William Crosby & Co Pty Ltd v The Commonwealth

High Court of Australia|1963-07-01|Before: Windeyer J, Owen JJ

High Court of Australia Windeyer J. Dixon C.J. McTiernan, Kitto, Taylor and Owen JJ. William Crosby & Co Pty Ltd v The Commonwealth [1963] HCA 6

ORDER Appeal allowed with costs. Order appealed from discharged. In lieu thereof order (a) that summons seeking leave to take a fresh step in the action be dismissed with costs (b) certify that the matter was one proper for the attendance of counsel at chambers. Order that summons to dismiss the action for want of prosecution be dismissed, no order as to the costs of this summons. Windeyer J. delivered the following judgment: -

I follow the reasons that the defendant urges against my making an order on this summons. But my view of O. 60 r. 12 (2) is not that it is designed to stop actions, or to destroy rights of action, or to add a rider to the Statute of Limitations. It appears to me that it is intended rather to enable the Court, when it is desired by a party to awake an action that has been dormant, to insist that the action be brought on and disposed of and not remain in a state of inaction. To this end, the rule, I think, enables the Court to take control of the proceedings by fixing anew the times within which steps which have not been taken are to be taken. It may be that in some cases it may be sufficient to say that a fresh step may be taken, leaving it to the Rules to fix times thereafter. I am inclined to think, however, that the rule does enable the Court to take control of proceedings which the parties have not been pressing on. According to our system of pleading, the adversary is left to police the times prescribed for steps in procedure. I do not think that is always satisfactory and it may be sometimes necessary for the Court to fix times to meet the circumstances existing. A party has a right to apply to have an action dismissed for want of prosecution, or he may take other steps to have the matter brought on and disposed of. He does not, I think, gain any immunities or rights by mere delay or inaction.

I appreciate that in this case the defendant, and perhaps the plaintiffs, may find themselves in difficulties by reason of the lapse of time. However, we constantly find nowadays that delay has led to destruction of evidence or inability to obtain evidence, but I do not think that these are, of themselves, matters which afford any ground for, as it were, destroying the right of action by refusing to give the necessary order to allow the plaintiffs to proceed.

For these reasons I give leave to take a fresh step in the action. But I propose to fix some times. The notice to admit facts and the notice to admit documents, which the plaintiffs propose to serve, must be served not later than Friday 22nd March. Those notices to admit facts and documents must allow one month for the admissions to be made or refused or such further time as a Justice may allow. On the expiration of that time the plaintiffs must proceed with reasonable expedition. If the notices are not delivered on or by Friday 22nd March the action will become automatically dismissed with costs for want of prosecution.

I make this order without prejudice to the right of the defendant to move during the forthcoming sittings at Sydney to dismiss the suit for want of prosecution. And any appeal from this decision should, if it be possible, be brought on during that sittings.

Costs of this application to be paid by the plaintiffs. Certify for counsel, including senior counsel.

