Monti v Roads and Maritime Services

CONSIDERATION

1. The relevant principles of law in relation to motions to vacate or adjourn hearings are well established. One instance of a useful summary of the principles, which I adopt for the purposes of this judgment, was set out by Sheahan J in Thaler v Cooma Monaro Shire Council (No 2) [2014] NSWLEC 51, at [3]-[4]: 3 The principles to apply to motions to vacate or adjourn hearings were concisely summarized in Kenoss Pty Ltd v Palerang Council ("Kenoss") [2013] NSWCA 174, by Ward JA, who said (at [13]): The power to adjourn proceedings or vacate hearings in s 66 of the Civil Procedure Act 2005 (NSW) confers a discretion that must be exercised in accordance with the overriding purpose described in s 56(1) of the Civil Procedure Act and in accordance with the dictates of justice as described in s 58 of that Act. The considerations that must be taken into account include: the prejudice to the respondent by such an adjournment; the prejudice to the applicant if such an adjournment is refused; the circumstances in which the application is brought; and considerations relating to the administration and management of matters in this Court. 4 The discretion, including as to costs as a remedy for resulting prejudice, has to be "exercised in the context of the common law adversarial system as qualified by changing practice and that this is not a system which today permits disregard of undue delay" (Kenoss at [16], citing Aon Risk Services Australia Limited v ANU [2009] HCA 27; (2009) 239 CLR 175, per French CJ at [24]).
2. The Court is satisfied that, as a consequence of slippage in the timeline set for the last critical days of case preparation, the Applicants are severely prejudiced in being able to adequately prepare their case. Although the overall slippage in the case management schedule for the preparation of the case should be a shared responsibility of the professional teams for both parties, specifically with respect to the quarry experts and forensic accounting experts failing to complete their Joint Expert Report until 2 March 2018, some thirty days later than the 31 January deadline set by Moore J in the orders of 15 December 2017, the most recent slippage is not the fault of the Applicants.
3. The exceedingly tight schedule, which was set at the Pre-Trial Mention hearing, was a compromise outcome where the Applicants agreed to no longer press for the vacation of the hearing dates, instead agreeing to the schedule which required the Respondent to provide both legal submissions and supplementary evidence regarding the post-acquisition After Case 2. The legal submissions were received on time together with some of the evidence on time, but the material from Dr Ferrier, which was clearly considered by the Applicants to be critical in understanding the ramifications of After Case 2, together with additional material from Mr Hill, was received well after the deadline. When it was served on a Saturday night at 10.24pm, it clearly placed the Applicants' team in an invidious position, not unreasonably submitting that there was now insufficient time for their experts, in particular David Mullins and John Heilig, to respond. From the material placed before the Court at the Pre-Trial Mention, the Applicants' town planner Paul Snellgrove was to be next in line to do his analysis, following the receipt of further advice from the other experts.
4. Although in other cases a couple of days slippage might be within tolerance (although strictly it should never be if it is a court order that has set the timetable) in this case adherence to the timetable set by the Court's orders of 12 March was absolutely critical and, unambiguously, was the precondition that led to the Applicants' counsel not pressing on 9 March for a vacation of the primary hearing dates at that stage. The Court considers the practical effect of the Respondent not meeting the Thursday 15 March deadline with Dr Rod Ferrier's material, was to rule out any chance of the Applicants responding with their supplementary expert evidence in response on Monday 19 March and by that same date serving any amended Points of Claim and schedule of disturbance losses under s 59(1)(f) of the Just Terms Act.
5. When material is to be served on a given date, in this instance Thursday 15 March, it logically means within office hours, effectively no later than 4.30pm. Receipt by such time of the Respondent's material would have enabled distribution that day, thereby allowing the relevant responding experts to commence work that evening. Instead the material was received at 10.24pm Saturday 17 March. The time of 10.24pm does not represent evening service, rather it is late at night when most people have gone to bed. Had the material been received earlier that Saturday, conceivably the Applicants might have prevailed upon their experts to work on the Sunday, although still unreasonable in the circumstances of the timetable that was set. However, given the lateness of the Saturday night service, there ought be no expectation that anyone would be available to work on the Sunday, as having not heard anything by that time, there ought be an expectation that people would have made alternative arrangements for their Sunday, after all, most people are entitled to pursue their private interests on such a weekend day if they've had no forewarning of another pressing commitment. Accordingly, the Court considers that the practical effect of the Respondent serving the material when they did, means it was effectively received on Monday 19 March, the very day the Applicants were to somehow have their experts prepare their evidence in response and for their legal team to have sufficient time to carefully deliberate on the extent of changes required to amend their Points of Claim and prepare a revised schedule of disturbance losses.
