Strathfield Municipal Council v Aussie Skips Recycling Pty Ltd

Land and Environment Court (NSW)|2019-03-28|Before: Pepper J

The Respondents Seek Leave to Rely on a Very Late Affidavit of Mr Roussakis

This is an application, on day four of a final hearing that was heroically listed for a three days by the Court on 19 December 2018, commencing on 20 March 2019.
As the volume of evidential material suggests, this Class 4 civil enforcement matter is complex: the amended summons is seeking no less than 13 declarations and 18 orders; there are presently approximately 31 real issues for determination agreed to by the parties; and the combined tender bundle is 11 volumes. There was no conceivable way that the matter could ever be heard in three days.
When the matter came before me for a pre-trial mention on 15 March 2019, I raised with the parties that either the matter would not conclude in the three days allocated to hear it, or that the Court would not be taken to all of the evidence that was contained in the evidence books. In the result, both observations proved to be correct. The matter requires, in addition to the four days of hearing to date, an estimated three to four days of additional hearing time.
In light of counsel's unavailability, the Court diary, and the unavailability of the expert witnesses, this matter will now be adjourned to either August or September this year.
It is within this temporal context that the present application by the first and second respondents ("the respondents") (the third respondent has filed a submitting appearance) for leave to rely on the affidavit of Mr Emmanuel Roussakis sworn 21 March 2019, is made.
The application is opposed by the applicant, Strathfield Municipal Council ("the Council").

Reasons Given for the Delay

The reason for not filing an affidavit of Mr Roussakis earlier is given an affidavit of Mr Walker affirmed 21 March 2019 ("the second Walker affidavit"). At paragraphs 6 and 12 - 14 of the second Walker affidavit, Mr Walker states that: 6. A forensic decision was made at this time to rely on the Walker Affidavit at the interlocutory hearing, rather than expose the General Manager of Aussie Skips, Mr Emmanuel Roussakis, to cross examination. The primary reason for my decision not to seek an affidavit from my client was because since these proceedings have commenced I have observed (and continue to observe) Mr Roussakis being very emotional and upset in respect of the proceedings. He has on numerous occasions become very upset around me in respect of the prospect of having to make staff redundant. After discussions with Counsel, a decision was made for me to affirm. … 12. On 14 March 2019, we were provided with the Applicant's objections to the First and Second Respondents' evidence. Those objections include an objection to paragraphs 38-52 of the Walker Affidavit on the grounds of "Relevance/Hearsay/Conclusion/Form". 13. This was the first time that I am aware of that the Applicant had raised an objection to my first affidavit. 14. As a consequence of receiving these objections, and following observations made at the site inspection as part of the Proceedings on 20 March 2019, a forensic decision was made to prepare and seek to rely on an affidavit from Mr Roussakis, notwithstanding that this would expose him to cross examination and lengthen any hearing. This decision was not taken lightly and involved several meetings with Mr Roussakis to ensure he understood the potential rigours of cross examination and to ensure he could control his emotions during that process. A copy of Mr Roussakis' affidavit of 21 March 2019 (the Rousakis Affidavit) is annexed hereto and marked "D".
However, in email correspondence exchanged between the solicitors on 21 March 2019, the only reason proffered for the delay by the respondents was that comments were made about the fact that the first Walker affidavit was on information and belief during a site visit on 20 March 2019 of the premises from which the business is operating.
No explanation whatsoever is given for the delay between 15 March 2019 (that is, after the receipt of the Council's objections) and 20 March 2019.

