Supreme Court New South Wales Medium Neutral Citation: Dlakic v MLC Limited [2019] NSWSC 387 Hearing dates: 3 April 2019 Date of orders: 03 April 2019 Decision date: 03 April 2019 Jurisdiction: Common Law Before: Campbell J Decision: (1) Adjourn the hearing of the matter fixed to commence on Monday 8 April 2019. (2) List the matter before me at 9.30am on Tuesday, 16 April 2019 for the consideration of any application for a lump sum costs order made by the defendant and for further directions as to management of the case. (3) The defendant is to file and serve any motion and affidavit in support relating to the lump sum costs order by Wednesday, 10 April 2019. (4) The plaintiff is to serve any evidence upon which he wishes to rely in relation to that matter by Friday, 12 April 2019. (5) I reserve all questions of costs thrown away until 16 April 2019. Catchwords: CIVIL PROCEDURE – Adjournment – factors to consider – complexity of case – estimated length of trial – plaintiff self-represented – prospect of proper legal representation being engaged – conditions include – lump-sum costs order – requirement that plaintiff pay the defendant's costs as a condition of granting adjournment Category: Procedural and other rulings Parties: Amil Dlakic (Plaintiff) MLC Limited (Defendant) Representation: Counsel: L Dlakic (by leave on behalf of the Plaintiff) J. Sexton SC with J Neal (Defendant) Solicitors: (Plaintiff self represented) Norton Rose Fulbright (Defendant) File Number(s): 2016/247422 EX tEMPORE Judgment - REVISED 1. These proceedings relate to a claim on a policy of life insurance in which the plaintiff claims substantial benefits relating to income protection and total and permanent disablement. The matter is set down for hearing with an estimate of 15 days to commence on Monday 8 April 2019. I have today heard an application brought on behalf of the plaintiff to adjourn or vacate the hearing dates. 2. The plaintiff is unrepresented. He has been in that position since previous solicitors ceased to act about 12 months ago. The application for the adjournment was in fact made by his wife, who I gave leave to appear. She has filed in the registry a notice of consent to act as tutor but no application for the appointment of a tutor has been made nor has any finding as to legal incapacity. 3. I should say that the plaintiff is legally trained and practised, as a solicitor between April 2000 and October 2014. He has been refused a Practising Certificate and the Occupational Division of the Civil Administrative Tribunal of NSW found him guilty of professional misconduct in relation to trust account matters in October of last year. I understand that protective orders have yet to be made. 4. His claim on the life insurance policy rests upon an allegation that he is totally and permanently disabled by reason of mental illness. The issues in the matter are of some complexity. First, it is said that, by its terms, the insurance policy was cancelled by reason of non-payment of the monthly premium in the months of March, April and May 2014. Secondly, it is said that the policy is liable to be avoided by reason of fraudulent misrepresentation; and thirdly, the insurer hotly contests that the plaintiff is totally and permanently disabled. Indeed, the insurer pleads on the basis of its expert medical evidence that the plaintiff does not suffer from a mental illness as such and that his condition is best explained by malingering. I may not have exhaustively covered the issues but I think I have said enough about them to indicate that the matter is one of some complexity and that the claim of the plaintiff is very hotly contested at every level. 5. It may be relevant to point out that the defendant is represented by experienced solicitors who have briefed experienced senior counsel with an experienced junior to appear to defend the action in this Court. 6. Mrs Dlakic, who appeared, as I have said, before me today, has moved on her affidavit sworn yesterday and filed this morning. The adjournment application is based on a number of grounds. 7. The first ground is that, to his wife's observation, the plaintiff's mental condition has deteriorated and that he is no longer capable of conducting these proceedings while unrepresented. The second ground is that the case is not ready for hearing because, substantially, the conclaves of experts for the production of joint reports that were ordered by the Registrar have not been conducted due to what Mrs Dlakic would characterise as the default of both parties. The third ground, and perhaps the most substantial ground, is that the plaintiff is desirous of obtaining legal representation for the proceedings. He has made contact with a firm of solicitors in Melbourne, experienced in this area, who have indicated a willingness to act subject to the satisfaction of certain conditions, including the payment of a substantial sum of money on account of costs and disbursements. 8. Mr Sexton of senior counsel opposes the adjournment application. He points out the following. First, that the case is a relatively weak one, on the defendant's assessment of it. Secondly, that whatever afflicts the plaintiff, the evidence demonstrates that he has appeared in Court representing himself in relation to these proceedings and other proceedings. He has demonstrated, as one might expect of a trained lawyer, an appreciation of the issues and an ability to marshal pertinent arguments addressing those issues. Thirdly, there is no satisfactory explanation for the delay in bringing forward an application for an adjournment; and fourthly, whatever might be said about the plaintiff's default, except in one immaterial respect, there has been no default on the part of the defendant; quite the contrary. 9. Learned senior counsel submits that the interests of justice require confirmation of the hearing dates rather than an adjournment. In the alternative, if I am persuaded an adjournment should be granted, he submits it should be on strict terms. Those terms should include an order for the payment of the costs thrown away by reason of the adjournment forthwith and a stay of the proceedings until those costs are paid. 10. I am satisfied that this is a difficult case for the plaintiff. Having said that, I am in no position to make any focused assessment of the plaintiff's prospects of success and it would be inappropriate for me to do so. The matter does seem to have its difficulties. Apart from the issues I have referred to, it does seem, on the objective facts, that whatever might be proved in relation to the plaintiff's medical condition, his absence from work, including his absence from practice, does coincide with the conduct matters arising. One can well appreciate that this will be a difficult case from the plaintiff's perspective. That, of course, could cut both ways, given what I have said about the grounds on which the adjournment is advanced. 11. I have been taken through the transcript of the plaintiff's appearances before the Prothonotary in July last year and before Adamson J in November last year. I must say, so far as his appearance before the Prothonotary is concerned, I accept the force of Mr Sexton's submissions, that accepting that was a hearing dealing with matters of practice and procedure only, he certainly had a firm grasp of the issues, he was focused about his case and advanced very pertinent arguments in favour of the position he was advancing, notwithstanding he was appearing against experienced junior counsel. 12. So far as the appearance before Adamson J is concerned, those qualities are less apparent. Indeed, although, as Mr Sexton pointed out, there were passages of the transcript where he was - to use the vernacular - well on top of the game, there are other aspects of it. It seems to me, as a matter of impression, they tend to dominate and show: his presentation of his case was chaotic; that he spoke to the learned judge inappropriately, especially for a person who has legal training and experience; he was rude to and repeatedly, despite the admonitions of the judge, interrupted counsel for the defendant; and he interrupted her Honour on frequent occasions. Whatever the explanation for that poor conduct on that occasion was, it certainly seems to me that were he left to his own devices in this long hearing, his prospects of success, such as they may be, would be very greatly diminished. Moreover, it does seem to me, if his work before Adamson J is representative of his present ability to argue his case, the trial is likely to take longer than the 15 days set aside, if it runs the full distance. 13. However, there is no current medical evidence explaining any change in his mental condition over the last few months. Giving full weight to Mrs Dlakic's lay impression, one is still left with the consideration that there is no medical evidence that explains what she has observed in terms of mental illness, which makes it difficult to judge, of course, whether what she has observed, and what was evident in large passages of the transcript before Adamson J, is a manifestation of what the defendant's expert regards as malingering or is due to the psychiatric illness that was diagnosed by his own experts, admittedly three years ago in terms of the most recent report. One's experience of life is sufficient for one to know that some people fall into a funk when difficult issues arise in life without being in any way mentally ill or in any way actually incapable of dealing with the issues they are facing. 14. It does seem to me, however, that there is some prospect of legal representation being obtained, even on the terms to which Mrs Dlakic deposes, of a substantial payment on account. First, I am satisfied that there has been an approach to the Melbourne firm identified in the affidavit and I am satisfied from the email disclosed at p 15 of the affidavit of Mrs Dlakic that they are requiring that payment on account. I should say that that email was, according to Ms Dlakic, inadvertently disclosed when she was preparing the affidavit. However, I am not so sure that privilege inures in the email given what she has said at para 14 of her affidavit. I am prepared to accept that the sum of $100,000 is a sum that has been mentioned by the solicitors as being required to be deposited before they are prepared to act. There is evidence before me suggesting that Mr and Mrs Dlakic will be in a position to deposit a figure of that magnitude in the near future. 15. It is necessary to mention that Mr Dlakic has been involved in litigation with his former law partner and related entities in the Equity Division of this Court. Mrs Dlakic has been appointed tutor for her husband in those proceedings. The judgment of Robb J has been tendered in the evidence before me. It does seem that the plaintiff has enjoyed substantial success subject to the assessment of compensation which his Honour seems to have referred out. 16. Mrs Dlakic has referred in her affidavit to an offer - she refers to it as an "open offer" - that has been made to settle those proceedings by the defendant in a very substantial sum of some $XXXXXXX. That offer was made as an offer of compromise which has now lapsed. But she puts it forward as confirmation of the fact, as it were, that they will be in funds to properly instruct the Melbourne solicitors, given some little time. It is unclear how long they need other than to say that the matter is apparently before Robb J for some purpose tomorrow. 17. It must be said, as Mr Sexton submitted, the fact that the defendant has made a substantial offer does not mean in any way that the plaintiff is likely to do better if the matter proceeds to finality. It is fair to say that there is no evidence that, notwithstanding the offer, the defendant is a man of substance who can readily satisfy any adverse judgment. Having said that, part of the success enjoyed by the plaintiff relates to a shareholding in a private company which owns unencumbered commercial real estate at Kogarah. One way or another, it seems for present purposes likely that the plaintiff will come into substantial funds in the relatively near future. 18. Mrs Dlakic was unable to answer my questions about why this application had not been put forward sooner after the successful result before Robb J when the plaintiff apparently wished to secure competent representation for the hearing. As Mr Sexton pointed out, when the matter was before the Prothonotary last year Mr Dlakic was speaking of new solicitors who would soon be on the record. I suppose again that can cut both ways inasmuch as that is some indication it was always his desire to secure legal representation for the case. 19. I reject the argument of Mrs Dlakic that both sides are in default in this matter. It is true, as the defendant acknowledges, that it failed to file, through an oversight, the amended defence that Adamson J gave it leave to file back in November. But I accept the argument that there is no disadvantage to the plaintiff in that slip. The plaintiff has been in possession of the amended defence since before the application was heard and the defendant's slip has now been rectified by the document being filed. It can hardly be said to have been derelict in that circumstance. 20. The substantial ground on which Mrs Dlakic says the matter is not ready, which she would seek to lay of the feet of both parties, is that, in accordance with the Court's usual practice, the Registrar made orders for experts to confer and produce a joint report with a view to giving concurrent evidence at the hearing. That has not occurred and indeed the defendant has filed a motion seeking to have those directions revoked, which is before me today but is not currently pressed. 21. The defendant has appropriately been in touch with the plaintiff seeking his cooperation to prepare the documentation to be submitted to the experts, to draft an issues document for their consideration and to attend to other matters relating to the necessary arrangements. The defendant's solicitors have written to the plaintiff by email on a number of occasions about this. I have reviewed that correspondence and I have found it to be refreshing because rather than perhaps taking a high-handed attitude as some might have thought they were entitled to do given the plaintiff's obvious default, the solicitors for the defendant have sought to be helpful to the plaintiff, to encourage him to observe his obligations under the directions, and have gone a long way by being prepared to undertake work that it was really his responsibility to perform, if not solely at least in cooperation with them. This extends to producing a very substantial Court book in preparation for the hearing next week. So I reject any submission that the defendant's solicitors have contributed to a situation where the case is not ready for trial. I am satisfied from their point of view that it is. 22. I acknowledge that the defendant could and perhaps should bring to the Court's attention a plaintiff's default. However, I do not criticise the defendant's solicitors for not doing that in this case. As I have said, their approach has been helpful. Bringing the matter back before the Court early incurs what might be unnecessary costs and regrettably often does not achieve the desired consequence. It seems that it was more helpful to do as was done here in an attempt to encourage the plaintiff to undertake the steps required of him, given his legal qualifications. 23. The only explanation for the lateness of this application is that, because of the other demands on her time, Mrs Dlakic did not fully appreciate that her husband was not attending to the preparation of this matter with appropriate diligence. Although she made observations about him which are recounted in her affidavit, she did not appreciate, she tells me from the Bar table, that he was so disengaged that he had not undertaken the work necessary to prepare the matter for hearing or to secure adequate legal representation. 24. Although that explanation is not very satisfactory, I am of the view that given the chaotic nature of the plaintiff's appearance before Adamson J, punctuated as it may have been, by lucid intervals, the complexity of the issues in the case, the estimated length of the trial and the real prospect of proper legal representation being engaged soon, that it is appropriate, not without some misgivings, to accede to the application made on his behalf that the proceedings be adjourned. 25. However, the adjournment cannot be without cost or consequence. Obviously the plaintiff must bear the costs thrown away by reason of this late application. Mr Sexton, very fairly I thought, indicated that they may not be very great given that affidavits and Court books prepared can be utilised when the matter finally comes on for trial. Also, as the application is made at least a few days out and not on the first day of trial, cancellation fees payable to counsel, if any, are likely to be less than they otherwise would have been. But he does submit that it is an appropriate case, given the unsatisfactory aspects of the application, for two things to happen. 1. The first is that the defendant should be at liberty to assess the costs forthwith; and secondly, that the proceedings should be stayed until the costs are paid. I have some sympathy for those views. I think the case needs to be very carefully managed to ascertain whether solicitors come into the matter and to encourage that to occur as soon as possible. 2. I am also of the view that the defendant should be given an opportunity to apply for a lump-sum costs order and, if successful on that application, then I would give consideration to staying the proceedings until the costs assessed are paid. Such orders are not normally made, as I discussed with Mrs Dlakic. However, as I have said, because this application is made late, and the explanation for the delay in making it and the need to make it is not very satisfactory, especially in the absence of any supporting medical evidence, consideration should be given to requiring the plaintiff to pay the defendant's costs forthwith as a condition of granting the adjournment. 3. These are my orders: 1. Adjourn the hearing of the matter fixed to commence on Monday 8 April 2019. 2. List the matter before me at 9.30am on Tuesday, 16 April 2019 for the consideration of any application for a lump sum costs order made by the defendant and for further directions as to management of the case. 3. The defendant is to file and serve any motion and affidavit in support relating to the lump-sum costs order by Wednesday, 10 April 2019. 4. The plaintiff is to serve any evidence upon which he wishes to rely in relation to that matter by Friday, 12 April 2019. 5. I reserve all questions of costs thrown away until 16 April 2019. ********** 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: 08 April 2019