6. The Applicants' counsel also indicated, quite reasonably, that there was an inconsiderate element in the Respondent's conduct in the context of the Applicants' solicitor being a sole practitioner based in a regional town, whereas the Respondent's solicitors are one of the Nation's largest legal firms, a Sydney based "big city law firm", as Ms Pearman put it, with a far greater capacity to allocate human resources to the demands of case management.
7. In all the circumstances, the Court has concluded that the Applicants' counsel is correct when she submitted that: "the prejudice to the Applicants' case is severe" and that "the preparation of the Applicants' case has been greatly disrupted". The Applicants have been deprived of sufficient opportunity to speak to their experts and denied an opportunity to consider their legal response in a timely fashion (necessarily dependent, in part, on a consideration of their experts' analysis). The Applicants' experts, presumably waiting to utilise a narrow "window of opportunity" should the Respondent's material had been received on time, have now advised that it would be impossible to respond prior to the scheduled commencement of the primary hearing. It necessarily follows, that by reason of the Respondent's experts' tardiness, it would be impossible for the Applicants to comply with the Court's orders 8 and 9 of 12 March.
8. The Court asked counsel for the Respondent to identify any prejudice that the Respondent might suffer should the scheduled hearing dates be vacated. Without describing the usual irritation or frustration that any party must feel upon finding a scheduled hearing abandoned, when geared up to commence the primary hearing in a case, Mr Waterson confirmed that there was no specific prejudice likely to be suffered by the Respondent, save that there may be uncertainty with respect to the availability of witnesses for the final hearing whenever it might occur.
9. An additional consideration emerged from the exchanges in Court on 19 March: the Applicants are firmly of the view that the scheduled number of hearing days is insufficient. The original eleven days had been reduced to ten at the Pre-Trial Mention. On the 19 March the Respondent's counsel said the effect of the unfortunate slippage could be ameliorated by the Court not sitting on Friday 23 March, thereby allowing the Applicants a weekend to consider their position and reducing the hearing to eight days duration. The Applicants' counsel vigorously rejected such a proposition, submitting that far from contemplating reducing the hearing duration to eight days, the Court will most likely need to set down substantially more days than the originally scheduled eleven days. The Applicant stressed that the case now had 17 primary expert reports, which when considered in the context of further supplementary reports and joint reports, now amounted to some 46 expert reports.
10. In considering the consequences that flow from the Court's decision to vacate the scheduled hearing dates, in the context of having decided that the Respondent should be allowed to ventilate After Case 2, thereby providing the Applicants sufficient time to properly consider this new scenario, prepare and file further evidence in response and formulate their legal arguments, the Applicants' counsel relied upon the High Court decision of Aon Risk Services Australia Limited v Australian National University [2009] HCA 26, 239 CLR 175, as providing guidance to the Court.
11. This Aon Risk Services Australia Limited v Australian National University decision clarifies that a party does not have an entitlement to amend a pleading, subject to payment of costs by way of compensation. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact that substantial delay and wasted costs and their effect on the parties, the court and other litigants - the concerns of case management - would assume importance on an application for leave to amend. Relevant matters would also include the nature and importance of the amendment to the party applying, the stage the litigation had reached when the amendment was sought, and the explanation for any delay in applying for amendment. At [97]-[99], the Court's joint judgment said as follows: The Court Procedures Rules make plain that the Rules are to be applied having regard to the stated objectives of the timely disposal of the proceedings at an affordable cost. There can be no doubt about the importance of those matters in litigation in the courts of the Australian Capital Territory. Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all (195). Such a view may largely explain the decision of this Court in Shannon v Lee Chun (196), which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment (197).
12. Although the Court does not consider the Aon Risk Services case is at "all fours" with the case before me, as the Respondent has strictly not yet sought to amend its "pleading" (or the way it puts its case) but rather relies on evidence that has emerged late from the joint conferencing between experts from both parties, saying that the After Case 2 scenario is proper to consider in the context of s 55(f) of the Just Terms Act, nevertheless the Court considers Aon does usefully place relevant principles in a proper context for consideration in this case. The paramount consideration of achieving a "just resolution" in the context of "the timely disposal of the proceedings at an affordable cost" is important. As my orders made on 19 March indicated, I have formed the view that, in order to achieve a just resolution, the Applicants have made out their case that the scheduled hearing dates for the primary hearing ought to be vacated and so they have succeeded on their Motion, for the reasons I have explained earlier.
13. In determining the issues arising from the Notice of Motion and previously having made the various case management orders at Pre-Trial Mention, the Court does not consider it has commenced its deliberation of the primary issues in the case, nor has it commenced a consideration of the merits of either parties' respective positions. Accordingly, the Land Valuation and Compensation List Judge will have a free hand to determine the next appropriate case management orders that are to be made on 13 April 2018.

