Douglas & Anor v Madden & Ors

Douglas & Anor v Madden & Ors - [2009] NSWSC 194 - NSWSC 2009 case summary — Zoe

[13]

The plain meaning of these words is very wide. The Court may extend "any time" fixed by "any ... order" and may do so as well after as before the time expires and even though the application to extend is not made until after the time has expired. As Baggallay LJ said in Carter v Stubbs ((1880) 6 QBD, at p 120) of the analogous English rule, it gives "very full discretionary power; indeed, I can hardly imagine a more extended discretion". It is a remedial provision which confers on a court a broad power to relieve against injustice. The discretion so conferred is not readily to be limited by judicial fiat. The fact that it manifestly is a power to be exercised with caution and, in the case of conditional orders, with due regard to the public policy centred in the finality of litigation does not warrant an arbitrary limitation of the power itself, not expressed in the words of the rule, so as to deny its capacity to apply to circumstances such as those which are to be found in the present case. It would be wrong to so read the rule as to deny to a court power to prevent injustice in circumstances where the party subject to a conditional order ought to be excused from non-compliance. 6 In McWilliam and Ors v Watson and Ors [2000] NSWSC 761, Adams J also had to consider an application to amend a self executing order dismissing proceedings, to overcome the plaintiff's failure to comply with the order. His Honour took the view that considerations of the importance of finality in litigation did not have much weight at that point of the proceedings, there having been no hearing on the merits of the plaintiff's claim. In that case, the explanation for the failure to comply with the self executing order was the plaintiff's impecuniosity, which proved to be an impediment in his ability to adhere to what the order had required of him. That provided a sufficient basis for a discretion to be exercised in the plaintiff's favour. 7 Nowadays, what is also required to be considered when a discretion such as this is sought to be exercised, is what is required under the Civil Procedure Act 2005. In the February judgment, I observed in relation to the defendants' application that the proceedings be dismissed, that:

[20]

22 Whilst this statement remains strictly accurate, I would venture to suggest that, with the advent of sections 56 to 60 of the CPA, the court is now required to consider the degree and type of injustice which each party may suffer as a result of the order sought, and to do so in the context of other factors, such as the elimination of delay and the desire to ensure that disproportionate costs are not incurred in the proceedings. 9 In Rayscan Management his Honour also concluded that an application such as this should succeed, even though there had been a history of failure to comply with the Court's orders. The particular orders which had finally been complied with, albeit after the time required, (as to the payment of money into Court), had been directed to righting the resultant imbalance between the parties to those proceedings. The overwhelming factor in that case warranting the making of the order sought, was found to be that to refuse the order would be to shut the defendant out of litigating a defence and cross claim, the balance between the parties in the proceedings having been righted by the late compliance with the order. 10 That situation is somewhat different to this one. Here, unless the order sought is made, the proceedings stand dismissed, that being the consequence of the orders made in February. The proceedings were brought in contract, tort, negligence and under the Trade Practices Act 1974 (Cth). It was argued to be a consideration in favour of granting the relief sought, that part of the plaintiffs' claim would be statute barred, if the relief were not granted. It was also argued to be relevant to consider that the defendants would then be entitled to seek its costs of the proceedings and that might impact on the plaintiffs' ability to begin further proceedings against the defendants, if they wished. If such proceedings were commenced, there would only be further delay in the parties' rights being determined. 11 These are all considerations to be weighed, undoubtedly I accept. Also to be considered, however, is that it was precisely these types of considerations which led to the self executing order being made in the February judgment. Then the defendants were seeking orders dismissing the proceedings for want of prosecution, in the face of the plaintiffs' repeated failure to comply with the Court's orders and directions, despite repeated warnings given by members of the Court as to the consequences of those failures. I observed in the February judgment that:

[23]

