Pacanowski v Simon Wakerman & Associates

CITATION: Pacanowski v Simon Wakerman & Associates [2009] NSWCA 402

JUDGMENT OF: Tobias JA at 1; Basten JA at 25

DECISION: Summons for leave to appeal dismissed with costs

CATCHWORDS: PROCEDURE - Dismissal of proceedings for want of prosecution - Application for leave to appeal - Whether discretion to dismiss proceedings miscarried - Whether denial of procedural fairness - Where delay gave rise to presumptive prejudice

LEGISLATION CITED: Civil Procedure Act 2005 Uniform Civil Procedure Rules

CASES CITED: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 83 ALJR 951 Hoser v Hartcher [1999] NSWSC 527

David Pacanowski Maxine Pacanowski PARTIES: Simon Wakerman & Associates Pty Ltd Simon Wakerman Angelo Natoli Natoli Constructions Pty Ltd

A: S D Robb QC COUNSEL: 1&2 R: S Torrington 3&4 R: B Dooley SC / I Judd

A: Charles G Roth SOLICITORS: 1&2 R: Blackstone Waterhouse, Sydney 3& 4R: George Mallos, Lawyer,

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40255/09

TOBIAS JA BASTEN JA

Tuesday 10 November 2009 DAVID PACANOWSKI and Anor v SIMON WAKERMAN & ASSOCIATES and Ors Judgment on application for leave to appeal 1 TOBIAS JA: On 13 April 2009 Judicial Registrar McDonald of the District Court ordered that proceedings instituted by the applicants (the plaintiffs) on 20 July 2005 be dismissed for want of prosecution pursuant to rule 12.7 of the Uniform Civil Procedure Rules 2005 (the Rules). The order was made upon the basis that the Judicial Registrar was not satisfied that the plaintiffs had shown cause why the proceedings should not be so dismissed. The plaintiffs seek the Court's leave to appeal from the Judicial Registrar's orders. 2 The Judicial Registrar recognised that the relevant power she was exercising was that contained in s 61(3) of the Civil Procedure Act 2005 coupled with that in rule 12.7 of the Rules. 3 In the course of the hearing of the show cause application on 16 April 2009, counsel for one or other of the respondents handed up to the Judicial Registrar a chronology comprising two pages. During the course of her judgment the Judicial Registrar placed some reliance upon that document as evidencing the history of the proceedings although it is clear, when comparing that document with her recitation of that history, that she also supplemented the document, one assumes, by reference to the District Court file. 4 The Judicial Registrar referred to the 11 principles to be considered on an application to dismiss proceedings for want of prosecution stated by Simpson J in Hoser v Hartcher [1999] NSWSC 527. The Judicial Registrar dealt with each of those principles in a manner that is not challenged except with respect to two of them. 5 There were a number of bases advanced in support of the submission that the Judicial Registrar's discretion to dismiss the proceedings miscarried. First, it was submitted that she failed to apply the directions contained in District Court Practice Note DC (Civil) No. 3 relating to Case Management in the Construction List of the District Court and, in particular, paragraph 8 which deals with show cause hearings in cases of serious and repeated non-compliance with court orders. A case may be listed in these circumstances for the plaintiff to show cause why the action should not be dismissed for want of prosecution. 6 Paragraph 8.3 of the Practice Note provides that at least five days before the show cause hearing the legal practitioner for the relevant party in default must file and serve an affidavit setting out the reasons why he or she has not complied with any relevant timetable. In addition, any other party who wishes the court to consider any submissions must put those submissions in writing and file and serve them at least five days before the directions hearing. 7 We were also referred to a document that was provided by the District Court to litigants and headed "Notice - Construction List Show Cause Hearing" and, in particular, paragraphs one, three and four thereof. Paragraphs one and three generally mirror paragraph 8.3 of the Practice Note. Paragraph four provides that except in special circumstances the court will not accept or receive any submission it has not received before the directions hearing. 8 In the present case the onus was upon the plaintiffs and/or their solicitor to provide material which would persuade the Judicial Registrar that they had shown cause why the proceedings should not be dismissed. The only document that was filed was an affidavit by Mr Roth, the plaintiffs' solicitor, sworn 15 April 2009 which did not comply with what I might refer to as the five day rule. No written submissions were filed on behalf of either party. 9 Notwithstanding non-compliance with the Practice Note, no objection was taken before the Judicial Registrar by counsel for the plaintiffs that the Practice Note or the notice to litigants had not been complied with by the respondents - which is not surprising given that the plaintiffs had not complied themselves with these directions. Accordingly the matter proceeded upon the basis of oral submissions without objection from either party. This did not involve any relevant error on the Judicial Registrar's part. 10 Second, the plaintiffs complain that the Judicial Registrar was in error in relying on the chronology that was handed up by the respondents at the commencement of the hearing and to which the plaintiffs had not had the opportunity to respond. Of course, it would have been open to their counsel in the show cause hearing to have provided his own chronology in support of any argument that the plaintiffs in fact had a case to resist the dismissal of the proceedings for want of prosecution, but no such chronology was provided. 