DR BRUCE HARDING v GWEN BOURKE

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40424/99 DC 8440/95

MASON P MEAGHER JA HEYDON JA Thursday 23 March 2000 DR BRUCE HARDING v GWEN BOURKE In November 1995 the respondent commenced an action in the District Court claiming damages for medical negligence. A notice of grounds of defence was filed by the appellant in February 1997. Neither party thereafter filed a praecipe for trial or took any other step to set the action down for trial. Under the recently amended r4C in Part 12 of the District Court Rules, failure to file a praecipe by 1 January 1998 deemed the respondent's action dismissed. No application to rescind the dismissal was filed by 1 July 1998, the deadline specified in r4C(4). In May 1999, the respondent moved the District Court for leave to file a praecipe for trial and for other relief against the deemed dismissal of the action.

The Trial Judge held that Pt 12 r4C was ultra vires. He directed the matter to be listed for directions before the list judge with a view to being listed for hearing.

HELD (by Mason P, Meagher JA and Heydon JA) allowing the appeal and remitting the respondent's motion to the District Court for further hearing:

Pt 12 r4C is valid. However the rule does not exclude the power to extend time that is conferred in Pt 3 r2 or Pt 1 r5 which permits the Court if it thinks fit to dispense with compliance with any of the requirements of the rules, either before or after the occasion for the compliance arises.

Henderson v Murray Publishers Pty Ltd unreported, Goldring DCJ, 30 March 1998 (overruled); Mortimer v Torsby Pty Ltd unreported, Knight DCJ, 13 April 1999 (applied); Coco v The Queen (1994) 179 CLR 427 (referred); Vanderweil v Noyce [1999] NSWCA 304 (referred); FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 (referred); David Grant & Co Pty v Westpac Banking Corporation (1995) 184 CLR 265 (distinguished).

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40424/99 DC 8440/95

MASON P MEAGHER JA HEYDON JA

JUDGMENT 1 MASON P: In November 1995 the respondent commenced an action against the appellant in the District Court claiming damages for medical negligence. 2 For actions commenced before the end of 1995 the procedure for setting down for trial is set out in Pt 12 of the District Court Rules (the Rules). Provision is made for the filing of a praecipe for trial once notice of grounds of defence has been filed. Such notice was filed by the appellant in February 1997. Neither party thereafter filed a praecipe or took any other step to set the action down for trial. 3 On 6 December 1996 a new r4C was added to Pt 12 as follows: Dismissal of dormant actions commenced before 1.1.96 4C (1) This rule applies to actions which were commenced before 1 January 1996: (a) by the lodging of an ordinary statement of claim; or (b) by the lodging of a statement of liquidated claim and in which notice of grounds of defence has been filed, which have not been disposed of by judgment or final order. (2) If in an action to which this rule applies no praecipe for trial has been filed before 1 January 1998, the action is on that date deemed to be dismissed. (3) If: (a) an action to which this rule applies has been adjourned; (b) the adjournment is not to a specified date or a specified sittings for hearing, directions or other purpose, or to any "Not Ready List" maintained in accordance with Practice Note No 33; and (c) the action remains so adjourned on 1 January 1998, the action is on that date deemed to be dismissed. (4) The Court may if it thinks fit by order rescind a dismissal which is deemed to have occurred through the operation of this rule if application for the order is made before 1 July 1998, and where such an order is made the Court shall give directions as to the future conduct of the action. 4 No praecipe had been filed by 1 January 1998. In consequence, the respondent's action was deemed to be dismissed pursuant to r4C(2). 5 In February 1999 the respondent retained her present solicitors. The file was collected from the former solicitors on 19 March 1999. It was discovered that no praecipe had been filed, although the respondent had at all times intended to prosecute the action. The respondent thereupon moved the District Court for the following orders: 1. The dismissal of the action which is deemed to have occurred through the operation of Part 12 Rule 4C be rescinded pursuant to Part 12 Rule 4C(4). 2. The time fixed by Part 12 Rule 4C(4) for an application under the sub rule be extended to the hearing of this motion. 3. Leave be granted to the Plaintiff to file a Praecipe for Trial. 4. Such further or other orders as this honourable court seems fit. 6 The motion was heard by Judge Naughton QC. His Honour's attention was drawn to the judgment of Goldring DCJ in Henderson v Murray Publishers Pty Ltd (30 March 1998). Judge Goldring had held that r4C was ultra vires. Being unpersuaded that the judgment of his brother judge was wrong, Judge Naughton properly followed it as a matter of judicial comity. He directed the matter to be listed for directions before the list judge with a view to being listed for hearing. The plaintiff was ordered to pay the defendant's costs of the motion. 7 A contrary view as to the validity of r4C had been taken by Judge Knight in Mortimer v Torsby Holdings Pty Ltd (13 April 1999). It would appear that this was not drawn to the attention of Judge Naughton. It will also become apparent that I have drawn extensively upon Judge Knight's judgment, with which I respectfully agree. 8 In this appeal, by leave, the appellant submitted that r4C was valid. The respondent did not contend otherwise. In my view this concession was properly made. 9 Section 161 of the District Court Act 1973 (the Act) relevantly provides: (1) The Rule Committee may make rules, not inconsistent with this Act, for or with respect to any matter: • …..

• that is necessary or convenient to be prescribed by rules, for the purposes of, or in connection with, the exercise by the Court of its civil jurisdiction under provisions of this Act, or of any other Act or law, or for carrying any such provisions into effect, and in particular for or with respect to:

(a) providing for the procedure (including the method of pleading) and the practice to be followed in the Court in all proceedings in which, or with respect to which, the Court has for the time being civil jurisdiction, and regulating or providing for any matters incidental to, or relating to, any such procedure or practice;...

(2) Without limiting the generality of subsection (1), rules may be made under that subsection for or with respect to-.... [Many paragraphs follow.]

10 Part 12 r4C is authorised by s161(1). The rule has an undoubted connection with the procedure of the District Court in the exercise of its civil jurisdiction. It operates as a spur to expedition and a sanction for tardiness. It is similar in ultimate effect to provisions such as Pt 18 r3 which empowers a judge to dismiss proceedings for want of prosecution, none the less so because Pt 12 r4C is self-executing. 11 With respect, Goldring DCJ was in error when he held that the power conferred by s161(1) was limited by the detail of the matters mentioned specifically in s161(2). The opening words of the latter subsection stipulate expressly to the contrary. 12 Goldring DCJ applied the passage in Coco v The Queen (1994) 179 CLR 427 at 436-7 which discusses the presumption that general words in a statute are insufficient to authorise interference with fundamental rights such as the right to unimpeded access to the courts. He continued: ... A power to put an end to litigation, especially when it is done without individual notice to the party whose right is being terminated, in my view constitutes a power to cause a very serious and adverse interference with the right, which every member of the community enjoys, to enforce his or her rights through the courts.

13 There is, in my view, an element of circularity in this reasoning because it supposes a more draconian effect in r4C than it truly has, given the definition of "dismissed" in Pt 1 r4 and the fact that r4C is subject to other rules to which reference will be made below. 14 The respondent exercised her right of access to justice when she commenced proceedings in the District Court. That right was at all times subject to obligations to comply with the rules of practice and procedure in the Court and to prosecute the action with proper diligence. Delay increases cost and will frequently interfere with the interests of justice. Many rules seek to encourage the just, quick and cheap disposition of litigation and r4C is no exception. 15 Judge Goldring suggests in one part of his judgment that the situation is worse because r4C was made by the Rule Committee without individual notice to every party whose action would be terminated. That, of course, is an aspect of all rule amendments touching procedure and it in no way casts a cloud over the validity of r4C. When made in 1996, r4C operated in relation to a closed group of pending actions but its sting was still prospective because the deemed dismissal would not occur until 1 January 1998, and only then if a praecipe had not been filed. 16 Rule 4C does not purport to affect the substantive rights of litigants in the District Court. At its highest, it regulates the pursuit of those rights by the dismissed action in that Court. That is because dismissal is without prejudice to any right to commence fresh proceedings seeking the same, or substantially the same, relief (see Pt 1 r4 and Vanderweil v Noyce [1999] NSWCA 304 at [15]). 17 Rule 4C being valid, the order directing that the matter be listed for directions with a view to listing for hearing should be set aside. 18 The appellant submits that the balance of the motion before the District Court should be dismissed because the action itself is deemed to be dismissed (r4C(2)). Remitter for further hearing is opposed as a futility. 19 The respondent presses for the determination of the balance of the relief sought in her notice of motion. 20 The power to rescind the deemed dismissal of the action which is conferred by r4C(4) is unavailable, according to the tenor of that subrule, because the respondent's application for such rescission was not made before 1 July 1998. The respondent counters by invoking the powers of the District Court to relieve against noncompliance with the rules or to dispense with the rules in the interests of justice (Pt 3 r2, Pt 1 r5(2) of the Rules and s 159 of the Act). 21 Part 3 r2 permits the Court, by order, to extend or abridge any time fixed by the rules or by any judgment or order. Subrule (2) stipulates that this power may be exercised after as well as before the time expires, whether or not an application for the extension is made before the time expires or at all. The broad, remedial scope of the rule is discussed and illustrated in FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 and El Ali v Government Insurance Office of New South Wales (1988) 15 NSWLR 303. 22 I reject as untenable the appellant's submission that "time" in this rule does not include a period of time expressed by reference to a date. 23 The appellant further submits that this rule is unavailable because Pt 12 r4C(4) operates as a specific provision, which was available if and only if application for the rescission order was made before 1 July 1998. Pt 12 r4C is said to be a particular provision containing a time condition that is expressed in such a way that it excludes the operation of the general provision found in Pt 3 r2. 24 The appellant cited David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 in which a general provision of the Corporations Law permitting the Court to extend the period for doing any act under the Law (s 1322) was held inapplicable to the power to apply to the Court to set aside a statutory demand. The latter power is conferred by a section (s 459G), subsec (2) of which states that "An application may only be made within 21 days after the demand is so served" (emphasis added). David Grant illustrates the general principle of statutory interpretation invoked by the appellant. But the legislation considered in that case is significantly different from the District Court Rules. The provision containing the relevant power (s1322) stipulated that an application "may only" be made within a fixed 21 day period. And the legislative intention to establish a self-contained code for the resolution of disputes involving statutory demands was spelt out in the Explanatory Memorandum (see David Grant at 270). 25 Both of these factors are absent from r4C. The Court's overriding concern to avoid injustice indicates to me that it was unlikely that Pt 12 r4C(4) was intended to stand alone and to exclude altogether the well-recognised power to extend time nunc pro tunc that is conferred in Pt 3 r2. In my view, the time limit in r4C(4) is capable of extension by resort to Pt 3 r2. One can readily envisage circumstances where, through no fault of a litigant, application to rescind the deemed dismissal of an action was not made during the six months window of opportunity (cf El Ali at 309, 312). These could include circumstances where both the party and the lawyer were ignorant of the making of r4C. I am not suggesting that such oversight, or any other oversight, would lead inevitably to a favourable exercise of the extraordinary discretion conferred by Pt 3 r2. 26 Let it be assumed that this is wrong. It would still not follow that r4C(4) is an impenetrable barrier to the exercise of the discretion to extend time in a proper case. There are two reasons why that is so. First, Pt 3 r2 could be applied directly to r4C(2) with the result that the deemed dismissal of the action will not occur if an extended period is given for the filing of a praecipe and if the praecipe is filed in that period. Secondly, it would be open to resort to Pt 1 r5 which permits the Court if it thinks fit to dispense with compliance with any of the requirements of the rules, either before or after the occasion for the compliance arises. Such a dispensing power is commonly encountered in rules of court and it serves to remind that rules are the servants of justice, not their masters (see Campbell, Rules of Court 1985 pp 106-7). Obviously one circumstance which might engage the dispensing rule is where a party has failed to comply with a time limit stipulated elsewhere in the Rules. By this means the requirement in r4C(4) could itself be lifted. Once again, I emphasise that I am expressing no view about the merits of the instant case. 27 It is unnecessary to consider whether s159 of the Act offers a third basis for the respondent to seek relief against the operation of Pt 12 r4C. Nevertheless, I doubt whether s159 applies, because there is no step in the proceedings needing to be rescued from asserted nullification. 28 Because of his view about the validity of r4C, the learned judge found it unnecessary to address the prayers for relief in the respondent's notice of motion which would have thrown up for consideration the alternative, discretionary bases for annulling the deemed dismissal of the respondent's action that I have discussed. The motion should be remitted to the District Court so that it can be determined on its merits in accordance with the reasons of this Court. 29 The appellant submitted that dismissal on the merits was inevitable, given that the affidavit material before Judge Naughton QC did not seek to explain the respondent's failure to file a timely praecipe for trial beyond stating that any default was not her own, but (by inference) that of her former solicitors. The material advanced in support of the favourable exercise of the Court's discretion was thin, but the application was not doomed to failure. Remitter will give the parties the opportunity to throw more evidentiary light upon the circumstances leading to the failure of both of them to file a praecipe for trial, the prejudice (if any) suffered by the appellant and any other relevant matter. 30 I propose the following orders: 1. Appeal allowed.

2. Set aside the orders of Naughton DCJ made on 14 May 1999.

3. Remit the respondent's motion to the District Court for further hearing in accordance with the reasons of the Court of Appeal. 4. Costs of the appeal to be costs in the motion.

31 MEAGHER JA: I agree with Mason P. 32 HEYDON JA: I agree with Mason P.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.