Supreme Court Rules 2000 (Tas), r 56.

Judgment Number: [2021] TASSC 61

RICKI IVAN STRANG v JOHNSTON, McGEE and GANDY PTY LTD

(ACN 009 547 130) and HYDRO-ELECTRIC CORPORATION (ACN 072 377 158)

EDITED TRANSCRIPT OF REASONS FOR JUDGMENT HOLT AsJ

1 On 1 July 2021, the second defendant filed an interlocutory application seeking the following orders:

"1 The proceeding is stayed until such time as the Plaintiff obtains an order of the Court or a judge to take a further step pursuant to Supreme Court Rules 2000, r56(1).

2 The Plaintiff's notice of intention to proceed dated 2 March 2021 is defective and set aside.

3 The purported step of the Plaintiff in filing and serving a list of documents sworn 2 March 2021 on 16 April 2021 is set aside.

4 The purported step of the Plaintiff applying for orders pursuant to r420(4) by letter dated 25 May 2021 is set aside.

5 The Plaintiff is to pay the Second Defendant's costs of and incidental to the application."

2 The application is principally founded on r 56(1) of the Supreme Court Rules 2000 which is as follows:

(1) If a step, other than an application on which no order has been made, has not been taken in a proceeding for 6 years since the last step was taken, a party may not take any further step in the proceeding without the order of the Court or a judge."

3 The plaintiff filed an affidavit verifying his list of documents on 14 August 2014. The primary question raised by the interlocutory application is whether in the six year period following the filing of the list of documents, any step has been taken in the proceeding. The plaintiff says that within the relevant six year period to 14 August 2020, three steps have been taken:

1 An interlocutory application was filed on 26 May 2015 by the second defendant, seeking an extension of time for the second defendant to bring proceedings against a prospective third party for indemnity and contribution under the Wrongs Act 1954, s 3(6), and for leave to issue a third party notice to the prospective third party, pursuant to r 202.

2 A request made by email from the plaintiff's solicitors to the second defendant's solicitors, sent 22 January 2020, for the inspection of the piece of equipment which the plaintiff alleges in his statement of claim caused his injury and which the plaintiff alleges was negligently designed and operated.

3 A request made by email from the second defendant's solicitors to the plaintiff's solicitors on 22 January 2020, in the following terms:

"Can you please have Mr Strang provided [sic] updated discovery including further medical reports and the terms of settlement of his workers compensation claim?"

4 The second defendant says that the interlocutory application, referred to by counsel for the plaintiff, is a step not to be counted in the six year period as it was within the words of r 56 "an application on which no order has been made".

5 The interlocutory application was the subject of several adjournment orders and a consent order imposing a timetable for the filing and service of affidavits. The interlocutory application was not pursued by the second defendant and so has not been disposed of by order of the Court.

6 The application not having been disposed of, it is in my view an excluded step under r 56. I form this view on the basis that the rule is concerned with the expectation that when proceedings are commenced they will be carried towards conclusion and that lengthy inactivity by the parties will result in a party, wishing to proceed, requiring the leave of the Court to do so. In this context, an unresolved interlocutory application speaks to inactivity and delay, rather than to progress. As a matter of construction I regard the reference to no order being made on the interlocutory application in r 56 as a reference to an order disposing of the application, either by granting it or dismissing it. An order imposing a timetable does not progress a proceeding, even though compliance would have that effect. For that proposition I refer to Artahs Pty Ltd v Gall Standfield & Smith (A Firm) [2012] QCA 272 (2013), 2 Qd R 202 at [2]- [4]. It follows that the filing of the interlocutory application and the proceedings on it, which did not resolve the application, are not to be counted for the purpose of calculating the six year period referred to in r 56.

7 The next claimed step is the email of 22 January 2020, seeking inspection. In this regard I consider the observation of Lindley LJ in Ives & Barker v Willians [1894] UKLawRpCh 64; [1894] 2 Ch 478 to be directly in point. His Lordship said at 484:

"The authorities shew that a step in the proceedings means something in the nature of an application to the Court, and not mere talk between solicitors' clerks, nor the writing of letters, but the taking of some step, such as taking out a summons or something of that kind, which is, in the technical sense, a step in the proceedings."

8 The rule with deals with inspection is r 437, the operation of which is only triggered by the filing of an application to the Court. The email to the solicitors for the second defendant was not an application and so is to be characterised as mere correspondence, as distinct from something in the technical sense which constituted a step in the proceeding. The result is that the email request for inspection is not a step to be counted in the prescribed six year period.

9 The final activity relied upon by the plaintiff is the transmission of the email from the second defendant requesting documents from the plaintiff.

10 The rules of discovery in certain circumstances operate as a substitute for the requirement to take out a formal application and obtain an order before an opposing party is under compulsion. The rules to which I refer activate an obligation directly imposed by the rules. One such discovery rule is r 383, which relevantly is as follows:

(1) A party to an action, if requested by notice by any other party at any time after the pleadings between them are deemed to be closed, is to -

(a) make discovery by producing to the other party for inspection all discoverable documents in respect of which privilege is not claimed; and

(b) if the other party so requires in the notice, make and serve on the other party a list of all discoverable documents.

(a) within 14 days after receipt of the notice ...".

11 The rule is to be read in the context of r 382, which provides that, subject to contrary agreement or order, the discovery obligation is a continuing obligation. It follows that a r 383 request can issue, even after formal discovery has been made. The issue of a notice is the equivalent of taking out a discovery application and obtaining a court order on it. In this regard the issue of a r 383 notice is, in my view, a step in the proceeding, that is to say, something in the technical sense contemplated by the rules which carries a proceeding forward.

12 Counsel for the second defendant says that the email is not a notice within the meaning of the rule because it lacks the required formality. For example, it does not state that it is issued pursuant to r 383. There was evidence from the author of the email, being the solicitor having carriage of the matter for the second defendant, that it was not his intention that the notice should operate as a notice under r 383, and that he issued the email without an intention to create an obligation on the plaintiff, but simply so that the documentation which was requested might be made available to him so that he could issue updated advice to his client.

13 It is to be noted that under r 383, the notice is expressed to be a notice containing a request, rather than a requirement. The email contains a relevant request for the provision of documents. The fact that it lacks formality is of no relevance as the rule does not specify any formalities which need to be satisfied for such a request to have effect.

14 Next, counsel for the second defendant referred to steps in proceedings as being steps carried out with an intention to carry forward the proceeding, and then sought to rely upon the state of mind of the author of the email requesting discovery, in particular the author's statement that he did not intend the email to be a request under r 383. Counsel relied upon the decision of Porter J in Coad v Dimmick [2013] TASSC 48, 22 Tas R 351. It is necessary to repeat precisely what his Honour said at [32]-[34]:

"[32] As to what is a step in a proceeding, it is a little difficult to discern a definitive test which has universal application, although the general thrust of the various statements is plain enough. In my view there is clear room for the proposition that an activity may be a step even though it has not in fact carried the action forward, provided that it is done with that intention. Obviously, at the very least, an activity must have the capacity to carry the action forward. Phrases used in the authorities, and which are suggestive of that approach, include:

• taking any proceeding 'with a view to continuing the litigation ...': Spincer v Watts (above) at 353;
• 'a proceeding designed to further prosecute the action or in any way to continue the action towards judgment ...': Leach v International Portion Foods Pty Ltd [1984] 2 Qd R 152 at 154;
• 'some step ... taken with a view to continuing litigation between the parties; ...': Rideout v Glaxo Group Ltd (above) at 206 - 207.
• 'some step ... to carry the action forward'; 'an action ... to prosecute an action to judgment': Argo (above) at 77 [27]; 78 [30].

[33] In B C Cairns_, Australian Civil Procedure,_ 9th ed (2011) at 111 [2.150], the author says, in apparent reliance on the Citicorp case, that '[t]o be a step the act must carry the proceeding forward, it must be something intended to continue the litigation. Acts done only in preparation of a party's case do not qualify as steps.' [Emphasis added.] Mr O'Farrell, both in the written outline and in oral argument, took the same approach and accepted the proposition that intention was an aspect of the test. I do not, however, suggest that on the basis of mere purpose or intention alone, an activity would amount to a step in a proceeding.

[34] I take the view that the activity must be one which is at least capable of carrying the action forward and one which is done with that intention. This accords with the authorities to which I have just referred. In particular, it accords with the proposition that a dismissed application may nevertheless advance an action towards judgment; see Burns v Korff (above) at 208, endorsed by Underwood J in Argo."

15 His Honour was considering, in that passage, activities contemplated by the rules, but which, in the result of a particular case, did not carry the action forward. The activity under consideration in Coad v Dimmick was a failed mediation conference but, nevertheless, the attendance of counsel at the mediation conference was an activity which showed that the action was alive.

16 No question of the subjective intent of the author of a document filed or served in proceedings arises in the present case. The notice was not an activity without effect. Once in the hands of the recipient party, the obligation to provide discovery of non-privileged documents arose. As I have said, the issue of a request, by force of the rules, has the identical effect of a successful application for discovery, which would always be regarded as a step in the proceeding for the purposes of r 56.

17 The request for documents made 22 January 2020 issued within six years of the previous step having been taken in the proceeding, namely the filing by the plaintiff of the list of documents on 14 August 2014.

18 The result is that r 56 is not engaged in the present case, and the application for a stay under that rule must be dismissed.

19 The application of the second defendant in pars 2, 3 and 4 of the interlocutory application to have certain documents set aside is not entirely dependent on whether or not the stay application succeeds. No step was taken in the proceeding in the twelve months following the issue of the discovery request on 22 January 2020. The result was that r 55 applied. The rule provides:

If a step, other than an application on which no order has been made, has not been taken in a proceeding for at least one year since the last step was taken, a party may not take any further step in the proceeding without first giving to every other party one month's notice of intention to proceed."

20 The notice of intention to proceed dated 2 March 2021 was not given to the first defendant and so it was not a notice in compliance with the rule. However, the filing of documents without the giving of the required notice of intention to proceed does not render the steps taken void unless the Court or a judge so orders. Rule 13 provides:

Failure to comply with any of these rules does not make any proceedings void, unless the Court or a judge so orders."

21 Counsel for the second defendant says that the irregular steps must be set aside, and relies upon the observation of Underwood J (as he then was) in the last two sentences of [39] of his Honour's decision in Argo v Attorney-General (No 3) [2004] TASSC 51, 13 Tas R 69:

"When the period of six years elapsed without a proceeding being taken, no further step in the proceeding may be taken without leave. If such steps are in fact taken without leave being granted, they will, on application being made, be set aside unless the conduct of the party not in default amounts to acquiescence, or waiver of the requirement that there be compliance with r56."

22 Here, there was nothing which amounted to acquiescence or waiver, and, like r 56, r 55 speaks in terms that "a party may not take any further in a step in the proceeding". I have reservations about the correctness of the observation of Underwood J, if he was intending to fetter the discretion conferred by r 13 but, for the reasons which follow, I need not consider that matter further.

23 No purpose, other than to cause delay, expense and inconvenience, would be served by making the setting aside orders sought, and so making the setting aside orders would be contrary to case management objectives. Rule 414 relevantly provides that the case management division of the rules applies to proceedings which a judge of his or own motion so directs. Rule 415(4A)(a) provides that a case management order may be inconsistent with any provision of the rules in their application to the proceeding.

24 Assuming, but without deciding it, that an order dismissing the set aside components of the second defendant's interlocutory application is inconsistent with the rules, I will bring the proceedings within the case management division and for case management reasons will dismiss the application contained in pars 2, 3 and 4 of the interlocutory application.

25 Before proceeding to hear the parties as to costs, I make the following orders:

1 Division 1 of Part 14 of the rules applies to the proceeding.

2 The second defendant's interlocutory application, filed 1 July 2021, pars 1-4, is dismissed.

3 I direct that these reasons be transcribed and sent by email to the solicitors for the parties.

4 I certify for the attendance of counsel in respect of the application.