Design & Survey Neon P/L v Davies

LOWER COURT District Court JURISDICTION : LOWER COURT DC 3051/00 FILE NUMBER(S) : LOWER COURT Boyd-Boland ADCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41035/03 DC 3051/00

HANDLEY JA SANTOW JA BRYSON JA

11 AUGUST 2004 DESIGN & SURVEY NEON PTY LIMITED v Stephen DAVIES Judgment 1 HANDLEY JA: I agree with Bryson JA. 2 SANTOW JA: OVERVIEW 3 As applicant, Design & Survey Neon Pty Limited, obtained leave to appeal from a decision of Boyd-Boland ADCJ of 24 October 2003 at the conclusion of this appeal hearing. The appeal was heard concurrently with the application for leave. That decision by Boyd-Boland ADCJ had originally set aside a preliminary dismissal order made by Bowden ADCJ of the respondent Stephen Davies' legal action for personal injuries. This was done when the respondent failed to appear at a show cause hearing. The appellant now seeks to reinstate that dismissal order and so dispose of the respondent's legal action against Design & Survey. 4 Bowden ADCJ made the original preliminary dismissal order on the 6 March 2001. That original order, and not just the application to set it aside, was made pursuant to Pt 1 r7A of the District Court Rules, which came into effect on 1 September 2000. 5 The essential grounds of the present appeal are (a) what is said to be the respondent's lack of satisfactory explanation for the circumstances (drug use) that led to the original preliminary dismissal order, (b) the respondent's delay and lack of satisfactory explanation for it, in bringing the proceedings to set aside that preliminary dismissal order, and (c) failing to find that the appellant had suffered prejudice, by the respondent's delay in prosecuting the proceedings, that prejudice being general rather than specific. 6 Part 1 rule 7A is in these terms: " 7A. (1) In this rule: "preliminary dismissal order" means an order made by the Court dismissing proceedings other than an order dismissing proceedings after there has been a trial or hearing on the merits of the case or an application to dismiss the proceedings. (2) The Court is not to make a preliminary dismissal order in respect of any proceedings unless it is satisfied that the parties to the proceedings have been appropriately notified that the order may be made. (3) A preliminary dismissal order does not have effect: (a) if an application is not made under subrule (5) - until a period of 28 days has elapsed after the making of the order, or (b) if an application is made under subrule (5) - unless the Court confirms the order under subrule (6) or (7). (4) The Court may, at the time it makes a preliminary dismissal order or subsequently, make such other orders as it thinks fit to ensure that any party to the proceedings in respect of which the dismissal order is made is appropriately notified of the making or consequences of the order. (5) Any party to proceedings in respect of which a preliminary dismissal order is made may, within the period of 28 days after the making of the order, apply to the Court to set aside the order. (6) On any such application, the Court may set aside the preliminary dismissal order or confirm the order as it thinks fit. (7) The Court may, if it thinks fit, confirm a preliminary dismissal order if: (a) the party who has made an application to have the order set aside does not appear at the hearing of the application, or (b) an application to set aside the order is withdrawn or otherwise not proceeded with." 7 No irregularity is asserted in the preliminary dismissal order, save insofar as might follow from the absence of any subsequent order under Pt 1 r7A(4). Irregularity on that score was an entirely new point raised in oral argument on this appeal. Before Boyd-Boland ADCJ the respondent relied rather upon his failing to receive any notification under Pt 1, r7A(2). That it was not received is not disputed on appeal. Nor is it disputed that the respondent remained in ignorance of the dismissal order thereafter until his new solicitors were appointed two year's later. What is disputed by the appellant is the adequacy of the explanation given by the respondent for his delay of well over two years in taking any further step in the proceedings. The primary judge essentially attributed it to his drug addiction, consequent breakdown of his de facto relationship and then concentrating on his drug rehabilitation programme, in which he still continues. The applicant takes issue with the adequacy of that explanation in light of the respondent's extreme delay, well beyond the 28 days allowed by Pt 1 r7A(5), to apply to set aside a preliminary dismissal order. 8 This appeal puts in issue the extent to which an appeal court should substitute its own exercise of discretion in a matter of practice and procedure for that of the primary judge. This is in circumstances where the primary judge did make one error of fact. That was in supposing, wrongly, that the respondent was employed by the appellant at the time he suffered his alleged injuries on the appellant's premises, "so as to have … [the appellant] accept the Workers' Compensation liability". That error notwithstanding, it is said in response that this was neither a necessary underpinning to the primary judge's decision nor of such substance as to justify and lead to a different exercise of discretion. Thus the facts of the accident were otherwise known to the appellant by service of process within the limitation period. Moreover medical assessments did exist and no specific prejudice was claimed but only the inevitable general prejudice from delay. Consequently the respondent contends that this error was not material nor such as to justify any different exercise of discretion by this Court.

SALIENT FACTS 9 The salient facts in this appeal are to a great extent not in dispute. 10 By Statement of Claim filed in the District Court of New South Wales on 28 April 2000, the respondent commenced proceedings in negligence against the applicant. He did so just before expiry of the three-year limitation period. The proceedings were in respect of certain injuries alleged to have been caused by an incident at the applicant's place of business involving a crane. Although the particulars of past and future economic loss refer to the plaintiff having been paid monies pursuant to the Workers Compensation Act, the action is not framed as an employee action, despite the assumption otherwise of Boyd-Boland ADCJ (at p.6). 11 The matter apparently proceeded in the ordinary course, with a status conference confirmed for later in the year when the matter came before the District Court on 9 October 2000. On 30 November 2000, however, the respondent's then Solicitors filed a Notice of Ceasing to Act on the basis that the respondent had consistently failed to respond to their written requests to contact them. All of their correspondence to the respondent had been directed to an address of 23 Dobell Street Yarrawarra, which was an address of property occupied by the respondent's de facto and their daughter. 12 On 11 December 2000, presumably at the status conference, the proceedings were listed for hearing on 6 March 2001 for the respondent to "show cause why the matter should not be struck out". The respondent made no appearance at that conference and no appearance at the subsequent hearing on 6 March 2001 having not received the relevant correspondence. In consequence, but evidently failing to appreciate the non-receipt of that correspondence, Bowden ADCJ made an order purportedly under Pt 18 r3 of the District Court Rules dismissing the proceedings. This order constituted a preliminary dismissal order within the meaning of Pt 1 r7A of the Rules. The order made recorded that "Defendant's letter to Plaintiff was not returned to Defendant." (The notation in the computer record erroneously refers to "Plaintiff" here, as is common ground.) It is not now disputed that the respondent never received that notification under Pt 7A r(2). 13 Some two years elapsed before the respondent placed the matter in the hands of his current Solicitors on 5 March 2003. A further five months elapsed before the respondent by his current Solicitors filed on 19 August 2003 a Notice of Motion to set aside the orders made by Bowden ADCJ. The Notice of Motion recited, mistakenly, that it was made pursuant to Pt 18 r3(4) of the District Court Rules. In fact this sub-rule had been repealed by that time and replaced by Pt 1 r7A(5) of the Rules but nothing hangs on that. 14 The motion was heard by Boyd-Boland ADCJ over two days on 2 and 23 October 2003 respectively. The application was made well after the 28 days allowed by Pt 1 r7A(5) to apply to set aside a preliminary dismissal order. Consequently it was necessary to amend the Notice of Motion to seek an extension of time pursuant to Pt 3 r2. That amendment was allowed by consent. Boyd-Boland ADCJ ultimately determined both the application for an extension of time and the application under Pt 1 r7A(5) in the respondent's favour, setting aside the order of Bowden ADCJ. 15 The respondent elaborated on his explanations for his delay in two affidavits sworn on 2 June 2003 and 25 September 2003 respectively. 16 First, the respondent (June affidavit paras 10-11, and 21) recited a long period of personal drug abuse. He states that he recommenced using drugs sometime in 1998, and from about late 1999 or early 2000 was heavily and habitually using several proscribed substances. In January or February 2002 on the advice of his general practitioner, the respondent entered a drug rehabilitation program, in which he is still participating. An unfortunate effect of the respondent's continued drug use was that his domestic relationship with his de facto partner deteriorated, ultimately irretrievably, ending sometime in 2001 despite several attempts by both partners to revive it. They have a daughter by that relationship. 17 Secondly, the respondent says (June affidavit paras 14-18) that as a consequence of his drug use and the deterioration of his domestic relationship, his place of residence was considerably unstable during the period from late 2000 until late 2002. While he tried to salvage his relationship with his partner, the respondent apparently resided intermittently at a property owned by his mother at 9 Balala Crescent Wattle Grove and at the property in Dobell Road, Engadine which was occupied by his partner and their daughter. When it became apparent that the relationship was irretrievable, the respondent moved permanently to the Wattle Grove property until he moved to 76 Rosemary Row Rathmines on 4 December 2002. There he currently resides with his daughter, who apparently began to reside solely with him from September 2001. 18 Of some significance is what he says in his affidavit filed 26 September 2003. There he explains that with the breakdown of his relationship, the daughter of it became his sole responsibility, so that his drug rehabilitation became his sole focus. I quote: "My relationship with her [his daughter Aleisha] was the entire focus of my concern from then on and it was that concern that helped me to be ready to enter and complete the drug rehabilitation programme from January of 2002." 19 In these circumstances, the respondent was accepted in his denial of receipt of any correspondence from his former solicitors apprising him of the status of his claim. He states that he had no knowledge that his former solicitors had ceased to act for him or that the matter had been listed on a 'show cause' basis for 6 March 2001, or indeed that a Preliminary Dismissal Order had been made (June affidavit para 19, September affidavit paras 1-2). Nevertheless he acknowledges that he was aware of the claim and took no steps to contact his former Solicitors regarding its progress. The respondent says he was totally unaware of the time frame for conduct of the action, being motivated by an overriding desire to rehabilitate himself, a goal to which, to his credit, he devoted himself from February 2002. (June affidavit paras 22-24, September affidavit para 4). The respondent says he first contacted new solicitors on 5 March 2003, after he felt he had rehabilitated himself sufficiently to devote his attention to his claim (September affidavit paras 5-6). It was only then that he learned of the preliminary dismissal order, through his new solicitors retrieving the old file.