10 Given what was advanced today by the parties it seems to me that the just course as between these parties is to give the plaintiffs one final opportunity to put on the evidence. I propose to make a self executing order on the basis that unless the plaintiffs have served all of their outstanding evidence by 4pm on 27 February 2009, the proceedings are dismissed. That date is 14 days from today, a date suggested by the defendants as reasonable, if such an approach were to be adopted. The plaintiffs did not seek to argue against such a timeframe, arguing rather that to be shut out completely, given how close they were to putting on the outstanding evidence, would not achieve justice. In putting that submission, this necessarily accepted the consequence of any further failure to file the outstanding evidence. 12 Whether the discretion sought should now be exercised in favour of the plaintiffs must plainly be considered in light of any explanation advanced for the plaintiffs' further failure to comply with the order made in February. It was then abundantly clear and accepted by the plaintiffs that this was their final opportunity to resist the dismissal of the proceedings then being urged upon the Court by the defendants. 13 What reasons were advanced for the plaintiffs' failure to comply with the terms of the self executing order? While affidavit evidence was put on by the plaintiffs' solicitor, there was, in fact, no explanation given as to why the order had not been complied with. The time afforded the plaintiffs to put on their outstanding evidence was generous in the circumstances explained in February, on any view. On earlier occasions difficulties with experts, briefing counsel and latterly, the consequences of the bush fires in Victoria were relied on. 14 All that was advanced on this occasion was that it was not until 3.40 pm on 27 February that the affidavit sworn by Mr Michael Hill was taken to the Registry to be filed. The original of the affidavit was with Mr Hill in Melbourne. The Registry was busy and it was not until 4.15 pm that the affidavit affirmed on Friday, 27 February by the plaintiff, Mr Troy Douglas, was filed and at 4.20 pm an undertaking was given to the Duty Registrar that the original of Mr Hill's affidavit would be filed by 6 March. 15 It was then that a sealed copy of Mr Douglas' affidavit and a copy of Mr Hill's report, being an exhibit to his affidavit, were served on the defendants' solicitor at about 4.45pm. The four volumes of documents annexed to the affidavits were not served, because they had not been copied. That was done on Monday, 2 March and those documents were then served after 11 am. 16 Why it came to be that the order was not complied with, was not explained at all. 17 For the plaintiffs it was accepted that the proceedings had been dismissed, as a consequence of their failure to comply with the self executing order. It was argued, nevertheless, that in considering the plaintiffs' application, the Court would consider that on the one hand, to refuse to make the order would be to 'snuff out' the plaintiffs' case, even though the defendants had not suffered any additional prejudice by the plaintiffs' short delay in complying with the order. They had already been sanctioned for their delay by the costs order made against them in the February judgment. Their claim was patently not a frivolous one. In those circumstances justice demanded that the extension sought would be granted. For the defendants it was argued that justice demanded that the extension be refused, because nothing had been advanced to explain why the Court's order had not been complied with. While the default was a short one, it was one which had occurred at a time when the defendants' application for dismissal had earlier been refused on the basis that the plaintiffs would be given one further, final chance to put on their evidence. To grant the order now sought in the absence of any explanation at all from the plaintiffs as to why that order had not been complied with, could not do justice, so far as the defendants were concerned. 18 The question which thus falls to the Court to answer is whether justice would be done between these parties, if the order now sought by the plaintiffs were made, in the face of this history? 19 The question, it appears to me must be approached having in mind the onus which fell on the plaintiffs to establish a proper basis for the relief sought. A foundation for the exercise of the discretion could have rested, as it has in other cases, on the plaintiffs' explanation of the difficulties which led them to the position where they were unable to comply with the order which gave them a final opportunity to put on their evidence. In this case, that was a considerable latitude, as was accepted by the plaintiffs at the hearing in February. 20 The plaintiffs gave no explanation at all for the failure to comply with the order which provided them with that final opportunity to pursue their claims. The consequences for the plaintiffs of any further failure to comply with the order was well apparent in February, when the self executing order was made. That was what they were sheltered from in February by the order then made, notwithstanding that they had been repeatedly warned as to the consequences of their failure to comply with the Court's orders. Nothing has changed in that respect and still the self executing order was not complied with. Before February the plaintiffs had been given multiple, repeated opportunities to advance their case and still, without explanation, they have failed to take advantage of the final opportunity they were then given to avoid the dismissal of the proceedings. 21 In the circumstances, given that there is no explanation at all of this further failure to comply with the Court's order, I am unable to see how the interests of justice dictate that the plaintiffs be given yet even another opportunity to advance their case. How could that reflect a proper balance between the parties at this stage of these proceedings, which concern complaints about matters which occurred in 2002 and 2003? I do not see that making the order would accord with the requirements of sections 56, 57 or 58 of the Civil Procedure Act 2005. It must be recollected that even in The State of Queensland & Anor v JL Holdings Pty Limited (1996) 189 CLR 146, it was observed by Kirby J at pp 169 - 172, that:

[24]

Amongst considerations which may tend to favour the extension of an indulgence to a party applying for it are the following: that this is the only way in which the true issues and the real merits, factual and legal, can be litigated and artificiality avoided [ The Commonwealth v Verwayen (1990) 170 CLR 394 at 456; Ramton v Cassin (1995) 38 NSWLR 88 at 91-92; special leave to appeal to the High Court of Australia refused 15 April 1996.]; that the oversight which occurred is adequately explained [ Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323 at 338, per Scott J, dissenting.] as, for example, that it arose out of sudden and unexpected events [ Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at 143.]; that the proposed amendment is of considerable importance to the rights of a party, particularly where it provides a complete answer to a claim [ United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 163, per Bollen J.]; that any fault is that of the party's legal representatives [ Clough and Rogers v Frog (1974) 48 ALJR 481 at 482; 4 ALR 615 at 618.]; that the oversight was wholly accidental [ United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 162.]; that it was simply the product of unavoidable human error [B yron v Southern Star Group Pty Ltd (1995) 123 FLR 352 at 353; 13 ACLC 301 at 302.] or, possibly, the outcome of the application to the case of fresh legal minds who perceived an important new point [ Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 390-391.]; that cost orders or the imposition of other conditions could adequately rebalance the competing claims to justice [ Black v City of South Melbourne (1964) 38 ALJR 309 at 310; cf Ketteman v Hansel Properties Ltd [1987] AC 189 at 220; The Commonwealth v Verwayen (1990) 170 CLR 394 at 464. Note the significance, in some litigation, of the limitations or requirements imposed by public legal aid: Howarth v Adey [1996] 2 VR 535, per Brooking JA.]; and that the hearing date is sufficiently in the future to permit a party to meet the amendment, taking into account any consequences for the gathering of fresh evidence, the conduct of discovery or like pre-trial procedures and the loss of assigned hearing dates [cf Brooks v Wyatt (1994) 99 NTR 12; Howell v Haines [1997] Aust Torts Reports 63,751.]. Departures from a court ordered timetable, whilst relevant, are not decisive [ Cohen v McWilliam (1995) 38 NSWLR 476 at 478, per Priestley JA.]. Such orders are the servants of justice. They are designed to enhance its achievement in a way that an inflexible application of rigid rules could prevent [ National Australia Bank Ltd v Nobile (1988) 100 ALR 227 at 235-236.] . Efficiency in the despatch of court lists can sometimes be purchased at too high a price, as the biographer of Lord Brougham vividly demonstrated [Atlay, The Victorian Chancellors (1906) vol 1, pp 318-319.].

[25]

Considerations which tend to argue against the grant of an indulgence include many which are the counterparts of the foregoing. Thus, the failure of a party to offer anything by way of explanation for a late application has been held relevant [ Amatek v Botman (1995) 13 ACLC 1729 at 1732.]. So has the blamelessness of the resisting party and the extent to which the applicant is at fault in its breach of clear directions [ Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at 141-142.]. Courts now take into account the strain which litigation may place upon those involved [ Ketteman v Hansel Properties Ltd [1987] AC 189 at 220.] and the natural desire of most litigants to be freed, as quickly as possible, from the anxiety, distraction and disruption which litigation causes [ Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 392.]. In my view this is not a consideration limited to litigation by natural persons or involving private citizens. Because justice cannot be measured solely in monetary terms, costs orders are not necessarily an adequate balm to the other party [ Ketteman v Hansel Properties Ltd [1987] AC 189 at 220; The Commonwealth v Verwayen (1990) 170 CLR 394 at 464, per Toohey J.]. Thus, the proximity of the hearing is clearly a most important consideration [ Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at 142-143; Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 393.]. An opposing party is entitled to have taken into account the consequences of an indulgence, especially where it would cause disarray at the last minute to its preparation of the trial [ Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 393.]. Similarly, the length of time that the proceedings have been pending before the application is made will often be a relevant consideration. The longer the time, the more reasonable it may be to expect that the parties, or their lawyers, should have earlier appreciated, and raised, the point in issue [ Clough and Rogers v Frog (1974) 48 ALJR 481; 4 ALR 615; Cohen v McWilliam (1995) 38 NSWLR 476 at 502.]. If a consequence of the indulgence is truly a necessity to postpone a trial date, this will be a most important consideration [ United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 161-162.]. Its importance increases with the congestion of court lists and the difficulty, particularly in the case of a lengthy trial, of securing early replacement dates. The extent to which a new issue would give rise to a substantial and new case in reply is also relevant. So may be the nature of the litigation and whether it has been assigned to a special list designed to cater for the peculiarities and special needs of commercial cases, long trials and the like [ GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 711; Cohen v McWilliam (1995) 38 NSWLR 476 at 497-498, per Cole JA; FAI General Insurance Co Ltd v Burns (unreported; Court of Appeal (NSW); 15 August 1996); Howarth v Adey [1996] 2 VR 535, per Brooking JA.]. Writers on effective case management repeatedly stress the importance of adhering to a "firm, credible ... trial date" as an important element in securing the serious attention to a dispute which may help to promote its resolution [Schwarzer, "Case Management in the Federal Courts", Civil Justice Quarterly, vol 15 (1996) 141, at p 144.]. They call attention to the risks of "litigation abuse" by which some litigants seek, at all costs, to avoid firm hearing times [Schwarzer, "Case Management in the Federal Courts", Civil Justice Quarterly, vol 15 (1996) 141, at pp 141-142.]. Courts are entitled to react unfavourably to repeated default on the part of a litigant whose conduct has the effect of frustrating a proper timetable fixed for the trial. Justice will not necessarily require that a party should have multiple opportunities to plead and present its case [cf Cohen v McWilliam (1995) 38 NSWLR 476 at 502, per Cole JA.]. A court must accord justice to the particular litigant. But it must also maintain its responsible use of scarce public resources [ Dawson v Deputy Commissioner of Taxation (1984) 71 FLR 364 at 366; United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 161; State Pollution Control Commission v Australian Iron & Steel Pty Ltd (1992) 29 NSWLR 487 at 493; Holcombe v Coulton (1988) 17 NSWLR 71 at 77.] and consider, in a general way, the impact which its orders have on other litigants and on the public generally [ Sali v SPC Ltd (1993) 67 ALJR 841 at 849; 116 ALR 625 at 636.].

[27]

22 It appears to me that this is one of those situations which his Honour had in mind in what he observed at [7]. The balancing of the type of factors which his Honour discussed in [5] and [6], in the light of the requirements of the Civil Procedure Act, led to the self executing orders made in February. The failure to comply with the self executing order then made resulted in the dismissal of the proceedings. There being no explanation given as to why it was that the plaintiffs did not comply with that order, the balance has now tilted towards the defendants. 23 While the delay in compliance with the order was short, a matter undoubtedly to be considered in determining whether the discretion should be exercised, it must also be considered that there was no suggestion by the plaintiffs that they had experienced any unanticipated difficulty in doing what the order required. On this occasion there was no suggestion that the time given was inadequate, or that anyone, the plaintiffs, the expert, or the plaintiffs' legal advisers, had made any mistake, even though the order did not require the filing of the outstanding evidence and indeed, the Rules expressly provided that evidence was not to be filed (see Rule 35.9). Still, even if the affidavits had been served on 27 February, rather than being filed, still the order would not have been complied with, given what was not served until the following Monday. 24 It seems to me that a party who does not comply with a self executing order such as here in question and who advances no explanation for the failure to comply with the order, but simply relies on an argument that to extend the time for compliance would have no adverse consequences for the other party, faces a difficulty, given the requirements of the Civil Procedure Act. That is but one matter which must be weighed in the balance. 25 In the present circumstances, given the plaintiffs' history in the proceedings, to grant the plaintiffs yet another opportunity to advance their claims, despite the dismissal of the proceedings, would appear to be contrary to the overriding purpose of the Civil Procedure Act and the Rules, particularly having in mind what is contemplated by s 56(3) of the Act, namely that:

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