Khanna v Bond Realty Pty Ltd

1. [1]

   THE COURT: This is an application for leave to appeal filed on 31 December 2018 from orders of Curtis ADCJ entered on 3 December 2018 after a hearing on 30 November 2018.

2. [2]

   The primary judge had before him a number of notices of motion filed on behalf of the Applicants, Mr Sanjeev Khanna and Ms Geeta Khanna. Each of those notices of motion related to proceedings which the Applicants had originally commenced in the District Court of New South Wales on 27 March 2017 against Mr Gerard Sumithra Abeywardane Gunsekera and Mrs Shalini Nirmali Lourdes Gunsekera and in which an amended statement of claim was filed on 24 April 2017 joining as a defendant Bond Realty Pty Ltd (Bond Realty), the First Respondent on this application.

3. [3]

   The procedural history leading up to the hearing before Curtis ADCJ on 30 November 2018 can be shortly stated.

4. [4]

   First, on 25 May 2018, Levy DCJ set aside service of the proceedings against Mr and Mrs Gunsekera, struck out the amended statement of claim and granted the Applicants leave to file an amended pleading.

5. [5]

   Second, the leave to file an amended pleading granted by Levy DCJ having been exercised, the new amended statement of claim was itself the subject of a successful strike-out application before Dicker DCJ on 14 September 2018. His Honour, however, granted the Applicants leave to file a further amended statement of claim by 2 November 2018.

6. [6]

   The Applicants had, in the form of the Amended Statement of Claim that came before Dicker DCJ, purported to join the sole director of Bond Realty, a Ms Ozlem Olcayto (Ms Olcayto), but this was done without the prior leave of the Court (Levy DJC’s orders of 25 May 2018 not authorising this course). Dicker DCJ rejected the purported joinder of Ms Olcayto and indicated that any application to join a further defendant would need to be by separate motion. His Honour ordered that the Applicants pay Ms Olcayto’s costs of the motion and that the other parties’ costs be costs in the cause.

7. [7]

   Third, on 15 October 2018, Strathdee DCJ ordered that Ms Olcayto be joined in the proceedings on condition that, by 5.00pm on 2 November 2018, the Applicants, pursuant to the orders that had been made by Dicker DCJ on 14 September 2018, file a proposed further amended statement of claim and pay costs in the sum of $5,534.19.

8. [8]

   2 November 2018 came and went without any further amended statement of claim having been filed. A series of motions in the proceedings were, however, filed by the Applicants on 26, 30 and 31 October and 16 November 2018, the last of these notices of motion purporting to supersede the motions of 30 and 31 October 2018.

9. [9]

   It was the 26 October 2018 and 16 November 2018 notices of motion filed by the Applicants which came before Curtis ADCJ on 30 November 2018.

10. [10]

    The 26 October 2018 notice of motion sought the following relief:

11. [11]

    1) leave to set aside the orders of Strathdee DCJ to pay $5,534.19 to Bond Realty’s solicitor;

12. [12]

    2) leave to file the “the cost, out of pocket expenses within 14 days”;

13. [13]

    3) leave to cross-examine Bond Realty and Ms Olcayto and their representatives on their affidavits.

14. [14]

    The 16 November 2018 further amended motion sought the following relief:

15. [15]

    1) leave to amend the originating process to correct a mistake in the name of a party to the proceedings pursuant to s 65(1)(b) of the Civil Procedure Act 2005 (NSW);

16. [16]

    2) service of notices to produce on Ms Olcayto or the secretary of Bond Realty;

17. [17]

    3) leave to cross-examine Ms Olcayto on her affidavits dated 10 September and 3 October 2018;

18. [18]

    4) leave to file a further amended statement of claim within 28 days upon filing a notice to produce and answering subpoena documents;

19. [19]

    5) orders for Mr Jaskeerat Singh Baweja (Mr Baweja) to comply with a subpoena served on him within seven days, and failing that for an arrest warrant to be issued pursuant to s 97 of the Civil Procedure Act 2005 (NSW);

20. [20]

    6) “leave for costs and out of pocket”.

21. [21]

    The reference to a subpoena issued to Mr Baweja in order 5 of the 16 November 2018 notice of motion was a reference to two subpoenas that had apparently been issued on 28 September 2018 and 19 October 2018. Mr Baweja had filed a notice of motion to set aside service of these subpoenas on 12 November 2018. This notice of motion was also before Curtis ADCJ on 30 November 2018. Mr Baweja is the Second Respondent in this appeal, having been joined by order of the Registrar on 1 April 2019.

22. [22]

    In the course of the hearing of the motions before Curtis ADCJ on 30 November 2018, Mr Khanna indicated that he wished to withdraw the motion of 26 October 2018 (tp 20-21). Bond Realty sought an order that Mr Khanna pay its costs of resisting the motion.