DISPOSITION OF APPEAL 20 It is appropriate at the outset to consider the effect, if any, of Zhao v Posa [2004] NSWCA 184, handed down after the hearing of this appeal. In Zhao, all members of the Court held that an order dismissing proceedings made on the application of a party is not a preliminary dismissal order within the meaning of Pt 1 r7A: Giles JA (with whom Tobias JA agreed) at [41], Cripps AJA at [67] to [68]. The significance of this ruling is that it is only when the Court makes an order dismissing proceedings of its own motion in furtherance of its case-management objectives, expressed in Practice Note No 33 issued under s68A of the District Court Act 1973, that the Court has power under Pt 1 r7A(5) to set that order aside. In cases where the Court dismisses proceedings on the application of a party, the only possible source of power to set that order aside is Pt 31 r12A which is narrower in scope than Pt 1 r7A(5), or possibly an inherent jurisdiction of the Court. 21 In this case, all parties and Boyd-Boland ADCJ himself appear to have proceeded on the basis that the application to set aside the dismissal order was properly brought under Pt 1 r7A(5). It has been assumed by all that what is in issue is a preliminary dismissal order within the terms of Pt 1 r.7A. Certainly, it has never been suggested that Boyd-Boland ADCJ lacked jurisdiction under Pt 1 r7A(5) to make an order in the terms he did. The Court file, records merely the following for the directions hearing of 6 March 2001 when the order was made (I have expanded abbreviations): "No appearance for Plaintiff. Plaintiff has not shown cause. Defendant's letter to Plaintiff was not returned to Defendant. Action dismissed P.18 Plaintiff pay Defendant's costs of action." 22 This note tends to my mind to suggest that the reason for the dismissal order made by Bowden ADCJ was the failure of the respondent to make an appearance and show cause. The inference is that since cause was not shown, the Court was of its own motion striking out the proceedings in order to vindicate the 'show cause' warning made earlier at the Status Conference. The only material in the Court file that appears to have been before the Court at the hearing was an affidavit as to correspondence sworn by the Defendant's solicitor Channon. This affidavit does not appear to have been in support of any motion and cannot show that the appellant's solicitors made an application for want of prosecution, being rather directed to showing that notice under Pt 1 r7A(2) had been provided (and to which the second sentence in the note above refers). 23 There is thus no documentary evidence in the Court file suggesting one way or the other whether in making the order Bowden ADCJ was acting on his own motion or on that of the appellant. Nor, bearing in mind the fact that an oral application may suffice to render Pt 1 r.7A inapplicable (as in Zhao), is there anything to suggest that such an oral application was made on 6 March. In these circumstances, and given the basis on which the parties have consistently presented the case, the only reasonable course for this Court to adopt is to proceed on the basis that the dismissal order was made on the Court's own motion. The decision in Zhao has no effect in this case, and the dismissal order was a Preliminary Dismissal Order within the meaning of Pt 1 r7A. 24 A threshold question is whether the preliminary dismissal order by Bowden ADCJ was irregular. For the reasons developed below, I do not consider it was. 25 Thus the appellant did not submit on appeal that there was any irregularity in the original preliminary dismissal order. This is so, though the reasons for judgment of Boyd-Boland ADCJ appear to indicate the issue weighed upon him somewhat. I have had the advantage of reading in draft the reasons for judgment given by Bryson JA. Subject to what follows, I agree with his conclusion that the application before Boyd-Boland ADCJ to set aside the preliminary dismissal order was not based on any alleged irregularity. 26 One issue was whether the criteria of Pt 1 r7A(2) had been satisfied in order to make the original preliminary dismissed order. They provide that the Court is not to make a preliminary dismissal order "unless it is satisfied that the parties to the proceedings have been appropriately notified that the order may be made." Given that it was not disputed the respondent did not in fact ever receive notification that his action had been listed on a 'show cause' basis for 6 March 2001, the question arises whether the primary judge could in fact have been so satisfied, within the meaning of r7A(2). Regardless of whether one takes a purely subjective approach to the rule or injects an objective element requiring the judge to be 'reasonably' satisfied (compare the approach of Brennan CJ in Kruger v. The Commonwealth (1997) 190 CLR 1 at 36), does not here particularly matter. There was ample material before Bowden ADCJ (in the form of an affidavit sworn by Mr Tim Channon of the appellant's solicitors), to enable him to be satisfied of notification. It annexes a letter dated 20 December 2000 sent by the appellant's solicitors to the respondent informing him that his claim had been listed on a 'show cause' basis for 6 March 2001. The letter recited that it was sent on direction by the Court, given that the respondent's own solicitors had ceased to act for him. It is not alleged that the primary judge made any error in being so satisfied on the material before him. 27 A secondary issue was whether the preliminary dismissal order was irregular for want of compliance with Pt 1 r7A(4). That is, does that sub-rule, which commences with the words "the Court may …", confer anything other than a broad discretion on the primary judge to make orders as it thinks fit. Alternatively, in the words of Windeyer J in Finance Facilities Pty Ltd & Ors v. Commissioner of Taxation (1970) 127 CLR 106 at 134, does "the particular context of words and circumstance make it not only an empowering word but indicate circumstances in which the power is to be exercised--so that in those events the 'may' becomes a 'must'." The terms of Pt 1 r7A(4) do not indicate any conditions precedent which must be met before the power becomes exercisable. They do, however, indicate a purpose for which it is to be exercised, namely "to ensure that any party to the proceedings in respect of which the dismissal order is made is appropriately notified of the making or consequences of the order." 28 It is sufficient, in my opinion, if the primary judge exercises the discretion under Pt 1 r7A(4) bona fide and for that purpose. There is no evidence that Bowden ADCJ did not do this. Absence of records in the court file in relation to any order under Pt 1 r7A(4), referred to by Boyd-Boland ADCJ at page 5, does not of itself indicate irregularity. Given that the appellants did not press the issue on appeal, I am content to leave the matter there.