This appeal turns on the Rule of this Court relating to the consequences of delay in prosecuting legal proceedings commenced in due time. The rule now stands as O. 60, r. 12, and the relevant part is found in sub-rr. (2) and (3). In its existing form it is as follows: "12. (2) When six years have elapsed from the time when the last step in a proceeding was taken, a fresh step shall not be taken without an order of the Court or a Justice, which may be made either ex parte or upon notice. (3) For the purposes of this rule - (a) a summons on which an order has not been made shall not be deemed a step taken; and (b) notice of trial, although avoided by non-entry or countermanded, shall be deemed a step taken." It will be noticed that the period of six years is the same as that provided by s. 3 of the Limitation Act 1623, 21 James I, c. 16. This means that if six years have elapsed since the last step has been taken in an action in the High Court on a simple contract debt a new writ cannot be issued on the cause. Not only is that action for ever stayed, unless the Court or judge makes an order to the contrary, but the plaintiff's cause of action is for ever barred in every court to which the six year period applies because it will be statute barred; that is, of course, unless there has been part payment, or an acknowledgement or some other revival of the cause of action in the meantime. Sub-rule (1) of r. 12 deals with failure to take a step in proceedings within one year and does no more than require a month's notice before taking a fresh step. The rule is made in pursuance of the power conferred by s. 86 of the Judiciary Act 1903-1960 Cth upon Justices of the High Court to make rules for the purpose of carrying into effect the provisions of the Judiciary Act relating to the practice and procedure of the High Court and under that head certain matters more particularly mentioned. If it had not been for one consideration I should have doubted the validity of sub-r. (2) because its effect if not its purpose is to bar causes of action effectually (assuming of course that some Statute of Limitations applies) and that seems to me to be open to the objection perhaps that it goes further than procedure. The consideration to which I refer, however, bears on that possible objection and I think puts it out of court. It consists in the manner in which the material provision or part of the rule was introduced into the law governing suits in the High Court. It was done by the High Court Procedure Act (No. 7 of 1903). Section 32 of that Act provided that the Rules in the Schedule to the Act should, as to all matters to which they extend, regulate the proceedings in the High Court. But those Rules might be annulled or altered by the authority by which new Rules of Court might be made under the Act. By s. 33 that authority was given to the Justices. The material part of O. 45, r. 8, was adopted from the Rules of the Supreme Court of Queensland, O. 90, r. 9. See Wilson and Graham, Practice of the Supreme Court of Queensland (1902) p. 419. In the case of ordinary civil litigation between subject and subject it may be assumed that the operation of the rule would be effectually to leave the cause of action barred. It is for that reason that I expressed a doubt whether upon its natural meaning the provision in the Judiciary Act 1903-1960 would authorize the material part of the rule, but having regard to its origin in s. 32 of the High Court Procedure Act 1903 and its Schedule, I do not think that view should be adopted. There is, however, a further difficulty that should be pointed out. I suppose that it cannot be regarded as completely clear that in an action in the High Court on a cause of action between subject and subject there is any Statute of Limitations, although as a judge sitting alone I held that s. 79 and s. 80 of the Judiciary Act 1903-1927 would supply one: Cohen v. Cohen [1] . See further, Musgrave v. The Commonwealth [2] as to s. 79 of the Judiciary Act 1903-1960. Here, moreover, the Commonwealth, i.e. the Crown in right of the Commonwealth, is a plaintiff. Whence comes the time bar to its action? Does s. 64 of the Judiciary Act apply? Perhaps a new suit may be brought and the question of the passage of time may then be considered.

(1929) 42 C.L.R. 91, at p. 99. 2. (1937) 57 C.L.R. 514, at pp. 531, 543, 547, 551.

The appeal is from an order made at chambers, upon notice, providing in pursuance of the Rule that a fresh step may be taken. The action is one brought in the High Court of Australia in the Principal Registry in the name of the Commonwealth of Australia, of a gentleman described as the Commonwealth Jute Buyer, duly appointed under and in accordance with the National Security (Jute) Regulations made under the National Security Act 1939-1943 Cth, and of the Australian Wheat Board. The writ was issued on 4th December 1946. The cause of action appearing in the statement of claim was for large sums of money sued for as payable in some cases either to the Commonwealth or the Australian Wheat Board, and in other cases sued for as payable by the defendant to the Commonwealth or the Australian Wheat Board, all for damages, and in other cases to the Commonwealth or the Jute Board. The causes of action arise out of transactions for the purchase of jute and failure to ship it from Indian ports. A great deal of delay took place in the prosecution of the action but one would suppose from the facts appearing in the affidavits filed in the summons upon which the order under appeal was made that the defendant had little reason to believe that the action was altogether abandoned. However, it does appear that a great deal of information must have disappeared in the long period which has elapsed since the institution of the suit and that a great disadvantage may be suffered by the defendant owing to the lapse of time and the disappearance of information and evidence. At all events, on the whole it appears better to allow the rule to have its prima facie effect and to stop the action.

Perhaps it is desirable to add that so far nothing much has been said about the parties. The action seems to have been instituted in the High Court on the footing that it falls within s. 75 of the Constitution because it relates to a matter in which the Commonwealth is a party and perhaps falls under Pt IX of the Judiciary Act. Why the Wheat Board or the Commonwealth Jute Buyer may as alternative plaintiffs succeed in such an action does not appear. No doubt in some way they are regarded as persons suing on behalf of the Commonwealth or otherwise entitled to sue in federal jurisdiction.

On the whole I am prepared to concur in the view that the suit should be stopped by the operation of the rule and for that purpose the order under appeal should be set aside.

This is an appeal from an order made by Windeyer J. under O. 60, r. 12 (2) of the High Court Rules which provides that "When six years have elapsed from the time when the last step in a proceeding was taken, a fresh step shall not be taken without an order of the Court or a Justice, which may be made either ex parte or upon notice." By r. 12 (3) (a) "a summons on which an order has not been made shall not be deemed a step taken".

