Supreme Court New South Wales Medium Neutral Citation: Bank of Western Australia Limited v Callipari, Jason David & Anor [2011] NSWSC 138 Hearing dates: 7 and 9 March 2011 Decision date: 09 March 2011 Before: Garling J Decision: Application for adjournment refused. Catchwords: PROCEDURE - Application for adjournment of final hearing - Failure to file defence or any supporting affidavit evidence - No satisfactory reason given for delay in filing pleadings - Repeated contravention of court orders - No evidence provided in support of application - Unlikely to have a proper defence - Irremedial prejudice likely to be suffered by the plaintiff. Legislation Cited: Australian Consumer Law Civil Procedure Act 2005 Trade Practices Act 1974 (Cth) Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Category: Interlocutory applications Parties: Bank of Western Australia Limited (P) Jason David Callipari (D1) J. Callipari Property Group Pty Ltd (D2) Representation: Counsel: M.A. Jones (P) R. Mitchell (D1 & D2) Solicitors: Corrs Chambers Westgarth (P) Eggleston Mitchell (D1 & D2) File Number(s): 2010/076426 EX TEMPORE Judgment - Third Application for Adjournment 1In August 2007, Jason Callipari borrowed about $630,000 from the Bank of Western Australia Limited under a Home Loan Facility. 2A company of which he was the sole director and shareholder, J. Callipari Property Group Pty Ltd, borrowed about $2.5M on a Business Loan Facility from the Bank. 3The Home Loan was secured by a company guarantee which was itself secured by a mortgage over Company property both in NSW and Victoria. The Company's loan was secured by the same mortgages, and also by a guarantee from Mr Callipari. Mr Callipari's guarantee was secured by mortgages over his property in NSW and Victoria. 4Both loans went into default during 2008. 5The Bank now claims judgment for possession of each of the secured properties and for a monetary sum of an amount over $3.2M. 6On 17 December 2010 the court fixed the present proceedings for a final hearing commencing on 7 March 2011. That order was made with the consent of the solicitors for the defendants. 7On that day Kirby J relevantly made two orders. They were: (a) an order that the defendants file and serve a sworn defence to the Bank's amended statement of claim on or before 4pm on 31 January 2011; and (b) an order that the defendants file and serve any affidavits upon which they intended to rely at the final hearing. 8Kirby J in making those orders made it plain to the solicitor for Mr Callipari and the Company that he intended that, by giving them to the end of January 2011 to file their defence and the affidavits in support of that defence, he was giving them "... a final opportunity ... the axe is about to descend ... to articulate the defence ...". 9The period allowed by the Court for these documents to be filed by the defendants was, having regard to the history of the proceedings in the court, a generous one. 10The defendants did not comply with these orders within the time allowed, nor have they sought to file these documents at any time since the expiry of the period allowed by the Court. 11On 3 March 2011, the matter came before Latham J. Mr Mitchell, solicitor on behalf of Mr Callipari and the Company, made an application for an adjournment of the final hearing but did so without seeking to file a notice of motion, or any affidavit in support, as evidence of any basis for an adjournment. Her Honour declined to grant the adjournment but indicated that the defendants were free to renew their application when the matter was listed for hearing on 7 March 2011. 12Her Honour also indicated that if any application was to be made that the Court would need to be provided with sworn evidence in support. 13At the commencement of the proceedings on 7 March 2011, Mr Callipari appeared in person for himself and sought leave to appear for the Company. He applied for an adjournment. He provided no affidavit in support of that application, nor did he provide any sworn evidence to support it. That application was, for the reasons then articulated, refused. 14The Bank then read and tendered the evidence upon which it relied for the orders which it sought. At the conclusion of the evidence, which was admitted largely without objection, Mr Callipari again sought an adjournment. In the circumstances which then existed, I adjourned the proceedings until 10.00am on Wednesday, 9 March 2011 and made orders requiring Mr Callipari to file a defence and any affidavits upon which he relied in support of that defence by 5.00pm on Tuesday 8 March 2011. It was made very clear to Mr Callipari at that time what would happen if he did not comply with the Court's order. 15On 8 March 2011 Mr Callipari filed an affidavit. He did not file a defence. 16On 9 March 2011, Mr Mitchell, solicitor, appeared for the defendants. He made a further application for an adjournment of the hearing. That application was opposed by the Bank. Mr Mitchell did not have available any evidence which explained why it was that an adjournment application was being made during the course of the final hearing of the proceedings at a time after all of the evidence for the Bank had been read and tendered, except for the affidavit as to the up to date state of indebtedness. Mr Mitchell pointed to the fact that his client had been unrepresented on Monday as a basis as to why the application was being renewed. 17The granting of an adjournment of the hearing of proceedings is an exercise of the powers of the court in accordance with the Civil Procedure Act 2005. Whenever powers granted by that Act are exercised the Court is obliged by s 56(2) of the Civil Procedure Act to give effect to the overriding purpose specified by s 56(1) of the Act, namely, " to facilitate the just, quick and cheap resolution of the real issues in the proceedings ". 18It is important to note that a party to civil proceedings in this Court is under a duty to assist the Court to "... further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with the directions and orders of the court ." (See s 56(3) of the Civil Procedure Act ). 19The High Court of Australia in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 has made it plain that in considering an application which has the effect of adjourning the hearing of a civil trial, a court should have regard to and take into account a range of matters, including: (a) the need to maintain public confidence in the judicial system; (b) given that courts are a publicly funded resource, inefficiencies in the use of that resource arising from adjournments or vacation of a final hearing are to be avoided; (c) whether there is any irreparable element of unfair prejudice in unnecessarily delaying proceedings: see French CJ at [5]; and (d) the specific terms of the legislation or rules of court which are called upon as a source of power for the granting of the orders sought: See [97] and [98] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. 20I note in particular in para 98 of that judgment their Honours say this: "...an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs." 21I also observe the remarks of Heydon J at paras 137 and 138, where his Honour notes that it is in the public interest generally, and in the interests of parties in particular, for commercial litigation of the kind this Court is presently engaged in hearing to be determined as soon as is practicable. 22I turn then to the particular facts and circumstances of this case. The Bank has established on the evidence tendered to date that the defendants owned a series of properties which were in the general area of and surrounding Mildura in Victoria. Some of the properties were in New South Wales but most were in Victoria. The properties were of various kinds and had various usages, including Mr Callipari's principal place of residence, the workshops at which he undertook repairs of motor vehicles and other engineering works, rural land upon which grapes were grown, vacant rural land, industrial buildings including factory warehouse type premises, and residential investment properties. 23I am satisfied that the Bank has established that Mr Callipari was no neophyte in the business of property investment. 24On 9 August 2007, Mr Callipari entered into a BankWest Lite Plus Home Loan which resulted on 22 August 2007 in an advance of $637,600 by the Bank to Mr Callipari. On 9 August 2007 the Company accepted an offer as a consequence of which the Bank provided financial accommodation in the form of a Business Edge Facility to a limit of $2,562,400. 25On 22 August 2007, the Bank advanced $2,548,870.50 to the Company pursuant to the Business Loan Agreement. 26Under the Home Loan Agreement, Mr Callipari was obliged to pay principal and interest in a timely fashion for the period of 30 years fixed by the loan agreement. In the event of default, including the failure to pay either principal or interest, the Bank was entitled to demand immediate payment of all amounts owing under the Home Loan Agreement. 27The Business Loan Agreement, which was an interest only agreement, established a loan facility for a period of five years and obliged the Company to pay the interest payments on time. A further term of that facility was that the Company was not to exceed the facility limit of $2,562,400. 28The Company entered into a guarantee indemnity in favour of the Bank with respect to the Home Loan Agreement and granted a mortgage over land in both Victoria and New South Wales to support such guarantee. The loan account statements provided by the Bank with respect to the Business Loan Account demonstrate that the loan was first disbursed on 22 August 2007 in accordance with the Company's discretion. 29It also demonstrates that the first two interest payments in September and October 2007, whilst they were made, were dishonoured by the paying Bank. The dishonour continued in December 2007 and January 2008. No interest payments were made in February, March, April or May 2008. 30In June 2008, a net sum of $161,300 was deposited for the credit of the account, which had the result of bringing the arrears of the account up to date and also of permitting an excess sum of about $43,000 to be applied in reduction of the principal which was owing. 