Reviewable miscarriage of discretion? 29 Next, the appellant contends that if the preliminary dismissal order was regularly made, then the discretion of the learned judge at first instance miscarried. This was when he ordered that the preliminary dismissal order be set aside pursuant to Pt 1 r7A(5). Importantly, the dismissal of the respondent's claim was essentially for want of prosecution. This was in circumstances where notification of that preliminary dismissal order never reached him. The respondent contends that no appealable error can be shown in the reasoning of the primary judge sufficient for an appellate court to overturn his exercise of discretion. 30 The limited scope for an appellate court to interfere with a discretionary judgment by a primary judge on a matter of practice and procedure is explained in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 505; cf Lovell v Lovell (1950) 81 CLR 513 at 532-4. 31 Summarising this and other cases, in Micallef v ICI Australia Operations Ltd [2001] NSWCA 274, Heydon JA (with whom Sheller JA and Studdert AJA agreed), stated at [45] that any impeachment of such an exercise of discretion must fail unless it can be demonstrated that the primary judge: (a) made an error of legal principle, (b) made a material error of fact, (c) took into account some irrelevant matter, (d) failed to take into account, or gave insufficient weight to, some relevant matter, or (e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning. 32 It is only in these limited circumstances that interference with the decision of Boyd-Boland ADCJ is permissible. This is so even if the appellate court considers that it would have exercised the discretion differently, had the discretion been entrusted to it at first instance: Sophron v The Nominal Defendant (1957) 96 CLR 469 at 474-5 per the Court. An appellate court must be able to reach a clear conclusion that, by reason of some error of fact or of law, the primary judge has failed properly to exercise the discretion committed to him or her: Mace v Murray (1955) 92 CLR 370. It is not enough that the appellate court would have chosen to exercise the discretion differently. 33 Thus even in the limited circumstances enumerated above, when appellate intervention is allowed, an appellate court must exercise considerable restraint before it chooses actually to review a discretionary decision especially when it is on a matter of practice and procedure: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 176-7 per curiam. The High Court cited with approval the comments of Jordan CJ in Re Will of F B Gilbert (deceased) (1946) 46 SR(NSW) 318 at 323: " ... I am of opinion that, ... there is a material difference between and exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."

And at 377: "the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration." 34 It is convenient now to deal with each of the five possibilities outlined by Heydon JA in Micallef in turn. This is to determine whether any appealable error has been shown in the discretionary judgment of the learned primary judge as would justify substituting a different exercise of discretion on appeal.

(a) Error of Legal Principle ? 35 The learned primary judge directed himself to the relevant authorities on applications for an extension of time to apply under Pt 1 r7A of the Rules. These included the decision of this Court in Bamforth v Betcke (2003) NSWCA 116, a judgment on analogous circumstances to the facts in this case. In Bamforth (supra) the application to set aside the preliminary dismissal order was brought some six months after it was made. In that case, all members of the Court (of whom I was one) concurred in the judgment of Giles JA, as to the appropriate principles to be applied in such a case. Giles JA stated at [53] to [54]: "53. Where a dismissal order was [made] because of the plaintiff's failure to comply with orders or directions, explanation and excuse before the dismissal order can be set aside does not have the same significance as it has in other circumstances. The gravity of the failure may count for or against the plaintiff, and if an explanation excusing the failure is given the plaintiff may enjoy greater prospects of success in the application. But the purpose in giving the dismissal order suspended effect, and making it open to be set aside or confirmed, is not just to give the plaintiff an opportunity to explain the failure. The plaintiff has had that opportunity, and the making of the dismissal order marks that the plaintiff has not provided a satisfactory explanation. Rather, the primary purpose is to enable the plaintiff to put his house in order and persuade the court that, notwithstanding the failure, the proceedings should be permitted to continue. In an application under Pt1 r 7A(5), the focus is on curing the failure, not explaining it.

54. When there is added failure to apply under Pt 1 r7A(5) within the twenty-eight day period, and extension of that period is necessary, again what matters is not explanation and excuse for the failure leading to the dismissal order, but explanation and excuse for the delay in making the application. Explanation for the original failure, of course, may colour and be relevant to any explanation for the delay, but the focus is on the latter." 36 Applying the principles expounded by Giles JA, a primary judge first needs to satisfy himself that there was an explanation and excuse for the delay of well over two years in making the application to set aside the dismissal order. Second, If so satisfied, the judge needs to determine whether the dismissal order should be set aside; that is, whether the failure which led to the order has been remedied and notwithstanding that failure, that the proceedings should be allowed to continue. The factual inquiries necessary to answer these two questions will inevitably overlap to some extent, as indeed was recognised by Giles JA at [54] above. 37 Unfortunately, the reasons of the Boyd-Boland ADCJ do not clearly distinguish between extension of the twenty-eight day period under Pt 3 r2 of the Rules and confirming or setting aside the dismissal orders under Pt 1 r7A(5) of the Rules. I am satisfied, however, that the primary judge correctly applied the legal principles as expounded in Bamforth by directing his mind to whether there was a satisfactory explanation for the more than two year delay in bringing proceedings to set aside the preliminary dismissal order. No error of legal principle can be shown in this approach. The primary judge then proceeded to consider the explanation tendered by the respondent, ultimately accepting it in the following terms: "Davies says he was unaware his Solicitors had ceased to act for him and was also unaware of the Dismissal Order. He was not cross-examined on those assertions which I now accept. He then says, despite his injuries and his continued drug abuse, he remained aware Court proceedings had been commenced but took no action to chase his Solicitors, as to progress. That, he says, was because he was unaware of any time-frame for the conduct of the action and because he had an over-riding desire to rehabilitate himself. His explanation and excuse for the delay in making the application is therefore based on an assertion of ignorance which I accept. The circumstances … I further accept the Affidavit of Hunt [the new solicitor] as a reasonable explanation for the delay between receipt of Davies' file, form his earlier Solicitors, and the making of this application." 38 Elsewhere the primary judge again refers to the respondent's explanation for his inaction as including his "continuing heroin addiction and the problems he was experiencing in his domestic relationship." Then the primary judge proceeded to balance the question of prejudice, being general not specific, suffered by the appellant with whether the justice of the case required the extension of time. This approach was correct in terms of legal principle, given that the object of Pt 3 r2 of the Rules is to give the court in every case a remedial discretion to extend time with a view to avoid injustice: FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 283 per Wilson J (with whom Brennan, Deane & Dawson JJ agreed). 39 The appellant, however, submits that there was an error of principle by the trial judge in accepting that illegal or criminal conduct by the respondent could constitute a satisfactory explanation (or alternatively, that the illegality should have been given greater weight in the discretionary balance, as to which see below). Neither of these submissions are well founded. The alleged illegality is said to lie in the respondent's admitted possession and use of prohibited drugs. It is obvious that any such illegality is wholly collateral to the relief sought pursuant to Pt 1 r7A(5). Contrary to the submissions of the appellant, the doctrines of 'clean hands' and ex turpi causa non oritur actio are simply not applicable in a matter such as this. As far as the former is concerned, the respondent has never sought any specific equitable relief at all which would necessitate an examination of his conscience and whether his hands were 'clean'. As far as the latter is concerned, it is a rule, as Diplock LJ stated in Hardy v Motor Insurers' Bureau [1964] 2 QB 745 at 767 (in a passage approved by Brennan J in Gollan v Nugent (1988) 166 CLR 18 at 34), that: "the courts will not enforce a right which would be otherwise enforceable if the right arises out of an act committed by the person asserting the right (or by someone who is regarded in law as his successor) which is regarded by the court as sufficiently anti-social to justify the court's refusing to enforce that right." [emphasis added]

Here of course, the Court is not enforcing a right, but granting an indulgence. Even leaving this crucial fact aside, the comments of Diplock LJ must be understood in the light of subsequent decisions which reflect a less expansive approach to the question of illegality, tending against mulcting a plaintiff to civil proceedings merely by reason of prior criminality or illegality. 40 The appellant cited in written submissions the High Court decision of Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, a case in which the court considered whether a mortgage given by a corporation carrying on an unauthorised banking business, could be enforced. Yango, however, does not assist the appellant's case. All members of the High Court agreed there that the fact that the contract was made and performed in the course of an unlawful enterprise did not mean relief was to be denied to the party carrying on the illegal business. Mason J (with whom Aickin J agreed) expressly averred that it is the form of the legislation that creates the illegality which is the relevant consideration, observing (at 429): "There is much to be said for the view that once a statutory penalty has been provided for an offence the rule of the common law in determining the legal consequences of commission of the offence is thereby diminished … and that it would be a curious thing if the offender is to be punished twice, civilly as well as criminally ( St. John Shipping Corporation v Joseph Rank Ltd . (1957) 1 QB 267, at p292, per Devlin J.). The main considerations from which the principle ex turpi causa arose can be seen in the reluctance of the courts to be instrumental in offering an inducement to crime or removing a restraint to crime: Beresford's Case (1938) AC, at pp586, 599 ; Amicable Society v Bolland (Fauntleroy's Case) (1830) 4 Bligh (NS) 194, at p211." 41 Of course, the respondent here is not seeking to enforce a right under an illegal contract, but the approach to illegality pointed to in Yango has not been doubted, rather tending to be confirmed in later cases such as Nelson v Nelson (1995) 184 CLR 538; Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215 at 228-230. In Nelson (at 561), when dealing with equitable relief and illegality, Deane and Gummow JJ cited the comments of Windeyer J in Smith v Jenkins (1970) 119 CLR 397 (at 411 to 414) that the ex turpi causa doctrine should be confined to contracts and conveyances, and noted the decreasing significance of the maxim in negligence cases such as Gala v Preston (1991) 172 CLR 243. In that case, cited by the appellant in written submissions, four members of the High Court preferred not to base their decision on a general rule excluding participants in a joint criminal enterprise from recovering in tort against their co-conspirators. Significantly, there is nothing in the District Court Rules 1973 disclosing an intention (in the sense referred to by McHugh J at 613 in Nelson) that the rights and remedies granted by the Rules should be unavailable because affected by some collateral illegality. 42 Importantly, the fact of the respondent's illegal drug-taking was not relied on by the primary judge at first instance as the satisfactory explanation. In the passage I have cited, Boyd-Boland ADCJ makes clear that the explanation he accepts is essentially that the respondent, then in sole charge of his daughter following the breakdown of his de facto relationship, was directing his mind to other matters but particularly his rehabilitation during the two year delay. He was moreover lulled by his general ignorance of the progress of his proceedings and his specific lack of knowledge that the dismissal order had been made. Any illegal drug-taking is collateral to that explanation. No error of principle has been shown.

(b) Material error of fact? 43 I now turn to whether the primary judge made any material errors of fact and, if so, whether sufficient to justify this Court in setting aside his decision and re-exercising the discretion. It is important to keep the two questions distinct, though clearly the degree of materiality bears on both. The appellant submits, and the respondent concedes, that Boyd-Boland ADCJ did in fact make a factual error in describing the respondent as an 'employee' of the appellant. The appellant claimed that this error led the primary judge to draw an unfounded inference that there had been prompt notification to the defendant of workers' compensation liability. It is claimed that this error affected the primary judge's conclusion that the respondent had discharged the burden of demonstrating that the justice of the case required the extension of time, notwithstanding the general prejudice suffered by the appellant by reason of the delay. 44 The mere fact of such an error is not however sufficient. This Court must be satisfied that the primary judge made a material error of fact and one that was not only operative in the result but of sufficient substance to justify setting aside the exercise of discretion to extend time. If a result, as here, is supported predominantly by other considerations, though also by a mistaken factual premise, its significance is correspondingly less. That said, the degree of prejudice flowing from the order appealed from does have a potential bearing, particularly if the error of fact must have led the trial judge to overlook or underestimate that prejudice. 45 In this case the appellant did not, either here or before Boyd-Boland ADCJ, seek to argue that specific prejudice would be suffered by it in consequence of the order extending time or setting aside the preliminary dismissal order. The appellant relied solely on general or presumptive prejudice inherent in the delay in bringing the application. It arises in the context of injuries said to have been suffered in the following circumstances (affidavit of 2 June 2003): "2. The aforementioned proceedings were brought following injury suffered by me on or about the 29th April 1997 in the course of my employment with the Defendant. On that occasion I was assisting in the loading of a quantity of aluminium into a tipper truck. I was sitting in the rear of the truck as a load of aluminium was lowered by crane. As the load was being lowered it struck me causing me to fall from the truck to the ground. As a result of the ensuing fall I suffered various injuries."

The respondent subsequently resiled from any assertion of employment, though not otherwise from the circumstances of the injury. 46 The appellant then claims support from Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, where McHugh J discusses the general deleterious effect of delay. But he does so in the context of delay in commencing proceedings, not their prosecution. There is here that significant difference identified by Giles JA in Bamforth v Betcke. Here what is in issue is whether, notwithstanding failure to comply with a direction, the court can be persuaded that the proceedings already commenced should be permitted to continue. The defendant remains on notice of their existence, though with the passing of time no doubt increasingly confident that the dismissal order would not be reversed. In Saad v Robins & Sons Pty Ltd [2003] NSWCA 87 at [30] to [35], with the concurrence of Mason P and Hodgson JA, I set out what I considered to be the principal propositions emerging from the various judgments in Brisbane South: "(i) it is for the respondent to place in evidence sufficient facts that lead the court to the view that actual prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice (per Toohey J and Gummow J at 547); (ii) whether or not an extension of time is prima facie prejudicial to the potential defendant (McHugh J and Dawson J suggesting it was and Toohey J and Gummow J suggesting otherwise), "the real question is whether the delay has made the chances of a fair trial unlikely ... if it has not there is no reason why the discretion should not be exercised in favour of the respondent" (per Toohey and Gummow JJ at 550); (iii) "... when actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period. The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice" (per McHugh J at 555);" 47 Given that here actual prejudice was not pleaded, the real question is whether the delay has made the chances of a fair trial unlikely. That proposition was however not asserted on appeal. There have been a number of cases (including Saad), where leave has been granted to commence proceeding after significant delays where there was no actual but only presumptive prejudice. Hence there is no inevitability that a different result should flow in the circumstances of this case. Importantly here the appellants were apprised of the claim within the limitation period and indeed have had the benefit of medical examinations and reports of the respondent. 48 To this I would add what is said by the respondent/opponent in his written submissions: "The claimant is correct in pointing out the factual error made by His Honour in describing the opponent as an employee of the claimant. A succinct statement of the opponent's assertion of the events of his injury and the involvement of the claimant is found at paragraphs 2, 3, 4 and 5 of the Statement of Claim (which in the Defence are 'not admitted' but not 'denied'). That the opponent was taken by ambulance from the claimant's premises where he was injured, having been struck by a crane operated by the claimant, to Sutherland Hospital, where he was treated for fractures, would surely have alerted the claimant that the incident called for investigation. It would be surprising indeed if the claimant's response to the opponent's injury was different because the latter was a visiting worker rather than an employee." 49 Absent actual or specific prejudice, general prejudice need not be a bar. However, the onus still remaining upon the applicant to show that it is just and fair for any extension to be given. It is in that context that any explanation must be judged. The respondent did give an explanation which the primary judge took into account for the delay, when dismissing the appellant's argument on prejudice. I cannot accept that the mistaken assumption of employment with consequent workers compensation liability, being error relied upon by the appellant, was the decisive or even a primary factor in the decision of the primary judge to extend time. It was essentially a make-weight mentioned in passing. Boyd-Boland ADCJ devoted much greater length in his reasons for judgment to evaluating the respondent's explanation for his delay. He also recognised that: "The Defendant does not seek to argue specific prejudice. It acknowledges awareness of the proceedings from the time the initial Statement of Claim issued." 50 In the light of the above, which immediately precedes the error of fact made by the primary judge, and taking into account the lack of specific prejudice and the fact that the court proceedings were commenced within time and promptly served, I do not accept that the primary judge's decision was so materially affected by that error as to justify a fresh exercise of discretion to the contrary. In particular the appellant did not set out to demonstrate that a fair trial was impossible. Nor in the circumstances and absent specific prejudice, could the appellant have done so. I accept that general prejudice entails staleness in the evidence and moreover putting the appellant through proceedings it must have thought were no longer any concern. Those are factors properly to be weighed in determining the justice of the case. But I do not consider they compel me to reverse the way the trial judge balanced that general prejudice against undoubted prejudice to the respondent if unable to assert his claim. This is more especially when the respondent was for two years in ignorance that his claim faced dismissal and had indeed been dismissed (though no doubt had he made enquiry earlier he would have been enlightened).

