Director General, Department of Services, Technology and Administration v Veall [No 1] [2011] NSWSC 209

Supreme Court New South Wales

Medium Neutral Citation: Director General, Department of Services, Technology and Administration v Veall [No 1] [2011] NSWSC 209 Hearing dates: 21, 22 and 23 March 2011 Decision date: 24 March 2011 Jurisdiction: Common Law Before: BUDDIN J Decision: Proceedings in respect of 1 st and 3 rd defendants only to proceed ex parte. Catchwords: Allegations of misleading or deceptive conduct and unconscionable conduct on the part of persons associated with the operation of an introduction agency Category: Procedural and other rulings Parties: Director General, Department of Services, Technology and Administration (Plaintiff) Hollie Veall (First Defendant) Helen Dimitrijevski (Second Defendant) Zivko Dimitrijevski (Third Defendant) Representation: Counsel: G Sarginson (Plaintiff) Solicitors: Anthony James Lean, General Counsel, NSW Fair Trading (Plaintiff) File Number(s): 2009/325996

Judgment 1By Amended Statement of Claim filed on 2 November 2010 the plaintiff seeks injunctive and declaratory relief as well as orders for restitution against the three defendants. The claims for relief arise out of the operation of a business known as TLC Counselling Pty Limited (TLC) as an introduction agency. The business operated out of premises in Tweed Heads from about February 2003 until July 2008 when it transferred to the Gold Coast, although TLC continued to contact consumers in NSW. The first defendant was initially employed as a sales consultant but later became a director of the company. The second defendant operated the company's bank accounts and was said to be "the driving force" behind TLC. The third defendant is the second defendant's husband and was, for many years, the sole director of TLC. The plaintiff alleges that TLC engaged, over a long period of time, in conduct which was misleading and deceptive. Its conduct, in broad terms, is alleged to have also been unconscionable in that as a result of representations made on behalf of TLC, unfair advantage was taken of emotionally vulnerable people, predominantly men. It is alleged that sums of money, in some cases many thousands of dollars, were paid by men meeting that description to TLC in the belief that they would receive services which did not ultimately materialise. In all there are 14 named persons, three of whom were women, who are said to have been misled and deceived by TLC. 2When the matter was called on for hearing on 21 March 2011 there was no appearance on behalf of any of the three defendants. The plaintiff then sought for the hearing to proceed on an ex parte basis. However, it sought some time in order to prepare an affidavit which was designed to demonstrate that each of the three defendants had received due notice of the hearing. To that end, when the matter resumed on 22 March, the plaintiff obtained leave to file in court an affidavit affirmed that day by Ms Barbara Mauro. She is the plaintiff's instructing solicitor in these proceedings. In her affidavit Ms Mauro provided a chronology of the proceedings and also annexed copies of relevant correspondence in respect of the three defendants. It is apparent that the third defendant was personally served with the orders which were made on 20 December 2010 (at which time the matter was fixed for hearing), and the orders which were made on 18 February 2011 concerning the further conduct of the proceedings. A copy of the affidavit of service in respect of the third defendant was annexed to Ms Mauro's affidavit. 3On 22 March, Mr Daoud appeared amicus curiae for the first defendant. He said that he appeared at the request of a firm of solicitors, Barwick Stevens, who had previously been instructed to appear on her behalf. He informed the court that the firm no longer had instructions to act for her, although I observe that no notice of ceasing to act has been filed. Mr Daoud said that he was appearing as a courtesy to the court and said that the firm of solicitors, and indeed the first defendant, were aware of the hearing. 4Ms Mauro shed some further light on the first defendant's position in her affidavit. She said: On 21 March 2011, I contacted Mr James Stevens, solicitor for the first defendant to advise him that the matter had been adjourned to 10.00 am on 22 March 2011. I said that I was preparing an affidavit regarding the proceedings and needed to ask him whether Ms Veall knew about the hearing date. We had a conversation to the following effect: I said "Mr Stevens, I just need to confirm whether Ms Veall knew about the hearing date? Did you advise Ms Veall of the date?" He said "I advised her of the date". He mentioned that he had discussed it with her by telephone and email, indicating February 17. He also mentioned that Ms Veall had filed a defence, did not intend to defend the proceedings and would accept the Court's judgment. He confirmed that he would arrange for an agent to attend on 22 March 2011 to inform the Court of Ms Veall's intentions. 5I note that the first defendant had indeed filed a defence and subsequently, an amended defence. 6There then followed discussion as to whether it could be established that the second defendant had had due notice of the hearing. During the course of that discussion, counsel for the plaintiff informed me of matters pertaining to the second defendant which he said that he felt obliged to raise "as a matter of propriety". He had, in fact, made passing reference to the issue the previous day. Counsel informed me that the second defendant had been due to appear last week in the Supreme Court of Queensland sitting in Brisbane to face proceedings for contempt of court. I was also informed that the plaintiff's instructing solicitors had been told by officers from the Department of Fair Trading in Queensland, who apparently have an interest in the matter, that those proceedings had been adjourned until July upon the basis that the second defendant was unfit to attend court. I was also informed that the plaintiff's solicitor understood that some form of medical report had been presented to the Supreme Court of Queensland. The plaintiff's solicitor was also given to understand that the doctor in question had sent correspondence to this Court. The matter was then stood down in order that further inquiries could be made about that issue. The plaintiff's instructing solicitor was then informed by registry staff that no such correspondence had been received by it in respect of these proceedings. My associate was given similar advice. 