Supreme Court New South Wales Medium Neutral Citation: Luigi Iacullo v Remly Pty Limited ACN 106 966 278 [2015] NSWSC 2133 Hearing dates: 6 October 2015 Date of orders: 06 October 2015 Decision date: 06 October 2015 Jurisdiction: Equity Before: Brereton J Decision: Hearing adjourned. Catchwords: PROCEDURE – adjournment of hearing – application to adjourn hearing made on day hearing due to commence – non-readiness of cross-defendants to proceed – potential conflict in legal representation of cross-defendants – non-disclosure of detail of conflict – weight to be ascribed to conflict in adjournment application – where cross-claimants served affidavit evidence late – whether late service of evidence prejudicial to cross-defendants. Category: Procedural and other rulings Parties: Dominic Iacullo (first cross-claimant) Lillian Iacullo (second cross-claimant) Luigi Iacullo (first cross-defendant) Badminton Investments Pty Ltd (second cross-defendant) IMS Developments Pty Ltd (third cross-defendant) Homeline Construction Pty Ltd (fourth cross-defendant) Michael Murr (fifth cross-defendant) Pacificon Pty Ltd (sixth cross-defendant) MMAI Pty Ltd (seventh cross-defendant) Glad Con Pty Ltd (eighth cross-defendant) Representation: Counsel: D A Smallbone (cross-claimants) M Condon SC (first and second cross-defendants) J T Svehla (third to eighth cross-defendants) Solicitors: Allsop Glover (cross-claimants) Somerset Ryckmans (first and second cross-defendants) Carroll & O'Dea (third to eighth cross-defendants) File Number(s): 2007/257623 Judgment (ex tempore) 1. HIS HONOUR: The first cross-claim in these proceedings is listed before the Court for hearing to commence today for a period of three weeks, expiring on 23 October 2015. The proceedings are mature, in the sense that they were commenced in 2007. There have been many previous hearings, including hearings that have disposed of the plaintiff's claims and the second cross-claim. There has also been a reference of accounting matters for inquiry and report, and debate over the adoption of the referee's report. 2. The cross-claimants Dominic Iacullo and Lillian Iacullo have very reasonably anticipated that the hearing of their claims would commence today. Regrettably, the readiness of the matter to commence today has been beset by a number of difficulties. One of them, and a significant contributing factor to the present situation, is no responsibility of the cross-claimants whatsoever. It appears that late in September, some issue arose within the camp of the third through eighth cross-defendants, which has been described in the evidence as a "conflict issue", pertaining to the position of the solicitors and counsel acting for those cross-defendants. 3. The nature of that issue beyond its description as a conflicts issue has not been disclosed to the Court. While that is a position that those parties are perfectly entitled to take as a matter of law, the non-disclosure of the nature of the underlying conflict means that the Court is unable to form any impression as to the reasonableness of the response in the circumstances, nor to proceed on any basis other than, in one way or another, it is entirely the responsibility of the relevant cross-defendants. In those circumstances, it is an issue to which I can give relatively slight weight. However, I give it some significance, not least because it is evident that bona fide efforts, including the retention of alternative legal advisers, discussions between them and the like have resulted in the position where the solicitors who formerly acted for those cross-defendants will now, notwithstanding their recent purported termination of the retainer, continue to act for them, and the Court will not be left confronted with a situation in which those cross-defendants have entirely new representatives coming into the case. 4. Other aspects of the non-readiness of the third to eighth cross-defendants to proceed today can be visited at least in part on the cross-claimants. Chief amongst them is the late service, on 21 September 2015, of a 641-paragraph affidavit of the cross-claimant Dominic Iacullo, together with its 465-page exhibit bundle, in circumstances where time had already been extended for service of lay evidence in reply to 31 August. The impact of that late service on 21 September was compounded by the conflict that had arisen within the cross-defendants' camp, which inhibited their ability to deal with it between 21 September and today. 5. Likewise, the late service on 23 September of a report of Mr Barker of 67 pages with 246 pages of appendices, and a further report of that expert witness on 1 October of 38 pages and eight pages of appendices, in circumstances where time had, on 10 August, been extended to 31 August for the service of any such expert evidence in reply. While I do not doubt that, as Mr Smallbone submitted, he and those assisting him worked furiously to complete Mr Murr's affidavit as expeditiously as possible, and no doubt the same could be said in connection with Mr Barker's reports in reply, the fact is that they were late after a previous extension of time, and given their size and extent, prejudicially late before a hearing to commence today. It may well be that an objection by the cross-defendants to reliance on them as