Torrac Nominees Pty Ltd v Karabay; UWS Macarthur Sports & Recreation Association Inc v Karabay

Wednesday 2 May 2007 TORRAC NOMINEES PTY LTD v KARABAY UWS MACARTHUR SPORTS & RECREATION ASSOCIATION INC v KARABAY Judgment 1 IPP JA: I agree with Young CJ in Eq. 2 YOUNG CJ in EQ: The Court is considering two applications for leave to appeal which have been heard on the basis that if leave is given, the appeal will also be considered concurrently. In proceedings 40223/06 the claimant is Torrac Nominees Pty Ltd. In proceedings 40242/06 the claimant is UWS Macarthur Sports & Recreation Association Incorporated. I will refer to the claimants as "Torrac" and "UWS". 3 Both claimants were sued by the opponent because the opponent suffered personal injury when he fell on a basketball court of which Torrac was the occupier during a pleasure trip which was organised and conducted by UWS. The plaintiff's injuries occurred on 21 July 1999. 4 On 26 June 2002, the opponent commenced proceedings in the NSW District Court against both Torrac and UWS. 5 On 17 September 2002, at a status conference, orders were made by consent for the preparation of the matter. The opponent failed to comply with these directions. On 16 January 2003, when the opponent was unrepresented, an order was made that he show cause why the matter should not be dismissed and the proceedings were stood over to 25 March 2003. 6 The plaintiff, who had qualifications as a commercial pilot, could not find acceptable employment in Australia and in September 2002 applied for positions in Turkey and he remained outside Australia until 5 September 2003. However, he had some telephone conversations, either directly, or through the medium of his sister, with his then solicitor during this period. 7 On 25 March 2003, the proceedings came before Boyd-Boland ADCJ. The solicitor informed his Honour that he had no instructions and had been unable to contact his client. The court of its own motion dismissed the matter pursuant to Part 18 rule 3 of the District Court Rules 1973 in force as at that time. 8 It was found by the learned Judge and is common ground, that Boyd-Boland ADCJ's order of 25 March 2003 was a preliminary dismissal order as defined in Part 18 rule 3 of the former District Court Rules. 9 Although the opponent says that he was in contact with his solicitor off and on from 2003 to 2005, nothing happened with respect to the District Court until 2005. The plaintiff was in and out of Australia during that period. He had contact from time to time with the solicitor who had filed the proceedings, but that solicitor indicated that he needed $4,000 to have the matter restored to the list, and that as the plaintiff had no funds, he could not meet this request. In April 2005, the plaintiff changed his solicitor. 10 On 21 October 2005, a notice of motion was filed in the District Court for orders extending the time for setting aside Boyd-Boland ADCJ's order, an application to set aside that order and for directions for the continuance of the case. 11 That motion came on for hearing before his Honour Judge Duck commencing on Tuesday, 14 March 2006. 12 His Honour delivered two judgments. In the first delivered on 22 March 2006, his Honour held that the court had jurisdiction to entertain the application to extend the time to apply to set aside Judge Boyd-Boland's decision. His Honour then heard further submissions and delivered his second judgment on 31 March 2006 in which he did set aside that order and reinstated the proceedings. 13 Both claimants seek leave to appeal from his Honour's judgments. Leave is needed because the judgments are interlocutory. 14 At the hearing before this Court on 12 March 2007, Mr G M Watson SC appeared for both claimants leading Mr M H Best for UWS and Ms M Holz for Torrac. Mr P R Stockley appeared for the opponent. 15 Mr Watson's principal submission is that on the true construction of the former District Court Act 1973 and Rules and the present Civil Procedure Act 2005 and Uniform Civil Procedure Rules 2005, his Honour had no power to extend the time for making an application to set aside Judge Boyd-Boland's order. 16 I will consider this point first, then if necessary, the points that the opponent has given notice that he would intend to raise by way of notice of contention, namely, that there were other heads of power which would justify Judge Duck's order. 17 The applications also raise the merits of Judge Duck's second judgment. However, that was a discretionary judgment and there are insufficient reasons in the materials presented to the Court to grant leave to appeal in respect of that aspect of the decision below. 18 Part 1 rule 7A of the now substantially repealed District Court Rules provided that the District Court may make a preliminary dismissal order dismissing proceedings without there being a trial on the merits or a formal application to dismiss the proceedings. The Court was empowered to make such an order of its own motion. 19 Subrules (3), (4), (5) and (6) then provided as follows: "(3) A preliminary dismissal order does not have effect: (a) if an application is not made under subrule (5) - until a period of 28 days has elapsed after the making of the order, or (b) if an application is made under subrule (5) - unless the Court confirms the order under subrule (6) or (7). (4) The Court may, at the time it makes a preliminary dismissal order or subsequently, make such other orders as it thinks fit to ensure that any party to the proceedings in respect of which the dismissal order is made is appropriately notified of the making or consequences of the order. (5) Any party to proceedings in respect of which a preliminary dismissal order is made may, within the period of 28 days after the making of the order, apply to the Court to set aside the order. (6) On any such application, the Court may set aside the preliminary dismissal order or confirm the order as it thinks fit." 20 The Civil Procedure Act (the 2005 Act), with certain exceptions, commenced on 15 August 2005. On the same day the District Court Rules were substantially repealed and procedure in the District Court commenced to be governed by the Uniform Civil Procedure Rules. There is no equivalent in the Uniform Civil Procedure Rules to Part 1 rule 7A of the former District Court Rules. Setting orders are now dealt with, generally, by Part 36.16. 