Applicable Legal Principles in Granting Leave

Sections 56 (the overriding purpose), 57, 58 (the dictates of justice), 60 and 61 of the Civil Procedure Act 2005 ("the CPA") relevantly provide as follows: 56 Overriding purpose (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. (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. 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. 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (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. … 60 Proportionality of costs 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. 61 Directions as to practice and procedure generally (1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings. (2) In particular, the court may, by order, do any one or more of the following: (a) it may direct any party to proceedings to take specified steps in relation to the proceedings, (b) it may direct the parties to proceedings as to the time within which specified steps in the proceedings must be completed, (c) it may give such other directions with respect to the conduct of proceedings as it considers appropriate. (3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following: (a) it may dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim, (b) it may strike out or limit any claim made by a plaintiff, (c) it may strike out any defence filed by a defendant, and give judgment accordingly, (d) it may strike out or amend any document filed by the party, either in whole or in part, (e) it may strike out, disallow or reject any evidence that the party has adduced or seeks to adduce, (f) it may direct the party to pay the whole or part of the costs of another party, (g) it may make such other order or give such other direction as it considers appropriate. (4) Subsection (3) does not limit any other power the court may have to take action of the kind referred to in that subsection or to take any other action that the court is empowered to take in relation to a failure to comply with a direction given by the court.
In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 the High Court opined as follows (at [98] - [103], footnotes omitted): 98. 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. 99. 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. Such a view may largely explain the decision of this Court in Shannon v Lee Chun, 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. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh. 100. The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd, that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also now generally accepted. In Bomanite Pty Ltd v Slatex Corp Aust French J said of Bowen LJ's statements in Cropper v Smith: "... That may well have been so at one time, but it is no longer true today ... Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary." 101. In Ketteman Lord Griffiths recognised, as did the plurality in J L Holdings, that personal litigants are likely to feel the strain more than business corporations or commercial persons. So much may be accepted. But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings. 102. The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment. 103. The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.
The Court said further (at [113] - [114], footnotes omitted): 113. In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings. 114. Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.
In Royal Motor Yacht Club (Broken Bay) Pty Ltd v Northern Beaches Council (No 2) [2016] NSWLEC 110, the Court referred to Aon and the decision in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303 in summarising the principles to be applied (at [23], albeit in the context of an application to vacate). Relevantly: 23. In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303, the High Court, after discussing Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and setting out ss 56-59 of the CPA emphasised the duty of parties and their lawyers to assist courts in furthering the overriding purpose contained in s 56 of the CPA. The plurality stated (at [51]-[57], especially at [56], emphasis added): 51. In Aon Risk Services Australia Ltd v Australian National University, it was pointed out that case management is an accepted aspect of the system of civil justice administered by the courts in Australia. It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants. The decision in Aon Risk Services Australia Ltd v Australian National University was concerned with the Court Procedures Rules 2006 (ACT) as they applied to amendments to pleadings. However, the decision confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice. 52. Unsurprisingly, the case management rules with which the Court was concerned in Aon Risk Services Australia Ltd v Australian National University had essentially the same object as those stated in the CPA. The overriding purpose of the CPA and the rules of court provided for by the UCPR, as stated in s 56(1) of the CPA, is "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings." … 53 …Sub-section (2) of s 58 goes on to provide that for the purposes of determining what the dictates of justice are in a particular case, the court must have regard to the provisions of ss 56 and 57 and may have regard to a number of other matters, to the extent it considers them to be relevant. Amongst these matters is the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction made in the process of case management. … 56. The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose. 57. That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the CPA can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the CPA assume that its purpose, to a large extent, will coincide with the dictates of justice.
The parties referred to, and relied upon, both of these authorities in particular.

Arguments of the Respondents as to Why Leave Ought to be Granted

The contentions of the respondents in favour of a grant of leave may be succinctly put as follows: 1. first, the material in Mr Roussakis's affidavit was highly relevant to the issue of the discretion of the Court to grant the relief sought, assuming breach could be demonstrated as pleaded by the Council; 2. second, no real prejudice that could not be cured by costs would flow to the Council if leave were granted. The proceedings were required to be adjourned part heard, through no fault of either party, until much later in the year. This would give the Council ample opportunity to meet the affidavit and to prepare any cross-examination of Mr Roussakis. The respondents agreed to pay the costs of the application for leave, the costs thrown away by the grant of leave, the costs of preparing the cross-examination of Mr Roussakis, and 50% of the costs of the time in Court spent cross-examining Mr Roussakis. In Court Mr Clifford Ireland, acting for the respondents, had initially informed the Court that his clients would agree to pay those costs on an indemnity basis as was sought by the Council if the leave were to be granted. However, this concession was later withdrawn by email during the course of drafting these reasons; 3. third, an extensive interim regime of injunctive relief and orders were made by the Court (by consent) on 19 December 2018, which the respondents were complying with at a cost of approximately $20,000 - $25,000 a month to them. This was sufficient to protect the amenity of the residents; 4. fourth, many of the documents attached to the first Walker affidavit would have been admitted into evidence as business records, irrespective of the content of the affidavit, and the Court could have drawn inferences from those documents as to the number of employees and the revenue of the business; and 5. fifth, the Council had not been wholly compliant with Court orders. For example, it served its evidence book late and had served two affidavits late (Mr Patrick Wong, an officer of the Council, and Mr Almir De Barros Teixeira Junior, a regulatory officer appointed by the council).

