Dawson v LNG Holdings Pty Ltd [2007] NSWSC 784

New South Wales Supreme Court

CITATION : Dawson v LNG Holdings Pty Ltd [2007] NSWSC 784

HEARING DATE(S) : 06/07/07 JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

EX TEMPORE JUDGMENT DATE : 6 July 2007

DECISION : Notice of motion to have proceedings vacated dismissed.

CATCHWORDS : PROCEDURE [32]- Adjournment- Application by third defendant to vacate hearing due to his ill health- Hearing vacated on two previous occasions- Third defendant's health problems found to be exaggerated and not principal reason for his seeking the adjournment- Plaintiffs' desire to get hearing on must be considered- Adjournment refused.

LEGISLATION CITED : Trade Practices Act 1974 (Cth)

Rhonda Dawson (P1) Wayne Dawson (P2) Trevor Solomons (P3) Irena Nebenzhal (P4) PARTIES : Illana Lampert (P5) LNG Holdings Pty Ltd (D1) Christine Nash (D2) Graham Vaughan (D3) Lyall Norman Gordon (6th Cross-Defendant)

FILE NUMBER(S) : SC 2031/05

L V Gyles (P) COUNSEL : M B Evans (D3) H J A Neal (6th Cross-Defendant)

Beckett & Associates (P) SOLICITORS : Ford Criminal Lawyers (D3) Roxburgh & Co (6th Cross-Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Friday 6 July 2007

