Bi v Mourad [2010] NSWCA 17 (11 February 2010)

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Bi v Mourad [2010] NSWCA 17 (11 February 2010)

Last Updated: 22 February 2010

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Bi v Mourad [2010] NSWCA 17


FILE NUMBER(S):
2009/00298355

HEARING DATE(S):
11 February 2010


EX TEMPORE DATE:
11 February 2010

PARTIES:
Shao Chun Bi (First Applicant)
Da Kang Ma (Second Applicant)
Wei Bi (Third Applicant)
George Mourad (First Opponent)
Mourad Constructions Pty Ltd (Second Opponent)
Lagrange Corporation Pty Ltd (Third Opponent)

JUDGMENT OF:
Allsop P Young JA Sackville AJA

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 1846/05

LOWER COURT JUDICIAL OFFICER:
Judicial Registrar McDonald

LOWER COURT DATE OF DECISION:
28 May 2009


COUNSEL:
C Jackson (Applicants)
J S Drummond (Opponents)

SOLICITORS:
Edrison Lawyers (Applicants)
Prime Lawyers (Opponents)

CATCHWORDS:
PROCEDURE- dismissal for want of prosecution- policy as disclosed in Civil Procedure Act 2005, ss 56-60- relevance of pre-2005 authority- paramount necessity of paying careful attention to ss 56-60- individual justice requires the elimination of undue delay- District Court Judicial Registrar dismissing proceedings on basis of plaintiffs' late reformulation of case and late production of amended (but defective) pleadings- review of appeal sought on different grounds- Judicial Registrar entitled to reach the conclusions reached.

LEGISLATION CITED:
Civil Procedure Act 2005, ss 56-60
Uniform Civil Procedure Rules 2005, r12.7


CASES CITED:
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230
Hoser v Hartcher [1999] NSWSC 527
House v R [1936] HCA 40; (1936) 55 CLR 499

TEXTS CITED:


DECISION:
(1) Leave to appeal is refused.
(2) The applicants to pay the opponents' costs.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 2009/00298355

ALLSOP P

YOUNG JA

SACKVILLE AJA

Thursday 11 February 2010

BI & ORS v MOURAD & ORS

Judgment

1 ALLSOP P: I will ask Young JA to deliver the first judgment.

2 YOUNG JA: This is an application for leave to appeal against a decision of Judicial Registrar McDonald of the District Court. The appeal lies to this Court under s 127 of the District Court Act 1973, which oddly enough makes an appeal from the Judicial Registrar lie to this court rather than, as one would have expected, review by the District Court itself.

3 The applicants are the registered proprietors of No 49 Reynolds Avenue, Bankstown, on which is erected a two-storey brick veneer house which they erected in 1992. In about the year 2000, the opponents, or one of them - it is immaterial as to who it was, so I will merely use the generic term “opponents” - who were the proprietors of Nos 45 to 47 Reynolds Avenue excavated as part of a project to erect a block of home units on No 47 close to the boundary of No 49.

4 The plaintiffs say they observed cracking of their building shortly after the excavation was performed, and that has continued.

5 There was some discussion early on with an insurance company who had insured the opponents' project, but the insurance company discovered by late 2004 that it had not insured the opponents for any work connected with excavation. The insurance company told everybody this and bowed out.

6 On 13 May 2005 the plaintiffs issued a summons in the District Court claiming damages for negligence or nuisance with respect to the excavation. There were also subsidiary counts in breach of contract and for damages under the Trade Practices Act 1974 (Cth) or Fair Trading Act 1987 (NSW). One can put those subsidiary counts aside.

7 The summons was issued at the request of solicitors who traded under the name of McMahon's National Lawyers. The opponents filed a defence in 2005 admitting a duty to the applicants, but denying breach and denying any contract. The proceedings continued at a leisurely pace up until 2008: sometimes it would appear at the fault of the applicants, sometimes at the fault of the opponents.

8 On 17 April 2008 the District Court ordered an expert conclave. That is, a conference between experts at which the experts discuss their reports in an endeavour to agree as much as they can and to highlight the areas of disagreement and the reasons therefor.

9 The conclave was held on 23 May 2008 lasting about five hours and the questions put to the experts were mainly answered in a way unfavourably for the applicants.

10 The matter was then listed in the first instance for discussions between the parties and then for directions in October 2008 and a hearing date was fixed for 11 February 2009, to last two days.

11 In January 2009 the applicants obtained a further report from a new expert, a Mr Katauskas, a geotechnical engineer. He took the view that the defendants' excavation had been the cause of the plaintiffs' damage, but for reasons apparently not previously considered. The applicants sought to rely on this report; the opponents objected and said that, if the applicants did intend to rely on it, they would have to file a notice of motion, which the applicants did on 30 January 2009. Although this appears to have been filed by a new solicitor, we were informed at the bar table that in fact it was merely a situation of the solicitor involved changing firms.

