Supreme Court New South Wales Medium Neutral Citation: Lake v Crawford [2013] NSWSC 96 Hearing dates: 14/02/2013 Decision date: 21 February 2013 Jurisdiction: Civil Before: Garling J Decision: (1) Order that the defence of the first defendant filed 11 June 2010 be struck out. (2) Order that judgment be entered in favour of the plaintiff against the first defendant in the sum of $3,900,000 together with interest up to 13 February 2013, in the sum of $1,992,428.77. (3) Order that the defence of the second defendant filed 11 June 2010 be struck out. (4) Order that judgment be entered in favour of the plaintiff against the second defendant in the sum of $1,345,000 together with interest up to 13 February 2013, in the sum of $1,665,627.60. (5) Order the defendants to pay the plaintiff's costs of the proceedings including any reserved costs. Catchwords: PROCEDURE - judgments and orders - summary judgment - defendant's continued failure to comply with Court orders - section 61(3) of Civil Procedure Act 2005 - strike out of defence as a result of non-compliance with Court directions. RESTITUTION - recovery of money paid under duress or compulsion - involuntary payment of money as a result of incapacity. Legislation Cited: Civil Procedure Act 2005 Category: Principal judgment Parties: Desmond Kenneth Lake (P) Ngaope Hoia Crawford (D1) Delcort Investments Pty Ltd (D2) Representation: C Freeman (P) No Appearance (D1 & D2) Goldbergs Lawyers (P) In person (D1 & D2) File Number(s): 2009/295057 Judgment 1Desmond Kenneth Lake, formerly a well-known jockey and horse trainer, commenced proceedings in 2009. 2At that time, he was under a legal incapacity and so the proceedings were commenced by his tutors, Gregory Grant Shand and Helen Keilar. 3Mr Lake was married to Deanne Lake. She died on 21 November 2008. The tutors are related to Mr and Mrs Lake. 4The defendants are Ngaope Hoia Crawford, who is generally known as Sonny Crawford, and a company, Delcort Investments Pty Ltd ("Delcort"), with which Mr Crawford is connected. 5The plaintiff claims that at a time when he was incapable of rational decision-making, and did not know the nature and effect of what he was doing, he appointed his two tutors and Mrs Lake as his enduring guardians. He says that the appointment was invalid. 6He further says that, from at least December 2006, Mrs Lake was an alcoholic and had an alcohol dependency, had a substance abuse disorder, had a number of personality disorders and was cognitively impaired. He says that as a consequence of those conditions, she was unable to adequately look after herself and required a high degree of personal assistance. He also alleges that for a 12 month period leading up to her death, Mrs Lake regularly took oxycodone and benzodiazepines which caused her to be mentally confused, and to lack rational cognition. 7It seems to be undisputed that during the period of time leading up to Mrs Lake's death, the first defendant, Sonny Crawford, lived with Mr and Mrs Lake and provided them both with some personal assistance. 8On 20 November 2007, the sum of $2.8M was transferred from Mr Lake's bank account to the bank account of the first defendant, Sonny Crawford. This fact is not in dispute. 9On 15 January 2008, the sum of $100,000 was transferred from Mr Lake's bank account to the first defendant. This fact is not in dispute. 10On 30 January 2008, the sum of $1M was transferred from Mr Lake's bank account to the first defendant's bank account. Again, this transfer is not disputed. 11It is asserted by the first defendant, that the monies were transferred on the authority, and at the direction of, Mrs Lake. The plaintiffs allege that at that stage, Mrs Lake was incapable of authorising such transfers, did not understand and was incapable of understanding the nature and effect of the transactions, did not have the authority to pay the monies beneficially to Sonny Crawford, and in acting as she did, she was acting under the influence of Sonny Crawford. 12At about the same time as these transfers occurred, the second defendant, Delcort, purchased land at Bringelly. It paid the sum of $1.345M. Settlement of the contract for sale took place on 6 February 2008. It is alleged by the plaintiff that the entire purchase price of $1.345M paid by Delcort for this property at Bringelly was obtained from part of the monies transferred into the Sonny Crawford's bank account. 13The plaintiff's claim the return of the monies from Mr Crawford and Delcort based upon restitutionary principles. They also plead a common money count of money had and received. 