3 Sons Investments Pty Ltd v Blair’s Developments Pty Ltd [2021] NSWSC 349

Catchwords: APPEALS – Procedural fairness – Summary judgment Supreme Court New South Wales Medium Neutral Citation: 3 Sons Investments Pty Ltd v Blair’s Developments Pty Ltd [2021] NSWSC 349 Hearing dates: 01 April 2021 Date of orders: 09 April 2021 Decision date: 09 April 2021 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) The summons is dismissed. (2) The plaintiff is to pay the defendant ’ s costs. Catchwords: APPEALS – Procedural fairness – Summary judgment Legislation Cited: Local Court Act 2007 (NSW) Supreme Court Act 1970 (NSW) Cases Cited: 3 Sons Investments Pty Ltd v Blair’s Developments Pty Ltd [2020] NSWSC 1869 House v The King (1936) 55 CLR 499; [1936] HCA 40 Snowy Monaro Regional Council v Cmunt (No. 3) [2018] NSWLEC 175 Category: Principal judgment Parties: 3 Sons Investments Pty Ltd (First Plaintiff) Max Burt (Second Plaintiff) Jaycene Irwin (Third Plaintiff) Blair’s Developments Pty Ltd (Defendant) Representation: Counsel: W R Chan (Defendant) Solicitors: Second Plaintiff (Self-represented) Priest Legal (Defendant) File Number(s): 2020/346508 Publication restriction: None Judgment This is the judgment in respect of an appeal by the plaintiffs from a decision of a Local Court Magistrate to strike out their defences and enter judgment against them in respect of a money claim. The second plaintiff, Max Burt, appears in person and purports to represent the two other plaintiffs , being his company and his wife , J aycene Irwin (for ease of reference, I will simply call Mr Burt the “ plaintiff ” in this judgment) . At the commencement of the hearing , there were two defendants being Blair ’ s Developments Pty Ltd and the Local Court of New South Wales. After some discussion with the plaintiff , h e agreed to discontinue the proceedings against the Local Court of New South Wales and I made orders to that effect. I will thus refer to Blair ’ s Developments Pty Ltd as the “ defendant ” . The plaintiff seek s leave to appeal from the decisions of the Local Court of New South Wales made on 12 and 23 November 2020. The appeal is made pursuant to ss 39 and 40 of the Local Court Act 2007 (NSW) ( “ LCA ” ) . The appeal is by way of rehearing ( s 75 A ( 5) of the Supreme Court Act 19 7 0 (NSW) ) . An appeal only lies on a point of law (s 39 LCA), otherwise it is necessary for the plaintiff to seek leave (s 40(1), 2(a) and 2(c) LCA). Both parties provided written and oral submissions. I admitted into evidence the contents of a one volume Court Book, albeit that Court Book contained an affidavit of the plaintiff sworn 6 December 2020 which must be considered fresh evidence. Having reviewed the matter and heard the submissions of Mr Chan, I granted leave to the plaintiff to rely on that affidavit. In reality, its contents are part submission and part summary of facts not in dispute. The defendant withdrew reliance on an affidavit from the solicitor for the defendant affirmed on 16 December 2020. It was only relevant to the earlier stay application which was determined by Hamill J ( as Duty Judge ) on 17 December 2020 [1] . T he defendant did not oppose the plaintiff speaking on behalf of all three plaintiffs. T here is some lack of precision in the summons as to the error of law on which the plaintiff relies . Having regard to the plaintiff ’ s submissions, both written and oral, I understand that the plaintiff seeks to appeal from the decision to strike out the defence and enter judgment , i n circumstances in which her H onour should have granted an adjournment to allow more time for the plaintiff to replead . I ndeed , it is apparent from a review of the transcript before the M agistrate that Counsel retained by the plaintiff in the C ourt below accepted that the defence was deficient and that there would need to be a repleading. However, he sought an adjournment to do so . T he plaintiff submits that he was denied procedural fairness and that the l earne d M agistrate gave weight to irrelevant considerations . As he submitted in perhaps a uniquely Australian way, he was not given a fair go. Background The plaintiff, through a trustee company , owns 400 acres near Port Macquarie . He has a forestry agreement with the New South Wales government . H e runs a business selling firewood . A s he mentioned on a number of occasions , he is a family man with three sons and he is in the process of succession planning to transfer the business to his sons in circumstances in which his health has not been good in recent times . H is neighbour ( through the defendant company) sold the company a small block of land for the sum of $50,000 . O n 14 June 20 1 7 the company and the defendant entered into a loan agreement pursuant to which the company was acknowledged indebte dness to the defendant in the sum of $50,000 . T he p laintiff and J aycene Irwin were guarantors . The loan amount was repayable on 13 March 2018. O n 11 April 2018 the plaintiff ’ s company propose d an extension in respect of the amount owing to 30 April 201 8 . T he defendant agreed to this extension but the company did not comply by paying the amount owing . T hen on 23 May 2018 the company sought a further extension which was again agreed to by the defendant . O nce again , the company defaulted . O n 19 July 2018 the company obtained a further extension to 30 November 2018 . The plaintiff then made a payment of $20,000 on 30 November 2018 . No further payments have been made. O n 24 June 2019 the company sought a further extension ( citing the plaintiff ’ s heart attack) and an extension was granted for a further six months . T hen on 2 December 2019 the defendant granted a further extension conditional upon interest payments being brought up to date . T hey were not . O n 27 March 2020 the defendant filed a statement of claim in the L ocal Court at Port Macquarie seeking payment in the sum of $42,682. 