Richards v Cornford

The rejection of the application 98 The statutory framework for the exercise of the power and discretion to extend or not to extend time as sought in the motion is constituted by the CP Act, ss 56-60. 99 The importance of these provisions has been stressed by this Court. See for example Dennis v Australian Broadcasting Corporation [2008] NSWCA 37; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[161]; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; Halpin v Lumley General Insurance Ltd [2009] NSWCA 372; and Bi v Mourad [2010] NSWCA 17. 100 Section 56 is central, and vital, to understanding how litigation is to be conducted in this State. It provides for an overriding purpose in s 56(1) as follows: "(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings." 101 Section 56(2) contains a statutory command to the courts of this State to seek to give effect to the overriding purpose: "(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule." 102 Section 56(3) creates a duty upon litigants to assist the court to achieve that purpose: "(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court." 103 Section 56(4) forbids practitioners causing their clients to be put in breach of the clients' duty: "(4) A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty identified in subsection (3)." 104 The duty upon the client can be seen to be one of imperfect obligation, but it is nevertheless real. The capacity, by s 56(5), to take breach of the duties in s 56(3) and (4) into account in the making of a costs order, does not prevent a breach of the duty in s 56(3) or (4) being taken into account in the exercise of other powers by the Court, indeed s 58(2)(a) requires that to be done and s 58(2)(b)(iv) expressly permits it to be done. 105 Section 57 describes the object of case management as follows: " 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1)." 106 As I sought to make clear in Hans Pet and Bi v Mourad, the question of efficiency is not the imposition of mere managerial standards. Rather, the timely disposition of litigation is central to the provision of justice in the individual case, and generally. I repeat what I said in Bi v Mourad at [47]: "Delay is a feature of litigation intended to be eliminated as far as possible by the statutory enactment of the regime in the Civil Procedure Act . It cannot always be done. This purpose is not through some parliamentary authoritarian or over-prescriptive view of how people should lead their lives; rather, it is through the keen recognition of the conduct of the courts, in particular in the 20th century, of the need to deal with cases expeditiously if they are to be dealt with justly. Delay and case backlog are not merely factors affecting the costs of delivering justice; they corrode the ability of the courts to provide individual justice. The reforms that have taken place under the Civil Procedure Act and the evident attempt by courts to ensure efficiency can be seen not merely to reflect worthy efforts for efficiency but also to be steps vital for the provision of timely individual justice. Views may differ of justice in any particular case; that is the nature of the term and the value-laden task of a decision-maker to do justice."

107 The considerations in s 57(1)(a)-(d) are inextricably related. Together with s 56(2), s 57(2) requires this Court to apply rules of court as best to ensure the attainment of the objects in s 57(1). Those objects include, of course, the "just determination of the proceedings": s 57(1)(a). There can be no doubt, however, that that means "just" for both parties: Aon at [94]. 108 Section 58(2) is also important. It states in s 58(2)(a) what are mandatory considerations and in s 58(2)(b) what are non-mandatory considerations: "(2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case." 109 Sections 59 and 60 deal with elimination of delay and costs: " 59 Elimination of delay

In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.