14The defendants filed a defence in which, putting it briefly, they admit the transfers of the money, allege that the transfers were properly authorised by a person of full capacity and deny the plaintiff's restitutionary claims. Procedural history 15After a number of interlocutory hearings, the proceedings were fixed for a final hearing to commence on 27 August 2012. The parties had given the Court an estimate of four days. It became apparent on that morning that the estimate was significantly short of the time, which was required for the hearing of the case, accordingly, the matter did not proceed to a hearing on that day. 16From 27 August 2012 until now, the matter has been the subject of regular case management. 17In August 2012, SKM Lawyers were instructed to act for both of the defendants. They were the second set of lawyers who had been instructed to act for the defendants. 18On 27 August 2012, the matter was adjourned for further directions and case management to 30 August 2012. 19By that time a hearing date for the final hearing of the matter had been fixed for 25 February 2013. 20On 30 August 2012, I made the following orders: "1. On or before 16/11/12 Dr Jennifer Bachelor and Dr Patricia Jungfer are to confer in respect of their reports concerning the capacity of the plaintiff in (a) an endeavour to reach agreement on any matters in issue; and (b) prepare a joint report in respect of matters agreed and not agreed and reasons for any disagreement. 2. On or before 16/11/12 Dr Jungfer and Assoc Prof Tuly Rosenfeld are to confer in respect of their reports concerning the capacity of Deanne Lake in (a) an endeavour to reach agreement on any matters in issue; and (b) prepare a joint report in respect of matters agreed and not agreed and reasons for any disagreement. 3. I note that the expert witness conferences to which Orders 1 and 2 refer shall be held without the attendance of the parties or their legal representatives. 4. I order that the parties engage in a mediation in accordance with the Civil Procedure Act 2005 any such mediation to be concluded on or before 5/12/12. 5. I stand proceedings over for directions 9.30 on 7/12/12. 6. Liberty to apply on 24 hours notice." 21The parties arranged for the Honourable Kevin Lindgren QC to conduct the mediation. However, notwithstanding the order which I made, that the parties attend a mediation, the first defendant indicated shortly in advance of the mediation that he would not attend in person. 22In those circumstances, Mr Lindgren QC indicated that Mrs Keilar as tutor for the plaintiff need not attend, as she resided in Melbourne. An attempt was made to mediate with the lawyers and the mediator, but without the respective clients present. Unsurprisingly, no resolution was reached. 23On 30 November 2012, SKM Lawyers filed a Notice of Intention to Cease to Act for the defendants. 24On 5 November 2012, as I had ordered, Dr Patricia Jungfer, and Associate Professor Tuly Rosenfeld held a joint conference. At the conclusion of that joint conference, it was agreed that Dr Jungfer would prepare the draft report, and send a copy of it to Professor Rosenfeld. 25Dr Jungfer did so, but shortly before 7 December 2012, it became apparent to the plaintiff's solicitor that Associate Professor Rosenfeld, although in agreement with the contents of the report, had declined to sign it because he was in dispute with the defendants and their solicitor about the payment of his fees. 26On 7 December 2012, the matter was listed for further case management to ensure that it was ready for a hearing. 27Ms Metry of SKM Lawyers, who although a Notice of Ceasing to Act as the solicitor for the defendants had been filed, appeared and informed the Court that: "There has been a conference between the two experts. My client is experiencing some financial difficulties and requires a further 1-2 weeks to sort that out. And, consequently, I understand that our expert has almost finalised the report, so within 1-2 weeks that can all be canvassed and be served." She went on to say: "... it was more so the expert sought to hold off until payment is received by him, so that there is now difficulties that we are trying to get instructions, and the instructions that we have from our client is that they need one to two weeks to sought out from their end, the financial aspects by which we can hopefully get the payment across to our expert, who is obviously not in a position to finalise the report ..." 28Ms Metry suggested that the order with respect to the experts, be such as extended compliance to 4pm 20 December 2012. 