The order against which the appeal is brought gave leave to the plaintiffs to take a fresh step in an action which had commenced in 1946, that step being the delivery to the defendant of notices to admit facts and documents. It went on to fix the time within which the notices were to be served and directed that, in default of service within the time allowed, the suit should stand dismissed for want of prosecution. In giving his reasons for making the order, his Honour expressed the opinion that the rule was not "designed to stop actions or to destroy rights of action or to add a rider to the Statute of Limitations " but was rather intended to enable the Court to "insist that the action be brought on and disposed of and not remain in a state of inaction" and "to this end to take control of the proceedings by fixing anew the times within which steps which have not been taken are to be taken". The defendant in the action, the respondent to the summons, had placed evidence before his Honour pointing to the conclusion that, by reason of the lengthy period which had elapsed since the commencement of the action, relevant evidence, both oral and documentary, which would have been available to it had the proceedings been prosecuted with reasonable despatch, was no longer available and it was submitted that for this reason the plaintiffs should not be given leave to take a fresh step. Having regard, however, to the opinion which he had formed of the purpose and effect of the rule, his Honour considered that this afforded no reason for refusing to grant the plaintiffs the leave sought.

With respect, we think the learned judge fell into error in construing the rule as he did. Its purpose is not to enable the Court to insist that an action shall proceed and to fix times within which further steps shall be taken. What it does is to forbid the further prosecution of proceedings in which no step has been taken for six years unless leave is given to continue them, and it follows that it is for an applicant for leave to show that there is good reason for excepting the particular proceedings from the general prohibition which the rule imposes.

In the present case the action was instituted by a writ of summons issued on 4th September 1946. The plaintiffs were then named as the Commonwealth of Australia, the Australian Wheat Board and one Stevenson, who was described as the Commonwealth Jute Buyer appointed under the National Security (Jute) Regulations. The endorsement on the writ alleged that during the years 1944 and 1945 four contracts had been made between the Commonwealth and the defendant for the sale by the latter to the former of large quantities of jute bran bags and corn sacks to be shipped from India to Australia by monthly instalments during 1944 and 1945. It is unnecessary to set out the details of the contracts sued upon, but they provided that payment was to be made by the establishment of irrevocable letters of credit in favour of Jhujnwala & Co. Ltd., a company carrying on business in Calcutta, against which drafts at 90 days' sight on London might be drawn. The plaintiffs alleged further that letters of credit in favour of Jhujnwala & Co. Ltd. had been established with various named banks carrying on business in Calcutta and that the company had drawn against those credits but that the shipments in respect of which they had been established had not been made. The claim was to recover £33,433 as on a total failure of consideration and, in the alternative, to recover damages amounting to £33,554 for failure to ship the goods.

It is apparent from the endorsement on the writ and from an amended statement of claim and the statement of defence which were later filed, that the action is one involving complex questions of fact and that much of the evidence bearing on the issues would have to be sought in India from persons who were conducting the affairs of Jhujnwala & Co. Ltd. at the relevant times and from officers then employed in the various banking institutions with which the credits were established. It seems probable that it would also be necessary to obtain evidence from India as to the availability of shipping space during 1944 and 1945 since the statement of defence alleges that space was unavailable before August 1945 and that thereafter the Government of India had refused to grant a licence to export the goods contracted to be shipped. The significance of this is apparent from an examination of the statement of defence which alleges that the contracts sued upon made provision whereby subject to the fulfilment of certain conditions the credits established in favour of Jhujnwala & Co. Ltd. might be drawn upon if freight was not available and contained other provisions dealing with delays in shipment due to the action of Government Authorities.

The writ having been served, an appearance was entered on 18th September 1946, and on 16th October of that year the solicitors for the defendant asked to be supplied with further and better particulars of the plaintiffs' claim. No particulars were in fact supplied until 1950. The next step in the proceedings was taken in June 1950 when the plaintiffs sought an order giving leave to amend the writ by substituting the plaintiff Barker for the plaintiff Stevenson. An order to that effect was made on 3rd August 1950 and on 17th August 1950 the plaintiffs served an amended statement of claim which substituted the name of Barker for that of Stevenson and made a number of other amendments which had no relation to the substitution of one plaintiff for another. On 23rd August 1950 further and better particulars of the plaintiffs' claim were given. In January 1952 the statement of defence was filed and served and, on 22nd August 1952, the plaintiffs' solicitor asked for further and better particulars of the defence. On the same day, the plaintiffs delivered a reply joining issue on the allegations in the statement of defence. On 1st October 1952 orders were made for mutual discovery and giving leave to administer interrogatories. On 18th March 1953 the solicitors for the defendant delivered further and better particulars of the statement of defence but no further step in the proceedings was taken until 5th March 1963 when the summons was taken out by the plaintiffs for leave to take a further step.