0 2 . O n 24 April 2020 each of the three plaintiffs in this C ourt file d identical defences in the L ocal Court . O n 26 May 2020 the matter was listed for callover at which time C ounsel, Mr Duc , appeared on behalf of the plaintiff s ( the defendants in the L ocal Court) and obtained an adjournment until 14 July 202 0. O n 10 July 2020 the plaintiff s filed a motion seeking a six month adjournment . T his motion was dismissed on 13 August 2020 . Then on 30 September 2020 the defendant (the plaintiff in the Court below) filed a motion seeking that the defence be struck out and summary judgment be entered . T he plaintiff then respond ed on 4 October 2020 with a further motion again seeking a six month adjournment . T hese motions were heard by M agistrate Darcy on 12 November 2020 . Her Honour dismissed the application for an adjournment and reserved her judgment in relation to the application for the defence to be struck out and for summary judgment. After a short adjournment, Counsel for the plaintiff made an application for a stay of the matter for 28 days. He made that application by way of an oral notice of motion. On 23 November 2020 Magistrate Darcy struck out the defences and entered judgment . Her Honour refused the application made by the plaintiff (the defendant in the Local Court proceedings) for a stay . O n 7 December 2020 the plaintiff filed a summons seeking leave to appeal . The decisions The decision s , the subject of the appeal, could only be the decision s of M agistrate Darcy o n 12 and 23 November 2020 . W hilst the plaintiff ’ s earlier motion seeking an adjournment had also been dismissed , the earlier decision w as superseded by h er H onour ’ s decision to: r efuse the plaintiff ’ s application for a further adjournment ; and strike out the defence and enter judgment . The primary reasons identifi ed by the M agistrate for her decision s are that: she was not satisfied on the material before her that the plaintiff was unable to properly participate in the proceedings ; and the defences did not set out any available defence but merely raised the prospect of a further extension to pay the balance of the debt and de nied that any interest was payable , having regard to the deed which she described as unequivocal in its terms . The plaintiff's contentions T he plaintiff identifie s what he described as six points which he submits should lead to success in the appeal. T he plaintiff submits that : h e did not have a fair hearing . He says that the M agistrate proceeded on the incorrect belief that he was merely trying to avoid a debt . H er approach to the matter was thus to deny him procedural fairness . She failed to give him an opportunity to properly investigate and articulate his defence ; a t the time of “ the case ” he had no ability to seek legal advice or understand w hat h e should be doing , having regard to his mental health and marital issues . H e could not function properly and he thus sought an adjournment to allow him time to regain his mental health and ability to deal with the matter ; h e has not had the ability to assess the case with a lawyer because he became overwhelmed by the aggressive conduct of the solicitor for the defendant and could not deal with aspects of the litigation ; h e is only seeking orders that the case be returned to the L ocal Court so that it may be dealt with properly after he has sought legal advice about any potential defence available to him . A s he submits , such a defence could be misrepresentation , mistake or economic duress ; t he M agistrate made an error in dealing with the matter straight away . T he M agistrate was malicious in favour of the defendant . Her Honour simply failed to take account of the plaintiff ’ s situation , even though it was explained to her ; and t he M agistrate was biased against him . T he plaintiff exp a nded on some of these points in both his oral and written submissions . For example, the plaintiff refer red to Snowy Monaro Regional C ouncil v Cmunt ( No. 3 ) [2] . However, that case is not relevant to the plaintiff ’ s appeal and the principles referred to relate only to the application for a stay ( which ha s already been dealt with by Hamill J ) . Both in his written and oral submissions the plaintiff emphasise d his parlous state of health . He stressed that his life had taken a downturn in 2019 when he suffered a heart attack . H e says that his heart stopped for six minutes and he has been left with some cognitive impairment. This impedes his ability to undertake things in the way he could previously and he says it has impeded his ability to properly defend the case . He becomes overwhelmed and the M agistrate should have allowed him additional time to deal with his health issues and investigate possible defences. The defendant’s position T he defendant ’ s