21 Insofar as the 2005 Act dealt with matters of procedure it was retrospective and applied to pending proceedings. 22 No suitor has a vested right in matters of procedure: Maxwell v Murphy (1957) 96 CLR 261, 267 per Dixon CJ. No reliance has been placed on s 30 of the Interpretation Act 1987 which contains the general savings provisions which automatically apply on the repeal of a statute unless excluded (s 30(3)). There being no presumption against retrospectivity in the case of legislation dealing with matters of procedure those provisions could not be attracted in any event: R v Registrar of Titles; Ex parte John Wolbers Constructions Pty Ltd [1973] VR 723. 23 This means, subject to any relevant savings and transitional provision, that a source of the power to set aside the order of dismissal had to be found in the 2005 Act. The opponent acknowledged that there was no such power. 24 The question is whether a relevant source of power can be found in the savings and transitional provisions of the 2005 Act in Schedule 6. The only source relied on is clause 10(a) under the heading "General saving". This heading is part of the Act (Interpretation Act s 35(4)(a)). 25 Bennion "Statutory Interpretation" 4th ed 2002 p 618 states: "A saving is a provision the intention of which is to narrow the effect of the enactment to which it refers so as to preserve some existing legal rule or right from its operation" [emphasis supplied]. 26 Accordingly, if the opponent is to succeed it must be because he can take advantage of clause 10 of the Schedule. 27 There is a problem with the way in which clause 10 of Schedule 6 is printed in Ritchie's Uniform Civil Procedure. The pure text of the provision reads as follows: "10. Subject to this Schedule and the regulations: (a) anything begun before the commencement of this Act under a provision of the old legislation for which there is a corresponding provision in this Act or the uniform rules may be continued and completed under the old legislation as if this Act had not been enacted, and (b) subject to paragraph (a), anything done under a provision of the old legislation for which there is a corresponding provision in this Act or the uniform rules (including anything arising under paragraph (a)) is taken to have been done under the corresponding provision of this Act or the uniform rules, as the case requires." 28 The vital question on these applications is whether clause 10 is applicable and this involves consideration as to whether the word "begun" includes cases where litigation was not only begun but completed before 15 August 2005. 29 It will be observed that the District Court action was a 2002 action which (unless something happened) was actually dismissed in March 2003, and that the motion to reinstate it was not filed until after 15 August 2005, that is, after the substantial repeal of the District Court Act and Rules. 30 The learned judge approached the problem by noting that there were corresponding provisions in both the District Court Rules and the Civil Procedure Act and thus he considered that the clause applied. 31 His Honour said in para 75 of his first judgment: "It was submitted that this provision [ie clause 10 of Schedule 6] preserves Part 1 rule 7A and hence the power to set aside the preliminary dismissal order. The proceedings were begun under a provision of the District Court Act 1973 by statement of claim. There is a corresponding provision under the Uniform Civil Procedure Act 2005. Pursuant to the transitional provision set out above the proceedings may be continued and completed under the old legislation. Such continuation would include, it seems to me, an application pursuant to Part 1 rule 7A of the District Court Rules to reverse the reversible order dismissing the proceedings." 32 With respect to the learned judge, I do not consider the matter to be quite that simple. 33 As the question is whether clause 10 is applicable, it is convenient to turn to why the opponent submits it is so. 34 As I understand it, the opponent puts his argument in two different ways:

B. Sufficient rights were generated in respect of the action under the old Act that they are preserved notwithstanding its repeal. 35 As to A, the text of sub-clause (a) allows something "begun" to be "continued and completed". This shows that "anything begun" is limited to things that can be continued and completed. Something that has already been completed is thus not within the term "anything begun". 36 This accords with the ordinary semantic significance of "begun". A beginning is the commencement of something which goes forward until it meets its conclusion, though in some situations one can say "that is the beginning and the end of it". Although I have not found any situation where a judge has actually said that the word "begun" in a transitional provision means "begun but not completed", that is clearly its significance. 