Douglas & Anor v Madden & Ors [2009] NSWSC 47 | Case summary

JUDGMENT 1 HER HONOUR: By notices of motion of 29 January and 2 February 2009 the defendants seek orders pursuant to Rule 12.7 of the Uniform Civil Procedure Rules 2005, dismissing the proceedings for want of prosecution. The proceedings were commenced by statement of claim filed in December 2005. On 6 February 2009, Hislop J stood the motion over to today for determination. 2 The order was opposed by the plaintiffs in the face of a history where in August 2008, Latham J warned of the consequence of further delay in putting on the evidence. In November 2008, when the plaintiffs were again ordered to file and serve the outstanding expert evidence by 19 December 2008, Hislop J warned that if the plaintiffs were in breach of that order there would be consequences or repercussions. 3 Affidavits of Mr Michael Nguyen of 29 January 2009 and Mr Toby Colin Blyth of 2 February, were relied on by the defendants to outline the regrettable procedural history of this matter. That history was entirely accepted for the plaintiffs as not being properly explicable. 4 Nevertheless, a further opportunity to put on evidence was pressed. Affidavits of Mr Bryan Goreman, the plaintiffs' solicitor, explained the present state of the evidence. Instructions had been given on 4 September 2008 for preparation of an expert's report on economic loss. A draft report was received on 29 January 2009 and sent to counsel by email. It was not received, on Mr Gorman's understanding, as the consequence of the heat wave in Melbourne and its effect on an internet server, as the result of rolling power outages experienced there. On 2 February a hard copy was provided and the report was now substantially complete and would be finalised after a conference to be held on 10 February, requiring then a further one to two weeks to complete. Further evidence would also need to be led from the first plaintiff, as to underlying facts dealt with in the report. This information was updated in a later affidavit on the basis that the report would be finalised on 19 February and that the plaintiffs' further evidence would be finalised shortly afterwards. 5 The defendants pressed for an order dismissing the proceedings, submitting that similar estimates had been earlier made and had not been adhered to. The plaintiffs' long history of repeated non compliance with orders made in the proceedings in relation to the provision of particulars as to quantum of the claim and the service of affidavit and expert evidence was relied on. Orders as to the service of such evidence had been made in 2008 in January, April, May, July, August, September, October and November and had still not been complied with. 6 Rule 12.7 permits the dismissal of proceedings which are not prosecuted with due despatch. The power is to be exercised in accordance with the provisions of s 56 and s 59 of the Civil Procedure Act 2005, which are concerned with, respectively, facilitating 'the just, quick and cheap resolution of the real issues in the proceedings' and eliminating delay. Fundamentally, the Court must always act in accordance with the dictates of justice in determining applications such as this (s 58). Attention must also be paid to the Court of Appeal's approach in Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 at [28] - [29]. 7 It is well settled that multiple failures to comply with directions and orders can properly result in the exercise of the discretion to dismiss. (See Micallef v ICI Australia Operations Pty Ltd & Anor [2001] NSWCA 274.) Nevertheless, the exercise of the discretion requires a balancing exercise, in which a range of relevant factors must be considered. 8 In this case the repeated explanation for the plaintiffs' failures to comply with the Court's orders has been various difficulties in getting an expert's report and the resulting need to put on further evidence from the plaintiffs, to provide a factual foundation for the report. The resulting prejudice to the defendants is patent, as the plaintiffs conceded. The claim is concerned with events which arose in 2002, as the result of the plaintiffs' dealings with the defendants, solicitors who advised in relation to a business, which commenced operations in 2003, which were suspended later that year as the result of steps taken by ASIC. 9 The proceedings have been on foot since 2005 and in 2009, the plaintiffs are still in breach of their obligations under the Court's orders, having still failed to put on their evidence, despite the repeated orders made. The plaintiffs have been on notice of the potential consequences of further delay since August 2008. Justice is not served if defaulting parties are simply given 'multiple repeated opportunities' to present their case. That would be to fail to do justice so far as the other parties to the proceedings are concerned and to ignore the consequences of such default for the administration of justice. 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. 11 The plaintiffs also accepted that an order in favour of the defendants for costs associated with the motion and its hearing would be made. The defendants sought such a costs order on an indemnity basis, payable forthwith. The plaintiffs did not consent to such an order, but advanced no arguments against it, other than in relation to when the costs should become payable. I am satisfied that on the history, a proper basis for departure from the usual costs order was established. That was a factor which weighed in the decision to grant the plaintiffs one final opportunity to put on their evidence. I also take the view that these costs should be payable forthwith. That is a proper approach in this case, given that the costs have plainly been incurred as the result of the plaintiffs' repeated failure to comply with the Court's orders, unreasonable conduct on any view, which has resulted in costs which ought not to have been incurred and the payment of which will otherwise be long delayed, given the stage the proceedings have now reached. The proceedings commenced in 2005, but in 2009, the plaintiffs have still not put on their expert evidence and that which must necessarily support it. (See Barrett J's discussion in Fiduciary Ltd v Morningstar Research Pty Ltd [2007] NSWSC 432 at [10] to [13]). 12 It was common ground that if the proceedings come to an end because the self executing order dismissing the proceedings takes effect, the plaintiffs must be ordered to pay the defendants' costs of the proceedings. 13 The defendants also asked the Court to revisit earlier costs orders made against the plaintiffs, in relation to earlier breaches of the Court's orders as to the filing of evidence, on the basis that they should now become payable forthwith. That was opposed by the plaintiffs, it being argued that such an approach would not be a just one, as between the parties, given that the defendants had failed on a security for costs application, in respect of which they had been ordered to pay costs, which were not payable forthwith and that the circumstances in which each such order was made, should be considered. 14 While I accept that there may arguably be a basis on which to revisit earlier costs orders, indeed perhaps a strong one, I also accept that such a reconsideration should not be undertaken without a proper identification of what costs orders have been made and the circumstances in which they were made, so that a fair assessment can be made as to whether or not there is now a proper basis to revisit them in the present circumstances.

Douglas & Anor v Madden & Ors

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Cases Cited (3)

Cited By (4)