2031/05 – DAWSON v LNG HOLDINGS PTY LTD JUDGMENT 1 HIS HONOUR: The third defendant is applying today for the hearing of these proceedings fixed for 15 days commencing 16 July 2007 to be vacated. 2 These proceedings were commenced in 2005 and came into the Expedition List when I was the Expedition Judge in 2005 including the month of March. The court was not inclined to expedite them at first but later did so and ordered that they be tried in May 2005. 3 There was a dispute before me as to how long the case was likely to take. The debate I think, though I may be corrected by reference to the court record, was whether it would take four days or five but I fixed it I think for four days for March 2006 before Brereton J. 4 However, shortly before the hearing, the solicitors for the second and third defendants alleged that they had not been properly heard before me, that I did not give them the appropriate time to develop their case and that the time for hearing would be much more than four days, and they served eight new affidavits four days before the hearing. 5 As a result of the latter, Brereton J vacated the first hearing and fixed the hearing to take 15 days before him in February 2007. 6 At the end of November 2006, the second and third defendants made an application to vacate the second hearing. Brereton J was sitting as Vacation Judge for the week before Christmas and, late on 20 December 2006, he vacated the second hearing. The principal reason for doing so was because it was alleged that senior counsel had been briefed who was willing to act for the defendants but would not be available in February, and there were other problems. His Honour refixed the hearing before White J to commence on 16 July 2007. 7 I should at this stage interpolate a couple of relevant facts. Firstly, that the first defendant is in liquidation and, secondly, that the general nature of the claim made by the plaintiffs is that they were investors in a scheme to develop real estate which was being project managed by the third defendant (the second defendant is his de facto wife) for which the plaintiff investors were promised very very generous rates of interest indeed. 8 It would appear that the plaintiffs' investment has been completely lost and the plaintiffs are seeking, inter alia, remedies against the second and third defendants under the Trade Practices Act 1974 (Cth) for false and misleading representations. 9 There were allied proceedings heard before his Honour Rein DCJ in the District Court in March/April of this year which were determined adversely to the third defendant, though he has lodged a holding appeal and proposes to appeal. Rein DCJ indicated he did not accept the sworn evidence of the third defendant. 10 In May this year, the third defendant underwent a stress test, he was admitted to St Vincent's Clinic and the court has three reports from medical professionals as to his condition. The third defendant was seen at St Vincent's Hospital by Dr Paul Roy and also by Dr Roy's son, who is also a doctor. However, Mr Vaughan, the third defendant, says that Dr Roy Senior really gave him a very cursory examination indeed. 11 Dr Roy reported that Mr Vaughan's left anterior descending artery has some mild tapering irregularity at the junction of its mid and distal thirds constituting a narrowing of probably 30%. However, there is certainly nothing in the coronaries that would explain his chest pain. He is hypersensitive and has elevated cholesterol readings and he has been in trouble because he has stopped taking his Lipitor. 12 Dr Roy said: "I don't think his minor coronary problem is sufficient to allow him to avoid his court appearances. I suspect that his more recent chest pain is due to oesophageal spasm secondary to the enormous emotional pressure that he is under." 13 Dr Roy informed Mr Vaughan's general practitioner of that opinion. 14 Mr Vaughan obtained a second medical opinion from Dr Haber, Consultant Physician specialising in cardiology at Auburn Hospital. He thought that Mr Vaughan may be suffering a clot in his left anterior descending coronary artery. He also had raised blood pressure which was affected by emotional stress. Considering those problems, Dr Haber believes that Mr Vaughan should be spared any emotional or physical stresses and therefore considers that on these reasonable medical grounds he should avoid attending court or any other stresses which could precipitate either a stroke or a heart attack, in a man who is predisposed to this, for at least two months and to be reviewed later. 15 Dr Roberts, a Psychiatrist at Burwood, gave a certificate that Mr Vaughan is unfit to attend court for a period of six to eight weeks and that him being compelled to attend court would on reasonable medical grounds be regarded as a circumstance that would potentially seriously compromise both his physical and mental health. 16 Mr Vaughan applied for the vacation of the hearing. He was represented by Mr Evans of counsel who said everything that could be said on his behalf. However, the opposing parties were represented by Mr L Gyles and by Mr H J A Neal who, again, said everything that could be said on the other side. 17 Mr Gyles relied to a great degree on the history and the way in which this case, whenever it gets to the barrier, has been the subject of a seemingly reasonable application made by Mr Vaughan to adjourn. He noted that Brereton J in December last year thought the matter was a borderline case but was influenced by the fact that an eminent senior counsel would be acting for Mr Vaughan and thought that that slightly tipped the balance in his favour because the case would proceed much more efficiently with the defence handled by experienced senior counsel. 18 Mr Gyles also said that one must be careful not only to take into account Mr Vaughan's circumstances, but also the circumstances of the other parties. The other parties have been waiting for their case to get on, despite the order for expedition, for over two years. 19 Mr Neal pursued a different tack. His client, Mr Lyall Gorman, filed an affidavit. The affidavit deposed to a meeting between Mr Gorman and Mr Vaughan in late June 2007 and various telephone conversations. He said that: "During these meetings Mr Vaughan said, amongst other things, words to the following effect: 'It is those other bastards (Dawson and Solomons) [who are the first and third plaintiffs] that we want to screw over. We will make them spend every last cent they have in defending this matter and then Christine [that is the second defendant] and I will put ourselves into bankruptcy so they get nothing. As a result of the Ferizis case [that was the District Court matter before Rein DCJ] it is inevitable that we will go bankrupt anyway. We will do anything it takes to get this case deferred, no matter what as long as these bastards suffer. I just want them to build up as much legal costs as we can force and then watch them as we walk away, move to the country and get on with our lives. I will do anything I can to make sure that Christine is not a victim of this. You know she does not deserve that. We are working hard at getting rid of Lampert, Nebenzahl and Solomons. They are all gutless and we have already made them spend more than they invested. If we get you out too we can just focus our energies on the Dawsons and Solomons (if he won't walk) and make them squirm and pay the price. Either way they will pay and not get a cent. We will do anything we can to defer this case as we have done historically without spending much money ourselves while watching them chalk up massive dollars. We just want to make the bastards spend as much money as we can, declare ourselves bankrupt and walk away. They will not get a cent of ours and they will be punished. We do not want to hurt your family we just want to get at the others. I have defended this case and the Ferizis one myself so as not to incur costs and I sit back and laugh every time I watch the bastards spend money in a Court room which I know they will never get back. I had some chest pains and I actually had witnesses to it. Anyway they have gone now but I am about to go and see a Psychiatrist for some anger management therapy. I don't care about me because I have been bankrupt before but I will do anything to protect Christine and her status as a barrister'." 20 Mr Vaughan denied those conversations. Mr Gorman was cross-examined. He stuck rigidly to what he said in his affidavit and he was unshaken in cross-examination. It is interesting that the same motive which Mr Vaughan allegedly ascribed to himself in the disputed conversation was also the matter that his Honour Rein DCJ found was the motivating factor in the District Court proceedings. I accept the evidence that Mr Gorman gave. 21 It is always difficult when a judge is given evidence as to the ill health of a party which suggests that the party may not be able to perform at his best at trial. However, a number of other factors must be taken into account: