Thiele v Radford

Supreme Court of NSW|2008-10-23|Before: White J

CITATION : Thiele v Radford [2008] NSWSC 1162

DECISION : See paras 37 and 39-42 of judgment.

CATCHWORDS : PRACTICE AND PROCEDURE - summary dismissal - de facto relationship property adjustment claim - multiple failures to comply with directions regarding service of affidavits - plaintiff suffers from depression and is the full-time carer for her infirm mother - plaintiff lives rent-free in a property jointly owned with defendant - defendant accepts that plaintiff would be entitled to some relief sought in the proceedings - serious risk that dismissal of proceedings would preclude later proceedings for relief under the Property (Relationships) Act 1984 (NSW) - dismissal refused but self-executing order made for dismissal in the event of a future failure to comply with directions

LEGISLATION CITED : Civil Procedure Act 2005 (NSW) Property (Relationships) Act 1984 (NSW)

Chandra v Perpetual Trustee Victoria Ltd [2006] NSWSC 1046 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 CASES CITED : Phornpisutikul v Mileto [2006] NSWSC 57 Cohen v McWilliam (1995) 38 NSWLR 476 Hartigan v International Krishna Consciousness Inc [1999] NSWSC 57

TEXTS CITED : Second Reading Speech for the Civil Procedure Bill

Trudy Lee-Anne Thiele PARTIES : v Andrew Joseph Radford

COUNSEL : Plaintiff: B Richards Defendant: D Williams

SOLICITORS : Plaintiff: Colin Daley Quinn Defendant: Southwell-Keely Law

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4877/07 Trudy Lee-Anne Thiele v Andrew Joseph Radford JUDGMENT 1 HIS HONOUR: This is an application for orders that the statement of claim and defence to cross claim be summarily dismissed. The defendant, who brings the application, also seeks an order that his cross-claim be dismissed. Counsel for the defendant says that the application is brought pursuant to r 12.7 of the Uniform Civil Procedure Rules. It relevantly provides that: " If a plaintiff does not prosecute the proceedings with due despatch, the court may order that the proceedings be dismissed or make such other order as the court thinks fit. " 2 Also relevant is s 61(3) of the Civil Procedure Act 2005 (NSW) which provides that if a party to whom a direction has been given for the taking of specified steps in relation to proceedings fails to comply with the direction the court may, inter alia, dismiss the proceedings. 3 The ground on which the application is made is that the plaintiff is in substantial default in complying with orders for the service of her affidavits. The proceedings concern claims by both parties for orders under s 20(1) of the Property (Relationships) Act 1984 (NSW). It is admitted on the pleadings that the parties were in a de facto relationship from 25 December 1990 to 12 October 2005. The plaintiff's claim was filed on 5 October 2007, that is, shortly before the expiry of the two-year time limit for making applications under the Act prescribed by s 18(1).

4 There have been about five directions hearings before a Registrar. On 10 December 2007, orders were made for the defendant to file and serve his defence and any cross-claim by 22 January 2008. The defendant filed those pleadings on 20 February 2008. Also on 10 September 2007, orders were made for the plaintiff to serve affidavit evidence by 26 February 2008 and for the defendant to serve his affidavit evidence by 18 March 2008. The proceedings were stood over to 25 March 2008. 5 On 29 February 2008, orders were made by consent for service of a defence to cross-claim. The Court noted that the parties agreed to the appointment of a private mediator. The matter was relisted by consent for directions on 15 May 2008. Presumably that was done because the parties and the Registrar expected that the matter would go to mediation. I was informed no such mediation took place. 6 On 15 May 2008, the proceedings were stood over to 12 June. On 12 June, orders were made by consent that the plaintiff serve her affidavits by 3 July 2008, and the defendant serve his affidavits by 24 July 2008, with the plaintiff to serve any affidavit in reply by 7 August. The matter was to be relisted for further directions on 21 August. These orders were not complied with. 7 On 18 July, the solicitors for the plaintiff, Colin, Davey and Quinn, wrote to the defendant's solicitors saying that "to assist with the completion of the plaintiff's evidence" they requested the production of certain documents from the defendant. The time for service of the plaintiff's evidence had already passed by this time. The documents sought appear primarily to relate to the defendant's position, and it was not submitted for the plaintiff that the documents sought by her solicitors were needed for her to complete her evidence. There was no indication by Colin, Davey and Quinn in the letter of 18 July 2008 that the plaintiff suffered any disability which precluded her preparing her evidence. 8 The defendant's solicitors replied on 12 August 2008 pointing out that the plaintiff was in default. On that day they served the defendant's affidavit and foreshadowed that unless the orders of 12 June 2008 were complied with, they would apply for the summary dismissal of the proceedings. They did not produce any of the documents sought by Colin, Davey and Quinn in the letter of 18 July 2008, but said that much of the material sought which was relevant to the proceedings was covered by the defendant's affidavit. 9 On 21 August 2008, the Registrar ordered that the plaintiff file and serve her affidavits by 26 September 2008, and stood the proceedings over until today, with provision for any notice of motion for summary dismissal to be returnable today. Even as of today, no affidavit in support of the plaintiff's claims in the proceedings has been served. 10 The plaintiff's explanation advanced in her affidavit of 15 October is that since 31 July this year she has been the sole carer for her mother who has undergone a total knee replacement. She deposed that "in the recent months the time required by me to give my mother has escalated because of a number of [medical] conditions she suffers". She said that she anticipated she will be required to continue to provide a high level of care for her mother until at least 31 October and possibly beyond. She annexed a medical certificate from a Dr Drummond saying that she was "unfit for duty" owing to being the carer for her mother and would so continue until 31 October. 11 This is an inadequate explanation, to put it at its lowest, for the plaintiff's default. Quite apart from the fact that the period of time for which the plaintiff has been her mother's sole carer commenced well after the time for her to have served her affidavits, no reason was advanced in this affidavit as to why her solicitors could not attend on her to assist in the preparation of her affidavit, even if the attendances on her mother precluded her travelling to the solicitors' offices. 12 The second explanation is that the plaintiff has suffered depression for a number of years, and I would infer from the medical reports that her depression is aggravated by feelings of stress when required to concentrate on preparation of these proceedings. She was treated by a Dr Lloyd and Dr Ganesan in 2006 for depression. Dr Lloyd reported that she suffers from long-term depression relating to a "multitude of family issues". Dr Ganesan, who is a general practitioner, reported that her depression is due to family conflicts and what she claims to be abuse and emotional torture by her partner. Dr Basta, who was also a general practitioner, reports having treated her for depression for the first time on 22 August 2007 and having been consulted in October and November 2007, and in March, May and September 2008 to renew the prescriptions for a drug which had been prescribed for that condition. He said that: " My impression is that [the plaintiff's] mood has been generally stable on [prescribed] tablets since she first consulted me on the 22.08.07 but on the 20.09.08 she presented with stress and aggravation of her depression which are likely to affect her concentration on fulfilling her requirements with the court. " 13 Her condition has not precluded her from standing for election in the local government elections held in September this year. I infer from that fact that she considered that if she were elected, she would be quite capable of fulfilling the obligations of a local councillor. 14 The plaintiff has been able to prepare affidavits for the purposes of today's hearing and has attended in court today to give evidence. 15 I would expect that the plaintiff should have been asked to prepare a proof of evidence before proceedings were commenced. I do not know whether that step was taken or not. Even if it were not, the plaintiff's affidavits have been due since February this year. The evidence in the medical reports does not specifically state that the plaintiff has been incapacitated from complying with her obligation to serve affidavits under the Court's orders. I do not regard the evidence of her medical condition as excusing the long and continued defaults. However, that is not the only question. 16 Counsel for the plaintiff pointed to prejudice to her if these proceedings were summarily dismissed. The submissions of counsel for the plaintiff assumed that dismissal of these proceedings summarily would effectively preclude institution of later proceedings for relief under the Property (Relationships) Act. That may not necessarily be so (see s 18(2)), but there is certainly a serious risk that that would be the position. Counsel for the defendant did not contend otherwise. 17 The particular prejudice to which counsel for the plaintiff pointed is that, on the present pleadings, it appears that the defendant concedes that the plaintiff is entitled to some relief under s 20 of the Property (Relationships) Act, which would be more advantageous to her than if no orders were made under the Act and she were entitled only to her share of jointly-owned property. That would be so a fortiori if she remains liable for loans secured by mortgages under which she is a joint borrower, although the property secured by the mortgages is in the name of the defendant alone. Hence, the plaintiff's counsel submitted that it is clear that the plaintiff's claim under the Act has substance, and there would be substantial prejudice to her if she were not permitted to have it heard on its merits. 18 The plaintiff seeks much wider relief under the Act than that which the defendant apparently conceded in his cross-claim filed earlier this year. 19 Secondly, it was submitted for the plaintiff that there is no prejudice to the defendant from the plaintiff having further time in which to comply with the orders for the service of her evidence which could not be compensated for by an order for costs. 20 It is common ground that the plaintiff is in occupation of a jointly-owned property, being the most valuable of the properties in question. Her mother also lives in that property. It is common ground that the plaintiff does not pay a rent or occupation fee to the defendant in respect of the occupation. But as counsel for the plaintiff points out, to the extent that that situation involves a benefit for the plaintiff at the defendant's cost, it is a matter which will be taken into account in due course when orders are considered under s 20. 21 The defendant also said that he suffered prejudice because he alone has been meeting payments due under the mortgages over three properties; two in New South Wales and one in South Australia. Only the property in which the plaintiff is presently living is jointly owned. Again, in so far as those properties are brought into consideration in the making of orders under s 20, the payments which the defendant is making under the mortgages will also be taken into account. If the relevant hardship to the defendant is in not disposing of the properties, and hence being required to keep up the payments on the mortgage, the short answer is that there is no order preventing his selling the properties, and the present position would not be changed by summary dismissal of these proceedings. 22 Therefore there is considerable force in the submissions of counsel for the plaintiff, that the plaintiff would suffer substantial prejudice if the proceedings were summarily dismissed, and that prejudice to the defendant could be adequately compensated for by an order for costs. However, that does not take into account the prejudice to the defendant of delay in the resolution of the proceedings. The very fact of proceedings being pending is a significant burden on any litigant, particularly an individual litigant, and is a matter to be taken into account in exercising the discretion for summary dismissal. 23 It was submitted for the defendant that I should find that the plaintiff was deliberately delaying these proceedings in order to extend the period for which she could live in the jointly-owned property with her mother, rent-free. If I were satisfied of that, then that would be a very powerful reason for acceding to the present application. However, although the plaintiff was cross-examined on this application, it was not put to her that she was motivated by that consideration in not serving her evidence, and I do not make such a finding. 24 Section 56 of the Civil Procedure Act provides that: "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. (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. " 25 Section 57 provides that: " 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). "

26 Section 58 requires that: "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. " 27 In the Second Reading Speech for the Civil Procedure Bill, the Attorney General, Mr Debus, said that: " It is important to note that the dictates of justice will not be limited to the dictates of justice only as between the parties, which has been argued to be the effect of the majority judgment in one of the leading cases on case management - State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146. " 28 Counsel for the plaintiff relied on the following paragraph in Chandra v Perpetual Trustee Victoria Ltd [2006] NSWSC 1046 (at [28]) per Brereton J: " [28] The ultimate aim of a court is the attainment of justice, and that aim is not surpassed by any principle of case management or efficiency in the procedures of the court. In particular, the achievement of efficiency in procedures, while a relevant consideration, is generally of less weight than the injustice of precluding the determination on the merits of a genuine issue between the parties [ Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146]. The Civil Procedure Act does not alter this. It continues to give primacy to the dictates of justice. The dictates of justice are determined by weighing the injustice of denying a party a hearing on the merits against the injustice of requiring the other to tolerate the first's procedural defaults. But while in evaluating what are the dictates of justice it is relevant to take into account such procedural defaults, it will only be in exceptional cases that the injustice they occasion to the other party is such as to justify the injustice of denying a hearing on the merits. "

29 With respect, I do not agree that State of Queensland v J L Holdings Pty Ltd dictates that, in making orders for the conduct of proceedings under the Civil Procedure Act, primacy is to be given to the issue of justice in the sense of not precluding the determination on the merits of a genuine issue between the parties. 30 In Dennis v Australian Broadcasting Corporation [2008] NSWCA 37, Spigelman CJ said (at [28] and [29]): " 28 The respondent invoked the authority of Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 in support of its ability to amend, even for the fifth time. Case management practices in all Australian courts have changed significantly in the decade since that judgment. Although it remains binding authority with respect to the applicable common law principles, the circumstances of the case were significantly different from those in the present case and do not dictate its outcome. In any event, such principles can be, and have been, modified by statute both directly and via the statutory authority for Rules of Court. 29 In this State J L Holdings must now be understood as operating subject to the statutory duty imposed upon the courts by s 56(2) of the Civil Procedure Act 2005, which requires the Court in mandatory terms - 'must seek' - to give effect to the overriding purpose - to facilitate the just, quick and cheap resolution of the real issues in the proceedings' - when exercising any power under the Act or Rules. ... " 31 I prefer the views of Campbell J (as his Honour then was) in Phornpisutikul v Mileto [2006] NSWSC 57 at [9] and [10], which were quoted in Chandra v Perpetual Trustee Victoria Ltd. Campbell J said: " [9] The substantive provisions of the Civil Procedure Act 2005 commenced on 15 August of 2005. That Act alters in significant ways the power of the Court to give directions concerning the conduct of proceedings, and in broad terms expects the Court to take a firmer hand in the preparation of matters than had previously been the case. Section 56 requires the overriding purpose of any decision made under the Act to be the just, quick and cheap resolution of the real issues in the proceedings. As well, though, s 57 allows the Court to have regard to not only the just determination of proceedings but also the efficient disposal of the business of the Court, the efficient use of judicial and administrative resources, timely disposal of the proceedings and all other proceedings in the Court at a cost affordable by the parties. Section 61(1) and (2) confers on the Court a wide power to give pre trial directions. Section 61(3) specifically provides that if a party to whom a direction has been given fails to comply with the direction the Court may, amongst other things, dismiss the proceedings. I would accept that the powers under s 61 should be exercised bearing in mind the principle that (to adopt the words used by s 62(4) in relation to directions as to the conduct of a hearing) each party is entitled to a fair hearing and must be given a reasonable opportunity to lead evidence, make submissions, present a case and, at a trial, to cross-examine witnesses. However, a reasonable opportunity does not mean multiple repeated opportunities. Litigants and the profession should not expect that failure to comply with pre trial directions will be accepted lightly by the Court.