Submissions of the Council

In response, a summary of the Council's submissions was to the effect that: 1. first, the reason given for the extraordinary delay (nearly three months) was wholly inadequate and lacked candour. The respondents had made a deliberate forensic decision not to call Mr Roussakis and ought to be bound by their decision. That experienced counsel and an experienced partner of a major commercial law firm could not have anticipated that objection would be made to the first Walker affidavit prior to being informed of this by the Council on 14 March 2019, was not credible. There has been no acceptance by the legal representatives acting for the respondents of their forensic miscalculation. Moreover, no explanation was given for the delay between 15 - 20 March 2019; 2. second, with the exception of the affidavits of Mr Wong and Mr Junior, the Council had complied with the timetable for filing its evidence. The documents in the evidence book largely constituted exhibits to the Council's affidavits that were filed and served on time. In any event, even if some of the Council's evidence had been filed late, this had no bearing whatsoever on the decision of the respondents to call Mr Roussakis; 3. third, any business records tendered by the respondents would not have assisted them because they could not, without more, have constituted evidence of the impact on the respondents' business if the relief sought by the Council was granted; 4. fourth, the respondents' business has continued to operate at the premises, not only generating revenue, but continuing to have an adverse amenity impact on the residents. There was evidence before the Court that after the interim orders were entered into by the respondents, an acoustic barrier was built on the premises without consent. Furthermore, there was an ongoing issue with noise; and 5. fifth, granting leave would be an inefficient use of the Court's valuable resources insofar as additional hearing time would be required to deal with Mr Roussakis's evidence.

Leave is Granted to Rely on the Affidavit of Mr Roussakis

Having regard to the relevant provisions of the CPA quoted above and applying the legal principles articulated in Aon and the other authorities referred to in this judgment, I am of the opinion that leave ought to be granted to the respondents to read the affidavit of Mr Roussakis. I have arrived, however, at this conclusion rely upon reluctantly.
I agree with the submission of the Council that the reason given by the respondents for the delay is wholly unsatisfactory. It beggars belief that the legal representatives (who are competent and experienced) for the respondents did not contemplate the objection ultimately raised to the first Walker affidavit.
Nevertheless, the inescapable fact is that this matter will be adjourned part-heard for a substantial period of time, which will enable the Council to meet Mr Roussakis's evidence. The adjournment is not due to the fault of any party (there has been non-compliance with the timetable to a minimal degree by both sides, which is to be expected in a hearing that was informally expedited by the Court).
Furthermore, in light of the costs concessions made by the respondents, the Council will not, as it properly accepted, suffer any real prejudice by the grant of leave.
However, it should be noted that had the matter not required adjournment, the Court would have had no hesitation in refusing the respondents leave to rely on the affidavit.
In my view, the residents will not be overly inconvenienced by the grant of leave given the extensive interim orders made by the Court on 19 December 2018.
Certainly, the undoubted forensic advantage held by the Council by the respondents' reliance on the first Walker affidavit will be lost, but this is not, as the Council stated, prejudice that is relevant to the Court's determination of this matter.

Respondents to Pay the Council's Costs Occasioned by the Grant of Leave

As stated above, the respondents resiled from an agreement to pay the Council's costs of the application and the costs thrown away by the granting of leave on an indemnity basis. The respondents submitted that an award of party-party costs was sufficient in all the circumstances. The respondents also did not consent to paying, as the Council sought, the entirety of the Council's costs occasioned by the grant of leave. Theirs was a more limited agreement.
In my view, the unsatisfactory nature of the explanation for the delay and its extraordinary length, warrant orders not only that the respondents pay the Council's costs thrown away together with its costs of the leave application, but also an order that the respondents pay all of the Council's costs occasioned by the grant of leave. In addition, and contrary to the assertion of the respondents, the circumstances of this application more than justify the making of all costs orders payable on an indemnity basis.

Orders

In conformity with the reasons given above, the orders of the Court are that: 1. the first and second respondents are granted leave to rely on the affidavit of Mr Emmanuel Roussakis sworn 21 March 2019; 2. the first and second respondents are to pay the applicant's costs thrown away by the grant of leave referred to in order 1, such costs to be paid on an indemnity basis; 3. the first and second respondents are to pay all of the applicant's costs occasioned by the grant of leave referred to in order 1, including the applicant's cost of the application, such costs to be paid on an indemnity basis; and 4. the exhibits are to be returned upon the publication of these reasons on CaseLaw.

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: 01 April 2019

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (9 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (5)