Supreme Court New South Wales Medium Neutral Citation: Dr Ghosh v Baycorp Collections PDL Aust Pty Ltd [2014] NSWSC 1727 Hearing dates: 12 November 2014 Decision date: 04 December 2014 Jurisdiction: Common Law Before: Schmidt J Decision: (1) The orders made by Hidden J by consent on 21 August 2014 are set aside. (2) Dr Ghosh is to bear the defendant's costs thrown away as the result of the leave to further amend her summons. (3) Dr Ghosh is to file and serve any amended summons by 30 January 2015. (4) The defendant is to file and serve any amended defence by 20 February 2015. (5) The matter is listed before the Registrar for directions on 27 February 2015. Catchwords: PROCEDURE - notice of motion - orders sought setting aside consent orders - irregularity established - orders made - leave to amend summons granted - costs Legislation Cited: Civil Procedure Act 2005 (NSW) Local Court Act 2007 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Across Australia Finance v Bassenger [2008] NSWSC 799 Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235 Nominal Defendant v Livaja [2011] NSWCA 121 Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 Category: Procedural and other rulings Parties: Dr Ratna Ghosh (Plaintiff) Baycorp Collections PDL Aust Pty Ltd (Defendant) Representation: Counsel: Mr A Kaufmann (Defendant) Solicitors: Ms Ghosh, unrepresented (Plaintiff) Baycorp Legal Pty Limited (Defendant) File Number(s): 2014/147232 Publication restriction: No Judgment 1Dr Ghosh commenced these proceedings in May 2014, seeking leave to appeal orders "from the whole of the decision below". A default judgment was entered against her in the Local Court in March 2013. On 2 May 2014, the Local Court refused to set aside that judgment. The appeal is said to have been brought under s 39(1), s 40(1) and s 40(2) of the Local Court Act 2007 (NSW). 2These proceedings concerned a disputed 2011 credit card bill of some $7,000, which the National Australia Bank ('NAB') claimed Dr Ghosh owed it. Dr Ghosh not only says she was charged twice for that debt, but that it was a debt the defendant wrongly claimed to have purchased from the NAB and one which she did not, in any event, owe the NAB. 3The amended summons on which Dr Ghosh now proceeds claimed, amongst other things, that the defendant had obtained the default judgment in the Local Court for $14,722.46 in respect of a credit card bill claimed to be owed to the NAB; that the claim related to a claimed $7,000 debit to Goldsmith Lawyers, for which they had no authority to debit to her credit card; that Dr Ghosh had paid the disputed sum to the NAB, which had debited a further $7,000, instead of reversing the debit, and froze the card, before she travelled overseas; that fraud had been reported to police in March 2011; that the defendant had failed to provide evidence of the debt, even in response to a subpoena; that Dr Ghosh had not been given notice of the Local Court hearing at which default judgment was entered; that the Local Court had wrongly refused to set aside the default judgment, in circumstances where evidence showed that Dr Ghosh had paid all that was owed to the NAB; that the defendant had failed to produce bank statements and receipts on which its case depended, even in response to a subpoena she had served; and that the result of the Local Court's approach was that the burden of proof had wrongly been shifted from the defendant to her. Dr Ghosh claimed that in the result, there had been a gross miscarriage of justice, bias and denial of procedural fairness by the orders made against her and the refusal of her application to have the default judgment set aside, a decision given against the weight of the evidence. 4The matter came before Bellew J in July 2014 when consent orders were made in terms that "the judgment of the Parramatta Local Court in proceedings 2013/87028 be stayed until 24 August 2014". Dr Ghosh was then represented by counsel, Mr Dibb. On 21 August, Hidden J made consent orders dismissing the appeal with costs. Dr Ghosh was then again represented by Mr Dibb. She was not present. 5By motion filed on 25 September 2014, Dr Ghosh sought orders under Rule 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) setting aside Hidden J's orders, reinstating the appeal and staying his Honour's costs order until the appeal is decided. An order for costs of the motion was sought against Mr Dibb. The motion was supported by an affidavit sworn by Dr Ghosh on 20 October 2014. 6On 24 October 2014, Dr Ghosh filed an amended notice of motion. There orders were sought under Rule 36.15(1) setting aside Hidden J's judgment; reinstating the appeal; staying execution of the costs order; staying execution of the Local Court judgment and its costs order; and staying execution of a costs order made by the Federal Circuit Court. 7Dr Ghosh gave affidavit evidence and relied on phone records and emails. The plaintiff relied on an affidavit sworn by her ex-husband Mr Bandyopadhyay, which she had relied on earlier in the proceedings. 8There is no issue that Dr Ghosh has paid the entire amount ordered by the Local Court. 9In her affidavit Dr Ghosh said that through no fault of her own, her appeal was dismissed by Hidden J by consent, but without her knowledge or consent and that in consenting to those orders, Mr Dibb had acted contrary to her express instructions, which had been communicated to him both by email and in a voicemail message left on his phone. 