position may be summarised as being that the plaintiff has not demonstrated any error of law and that leave should not be given to pursue the grounds of appeal sought in the summons . Further, the defendant submits that some of the statements made by the plaintiff are simply incorrect , f or example , those relating to a lack of legal representation . Further , t he defendant submits that the plaintiff ’ s emphasis on his own health issues would not have prevented the plaintiff ’ s wife, who was a separate defendant, from dealing with the proceedings . Determination I accept that the plaintiff ’ s health issues have made things more difficult for him and that h is heart attack has made him face some difficult problems . H e says he is now engaged in succession planning and that it can become overwhelm ing . His cognitive impairment appears to be subtle . He presented his case before me in a succinct and precise way , albeit that some of his submissions were somewhat off point . Having said that , he is not entitled to simply commence proceedings in this C ourt so as to be given a further opportunity in the L ocal Court . H e must establish an error of law or establish that leave should be granted to appeal on some other basis . I n my view , he has not established any error of law and there is no basis on which leave should be granted to pursue any other grounds. I t is a curious feature of this appeal that the plaintiff does not : dispute the terms of the loan agreement; dispute that he has not paid the amount owing; dispute that he did not comply with the extensions afforded to him to repay ; and identify any basis even at this stage why he is , should or would not be liable to the defendant in accordance with the statement of claim issued by the defendant in the L ocal Court . I ndeed , he has accepted in correspondence that the money is owed . H e did not suggest on this hearing that it was not owed . W hen pressed as to what defence he might wish to file if he obtains the orders he seeks and on what basis he could possibly defend the matter , he said that he did not know . W hat he really seeks is a further opportunity to investigate potential defences , such as one based on a mistake or economic duress or misrepresentation at the time of entry into the loan agreement . H e says that he should be afforded an opportunity to do so with proper legal representation and proper advice about his options . However, whilst he presses for a further opportunity to do so , he is unable to identify what new defence he might file and does not identify even one factual matter which might give rise to some defence based on misrepresentation or economic duress . I asked him to explain the background to the matter . H e said that his neighbours had been attempting to sell the land for some time . H e, through his company, ultimately bought it at a good price and entered into the loan agreement with his neighbours being the defendant . H e did not identify any fact or circumstances which might lead to an argument that he suffered economic duress or that there were any misrepresentations made to him . P resumably , if I make the orders he seeks and remit the matter back to the L ocal Court , he would seek time to engage legal assistance and then formulate a defence . T his is in respect of a debt that has been owing since 13 March 2018 . Whilst the plaintiff paid the sum of $20,000 on 3 0 November 20 18, as far as I am aware, he has made no further attempt to pay the remaining balance . This is in circumstances in which he does not dispute the terms of the loan agreement . Not only did he have ample opportunity to prepare a proper defence prior to the de fence being struck out ( he had eight months between the commencement of the proceedings and the defence being struck out) but he comes to this C ourt still unable to indicate what h is defence might be . I must determine the appeal according to law , but it is notable that the plaintiff appears to be in the same position in April 2021 a s he was throughout 2020 . He wishes to defend the matter but is uncertain as to what h is defence might be , whilst at the same time acknowledging the terms of the loan agreement and that he has not paid the debt . Having said all that , the question for determination on this appeal is whether the plaintiff has established an error of law on the part of the l earned M agistrate . H e has not . F irstly , her Honour made findings on the plaintiff ’ s application for an adjournment to the effect that she was not satisfied on the material before her that an adjournment should be granted . That is of course a discretion ary decision [3] . T here is no evidence that there was any failure to properly exercise the discretion . There is no evidence that the M agistrate acted on a wrong principle , mistook the facts or did not take into account any material consideration . I ndeed , it is apparent from her Honour ’ s judgment that her H onour considered all of the material put forward by the plaintiff in support of the adjournment and was not satisfied that it was sufficient to grant one . No error has been demonstrated . I n terms of her Honour ’ s decision to strike out the defence and enter judgment , again , no error has been demonstrated . I ndeed , Counsel for the plaintiff in the C ourt below ( Mr Duc ) candidly acknowledged that the defence which