National Australia Bank v Sayed (No. 10)

1. [1]

   These proceedings commenced on 28 May 2010. The National Australia Bank claimed judgment for possession of a property owned by Mr and Mrs Sayed in Gahans Lane, Woonona. On 22 August 2011 Mr Sayed filed a defence and cross-claim against the Bank.

2. [2]

   By an amended first cross-claim filed 18 August 2015 Mr Sayed sought declarations; first, that NAB breached its duty to act in good faith in exercising a power of sale over another property he owned, consisting of two adjoining lots, in Rothery Road, Corrimal that also secured NAB’s debt; and secondly, that NAB acted unconscionably in relation to the Corrimal loan and mortgage. The substance of the claim was that the Corrimal property had been sold at an undervalue.

3. [3]

   The proceedings were listed before Adams J on 20 August 2012. Negotiations took place between the parties and their lawyers to settle the proceedings. Those negotiations led to the signing of what was called an In Principle Agreement dated 23 August 2012. An issue arose as to whether the Agreement included a settlement of the cross-claim concerning the sale of the Corrimal property. In National Australia Bank v Sayed (No. 5) [2016] NSWSC 669 I noted the Court of Appeal’s decision that the In Principle Agreement excluded the claim that Mr Sayed was making in respect of the Corrimal property but included matters concerned with the Woonona property: Sayed v National Australia Bank Limited [2013] NSWCA 304.

4. [4]

   By a notice of motion filed 4 March 2016 Mr Sayed sought leave to file a further amended cross-claim and sought the supply of unredacted versions of certain bank documents. The first issue I had to determine was the extent of the claims in the proposed amended cross-claim Mr Sayed wished to file. In Sayed (No. 5) I refused leave for the proposed cross-claim to be filed because it did not comply with r 19.5 Uniform Civil Procedure Rules 2005 (NSW) and because it sought to plead a number of matters that, for reasons I there gave, could not be pleaded. The result was that Mr Sayed could claim in respect of an alleged sale at an undervalue of the Corrimal property, but not in relation to the loan or security associated with the Woonona property. However, I did not preclude Mr Sayed from advancing a properly pleaded further amended cross-claim.

5. [5]

   I also held that privilege had not been waived over the documents which were otherwise protected from disclosure by client legal privilege.

6. [6]

   On 5 September 2016 I heard a further application from Mr Sayed for leave to file a further amended first cross-claim. I did not require Mr Sayed to file a further notice of motion to do so, and I identified that the proposed further amended first cross-claim was the document behind Tab 1 in the court book handed up at the hearing of the application: National Australia Bank v Sayed (No. 6) [2016] NSWSC 1253.

7. [7]

   I held in Sayed (No. 6) that Mr Sayed should not be permitted to claim in relation to his assertion that one of the blocks of land in Rothery Street, Corrimal was sold as landlocked land when in fact it was not so landlocked. My reasons for doing so can be briefly stated. If Mr Sayed was permitted to argue such a claim and was successful in doing so, NAB would be likely to have causes of action against its agent, MERC and MMJ. However, those claims would now be statute barred. Further, I held that Mr Sayed was aware of the landlocking issue by August 2012. Despite being so aware, he did not apply to amend his cross-claim until 4 March 2016. Any claims NAB might have had against MERC and MMJ needed to be commenced prior to 19 February 2016. There was no evidence of fraud or mistake that would extend the limitation period. Finally, no satisfactory explanation was provided by Mr Sayed for the delay in making the claim based on the landlocked land.

8. [8]

   On 25 October 2016 Mr Sayed filed a further amended first cross-claim. In that pleading Mr Sayed included words in paragraph 32 that referred to landlocking and included particular (k) under paragraph 33 which similarly dealt with landlocking. Those matters were drawn to my attention at a directions hearing. I ordered that they be struck out for the reasons I there gave: National Australia Bank v Sayed (No. 8) [2017] NSWSC 89.