12 The application was opposed. It was heard by Judge Truss on 4 February 2009. Her Honour considered that she should grant the application, but she also considered, although this was not actually asked for in the motion, that proper conduct of the litigation required that the changed circumstances be reflected in amended pleadings. Her Honour gave leave, but she also made ancillary orders and put limitations on the leave that she gave.

13 It is probably useful to refer to some of the transcript before her Honour. (Page 169 of the White Book): Her Honour: "Very well, so I order the plaintiffs to file and serve an amended statement of claim, fully pleading the case they now make. How long do you need for that, Mr White?" (Mr White appearing for the present applicants). Mr White said: "Could I ask for 28 days? Her Honour said, "Yes". And then added, "On the basis that, if I have anything to do with it, it will be the very, very last one". ... "And so what do you want done about the conclave? A further conclave? Do you need to come back for more orders or can I provide" - and then she was interrupted: "Your Honour ... the better thing would be" said Mr White, "to get the new statement of claim on and bring the matter back for directions a week later and ... I don't know what's going to happen between the 28 days...I think given the circumstances let's get that pleading sorted and bring the matter for seven days after which we can determine now that date" (sic).

14 After further discussion her Honour said that she would just put the matter for further directions in the Judicial Registrar's list on 12 March.

15 The matter did get into the Judicial Registrar's list on 12 March, but very little happened on that particular day. The applicants had recently changed solicitors and the Judicial Registrar made an order granting leave to file a notice of change of solicitor in court extending the time for filing an amended statement of claim to 9 April 2009 she added in her order 3, "If that order is not complied with, the plaintiffs must show cause on the next occasion why the proceedings should not be dismissed for want of prosecution or why, if the matter is not dismissed, the leave granted on 5 February 2009 to rely on an expert report should not be revoked".

16 The matter was then stood over to 16 April 2009 before the Judicial Registrar, it would seem, at 2pm. On that very day, presumably earlier in the day, a draft amended statement of claim was produced. The Judicial Registrar said in her judgment that the plaintiffs did not serve that proposed document in sufficient time for the defendants' representative to review it and counsel for the opponents asked the client to put in written submissions and that was granted by the Judicial Registrar, who then continued to hear the matter and in due course considered the written submissions and gave judgment on 28 May 2009, that judgment going into over 30 pages.

17 The amended statement of claim is in the White Book. It seems that the amount claimed was reduced from the maximum $750,000 previously claimed to $257,000, presumably because of the matters which had failed in the experts' conclave. As far as I can see, the principal amendment was to include new paragraph 16A and to include particulars of negligence that the opponents had failed to take into account that the removal of trees on No 47 would affect the moisture content of the soil and that that was a cause of the plaintiffs' problems.

18 I should have said that Judge Truss made her decision on 5 February 2009. At that stage the proceedings had been set down for hearing on 11 and 12 February and because of Judge Truss' decision and proposed amendment those hearing dates had to be vacated. The Judicial Registrar delivered her judgment on 28 May 2009. She set out the listing of the proceedings in greater detail than I have summarised and she noted there had been a previous motion back in September 2007 to dismiss the proceedings for want of prosecution which the plaintiffs had survived.

19 At page 35 of the White Book the Judicial Registrar noted that in 2006 and 2007 there had been cross-claims; that there had been a whole series of experts' reports on the applicants’ side; that new issues were coming up and dropping out; and that in May 2007 evidence had been served outside the order of the court and that the case was in an unsatisfactory position. However, because of the way in which matters developed in 2007, the defendants discontinued the cross-claim based on the previous conduct of the case.

20 She indicated at page 38 that on 28 February 2008 it became apparent that the plaintiffs' solicitor had intended to cease to act but then changed his mind or, rather, that that did not happen and there had been some delays in making orders because the solicitor had filed a notice of intention of ceasing to act. There was a complaint in April 2008 by the opponents that the plaintiffs had not complied with particularising their case and things dragged on through 2008 until the conclave was arranged.

21 The Judicial Registrar also noted, and she noted more than once, that she was receiving letters from the plaintiffs themselves rather than through the lawyers and she made it clear that she did not read these.

22 The case that was being made before the Judicial Registrar was that the report of Mr Katauskas required reformulation of the case. Judge Truss allowed that reformulation on conditions; those conditions had not been met. The applicants were then asking the Judicial Registrar to extend the time to file an amended statement of claim (a document which is now admitted to be quite defective) and hold a further conclave and that was going to take some time, and were arguing that one of the reasons why the directions of Judge Truss had not been complied with was because there had been a recent change of solicitors.

