Supreme Court New South Wales Medium Neutral Citation: Zarfati v McMillan (No 2) [2023] NSWSC 1414 Hearing dates: 9 November 2023 Date of orders: 9 November 2023 Decision date: 09 November 2023 Jurisdiction: Common Law Before: Wright J Decision: See [22] and [23] Catchwords: CIVIL PROCEDURE – Dismissal of Proceedings – self executing orders previously made by consent – where plaintiff has not complied with prior self-executing orders – recording dismissal – no point of principle CIVIL PROCEDURE – Judgments and Orders – liberty to apply – not appropriate where liberty sought to vary substance of orders made Cases Cited: Dowdle v Hillier [1949] 66 WN (NSW) 155 Georges v Peter Wieland [2010] NSWSC 1378 Phillips v Walsh (1990) 20 NSWLR 206 Zarfati v McMillan [2023] NSWSC 839 Category: Procedural rulings Parties: Frank Zarfati (Plaintiff) Robert McMillan (Defendant) McMillan Investment Holdings Pty Ltd (Second Defendant) Representation: Counsel: M Waters (Plaintiff) (until excused) J Svehla (Defendant) Solicitors: Pope & Spinks Solicitors (Plaintiff) until 8 November 2023 Somerset Ryckmans (Defendant) File Number(s): 2020/00163152 REVISED EX TEMPORE JUDGMENT 1. The proceedings were listed for directions, to the extent necessary, today, 9 November 2023, as a result of order 10 made on 21 April 2023. Mr Svelha appears for the defendants and Ms Waters said that she appeared for the plaintiff. As I understand the Court file and the electronic records, however, there is no notice of appearance filed by Ms Waters' instructing solicitors. 2. The situation appears to be that Mr Pope, who previously was the solicitor on the record for the plaintiff, filed a notice of ceasing to act on 8 November 2023, having previously complied with the requirements of giving notice in that regard. I was not aware, at the time Ms Waters announced her appearance, that no notice of appearance had been filed. If I had been so aware, I would have asked for an undertaking that her instructing solicitors file such a notice. 3. Nonetheless, Ms Waters initially applied for an adjournment of the proceedings, on the basis that she and her instructing solicitors had only very recently been engaged by the plaintiffs. In light of the orders made on 21 April 2023, by consent, and the fact that they required the plaintiff to pay certain amounts by certain dates, in default of which, the proceedings would be dismissed, I inquired of Ms Waters whether her client was in a position to pay the amounts determined in accordance with those orders. 4. Ms Waters took instructions on that matter and informed the Court that the plaintiff was not in a position to pay those amounts and would not be likely to be in a position to pay them in the foreseeable future. In those circumstances, Ms Waters said that she did not press her application for an adjournment. For this reason, I did not need to consider any adjournment application further. Ms Waters sought to be excused from further attendance and she was excused. 5. Having outlined the circumstances of the hearing on 9 November, I now turn to the substantive issues to be considered in this directions hearing. 6. This matter has been listed today for further directions in accordance with order 10 made on 21 April 2023 to confirm whether the proceedings are dismissed, and to deal with any other aspects of the matter outstanding. In that regard, on 21 April 2023, aspects of two notices of motion, one filed by the plaintiff on 25 January 2023, and a second filed by the defendants on 27 January 2023, were dealt with by the making of orders by consent designed to achieve some relatively expeditious progress in the proceedings. 7. Those orders made on 21 April 2023 did not, however, deal with all aspects of the two notices of motion, including in particular, prayer 6 of the defendants' notice of motion, filed on 27 January 2023, relating to a personal costs order sought against Mr Pope, the solicitor who was then acting for the plaintiffs. That aspect of the defendants' notice of motion has now been resolved by agreement between the defendants and Mr Pope. 8. It also appears that there was no other aspect of the two notices of motion that are now pressed. In these circumstances, it is appropriate to order by consent that prayer 6 of the defendants' notice of motion of 27 January 2023 be dismissed with no order as to costs as between the defendants and Mr Pope. 9. The defendants and Mr Pope initially sought, however, a further order that those parties have liberty to apply to vary that costs order in the event that the same or similar relief is that sought in the defendants' notice of motion, prayer 6, was sought by the defendants against Mr Pope in future. It was somewhat difficult to know precisely what this order meant, or what this order was proposed to mean. However, there is a more fundamental problem with that proposed order. 10. While liberty to apply may be granted in relation to final orders that dispose of proceedings or an application, the purpose of doing so is to permit the working out of the orders. Generally, liberty to apply does not permit, and it should not be granted so as to permit, people to come and ask that the order itself, in relation to which liberty is granted, be varied. 11. The law in relation to this matter has been summarised in a number of cases. While liberty to apply may be granted, it is limited to matters concerning the working out, or implementation, of an earlier order: Dowdle v Hillier [1949] 66 WN (NSW) 155 at 156. Similarly, it has been held that liberty to apply cannot be used to alter the substance of an order already made: Phillips v Walsh (1990) 20 NSWLR 206 at 209. 