Mahommed v Unicomb (No 3)

1. [1]

   Before the Court is an application by way of notice of motion. The first plaintiff seeks to set aside an order which dismissed his claims against the first defendant. The order was made last year by Robb J. The notice of motion seeks other orders but the applications cannot succeed unless the dismissal order is set aside.

2. [2]

   The proceedings concern the assets and affairs of a trust called the Lovedale Ranch Unit Trust. The Trust was constituted by deed of trust dated 1 September 2009. It was a vehicle for investment by unit holders in a property at Lovedale Road, Allandale. Allandale is in the Hunter region of NSW. The trustee of the trust was, at the relevant time, Loire Consultants Pty Ltd (“Loire”). Loire was initially the third defendant. It was later removed as a defendant and joined as the second plaintiff.

3. [3]

   Loire is now in liquidation. It had previously been, since August 2014, controlled by Peter Shah Mahommed, the first plaintiff. He claims to enforce causes of action of Loire as assignee under a deed of assignment dated 12 November 2015. The validity of the assignment purportedly effected by the deed is apparently in dispute.

4. [4]

   The orders by Robb J followed lengthy interlocutory proceedings and the delivery of two judgments as I will describe. For the purpose of those proceedings, the plaintiffs’ pleaded claims and allegations were set out in the third version of the statement of claim, which is referred to in the judgments as the Further Amended Statement of Claim (“FASOC”).

5. [5]

   The first defendant is Pamela Margaret Unicomb. She was, at the relevant time, the sole director of the second defendant, Greenhills Securities Pty Ltd (“Greenhills”). She also appears to have held fifty per cent of the units in the Trust.

6. [6]

   Mrs Unicomb’s involvement in the proceedings results from alleged activities of her husband, Michael Charles Unicomb. The FASOC alleged that he was an accountant who acted as a tax agent and investment adviser to the unit holders of the Trust. Mr Unicomb was also alleged to have been a de facto director (and the de facto controller) of Greenhills.

7. [7]

   Mr Unicomb is not a party to these proceedings. He is, or was, a party to other proceedings dating from 2014. I refer in more detail to those proceedings below.

Claims and procedural history

1. [8]

   The allegations in the FASOC centred on various monetary dealings connected with the Trust and allegedly orchestrated by Mr Unicomb. The FASOC alleged that those dealings gave rise to, or otherwise were associated with, six debts totalling $2.025 million. The plaintiffs’ causes of action in the FASOC were pleaded by reference to those debts, which were referred to as debts 1 to 6.

2. [9]

   These six debts were made up of debts allegedly owing by Loire as trustee of the Trust to third parties (including unit holders) and debts allegedly owed by Greenhills to Loire as trustee of the Trust. The first group of debts therefore represented liabilities of the Trust and the second group represented assets. In what follows, references to Loire are to Loire as trustee of the Trust.

3. [10]

   The FASOC made claims against Greenhills concerning all six debts. The claims against Mrs Unicomb were confined to debt 5 (in the amount of $207,594). Mrs Unicomb was sued in an accessorial or derivative capacity and as director of Greenhills.

4. [11]

   The proceedings have a long and chequered procedural history. They began in the District Court in February 2016. At that time Mr Mahommed was the sole plaintiff.

5. [12]

   In June 2016, Gibson DCJ struck out part of the claim and dismissed the balance on the ground that the District Court had no jurisdiction to entertain it: Mahommed v Unicomb [2016] NSWDC 114. An application was then made on behalf of Mr Mahommed under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 36.16, to set aside, or vary, Gibson DCJ’s orders. That application was dismissed by Balla DCJ on the ground that it was an impermissible attempt to reopen the case after final judgment had been delivered.

6. [13]

   An application was then made on behalf of Mr Mahommed to the Court of Appeal in its supervisory jurisdiction (Supreme Court Act 1970 (NSW), s 69). That application was decided by the Court of Appeal in April 2017: Mahommed v Unicomb [2017] NSWCA 65. The leading judgment was written by Ward JA, with whom Macfarlan JA and McDougall J agreed.

7. [14]

   The Court of Appeal upheld Gibson DCJ’s decision so far as the striking out of some of the claims was concerned. But the application was successful in keeping alive the other claims, which Gibson DCJ had summarily dismissed. Gibson DCJ’s error was that, having found that there was lack of jurisdiction to deal with the remaining claims in the proceedings, she was statutorily obliged to transfer the proceedings to this Court: see at [55],[57]. The Court of Appeal set aside Gibson DCJ’s dismissal of the claims and ordered that they be transferred to this Court

8. [15]

   Mr Mahommed’s success was, however, limited. The Court of Appeal refused to disturb the costs order made against Mr Mahommed by Gibson DCJ. The Court of Appeal also refused to disturb the costs order made by Balla DCJ. Ward JA explained (at [60]):

9. [16]

   Order 3 made by the Court of Appeal reflected Ward JA’s criticism of Mr Mahommed’s District Court statement of claim as “hopelessly pleaded”. It provided:

10. [17]

    The criticism appears to have been accepted on the hearing of the appeal. The form of order 3 reflected an undertaking which had been offered at the hearing: see [2017] NSWCA 65 at [20].

11. [18]

    The FASOC was subsequently prepared and filed in this Court. It was accompanied by an affidavit containing the verification that was required. But an application was then made on behalf of Mrs Unicomb and Greenhills to strike it out and dismiss the proceedings. The application was made by notice of motion filed in August 2017.

12. [19]

    The defendants’ motion was fixed for hearing before Robb J on 20 November 2017. On 10 November, a notice of motion was filed for Mr Mahommed (but not Loire). That notice of motion sought, by way of cross-application, leave to file a new version of the statement of claim (referred to in the interlocutory proceedings before Robb J as the “2FASOC”, meaning the proposed second further amended statement of claim).

13. [20]

    His Honour heard both motions together on 20 November 2017. He delivered judgment on 9 March 2018: Mahommed v Unicomb [2018] NSWSC 291.

14. [21]

    After recounting the procedural history to that point, his Honour observed at [25]:

15. [22]

    His Honour continued at [26]-[28]:

16. [23]

    The grant of leave to file the 2FASOC was opposed. Nevertheless, as a matter of expediency, Robb J considered whether, if the amendments it propounded were made, Mr Mahommed would have an answer to the defendants’ application.

17. [24]

    The 2FASOC propounded amendments to the claims as pleaded in the existing FASOC against Mrs Unicomb. It also propounded new claims against her. There were three reformulated existing claims and two new claims.

18. [25]

    Robb J considered the proposed amendments and the proposed new claims in detail. He concluded that both the FASOC and the 2FASOC were inadequate in their pleading of claims against Mrs Unicomb. The FASOC should be struck out and leave to file the 2FASOC refused so far as those claims were concerned. At [190] he continued:

19. [26]

    Robb J directed that the parties bring in short minutes of order to give effect to his judgment. He said at [195]:

20. [27]

    The making of orders to carry his Honour’s judgment into effect proved to be a protracted process, involving both correspondence between the parties and the Court and Court appearances. These were handled for Mrs Unicomb and Greenhills by their solicitor, Mr Patrick Tudehope, and for Mr Mahommed and Loire by their solicitor, Mr Leonardus Smits.

21. [28]

    An initial complication was that, in his judgment, his Honour had proceeded on the basis that Greenhills was not challenging the pleading of the claims against it in the existing FASOC. Mr Tudehope took the point that this was incorrect. In fact, Mr Tudehope contended, Greenhills had sought to have the pleading struck out but this had been overlooked.

22. [29]

    The proceedings were relisted before Robb J on 5 June. His Honour directed that the parties lodge written submissions on the point raised by Mr Tudehope concerning the claims against Greenhills, and reserved for further consideration whether to issue a further judgment on the question. Concerning the claims against Mrs Unicomb, which were not affected by the issue raised on behalf of Greenhills, the order was:

23. [30]

    Mr Smits did not file a further notice of motion as the terms of this order contemplated. Instead, in a manner which I will describe in more detail below, he purported to amend the notice of motion which had been before Robb J at the hearing on 20 November 2017. This amended motion was allocated to the Applications List. There it remained for several months in the call-over list, awaiting Robb J’s decision on the claim against Greenhills.

24. [31]

    Robb J handed down judgment concerning the claim against Greenhills on 25 September: Mahommed v Unicomb (No 2) [2018] NSWSC 1450. He concluded that the claims pleaded against Greenhills should stand. Referring to the notices of motion from the defendants and the plaintiffs which had been before him at the hearing on 20 November 2017, he said at [64]-[65]:

25. [32]

    On 20 November 2018, the proceedings (including the amended motion which had been held in the Applications List) came before Robb J again. His Honour made the orders concerning the claim against Mrs Unicomb that the Court:

26. [33]

    In accordance with his Honour’s orders, the proceedings came back before him on 13 February 2019. No pleading certified by counsel had been prepared in accordance with the November 2018 orders. His Honour ordered that the proceedings against Mrs Unicomb be dismissed, and made directions for the further conduct of the claim against Greenhills. Those directions required Greenhills to file its defence within one month. The proceedings against Greenhills were then stood over for further directions before the Registrar.

27. [34]

    Mr Mahommed’s present notice of motion was filed on 27 February 2019. The motion’s progress towards hearing was itself somewhat chequered.

28. [35]

    Following the filing of the notice of motion, the Registrar made an order suspending the direction for the filing of Greenhills’ defence. But for reasons which are not immediately apparent from the file, no hearing date was allocated for the motion and it languished for more than a year.

29. [36]

    Eventually, on 3 April 2020, a notice of motion was filed for Mrs Unicomb and Greenhills. The notice of motion sought an order that the plaintiffs file an amended statement of claim compliant with the orders made by Robb J on 20 November (that is, verifying that it had been settled by senior counsel) within 21 days, “time being of the essence”; and, in default of compliance of that order, that the proceedings be dismissed.

30. [37]

    This motion was misconceived. The claim against Mrs Unicomb had already been dismissed, and Robb J had decided that the claim against Greenhills was to continue on the existing pleading, albeit that those proceedings had been put on hold pending the determination of Mr Mohammed’s February 2019 motion. The Court pointed this out to the parties, dismissed the defendants’ motion, and arranged for the February 2019 motion to proceed to hearing. The hearing took place before me on 7 August.

Claims by Loire against Mrs Unicomb and Greenhills

1. [38]

   As originally filed, the applicants under the notice of motion were both Mr Mahommed as first plaintiff and Loire as second plaintiff. Loire, however, was placed in liquidation in July 2019. This resulted in the withdrawal of Mr Smits’ instructions on behalf of Loire.

2. [39]

   The liquidator of Loire is Mr Wil Honner of Pricewaterhouse Coopers. Shortly before the hearing of the notice of motion, the Court was informed by solicitors acting for Loire on Mr Honner’s instructions that, exercising his powers as liquidator, Mr Honner had assigned Loire’s causes of action the subject of the proceedings to a purchaser. Mr Honner’s solicitors stated that Loire had no further interest in the proceedings and did not propose to participate.

3. [40]

   In a later communication the solicitors indicated that their instructions had been withdrawn, apparently due to a lack of funds in the administration. The Court then received a message from Mr Honner that he did not intend to appear on the hearing unless the Court required him to do so.

4. [41]

   I did not consider this acceptable and I did require Mr Honner to appear at the hearing on 7 August. As it seems to be not uncommon for a liquidator who inherits proceedings and then assigns the cause of action to take the attitude taken by Mr Honner, I should say why.

5. [42]

   It is well established that the liquidator has power to assign the company’s causes of action. But although the assignment may be effective to vest the cause of action in the purchaser, it does not automatically have effect for the purposes of the proceedings. The company remains the person responsible for litigating the cause of action in the Court until the assignment is reflected on the record of the Court. The position is analogous to that which it obtains when an assignment is effective in equity but further steps are required for it to be effective at law.

6. [43]

   What this means is that an application must be made to the Court to have the purchaser substituted as the plaintiff for the company, or otherwise joined to the proceedings so that it can thereafter pursue the cause of action in the litigation. Contrary to the assumption made by Mr Honner and his solicitors in these proceedings, the proper party to make such an application is not the purchaser. The purchaser, as a non-party, has no standing (in fact it was revealed at the hearing that in this case the purchaser was the second defendant, Greenhills, but that is a purely fortuitous circumstance). The proper party to make the application is the company.

7. [44]

   This is so for another reason. There may be a question about the validity of the assignment. Furthermore, the liquidator’s decision to assign is subject to the control of the court supervising the liquidation, and there may be a challenge to the decision. Until the validity of the assignment has been accepted by the parties or confirmed by the Court, the company cannot be removed as a party from the proceedings. Indeed, where the validity of the assignment depends upon disputed issues of fact or otherwise cannot be determined on a summary basis, it may be necessary for the company to remain a party to the proceedings and for the purchaser to be joined as an additional party.

8. [45]

   It follows that a liquidator wishing to assign a cause of action in pending proceedings cannot simply execute an assignment and leave the Court to deal with the purchaser. The job is not done until the assignment is reflected on the record of the Court.

9. [46]

   The obvious solution is to require the purchaser, under the terms of the assignment, to take responsibility for making the application (and for the further costs of the company’s representation if for some reason the assignment does not go through). But if no such obligation is imposed on the purchaser, or the purchaser does not discharge it, the responsibility remains the liquidator’s.

10. [47]

    Mr Honner accepted this after I explained it to him. I granted Mr Honner leave to represent Loire. He conferred with the purchaser (who, as I have said, turned out to be Greenhills) and negotiated the resolution of the proceedings between Loire and Greenhills (which were the only extant proceedings by Loire, its claim against Mrs Unicomb having been dismissed under Robb J’s orders of 13 February 2019). The proceedings were dismissed. Loire thus dropped out of the picture.

Claims by Mr Mahommed against Mrs Unicomb

1. [48]

   Mr Mahommed’s February 2019 motion seeks orders setting aside two of the orders made by Robb J on 20 November 2018. They are the order dismissing the claim against Mrs Unicomb on an “implied contract” basis and the order striking out the FASOC against her.

2. [49]

   The motion also seeks orders setting aside the order of 13 February dismissing the balance of the claim against Mrs Unicomb. Other orders are sought for the further conduct of the proceedings but it is unnecessary to consider those unless the set-aside orders are made.

3. [50]

   As will be seen, part of Mr Smits’ argument was that, following the delivery of the March 2018 judgment, the Court failed to deal properly and fairly with Mr Mahommed’s amended notice of motion (see [19] above). This requires me to go into the procedural history in more detail.

4. [51]

   About eight weeks after the delivery of the March 2018 judgment, and before the matter had returned to court for the making of orders, Mr Smits filed an amended version of Mr Mohammed’s November 2017 notice of motion (see [30] above). That amended document was filed through the Registry on 4 May 2018, apparently without any leave having been granted, and despite the fact that the original motion had been the subject of a hearing and a judgment.

5. [52]

   Mr Mohammed’s amended notice of motion appended various additional prayers for relief to the prayers for relief in his November 2017 notice of motion. Those additional prayers for relief arose out of three interlocutory matters.

6. [53]

   The first interlocutory issue concerned the parallel proceedings against Mr Unicomb. Those proceedings had been commenced in the District Court in 2014, but an order had been made in November 2017 transferring them to this Court. The amended notice of motion sought orders for Mr Unicomb to be joined as a party to these proceedings and for the two proceedings to be consolidated or heard together. I will refer to this as the consolidation issue.

7. [54]

   The second interlocutory issue concerned the representation of Loire. It appears that another person interested in the affairs of the Trust, a Mr Dixon, had filed a notice purporting to remove Mr Smits as the solicitor for Loire. The amended notice of motion sought orders providing that Mr Smits, and Mr Smits alone, act as the solicitor for Loire. I will refer to this as the retainer issue.

8. [55]

   The third issue concerned the re-pleading of the FASOC. Prayer 14 in the amended notice of motion was:

9. [56]

   A few days later, Mr Smits served on Mr Tudehope a notice to admit facts and authenticity of documents. A few days later again, he served a notice to produce documents. Presumably the admissions and documents sought concerned the substantive claim in the proceedings. On 22 May, Mr Tudehope filed a notice of motion for Mrs Unicomb and Greenhills seeking orders that the two notices be set aside.

10. [57]

    On 4 June, Mr Mahommed affirmed an affidavit in the proceedings. The affidavit appears to have been intended to support the fresh prayers for relief in his amended notice of motion of 4 May. It explained the background to the consolidation and retainer issues. The affidavit also contained an account of Mr Mahommed’s dealings with Mr Unicomb, and referred to documents concerning the various debts the subject of Mr Mahommed’s claims in these proceedings. Mr Mahommed did not annex any further version of the statement of claim, no doubt because the amended notice of motion only contemplated that this would be provided within 28 days after the motion was dealt with. The affidavit was filed in Court when the matter came back before Robb J on 5 June, the day after it was affirmed.

11. [58]

    I have already referred to some of the orders made by Robb J on 5 June. His Honour directed that the parties lodge written submissions with him concerning Greenhills’ application to re-open its strike-out application. The timetable for the submissions finished on 19 June. The directions also permitted the parties to deal in the submissions with any costs issues arising out of the matters dealt with in the judgment.

12. [59]

    At [32] above I quoted the direction which required that any application by the plaintiffs for leave to re-plead be made by way of notice of motion, to be filed and served by 15 June and made returnable on 19 June. That notice of motion was to be made returnable before the Registrar, not Robb J. His Honour also ordered:

13. [60]

    On 12 June, Mr Tudehope lodged with Robb J a written submission pursuant to his Honour’s orders of 5 June. That submission does not appear to be in evidence, but it appears to have dealt, as the 5 June orders contemplated, with the application to re-open the August 2017 motion, so far as it concerned the plaintiffs’ claims against Greenhills, and with the costs of the August and November 2017 motions.

14. [61]

    Then on 15 June, Mr Smits filed a second further amended version of Mr Mahommed’s November 2017 notice of motion (it seems that a further amended version of the notice of motion was produced at some point after the amended version was filed on 4 May and before the second further amended version was filed on 15 June, but that further amended version does not appear to have been filed). The amendments introduced the following additional prayers for relief:

15. [62]

    Prayer 1A referred to a further version of the 2FASOC which was prepared by Mr Smits and dated 15 June 2018, although not signed or verified. Despite the wording of Prayer 1A, the revised 2FASOC does not seem to have been attached to the amended notice of motion as filed. But according to the evidence of Mr Mahommed, on 15 June he delivered to Robb J’s chambers copies of the amended notice of motion, the revised 2FASOC and his affidavit of 5 June.

16. [63]

    According to his evidence, Mr Mahommed also delivered two written submissions to his Honour’s chambers. The first described itself as a submission in reply to the defendants’ submission of 12 June. The second described itself as a submission on the “substantive merits” of the plaintiffs’ claims in the proceedings.

17. [64]

    The “reply” submission consisted of 18 pages. It began by drawing attention to the newly amended notice of motion, the revised 2FASOC, Mr Mahommed’s affidavit, and the “substantive merits” submission, which it described as the “Enclosures”. The submission then stated:

18. [65]

    Mr Smits continued (bold and underlining in original):

19. [66]

    The submission then launched into a fifteen page point-by-point attempt to rebut Robb J’s March judgment. Every conclusion his Honour reached appears to have been contested. The “substantive merits” submission, which was 30 pages long, continued in similar vein.

20. [67]

    What Robb J would have expected, based on his orders of 5 June, was a written submission responding to the defendants’ submission of 12 June, that is, on Greenhills’ re-opening application and on the costs of the motions before his Honour. I have not read the “reply” and “substantive merits” submissions in full, but they were not structured as a response to the defendants’ 12 June submissions. Seemingly, any points by way of reply to the defendants’ arguments would have had to be extracted from a mass of unresponsive assertion and argument.

21. [68]

    Proceeding in this way was a recipe for chaos. The orders of 5 June provided for any re-pleading application to be made by way of a fresh notice of motion, not by way of amendment of any existing notice of motion. Furthermore, the orders contemplated that Greenhills’ re-opening application and any consequential debate about costs was to take place before his Honour, but the re-pleading application and the application to consolidate the proceedings with the proceedings against Mr Unicomb would be dealt with separately by the Registrar, at least in the first instance.

22. [69]

    To the extent that the further amended notice of motion sought to have his Honour’s orders reconsidered, this had not been foreshadowed before his Honour at all and it fell entirely outside the then existing procedural timetable. There was no occasion under that timetable for filing the second further amended notice of motion at all, let alone delivering it, the affidavit and the submissions in support of it to Robb J.

23. [70]

    The confusion was substantive as well as procedural. On the one hand, Mr Smits appeared to be challenging the decision made by Robb J in the March judgment. If that challenge succeeded, that would presumably nullify, or at least alter the scope of, Robb J’s conclusion that re-pleading was necessary. But at the same time Mr Smits appeared to be pressing a re-pleading application pursuant to orders made by Robb J consequent upon that judgment.

24. [71]

    On 31 July the Associate to Robb J emailed Mr Smits. She referred to his Honour’s orders of 5 June concerning the provision of submissions, including costs submissions. The Associate stated that she had received submissions from the defendants but not from the plaintiffs and asked whether such submissions were to be sent and when they would be received. Mr Smits replied:

25. [72]

    Later that day, Mr Smits followed up enclosing copies of his written submissions from the November 2017 hearing and the two submissions dated 15 June 2018. His letter stated:

26. [73]

    In both his email and his letter Mr Smits referred to the joinder of the proceedings with the proceedings against Mr Unicomb, but indicated that this issue was before the Registrar. He also indicated that the Registrar was dealing with the defendants’ notice of motion of 22 May.

27. [74]

    This exchange of correspondence failed to remove the confusion. The only thing which was clear was that the amended notice of motion, so far as it concerned the joinder of Mr Unicomb, and the defendant’s notice of motion of 22 May, was not before Robb J. Although Mr Smits referred to the submissions and stated that “all were relevant”, this statement was made in the context of an enquiry and response concerning costs. Mr Smits did not make clear whether the plaintiffs were pressing to have applications to have the judgment re-considered, or for leave to re-plead, determined, and if so by whom.

28. [75]

    Meanwhile, the proceedings on the second further amended notice of motion, and the defendants’ notice of motion of 22 May, had been allocated by the Registrar to the Applications List. On 14 August, they came up for call-over in that List before me. Mr Smits and Mr Tudehope appeared.

29. [76]

    I considered that, as Robb J had decided that the existing FASOC was inadequate, the notice to admit and notice to produce should be set aside, on the understanding that when further pleadings had been formulated, fresh notices could be issued. I therefore made orders in accordance with the defendant’s notice of motion of 22 May.

30. [77]

    The parties agreed that the amended notice of motion should not be fixed for hearing until Robb J had delivered his decision. Proceedings on the amended notice of motion were adjourned for call-over on 25 September.

31. [78]

    By the time the matter came back to Court, Rees J had taken over management of the Applications List. The proceedings on the amended notice of motion were mentioned before her Honour on 25 September and adjourned to 6 November.

32. [79]

    I have already quoted at [31] above the invitation by Robb J when he handed down his second judgment (coincidentally, on 25 September) for the parties to propose orders disposing of the two motions which had been the subject of his March judgment (that is, the defendant’s August 2017 strike-out motion and Mr Mahommed’s November 2017 motion for leave to amend in terms of the 2FASOC); and also the balance of the proceedings. On 8 October, Mr Tudehope responded. His response (which included a proposed minute of order) is not in evidence but Mr Smits’ response, which was sent later that morning, is.

33. [80]

    Mr Smits advised Robb J’s Associate that proceedings on the amended notice of motion were listed for mention before Rees J on 6 November. He described the motion as involving three “unresolved applications”. The first was the re-pleading application. Mr Smits stated that the revised 2FASOC would need further revision in the light of his Honour’s second judgment. The second application was to have the March judgment reconsidered. The third was the consolidation application (by this stage a mirror application had also been made by way of notice of motion in the proceedings against Mr Unicomb).

34. [81]

    Mr Smits advised that some of these issues had been raised before Rees J on 25 September. He said:

35. [82]

    On 30 October, Robb J’s Associate responded to the emails from Mr Tudehope and Mr Smits. She said:

36. [83]

    Robb J’s Associate then turned to the outstanding issue before his Honour, namely the making of orders to finalise the issues dealt with in his two judgments. She asked Mr Smits to respond to Mr Tudehope’s proposed minute of order of 8 October, following which Mr Tudehope should reply. She added:

37. [84]

    Robb J’s Associate finally referred to the re-pleading application. She stated:

38. [85]

    Mr Tudehope’s proposed minute of order had apparently provided for a deadline under which the revised version of the statement of claim should be served. Mr Smits responded on the following day stating that he was ill and needed medical treatment. He also referred to other hearings in which he and Mr Mahommed were engaged, including a case in the Corporations List concerning a property development at Beechworth. He attached a medical certificate which stated that he was unable to “perform work duties at full capacity” up until 6 November but would be able to return to normal duties thereafter.

39. [86]

    Mr Smits also wrote to the Associate to Justice Rees in similar vein. The result was that the directions hearing scheduled before her Honour on 6 November was put back to 20 November.

40. [87]

    On 9 November Mr Smits emailed to Robb J’s Associate a further written submission, together with proposed short minutes of order as requested on 30 October. The written submission described itself as having been “directed by Justice S Robb on 05/06 Nov 18”, although there is nothing in the file to indicate that his Honour sought any further written submissions. The submission was nine pages long. The submission referred to, and quoted extensively from, the “reply” and “substantive merits” submissions of 15 June 2018. It also recounted the more recent procedural history and stated:

41. [88]

    The submission also referred to the attached proposed minute of order which it said could be made with the plaintiff’s consent. Those orders included:

42. [89]

    On 13 November, Mr Tudehope replied. Orders 2, 4 and 7 were agreed, subject to the dates in 7(b) and 7(c) being brought forward (which did not impose any additional burden on Mr Smits).

43. [90]

    In accordance with the Court’s directions, the proceedings were to come before Rees J on 20 November. By that date the proposed amended pleading referred to in consent order 7(a) had not been lodged, although of course the order had not actually been made. It appears that owing to illness Mr Smits did not attend the hearing. For reasons which are unclear from the file, the matter was referred by Rees J to Robb J.

44. [91]

    I have already set out the orders made by Robb J on 20 November 2018 concerning the claim against Mrs Unicomb, which fixed 13 February 2019 as the next hearing date and required that any new pleading be settled by senior counsel, accompanied by supporting affidavit evidence, and served by 11 December. The orders thus allowed a further three weeks beyond the date volunteered by Mr Smits, but imposed the additional requirement that the amended pleading be certified by senior counsel and supported by affidavit evidence.

45. [92]

    His Honour also made the following order concerning the amended notice of motion:

46. [93]

    There are no formal reasons on the court file for Robb J’s orders (this is, of course, common for orders of the type made by his Honour). Nor was the transcript on the file or in evidence before me; it may never have been taken out.

47. [94]

    But in the light of his Honour’s earlier judgments, these orders are self-explanatory. His Honour was giving the plaintiffs the final opportunity of which he spoke in his March judgment to propound a properly pleaded case against Mrs Unicomb. The additional conditions imposed by the orders were designed to ensure that any further version of the statement of claim would be properly and responsibly pleaded.

48. [95]

    Three days later, on 23 November, Mr Smits wrote to Robb J stating that he had been “instructed and directed specifically” to request his Honour to recuse himself from further hearing the proceedings, on the ground of apprehended bias. The letter made numerous complaints about the way in which the proceedings had been handled. These included:

    1. (1)

       (inferred) failure to consider Mr Smits’ submissions of 15 June 2018, and 9 November 2018;

    2. (2)

       failure to deal with the second further amended notice of motion filed on 15 June;

    3. (3)

       apparent “closing out” of the second further amended notice of motion, insofar as its sought a reopening of the hearing, “thereby forestalling any consequential re-opening of any right of appeal in respect of the judgment of 9 March 2018”;

    4. (4)

       imposing unreasonable temporal constraints on re-pleading;

    5. (5)

       “stultifying the legal process of the plaintiffs” by making “punitive” costs orders and “constrained” re-pleading orders.