served out of time would have succeeded. Rather than pursuing that course, the cross-defendants seek in effect an adjournment of the commencement of the hearing for a week. 6. Of significantly less moment is the late service of affidavits of the first cross-defendant Luigi Iacullo in reply to that of Dominic Iacullo, and the late delivery of the court book and the cross-claimants' opening submissions. One would anticipate that the cross-defendants would already be familiar with the material contained in the court book, even if the court book has not been delivered on time. 7. Nonetheless, it seems to me that the late service of Dominic Iacullo's evidence and the reports of Mr Barker to which I have referred effectively deprive the cross-claimants of the submission that they have done everything conceivable to enable the matter to proceed today and provide some basis for the cross-defendants' application. Moreover, it seems to me that one consequence of acceding to the cross-defendant's application is to deprive them of an objection on grounds of late service of the affidavits to which I have referred. In addition, in response to the cross-claimant's submission that, in the event that I were to accede to the application, conditions should be imposed in respect of a mortgage apparently granted by the fifth cross-defendant in favour of Homeline and concerning issues raised in a letter of 29 September 2015 from the cross-claimants' solicitors to the third to eighth cross-defendants' solicitors, it has been indicated that appropriate undertakings to meet such conditions will be proffered to the Court. 8. Initially, I was troubled that acceding to the application might result in it not being possible to complete the hearing with additional days until February of next year. However, it now appears that the Court will be able to allocate 2, 3 and 4 November as additional days for the hearing of the matter, and in those circumstances the prejudice from acceding to the application is very slight. Moreover, some of the time this week will be used on at least one interlocutory issue that is to be debated and in addition some time will be saved by the Court having an ability to consider the lately received opening submissions of the cross-claimants, which there has not been an opportunity to do to date, although the Court has considered the more timely but much less comprehensive submissions of the first and second cross-defendants. 9. In those circumstances, I think the more just approach is to accede to the application so far as the remaining days of this week are concerned, with a view to commencing the hearing on Monday of next week and, to the extent necessary, reserving 2, 3 and 4 November for completion of the hearing. 10. The Court therefore orders that: 1. The commencement of the final hearing of the proceedings be adjourned to Monday, 12 October 2015 for two weeks concluding on Friday 23 October 2015 and continuing on 2, 3 and 4 November 2015. 2. Time for service of the affidavit of Dominic Iacullo of 21 September 2015 be extended to 21 September 2015. 3. Time for service of the affidavits of Luigi Iacullo of 25 September 2015 and 3 October 2015 be extended to 25 September and 3 October 2015 respectively. 4. Time for service of the reports of Mr Baker of 23 September and 1 October 2015 be extended to 23 September and 1 October 2015 respectively. 5. Order 1 is made upon the undertaking of the fifth cross-defendant, Michael Murr, to the Court that he will, by close of business on Thursday, 8 October 2015: 1. procure from Homeline Building Pty Ltd and lodge for registration a discharge in registrable form of the mortgage dated 15 July 2015, a copy of which is included in tab 7 of exhibit RJBA-8 referred to in the affidavit of Richard John Baine Allsop of 2 October 2015 and circulate a copy and evidence thereof to the solicitors for the other parties; and 2. provide to Allsop Glover a response addressing the issues raised in the letter from Allsop Glover to Carroll & O'Dea dated 29 September 2015 together with the documents called for in the said letter or to the extent that he is unable to do so, an affidavit explaining why he is unable to do so and if those documents have been but no longer are in his possession, custody or power, when they were last so and what has become of them. 1. Pursuant to (NSW) Civil Procedure Act 2005, s 26, the proceedings be referred for mediation by a mediator to be agreed upon between the parties, such mediation to take place by Friday, 9 October 2015. 2. In connection with such mediation, each party by close of business on 6 October 2015 serve on the other a without prejudice offer of compromise. 3. There be liberty to apply on two hours' notice by arrangement with my associate in the meantime. Costs 1. It seems to me that while on the one hand the cross-defendants are seeking an indulgence, on the other hand the cross-claimants have, by the late service of material, contributed to the situation, and the costs of the application should be costs in the proceedings, but the question of costs can be deferred to be dealt with if it needs to be dealt with otherwise in conjunction with the other costs application arising out of today. ********** 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: 13 July 2017