In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute." 110 All these provisions are to be read against the background of the modern approach to despatch of litigation and the need for reasonable expedition contained in cases such as Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379; Sali v SPC Ltd [1993] HCA 47; 67 ALJR 841 at 844 and Aon. 111 The just determination of the proceedings was stressed by Mr Deakin QC in his submissions. He referred to the "shutting out" of QBE from its rights and the necessary injustice of that position. This should not be visited up on QBE, he submitted, by reason of the delay of its retained solicitors and counsel. The appeal could be heard this year, with a judgment likely in the last two to three months of 2010, or, at the latest early 2011. Any wasted costs would be borne by QBE. There was, therefore he submitted, no contrary "injustice" countervailing to the injustice to QBE of being shut out from vindicating its legal rights. 112 I disagree. 113 First, QBE by its own conduct in breach of its duty under the CP Act s 56(3), failed to protect its right under the UCPR to cross-appeal. The rules reflect the prima facie entitlement QBE had for a proper opportunity to vindicate its rights in the controversy. It lost those rights, by its own conduct. Thereafter, it had a right to seek the discretionary exercise of a power by the Court to have time extended for the filing of its notice of cross-appeal. The approach of QBE to the cross-appeal was the antithesis of the overriding purpose. QBE's approach, from early June to late August was one in which time did not matter. It led to the result that parties would have to wait for it and once it had prepared itself it would bring forward its application to vindicate its rights. 114 Secondly, QBE failed (again in breach of s 56(3)) to pursue that application to the Court with any despatch. Whilst the solicitors can be criticised for a lack of alacrity from 25 August, and likewise the second senior counsel from November, the position QBE then found itself in was referable and due to its own failure to give instructions in June, July and early August to get on with the preparation of a possible cross-appeal. 115 The delay from August to November was that of QBE's solicitors. They did not need red appeal books. There was a delay as to exhibits, but why they did not have their own or why they did not promptly after 25 August (knowing QBE was already out of time) obtain them from the District Court was not explained. 116 The second senior counsel was briefed regarding a notice of cross-appeal now over two months out of time. If he was not likely to be able to respond timeously, it was the solicitors' responsibility to find senior counsel to advise promptly. The solicitors could have acted on junior counsel's advice, if so instructed. 117 Delay took place until March. In the evidence, the solicitors blame the second senior counsel. Senior counsel took responsibility. However, as I have said, QBE placed their legal practitioners in this position by failing to give timely instructions in June, July and August. 118 Thirdly, there is considerable countervailing injustice. As QBE knew from the litigation and the reasons, Ms Richards had a degree of psychological and psychiatric vulnerability which was real, uncontrived and directly related to and consequent upon her injury. She received the judgment moneys and, as could reasonably be expected, she began to repair her life. I will not repeat the evidence about this. It is relevant to this application, and not just to any restitution action for the recovery of the judgment moneys. The consequence of granting an extension of time in late March or May 2010 would have been to place Ms Richards back into a position of uncertainty and stress about this litigation and its consequences for another six to nine months. This stress and uncertainty would not only be about winning or losing a case, being compensated or not for her significant injuries, possibly having costs awarded against her and perhaps being made bankrupt, but also about possibly losing the land, house, car and refunding moneys spent on living expenses, including her wedding. These are not considerations capable of being dealt with by costs. They are not answered by saying that her solicitors were told of an intention to cross-appeal. With the utmost respect to QBE and its solicitors, the view that merely saying this, that is stating an unparticularised intention, was appropriate in September and December borders on arrogance to Ms Richards and to the Court. There was a right to cross-appeal if the rules were complied with. If QBE chose, as appears to be the case here, not to comply with the rules, the leave of the Court was required to extend time. Ms Richards had the judgment moneys and was entitled to use them. A timely cross-appeal before 20 August with its grounds illuminated would have required Ms Richards to recognise that the fight was not over. Instead, matters proceeded for another seven months. 119 As Gummow, Hayne, Crennan, Kiefel and Bell JJ recognised in Aon at [94], referring to what Waller LJ said in Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894, where a party has had a sufficient opportunity to plead its case it may be necessary for the court to make a decision which may produce a sense of injustice in that party for the sake of doing justice to the opponent and other litigants. 120 I will deal with other litigants shortly. For an extension of time now to be given to QBE seven months out of time after QBE had done nothing from early June until late August to protect its own rights and to prepare a possible cross-appeal would reasonably create a sense of injustice in Ms Richards as to how the legal system operated. Someone in her position could reasonably think that the strain and uncertainty imposed on her by such a decision (if made) would reveal that the strictures of the CP Act, ss 56-60, the duty on parties to assist to further the overriding purpose and the general statements of principle as to the conduct of modern litigation were no more than empty and pious rhetoric. They are not. Ms Richards and QBE were entitled to a determination that was just and timely. Ms Richards' entitlement to that would be undermined by granting to QBE, in all the circumstances, an extension of time that would lengthen the duration of the controversy by another six to nine months. 121 In addition, there are considerations of other litigants. The consequences of the late application by QBE would include the separate listing of the cross-appeal in the last quarter of this year. If the cross-appeal had been put on within time it could have been heard with Ms Richards' appeal and together they would have taken little more than one day. As it is, Ms Richards' appeal took half a day on 5 May and the cross-appeal would take the best part of a day later this year. This is not, in itself, a significant body of extra time. However, if one considers it as the product of an exercise of a discretion which would be made in other cases a significant factor would have to be built into the Court's operations to take account of parties who, like QBE in this case, did not take timely steps for the vindication of their rights. This would be a significant impediment to other litigants in the running of this Court's list. 122 There are other matters which confirm me in the view that in the balancing of interests between QBE and Ms Richards a decision should be made refusing QBE's application. Apart from the fact that QBE took no steps from early June to protect its rights, from early April it was not concerned to appeal if Ms Richards did not appeal herself. One can infer from this that, at least as advised in early 2009, QBE did not feel any sense of injustice as to the verdict of the primary judge. Further, though I am prepared to approach the application on the basis that QBE's cross-appeal was reasonably arguable, as I have earlier said, there was no obvious or egregious error in the approach of the learned primary judge. 123 It is unnecessary to consider in any detail the position that would have obtained had the facts demonstrated that QBE was guiltless in the default that has occurred and that it was only the legal practitioners who were the instruments of delay. For the reasons that I have given, that is not the position here. In large and significant part, the failure by QBE to give appropriate instructions from early June to prepare a likely cross-appeal can be seen as instrumental in the problems that it faced. There was a lack of alacrity in the second senior counsel dealing with an application already out of time. The same can be said of the solicitors. Although they, on many occasions, sought to hurry the second senior counsel (as they were at pains to demonstrate in the evidence) their responsibility went further than that and they should have recognised the need to deal with the matter either after instructions upon junior counsel's advice or after obtaining a senior counsel who could deal with the matter promptly. 124 It is also unnecessary to consider what would have been the position had the case concerned another commercial entity, rather than a person in the position of Ms Richards. Different considerations would obtain, though not necessarily with a different result. Commercial parties are expected to propound their commercial disputes with despatch. Here, a commercial party did not do so, preferring what can only be described as a languid approach from June to the end of August. This put an individual, otherwise placed at psychological risk by the injuries she had received in the accident in question, in a position of risk of significant personal strain. 125 In all the above circumstances, I was of the view on 6 May that QBE should not be given an extension of time to file its notice of cross-appeal and that it should pay Ms Richards' costs of the motion (which costs order it conceded in paragraph 3 of the notice of motion.) 126 Since completing these reasons, I have read the reasons in draft of Basten JA. I agree with his Honour's additional observations. 127 McCOLL JA: I agree with Allsop P. 128 BASTEN JA: As the President has noted, on 6 May 2010 the Court refused an application by QBE Insurance (Australia) Ltd ("QBE") to extend the time for filing a notice of cross-appeal. I agree with his Honour's reasons and would add the following observations in support of the approach outlined by the President. These observations are directed to two specific matters, namely the statutory regime engaged by the application and the evidential basis for the application.

Statutory regime 129 The rules regulating applications for leave to appeal, appeals and cross-appeals to this Court are to be found in Uniform Civil Procedure Rules 2005 (NSW), Part 51. All applications and appeals are subject to prescribed time limits. The time limits run from the "material date" which, in the case of a judgment of the District Court, is identified as "the date on which the decision is pronounced or given": r 51.2, material date (e). The judgment of Murrell SC DCJ was given on 7 May 2009. If QBE were aggrieved by the judgment, it had a right of appeal pursuant to s 127 of the District Court Act 1973 (NSW). Given the amount of the judgment, no leave was required: cf s 127(2)(c). QBE had three courses open to it in order to exercise such a right. First, if in doubt as to whether it wished to pursue an appeal, it could have filed and served on the prospective respondents, a notice of intention to appeal, within 28 days after the material date: r 51.8. If it wished to pursue that intention, it would have been required to file and serve a notice of appeal within three months after the material date, namely by 7 August 2009. It did not take that course and does not now seek to do so. 130 The second course available to it was to file a notice of appeal which, absent the preliminary step of giving notice of intention to appeal, was required to be undertaken "within 28 days after the material date or such other time as the Court may fix": r 51.16(1)(c). The Court would have power to extend time under sub-r (1)(c), "at any time": sub-r (2). QBE did not ask the Court to exercise that power. 131 The third alternative was to file and serve a notice of cross-appeal seeking to discharge or vary the judgment below: r 51.17(1). There being no requirement to seek leave to cross-appeal, the notice was to be filed and served in accordance with the following subrule: 51.17 Filing and service of notice of cross-appeal … (2) A notice of cross-appeal must be filed and served on each necessary party: (a) if the notice of cross-appeal is filed pursuant to leave to cross-appeal - within 7 days after leave to cross-appeal is given or such other time as the Court may fix, or (b) in any other case - within: (i) 14 days after the filing of a summons seeking leave to appeal or a notice of appeal, whichever is the earlier, or (ii) such other time as the Court may fix. (3) The Court may extend time under subrule (2)(a) or (b)(ii) at any time. … (4) A party applying for an extension under subrule (2) must lodge and serve the draft notice of cross-appeal with the application. 132 The powers of the Court to extend time are substantially in identical terms in relation to appeals and cross-appeals. Nevertheless, QBE sought support for its application from the differential treatment of appeals and cross-appeals with respect to the stated temporal restriction. Thus, a party wishing to appeal had either 28 days, or, if notice of intention were given, three months, from the date of judgment. By contrast, QBE noted, a cross-appellant had only 14 days, albeit from the date on which the appeal was filed. (The rule might better provide that the 14 days run from the date on which the notice of appeal was served, if later than the date of filing, and no doubt an extension of time would readily be granted to accommodate any difference: that was not an issue in the present case.) 133 The temporal variation may be conceded, but the shorter period for filing a cross-appeal is understandable, given the nature of the procedure. A cross-appeal is in the nature of an appeal, in that it seeks discharge or variation of the orders of the Court below. Where both parties to proceedings wish to challenge the orders below, it is not uncommon for each to appeal. The procedure by way of cross-appeal is conducive to avoidance of appeals where a party is, in effect, content to accept less than complete success at the trial, so long as the other party does not seek to improve its position as determined at trial. The cross-appellant is not in a worse position, with regard to time, than the appellant. The rule requires, in effect, that a party willing to abide by the outcome unless the other party appeals must be in a position to move promptly in the event that the other party does take that step. As the President has fully explained, QBE failed to act in accordance with the underlying requirement in that respect. 134 In considering the exercise of the power to extend time, this Court is required to give effect to the "overriding purpose" of the Civil Procedure Act 2005 (NSW) and the rules, which is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings": s 56(1). The requirements, as expressed in ss 56, 57 and 58 of the Civil Procedure Act (set out above at [99]-[102], [104] and [107]) are in similar, but arguably stronger terms, than r 21 of the Court Procedures Rules 2006 (ACT), applied in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 ("Aon"). 135 The order under challenge in Aon was said to have involved an application to amend pleadings to permit the "real issues in the proceeding" to be decided: Court Procedures Rules, r 501. (It was held otherwise in the High Court.) Permitting that course would (and did in Aon at first instance) lead to the vacation of trial dates and other consequences in the proceedings then on foot. This case was different: Ms Richards' appeal was heard on the date for which it had been fixed and has been determined. Once the appeal proceedings had been determined by final orders, there may have been a question as to whether QBE was any longer entitled to file a notice of cross-appeal. That issue was not raised and, to avoid the issue arising, this Court made orders disposing of the application prior to deciding the appeal. It was also unnecessary to decide whether the final determination of Ms Richards' appeal, and the entry of orders in respect of that appeal, would constitute an obstacle to the prosecution of a cross-appeal. 136 There may also have been an issue as to whether, for the purposes of the Civil Procedure Act, "the proceedings" were the appeal, the cross-appeal or both taken together. The submissions proceeded on the basis that the appropriate course was to treat the proceedings as the combination of the appeal and the cross-appeal. That was sensible, in a practical sense, because, if successful in its proposed cross-appeal, QBE sought restitution of the moneys paid by it to Ms Richards. 137 Although s 56 purports to identify a single "overriding purpose", what is in fact required by an application of the statutory mandate is a balancing exercise. In some cases, compromise will be possible; in other cases, of which this is an example, there is a binary choice. Either Ms Richards is entitled to the consequences of finality and is not at risk as to the proceeds of her judgment, in which case QBE will be denied its right of appeal, or Ms Richards' judgment will be placed at risk, so that QBE may pursue its challenge to liability. There is a tension to be resolved: see Halpin v Lumley General Insurance Ltd [2009] NSWCA 372 at [28] (in my judgment) and [93]-[95] (Sackville AJA, Tobias and I agreeing). 138 In written submissions on the motion, QBE made no reference to the provisions of the Civil Procedure Act discussed above. They were relied on in passing, in submissions filed for Ms Richards. At the hearing, counsel for QBE did not suggest they were inapplicable. However, their consideration was essential to the identification of the criteria to be applied in determining the application. More broadly, QBE did not expressly identify criteria by which its application was to be determined. Such criteria had to be gleaned from the matters discussed in the submissions. These included:

(a) potential prejudice to each party from acceptance or rejection of the application;

(b) the reasons for the applicant not bringing the cross-appeal in a timely manner, and

(c) the subservience of case management principles to the resolution of disputes. 139 The applicant also sought to exclude certain considerations, namely:

(a) withholding relief as a form of discipline or punishment for disobedience to the rules, and

(b) factors relevant to whether an order by way of restitution should be made against Ms Richards, if the cross-appeal were successful. 140 It may be added that little consideration was given to the available responses of other parties to the cross-appeal, if it were to run. For example, an order was sought in the draft notice of cross-appeal seeking judgment in favour of QBE against Mr Cornford and his company, together with interest. (Neither had received any payment from QBE.) However, their counsel advised the Court that they would seek to challenge the finding of negligence in the original proceedings if the cross-appeal proceeded. Whether they were entitled to do that was unclear, but QBE did not argue that they could not, or should not be permitted to seek to take that step. There was also acceptance by QBE that the worker's compensation insurer would wish to be joined. It is sufficient to say that the procedural consequences of an extension of time were not clearly identified or addressed by QBE, with the result that the Court could not be satisfied that they would be as limited as suggested by counsel for QBE. 141 QBE also sought to rely in its submissions on the proposition expressed by Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710, said to have been cited with approval in the judgment of Gummow, Hayne, Crennan, Kiefel and Bell JJ in Aon at [73]. To the extent that Bowen LJ stated that the courts were to decide the rights of the parties and "not to punish them for mistakes they make in the conduct of their cases", the proposition should be accepted. The High Court did not, however, give wholehearted support to what followed. However, importantly for present purposes, the relevance of the passage depended upon whether QBE did in fact make an "error or mistake". That requires attention to the evidential basis upon which the present application was made.

Evidential basis of application 142 QBE relied upon three affidavits of its solicitor, one of which annexed a draft notice of cross-appeal and the cross-appellant's submissions in support thereof, and added two paragraphs as to the history of the matter. The second identified one further matter of history and set out searches undertaken to ascertain the assets of Ms Richards. The third affidavit (sworn on 15 April 2010) set out the detailed history of the matter together with some statements as to why steps were or were not taken at a particular time. It is the last affidavit which formed the basis of the principal arguments for QBE. Its contents have been discussed in detail by the President and need not be repeated. 143 Two aspects of the affidavit should be noted. First, the solicitor stated at par 17: "I was aware of the requirement of Rule 51.17 of the Uniform Civil Procedure Rules [which?] requires that a Notice of Cross-Appeal must be filed and served on each necessary party within 14 days after the filing of a Summons seeking leave to Appeal or a Notice of Appeal, whichever is the earlier." 144 The affidavit was set out chronologically, but I would infer that the statement as to the solicitor's state of knowledge applied at all material times. 145 The affidavit was prepared on behalf of QBE, the solicitor noting that throughout "these proceedings" she had received instructions from a named senior claims officer of QBE: paragraph 2. No evidence was proffered from the senior claims officer, nor from any other officer of QBE. It should be inferred that, as an experienced solicitor, the deponent would have provided information, with advice where necessary, to the instructing officer of QBE. It is not possible on the evidence to draw a line between that which QBE knew, understood or required and that which the solicitor stated in her affidavit. 146 Secondly, at no point in the affidavit did the solicitor indicate that she was under any misapprehension or made any mistake or error. It should similarly be inferred that QBE was under no misapprehension and made no mistake or error. Its course of conduct was therefore deliberate and was undertaken in full understanding of the requirements of rules of the Court. The only proffered explanation or excuse for non-compliance with the temporal requirements of the rules, was the material outlined by the President, seeking to pass the responsibility for the later stages of the delay to senior counsel. In relation to the period after 6 November 2009, there was no statement as to when she (and therefore QBE) expected to receive the advice on any cross-appeal; there is no evidence that counsel was given instructions in that regard. Even the subject-matter of the possible cross-appeal, then under consideration, was not identified. 147 The evidential basis was inadequate to warrant the extension of time sought. **********

18/06/2010 - Counsel incorrect - Paragraph(s) Coversheet

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