10Neither Dr Ghosh nor Mr Bandyopadhyay were required for cross-examination. Their evidence is thus unchallenged. 11Dr Ghosh did not suggest that the defendant was made aware of her instructions. Her case was that she learned of the orders dismissing her appeal late on 21 August, when Mr Dibb told her that the case went all afternoon and her appeal was dismissed, because Hidden J did not accept that she had not been served with the Local Court application. She claims that she was not aware that the orders were made by consent, until they were served on her on 14 September. The Court has power to make the orders sought 12Dr Ghosh's application relates to orders which, on their face, were regularly made by consent, on her counsel's application, in open Court but they have been entered. 13Under s 73 of the Civil Procedure Act 2005 (NSW) there is now no question that the Court can, in these proceedings, determine any question as to the terms on which and whether the proceedings were compromised or settled between the parties. It was finally not in dispute however, that the consent orders had been made without Dr Ghosh's instructions. 14Rule 36.15 permits a judgment or order to be set aside on sufficient cause being shown, if entered or made, irregularly, illegally or against good faith. In Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13, Sheller JA discussed the circumstances in which a superior court might exercise its inherent jurisdiction to discharge or revoke a consent order made in the context of a compromise of proceedings entered into by a party under a mistake (see at [32]). 15 Here the irregularity was said to be that the consent order was made in circumstances where Dr Ghosh had given no instructions to consent to the orders made and where those orders were inconsistent with the express instructions earlier given by Dr Ghosh. 16In the circumstances, if the defendant consented to orders setting aside the judgment and order which Dr Gosh seeks, they could be made under Rule 36.15(2), but that consent was not given, even though Dr Ghosh's evidence was not challenged. The orders made were not consented to 17I am satisfied that the evidence established that the consent orders were made contrary to Dr Ghosh's instructions. 18Dr Ghosh's application plainly rests on a serious allegation. It is supported by copies of two email communications sent to Mr Dibb in these terms: "From: Ratna Ghosh Sent: Thursday, August 21, 2014 12:12 PM To: Christopher Dibb Subject: Baycorp appeal Dear Chris, I have attached the Appeal again for you. Please get the Stay order today. You could say it was part heard by J Bellew[sic] and should be heard by him, in order to delay. Say they are trying to enforce debt of which they have no proof or authorisation obtained by a default judgment without serving me. Thanks, Ratna Ghosh From: Ratna Ghosh Sent: Wednesday, August 20, 2014 6:41 PM To: Christopher Dibb Subject: Re: Baycorp appeal Dear Chris, I can be contacted tomorrow am on 02 xxxxxxxx. The hearing is Courtroom 9C with Reg. Kenna for directions at 9am (usually later by the time they call you). Please try to delay the actual hearing and extend the STAY order. If it proceeds, tell the Judge they have no proof of authorisation for the $7000 debited by Barrie Goldsmith, and he only invoiced me for $3000. They have also added interest although they cancelled the card in March 2011. So they shouldn't be allowed to enforce a debt that is in dispute (was with the Finance Ombudsman when NAB pretended they sold the debt to Baycorp to avoid an investigation). Please also tell the Judge NAB has fraudulently altered the bank statement, which is why they have alleged to have lost all bank records until it went to the Supreme Court, as they never reversed the 2nd $7000 NAB themselves debited my card in March 2011, which is why the card went over the limit and was blocked. This is why Baycorp consistently maintained "unfortunately we have lost all bank records" and refused to produce anything even in response to a subpoena to produce. Good Luck for tomorrow!!! Ratna Ghosh" 19These instructions are clearly inconsistent with the consent orders that Mr Dibb asked Hidden J to make the following day. There was then no separate appearance for the plaintiff and Dr Ghosh was not present. No evidence was called from Mr Dibb, but in the circumstances, Dr Ghosh's unchallenged evidence, supported as it is by her phone records and these emails, must be accepted. The orders should be made 20Dr Ghosh 's case was that her instructions about the consent orders made by Hidden J were never sought nor given. She explained in her submissions that to have given such consent would have made no sense, given all that had occurred prior to the hearing and the costs she had incurred to that point. That must be accepted, given that the orders finally disposed of the proceedings, setting aside the stay earlier agreed, dismissing the appeal and ordering that Dr Ghosh pay the defendant's costs. 