23 Now, the Judicial Registrar dealt with that application. She said that the fact that there had been a recent change of solicitors did not appear to be, in her view, a very serious matter because it was a choice which the plaintiffs themselves had made. She reviewed the whole of the delay. She looked at the reformulation of the case, the statement of claim, the submissions, the history of the matter and she made a discretionary decision that it would not be appropriate to accede to the applicants' requests and she thought the proper order was to dismiss the proceedings with costs.

24 The decision of the learned Registrar was a discretionary judgment and we thus have to consider the boundaries on review for such discretionary judgments as mapped out in cases such as House v R [1936] HCA 40; (1936) 55 CLR 499. Thus, it is irrelevant even if it be the case, and I am not at all sure that it is, that members of this Bench may, had they been the original decision-maker, have reached a different decision. The applicants must show substantial error in the way in which the Judicial Registrar approached the case.

25 On this application Mr C Jackson appeared for the applicants and Mr J S Drummond appeared for the opponents.

26 Mr Jackson put forward virtually everything that could possibly be said in favour of the reversal of the Judicial Registrar's decision. His main point was that the Judicial Registrar did not deal with matters of prejudice. He says that this case, where damage had been caused to the plaintiffs' property, is a viable one and should go for trial. One would have expected that if there had been substantial prejudice to the defendants that the defendants would have put forward some material; they did not. There was not thus before the Judicial Registrar any evidence of prejudice, or at least evidence of prejudice that could not be met with costs, and the Judicial Registrar did not balance matters and allowed considerations of case management to outweigh considerations of justice.

27 Mr Jackson thought it was significant that the Judicial Registrar did not actually mention the vital fact that the applicants could not start again because the actions had become statute-barred. I do not consider that this is a valid criticism, as it is quite clear in the way in which the Judicial Registrar recited the facts that she realised that nine years had gone by since the events, and it is not necessary for a judicial officer to set out each of these points.

28 Mr Jackson also notes that the Judicial Registrar relied on a decision of Simpson J in Hoser v Hartcher [1999] NSWSC 527 particularly paragraph 25. In that case, Simpson J set out a number of relevant factors to be considered in this particular case. Although that is a 1999 decision, before the Civil Procedure Act 2005, and before the recent decision of the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175, it is still a valuable guide to judges, but it would be wrong to treat Hoser as if it was statute and it must always be remembered that each case has different facts and circumstances. I certainly do not think the Judicial Registrar departed at all from the spirit of Hoser as far as it is still applicable.

29 Mr Jackson says that the Judicial Registrar's decision means that principles of case management have outweighed justice and that, as no prejudice is shown to the defendants, the decision must be wrong. I understand an advocate putting it this way, however, there was prejudice and indeed the learned Judicial Registrar found prejudice, not only in the way in which cross-claims had been dismissed, but the way in which expense had been caused to the defendants by a constant change of decision by the plaintiffs and the history of the proceedings.

30 Although Mr Jackson says that justice must be the core consideration, it must be remembered that although "justice" is a word that is often used in this sort of case, the term "justice" is employed in the sense of justice to both parties.

31 It must also be remembered these days that ss 56 to 60 of the Civil Procedure Act 2005 set up a regime that requires the courts to turn away reluctant gladiators and to ensure that they either prosecute their claims in due time or get sent away from the court.

32 The learned Judicial Registrar had this in mind, and recent decisions, including the decision of this court in Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230 make it clear that that must be the approach adopted. In my view, the learned Judicial Registrar considered the factors and she made her discretionary decision, and I myself cannot see any error in that approach which would merit this Court interfering with it.

33 Primary judges must consider themselves free to exercise their discretions in this sort of case without the thought in the back of their mind that this court will weakly say, "Oh, we had better let the claim be adjudicated and the other side can be satisfied by an order for costs". This is not the clear policy of the legislator in the Civil Procedure Act.

34 The costs of this matter, and no doubt they are now substantial, are to be balanced against the fact that the claim is only $257,000. However, whilst all lawyers have a feeling in their minds that it is usually just that a matter should proceed to be determined on the merits, the law is, as made clear in the Civil Procedure Act, that if you do wish to bring a claim in the court, you must bring it and prosecute it with due diligence.

35 In this particular case various indulgences were given to the plaintiffs. In February 2009 leave was given to them which, had they acted in accordance with it, they would not have experienced their present problem. Judge Truss made what was clearly a final indulgence in respect of what the applicants sought and, as I have indicated, the then advocate for the plaintiffs agreed that twenty-eights days would be enough to amend the statement of claim and thus meet her Honour’s condition of granting leave.

36 There is no error on the part of the Judicial Registrar and I refuse leave to appeal with costs.

37 SACKVILLE AJA: I agree with the judgment delivered by Young JA and with his Honour's proposed orders. I wish to add only the following brief comments.