(c) Acted upon irrelevant matters 51 It was argued by the appellant that the primary judge should not have taken into account the fact that the respondent had been medically examined, in disposing of the question of prejudice. The appellant submitted that the medical assessment was relevant only secondarily, and that the primary judge ought not to have considered it as he did. I disagree. When the appellant is claiming general prejudice it would be unbalanced to say that the judge must give exclusive or greater attention to that part of the evidence which is most prone to being lost or obscured by delay, without also considering evidence not so affected. The effect of the delay on all of the evidence is a legitimate consideration for a primary judge. In any event, I am not satisfied that even if this were an error it would be sufficient to justify interference with the discretion of the primary judge.

(d) Failure to take into account or give sufficient weight to relevant matters? 52 In written submissions, the appellant said that the primary judge failed to take into account that the delay was caused by the plaintiff's conscious and deliberate decision not to pursue the proceedings. In submissions on appeal, the appellant developed this submission, pressing that the illegality of the conduct should have also been taken into account by Boyd-Boland ADCJ as a factor weighing heavily against making a decision in the wrongdoer's favour. As I have said, I do not consider this submission to be well-founded. The equitable maxim of clean hands applies only to a claimant who seeks an equitable remedy from a Court exercising equitable jurisdiction. It is wrong to apply it by analogy here. 53 The real substance of the appellant's submission is that the respondent was directing his attention to something other than his claim for most of the two and a half year period between the dismissal order being made and his application to set it aside. It is true too that his new solicitors took a further five months after the two years (5 March 2003 to 5 August 2003) to apply to have the preliminary dismissal order reversed. There is however some explanation for that further delay in the affidavit of his new solicitor Mr Hart of 15 October 2003. While that further delay is regrettable it did not weigh heavily with the primary judge and I do not consider there is sufficient basis for interfering in that aspect of his discretionary assessment either. I am not persuaded that the appellant's submission, based on the respondent so directing his attention elsewhere and the nature of his reasons for doing so, demonstrate that the trial judge's discretion must have miscarried in such a way as to warrant appellate intervention. 54 In one sense every delay is caused by the litigant (or their legal representatives) giving attention to something other than the litigation. In this case, the primary judge gave detailed consideration of the respondent's explanation for his delay, referring to the respondent's general ignorance of time frames, his severely unstable personal life and his drug-dependency attended subsequently by a protracted period of rehabilitation. There was also his commendable concern for the child of his now ended de facto relationship, who had become his sole responsibility, so that persevering with rehabilitation became his exclusive focus. The trial judge was ultimately persuaded in the respondent's favour, taking the various factors into account. In particular the trial judge concluded that the respondent should be allowed to cure his earlier failure and be permitted to continue his proceedings, in accordance with the approach laid down by this court in Bamforth v Betcke. I do not think that the primary judge failed to take into account a relevant consideration in so concluding.

(e) Result so unreasonable or unjust as to suggest an error not on the face of the reasoning? 55 The final question is whether the result in this case is so manifestly unjust or unreasonable as to suggest an error on the face of the reasoning. I do not consider that it is. Undeniably two and a half years is a significant delay. But it is by no means the lengthiest delay seen in our Courts - Saad (supra) for instance involved a delay of some eleven years in commencing proceedings. The appellants were unable to point the primary judge to any specific prejudice suffered by them as a result of the delay, relying merely on general prejudice. Nor is any prejudice evident so as to render the result of the primary judge's decision unsustainable. I would adopt what was said by Heydon JA (with whom Sheller JA and Campbell AJA agreed) in a recent case on determinations under Pt 1 r7A(5), Erhard v Bhatia [2002] NSWCA 388: "A question thus arose: as a matter of justice, should the interests of the District Court and the defendant in the efficient operation of the Court's case management procedures, coupled with delays of which the plaintiff's solicitor or the plaintiff had been guilty … have prevailed over the interests of the plaintiff in having her claim against the defendant determined on the merits?" 56 Heydon JA then cited the comments of Dawson, Gaudron & McHugh JJ in State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154-155: "Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim . ..." [emphasis added]. 57 When this is borne in mind, the decision of Boyd-Boland ADCJ does not produce a result so unreasonable or unjust as to suggest error.

OVERALL CONCLUSION 58 I do not consider the appellant has demonstrated a sufficient basis to reverse the discretionary decision of the primary judge in what is a matter of practice and procedure where appellate restraint is clearly called for. As said by Toohey and Gummow JJ in Brisbane South, "the real question is whether the delay has made the chances of a fair trial unlikely", and if that is not the case, "there is no reason why the discretion [to extend time] should not be exercised in favour of the respondent". 59 The discretion in Brisbane South was to extend time to commence proceedings in a limitation context. That may suggest a more stringent approach. Here it is merely to extend time to reverse a preliminary dismissal order so as to continue proceedings already commenced. I do not consider that the chances of a fair trial have been prejudiced. Nor do I consider that the primary judge's discretion was exercised in such a way as to justify appellate intervention. In particular I consider that the error of fact made by the trial judge did not so weigh in his determination as to justify appellate intervention having the effect of reversing that discretionary determination. None of the other limited bases for appellate intervention have been made out. 60 Accordingly, I consider that it should be ordered that: (a) The appeal be dismissed. (b) Appellant to pay the respondent's costs of the appeal. 61 BRYSON JA: The appellant (defendant in the District Court) appeals by leave granted on 26 May 2004 against the order of his Honour Acting Judge Boyd-Boland made in the District Court at Sydney on 24 October 2003 in proceedings 3051 of 2000. The respondent (plaintiff in the District Court) claimed by Ordinary Statement of Claim filed on 28 April 2000 damages for personal injury which he sustained at the appellant's business premises at 2 Production Road, Taren Point on 29 April 1997. Though the facts in evidence are very bare, it appears that the respondent was then employed by someone other than the appellant, apparently a customer of the appellant, and in the course of that employment attended at the appellant's business premises for the purpose of picking up a load of aluminium onto a tipper truck. The respondent's evidence was that he was assisting in loading the aluminium onto the truck and was sitting in the rear of the truck as a load of aluminium was being lowered by a crane. The load struck him causing him to fall from the truck onto the ground and suffer personal injuries. He alleged a number of injuries of some severity, with continuing disability, and claimed $750,000 damages. 62 The appellant filed Notice of Grounds of Defence on 30 May 2000 and disputed liability, denied negligence and other allegations, and pleaded contributory negligence. Steps were taken in the District Court in preparation of the proceedings for hearing. Subpoenas were issued, documents were produced and access orders were made. A Case Management Review on 9 October 2000 was adjourned, and a Status Conference was appointed for 11 December 2000. Before the Status Conference was to take place the solicitors who issued the Ordinary Statement of Claim and thereafter acted for the respondent (the first solicitors) filed Notice of Ceasing to Act on 30 November 2000. They also filed an affidavit by Ms K.L. Hurley, solicitor, sworn on 28 November 2000 which showed that she had attempted to contact the respondent by correspondence dated 16 October 2000, 3 November 2000 and 13 November 2000, had received no response and had sent him Notice of Intention to Cease to Act on 16 November 2000. Ms Hurley said that the last known address of the respondent was 23 Dobell Street, Yarrawarra, and that his present whereabouts were unknown to her. 63 On 11 December 2000 an officer of the District Court directed that the proceedings be listed on 6 March 2001 to show cause why the action should not be struck out for want of prosecution. The appellant's solicitors sent a letter to the respondent on 20 December 2000 notifying him of the appointment for a directions hearing on 6 March 2001, informing him that "At that directions hearing you must show cause why your action should not be dismissed for want of prosecution" and enclosing a copy of a notice from the Court relating to the appointment. 64 On 6 March 2001 the proceedings were listed before his Honour Acting Judge Bowden. There is no transcript of what took place but his Honour's notes show: "No appearance for plaintiff. Plaintiff has not shown cause. Defendant's letter to plaintiff was not returned to defendant. Action dismissed Part 18. Plaintiff to pay defendant's costs of action." I have expanded some abbreviations.

65 It appears that Bowden ADCJ made the Preliminary Dismissal Order under Pt.18 r.3(1) of the District Court Rules 1973 which is in these terms: 18.3 Want of prosecution

(1) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may, on application by any party or of its own motion, dismiss the proceedings or make such other order as the Court thinks fit.

66 No further step was taken in the Court in the proceedings until 19 August 2003 when new solicitors appointed by the respondent filed Notice of Motion, returnable on 5 September 2003 which claimed: (1) Pursuant to Pt.18 r.3(4) set aside the order made on the 6th March 2001

At the same time the new solicitors filed Notice of Change of Solicitor and gave an address for service; this was the first address for service which the respondent had notified since his first solicitors ceased to act. 67 Part 18 r.3(4) referred to in the Notice of Motion had been omitted by an amendment to the District Court Rules 1973 which took effect on 1 September 2000. The new relevant rule was Pt.1 r.7A which is in these terms:

1.7A Effect of certain orders dismissing proceedings

"preliminary dismissal order" means an order made by the Court dismissing proceedings other than an order dismissing proceedings after there has been a trial or hearing on the merits of the case or an application to dismiss the proceedings. (2) The Court is not to make a preliminary dismissal order in respect of any proceedings unless it is satisfied that the parties to the proceedings have been appropriately notified that the order may be made. (3) A preliminary dismissal order does not have effect: (a) if an application is not made under subrule (5) - until a period of 28 days has elapsed after the making of the order, or

(b) if an application is made under subrule (5) - unless the Court confirms the order under subrule (6) or (7). (4) The Court may, at the time it makes a preliminary dismissal order or subsequently, make such other orders as it thinks fit to ensure that any party to the proceedings in respect of which the dismissal order is made is appropriately notified of the making or consequences of the order. (5) Any party to proceedings in respect of which a preliminary dismissal order is made may, within the period of 28 days after the making of the order, apply to the Court to set aside the order. (6) On any such application, the Court may set aside the preliminary dismissal order or confirm the order as it thinks fit. (7) The Court may, if it thinks fit, confirm a preliminary dismissal order if: (a) the party who has made an application to have the order set aside does not appear at the hearing of the application, or

(b) an application to set aside the order is withdrawn or otherwise not proceeded with. 68 The judgment of Giles JA in Zhao v. Posa & Ors [2004] NSWCA 184 at [36] to [44] illustrates the state of the law before the amendments to Pt. 18 and the addition of Pt. 1 r.7A took effect on 1 September 2000. See too the judgment of Cripps AJA at [66] to [71]. 69 The period of 28 days referred to in subr.7A(5) had of course expired before the Notice of Motion was filed and the District Court was empowered to extend that time by Pt.3 r.2: 3.2 Extension and abridgement (1) The Court may by order extend or abridge any time fixed by the rules or by any judgment or order. (2) The Court may extend time under subrule (1) as well after as before the time expires, whether or not an application for the extension is made before the time expires or at all.

70 The Notice of Motion was heard by Boyd-Boland ADCJ on 2 and 23 October 2003. His Honour treated the claim in the Notice of Motion as an application for the Court to set aside the Preliminary Dismissal Order under Pt.1 r.7A(5) of the District Court Rules 1973. His Honour allowed an amendment to the Notice of Motion so as to seek an extension of time pursuant to Pt.3 r.2. There was no amendment to substitute reference to Pt. 1 r.7A(5) for the inappropriate reference to Pt.18 r.3(4) in the Notice of Motion, but it is quite clear that his Honour intended to act under r.7A(5) and not under any other power to set aside the Preliminary Dismissal Order. On 24 October 2003 his Honour published reasons, set aside the Preliminary Dismissal Order and made related orders including an order that the respondent pay the appellant's costs of the Notice of Motion.

71 It is also relevant to take notice of Pt.31 r.12A: 31.12A Setting aside of judgment or order (1) A judgment or order of the Court in any proceedings may, on sufficient cause being shown, be set aside, on terms, by order of the Court, if the judgment was given or entered up, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the Court in any proceedings may, on terms, be set aside by order of the Court if the parties to the proceedings consent. 72 Relevant provisions of the District Court Act 1973 are ss.81 and 159: 81 Judgment final Subject to this or any other Act, a judgment in an action shall, unless set aside in accordance with this Act, be final and conclusive between the parties to the action. 159 Irregularity (1) Where, in the purported commencement of any proceedings or at any stage in the course of or in connection with any proceedings, there is, by reason of anything done or left undone, a failure to comply with any requirement of this Act or of the rules whether in respect of time, place, manner, form or content or in any other respect: (a) the failure shall be treated as an irregularity and shall not nullify the proceedings, or any step taken in the proceedings, or any document, judgment or order in the proceedings, and

(b) subject to subsections (2) and (3), the Court may, on terms, set aside wholly or in part the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings, or exercise its powers under the rules to allow amendments and to make orders dealing with the proceedings generally. (2) The Court shall not wholly set aside any proceedings on the ground that although not constituting an action for the recovery of a debt or liquidated demand they were commenced by the lodging of a statement of liquidated claim. (3) The Court shall not set aside any proceedings or any step taken in any proceedings or any document, judgment or order in any proceedings on the ground of a failure to which subsection (1) applies on the application of any party unless the application is made within a reasonable time and before the applicant has taken any fresh step after becoming aware of the irregularity. 73 Where an application to set aside a Preliminary Dismissal Order is made under Pt.1 r.7A(5) the grounds on which the Court may act are not limited to irregularity or the other grounds referred to in Pt.31 r.12A: see in Zhao v Posa, Cripps AJA at [68]. The wide grounds on which the power in r.7A(5) may be exercised include irregularity, illegality and breach of good faith, to which Pt. 31 r.12A(1) refers, but are not limited to them. An application to set aside a Preliminary Dismissal Order based on an alleged irregularity and on Pt.31 r.12A is not subject to the time limit of 28 days imposed by r.7A(5): it appears that s.159(3) has the effect that a reasonable time is available for such an application unless the applicant has taken a fresh step. The power to extend time in Pt.3 r.2(1) does not enable the reasonable time referred to in subs. 159(3) to be extended, but it does enable the period of 28 days referred to in Pt.1 r.7A(5) to be extended.