21Dr Ghosh submitted that the apparent error which had occurred could readily be addressed without the need to resort to expensive and time-consuming appeal proceedings and so she was entitled to the relief pressed: see Nominal Defendant v Livaja [2011] NSWCA 121 at [23]. There it was held at [19] - [20] that a judgment or order of the Court is taken to be entered when it is recorded in the Court's computerised court record system in accordance with Rule 36.11(2) and that: "23 Further, it is helpful to distinguish between a case such as Autodesk , where the High Court believed it had delivered a final judgment, a case such as Brooker v Friend (No 2) [2008] NSWCA 129, where this Court delivered its reasons, with proposed final orders, but sought submissions in respect of the appropriate form of the orders, and a case such as the present, where a trial judge, without the benefit of transcript, is delivering an oral judgment from handwritten notes. It is also desirable to distinguish between cases where, perhaps because of the delivery of formal written reasons, the application to vary the judgment is delayed, as compared with the present case, where it was made immediately the calculation had been expressed. The reason why such distinctions are important is that the public interest in the finality of litigation carries far less weight in some circumstances than in others. Where an apparent error can readily be addressed without the need to resort to expensive and time-consuming appeal proceedings, that course should be permitted and encouraged." 22On the evidence, this situation appears to involve a mistake. In Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235 it was observed at 242: "...But in the circumstances of this case it does not appear to us that the court possesses a discretion to set aside the compromise or to intercept the formal entry of judgment. It is not a case of misapprehension or mistake made by counsel in consenting to an order or settlement: cf. Hickman v. Berens (1895) 2 Ch 638 . It is not a case where the assistance of the court is sought or invoked to carry a compromise into effect which otherwise could not be enforced by the party relying upon it. In such a case the assistance may be refused on grounds not necessarily sufficient to invalidate a simple contract. It is not a case where a compromise has been agreed upon by counsel acting only in pursuance of his apparent or implied authority from his client but, owing to a mistake or misapprehension, in opposition to his client's instructions or in excess of some limitation that has been expressly placed on his authority. In such a case, at all events until the judgment or order embodying the compromise has been perfected, an authority exists in the court to refuse to give effect to or act upon the compromise and perhaps to set it aside: see Neale v. Gordon Lennox (1902) AC 465, particularly at pp 469, 470, 473 ; Shepherd v. Robinson (1919) 1 KB 474 ; Little v. Spreadbury (1910) 2 KB 658, at p 662 , per Bray J.; Hansen v. Marco Engineering Co. (Aust.) Pty. Ltd. [1948] VicLawRp 37; (1948) VLR 198, at pp 201-203, per Fullagar J.; Schwarz v. Clements (1944) 171 LT 305, at p 309. In the course of the judgment in the case of Sheonandan Prasad Singh v. Abdul Fateh Mohammad Reza (1935) 62 Ind App 196, already cited, Lord Atkin said that these cases qualified the implied authority of counsel to compromise an action. "In the first instance the authority is an actual authority implied from the employment as counsel. It may, however, be withdrawn or limited by the client; in such a case the actual authority is destroyed or restricted, and the other party if in ignorance of the limitation could only rely upon ostensible authority. In this particular class of contract, however, the possibility of successfully alleging ostensible authority has been much restricted by the authorities such as Neale v. Gordon Lennox (1902) AC 465 and Shepherd v. Robinson (1919) 1 KB 474, which make it plain that if in fact counsel has had his authority withdrawn or restricted the Courts will not feel bound to enforce a compromise made by him contrary to the restriction, even though the lack of actual authority is not known to the other part" (1935) 62 Ind App, at pp 199, 200. It is said that this power of the courts is to be exercised as a matter of discretion when in the circumstances of the case to allow the compromise to stand would involve injustice in view of the restriction on counsel's authority. See Halsbury's Laws of England, vol. 3, 3rd ed., p. 51; 2nd ed., vol. 2, pp. 526, 527...." 23These observations were considered by White J in Across Australia Finance v Bassenger [2008] NSWSC 799. His Honour there took the view that the Court has inherent jurisdiction to set aside orders made by consent, even after entry, on grounds on which the contract embodied in the orders could be set aside. Further, where the Court's assistance to carry the compromise into effect is required, the Court may also decline that assistance, if to provide it would lead to injustice (see at [25]). 24White J took the view at [78] that: "A solicitor or barrister retained to conduct litigation ordinarily has implied as well as ostensible authority to bind his or her client to a compromise of the proceedings provided that he or she does not act contrary to instructions, the circumstances do not otherwise indicate that express instructions are required, the compromise does not include matters collateral to the action, and the compromise is effected in a fair and reasonable manner so that it is fairly within the limits of authority (Donellan v Watson (1990) 21 NSWLR 335 at 342; Prestwich v Poley (1865) 18 CB (NS) 806; 144 ER 662; Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387)." 