COSTS

1. The Applicants seek their costs on an indemnity basis arising from (a) the Respondent's After Case 2 being raised so late in the proceedings; and (b) their costs thrown away by the vacation of the hearing dates.
2. The Court will make no order in response to the Respondent's After Case 2, but rather considers that it is more appropriate that the associated costs be costs in the cause, to be determined in the usual manner at the conclusion of the primary hearing. The Court accepts the After Case 2 arose out of the joint conferencing process with the experts for both parties participating. Having been examined by the experts as a possible scenario, it was unrealistic to expect the Respondent to thereafter suppress consideration of it. The Court understands the inconvenience that has arisen as a consequence of After Case 2 emerging, but considers that there has been no wasted effort in considering it to date and all such consideration will contribute to the proper examination of it when examined in detail in the course of the primary hearing.
3. With respect to the Applicants' costs thrown away by the vacation of the scheduled hearing dates, the Court has decided that the Applicants should have their costs thrown away paid by the Respondent, irrespective of the final outcome of the primary hearing. Although the normal course in Class 3 proceedings is that an applicant who is successful will be entitled to their costs, given that the outcome in these proceedings are far from being determined, it is appropriate that the Court flags at this stage that the Applicants are entitled to their costs thrown away come what may.
4. Having flagged that the Applicants are entitled to these costs thrown away, as for the determination of their quantum and the consequential details as to when they are to be paid, those are all matters for the trial judge at the conclusion of the case. In rejecting the Applicants' submission that these costs should be paid forthwith, I am mindful that pursuant to the usual procedure under s 68(2)(a) of the Just Terms Act the Applicants have been paid by the Respondent 90% of the Valuer General's assessment of the compensation due to the Applicants.
5. The final remaining question is whether the order for costs in favour of the Applicants should be for costs on an indemnity basis. The judgment of Sheahan J in Young v King (No 11) [2017] NSWLEC 34 at [106]-[110] usefully sets out a summary of the law relating to the award of indemnity costs. For the purpose of this judgment, the principles set out in Young v King and the many authorities therein set out are relevant and apposite to guiding my determination whether indemnity costs should be awarded.
6. I do not consider that the Respondent's conduct in failing to meet the Thursday 15 March deadline gives rise to any of the descriptions of conduct referred to by Sheahan J. as giving rise to a justifiable award of indemnity costs. I do not believe the Respondent's conduct, via its experts or its lawyers, constitutes conduct that was "ethically or morally delinquent", that it was motivated by an "ulterior motive", or that there was a deliberate element of abuse of process. The Court's "discretion to award indemnity costs is absolute and unfettered, it must be exercised judicially in the sense that there is some special or unusual feature in the case justifying such an award".
7. I suspect that the Respondent's solicitors had no wish to be trying to meet the Court's orders at 10.24pm on a Saturday night, as indeed Dr Ferrier had no wish to be embarrassed by being caught up in competing hearing commitments, most probably before another judge of this Court, and thereby unable to meet the commitments in this case. In short, in the context of the authorities confirming that "each case turns on its own facts, as they may be found to display the reasonableness or otherwise of the parties' conduct", on the facts in this case I do not consider that with respect to the order for costs I now make that it would be warranted to do so on an indemnity basis.

ORDERS

1. The Court made the following orders at the conclusion of the hearing on 19 March 2018 1. That the hearing dates commencing 22 March 2018 be vacated. 2. That the date of 19 March 2018, as appearing in Order 8 of the Court Orders dated 12 March 2018, be substituted with date of 29 March 2018, and that the supplementary expert report/s referred to therein be filed before close of business hours on that date. 3. That any further joint supplementary reports prepared by the parties' experts in the disciplines of blasting, geology, planning, quarrying and forensic accounting, be served before close of business hours on 10 April 2018. 4. That orders 9, 10, 11, 12 and 13, as appearing in the Court Orders dated 12 March 2018, be vacated. 5. The proceedings be listed for directions before the Land Valuation and Compensation List Judge on Friday 13 April 2018. 6. Liberty to restore at three working days' notice.
2. The Court now makes the following additional orders: (7) The Applicants' costs thrown away due to the vacating of the scheduled dates for the primary hearing are to be paid by the Respondent, with the final orders with respect to their quantification and payment to be determined by the Court at the conclusion of the proceedings. (8) The parties' additional costs incurred by reason of the emergence of the After Case 2 scenario following the service of the Joint Expert Report dated 2 March 2018, be costs in the cause.

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. Decision last updated: 21 March 2018