37 Thus, one must look to the status of the action as at 15 August 2005. The District Court file noted the action as having been completed. If that represented the correct legal position (a matter that I will examine under B(ii)) then the clause cannot apply unless, as occurred in Dib v Regtop [2006] NSWCA 380, a motion to set aside the dismissal had been filed before the repeal of the old Rules. 38 Submission A reflects the way Judge Duck approached the case, but with respect to his Honour, it seems to me that he overlooked the point that as the proceedings were completed, they did not come within the expression "anything begun". 39 B could be put on two different bases: (i) that there is some right arising out of the previous litigation; or (ii) that there was some scintilla of life left in the proceedings which survived the repeal of the old Rules. 40 As to the first, clause 10(a) would apply without any difficulty if an application under Part 3 rule 2 of the District Court Rules for an extension of the time limited in Part 1 rule 7A(3) for making an application to set aside a preliminary dismissal order was pending when the 2005 Act commenced on 15 August 2005. 41 That was the situation in Dib v Regtop [2006] NSWCA 380 where this Court held that clause 10(a) enabled the application in question to be continued as if the 2005 Act had not been enacted. However, the fact that that motion was filed before the repeal was a vital fact in that decision. As Lord Herschell LC said in Abbott v Minister for Lands [1895] AC 425, 431: "… the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a 'right accrued' … ." 42 The importance of acts done under enabling legislation prior to its repeal in creating rights which are preserved by savings provisions is illustrated by Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541, 552; Esber v Commonwealth (1992) 174 CLR 430, 440; Gerrard v Mayne Nickless Ltd (1996) 135 ALR 494, 512-3; Dossett v TKJ Nominees Pty Ltd (2003) 218 CLR 1, 14, para [45]; Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291, 298. 43 An individual substantive right which came into existence before the repeal of the statute which created it will be saved by the Interpretation Act provisions even if nothing had been done to enforce or claim that right before the repeal: Re Brandon's Patent (1884) 9 App Cas 589; Convex Ltd's Patent [1980] RPC 423 (CA); Carr v Finance Corporation of Australia Ltd (No 2) (1982) 150 CLR 139; Chief Adjudication Officer v Maguire [1999] 1 WLR 1778, 1788, 1790 (CA); Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291, 297-8. 44 There is no relevant substantive right in this case. The opponent's only so-called "rights" were procedural, the right to apply for an extension of the time fixed by Part 1 rule 7A(3) of the District Court Rules and, as Duck DCJ found, the "right" to continue the proceedings begun by the filing of the statement of claim on 26 June 2002. The first so-called right was not exercised before 15 August 2005. In that respect nothing was "begun" which could be "continued and completed". 45 The question as to whether the action had a scintilla of life in it notwithstanding the fact that the record was endorsed that it had been completed must be considered after analysing what a preliminary dismissal order under the old District Court Rules entailed. 46 I believe it is instructive to consider two lines of authority, the first dealing with dismissal for want of prosecution generally and the second with dismissal in the District Court otherwise than on the merits. 47 It must be remembered that the traditional dismissal for want of prosecution as well as deemed dismissal, unless it is set aside, merely terminates the action. As s 91 of the Civil Procedure Act makes abundantly clear, if it were not already clear, such dismissal does not of itself prevent a further action being brought unless some statute of limitations produces a contrary result. 48 An order for dismissal for want of prosecution made on the application of the opposing party is an interlocutory order and like most interlocutory orders, it may be set aside by a subsequent order. 49 However, one must be careful when classifying an order as interlocutory because, as is pointed out in Ritchie's Uniform Civil Procedure [36.16.35], an order may be classified as interlocutory for the purpose of appeal, but may have the practical effect of determining the parties' rights in which case they may not be capable of variation, but can only be dealt with on appeal. 50 In Wilkshire v Commonwealth (1976) 9 ALR 325, 330, Muirhead J said that there is inherent power in every court to regulate and govern its own practices and procedures and that normally involves jurisdiction to vary any interlocutory order; see also Mullins v Howell (1879) 11 Ch D 763, 766 and Douglas v John Fairfax & Sons Ltd [1983] 3 NSWLR 126, 134. 51 If an order is made dismissing proceedings for want of prosecution, including an order defeasible on performance of a condition, once the order is entered (assuming the period for defeasance has expired) the order will be irreversible; see eg Exell v Exell [1984] VR 1. 52 The Court's inherent jurisdiction does not enable it to reinstate proceedings that have been dismissed once the order disposing of them has been perfected: Bailey v Marinoff (1971) 125 CLR 529. It is thus of no purpose to consider special situations such as those considered in Taylor v Taylor (1979) 143 CLR 1. 53 When one looks at the cases describing the status of an action after an order has been made dismissing it for want of prosecution, one sees a variety of descriptions. 