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[2024] NSWSC 645

Saade v Rahme

Default judgment and related relief granted

Catchwords

CIVIL PROCEDURE — Default judgment — Defence struck out for failure to prosecute with due dispatch – No issue of principle

Legislation cited

  • Uniform Civil Procedure Rules 2005 (NSW) § 12, r 12.7; Pt 16, r 16.6

Judgment

Summary

  1. [1]

    On 8 August 2018, the plaintiff (Dr Saade) and the defendant (Mr Rahme) entered into a facility agreement whereby Dr Saade lent Mr Rahme $650,000. Both the agreement and the advance of the funds was admitted by Mr Rahme in his defence to these proceedings. Dr Saade now applies by notice of motion filed on 13 May 2024 for default judgment against Mr Rahme. For the reasons which follow that relief will be granted.

  2. [2]

    The Court gratefully acknowledges the assistance it derived from the written submissions and efficient presentation of the application by Mr J Horowitz of Counsel, who appeared for Dr Saade.

Facts and procedural history

  1. [3]

    Mr Rahme made no repayments under the agreement.

  2. [4]

    In due course, Dr Saade commenced these proceedings against Mr Rahme. At lease initially, they were defended. They primarily proceeded by reference to an amended statement of claim filed on 22 May 2023 and a defence filed for Mr Rahme. Mr Rahme also filed a cross-claim against Dr Saade, which raised a set off by reference to amounts allegedly owed by Dr Saade to Mr Rahme in defence to the otherwise admitted debt under the agreement.

  3. [5]

    On 29 September 2023, Mr Rahme's solicitor filed a notice of ceasing to act. The matter came before the Court on 5 February 2024, when there was no appearance for Mr Rahme.

  4. [6]

    On 10 March 2024, Mr Rahme sent Dr Saade this WhatsApp message:

  5. [7]

    Mr Rahme has since failed to appear at four directions hearings: 11 March, 4 April, 18 April and 14 May 2024.

  6. [8]

    On 14 May 2024, pursuant to one of the prayers in Dr Saade's motion, Registrar Walton dismissed Mr Rahme's amended statement of cross-claim pursuant to UCPR Part 13, r 13.6.

  7. [9]

    Mr Rahme's apparent indifference to these proceedings has continued up to and including today. When the matter came before me last Friday in the Applications List, I directed that steps be taken to inform Mr Rahme of today's hearing. Among other things that were done, Dr Saade's process server texted Mr Rahme to ensure that Mr Rahme had received earlier correspondence and gave details of the time and location for today's hearing. That text was responded to by Mr Rahme with two images which I can only assume were intended to be amusing, but which clearly sent the message that Mr Rahme had no interest in appearing today or in the proceedings at all. The Court finds accordingly, and that Mr Rahme was well and truly on notice of today's hearing.

Consideration

  1. [10]

    The application proceeds in two parts. The first is an application pursuant to UCPR Part 12 r 12.7(2):

  2. [11]

    I am satisfied by reason of the matters in [5] to [9] above that Mr Rahme has failed to conduct his defence with due despatch. In those circumstances, I will in due course make an order that his defence be struck out.

  3. [12]

    It will then follow that for the purposes of UCPR Part 16 r 16.2(1)(c), Mr Rahme will be in default for the purposes of Part 16 because the Court will have ordered his defence to be struck out.

  4. [13]

    The Court's discretion to enter a default judgment on Dr Saade's claim against Mr Rahme pursuant to UCPR Part 16 r 16.6 will be engaged:

  5. [14]

    I find by reference to the affidavits that have been read by Mr Horowitz that all the necessary formalities for the purposes of entry of default judgment under r 16.6 have been satisfied.

  6. [15]

    Mr Horowitz has provided the Court with the necessary evidence of the calculations of the principal amount owed under the agreement and a related unitholders' agreement between the parties also sued on by Dr Saade. I am also satisfied that the order for costs should be on the indemnity basis by reference to the familiar provision in financing documents of this kind that the borrower is to indemnify the lender fully for any costs of enforcement.

Conclusion

  1. [16]

    Accordingly, the Court make these orders propounded by Mr Horowitz:

    1. (1)

      Order that the Defendant’s Amended Defence dated 19 May 2023 be struck out.

    2. (2)

      Order that there be judgment in favour of the Plaintiff against the Defendant for $2,295,551.45.

    3. (3)

      Save for the costs prescribed under Part 1, item 5, Schedule 1 of the Legal Profession Uniform Law Application Regulation 2015 (NSW), order that the Defendant pay the Plaintiff’s costs on an indemnity basis, of and incidental to the:

    4. (4)

      Order that the Defendant pay the Plaintiff’s solicitor costs of applying for default judgment fixed under the Regulation in the sum of $1,755.60.

    5. (5)

      Liberty to the plaintiff to apply for the costs referred to in order 3 to be assessed on a gross sum basis.

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.