29With respect to the mediation, which had been ordered to occur on or before 5 December 2012, Ms Metry informed the Court that she had received "very late instructions our client was not in Sydney. He was, in fact, overseas". She confirmed that the mediation had been arranged on a date convenient for her client and that it was originally intended that it go ahead with him present, but because her client was overseas, it could not proceed. 30Accordingly, on 7 December 2012, I made the following orders: "1. I extend time for compliance with Order 2 of the Court's order made on 30/8/12 until 4pm 20/12/12. 2. I extend time for compliance with Order 4 of the orders of the Court made 30/8/12 until 4pm 20/2/13. 3. I direct that the tutor for the plaintiff and the defendant personally to attend any further mediation. 4. I stand proceedings for further directions to 9.30 on 22/2/13 before me." 31On 3 January 2013, SKM Lawyers filed a Notice of Ceasing to Act and served it on the lawyers for Mr Lake. 32After the solicitors for the plaintiff attempted to make further contact with the defendants with respect to participation in the mediation and the outstanding joint report, and received no response, the proceedings were listed before me on 7 February 2013 pursuant to the grant of liberty to apply. 33On that day I made the following orders: "1. I order that Ngaope Hoia Crawford who is also known as Sonny Crawford, appear in person before me in Court 11C at 9.30am on 14/2/13. 2. I order that the 2nd defendant, Delcort Investments P/L by its proper officer appear before me in Court 11 C at 9.30am on 14/2/13. 3. I grant leave to the plaintiff if so advised, to move the Court for summary judgment at 9.30am on 14/2/13. 4. I direct the solicitor for the plaintiffs to notify the defendants of these orders by posting a letter notifying the orders by 4pm 7/2/13." 34I am satisfied, pursuant to those orders, that the letters were sent to the defendants at their last known address informing them of the Court's orders. When the proceedings were before the Court on 14 February 2013, there was no appearance by the defendants. 35On that day, the material placed before the Court satisfied me that the monies claimed by the plaintiff remained outstanding, no instructions had been given to Professor Rosenfeld to complete the joint expert report, no mediation had occurred and that notwithstanding notification to their last-known address, the defendants did not comply with the Court's orders. Motion 36The plaintiffs move for summary judgment in light of the history of the proceedings and the failure of the defendants to comply with the orders of the Court. 37Section 61(3) of the Civil Procedure Act 2005, provides the Court with power to strike out any defence filed by a party and give judgment on the claim where the Court is satisfied that a party to whom a direction has been given, has failed to comply with the direction. 38I am satisfied that the defendants have intentionally failed to comply with orders and directions of this Court with respect to the filing of the expert report of Professor Rosenfeld jointly with Dr Jungfer because they have failed to pay Professor Rosenfeld to complete that report. I am also satisfied that the defendants have failed to comply with the order for mediation, namely that they attend a mediation in person, and I am also satisfied that the defendants have failed to comply with the Court's orders that they attend the Court. 39Having regard to the fact that the issues in this case will, in large part, turn on expert evidence, the failure of the defendants to permit their expert witness to sign a joint expert report, is directly obstructing the just, quick and cheap disposal of the proceedings. 40I am also satisfied that in all of those circumstances I am prepared to make the orders sought in the Notice of Motion which have the effect of striking out the relevant defence, and entering judgment in favour of the plaintiff. Orders 41I make the following orders: (1)I order that the defence of the first defendant filed 11 June 2010 be struck out. (2)I order that judgment be entered in favour of the plaintiff against the first defendant in the sum of $3,900,000 together with interest up to 13 February 2013, in the sum of $1,992,428.77. (3)I order that the defence of the second defendant filed 11 June 2010 be struck out. (4)I order that judgment be entered in favour of the plaintiff against the second defendant in the sum of $1,345,000 together with interest up to 13 February 2013, in the sum of $1,665,627.60. (5)I order the defendants to pay the plaintiff's costs of the proceedings including any reserved costs. ********** 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 February 2013