[10] There is some reluctance on the Court to dismiss a case when there has not been a hearing on merits. However, if a party, by repeated failures to comply with directions, demonstrates that she is not prepared to play her role in the expeditious advancing of the proceedings, it is that party's own conduct which has prevented a hearing taking place. The power to dismiss proceedings for failure to comply with directions is one which will be used in appropriate cases. " 32 In Chandra, Brereton J said (at [25]) that the proposition that a reasonable opportunity to present a case did not mean multiple repeated opportunities was redolent of the reasoning of Cole JA in Cohen v McWilliam (1995) 38 NSWLR 476 (at 503). Brereton J pointed out that Cole JA was there in the minority. However, the Civil Procedure Act makes different provision from the rules and common law considered in Cohen v McWilliam. In Hartigan v International Krishna Consciousness Inc [1999] NSWSC 57, Bryson J (as his Honour then was) said at [9] and [l2] that Cohen v McWilliam provides no guidance on applications for the dismissal of proceedings for want of prosecution. It does not appear that Brereton J was referred to Hartigan v International Krishna Consciousness Inc. 33 In my view, the observations of Campbell J in Phornpisutikul v Mileto are not to be qualified by Cohen v McWilliam. In Hartigan v International Krishna Consciousness Inc, Bryson J eloquently described the importance, in the public interest, of the Court's authority being maintained to require litigants to comply with its orders. His Honour said of the notion of court efficiency the following (at [11]): " ... 'Court efficiency' is a terse mnemonic indeed for the public and private interests involved in conducting Court business according to a known and predictable course, on which expensive preparations can reasonably be based, and with due use of publicly-owned resources, paid for by taxation levied under stern laws and for the most part out of the proceeds of personal exertion of persons who make no use of the Court. A lengthy exposition could be made of what is involved in Court efficiency, with an examination of the adverse impact on the private interests of other litigants in the instant proceedings, of other litigants who are claiming the Court's attention, and in the public interest in maintaining the Court's authority by observance of arrangements with which the Court has directed litigants to comply. There is a public interest in the Court's requiring litigants to respect the due exercise of its compulsory powers over litigants, and in itself acting in the same way, and in maintenance of faith with persons who have expended time and energy to conform with the Court's directions. It is injurious to the respect which the Court and others should maintain for the Court's authority if arrangements made with care are set aside for the benefit of persons who have not complied with the rules of Court. " 34 This case involves balancing the interests of the plaintiff of having her claim, which appears to have at least some substance, tried on its merits, against the interests of the defendant and the public interest in ensuring that the court's orders for the conduct of the litigation are complied with and appropriate sanctions are applied in the event of non compliance. 35 In my view, it cannot be said that it would be unjust to the plaintiff for her proceeding and the cross-claim to be summarily dismissed. Whilst that would occasion hardship, there would be no injustice because she has had multiple opportunities to serve her evidence. Nonetheless, the hardship is a matter to be weighed. Whilst I do not accept that it is only in an exceptional case that a party will be denied a hearing on the merits because of procedural defaults, there is some explanation in this case, albeit not adequate, for the defaults. More significantly, I think that the need to maintain the authority of the Court can be met by a self-executing order for the dismissal of the proceedings in the event that the plaintiff fails to comply with the last extension she will be offered for the service of her evidence. Moreover, the defendant's position will be assuaged by appropriate costs orders. That still leaves the defendant facing further delays in the proceedings being concluded, but in the circumstances I am not prepared to dismiss the proceedings forthwith. 36 The plaintiff says in her affidavit, sworn as recently as yesterday, that, notwithstanding her medical condition, she is confident that she will be able to complete and serve her affidavit material by no later than 1 December 2008. I think her affidavit ought to be filed as well as served, so that there will be a public record of the time at which the affidavit is filed. The self-executing order will operate if her affidavit is not filed and served by the time I specify. 37 I extend the time for the plaintiff to file and serve any affidavits upon which she proposes to rely to 1 December 2008. If the plaintiff fails to comply with this order then, subject to any further order that may be made prior to 1 December 2008, I order that the statement of claim and cross-claim be dismissed. 38 It is not usual for a cross claim to be dismissed for want of prosecution by the plaintiff of the plaintiff's claim but I make that order because that was the form of the order which the defendant sought. The defendant acknowledged that if the plaintiff's claim were dismissed, his cross-claim should be dismissed also. 39 The defendant is entitled to his costs of the present application. The Registrar made an order for the payment of costs of the attendance of 21 August 2008. I order that the plaintiff pay the costs of the defendant's notice of motion of 10 October 2008. In the light of the delays occasioned by the plaintiff's default, it is appropriate also to order, pursuant to r 42.7, that the costs the subject of the order of the Registrar of 21 August 2008 and the costs of this application may be assessed forthwith and are to be payable forthwith after agreement or assessment.

[Counsel addressed on costs.] 40 I refuse the application for indemnity costs. I also order that if, pursuant to the preceding order, proceedings are dismissed, that the plaintiff pay the defendant's costs of the proceedings. 41 I stand over the proceedings to Thursday 4 December before the Registrar. WILLIAMS: If the proceedings are dismissed then we wish to reserve our position to argue the question of indemnity costs, because there have been certain offers made; but I won't say more than that there have been the usual offers made that would normally found such an application.

42 HIS HONOUR: Yes, I think that's reasonable. If the proceedings are summarily dismissed pursuant to the preceding orders, I also give liberty to any party to apply in relation to any special costs order.

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