PRACTICE AND PROCEDURE - appeal from Master - whether proceeding should be dismissed for failure to comply with procedural order
[3]
This proceeding was commenced in the Federal Court of Australia on 10 December 2002 and proceeded at a leisurely pace. The statement of claim, or what perhaps is a proposed amended statement of claim, it is not entirely clear, pleads breach of contracts, namely certain franchise agreements, and pleads a claim in tort, namely interference with contractual relations. There are a number of defendants presently before the court. There are the first and third defendants who are connected with one of the franchise agreements, and the fourth, fifth and sixth defendants who are involved in allegations, as I understand it, of breach of contract and interference with contractual relations.
Plaintiff v Defendant [2007] VSC 373 | Case summary | Zoe
In June 2005 the plaintiff was ordered to pay the sum of $25,202.83 in relation to the costs of an earlier security for costs application that had been made in the Federal Court under which the plaintiff had been ordered to pay, and in fact did pay, the sum of $60,000 as security for the costs of the fourth, fifth and sixth defendants. On 14 October 2005 the proceeding was transferred to this court and, although some time has elapsed since then, little has happened in the case.
The plaintiff appears to have taken no steps subsequent to the transfer and, even after directions were given by the Senior Master in June 2006, failed to advance the case with any speed or care or attention. That resulted in a hearing before Master Lansdowne on 24 October last year at which the plaintiff failed to appear and its application for leave to amend the statement of claim was dismissed and the plaintiff was given 30 days to file and serve a summons for directions to be returnable before Master Efthim. Master Lansdowne ordered that, in the event that the plaintiff failed to comply with that order for filing and service of a summons for directions, the proceeding stand dismissed. The order was served but the plaintiff failed to comply with the order.
The material before the court indicates that the plaintiff was aware of the order and had time to comply with it, but failed to do so. The reason for that is not entirely clear. It appears partly to have stemmed from the fact that a receiver was appointed to the firm of solicitors acting for the plaintiff and that solicitor filed a notice of ceasing to act, although appears not to have served it on the plaintiff. Another solicitor, who had formerly been involved in the proceeding, was approached within the time needed to comply with Master Lansdowne's order, but also appears to have taken no action. Precisely why is not clear.
I have been told, although it is not supported by evidence before the court, that in fact the plaintiff had no directors at this time, although it did have a shareholder who was active in the matter and who was seeing solicitors. It is reasonable to think that the failure to comply with Master Lansdowne's order was as a result of the negligence of the legal practitioners involved, at least to some extent and the carelessness and inattention of the shareholder of the company involved, but it is also fair to say I think that they were perhaps the victims of circumstances. It really is a matter of speculation, because the court has not been provided with a frank and full explanation. The device has been adopted of exhibiting affidavits that were sworn in another proceeding containing a lot of irrelevant material, and seeking to use bits and pieces from those affidavits in aid of the present application.
But to continue with the history, the summons for directions not having been issued, the proceeding stood dismissed and the plaintiff then apparently became armed with a new director and a new solicitor and made an application to vary Master Lansdowne's order or set it aside, or to have the time for issuing the summons for directions extended. That application came on before Master Daly who, on 16 March, dismissed the plaintiff's application. This present proceeding is an appeal from that order; thus in the nature of a rehearing.
As I have already indicated, I do not think that the reason for non-compliance with Master Lansdowne's order has been adequately explained; however further material has been produced by the plaintiff for this hearing and I have given the plaintiff special leave to rely on it because the material produced was in fact affidavit material that should have been on the court file but apparently was not, namely affidavit material sworn on behalf of the plaintiff in the Federal Court in relation to the security for costs application, as I understand it. Because of problems the plaintiff had with solicitors, apparently copies of those affidavits were not available and because, for some reason still unexplained, the Federal Court file that was transferred to the Supreme Court seemed to have been not before the Master and is not before me, the originals of those affidavits were not available. But having allowed the plaintiff to rely on them, it appears that there is at least an arguable case and indeed Mr Collins, who appears for the fourth, fifth and sixth defendants, conceded that there was an arguable case as between the plaintiff and his clients.
Mr Davies who appears for the first and third defendants did not make such a concession, but there is a perfectly respectable pleading in existence, or at least partly in existence, and it has been verified by the individual behind the plaintiff company and although the material was scanty to say the least, it cannot be said that the case is without merit.
It is a serious matter to dismiss a case for procedural defaults and it is always open to defendants to have a case dismissed for want of prosecution by showing inexcusable delay and prejudice. I do not think that it is appropriate to have this case determined on a procedural non-compliance, albeit not very well explained or justified. The parties are entitled to have this case heard and, subject to paying for the indulgence involved, to get an appropriate extension of time. I think justice requires that the plaintiff have a further opportunity to mend its hand. It is a matter of discretion and I do not think the matter has reached the point where a dismissal without adjudication is justified.
For those reasons I will allow the appeal in part and make the following orders:
[4]
1. Paragraph 1 of the order of Master Daly made 16 March 2007 is set aside.
[5]
(a) if the plaintiff pays the sum of $25,203.83 on or before 20 April 2007 in discharge of the costs payable pursuant to the order of Federal Court Deputy District Registrar Muscat made 24 June 2005; and
[6]
(b) if the plaintiff pays into court on or before 20 April 2007 the further sums of $7,700 as security for the costs hereinafter referred to of the first and third defendants, and the sum of $10,000 as security for the costs hereinafter referred to of the fourth, fifth and sixth defendants,
[7]
the time for filing by the plaintiff of the summons for the directions in this proceeding be extended to 24 April 2007, such summons for directions to be made returnable before a master on the earliest available date thereafter.
[8]
The costs referred to in Paragraph 2 hereof are the costs of the defendants referred to in Paragraph 4 hereof, together with the costs ordered to be paid in Paragraph 2 of the order of Master Daly made 16 March 2007 and in Paragraph 6 of the order of Master Lansdowne made 24 October 2006.
The plaintiff pay the costs of the first, third, fourth, fifth and sixth defendants of this appeal and of the summons of the fourth, fifth and sixth defendants.
In relation to the application by the plaintiff to restrain Mr Cawthorn from acting, I will adjourn it sine die and reserve costs.