11 It was submitted that in some way the plaintiffs were denied procedural fairness. Reliance was placed upon the following statement by counsel for the plaintiffs in his oral submissions: "Now the position may well be this, that, if you look at the chronology, you can see that various events did or didn't occur, or there was perhaps compliance in one area but not in another area, as between the various parties, but it is not the full story and to entertain an application for dismissal based on the chronology, in my submission, is premature. On the other hand, if the defendants seek to agitate such an application, then that can be done by way of motion, with all the evidence, with all the detail, that can be put before the court as to what each of the parties did or didn't do that might give rise to any such order, bearing in mind, of course, as Judicial Registrar, you would appreciate, such an order is a drastic order. I can't take it any further than that." 12 The problem with that statement is, first, it was made at the heel of the hunt rather than at the commencement of it and, second, no suggestion was made by counsel that the matter should be adjourned to enable any further material to be filed which would supplement the chronology handed up by the respondents. In my view there is no substance in this ground of challenge. 13 Third, a challenge was made to the Judicial Registrar's response to the seventh principle stated by Simpson J in Hoser, namely, that the onus lay on the defendant to establish any prejudice upon which reliance is placed. The Judicial Registrar, when referring to this particular principle, noted that there was no evidence of actual prejudice except in relation to the third and fourth respondents' cross-claim, but she considered there was considerable presumptive prejudice resulting from delay, the passage of time and the fact that costs orders had been made a portion of which would be unrecoverable. 14 It was submitted that presumptive prejudice as distinct from actual prejudice was insufficient to satisfy Simpson J's seventh principle. I do not agree. One only has to refer, in a slightly different context, to the views of the High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 83 ALJR 951 at [100], [101] and [111] to note that there can be different forms of prejudice relating to litigation which are presumptive and which are required to be taken into account when dealing with case management issues such as that which was the subject of that case and that which is the subject of the present case. 15 Presumptive prejudice has always been a matter to be considered in other similar areas of discourse such as when an application is made for an extension of time under statutes of limitation and where a stay of proceedings is sought upon the basis of unreasonable delay. I see no reason, as a matter of principle, why presumptive prejudice cannot be relevant in a context such as the present where, in particular, the litigation had been on foot for nearly four years with little, if any, real progress towards a resolution. 16 Fourth, it was submitted that the Judicial Registrar erred in finding that "numerous costs orders" had been made. It was suggested there were only two. Given the context in which the Judicial Registrar made that comment, and given the totality of her reasons, I do not consider that any numerical error, if such there be, as to the number of costs orders made had any influence upon her ultimate conclusion. 17 The fifth challenge was to the Judicial Registrar's response to the eleventh principle stated by Simpson J, namely, " The exercise of discretion to strike out should not incorporate any element of punishing a tardy plaintiff or of excluding one who may appear to have some unworthy characteristics ." 18 The Judicial Registrar referred to this principle but stated that it had been overtaken by the provisions of the Civil Procedure Act. 19 Given what followed in her judgment, it is clear that the Judicial Registrar was referring in particular to s 56 of the Civil Procedure Act which provides that the overriding purpose of the Act and the Rules in their application to civil proceedings was to facilitate the just, quick and cheap resolution of the real issues in the proceedings. One thing which it seems can be stated about this matter is that there has been nothing cheap or quick about the resolution of issues raised by the plaintiffs in their amended statement of claim. In my view, there was no error on the Judicial Registrar's part in her reference to the provisions of the Civil Procedure Act overtaking Simpson J's eleventh principle. 