38 Mr Jackson, who appeared for the claimants, frankly acknowledged that the proposed Amended Statement of Claim upon which the claimants relied before the Judicial Registrar was not in a form that could be proceeded with. Mr Jackson indicated that the claimants now wish to rely on the original Statement of Claim, should they be permitted to proceed to trial. The difficulty is that this was not the way in which the matter was put to the Judicial Registrar. The claimants insisted before the Judicial Registrar that they wished to re-cast their case and to rely upon the proposed Amended Statement of Claim. The Judicial Registrar refused to permit the proposed Amended Statement of Claim to be filed. That decision is not now challenged.

39 The Judicial Registrar pointed out that four years had elapsed since the proceedings had commenced and nine years had elapsed since the relevant events occurred. The Judicial Registrar noted that despite this delay, the claimants had not properly formulated their case. In these circumstances, it is not surprising that the Judicial Registrar expressed the view that: "this case has reached the point where the court must say, 'Enough is enough'".

40 In my opinion, for the reasons given by Young JA, no error has been shown in the exercise of the discretion conferred on the Judicial Registrar by Uniform Civil Procedure Rules, r 12.7, which allows proceedings to be dismissed for want of prosecution of the proceedings with due dispatch.

41 The Judicial Registrar stated the principles governing the application in terms which recognise that the ultimate question is whether, having balanced the prejudice to each party, justice demands that the application be dismissed. On one view, the statement of principle derived from the judgment of Simpson J in Hoser v Hartcher [1999] NSWSC 527 may be somewhat too generous to the claimants: cf Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230; Aon Risk Services Pty Limited v Australia National University [2009] HCA 27, 239 CLR 175; Civil Procedure Act, ss 56–60. In any event, her Honour's statement of the relevant principles reveals no error.

42 In addition to the matters of prejudice referred to by Young JA, the Judicial Registrar made a specific finding that the opponents had suffered considerable prejudice, because they decided to discontinue a cross claim on the basis of what the claimants said was the amended case they wished to present. The claimants subsequently sought to rely on a cause of action previously abandoned, thereby creating a difficulty for the opponents. There has been no serious challenge to the finding of prejudice.

43 The Judicial Registrar also found that no real explanation had been given for the claimants’ delay in conducting their case, particularly the failure to comply with the orders made by Judge Truss to which Young JA has referred. The Judicial Registrar further found that the opponents had not simply stood by hoping that the proceedings would go away, but had filed a motion at an appropriate time seeking to have the proceedings brought to an end.

44 In my opinion, nothing has been identified which suggests that the Judicial Registrar was not entitled to reach the conclusion that she did in the exercise of the discretionary powers conferred on her. On the contrary, having regard to the way in which matters were presented to the Judicial Registrar, it might be thought that this was precisely the sort of case that called for the exercise of the powers conferred on the court by the Civil Procedure Act and the Uniform Civil Procedure Rules.

45 For those reasons I agree with the orders proposed by Young JA.

46 ALLSOP P: I agree with the orders proposed by Young JA. I respectfully agree with his Honour's reasons and with the additional comments of Sackville AJA.

47 Delay is a feature of litigation intended to be eliminated as far as possible by the statutory enactment of the regime in the Civil Procedure Act. It cannot always be done. This purpose is not through some parliamentary authoritarian or over-prescriptive view of how people should lead their lives; rather, it is through the keen recognition of the conduct of the courts, in particular in the 20th century, of the need to deal with cases expeditiously if they are to be dealt with justly. Delay and case backlog are not merely factors affecting the costs of delivering justice; they corrode the ability of the courts to provide individual justice. The reforms that have taken place under the Civil Procedure Act and the evident attempt by courts to ensure efficiency can be seen not merely to reflect worthy efforts for efficiency but also to be steps vital for the provision of timely individual justice. Views may differ of justice in any particular case; that is the nature of the term and the value-laden task of a decision-maker to do justice.

48 Here the task of the Judicial Registrar was the exercise of a power to dismiss. In my view, for the reasons amply given by Young JA and Sackville AJA, the exercise of that power was not unreasonable and in the circumstances well understandable. It was not infected with any legal or factual error of a relevant kind. If I may respectfully say so, the Judicial Registrar's reasons were careful and reflected the clear gravity which the Judicial Registrar plainly recognised that the decision involved.

49 In particular, I would like to add that careful attention to the Civil Procedure Act and ss 56-60 is what is required in each case. While I in no way criticise the terms of Hoser v Hartcher as laid down at the time that decision was made and without wishing to be critical in any way of it, I would say that the surest guide to be employed in any exercise of the discretion of this kind is a careful attention to the terms of the Civil Procedure Act, in particular ss 56-60.

50 For those additional reasons I agree with the orders.

51 The orders of the court are:

1. The application for leave to appeal be refused;

2. The applicants to pay the costs of the respondents in that application together with the costs of the concurrent hearing.

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LAST UPDATED:
19 February 2010