12. At its core, the principle of finality must be recognised. As Brereton J in Georges v Peter Wieland [2010] NSWSC 1378 at [23] said: "'Liberty to apply' does not authorise the grant of different relief against different parties ... such liberty does not extend to an application made for the purpose of obtaining substantive relief that is substantially different from that given by the original order."' 13. These matters having been brought to the attention of the parties, the proposal to include order 2 was abandoned and the Court was asked to note an agreement by the parties in its place. While it is not entirely clear what this agreement, that it is proposed the Court should note, actually means, I am prepared in the circumstances to make the notation requested. 14. Finally, in order to ensure that there are no outstanding matters under the two notices of motion, I propose to order, by consent, that those notices of motion be otherwise dismissed. [For orders in relation to prayer 6 and the notices of motions, see 22 below]. 15. In relation to the remainder of the proceedings, on 21 April 2023, at the request of the parties, I made orders by consent, as set out in my judgment of 18 July 2023, Zarfati v McMillan [2023] NSWSC 839 at [2]. These orders included order 1, which was an order that the plaintiff pay the defendants' costs of and incidental to the two notices of motion identified, in a gross sum to be determined by the Court. That was referred to as the "costs order". In addition, order 3, required the plaintiff to provide security for costs in a sum determined by the Court, and that was referred to as the "security for costs order". The orders made on 21 April 2023 also included a timetable for the provision of evidence in relation to the determination of the gross sum for the purposes of the costs order, and the determination of the amount of security, for the purposes of the security for costs order. 16. On 18 July 2023, I determined that the amount of the costs to be paid under the costs order was $205,000 inclusive of GST, and the amount to be provided under the security for costs order was $155,000 inclusive of GST. 17. The orders made on 21 April 2023 also included order 5, which provided, in effect, for dismissal of the proceedings if 1. the amount of costs under the costs order was not paid within 42 days of the date of the amount of the costs order being determined; or 2. the amount of security under the security for costs order was not provided within 42 days of the date of determination of the amount of security. 1. Forty‑two days from 18 July 2023, the date that those determinations were delivered as referred to in order 5, was 30 August 2023. Mr Ryckman's affidavit of 6 November 2023 and Ms Kuznetsova's affidavit of 9 November 2023 established that the $205,000 costs were not paid within the 42 day period, nor was the amount of security provided within that period. 2. Ms Kuznetsova's affidavit also established that those amounts have not been subsequently paid or provided. Accordingly, by operation of order 5, made on 22 April 2023, and the fact that the costs have not been paid and a security has not been provided, the proceedings are dismissed. 3. In order formally to record the fact of dismissal, in light of my findings that the gross sum costs of the motions were not paid, and the amount of security for costs was not provided, within 42 days of the relevant date, or at all, it is appropriate to make, to the extent necessary, an order formally dismissing the proceedings. 4. In addition, in these circumstances, there does not appear to me to be any reason or circumstance which would justify the defendants being deprived of their costs of the proceedings in addition to, and separate from, any costs already ordered. Orders 1. For those reasons, the Court orders by consent that: 1. Prayer 6 of the defendants' notice of motion filed on 27 January 2023 (the defendants' motion) be dismissed, with no order as to costs, as between the defendants and James Patrick Pope (Mr Pope), the solicitor on the record for the plaintiff in the proceeding at the relevant times. 2. The plaintiff's notice of motion filed on 25 January 2023 and the defendants' motion are otherwise dismissed. And the Court notes the agreement between the defendants and Mr Pope that order (1) does not prevent the defendants from seeking the same, or similar relief, as the relief sought in the defendants' motion against Mr Pope in separate proceedings, and if the defendants commence such proceedings against Mr Pope, the Mr Pope will be entitled to make an application for his costs of the defendants' motion in that separate proceeding. 1. In relation to the remainder of the proceedings, the Court orders that: 1. To the extent necessary, the proceedings are dismissed. 2. Save for 1. the defendants' costs of the plaintiff's notice of motion filed on 25 January 2023, and the defendants' notice of motion filed on 27 January 2023 (defendants' motion), which are the subject of the costs order made on 21 April 2023 in favour of the defendants, and which the plaintiff was ordered to pay the defendants in the sum of $205,000 on 18 July 2023; and 2. any other costs the subject of any other costs order previously made in the proceedings, the plaintiff pay the defendants costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 November 2023