25Here, however, it appears that Dr Ghosh's counsel had no authority to settle the proceedings on the basis of the consent orders. Dr Ghosh's uncontested evidence was that the consent orders sought were directly contrary to her express oral and written instructions. In those circumstances, further express instructions to agree to the consent orders sought were required, but not obtained. 26On the defendant's case, even if this was accepted, the orders sought would not be made because Mr Dibb had ostensible authority to agree to the consent orders made. It was conceded, however, that the evidence put this case into the territory discussed in Harvey v Phillips namely, that on Dr Ghosh's uncontested evidence Mr Dibb did not have authority to consent to the dismissal of the appeal on the basis that she would bear the defendant's costs and that accordingly, the Court is not bound to enforce a compromise made contrary to instructions, even though the lack of actual authority was not known to the defendant. 27In those circumstances, I am satisfied that an irregularity has been established and that justice requires that the Court's discretion to set aside the consent orders be exercised. 28I have reached that conclusion despite the defendant's case that Dr Ghosh has no realistic prospects of succeeding on the appeal she has brought. In part that submission rested on an analysis of the amended summons, the pleading of which is unquestionably deficient. 29It must also be considered that the defendant was not clear as to precisely what it had intended to agree by the consent orders Bellew J was asked to make. In part, this appears to rest on the absence, or nature of the reasons given for the Local Court's decision on 2 May 2014. In the circumstances, the stay agreed must have been a stay of the default judgment given in March 2013, pending hearing of the appeal to this Court, of the refusal in May 2014 to set aside the default judgment. 30It seems to me on a fair reading of the amended statement of claim and the events which followed its filing, including the orders made by Bellew J by consent, that what Dr Ghosh has sought to appeal by her amended statement of claim is not only the Local Court decision of 2 May 2014, refusing to set aside the default judgment, but other decisions given in the proceedings, including in relation to subpoenas and costs. 31 In the circumstances Dr Ghosh must have the leave sought to further amend her pleading, so that what is truly in issue between the parties can be clearly identified. Costs and other orders 32Given that Dr Gosh has already paid the defendant in accordance with the Local Court's March 2013 order, there is no point in now staying the default judgment, pending the hearing of the appeal. 33The usual order as to costs is that they follow the event. Dr Ghosh's original motion sought costs orders against Mr Dibb, but that was abandoned in the amended motion. Dr Ghosh also sought an order quashing orders made by the Federal Circuit Court, but as I explained to her, this Court has no jurisdiction to make such an order. 34Dr Ghosh initially submitted that the defendant should bear her costs of her motion, because it should have taken steps to ensure that Mr Dibb had her authority to consent to the orders made. As I explained to Dr Ghosh, that submission may also not be accepted. Dr Ghosh instructed Mr Dibb to appear in her absence. The defendant was entitled to assume that Mr Dibb had the instructions he appeared to have, when he consented to the orders which Hidden J made and was not entitled, or obliged to speak to her direct, to confirm that he had actual authority to consent to the orders Hidden J was asked to make. 35Dr Ghosh finally submitted that in the circumstances which had arisen, each party should bear their own costs. The defendant submitted that costs should be reserved, or that no costs should be ordered, given that what had occurred was through no fault of the defendant. 36While the defendant could have consented to the order sought by Dr Ghosh setting aside the orders Hidden J had made and perhaps should have, given that her evidence was not challenged, the circumstances which have arisen were not of its making. In the result, in my view, justice demands that there be a departure from the usual order. I have concluded that there should, accordingly, be no order as to costs on the motion. 37There must, however, be an order against Dr Ghosh for the costs thrown away as the result of the leave given to further amend her summons. 38Given the identified deficiencies of the amended summons; the leave there sought to further amend the summons; and the matters addressed at the hearing earlier referred to, I am satisfied that Dr Ghosh should be given leave to further amend her summons, so that it clearly identifies each decision and order of the Local Court which she seeks to challenge in these proceedings and the grounds on which, in each case, that challenge is pressed. That leave should be exercised by 31 January 2015. 39I make the following orders: (1)The orders made by Hidden J by consent on 21 August 2014 are set aside. (2)Dr Ghosh is to bear the defendant's costs thrown away as the result of the leave to further amend her summons. (3)Dr Ghosh is to file and serve any amended summons by 30 January 2015. (4)The defendant is to file and serve any amended defence by 20 February 2015. (5)The matter is listed before the Registrar for directions on 27 February 2015. ********** 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: 04 December 2014