Padovan & Anor v MGG Group Pty Ltd (in liq) & Ors [2011] NSWSC 789 (22 July 2011)

Last Updated: 29 July 2011

Supreme Court New South Wales

Case Title:	Padovan & Anor v MGG Group Pty Ltd (in liq) & Ors
Medium Neutral Citation:	[2011] NSWSC 789
Hearing Date(s):	22 July 2011
Decision Date:	22 July 2011
Jurisdiction:	Equity Division
Before:	Black J
Decision:	Application to vacate hearing date dismissed.
Catchwords:	Application to vacate hearing.
Legislation Cited:	- Bankruptcy Act 1966 (Cth) - s 58 - Civil Procedure Act 2005 (NSW) - s 56, s 57, s 58, s 59.
Cases Cited:
Texts Cited:
Category:	Interlocutory applications
Parties:	Michael Paul Padovan (First Plaintiff) Ravi Gangaram Bale (Second Plaintiff) MGG Group Pty Ltd (in liq) (First Defendant) RCJ Holding Pty Ltd (in liq) (Second Defendant) Mouhsen Gittany (Third Defendant) Steven Jeitani (Fourth Defendant)
Representation
- Counsel:	Counsel: S. Golledge (Plaintiffs) F. Salama (Third Defendant) M. Galler (Fourth Defendant)
- Solicitors:	Solicitors: McGrath Solicitors (Plaintiffs) ERA Legal (First & Second Defendants) Paramonte Legal (Third Defendant)
File number(s):	10/282599
Publication Restriction:

Judgment

1. Application is made by the Third Defendant to vacate the hearing of this matter, listed today. That application is supported by an affidavit of George Hadchiti, sworn on 22 July 2011. There appear to be two essential grounds of the application. The first is that the Third Defendant is not ready to proceed today, for reasons that I will set out below. The second is the Third Defendant's contention that these proceedings will last longer than the day for which they are listed. Mr Golledge, who appears for the Plaintiffs, has indicated that he anticipates that the matter is likely to be able to complete within the day, although he has properly acknowledged there is no certainty of that outcome.
   
2. Mr Hadchiti's evidence suggests that two matters have contributed to the Third Defendant's lack of readiness to continue with the proceedings today. The first is the fact that the Third Defendant's solicitors and counsel have not been in funds to conduct the matter for some time and are not in funds to conduct the matter now. The second is a suggestion that the Third Defendant has been disadvantaged because the matter has not proceeded by way of either a Statement of Claim or Points of Claim. I give little weight to the second matter, because that could have been addressed at any time by restoring the matter before the Registrar so that any issue concerning it could be resolved.
   
3. The first matter provides an explanation for the current status of the matter so far as the Third Defendant is concerned, but does not provide a reason for the Court to vacate the proceedings today since it is a matter that is within the Third Defendant's control.
   
4. The application to vacate the hearing date today needs to be determined by reference to sections 5659 of the Civil Procedure Act 2005 (NSW). The Court must, by s 56, have regard to the overriding purpose, being the just, quick and cheap resolution of the real issues in the proceedings. Section 57 deals with the process of case management and requires the practice and procedure of the Court to be regulated to ensure the attainment of the objects specified in the section, including the just determination of the proceedings, the efficient disposal of the Court's business, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings and all other proceedings in the Court at an affordable cost. Section 58 requires the Court, in dealing with amendments, to seek to act in accordance with the dictates of justice.
   
5. I have had regard to these factors in considering this application. I note that the application is complicated by one further matter, which is that it appears that the Fourth Defendant was some time ago placed in bankruptcy.
   
6. The Plaintiffs accept that, as against the Fourth Defendant, the proceedings are subject to the stay arising under s 58 of the Bankruptcy Act 1966 (Cth). The Plaintiffs have indicated that they would not pursue proceedings as against the Fourth Defendant which are the subject of that stay if I were otherwise disposed to order that the proceedings continue today, while reserving their position if I were to vacate the hearing today.
   
7. I recognise that vacating the hearing date might allow the Third Defendant in future to place his counsel and solicitors in funds to conduct the proceedings. However, there is a plain prejudice to the Plaintiffs which arises from vacating the hearing date. The Plaintiffs have incurred costs in reaching the position that they are ready to proceed today. Even if I were to order that those costs be assessed and paid forthwith, there is no guarantee that they can be paid by the Third Defendant, because the factors which may have led to the position that he has not placed his own legal representatives in funds to conduct the proceedings may also impact his ability to meet any order for costs against him. There is also an impact on the Plaintiffs so far as their hearing would inevitably be delayed, although that impact could be mitigated to some extent by extending the existing caveat to secure their position. Finally, there is an impact upon other litigants in the Court whose matters have not been listed today because this matter has been listed for hearing.
   
8. The factors supporting an application to vacate the hearing date are significantly weakened in my view by the fact that no earlier application was made to the Court to vacate the hearing date. Had such an application been made, the matter might have been able to have been vacated with less prejudice to the Plaintiffs than they would now suffer, and without other litigants losing the opportunity to have matters heard before the Court today.
   
9. I have considered all of these matters and on balance I take the view that I should not vacate the hearing date listed for today. In my view, the factors which indicate prejudice to the Plaintiffs and prejudice to the community from vacating the hearing date outweigh the factors which would support vacating the hearing date. In these circumstances I do not order that the hearing date be vacated.
   
10. After I declined to vacate the hearing date, application was made by the solicitors appearing for the Third Defendant, Mr Hadchiti of the firm of Paramonte Legal, for leave to withdraw from the proceedings under rule 7.29(2) of the Uniform Civil Procedure Rules. Such leave is required because a date for trial has been fixed and that withdrawal would not occur at least twenty-eight days before that date.
    
11. Mr Hadchiti's affidavit makes clear that attempts have been made to regularise the position in respect of the Third Defendant placing Mr Hadchiti in funds to conduct the proceedings for some considerable time. In these circumstances I consider it appropriate to grant leave under rule 7.29(2) for Mr Hadchiti and Paramonte Legal to file and serve a Notice of Ceasing to Act.
    
12. The Plaintiffs sought leave to discontinue all claims for relief so far as they concern the Fourth Defendant in these proceedings and also sought an order, pursuant to rule 42.19(2), that there be no order as to costs of the proceedings as against the Fourth Defendant. That application reflects the fact that, as I noted above, the Fourth Defendant has been placed in bankruptcy and a stay under s 58 of the Bankruptcy Act is currently applicable so that the Plaintiffs could not continue the proceedings as against the Fourth Defendant without leave from a Court with bankruptcy jurisdiction. This application is not opposed by the Fourth Defendant, and it seems to me appropriate that the Plaintiffs' application for leave to discontinue the claims for relief as against the Fourth Defendant be granted and that there be no order as to costs as between the Plaintiffs and the Fourth Defendant.
    
13. Accordingly, I order that:
    

(1) Mr Hadchiti and Paramonte Legal have leave to file and serve a Notice of Ceasing to Act for the Third Defendant.

(2) the Plaintiffs have leave to discontinue all claims for relief so far as they concern the Fourth Defendant and there be no order as to costs as between the Plaintiffs and the Fourth Defendant;

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