49. [96]

    The letter concluded:

50. [97]

    Robb J did not respond to this letter. Mr Smits did not follow it up by making a formal application for Robb J to recuse himself, or by launching appeal proceedings. Nor did he comply with the re-pleading directions made by Robb J on 20 November. In fact, on the evidence before me, he made no attempt to do so.

51. [98]

    Under the orders made by Robb J on 20 November, the proceedings were to return to Court on 13 February 2019. On 11 February, Mr Smits emailed Mr Tudehope. The email was a response to an email from Mr Tudehope of 4 February (not in evidence) inquiring about prayer 8 of the amended notice of motion, which concerned consolidation. The email referred in considerable detail to overlap between the two proceedings. It ended by asking for Mr Tudehope’s view on the consolidation issue and stated that in the absence of agreement as to the orders to be made, a hard copy of the email should be handed up in Court. It appears that Mr Smits was not intending to appear on 13 February.

52. [99]

    The following day, Mr Smits sent a further email to Mr Tudehope canvassing the claims with respect to debts 1 to 5 and repeating the allegation of jurisdictional errors on the part of Robb J. The email concluded:

53. [100]

    On the following day, the proceedings came back before Robb J. Again there was no formal judgment, but the transcript of the hearing is in evidence.

54. [101]

    Mr Mahommed attended the hearing; Mr Smits did not. According to Mr Mahommed, Mr Smits had some unspecified family problem which prevented him from attending. Mr Mahommed represented himself at the hearing, and Robb J granted him leave to appear for Loire as well. Mr Unicomb also appeared, as the proceedings against him had been listed.

55. [102]

    In the course of his submissions, Mr Mahommed referred to Mr Smits’ letter of 23 November asking Robb J to recuse himself. Robb J explained that he had been told by his Associate that the letter had been received, but that once his Honour realised the nature of the communication, he considered that he should not look at it. This was because of the rule against the Court receiving ex parte communications. Counsel for the defendants confirmed that the defendants’ legal representatives had not even been aware of the letter.

56. [103]

    His Honour made it clear to Mr Mahommed that, because no revised statement of claim had been notified in accordance with the orders of 20 November, the opportunity to amend the proceedings had passed and dismissal followed as a matter of course. His Honour also explained that he had to dismiss the amended notice of motion because it had been filed without leave and sought to amend a motion with which the Court had already dealt. His Honour declined to make any orders in the 2014 proceedings, on the basis that any application for consolidation needed to be made properly by way of separate notice of motion.

57. [104]

    I have already referred to the orders made by Robb J dismissing the plaintiffs’ claims against Mrs Unicomb and directing that Greehills file its defence. His Honour also made the following order concerning the amended notice of motion:

58. [105]

    Despite the dismissal of the proceedings against Mrs Unicomb, on 27 February 2019 Mr Smits produced yet another revised version of the 2FASOC. That proposed pleading was apparently served on Mr Tudehope at some stage, but no leave has ever been obtained from the Court to make the amendments in it.

59. [106]

    Mr Smits’ submissions in support of the application were lengthy and diffuse. I will not try to summarise them all. Instead I set out what seem to me to be the main points.

    1. (1)

       The amended notice of motion contained an application to reopen the judgment of 9 March 2018. Mr Smits complained that this application was never dealt with by the Court. Mr Smits pointed out that in June he lodged lengthy submissions with Robb J identifying alleged errors in the judgment. Thereafter the amended notice of motion was regularly stood over by the Court until Robb J raised procedural problems with it (as Mr Smits characterised them) on 20 November. Those procedural problems led to its dismissal on 13 February the following year. The merits of the submissions were never formally considered.

    2. (2)

       Mr Smits also complained that the Court failed to deal with the revised 2FASOC, and the affidavit from Mr Mahommed, which he lodged with the Court in June 2018. Mr Smits submitted that in lodging these documents, Mr Mahommed complied with the orders made by Robb J on 5 June. But the Court never ruled on whether the amendments in the revised 2FASOC were permissible.

    3. (3)

       Mr Smits next complained about the course of events on 20 November 2018. Mr Smits pointed out that it had been foreshadowed that the re-pleading application would be dealt with by Rees J. Then Robb J took control of the matter back and made his own timetabling orders, which included a requirement that any proposed new version of the statement of claim be settled by senior counsel. No such condition had been imposed in the earlier orders of 5 June. Nor (it seems) had any such condition been foreshadowed in the correspondence passing between the Court and the parties. Mr Smits characterised its imposition on 20 November as a change of direction by the Court which resulted in unfair surprise.

    4. (4)

       Mr Smits also challenged the appropriateness of the condition. Mr Smits acknowledged that senior counsel had settled the FASOC before it was filed in 2017, in accordance with the orders of the Court of Appeal, but pointed out that this had been offered to the Court of Appeal as an undertaking. It had not been imposed on the plaintiffs. The condition was spent when the FASOC was filed, and a further condition should not have been imposed. Although Mr Smits did not repeat the assertion in his letter of 23 November 2018 to Robb J that the condition was deliberately imposed by the Court in the knowledge that it could not be complied with, he did not withdraw that assertion either.

    5. (5)

       Finally, Mr Smits contended that the conduct of the hearing on 15 February 2019 was unfair to Mr Mahommed as a self-represented litigant. Mr Smits argued that Mr Mahommed could not reasonably have been expected to be able to defend himself against what was in substance an application to have his proceedings summarily dismissed. The suggestion was that the Court had failed to afford Mr Mahommed the degree of assistance required to ensure procedural fairness.

60. [107]

    The application relies on UCPR r 36.16. Sub-rule (1) permits the Court to set aside or vary its judgment or order if an application is made before the order is entered. Sub-rule (2) permits the Court to set aside its judgment or order in other circumstances, which are not relevant for present purposes. The relevant remaining sub-rules are (3) and (3A):

61. [108]

    The present notice of motion was filed within fourteen days of the orders made in February 2019. The Court therefore has power under sub-rule (3A) to set aside those orders as if they had not been entered.

