be struck out in the circumstances where the Defendant plainly has failed to show cause why that should not occur in consequence of the List Judge’s earlier recognition, which I have repeated today in the exercise of my singular discretion, that the Defence is not pursued with due despatch.

24. Secondly, there is nothing in the documentation of the proceedings available to me today to indicate that a viable or reasonable defence has been pleaded or is otherwise identified.

25. In commercial debt recovery, delay causes prejudice and embarrassment for a party as a defendant in a liquidated claim such as this. To repeatedly seek extensions of time, and to not comply with Court’s directions, can lead in some circumstances to an abuse of process of the Court.

26. In the absence of any explanation for the delay beyond that earlier voiced in the Defendant’s solicitor’s email of a death in the family and subsequent illness of the Defendant, which circumstances were stated months ago, and in the circumstances of the correspondence to which I have referred showing that the Defendant plainly acknowledged that the last extension of time was sought by her on a final basis, and then ultimately the failure of the Defendant to show cause as required today; in my opinion, maintenance of the Defence would be an abuse of process of the Court.

27. In the circumstances, I make orders in accordance with the Notice of Motion filed by the Plaintiff on 10 July 2024:

1. The Defendant’s Defence filed on 3 November 2023 be struck out.

2. Judgment for the First and Second Plaintiffs against the Defendant for the liquidated amount in the sum of $130,184.23.

3. The Defendant pay the First and Second Plaintiffs’ costs of and incidental to the motion and costs of the proceedings so far.

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Decision last updated: 16 December 2024