Supreme Court New South Wales Medium Neutral Citation: Iscorp Investments Pty Ltd v Yohana [2011] NSWSC 1399 Hearing dates: 7 November 2011 Decision date: 07 November 2011 Jurisdiction: Equity Division Before: Rein J Decision: 1. Plaintiff's adjournment application refused. 2. Plaintiff to pay the costs of this adjournment application. Catchwords: PRACTICE AND PROCEDURE - adjournment application by the plaintiff - where the plaintiff corporation (and its sole director and shareholder) has no assets to fund the proceedings and is seeking help from friends and family of the sole director/shareholder - where the plaintiff has obtained an injunction and undertakings from the defendant in respect of dealing with lots in which the plaintiff claims a beneficial interest - failure of the defendant to pay monies pursuant to a costs order made in other proceedings in favour of a partnership conducted, inter alia, by the sole director/shareholder of the plaintiff Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Halpin v Lumley General Insurance Ltd [2009] NSWCA 372 Category: Interlocutory applications Parties: Iscorp Investments Pty Ltd (plaintiff/cross-defendant) Youbert Yohana (defendant/cross-claimant) Representation: S Jacobs (plaintiff/cross-defendant) N Cotman SC; R Newton (defendant/cross-claimant) David Legal (defendant/cross-claimant) File Number(s): SC 2009/289992 EX TEMPORE Judgment 1This is an application for an adjournment by the plaintiff, Iscorp Investments Pty Ltd ("Iscorp") , of the proceedings which are due to commence tomorrow and listed for four days. 2The proceedings, in broad terms, concern transactions in respect of a number of lots of land, some of which were purchased jointly by the plaintiff and the defendant and some by the plaintiff and conveyed to the defendant, with some refinancing having already taken place. In essence, it seems that the plaintiff had no more borrowing capacity and the defendant did have a capacity to borrow from banks. 3The plaintiff, in the course of these proceedings, has obtained interim injunctions against the defendant from dealing with one of the lots. In respect of two other lots, the defendant gave undertakings not to deal with those lots until the conclusion of the hearing. Both sets of restrictions were supported by the usual undertaking as to damages given on behalf of the plaintiff. 4The plaintiff is a corporation whose sole director is Mr Henrick Isaac. He is, I am informed, the sole shareholder of the corporation as well as being its sole director. Mr Isaac was a solicitor but he has been suspended from practice and does not currently practice, although the precise reasons for this have not been made clear. 5The plaintiff made an application for an adjournment before Ward J on 20 October 2011, which application was refused. There were some other matters dealt with in the same application but separate from the issue of an adjournment. 6In the course of her Honour's judgment, Ward J noted at [50]: "Unfortunate or otherwise as it maybe for Iscorp, it seems that a forensic decision was taken by it (or Mr Isaac) as to the manner in which it would prepare for the hearing." Her Honour noted that the hearing date was fixed on 6 September 2011 and noted that Mr Isaac had elected not to take steps to obtain any statements or affidavit evidence from unidentified witnesses on whom, Mr Isaac told her Honour, Iscorp wished to rely. Mr Isaac had sought leave to appear on behalf of Iscorp which leave was granted on the undertaking of Mr Isaac to file, within seven days, an affidavit in compliance with rule 7.2 of the Uniform Civil Procedure Rules 2005 (NSW) ( "UCPR" ). This was not in fact done. Today, an affidavit from Mr Isaac was filed in Court but it did not comply with that rule. 7In respect of today's application, Mr S Jacobs of counsel appears for Iscorp. Mr N Cotman SC appears with Mr R Newton of counsel for the defendant. 8An affidavit of Mr Isaac of today's date was relied on. There are four matters relied on in support of today's application. Firstly, Iscorp has no money to retain solicitors and counsel and has been trying to obtain loans. Secondly, Mr Isaac's nephew was murdered a year ago and yesterday was the anniversary of that event. Thirdly, Mr Isaac's bridal wear business has been vandalised and firebombed, affecting his cash flow. Fourthly, the defendant has, in other proceedings against Barclay Benson Lawyers ( "Barclay Benson" ), a firm of which Mr Isaac was a partner with a Mr Williams, an order for costs made against him in favour of Barclay Benson totalling approximately $58,000 which the defendant has not paid. There has been an application by Mr Yohana for leave to appeal from the costs orders made and that matter listed before the Court of Appeal on 15 December this year. 9In his affidavit of today, Mr Isaac deposed to his efforts to obtain money from third parties, which efforts to date have not crystallised in any money actually being provided to him for the benefit of the plaintiff. There is very little information about who might provide the money. Mr Isaac gave an explanation as to why their identity has been withheld, other than a friend who originally indicated some willingness to assist but, when called upon to do so, refused. More importantly, none of the prospective lenders are in any way committed to lend anything to the plaintiff, and Mr Isaac is himself facing bankruptcy proceedings which were today adjourned until next week. The problems of Mr Isaac's bridal wear business might explain why he is under threat of bankruptcy. 10In the absence of a certain obligation upon third parties to provide funding or some very clear indication from the prospective lenders that they will do so, I think that the Court cannot presume that the prospect of funding is anything more, at the moment, than a mere possibility. 11So far as the nephew is concerned, it is unfortunate but no attempt was made before today to alter the hearing date by reason of that matter, nor was it a matter raised before Ward J. Mr Jacobs did not put that point as a matter which, on its own, warranted an adjournment. Indeed I think he accepted that none of the first three matters which I have mentioned alone, or even cumulatively, would warrant adjourning the case having regard to the fact that it is not only the plaintiff's interests which need to be considered but also those of the defendant and the resources of the court. 12Mr Jacobs drew my attention to a helpful summary of the ss 56-59 of the Civil Procedure Act 2005 (NSW) in Halpin v Lumley General Insurance Ltd [2009] NSWCA 372 at [21]-[30]. 13Mr Jacobs laid much emphasis on the fourth point, namely the issue of non-payment of costs by Mr Yohana, the defendant, saying that the failure of the defendant to pay the monies due under the judgement or the orders made by this court created considerable unfairness to the plaintiff. 14I do not accept that the existence of a costs order against Mr Yohana is relevant to the adjournment application. The order for costs is one made in favour of the partnership, Barclay Benson. It is true that by Exhibit A, Mr Williams, the other partner of the firm, authorised Mr Isaac to collect the debts of the partnership but the authority is not an assignment. More importantly, there is no evidence that the monies, when received, will not be required to be paid to meet any partnership debts. Further, Mr Isaac is not a plaintiff and I do not think it can be assumed that money which might end up owing to Mr Isaac could be treated as relevant to Iscorp's financial position, particularly given the existence of bankruptcy proceedings against Mr Isaac. This issue of the unpaid orders against Mr Yohana in other proceedings is another matter that was not ventilated before Ward J. 15The plaintiff obtained an injunction on the basis of undertakings from the defendant and on the basis of an undertaking by the plaintiff which has prevented the defendant from freely dealing with the assets. I think there is a strong basis for dissolution of the undertakings which will need to be considered but the plaintiff has not offered to have these defendant's undertakings dissolved. 16This matter has been the subject of two expert referee reports which have been adopted by this Court. It appears from the comprehensive nature of those reports that much of the issues that have arisen on the pleadings have already been dealt with by the reports, so that what remains may fall within a narrower compass than what at first seems to be the case. 17Mr Yohana is an individual who faces a corporation which, it now seems clear, has no assets other than those it claims in the proceedings and a costs order against the plaintiff which would be a normal and appropriate concomitant of an adjournment of the proceedings will be of little benefit to him even if Mr Isaac is required to pay those costs personally. 18Having regard to the requirements of ss 56-59 of the Civil Procedure Act and in consideration of the discretion which I have in relation to this matter I am not persuaded that it is appropriate or in the interests of justice for this matter to be adjourned. Accordingly, the matter will proceed tomorrow at 10am. 19The plaintiff should pay the costs of this adjournment application, including the mention last Friday. ********** 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: 21 November 2011