62. [109]

    There is no time limit in sub-rule (3), to the extent that the order in question does not dismiss or otherwise determine a claim for relief. That sub-rule can thus be used to challenge the strike-out order made in November 2018, but not the dismissal order made on that occasion.

63. [110]

    Mr Mahommed’s application also relies on UCPR r 36.15(1). That rule provides:

64. [111]

    There is no time limit on an application under UCPR 36.15. Thus it can be used to challenge both the November 2018 and the February 2019 orders.

65. [112]

    The parties did not refer me in any detail to case law on the application of the relevant rules. That is unfortunate because the case law shows that there are limitations to the rules which are not necessarily apparent from the language used, considered on its own.

66. [113]

    The general principle is that once an order is made disposing of proceedings and entered, that order is final and cannot be recalled by the Court: Bailey v Marinoff (1971) 125 CLR 529 at 530. The principle is based on finality of litigation. That is a “central and pervading tenet of the judicial system”. There are exceptions to it but they are narrow and well-defined: Burrell v The Queen (2008) 238 CLR 218 at [15].

67. [114]

    One exception is the reconsideration of a decision before the judgment in question has been entered. That is the field covered by r 36.16(1) and (3A). But such reconsideration is still only very limited. The Court may be asked to deal with a factual or legal point overlooked in the reasons for judgment. But the procedure cannot be used to re-argue the merits of the case: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300.

68. [115]

    There is a further limitation on the principle which applies to proceedings at first instance. Generally there is a right of appeal and a judgment which is erroneous can be corrected by the Court of Appeal. Where the trial judge has delivered judgment and it is argued that points have been overlooked it may be convenient for the judge to consider those points rather than put the parties to the expense and difficulty of raising them on appeal. But rarely if ever would it be appropriate for another judge to review the trial judge’s judgment in that way: see Douglas v John Fairfax & Sons Ltd [1983] 3 NSWLR 126 at 134D-E; DPP v Gerathy [2000] NSWSC 228 at [4]-[9].

69. [116]

    It is open for one judge sitting in first instance to vary an interlocutory order made by another first instance judge. But generally speaking, this requires a change in circumstances. The practical reasons why challenges to considered interlocutory decisions on the merits are discouraged on appeal are well-known: see In the Will of Gilbert (1966) 46 SR (NSW) 318. Those reasons apply with even greater force where one first instance judge is asked to review the interlocutory decision of another.

70. [117]

    This deals with Part 36, r 16. I turn to Part 36, r 15. The rule was derived from a former provision of the District Court Rules 1973 (NSW), Part 31, r 12A. That rule replaced an earlier rule which applied to the setting-aside of default judgments. Rule 12A applied more generally. But in Coles v Bourke (1987) 10 NSWLR 429, Kirby P, giving the judgment of the Court of Appeal, said at 437:

71. [118]

    In Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190 orders made by the Court of Appeal following the hearing of an appeal were challenged by the unsuccessful respondent on the basis that the orders were “irregular” for the purpose of r 36.15. The irregularity alleged was that the appellant had not been the proper defendant. It had allowed the proceedings to continue against it when the correct defendant was another related company. As a result, the trial process (including steps such as discovery) had allegedly miscarried.

72. [119]

    The Court held that, even if the respondent’s allegations were factually correct, they did not bring the case within r 36.15. The Court stated (at [18] and [19]):

73. [120]

    The respondent in Perpetual also relied on the Civil Procedure Act 2005 (NSW), s 63. That relevantly provides:

74. [121]

    The respondent argued that the section gave the Court power to set aside a final judgment on appeal as a result of irregularities which occurred before trial or at trial. The Court stated at [38]:

75. [122]

    The Court emphasised “central and pervading tenet” of finality. The Court concluded that this required the word “judgment” to be given a narrow interpretation. Accordingly the application based on s 63 also failed.

76. [123]

    As a result of these decisions there may be room to argue about the precise scope of r 36.15. Both s 63 and r 36.15 refer to irregularities. The Court of Appeal did not consider the relationship between the rule and the section in Perpetual. But it would be strange if, in its application to irregularities, the rule could extend beyond s 63.

77. [124]

    The rule of course applies not only to irregularities but also to judgments made “illegally” or “against good faith”. Potentially this would overlap with the Court’s power to set aside a perfected judgment for fraud: Clone Pty Ltd v Players Pty Ltd (2018) 264 CLR 165. But that rests on substantive principles of law (derived from equity) and should be invoked by way of separate proceedings, not by way of motion in the existing proceedings: Clone at [32].

78. [125]

    All of this suggests that there may be limitations in r 36.15 which are not immediately apparent. The rule may be limited to interlocutory judgments or those given without a hearing on the merits. Or it may be limited to judgments obtained where the irregularity, illegality or want of good faith is that of the party obtaining the judgment. But on any view, it must be sparingly exercised. Rarely, if ever, would it be appropriate for the power to be used by one first instance judge but to review a considered judgment of another first instance judge.

79. [126]

    The reference to Mr Smits in his correspondence and submissions to relief under s 69 of the Supreme Court Act, and to errors “inside and outside of jurisdiction” is puzzling. None of the complaints made by Mr Smits amount to an allegation of jurisdictional error; so far as I can see, there would have been no occasion for those orders to be challenged under s 69. The proper mode of challenge would have been through ordinary appellate proceedings. It may be that Mr Smits was confused by what earlier happened with the challenge to the District Court orders. Presumably, s 69 relief was sought in those proceedings because there had been a decision that the claims fell outside the limited statutory jurisdiction of that Court.

80. [127]

    In so far as the orders of 20 November 2018 dismissed the “implied contract” claim against Mrs Unicomb, they were final. The orders concerning the repleading application were interlocutory. Leave to appeal would have been required. But it is clear that the orders were appealable. All of Mr Smits’ complaints, whether involving alleged error in the judgment of 9 March 2018, or alleged denial of procedural fairness, would have been available as grounds of appeal.

81. [128]

    The February 2019 orders dismissing the balance of Mrs Unicomb’s claim were also final orders. Mr Mahommed had a right of appeal against those orders, subject to any requirement of leave imposed by subject matter or quantum.

82. [129]

    In substance, the application before me is an attempt to reargue the merits of Robb J’s orders. Those orders in turn reflected his Honour’s judgment of 9 March 2018. Mr Smits should have known, as a result of his prior experience in the District Court (see [12] above), that the proper remedy was to appeal.

83. [130]

    In these circumstances, I think the applications cannot succeed. None of the complaints made by Mr Smits engage the relevant provisions of the rules; or, to the extent they do, the settled practice of the Court is against the challenge being considered by another first instance judge. Similar statements apply to the orders of February 2019.

84. [131]

    In his argument, Mr Smits also asserted that the Court has an inherent power to set aside its orders, and relied upon that alleged power as a further basis for his arguments. But it is not necessary to consider whether any such inherent power exists. If it does, it must likewise operate within the “central and pervading tenet” of finality. Reliance on it would not yield a different result in this case.

85. [132]

    I have already referred to the unfortunate procedural history of this application, and to the parties’ failure to address the case law surrounding the relevant rules. In hindsight it is clear that the application could, and should, have been dealt with in a summary way. It is unfortunate that, because the application went to a full hearing, and has taken so long to resolve, Mr Mahommed may have got the false impression that Robb J’s orders were not the end of the line at first instance.

86. [133]

    For the reasons which I have given, I would not ordinarily comment at all on the propriety of the orders made by Robb J which are challenged in the application. But given the effort which Mr Smits invested in the application, I propose to make some observations by way of response to the points he made, so that Mr Mahommed can see that the application did not fail just for technical reasons.

87. [134]

    In my respectful view his Honour’s decision to dismiss the proceedings was entirely understandable. My answers to Mr Smits’ arguments are as follows.

    1. (1)

       An application to reopen a judgment should be pursued with special promptness. Mr Smits could not, just by amending the notice of motion so as to seek a reopening and taking no further action, keep the judgment in suspended animation. It was his responsibility to press the reopening application before Robb J. That should certainly have been done before the time came to make orders reflecting that judgment. This was the course followed by Greenhills, which made Mr Smits’ inaction even more inexplicable. Furthermore, as already stated, there was confusion in Mr Smits’ correspondence and submissions between challenging his Honour’s judgment and complying with it. That confusion continued right up until November when his Honour made orders giving effect to the judgment. It was not for the Court to try to work out what Mr Smits wanted. It was for him to decide what application he wanted to make and then to pursue it.

    2. (2)

       Mr Smits did not comply with the orders made by Robb J on 5 June concerning the repleading of the statement of claim. His argument before me implicitly acknowledged that, by asserting that he “substantially” or “in effect” complied. In any event, Mr Smits later acknowledged both in submissions and correspondence that further amendments were required. In effect, the June 2018 version of the pleading and supporting affidavit from Mr Mahommed fell by the wayside.

    3. (3)

       Mr Smits was clearly on notice, as at 20 November 2018, that Robb J intended to finalise the orders resulting from his March judgment. In particular he was on notice that repleading orders were to be made. He himself submitted proposed orders for this purpose. As at 20 November, on the evidence before me, the terms of those orders had not been agreed. It is unfortunate that Mr Smits did not attend the hearing on 20 November. But this was not the Court’s responsibility. Mr Smits could not reasonably expect for the Court to continue to hold its hand. Mr Smits may have expected that the orders will be made by Rees J, but given Robb J’s familiarity with the case there could be no conceivable ground of complaint that the matter was referred to him, thus enabling him also to cover off his two judgments.

    4. (4)

       It is true that the plaintiffs initially offered an undertaking to have an earlier version of their statement of claim settled by senior counsel. But Robb J was entitled to impose reasonable conditions on the grant of leave. His Honour had made it clear that the plaintiffs were down to their last chance. A condition of settlement by senior counsel was not in the June 2018 orders but those had fallen by the wayside. In my respectful view, the imposition of the condition was quite understandable. There was an ongoing unanswered question about whether the plaintiffs had a viable claim at all. A party who has had multiple pleadings cannot expect to be allowed repeated unconditional opportunities to plead again. I add that the complaint of bias was, at best, misconceived. It was completely baseless.

    5. (5)

       It was not the Court’s fault that Mr Smits did not attend the hearing on 13 February 2019. There is no evidence that he asked for a further period of time. He could not expect to delay the progress of the proceedings just by sending Mr Mahommed along. In any event, by then it was too late. It was clear that Mr Smits was unable or unwilling to obtain a pleading settled by senior counsel.

88. [135]

    By February, the plaintiffs had failed, despite numerous attempts, to formulate a viable pleading. They had not even settled on a version of the statement of claim to be the subject of an application for leave, let alone obtained the imprimatur of senior counsel for that proposed pleading. They were now suggesting that the issue should be deferred further as a result of the proposed joinder of Mr Unicomb. The dismissal of the claims against Mrs Unicomb was, in my respectful view, an inevitable result.

Orders

1. [136]

   For the reasons I have given, Mr Mahommed’s application fails and must be dismissed. On the material before me I see no reason why costs should not follow the event on the ordinary basis. Any application for any different order can be made in accordance with the Rules.

2. [137]

   The orders of the Court are:

   1. (1)

      Dismiss the motion.

   2. (2)

      Order that the applicant (plaintiff) pay the costs of the respondent (first defendant) of the motion.