54 In Freeman v Rabinov [1981] VR 539, 543, the Victorian Full Court held that once such an order has been made, even if there is an outstanding issue of damages on a cross claim, the jurisdiction of the court is exhausted. In Whistler v Hancock (1878) 3 QBD 83, 84, Cockburn CJ said that "the action was at an end". In Wallis v Hepburn noted on the same page, the court described the action as being "dead", and this description appears in other cases as well. 55 Roskill LJ in Samuels v Linzi Dresses Ltd [1981] QB 115, digests the cases following Whistler's case and overrules it for England. 56 In Regina v Bloomsbury and Marylebone County Court; Ex parte Villerwest Ltd [1976] 1 WLR 362, Lord Denning MR said at 366: "Even though the action may be said to cease to exist, the courts have always power to bring it to life again … ". 57 In Samuels v Linzi, Lawton LJ said at 127: "The concept of the action being dead is one which does not fit in, as Roskill LJ has pointed out, with the modern approach to striking out for want of prosecution. Further, the illogicality of the purported application of this concept to this case is shown by the order which is under consideration in this appeal because on the face of that order it is clear that the litigation is not dead; it is very much alive." 58 His Lordship then pointed out that because the defence and counter claim were struck out, the plaintiff had liberty to sign judgment for damages to be assessed and his Lordship continued: "The litigation was to go on. A distinction between striking out a defence and striking out a counterclaim lacks reality." 59 In Bailey v Marinoff supra, Gibbs J dissented in the result. However, what he said on the present point is valuable. His Honour said at p 544-545: " … to say that the appeal is dead, or at an end, seems to me, with all respect, to be beside the point, which is whether the inherent jurisdiction of the court permits it to vary the condition of an order dismissing an appeal after the condition has taken effect, and to say without more that because an appeal is at an end therefore no further order can be made is to beg the question." 60 In FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268, Gaudron J said at 289: "Although it has been common to speak of a conditional order for dismissal as self-executing or of a proceeding upon which such an order has operated as 'dead', that seems to me to obscure the fact that a conditional order, of its nature, necessitates the exercise of the further judicial function of determining that the condition was not satisfied at the specified time. Where such an issue remains to be determined in relation to a proceeding it cannot be said that the court is functus officio." 61 I now turn to consider various decisions of this Court in which judges have made comments as to the situation of an action after a preliminary dismissal order has been made under various versions of the former District Court Rules. 62 In Harding v Bourke (2000) 48 NSWLR 598, this Court had to deal with an earlier District Court Rule dealing with deemed dismissal if there was inaction in proceedings. Mason P, with whom Meagher and Heydon JJA agreed, said at pp 601-2 [16] that the rule "does not purport to affect the substantive rights of litigants in the District Court. At its highest, it regulates the pursuit of those rights by the dismissed action in that court. That is because dismissal is without prejudice to any right to commence fresh proceedings seeking the same, or substantially the same, relief … ". 63 The word "reinstate" tends to be used in authorities which have considered applications to extend the time and grant relief against preliminary dismissal orders under the final version of the District Court Rules; see eg Andresakis v Alexus Holdings Pty Ltd [2006] NSWCA 294 per McColl JA with whom Giles and Hodgson JJA agreed, at [34], [48], [55], [67] and Erhard v Bhatia [2002] NSWCA 388 [70] per Heydon JA. 64 Counsel cited two previous unreported decisions of this Court in applications for leave to appeal from decisions of District Court judges, namely Wilson v Kochate Pty Ltd [2003] NSWCA 25 and Zhao v Posa [2004] NSWCA 184. Apart from the fact that in the former case Ipp JA used the word "reinstatement" and in the second Giles JA spoke about a reversible or irreversible dismissal, I found no assistance from either of those cases. 65 I cannot really say that this review has thrown much light on the situation. The reason why it was undertaken is that it seemed to me that if there was a scintilla of life left in the action it might be said that it had been begun but not completed. 66 However, the review indicates that, whilst some of the authorities recognise that a dead action may be reinstated, until some action is taken to do so, the action is "dead" ie completed. It is thus not an action that comes within the words "anything begun". 67 Accordingly, his Honour Judge Duck had no power to make the order he made. 68 As I noted earlier, this is a concurrent hearing for an application for leave to appeal, and if that is granted, the hearing of the appeal. The question raised as to the power of the District Court to make the reinstatement order is one which is suitable for leave to appeal, especially as it seems clear that if leave to appeal is granted, the appeal should be allowed. Leave is only granted on the point about power. I would not have considered this an appropriate case to grant leave to appeal on the discretionary aspect of Judge Duck's decision. 69 Accordingly, the order should be that the claimants within 7 days file a formal notice of appeal and that subject to that, the appeal be allowed with costs with the usual provision for a certificate under the Suitors Fund Act 1951. 70 I must now turn to the proposed notice of contention which contains two paragraphs as follows:

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Cases Cited (16)

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