9. [9]

   Mr Sayed filed a further notice of motion seeking leave to amend his cross-claim on 28 March 2017. I had given Mr Sayed leave to file this notice of motion limited to a clarification of the matters determined in Sayed (No. 8). However, Mr Sayed’s notice of motion sought amendments beyond those for which I had given leave. I gave judgment in respect of that notice of motion on 13 April 2017 and by that judgment I gave leave to Mr Sayed to file a second further amended cross-claim with the amendments specified in the judgment: National Australia Bank v Sayed (No. 9) [2017] NSWSC 389. The Second Further Amended Cross-Claim was filed on 28 April 2017.

10. [10]

    On 30 June 2017 I was satisfied that the proceedings were sufficiently prepared to permit the parties to obtain a hearing date. The parties were directed to approach the Listing Manager for a hearing of the cross-claim by no later than 4 July 2017, with an estimated hearing time of seven days. The parties subsequently obtained a date for hearing commencing 30 April 2018.

11. [11]

    Without any leave to do so, Mr Sayed filed a notice of motion on 28 November 2017 seeking the following orders:

12. [12]

    By reason of my conducting a criminal trial in December 2017 I was unavailable to hear the notice of motion. I directed that it be listed before the Duty Judge, particularly as the matter of any amendment to the pleadings needed to be resolved at a sufficient time before the substantive proceedings were listed for hearing. The Bank submitted to the Duty Judge, Walton J, that the Motion would take approximately a day to hear and, in any event, the matter was more appropriately dealt with by me because I had case-managed the proceedings to that point. For those reasons, the motion ultimately came before me for hearing on 9 February 2018.

13. [13]

    The affidavit in support of the motion consisted only of the annexing of an email from Mr Sayed to the Bank’s solicitors, Dibbs Barker, and that firm’s reply. The email from Mr Sayed said this:

14. [14]

    The reply from Dibbs Barker said that the firm was not aware of any facts or circumstances creating any conflict of interest between the firm and NAB. They required Mr Sayed to set out in detail including by reference to documents, the facts, matters and circumstances that he asserted gave rise to an alleged conflict of interest.

15. [15]

    When the matter came before Walton J as the Duty Judge, his Honour made procedural directions that required Mr Sayed to identify the matters on which he relied to support the removal of Dibbs Barker as NAB’s solicitors. In a document dated 12 December 2017 Mr Sayed identified the following four affidavits on which he relied:

16. [16]

    Mr Sayed thereafter set out what he described as “Facts” and “Allegations” as follows:

17. [17]

    Mr Sayed informed Walton J that orders 2 and 3 sought in the notice of motion were dependent on order 1 first being made. However, when the matter was argued before me, Mr Sayed said he was seeking all four orders in the notice of motion.

18. [18]

    On 5 February 2018, the motion then having been fixed before me for hearing on 9 February 2018, Mr Sayed forwarded an email to Dibbs Barker saying that, if I made order 1 sought in the notice of motion, Mr Sayed would be seeking to amend the cross-claim to include Dibbs Barker as a second cross-defendant. He provided a proposed draft cross-claim seeking a declaration that Dibbs Barker was professionally negligent and engaged in unethical and unlawful conduct, and an order that they pay him damages arising from those matters. The pleading, apart from inserting two early paragraphs identifying Dibbs Barker, simply added some 13 paragraphs at the end asserting negligence by Dibbs Barker in the advice they gave to NAB in relation to the sale of the Corrimal land. The pleading asserted that if a shortfall had not occurred, such shortfall being the fault of Dibbs Barker, NAB would not have begun legal proceedings against Mr Sayed to recover further monies.

(1) Should the solicitors be removed?

1. [19]

   In Kallinicos v Hunt [2005] NSWSC 1181 Brereton J said:

2. [20]

   His Honour then examined the cases to see if Prince Jefri denied the availability of the court’s supervisory jurisdiction to restrain a solicitor from acting against a former client other than where confidences were put in jeopardy. His Honour concluded:

3. [21]

   In Westpac Banking Corporation v Newey [2013] NSWSC 533, a case in which allegations were levelled against the solicitors acting for the opposing party not dissimilar to the allegations made on the present application, Pembroke J said:

4. [22]

   Fairly similar remarks to those made by Pembroke J could be made in the present matter. Mr Sayed does not point to any evidence suggesting any negligence on the part of Dibbs Barker, let alone unethical and unlawful conduct. Mr Sayed does not know what advice was given by Dibbs Barker to NAB at the time of the sale of the Corrimal property. He previously sought unredacted copies of documents, but I declined to order that the documents be unredacted because I was satisfied they were protected by client legal privilege and that there had been no waiver of the privilege in any pleading by NAB.