The long delays which occurred up to 1953 were doubtless due, in part at least, to the complexities of the case, the necessity for making investigations in India and elsewhere and probably also to the difficulty of obtaining relevant information as to events in India during 1944 and 1945. But, for the purposes of this appeal, it is, we think, to the period between 18th March 1953, when the last step was taken, and 5th March 1963, when the plaintiffs sought leave to take a further step, that attention should principally be directed. It appears that sometime in 1953 discussions took place between the parties with a view to a settlement of the claim and that late in 1954 or early in 1955 counsel for the defendant made an offer of settlement to counsel for the plaintiffs. In August 1955 counsel for the plaintiffs told the defendant's counsel that the offer was not acceptable. No further communications seem to have passed between the parties until 13th July 1956 when the plaintiffs' solicitor wrote to the defendant's solicitors confirming that the offer made in 1954 or 1955 was unacceptable. In November 1956 the solicitors for the defendant gave the plaintiffs' solicitor a list of documents in the defendant's possession and on 6th February 1957 the plaintiffs' solicitor gave the defendant's solicitors a list of the plaintiffs' documents. This was done pursuant to some earlier arrangement apparently made between the solicitors in 1953. In April 1957 mutual inspection of the documents listed took place. In August 1958 the defendant's solicitor picked up from the office of the plaintiffs' solicitor the defendant's documents which had been left at that office for inspection. When doing so, he enquired "about the position of the action" and was told that information was being sought in India and that at a later stage an application would be made to take evidence on commission in that country. The next communication between the solicitors occurred in June 1959 when the solicitor for the plaintiffs telephoned the defendant's solicitors and asked if the offer of settlement made in 1954 or 1955 was still open to be accepted. He was told that it was no longer open but that enquiries would be made to ascertain whether it might be renewed. On 13th January 1960 a similar telephone enquiry was made by the plaintiffs' solicitor and on 15th February 1960 the defendant's solicitors replied that the offer was no longer open and that no further offer would be made. Thereafter no further communications passed between the solicitors until the summons of 5th March 1963 was issued. It should be added that no notice of trial has ever been given nor has the action ever been entered for trial. Having regard to all these circumstances, it is not surprising that the defendant and its advisers long ago formed the opinion that the action would never be brought on for hearing and no doubt they were content that this should be so. For the major part of the delay that has occurred since the last step was taken in March 1953, the responsibility must rest, we think, upon the plaintiffs and their advisers. No doubt that delay was in large measure due to difficulties in ascertaining the facts about events occurring many years before, but it must be borne in mind that it was the plaintiffs who were making the claim. They had the carriage of the action and their legal advisers presumably knew of the existence of O. 60, r. 12 (2). For ten years they took none of the steps in the proceedings for which the Rules provide and in the very nature of things it is almost certain that the lapse of time would make it impossible now to obtain evidence of happenings in 1944 and 1945, which would earlier have been available. Written records may have been lost or destroyed. The impossibility of tracing persons in India and elsewhere who would have been able to speak as to relevant facts is obvious and, even if such persons are still alive and could be found, it is unlikely that they would have much or any recollection of events which happened in 1944 and 1945. These difficulties are illustrated by the affidavit of the defendant's solicitors filed in the summons, in which specific instances are given of the death or disappearance of persons who could have given material evidence. It is quite true to say, as counsel for the plaintiffs said, that the defendant could have moved long ago to dismiss the action for want of prosecution or could have taken steps to enter it for trial. But that, in our opinion, affords no answer. Order 60, r. 12 (2), presupposes that no such steps have been taken by the party in whose favour time has run under that rule. Nor is it any answer for the plaintiffs to say, as counsel appearing for them did, that by reason of the lapse of time they will find it equally difficult or impossible to obtain evidence which would have been available at an earlier date.

For all these reasons we are of opinion that the plaintiffs have failed to show that the case is one in which it would be proper to grant leave to take a further step and that the appeal should be allowed.

One further matter remains to be mentioned. In making the order appealed against, Windeyer J. stated that it was made without prejudice to the right of the defendant to move to dismiss the action for want of prosecution. The defendant thereafter did so move and his Honour directed that its application be referred to the Full Court so that it might be heard at the same time as the appeal. Before us counsel for the defendant stated that, if the order giving leave to take a fresh step was set aside and in lieu thereof an order was made dismissing the plaintiffs' application, he would not ask that the action be dismissed for want of prosecution. Accordingly, we think the defendant's summons should be dismissed.

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties