LINFOX AUSTRALIA PTY LTD v KHOURY [2008] NSWCA 24 | Case summary

4 March 2008 LINFOX AUSTRALIA PTY LTD v KHOURY (NO. 2) Judgment 1 McCOLL JA: I invite Basten JA to deliver the first judgment. 2 BASTEN JA: As this matter is before this Court for the second time and has not yet reached a trial, it is necessary to identify the background facts by reference to the pleadings. The immediate question for determination concerns the correctness of an order made by Judicial Registrar McDonald in the District Court refusing Linfox Australia Pty Ltd ("Linfox") leave to file a cross-claim against Flexfleet Pty Ltd ("Flexfleet"). 3 The plaintiff claims that he was injured on 7 February 2001 whilst loading a trailer at a facility operated by Woolworths Ltd at Yennora. The plaintiff alleges that he was injured when attempting to pull down the shutter at the back of the trailer, it becoming jammed and causing him to sustain an injury to his back. 4 For circumstances which are recounted in this Court's earlier judgment, the present proceedings were not commenced against Linfox until 20 April 2006: see Khoury v Linfox Australia Pty Ltd [2006] NSWCA 51. Because the claim was covered by the Motor Accidents Compensation Act 1999 (NSW) the proceedings should have been commenced by 7 February 2004. As a result, the plaintiff required leave pursuant to s 109 of that Act in order to commence the proceedings. That leave was granted by this Court on appeal. 5 It is clear that the defendant, Linfox, was aware of the intended proceedings during 2004, at which stage solicitors for the plaintiff were seeking to identify the trailer. Proceedings were first commenced (without leave) on 1 February 2005, from which time Linfox was on notice as to the claim. 6 On 17 March 2005, the plaintiff issued a subpoena addressed to Linfox requiring it to produce documents, one result of which was the production of certain worksheets indicating that repairs had been undertaken on the particular trailer on and before 7 February 2001, as recorded in a document printed on 12 May 2005, as well as in contemporaneous documents. Those documents indicated that relevant repairs were undertaken by Chilliflex Pty Ltd, being the company now known as Flexfleet, which is sought to be joined by Linfox to the proceedings, by way of cross-claim. It appears that repairs may have occurred before the accident. 7 On 27 February 2007 the solicitors for the plaintiff sent to Linfox a notice to admit authenticity of the documents concerned with the repair of the trailer. On 6 March 2007 Linfox disputed the authenticity of the documents, although these documents appear to form part of the record upon which the cross-claim is sought to be brought. 8 On 12 April 2007 Linfox filed a notice of motion in the District Court seeking leave to issue a cross-claim against Flexfleet. In support of that motion, a solicitor for Linfox swore an affidavit stating that the documents produced under subpoena by Linfox "reveal that on 6 February 2001 a new roller door was supplied and fitted to trailer PTO746" by the company now known as Flexfleet. 9 The plaintiff's solicitors appear to have issued a subpoena to Flexfleet, seeking relevant documents from it. At the hearing of the motion in the District Court a letter from Flexfleet dated 2 January 2007 was tendered in which that company stated that the documents sought under subpoena were not available and had been destroyed. This document was tendered in support of the proposition that, if Flexfleet were now joined as a cross-defendant, the plaintiff would be prejudiced unless it were able to commence proceedings against Flexfleet and an application out of time to take that step would be likely to fail, given the prejudice likely to be called in aid by Flexfleet as a result of the destruction of the relevant documents. (No argument was presented against these propositions in the District Court.) 10 The motion to issue the cross-claim was heard by the Judicial Registrar on 4 May 2007. In the course of her reasons for dismissing the application, the Registrar noted that the submissions of counsel in support of the motion were "very brief and did not go beyond the matters in the affidavit". The transcript of the hearing confirms that observation. When counsel appearing for the plaintiff noted in opposition that Linfox was apparently seeking to rely upon the very documents which it claimed were not authentic, counsel responded: "Judicial Registrar my instructions are that we are before the court today with regards to the notice of motion, and that the issue of authenticity of documents is an evidentiary one that will be dealt with by the trial judge later on in the proceedings, and that that is not the reason why we're here today, so the leave should still be granted and should not be severed. The cross-claim should still proceed." 11 When the Judicial Registrar pointed out that this was a somewhat trite response and that the matter might not be as simple as she was seeking to suggest, counsel merely responded: "Yes, those are the extent of my instructions Judicial Registrar." 12 In addition to other matters of concern, the Judicial Registrar noted that the proceedings had been on foot for over a year and that the plaintiff was substantially ready for a hearing. A relevant circumstance was that the motion to join the cross-defendant was not made until 12 months after the commencement of the proceedings and after the expiry of the limitation period so far as any claim against the proposed cross-defendant by the plaintiff was concerned. 13 Had it been thought appropriate to challenge the judgment and order of the Judicial Registrar, an application should have been made within 28 days of the ex tempore judgment being delivered. That time would have expired on 1 June 2007. However, the summons seeking leave to appeal was not filed until 9 August 2007. 14 In its written summary of argument, Linfox explained the delay in commencing proceedings in this Court by reference to its solicitors "erroneously" filing a motion in the District Court seeking to review the decision. It may be assumed that that happened, although no evidence was put on in support of this explanation. It was then said that the summons sought to be filed in this Court was rejected because no white book accompanied the summons. That was explained on the basis that "the transcript" was not available. It was further submitted that "the Defendant acted promptly upon receipt of the Plaintiff's Statement of Claim in investigating the matter and making application for a Cross-Claim to be filed and that any delay can be traced back to the Plaintiff's delay in instituting proceedings following the expiration of the limitation period". 15 The earlier judgment of this Court found that a full and satisfactory explanation had been given for the plaintiff's delay. No evidence is presented by Linfox for the proposition that it "acted promptly" in investigating the matter and filing its cross-claim. All the evidence in this Court indicates that it had identified the relevant documents in May 2005. In respect of the other issues before the Judicial Registrar, Linfox submitted that the commencement of a cross-claim would not impose significant prejudice on the plaintiff and that the fact that any claim against Flexfleet may be statute barred was irrelevant, as was the absence of documents held by Flexfleet. 16 These submissions gave as little assistance as to the substance of the arguments to be placed before this Court as did the submissions made by counsel for Linfox before the Judicial Registrar. 17 The evidential material presented by the applicant in this Court did not identify the material put before the Judicial Registrar or whether the material placed before this Court was the whole, part of or unrelated to, the material placed before the Judicial Registrar. The Judicial Registrar dealt appropriately with the material placed before her so far as this Court is able to identify the material, including both evidence and submissions. 18 The objective facts known to the Court demonstrate that Linfox knew about the proposed proceedings to be brought by the plaintiff some two years before they were sought to be commenced. There is no evidence that Linfox took any steps to investigate who might be responsible for the alleged jamming of the trailer door until after it had been asked by the plaintiff, through the mechanism of a subpoena for production, to search its own files for relevant records. These are the very investigations Linfox might be expected to have undertaken to determine the extent to which it might be prejudiced by the opponent's s 109 application. As the Court's first decision (see [4] above) reveals, the s 109 application was resisted on the basis there had been no adequate explanation for the delay. No argument based on prejudice was advanced. 19 Having found the records apparently in May 2005, Linfox could have proceeded to cross-claim, had it so wished, immediately after the 2006 proceedings were commenced. It did not do so. Rather, it took what appears to have been a potentially inconsistent step of denying the authenticity of the documents, whatever that may mean in the circumstances. The delay in seeking to cross-claim means that a matter which is ready to proceed to trial will be further delayed, to the prejudice of the plaintiff, if the Court accedes to the application. Indeed, this application also has that effect. 20 There is no admissible evidence before this Court to explain the delay in seeking to challenge the decision of the Judicial Registrar. The circumstances which were addressed by this Court in the one case to which counsel has referred, namely Maitland v Nationwide News Pty Limited [2004] NSWCA 155, were quite different from the present, but the principles enunciated by McColl JA at [16] ff are undoubtedly the principles to which reference should be made in the present circumstances. Not being persuaded that an appeal on a matter of practice and procedure, in the circumstances of this case would have real prospects of success, I would dismiss the application for leave to file a summons for leave to appeal out of time, and order Linfox to pay the respondent's costs in this Court. 21 McCOLL JA: I agree. The orders of the Court will be as Basten JA proposed.

LINFOX AUSTRALIA PTY LTD v KHOURY

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