Litmus Australia Pty Ltd v Canty & Ors [2006] NSWSC 138

New South Wales Supreme Court

CITATION : Litmus Australia Pty Ltd v Canty & Ors [2006] NSWSC 138

HEARING DATE(S) : 02/12/05, 08/03/06

JUDGMENT DATE : 8 March 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

EX TEMPORE JUDGMENT DATE : 03/08/2006

DECISION : Leave for further submissions to be filed

CATCHWORDS : PROCEDURE - need for legal representatives to co-operate in distilling controversy and in bringing it before court

Litmus Australia Pty Ltd (in liquidation) - Plaintiff PARTIES : Paul Brian Canty - First Defendant Lindsay Robert Aitken - Second Defendant Quality Images Australasia Pty Limited - Third Defendant

FILE NUMBER(S) : SC 2189/05

Mr J.T. Johnson - Plaintiff COUNSEL : Second Defendant in person Mr C.J. Bevan/Mr A. Iuliano - First and Third Defendants

Marsdens Law Group - Plaintiff SOLICITORS : Second Defendant in person Evangelos Patakas & Associates - First and Third Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

WEDNESDAY 8 MARCH 2006

2189/05 LITMUS AUSTRALIA PTY LTD (IN LIQUIDATION) v PAUL BRIAN CANTY & 2 ORS

JUDGMENT

1 On 2 December 2005, I heard an interlocutory process by which the first and third defendants, represented by Mr C. Bevan and Mr A. Iuliano of counsel, sought an order that the originating process be struck out and for certain special orders with respect to costs. The plaintiff was represented by Mr J.T. Johnson of counsel. There were two matters in that Friday Corporations List. Their combined time estimate was more than the one day available. I therefore attempted to deal with the application of the first and third defendants quickly. Judgment was reserved. 2 The following Monday, 5 December 2005, Mr Bevan forwarded to my Associate and copied to Mr Johnson supplementary submissions in reply which he said time had not permitted him to address on the Friday afternoon. Also on 5 December, Mr Johnson emailed my Associate (with a copy to Mr Bevan) noting that no leave had been granted for the making of the further submissions and saying that he was instructed to object to reliance on them. 3 By facsimile dated 6 December 2005, Mr Iuliano communicated through my Associate a request for leave to file in chambers the further submissions that had been sent. Mr Iuliano also indicated consent to the filing of any submissions in response by Mr Johnson's client. 4 On 7 December 2005, I had my Associate write to the legal representatives as follows: "If the matter of the additional written submissions cannot be sorted out consensually, the proceedings will be listed for mention at 9.30am on whichever of 1, 2 or 3 February 2006 is convenient to the parties." 5 Also on 7 December 2005, Mr Iuliano wrote to my Associate saying that he was available on the nominated dates. The long vacation intervened and on 31 January 2006 my Associate wrote to the legal representatives as follows: "A note on this file suggests there is a need for the matter to be listed for brief mention. Can you please advise whether this is still the position." 6 Also on 31 January 2006 Mr Iuliano wrote to my Associate saying that his opponent had not communicated to Mr Bevan or him whether there would be consent to the filing of the supplementary submissions. That was an odd thing to say in the light of the fact that Mr Johnson's email to my Associate of 5 December had been copied to Mr Bevan. Mr Iuliano then referred to dates that would be suitable to him for a brief mention. 7 After receipt of this letter I had my Associate telephone Mr Iuliano to request that he speak to Mr Johnson about suitable dates and to see if the matter could be sorted out. When nothing further had been heard by 15 February 2006, I had my Associate write to the legal representatives as follows on that day: "Because there appears to have been no resolution between the parties on the question whether Justice Barrett may have regard to the written submissions forwarded by the applicant without leave, his Honour has directed that the matter be listed for mention. Available dates at 9.30am are 22, 28 February, 2 March. It would be appreciated if counsel could agree which of these dates is a suitable date and advise me." 8 On 15 February, Mr Iuliano emailed Mr Johnson saying that 22 February and 2 March was suitable to him. There was, however, no reply from anybody to my Associate on that matter by 28 February, and on that date my Associate wrote again to the legal representatives as follows: "There has been no reply to my facsimile of 15 February 2006. Justice Barrett has directed that the proceedings be listed for mention at 9.30am on Wednesday, 8 March 2006 so that such submissions as are thought necessary may be made on the question whether he may have regard to the written submissions forwarded without leave." 9 That letter brought a response dated 7 March from the solicitors instructing Mr Bevan and Mr Iuliano as follows: "We confirm receipt of your facsimile dated 28 February 2008 [sic] and thank his Honour for listing the matter for mention. We apologise for not responding to your earlier facsimile to the parties dated 15 February 2006 requesting our counsel's availability for such mention. We did not do so because further to that facsimile Mr Johnson of counsel briefed for the Plaintiff notified Mr Iuliano of junior counsel briefed by the first and third defendants, that there was no further objection by the plaintiff to the filing of the first and third defendants' supplementary submissions and that submissions in reply by the plaintiff would be forthcoming from Mr Johnson. Enclosed for your information is a copy of an email from Mr Iuliano to Mr Johnson dated 1 March 2006. To date we have not been served with the plaintiff's submissions in reply to the first and third defendants' supplementary submissions." 10 On the same day Mr Johnson emailed my Associate (with copies to the legal representatives of the first and third defendants) enclosing proposed submissions which began by reiterating the plaintiff's objection to the making of the late submissions by the first and third defendants. He then went on to deal with matters on the alternative basis that the court might grant leave to the first and third defendants to rely on those late submissions. By this I mean that he made submissions in reply to those submissions. 11 I am bound to say that the history of what I can only describe as unaccommodating behaviour as just outlined has done nothing to advance the cause of just, quick and cheap resolution of this particular application. 12 If counsel are informed that the judge wishes to have a matter relisted, it behoves them to see what they can do to agree a date or a range of dates suitable to them both and to present that to the Associate rather than leaving the Associate to chase them up in the manner of some form of clearinghouse manager. Above all, they have a duty to do what they can to explore, and, where possible, implement solutions rather than leaving it to the judge and his staff to pursue matters. 13 Once it became clear that the plaintiff objected to the course on which the first and third defendants embarked after judgment had been reserved, a two-stage process should have been undertaken. First, counsel should have spoken to one another - and I emphasise "spoken" - in order to discover the area of the parties' disagreement and the basis for it; second, once the controversy had been defined, one party or the other should have taken formal steps to bring it before the court by way of appropriate application. Instead, the court became a mail exchange in a flurry of quite unsatisfactory correspondence which it has had to bring to a head of its own motion. 14 I turn now to the question whether the first and third defendants should be allowed to make their further submissions. Those submissions fall into two parts. Under the first part, the first and third defendants withdraw their application for an order for costs against the liquidator of the plaintiff personally describing it as untenable; second, the first and third defendants indicate that the application for a costs order against the plaintiff's solicitor is pressed, something that in view of the hearing on 2 December did not really need to be said, but more pertinently, advancing further or at least more concentrated reasons why such an order should be made; third, it was indicated that the strike-out application was pressed and that this was so despite an argument based on the relevant limitation period that the plaintiff had raised at hearing. The point was also made that the limitation issue was not one which the first and third defendants had had any way of appreciating before the hearing and having listened to what was said on behalf of the plaintiff at the hearing. 15 Particularly in the circumstances of shortage of time in which the application was heard on 2 December, added to which there can be no conceivable prejudice to the plaintiff if it has an opportunity to make countering submissions, I will take these submissions by the first and third defendants into account. Leave for the making of those submissions is granted. Furthermore, and in view of what has just been said, I will also take into account the further submissions forwarded by Mr Johnson. Again, leave for those submissions to be made is granted. 16 There is then the question of costs. It has been put to me on behalf of the first and third defendants that an order for costs should be made against the plaintiff and that I should also consider making an order for costs personally against Mr Johnson. My decision is that I will make no order as to the costs of today to the intent that each party should bear its own costs. The parties should, in that connection, take into account the observations that I have made about the conduct of the legal representatives. **********