20 Finally, application was made by the plaintiffs to read an affidavit sworn 9 November 2009 by their solicitor, Mr Roth. That was opposed but the members of the Court have read the affidavit. The thrust of it seems to be that when the matter was before the Judicial Registrar on 15 January 2009, draft short minutes were handed up with the consent of all parties which provided in paragraph four that if orders (1) and (2) were not complied with an affidavit explaining the inability to comply with those orders was to be filed by a certain date. Mr Roth appeared for the plaintiffs at that particular hearing. 21 It is apparent from the transcript of the hearing from that day that the Judicial Registrar did not accept paragraph four in the form in which it was handed up to her and made it patently clear, in my view, that if orders (1) and (2) were not complied with - and they related to the filing of a further amended statement of claim and the filing by the plaintiffs of all their evidence by a certain date - the plaintiffs must show cause on the next occasion, which the Judicial Registrar fixed as 16 April, why the proceedings should not be dismissed for want of prosecution. 22 Even accepting Mr Roth's statement that he misunderstood the nature of the order which had been made and that he only understood that he was required on the next occasion to file an affidavit as to the reasons why orders (1) and (2) could not be complied with, it is apparent that his misunderstanding was not conveyed to counsel who appeared on the plaintiffs' behalf on 16 April for there is no mention of it in the transcript of the proceedings of that date. 23 As appears from the transcript, there can be no doubt that counsel for the plaintiffs was fully aware of what was to occur on 16 April and which was in accordance with the order of the Judicial Registrar made on of 15 January, namely, that if the plaintiffs had not filed their evidence by the stipulated date, they were to show cause why the proceedings should not be dismissed for want of prosecution. In my view, even if it was appropriate to take that affidavit into account, it does not advance the plaintiffs' case on this application. 24 In my view, therefore, I do not consider that the chance of the plaintiffs succeeding on an appeal from the Judicial Registrar's orders is such as to warrant the grant of leave to appeal. I therefore propose that the summons for leave to appeal be dismissed with costs. 25 BASTEN JA: I agree with the orders proposed by the presiding Judge and also with his reasons. I would add some remarks in relation to first of the grounds which was raised, namely, the failure to accord procedural fairness in the circumstances in which the matter came on for hearing on 16 April. First, I would take account of the evidence in the affidavit of Mr Roth of 9 November 2009. Nevertheless, for the reasons which the presiding Judge has given, I do not think it demonstrates any lack of opportunity, objectively assessed, for the applicants to show cause in the manner which the Judicial Registrar had indicated would be expected if her orders were not complied with. 26 Secondly, significant reliance was sought to be placed both by the Judicial Registrar in her reasons and by counsel for the applicants in challenging her decision on the principles summarised by Simpson J in Hoser v Hartcher [1999] NSWSC 527. Care should be taken in seeking to treat those as a set of generally applicable criteria to be applied in considering dismissal for want of prosecution. Her Honour was explicit in making clear the list was not exhaustive and that they did not necessarily apply in all circumstances. 27 It may also be noted that Simpson J distinguished between delay which had occurred between the date on which the cause of action accrued and the commencement of proceedings and delay thereafter. The former was identified as a relevant factor, but the onus was, in either period, on the defendants to establish prejudice. Delay could clearly give rise to prejudice and the delay between the date after which the proceedings were commenced and the date on which the application was being considered was also a highly relevant factor to be taken into account. The consequences of delay have been considered more fully in Aon Risk Services, to which the presiding Judge has referred (at [14] above), particularly at [111]-[114] in the joint judgment. Those matters should all be assessed and taken into account in the circumstances of a particular case. It is not necessarily a basis for challenging the decision to dismiss a proceeding that there are aspects of particular guidelines as formulated in another case which have not been adequately considered. 28 Finally, although the Judicial Registrar noted that the guidelines were formulated in 1999 and needed to be informed, as her Honour put it, by the enactment of the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules, it is not clear that her Honour gave detailed consideration as to how that might affect the Hoser criteria. As the presiding Judge has indicated, the correct approach, informed by that legislation, should now be appreciated as providing a wider discretion for dismissal of proceedings for want of prosecution, just as in Aon Risk Services there was a relaxation of the restrictions on the refusal of amendments to pleadings. 29 For those further reasons, I would find no error in the approach adopted by the Judicial Registrar and agree with the presiding Judge's orders. 30 TOBIAS JA: The orders of the Court are as I have proposed. **********

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