74 In my understanding of the reasons given by Boyd-Boland ADCJ, his Honour's order was not based on any view that there had been an irregularity in the proceedings leading to or relating to the Preliminary Dismissal Order. His Honour's reasons referred to the requirement that the appellant inform the respondent that the matter was listed to show cause on 6 March 2001 and said "I further infer a letter was so sent which would have been addressed to [the respondent's] only known address at Yarrawarra." As an affidavit of the appellant's solicitors showed that a letter dated 20 December 2000 was sent to the respondent notifying him of the appointment for a directions hearing, I treat his Honour's statement as finding that the letter was sent notwithstanding the word "infer". 75 Boyd-Boland ADCJ found and the appellant does not dispute that the respondent did not actually receive the letter dated 20 December 2000 and the notice enclosed with it. The letter was sent to the respondent at 23 Dobell Street, Yarrawarra, New South Wales, 2233, which was the last address known to his first solicitors and notified when they ceased to act. The respondent has referred to that address in an affidavit as Dobell Road Engadine; Engadine is the next suburb south of Yarrawarra and I have taken notice of a map in a street directory which shows that Dobell Road is in Yarrawarra, but is quite close to Engadine. 76 The respondent gave evidence and Boyd-Boland ADCJ found that the respondent did not receive a series of letters from 14 August 2000 to 4 December 2000 sent to him by his first solicitors which were addressed to 23 Dobell Street, Yarrawarra. His Honour found to the effect that the respondent had experienced a long period of drug abuse and breakdown in a personal relationship; the drug abuse dated from well before the injury and resulted in frequent changes to his address. Between 1997 and 2000 he resided at times at Kirrawee, at times at two addresses in Engadine, and for a time at Wattle Grove. He spent some time on and off at another property in Dobell Road Engadine occupied by his then de facto partner and their daughter. Boyd-Boland ADCJ found that the respondent was residing at Dobell Road Engadine (meaning Yarrawarra) at the time of the series of letters from 14 August 2000 to 4 December 2000. His Honour found that the respondent lost the benefit of legal representation because his first solicitors ceased to act as a consequence of the respondent's failure to answer their correspondence. It was also found that the respondent did not attend the directions hearing on 6 March 2001 because he was never in fact advised of it and had no knowledge of it. His Honour said that the District Court "…was fortified by the knowledge [the respondent] had got a letter which would afford him the opportunity to be heard as required by Part 1 Rule 7A(2). It is submitted, but for that, it is likely the order would not have been made. I accept that submission."

77 Later at page 7 of the judgment his Honour said: … I find that in this instance an order dismissing [the respondent's] action was made in the absence of him being properly informed of that possibility. That was the sole factor that came to necessitate the present application. 78 This was not a decision that there had been an irregularity. On the material before Boyd-Boland ADCJ it would not be correct to conclude that the proceedings which led to the Preliminary Dismissal Order were irregular. The affidavit of service of the letter showed that the respondent had been appropriately notified that a Preliminary Dismissal Order was to be considered; a letter had been sent to him at the last known address notified when his first solicitors gave Notice of Ceasing to Act. 79 When the letter and notice were sent to the respondent on 20 December he did not have an address for service. The District Court Rules 1973 make a number of provisions requiring a party to notify an address for service and assuming that a party has one. Under Pt.8 r.8(3) a party may change the address for service. The respondent did not do so until his new solicitors gave their address on 19 August 2003. 80 Boyd-Boland ADCJ said:

[The respondent] next says no notice of the order was sent and points to the Court records to support that assertion. Certainly there is nothing recorded there to indicate positively, such a notification was sent.

Under r.7A(4) of the District Court Rules 1973 Bowden ADCJ had power to make such orders as his Honour thought fit to ensure that any party to the proceedings was properly notified of the making or consequences of the order; as this power is discretionary, the absence of any record in the Court file in relation to such order is not an indication that proceedings were irregular. Further, the notification referred to in r.7A(4) can be either a notification of the making of the order, or of the consequences of the order, and it was open to Bowden ADCJ to take the view that the consequences of the order had been notified by the letter of 20 December 2000 and the notice enclosed with it. In the circumstances I do not regard passages in Boyd-Boland ADCJ's reasons to which I have referred as indicating that the application to set aside the Preliminary Dismissal Order was based on an irregularity, or as indicating that there was an irregularity. The notice of motion and supporting affidavit did not raise that issue. If it had been raised the appellant could have met that issue by adducing evidence of what happened during the hearing before Bowden ADCJ. As it is the only evidence of that is the cryptic note on the file. 81 After the first solicitors ceased to act, the respondent did not attend to this litigation until he consulted his new solicitors on 5 March 2003. They then requested the file from the first solicitors, received the file about 21 March 2003, directed attention to his affairs, and after some months applied on 19 August 2003 to set aside the Preliminary Dismissal Order. The respondent and his new solicitors first learnt of the dismissal of the proceedings in consequence of receiving the file from the first solicitors. Boyd-Boland ADCJ found "The explanation for delay, through to the point when he came to consult [his new solicitors] is that he did nothing, in that period because of his continuing heroin addiction and the problems he was experiencing in his domestic relationship." 82 Among the matters considered by Boyd-Boland ADCJ in relation to whether time should be extended was the effect on the appellant of extending time, setting aside the Preliminary Dismissal Order and reviving the proceedings. His Honour said: The [appellant] does not seek to argue specific prejudice. It acknowledges awareness of the proceedings from the time the initial Statement of Claim issued. There is evidence the injury occurred in the context of [the respondent's] employment with the [appellant] in relation to which he sought and secured Workers Compensation benefits from the [appellant]. The parties confirmed to me that the [appellant] had had the benefit of medical assessment of [the respondent] and the existence of specialist medical reports in [the respondent's] case is evident from the Court file.

His Honour went on to refer to the appellant's submission that there was prejudice arising from delay, and referred to the observations on that subject in Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 by McHugh J at 552 and 553. When stating conclusions and in effect exercising the discretionary elements of his decision, his Honour said: In circumstances where the facts of the accident were clearly promptly provided to the [appellant] so as to have it accept the Workers Compensation liability and where medical assessment exists, I take the view [the respondent] has discharged the positive burden of demonstrating that justice of this case requires the extension. 83 Unfortunately these were errors of fact, in that the appellant was not the respondent's employer, and there was no ground for the inferences that the facts of the accident were promptly provided to the appellant. If the appellant had been the employer it would be reasonable to draw inferences that in compliance with the law relating to workers compensation there probably was a prompt report of the injury, and that the circumstances were investigated before workers compensation was paid; but those inferences were not open on the present facts. These were errors of considerable importance. There is a great difference between the supposed position of the appellant as defendant in a claim by an employee for an injury on its own premises, for which it had statutory responsibilities under Workers Compensation and other legislation, and the position of the appellant in a claim by a stranger which was first notified to it by service of process three years after the injury. An employer may reasonably have attributed to it a full opportunity and strong motivation to ascertain, record and remember information about a workplace injury to its own employee: and a liability or a claim of some kind can be foreseen as a fair certainty. Boyd-Boland ADCJ made such an attribution but this was entirely wrong as the respondent had no obligation to notify his injury and the appellant had no occasion to consider a claim or possible liability until three years later, when the opportunity for ascertaining and proving the facts was cold. The suggestion made by respondent's counsel that an ambulance must have attended to take the respondent to hospital and that this alerted the appellant to the need for investigation serves to illustrate how different the events were to the state of affairs erroneously supposed by Boyd-Boland ADCJ. The error meant that an advantage of a three-year start in investigating the facts was wrongly attributed to the appellant. 84 As his Honour's decision was influenced by an erroneous view of the facts about the time and manner in which information about the accident and injury became available to the appellant, the exercise of discretion should in my opinion be set aside upon the principles expressed in House v. The King (1936) 55 CLR 499 at 504-505, and the Court of Appeal should exercise the discretion anew. The affidavit evidence bearing on the exercise of discretion was not subject to cross-examination. The Court of Appeal is in a position to come to factual conclusions on it. 85 An important matter for the exercise of the power to extend time is the respondent's explanation for not attending to the conduct of these proceedings from about August 2000, when the series of letters from his first solicitors calling for his attention began, until March 2003, when he consulted his new solicitors. His evidence shows that around 1990 or 1991 he entered into a relationship with Ms Kathy Visser, that he lived in a de facto relationship with her and that they have a daughter who was born on 5 June 1996. The respondent used various illegal substances prior to his injuries including methadone, amphetamine and marijuana. When Ms Visser became aware of his drug use about 1993 she argued with him and asked him to "clean up [his] act." He consulted Dr Hardy a general practitioner who arranged for him to enter a drug rehabilitation program about 1994 and 1995, and he remained off narcotics for some time; he completed the drug rehabilitation program not long before his injury on 29 April 1997. By entering into drug rehabilitation he was able to avert the ending of his relationship with Ms Visser. He returned to drug use about 1998. There were stresses within his relationship with Ms Visser arising from financial hardship and his on-going disabilities; there were many arguments, the relationship became strained and he separated from Ms Visser late in 1999 or early in 2000. 86 The respondent then returned to heavy drug use, including methadone, amphetamines, marijuana and heroin. There were a number of changes of address from 1997 to 2000. From about 3 July 2000 he moved to 9 Balala Court, Wattle Grove which was a house owned by his mother; he believed that he informed his first solicitors of that address and contended that some correspondence was forwarded to him at that address by them. He attempted to resume his relationship with Ms Visser in late 2000 and they lived together for about six months during 2000 and 2001; during this period he primarily resided at Balala Court, Wattle Grove and occasionally at Dobell Road, Engadine. He continued to use drugs and this became the source of many arguments and altercations; on many occasions police were called to the home; the relationship was not resumed on a peaceful or satisfactory basis. He said that he believed that he informed his first solicitors that he was residing at Dobell Road, Engadine; that to the best of his knowledge and belief he did not receive the series of letters dated 14 August 2000 to 20 December 2000 which the solicitors directed to him there, and that he believed that if they were forwarded to him there "… they were not passed on to me by my former de facto wife." 87 The respondent said that he continued to use narcotics until January or February 2002, when Dr Hardy again arranged for him to enter a drug rehabilitation program which he is still participating in; he has not used illegal substances since about January or February 2002 but he is on a methadone program as part of the drug rehabilitation program. He was aware throughout that proceedings had been commenced on his behalf in the District Court, and did not contact his first solicitors in relation to the progress of the proceedings. His explanation is: "… the reason for this was that initially I was unaware as to the time frame within which the matter would proceed. In addition, once I fully appreciated the extent of my drug use, I felt it appropriate that I take steps to rehabilitate myself in that regard. I was also concerned that if I was to receive a sum of money at that time then I would have simply spent it on drugs."

His evidence presents a picture of relative stability in that he continues to consult Dr Hardy for treatment of injuries and continuing disabilities which he claimed resulted from his accident and injuries, continues with his drug rehabilitation and methadone programs, and resides at Rathmines, now with his daughter, where he intends to reside for the foreseeable future. 88 The appellant tendered no evidence before Boyd-Boland ADCJ and was not able to maintain any claim based on evidence that it had incurred any particular prejudice due to the respondent's delay, whether by evidence of some identifiable witness becoming unavailable, by loss of opportunity to pursue some line of inquiry, or otherwise. Boyd-Boland ADCJ adverted to the influence of delay and the underlying reasons for enacting limitation periods referred to by McHugh J in Brisbane South Regional Health Authority v. Taylor. The proceedings were brought shortly before the expiry of the limitation period of three years; so far as appears, the bringing of the proceedings was the first signal to the appellant that an allegation of negligence or a claim was made against it. This might have imposed some prejudice or difficulty upon the appellant arising from the elapse of time, but any such prejudice or difficulty was to be borne by the appellant without remedy, as the law authorised that delay. On the other hand when the application for an extension was made and proceedings came before Boyd-Boland ADCJ, more than six years had passed, and the appellant should reasonably have believed, from March 2001 onwards, that the proceedings had been concluded by an order of dismissal. If it was to be shown that the appellant had some earlier indication or opportunity to inquire into the facts, the burden of proving these circumstances lay on the respondent when applying for an extension of time. Commencement of the proceedings had given the appellant an indication that it must investigate its position and inquire into the facts; dismissal of the proceedings had given an indication that it no longer needed to concern itself with the claim. Extension of time would revive after more than six years a claim for which the statutory period of limitation is three years. 89 The delay for which explanation was called was the delay in making the application to set aside the Preliminary Dismissal Order, not the delay and inattention which led to the Preliminary Dismissal Order. This was explained in Bamforth v. Betcke & Ors [2003] NSWCA 116 by Giles JA at [34]; Boyd-Boland ADCJ referred to and correctly directed himself as to the law there explained. 90 An application to set aside the Preliminary Dismissal Order could hardly have failed if it had been made within the 28 days for which Pt 1 r7A(5) of the District Court Rules 1973 now provides. For a few months thereafter, a decision to extend time would have been well within the range of available discretionary outcomes if a litigant lost touch with his solicitors for a few months through distress or disordered circumstances in personal life, but then returned to the reasonable conduct of legal business. The prejudice occasioned by an extension of time of several months would be unlikely to be great; but of course, it would be necessary to consider any specific prejudice which was demonstrated by evidence. 91 The present case is very different. The respondent was out of contact with the first solicitors who were conducting his legal business from August 2000 onwards. He did not take any useful step to conduct his lawsuit from August 2000 on, and in particular did not do so between March 2001 when the proceedings were dismissed and March 2003 when he consulted his new solicitors. If he had thought about it, it should have seemed obvious to him that inattention like this might well lead to dismissal of the proceedings and to the appellant's being told that it no longer needed to concern itself with the claim; as in fact happened. Two years is a long time in a District Court action. It is also a long time for a defendant summoned to answer a claim and make a defence by a Court exercising the power of the State to be left believing that the proceedings had been dismissed. It is unjust for a defendant left for so long to understand that a claim against it had been dismissed and it did not need to give any more attention to it to be told that the claim had been revived, and that it must defend the claim. The respondent was at all times aware that he had a pending claim; he chose to give his attention to other matters. Some of those other matters indeed had a strong claim on his attention; restoration of his personal relationship and his own rehabilitation must attract sympathy; drug addiction does not. None of these claims on his attention has much weight when balanced against the indication given to the appellant, for years, that the case was all over. 92 The appellant's counsel made much of the illegality of the respondent's drug taking activity. In my opinion the fact that drug taking is illegal is not itself an important aspect. It certainly does not engage sympathy, but it is not a function of the discretion to extend time under the District Court Rules 1973 to repress illegal drug taking; that can be left to be dealt with in other ways. What appears to me to be important overall is that the respondent was never unaware that he had brought a claim against the appellant, and, I would say, was never unaware that he should be attending to it, but that he chose to direct his attention to other purposes to the exclusion of attending to his claim. 93 A litigant has a responsibility to the Court, to the public, to the opponent and to himself, to attend to litigation and conduct it with a reasonable degree of attention and promptness. This responsibility bears more heavily on a plaintiff, who has engaged the power of the State to compel the defendant to give attention to the claim: it is oppressive and unjust to extend the time of this attention and compulsion unnecessarily. A defendant may be compelled and given an opportunity to answer a claim: but in fairness it should not be oppressed by prolonging or magnifying the attention required. 94 It falls to the Court of Appeal to come to a discretionary decision on whether time to apply to set aside the Preliminary Dismissal Order should be extended after reviewing and attempting to weigh and balance the various factors favouring and adverse to granting an extension. The factors on one side and the other of the weighing process are extremely unlike each other. The overall effect of the events, in my assessment, is that the respondent, for reasons of his own which have nothing to do with the appellant, and nothing to do with his claim, neglected his claim, while remaining aware of it, and gave his attention to other matters; and this continued for more than two years. Time continued to pass, and the prejudice to the appellant imputed to delay continued to accrue after the appellant had been told by the District Court that the case had been dismissed. In my judgment the discretion to extend time should not be exercised in favour of the respondent. It would be a small tyranny to tell the appellant, more than two years after the proceedings were dismissed, that the appellant should have stood waiting while the respondent devoted his attention to his drugs and his complex private life, and that now that the respondent's attention has returned to the matter in hand the appellant must attend to it too. In my judgment this is not the right way to use public power. 95 For these reasons the appeal should be allowed. The following orders should be made: (1) Appeal allowed with costs. (2) Order of Boyd-Boland ADCJ of 24 October 2003 be set aside. (3) In lieu thereof order that the Notice of Motion of 19 August 2000 be dismissed with costs. (4) The respondent is to have a certificate under the Suitors Fund Act. *********

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