had been filed on behalf of all three defendants (as they were in the C ourt below) could not stand and would need to be amended . H e sought further time to amend . H owever, just like in this case, when pressed as to the basis on which the defence might be amended and the basis on which the defendant s might maintain that they are not liable , he merely said that he would need to obtain instructions . H e was unable to offer any assistance to the C ourt in terms of whether there would be a basis for a defence based on mistake or misrepresentation or economic duress . It is unsurprising that her H onour struck out the defence . It did not disclose an arguable defence . It is unsurprising that her H onour declined to allow the defendants ( as they were in the C ourt below ) further time to replead and file a defence in circumstances in which Counsel appearing on behalf of all three defendants could not articulate the basis on which the matter might be defended . I emphasise that this is no criticism of the Counsel. T hat was not his fault . He can only act on instructions . In those circumstances , no error has been demonstrated in the decision of the M agistrate to refuse the plaintiff more time to investigate what defence he might have had and replead . Dealing more specifically with each of the plaintiff ’ s points , there was no denial of natural justice or lack of procedural fairness . C ontrary to the submissions made by the plaintiff , he was represented in the C ourt below , both at the time of the original application for an adjournment and at the time of the secondary application for an adjournment . He was represented for the defendant ’ s application to strike out the defence and for summary judgment . T he plaintiff was represented by C ounsel . A gain , the re may have been some overstatement by the plaintiff in the submissions . P erhaps he meant to say that he did not have legal assistance in the drafting of the original defences , but matters ha d long moved on since the time of the filing of the original defences . H is submission that he just wants an opportunity to confer with lawyers and prepare a proper defence somewhat overlooks the fact that he retained C ounsel on more than one occasion to appear in the L ocal Court . H e had legal representation and there was ample time for him to confer with his legal representatives about amending the defence if he wished to do so . He says he did not have the ability to confer because of his medical condition . A gain , I must say that although I do not doubt his statements as to his medical condition , he presented as a person well able to discuss , confer and understand basic concepts . H e did not present as a person who would be incapable of understanding the proposition that , having entered into an agreement to pay a certain amount of money to the defendant , the defendant is entitled to be paid that amount of money , absent some legal basis for not paying the amount of money . It follows that I reject those points raised by him which are dependent upon his assertion that he did not have an opportunity to obtain legal representation and was not able to grapple with the situation . In any event , I accept the submission made on behalf of the defendant that it was not just Mr B urt who was being sued . H is wife , Jaycene Irwin, was also being sued . There i s no evidence that she was incapable of instructing lawyers to mount a defence or to understand and deal with the process . T he plaintiff ’ s submission about the writ which has been issued subsequent to the entry of judgment is mis placed . T he defendant was entitled to have the writ issued in circumstances in which it had obtained a judgment . F inally , I reject the submission that the learned M agistrate demonstrated bias . T here is no evidence of either apprehended bias or actual bias . T he plaintiff appears to have taken the view that because the M agistrate rejected the submissions made by his C ounsel and accepted the defendant ’ s submissions that her decision demonstrates bias . I t does not . N othing more needs to be said about this submission by the plaintiff other than that it has absolutely no merit . Finally, the plaintiff said on a number of occasions that all he wanted was a “ fair go ” and that he had a belief that he should have been given a further opportunity to amend his defence and what the M agistrate did was not right . T hat may be his belief , but it might also be said that on my analysis of the events leading up to this litigation and the progress of the litigation so far , the plaintiff has been given more than a fair go . T he defendant extended the time for payment of the debt on a number of occasions , only commencing proceedings in the L ocal Court in 2020 . T he plaintiff could have applied at any time to amend his defence between the time of service and the orders being made striking out the defence . H e did not do so . I n any event , I must decide this matter according to law . A s the plaintiff has not demonstrated any error , the summons is dismissed. I order that the plaintiff s pay the defendant ’ s costs . ********** Endnotes 1. 3 Sons Investments Pty Ltd v Blair’s Developments Pty Ltd [2020] NSWSC 1869. 2. [2018] NSWLEC 175 at [17]. 3. See House v The King (1936) 55 CLR 499; [1936] HCA 40. 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