31The authority for this application of funds was put in dispute by Mr Mitchell's submissions. On the basis of the evidence which is before this Court at this stage, I would be satisfied to the extent necessary that this application of funds accorded with what was agreed between Mr Callipari and the Bank. However, if I be wrong in this conclusion, it seems to me that the financial difference in the net position of Mr Callipari and the Company at the present date would be very small indeed. 32After June 2008, no payments were made of any kind whatsoever by Mr Callipari or the Company on the business loan. The home loan statements put into evidence by the Bank demonstrate that the home loan was first advanced in August 2007. Payments of interest and principal commenced to be made in September 2007. The October 2007 payment of principal and interest was dishonoured, as was the payment made in December 2007, January and February 2008. No payment at all was made after February 2008 until 11 June 2008, when a sum of $35,000 was paid which had the effect of bringing the account back into order. 33Two further payments of principal and interest were due in June and July 2008. The only payment made with respect to those was the sum of $5,000 on 28 July 2008, which was inadequate to pay for those two monthly accruals. Thereafter no further payment has been received by the Bank on the home loan account. 34This conduct was sought to be explained by the defendants on 27 October 2008 when their solicitors, Eggleston Mitchell, wrote to the Bank's lawyers and informed the Bank, on behalf of Mr Callipari and the Company, that " Our client has stopped making repayments on the loan not because he is in financial difficulties but because he has lost confidence in the personnel at the bank ." 35Self-evidently, this excuse is not a proper basis for non-payment of financial obligations. 36Mr Mitchell has sought to articulate circumstances which he submits would amount to an arguable defence. I would summarise these circumstances in this way: (a) The entire transaction was entered into by Mr Callipari and the Company and, as a consequence of conduct which would give rise to a finding of a breach of s 51 of the Trade Practices Act 1974 (Cth) [sic], now the Australian Consumer Law , and the availability of relief under that Act directed to setting aside the transaction in whole or in part; and (b) The Bank has not properly accounted for the receipt by it in June 2008 of moneys from the sale by the Company of a water entitlement. 37Other matters were raised in submission which did not have sufficient particularity to enable me to understand what defence, if any, existed by reason of those matters. 38The evidence for the Bank demonstrated that the realistically realisable values of the secured properties were less than the total outstanding debt claimed by the Bank to be owing to them. Further delay in the proceedings would only exacerbate that position. There was no evidence for Mr Callipari or the Company of his or its current financial position. It was not submitted that he or it had other available assets which would alleviate this position of which the Bank has given evidence, nor did Mr Callipari or the Company offer to bring any money into Court to alleviate the position of the Bank in the event that an adjournment were granted. This evidence satisfies me that the Bank would suffer ongoing prejudice if the adjournment were granted, which is unlikely ever to be able to be remediated. 39The defences articulated by Mr Mitchell orally, to which I earlier made reference, are not, to my mind, so far as I can discern them, defences to the Bank's claim. Rather, they may, if they can be established, amount to a basis for a cross-claim against the Bank for relief of a general equitable kind or else relief in accordance with statutory entitlement. No such cross-claim has ever been filed. 40In summary, this application for adjournment is made at a very late stage. No explanation is proffered which is sufficient to explain why the application has only been lately made. The defences which it is argued ought to be allowed to be pleaded are not, upon examination of the limited material provided, likely to be established as defences to the Bank's claim, although they may be able to be pleaded as a cross-claim. 41The Bank has established a strong case on the evidence so far led for the grant of the relief sought in the principal claim. The defendants have had abundant opportunity to file a defence and affidavits in support and have been consistently in breach of the Court's orders in that respect. To adjourn the matter now would adversely impact on the listing of other matters in the Court and the efficiency with which the Court is able to attend to the demands of its other work. An adjournment now would not further the overriding purpose set out in s 56 of the Civil Procedure Act and the Bank would suffer irremediable prejudice by an adjournment. 42In all of those circumstances, I am not satisfied that it is in the interests of justice to adjourn this hearing and I refuse that application. Orders (1) Application for adjournment refused. ********** 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: 10 March 2011