7Nevertheless, during the period of the adjournment contact was made on behalf of the plaintiff with a Dr Glenn Fuller, the psychiatrist who had prepared the report for the Supreme Court of Queensland. It was also ascertained that Dr Fuller had faxed a copy of his report to the registry of this Court. I was informed that a member of the registry staff had then recalled having seen the facsimile but was now unable to locate it. In any event, the proceedings were further adjourned in order that Dr Fuller's report, or a copy of it, could be obtained. The registry staff have now managed to locate the facsimile. Dr Fuller's letter, which is dated 8 March and addressed to the court, is in the following terms: Ms Helen Dimitrijevski is currently an inpatient of the Tweed Valley Clinic, the Adult Mental Health Unit of the Tweed Hospital. She was admitted on 02/03/2011 with Major Depression. It is expected that Helen will require ongoing hospitalisation and specialist psychiatric treatment for at least the next 2 months. An adjournment for this 2 month period is requested and a detailed report will follow to assist the Court in this matter. 8At the bottom of the letter the following details in Dr Fuller's handwriting appear: 21/3/11 Ms Helen Dimitrijevski and her husband Zivko Dimitrijevski attended the Brisbane Supreme Court today from the hospital. The Brisbane Court case was mentioned today and adjourned for four (4) months. 9The facsimile cover sheet indicates that it was sent by Dr Fuller from Tweed Valley Clinic on 21 March at 14:43 hours. 10I was also informed by counsel for the plaintiff, by way of elaboration, that Dr Fuller had said that the second defendant had originally been admitted to hospital on an involuntary basis on 1 March. She had remained there on an involuntary basis for a period of seven days and thereafter for a further seven days on a voluntary basis. She had then been released from hospital and is now under the care of the local area mental health team. I was further informed that Dr Fuller had said that "her psychological condition has apparently impaired her ability to prepare a defence". 11Counsel specifically accepted that he was not in a position to challenge the bona fides of Dr Fuller's report. Counsel for the plaintiff nevertheless contended that notwithstanding Dr Fuller's report, the matter should still proceed on an ex parte basis against the second defendant. The thrust of the plaintiff's submission was summarised in the following terms: notwithstanding what Dr Fuller says, ... the matter should proceed ex parte. Your Honour may be against me on that but the basis is this, your Honour: That [neither] the second defendant nor the third defendant has made any active attempt to defend the proceedings. They have had solicitors representing them for a considerable period of time. They have been in default of numerous timetables in respect of filing defences, putting on evidence. Nothing has been done by them. After the notice of ceasing to act was filed, then we had a situation where nothing is done and here we are today and it is the plaintiff who is bringing all these matters to the attention of the Court. 12I have been able to glean the following details from the chronology to which I referred earlier. The second defendant was represented by counsel when the matter was before the Registrar on 19 February and 31 March 2010. On 28 May and 11 June 2010 the proceedings were called over before the Registrar, and on each of those occasions the plaintiff mentioned the matter on behalf of the second defendant. There was no appearance on behalf of the second defendant on 27 July 2010, 6 October 2010, 20 December 2010 or on 18 February 2011. 13As counsel for the plaintiff correctly pointed out, the second defendant has not filed a defence and nor has she complied with various orders to do so. The second defendant's solicitor filed a notice of ceasing to act on 7 December 2010. 14In light of that history, I accept the plaintiff's contention that the second defendant has effectively not participated in the proceedings since about the middle of last year. Precisely the same observations can be made in relation to the third defendant. Clearly enough, it is in the interests of justice, including the legitimate interests which are represented by the plaintiff, to have matters proceed with due despatch and particularly in circumstances in which a matter has been listed for hearing. It is apparent that a large amount of time, effort and resources have been devoted by the plaintiff to preparing the matter for hearing. That is a powerful consideration. So too, however, is the need to ensure that the second defendant is heard and is in a position to resist (if need be) the relief which is claimed against her. In order to be able to do so, she must be in a fit condition. Dr Fuller's report clearly indicates that the second defendant is not currently in such a condition. Moreover, it is for that reason that his letter seeks an adjournment of the proceedings on her behalf. As I have indicated, her situation was obviously regarded sympathetically by the Supreme Court of Queensland as recently as last week. In my view, the interests of justice require that the proceedings in respect of the second defendant be adjourned. 15However, there is no reason why the proceedings against the first and third defendants cannot proceed ex parte. Counsel for the plaintiff informed the Court that he is instructed to proceed in that fashion upon the basis that the hearing, at this stage, will be limited to what he described as the "issue of liability".