23. [23]

    On 30 November 2018, Curtis ADCJ dismissed both the 26 October 2018 motion and the 16 November 2018 motion with costs each in the fixed sum of $8,618.33 payable within 28 days.

24. [24]

    His Honour also, on the oral application of counsel for Bond Realty and in light of the other orders that he had made, dismissed the District Court proceedings in their entirety and ordered the Applicants to pay Bond Realty’s solicitor costs in the fixed sum of $10,000 within 28 days. As was put by Ms Thew on behalf of Bond Realty:

25. [25]

    The primary judge also took the view that the relief sought in the 12 November 2018 notice of motion, namely the setting aside of the subpoenas, would also follow if the proceedings were dismissed. As such Curtis ADCJ also ordered that the subpoenas to Mr Baweja be set aside and Mr Khanna pay Mr Baweja’s costs of $7,500 within 28 days.

26. [26]

    The application for leave to appeal which is before the Court is from each of the orders of Curtis ADCJ although the grounds on which the application is sought to be made are far from coherent.

27. [27]

    It should also be noted at this point that the summons seeking leave to appeal and the summary of argument that has been filed on behalf of the Applicants appear to seek to challenge the orders of Dicker DCJ and Strathdee DCJ in addition to those of Curtis ADCJ. The summons having been filed on 31 December 2018, the challenge to their Honours’ orders made on 14 September and 15 October 2018 respectively is well out of time. No application in this regard has been made nor any affidavit filed in support of any extension of time. As such, we do not propose to consider the purported challenge to their Honours’ orders.

Applicable principles

1. [28]

   In PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48, this Court made reference to the proper approach of an intermediate appellate court to applications for leave to appeal from interlocutory decisions involving the exercise of discretion on questions of practice and procedure. The Court observed (at [5]) that discretionary decisions “engage the strictures against over-ready appellate interference and the correlative need for ‘added restraint’ associated with House v The King (1936) 55 CLR 499 with the consequence that a ‘heavy burden’ lies on an applicant seeking leave to appeal from a discretionary judgment on a question of practice or procedure” (citations omitted).

2. [29]

   The Court in that case also noted (at [6]) the well-established grounds which generally must be satisfied before leave to appeal to this Court is granted, namely that:

3. [30]

   In our opinion, for the reasons that follow, none of these criteria is made out and leave to appeal should be refused with costs.

Consideration

1. [31]

   The 26 October notice of motion which was dismissed was a notice of motion which Mr Khanna sought to withdraw in the course of the hearing and it was reasonable that the First Respondent be awarded its costs in relation to that notice of motion. There was and is no good reason why a party that has prepared to meet a notice of motion should be deprived of its costs if a party that has filed it withdraws it in the course of argument. Whilst costs will not always be ordered in such circumstances (see Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-625; see also Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84), that is not an invariable rule and there was no error of principle in the primary judge’s decision to award costs in relation to the 26 October 2018 notice of motion.

2. [32]

   There is absolutely no reason to grant leave to appeal from a decision to dismiss a notice of motion in circumstances where the applicant on the motion has put the other side to costs in preparing to meet it but has then sought to withdraw it.

3. [33]

   In relation to the orders made by Curtis ADCJ to dismiss the 16 November 2018 notice of motion and the proceedings more generally, these orders relate to and arise out of the Applicants’ continuing inability to formulate their claims for substantive relief in a sufficiently coherent way. That inability was candidly acknowledged by Mr Khanna in the hearing in the following passage of the transcript which was before the Court on the leave application:

4. [34]

   After this submission, the primary judge sought clarification in the following exchange:

5. [35]

   In his brief reasons, Curtis ADCJ made reference to Mr Khanna’s acknowledgement of his inability to formulate the claim as a reason for refusing an application for an extension of time in which to file a further amended statement of claim, this being one of the prayers for relief sought in the notice of motion of 16 November 2018. His Honour said:

6. [36]

   His Honour was also referred to two medical reports, one being a report of Dr Anna Bartolomeo which his Honour mistakenly referred to as having been generated on 8 August 2012. This mistake was an obvious but immaterial error. The second was a medical report of a Dr Rahmanamlashi of 19 October 2018. The primary judge held that he was not satisfied on that material that Mr Khanna was medically disabled in a way that explained his failure to file an amended statement of claim by 2 November 2018. No detailed submission was made as to why his Honour was wrong to reach that conclusion or as to why it was not open to him.

7. [37]

   The decision to refuse a further extension of time was a discretionary one which was exercised against the background of the full history of the proceedings including the number of opportunities that had been afforded to Mr Khanna to formulate or reformulate his claims in a coherent and satisfactory manner.

8. [38]

   The dismissal of the proceedings was appropriate given the Applicants’ failure and acknowledged inability to take up the leave which had been extended to them by Dicker DCJ (and Levy DCJ before him) to amend the pleaded case in a manner that was coherent and acceptable. The legal system cannot function without claims being coherently formulated. This is a requirement of the rules of court both for reasons of fairness to a party or parties who are sued and also because it is more generally in the public interest that claims be properly formulated as vague and incoherent claims inevitably absorb far greater judicial time and resources than they would had they been formulated with the requisite precision.

9. [39]

   Having reviewed the transcripts of hearing before each of Levy DCJ, Strathdee DCJ and Judge Curtis ADCJ, the need for a clear formulation or articulation of the case the Applicants wished to propound had been made abundantly clear to them and, in particular, to Mr Khanna. The Applicants were well and truly on notice that this was their obligation and Curtis ADCJ, faced with Mr Khanna’s acknowledgment that he was not in a position coherently to formulate the claim he wished to bring, was not obliged to extend further time to allow this to occur. His Honour’s order refusing an extension of time was entirely open to him and appropriate in the circumstances. His costs orders necessarily followed the event.

10. [40]

    Although his Honour’s reasons for dismissing the motions of 26 October 2018 and 16 November 2018 were brief, they need to be read in the context of the transcript as a whole. On the very simple facts of the case, namely that the Applicants had not exercised the liberty they had been afforded to file a further amended statement of claim by 2 November and the circumstances where it was said that they were currently unable to formulate their claim, the reasons of the judge really needed to do no more than recite those facts which fell to be considered in the context of the entire history of the litigation, of which all parties were aware and of which Curtis ADCJ was entirely cognisant. His Honour had been fairly and responsibly taken through the history of proceedings by Ms Thew on behalf of the First Respondent.

11. [41]

    The same vice of incoherence which had attended earlier attempts to formulate a claim regrettably also infected the application for leave to appeal and the summary of argument proffered in support of that application.

12. [42]

    In its written submissions, the First Respondent endeavoured, as best it was able, to summarise what it gleaned to be the proposed grounds of appeal or bases identified for seeking to attack the orders of Curtis ADCJ. As summarised in the First Respondent’s submissions, these grounds of attack were that the primary judge:

13. [43]

    In our opinion, these several attacks on the reasons and orders of Curtis ADCJ are either without foundation or are not such as to satisfy the criteria for a grant of leave to appeal. A number have already been dealt with.

14. [44]

    Insofar as the Applicants’ case suggests some bias on the part of Curtis ADCJ, we see no basis whatsoever for this contention, such as it was. Certainly no comprehensible basis for this contention was advanced by the Applicants in their summary of argument. Mr Khanna was afforded ample opportunity to present argument both on his own behalf and on behalf of Mrs Khanna, and in chief and in reply.

15. [45]

    In relation to the complaint about the dismissal of the 30 October 2018 notice of motion, as already stated, the further amended notice of motion of 16 November 2018 superseded the 30 October 2018 motion (and, for that matter, the 31 October 2018 motion). In those circumstances the primary judge was quite right not to address those motions. The criticism of his Honour’s dismissing the 30 October 2018 motion without reasons is wholly unsound.

16. [46]

    Insofar as complaint is sought to be made that Curtis ADCJ made orders in the absence of Mrs Khanna, whilst Mrs Khanna was not personally present at the 30 November 2018 hearing, at the commencement of that hearing, Mr Khanna explained that Mrs Khanna was overseas and tendered to the Court an “authority letter for [Mrs Khanna]”. The Applicants, having arranged for Mr Khanna to appear on behalf of Mrs Khanna, cannot now complain of orders having been made in her absence. No suggestion was made that Mrs Khanna had not authorised her husband to appear on her behalf on 30 November 2018.

17. [47]

    Finally, in relation to the decision to set aside service of the subpoenas, two points should be made. First, the Applicants did not in their original written submissions advance any argument to impugn this decision. Secondly, in oral submissions and written submissions in reply to the Second Respondent’s submissions, the Applicants submitted that they had not been served with the notice of motion filed on 12 November 2018 seeking to set the subpoenas aside. A review of the transcript of the hearing before Curtis ADCJ certainly suggested that Mr Khanna was aware of this notice of motion and Ms Berberian on behalf of the Second Respondent was given leave to forward to the Court a copy of the email serving the notice of motion on Mr Khanna. We are satisfied that Mr Khanna had knowledge of it and that it was listed for hearing on 30 November 2018. The setting aside of the subpoenas was inevitable once the primary judge reached the conclusion that the proceedings should be dismissed.

18. [48]

    For the above reasons, we would dismiss the application for leave to appeal with costs.