5. [23]

   He submitted that it was clear from the affidavit of Alexandra Kirby and from the timeline he prepared as part of his submissions, with particular reference to the entries in July and August 2009, that the legal advice must have concerned the landlocking. However, even if that inference can be drawn it says nothing about any negligence or unlawful conduct on the part of the solicitors.

6. [24]

   He said in submissions on the motion:

7. [25]

   He then submitted that, when negotiations were being conducted at the time of the hearing before Adams J in 2012, the solicitors were arguing that the release provided for in clause 7(a) of the draft deed of settlement (see Sayed (No 5) at [17]) was a release which protected its agents MERC and MMJ. Mr Sayed compared that with what he said happened at the hearing regarding the claim in respect of landlocked land (Sayed (No 6), which he said was NAB wanting to sue MERC and MMJ. He submitted at that point that Dibbs Barker were only interested in protecting themselves, and he said:

8. [26]

   Mr Sayed was not able to point to any evidence of negligence or unlawful acts on the part of Dibbs Barker. It was merely his belief. He certainly asserts that Dibbs Barker were negligent in relation to the landlocked issue, but the assertion appears to derive only from his belief in that regard. He sought to cross-examine Danielle Kuti on whose affidavit he relied in support of his motion. I declined to permit such cross-examination, not only because it was Mr Sayed himself who had read her affidavit on the motion but also because the cross-examination was likely to be a fishing expedition to obtain some evidence of wrongdoing by Dibbs Barker and, in any event, was almost certain to trespass into areas protected by client legal privilege.

9. [27]

   As in Newey, it is relevant although not determinative that the plaintiff does not itself perceive any conflict with its solicitors or that any error concerning the landlocking was the fault of the solicitors. The present application is put on the basis of a conflict of interest between NAB and its solicitors. But, as in Newey, this is not a case involving a conflict of interest. At best, there is, as in Newey, a theoretical possibility of a claim by NAB against the solicitors if NAB is unsuccessful in defending Mr Sayed’s cross-claim. With that goes an implied assertion that the solicitors have an interest in justifying their actions at the time of the sale of the land.

10. [28]

    Another relevant consideration is the fact that, as I already determined in Sayed (No. 6) with regard to MERC and MMJ, the limitation period has long expired for NAB to be able to sue Dibbs Barker for any negligence or breach of retainer concerned with the sale of the Corrimal property.

11. [29]

    There is no realistic sense of impropriety about the circumstances. There is nothing that sensibly justifies the conclusion that, unless an order was made removing the solicitors, the integrity of the judicial process would be impaired. In the circumstances, I do not consider that a fair-minded, reasonably informed member of the public would conclude that the solicitors should be restrained from acting for NAB “in the interests of the protection of the integrity of the judicial process”.

12. [30]

    The issue of the limitation period is also relevant to Mr Sayed’s desire to sue Dibbs Barker himself. The time for doing so has expired. There is the further consideration relating to any such claim that it is difficult to see how any duty of care was owed by NAB’s solicitors to Mr Sayed. In Bebonis & Anor v Angelos & Ors; Christopoulos & Anor v Angelos [2003] NSWCA 13; (2003) 56 NSWLR 127 Handley JA (Beazley and Heydon JJA agreeing) said at [42]:

13. [31]

    The application to remove the solicitors should be refused.

(2) Redacted documents

1. [32]

   In Sayed (No. 5) I dealt with the question of whether documents that had been redacted and produced in answer to a Notice to Produce should be provided in an unredacted form. I held that there had been no waiver of client legal privilege attaching to the documents. The matter was argued for Mr Sayed by Mr Hall SC.

2. [33]

   Nothing in the evidence now relied upon by Mr Sayed provides any basis for a claim that privilege has been waived. Nor is there any other reason why those documents should be disclosed.

3. [34]

   The present application amounts to an application under r 36.16(3) UCPR to set aside or vary any judgment or order. Especially where such a judgment or order has been made after a contested interlocutory application, it is necessary for the person seeking a variation of the order to show a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the court on the hearing of the original application: Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46; Levy v Bablis [2012] NSWCA 77; Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82 at [11]-[12].

4. [35]

   Mr Sayed submitted that a reading of the affidavit of Alexandra Kirby shows that the documents over which privilege is claimed were not communications between Dibbs Barker and NAB but, rather, were diary notes. The relevant documents are described in this way:

5. [36]

   Section 118 of the Evidence Act 1995 (NSW) provides:

6. [37]

   The diary notes are confidential documents and they record confidential communications. Section 118 brings about client legal privilege with respect to those documents. Mr Hall SC did not argue otherwise at the hearing of the motion for the provision of unredacted versions of those documents (Sayed (No 5)). He was undoubtedly correct in not doing so. All that was argued was whether privilege was waived. No evidence is put forward that casts any doubt on the maintenance of the privilege that was claimed and continues to be claimed. No change of circumstances is shown by Mr Sayed.

7. [38]

   This order should be refused.

(3) Landlocking

1. [39]

   Mr Sayed had previously sought the right to amend the cross-claim to include the landlocking claim. I dealt with this after a contested interlocutory hearing in my judgment in Sayed (No. 6).

2. [40]

   No material change of circumstance or new material is identified to justify any variation of the order I made in that regard. This order should be refused.

The application as a whole

1. [41]

   There is a further reason that orders 1 to 3 should be refused.

2. [42]

   Section 58 of the Civil Procedure Act 2005 (NSW) is relevant. In Sayed (No. 6) I discussed the application of s 58 to Mr Sayed’s then application to amend the cross-claim. Everything that I said there at [44]-[48] is relevant on the present application to amend the cross-claim. It also relevant to a consideration of the application to remove Dibbs Barker as NAB’s solicitors, and to the leave sought to amend to add a claim by Mr Sayed against Dibbs Barker.

3. [43]

   All of this material was available to Mr Sayed at a much earlier time. Despite at times being advised and assisted by solicitors and senior counsel the present application is only now being made well after the time the matter was set down for final hearing and only a few months before that final hearing. No explanation is provided for the delay in making the present application: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [102]-[103].

4. [44]

   As a matter of discretion, even if other matters were established, I would decline to permit the amendments and to order the removal of the solicitors.

5. [45]

   The matter should go to trial on the second further amended cross-claim filed 28 April 2017 and the defence thereto.

(4) Subpoenas

1. [46]

   Mr Sayed seeks to issue two subpoenas. The first is addressed to Dibbs Barker Solicitors and seeks the following documents:

2. [47]

   This subpoena must be seen in the light of the fact that Mr Sayed has issued four Notices to Produce addressed to NAB during the currency of the proceedings. Lawyers for NAB have said, without dissent from Mr Sayed, that from an early stage in the proceedings the mutual understanding between the legal representatives was that relevant documents would be produced in response to Notices to Produce rather than formal discovery to minimise costs.

3. [48]

   The first Notice to Produce was issued by lawyers acting for Mr Sayed on 6 December 2011. It was largely concerned with the loan facilities in relation to the properties but also sought a copy of the contract for the sale of the Corrimal land.

4. [49]

   The next Notice to Produce served by solicitors then acting for Mr Sayed was issued on 28 March 2012. It sought production of the following documents:

5. [50]

   The third Notice to Produce served by solicitors for Mr Sayed on 18 July 2012 required production of the following documents:

6. [51]

   Finally, on 13 November 2015, after the resolution of the principal part of the proceedings and when only the cross-claim concerning the Corrimal land was extant, Mr Sayed issued a further Notice to Produce requiring production of the following documents:

7. [52]

   At all times when these Notices to Produce were served Dibbs Barker were acting for NAB. Indeed, in respect of the first three Notices to Produce, those Notices were addressed to NAB at Dibbs Barker.

8. [53]

   In addition, subpoenas have already been issued on Mr Sayed’s behalf to MMJ North Pty Ltd (2 subpoenas), Robert Webley (2 subpoenas), Realta Enterprises Pty Ltd, MMJ Real Estate and Addison’s Advisory Group.

9. [54]

   In my opinion, no further purpose is served by granting leave to Mr Sayed to serve the subpoena he now seeks leave to serve on Dibbs Barker. NAB was required to produce in answer to the Notices to Produce documents that were in its possession or control, and that would include documents in the possession of Dibbs Barker. It is apparent from the production of documents already made that the documents included those in the actual possession of Dibbs Barker. The affidavit of Alexandra Felicity Kirby of 10 May 2016, and the dispute and judgment (Sayed (No. 5)) that resulted from that affidavit, demonstrate that that was so. Any communications between Dibbs Barker and the persons and entities specified in the subpoena now sought to be issued clearly fell within one or more of the Notices to Produce issued 28 March 2012, 18 July 2012 and 13 November 2015.

10. [55]

    NAB and Dibbs Barker would be under a continuing obligation if further documents were located in circumstances where formal discovery was in place. Dibbs Barker would understand that where Notices to Produce were agreed to be used in lieu of discovery that a similar obligation would exist if further documents were discovered after production in answer to those Notices to Produce.

11. [56]

    Mr Sayed, in a written submission lodged after I reserved judgment, and lodged in response to an email from counsel for NAB detailing the earlier Notices to Produce, asserts: (a) that it would now seem there was no compliance with paragraphs 4 and 5 of the Notice to Produce dated 28 March 2012 because “it should have included the MERC file which it did not”; (b) that there was no compliance with the Notice to Produce dated 18 July 2012; and (c) in relation to the Notice to Produce dated 13 November 2015, that NAB argued it had complied by its earlier production and that Mr Sayed was trying to obtain documents already supplied to Swaab (his former solicitors) over which they held a lien, whereas, according to Mr Sayed, the Notice to Produce dated 13 November 2015 was materially different from the Notice issued on 28 March 2012.

12. [57]

    No issue of non-compliance by NAB with Notices to Produce has previously been raised before me apart from the dispute concerning redacted documents dealt with in Sayed (No 5). Non-compliance (if such be the case) is not dealt with by issuing further Notices or Subpoenas but by challenging the extent of the production. If non-compliance is still an issue, that matter will be listed before me to resolve.

13. [58]

    Unnecessary expense would now be incurred if Mr Sayed was given leave to issue the subpoena to Dibbs Barker in circumstances where no useful benefit would be served by requiring Dibbs Barker again to go through their files to comply with the subpoena.

14. [59]

    Leave to issue the subpoena to Dibbs Barker is refused.

15. [60]

    The second subpoena is addressed to Allmain Pty Ltd. It seeks the following documents:

16. [61]

    When I enquired who Allmain was I was told it was the entity referred to as the “alternative principle (sic) agent” in paragraph 30 of the Second Further Amended Cross-Claim which pleads:

17. [62]

    The reference to “taking further steps to reassign Corrimal to an alternative principle (sic) agent” is not taken any further in the pleading. There is no particular of negligence associated with the taking of “further steps”, nor is there any further mention about an alternative principal agent. The “further steps” are not identified. In those circumstances it cannot be said that there is any issue in the proceedings that relates to Allmain. On the face of it, no document in Allmain’s possession or control is relevant to the issues in the proceedings. At its highest, the subpoena amounts to a fishing expedition.

18. [63]

    Leave to issue the subpoena to Allmain is refused.

Conclusion

1. [64]

   The notice of motion filed 28 November 2017 should be dismissed. No further notices of motion are to be filed in the proceedings without my leave. Mr Sayed has been told twice in the past that where proceedings are being case-managed motions are not to be filed without leave. He was so informed in an email by my Associate on 28 August 2016 and by me at a directions hearing on 5 September 2016.

2. [65]

   Accordingly, I make the following orders: