Prynew Pty Limited v Nemeth [2011] NSWCA 5 (31 January 2011)

Last Updated: 2 March 2011

Court of Appeal New South Wales

Case Title:	Prynew Pty Limited v Nemeth
Medium Neutral Citation:	[2011] NSWCA 5
Hearing Date(s):	31 January 2011
Decision Date:	31 January 2011
Jurisdiction:
Before:	Allsop P
Decision:	(1) As to the motion brought by the first respondent: (a) the motion is dismissed, but the respondents to that motion, that is the appellants, pay the costs of the applicant to the motion being the first respondent and the fourth respondent to the proceedings. (b) The dates for hearing of this appeal of 21 and 22 February are vacated. The appellants pay the costs of the first and fourth respondents to the appeal thrown away by the vacation of the hearing on an indemnity basis, leave being granted to assess such costs forthwith. 2. As to the amended notice of motion brought by the appellants: (a) grant leave in accordance with prayers 1 and 2 of the motion to amend the existing notice of appeal and the submissions; (b) the further amended notice of appeal be filed within fourteen days. The orange, blue and black books be filed with the court on or before 28 February 2011. (c) Order 3 in the notice of motion to adduce fresh evidence is refused. (d) The appellants, the applicants on the notice of motion, pay the costs of the first and fourth respondents of the motion. (e) As to the costs of the issues abandoned, as a condition of the grant of leave to amend, order that the appellants pay the costs of the first and fourth respondents of the issues abandoned. (f) The amended notice of motion is otherwise dismissed and the appeal is to be relisted at the earliest opportunity after the 28 th February, assuming the orders are complied with, for the obtaining of a hearing date at the earliest opportunity. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	PROCEDURE - Civil - pleadings - application to amend - application to adduce fresh evidence - application under Civil Procedure Act 2005, s 61 for dismissal with costs - dilatory preparation of appeal COSTS - vacation of hearing date - indemnity costs - abandonment of issues - costs thrown away
Legislation Cited:	Civil Procedure Act 2005
Cases Cited:	Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2008] NSWCA 228 House v R [1936] HCA 40; (1936) 55 CLR 499
Texts Cited:
Category:	Principal judgment
Parties:	Prynew Pty Limited (First Appellant/First Cross Respondent) Peter Tsu (Second Appellant/Second Cross Respondent) Ferdinand Nemeth (First Respondent/Cross Appellant) Virginia Nemeth (Second Respondent/Third Cross Respondent) QBE Mercantile Mutual Limited (Third Respondent) Piling Contractors (Qld) Pty Limited (Third Cross Respondent)
Representation
- Counsel:	Counsel: Mr W Washington (Appellants)
- Solicitors:	Solicitors: Colin Biggers & Paisley (Appellants) Gadens Lawyers (First Respondent) In Person (Second Respondent) Curwoods Lawyers (Third Respondent) Thompson Cooper Lawyers (Third Cross Respondent)
File number(s):	2009/298275
Decision Under Appeal
- Court / Tribunal:	Supreme Court
- Before:	Macready AsJ
- Date of Decision:	23 February 2009
- Citation:
- Court File Number(s)	55037/2003, 55019/2003
Publication Restriction:

Judgment

1	ALLSOP P : There are two motions before the court. One by the first respondent to the appeal, to whom I will refer as Mr Nemeth's estate, and one by the appellants, to whom I will refer as their adjacent builders.
2	I will not lengthen these interlocutory reasons by a detailed history of the case. The one step that seems to have been taken in this appeal recognisable as one provided for by the rules, other than these motions, is that there are two red books which contain a report of the referee and the primary material before the learned Associate Judge who dealt with the matter.
3	Very briefly, a house in the eastern suburbs of Sydney, in Mona Road in Darling Point, had its support affected by adjacent building being conducted by the adjoining builders some years ago. Mr Nemeth, who has now passed away, and his then wife Mrs Nemeth were the proprietors of the building affected by the undermining.
4	The question naturally arose as to responsibility for the damage to the Nemeths' property. That issue was referred to a referee who provided a detailed and long report for a sum of money. That report was then the subject of adoption proceedings in the court. Those adoption proceedings were conducted before Macready AsJ: Piling v Prynew; Nemeth v Prynew [2008] NSWSC 118. It is his Honour's decision to adopt the report that is the subject of the appeal.
5	The appeal has had a number of iterations. Its original form it was criticised in constructive terms by a judge of appeal who recommended to the appellants that they have a look at its form. It was long and attacked many of the factual conclusions of the referee and indirectly and directly attacked his Honour's exercise of power in failing to conclude that many factual issues were not capable of being found.
6	I do not propose to discuss the well-known principles of review of referees' reports by judges in the divisions. Sufficient reference can be made to a judgment of the Chief Justice and myself in the case of Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2008] NSWCA 228 and the well-known judgments of judges of the Commercial Division such as Cole J and McDougall J and others. That was the position of the appeal until early this year.
7	By way of introduction to describing the two motions, it can be said without fear of any real contradiction that the preparation of the appeal in the eighteen months or so that it has been in the Court's list has been less than one would have hoped for by practitioners. Indeed, during the course of debate today I described it as having been lamentable, a comment which was not contested. That criticism is not one that can be made in those terms of the current solicitors for the appellants, however, the preparation of this appeal reveals in stark form how the Court in any attempt to bring cases on and to a conclusion with a reasonable degree of despatch is significantly in the hands of practitioners involved and when they fail, short of doing the work itself, which the Court never does, the Court is left in the position that it finds itself in today. I have judges who had more than busy schedules and I do not think it appropriate for them to spend their time dealing with cases that are lamentably prepared.
8	With that introduction, there are two motions. The first, as I said, was from Mr Nemeth's estate. It sought an order pursuant to s 61 of the Civil Procedure Act 2005 (NSW) that the first and second appellants' notice of appeal be dismissed with costs. There have been a number of cases on the scope, context and proper application of the new powers under the Civil Procedure Act . I would commence by saying that the motion by Mr Nemeth's estate is not without its foundation. The parties should not think that they can prevaricate and delay in the preparation of appeals without facing the possibility of dismissal of the appeal for those kinds of gross inefficiencies. However, on balance, I am not prepared to put an end to the appeal at this stage. That is not to say that if the conduct of this matter continues to be undertaken with the inefficiency that it has in the 18 months to date that I would not consider entertaining an application of this kind in the future. That leaves the difficulty of what to do with this matter. I will come to that in dealing with the motion of the appellants.
9	The appellants in a motion that was amended by leave today seek various orders. First, leave to amend the notices of appeal in a form reflected by the material contained in the affidavit of Mr Tsu in support of that application. Second, leave to amend the appellants' revised submissions by deleting paragraphs as are set out in the supporting material.
10	Those two paragraphs can be dealt with fairly shortly. They reflect an abandonment of the wholesale attack on the Associate Judge's adoption of the report in many of its respects. They leave only in effect two substantive issues; whether or not the learned Associate Judge should have remitted to the referee certain matters and not entered judgment on the basis of the referee's report, and questions of costs. As I would understand it, those questions of costs flow parasitically upon the primary remaining contention.
11	I propose to grant leave to amend and revise the submissions on the costs conditions that I will identify in due course.
12	Mr Robertson's submissions on behalf of Mr Nemeth's estate were in support of the order he sought in the motion, but he did not seek to oppose orders 1 and 2 subject to the costs orders to be made in connection therewith if the Court was otherwise minded not to accede to his client's request for a dismissal of the proceedings. Those amendments should leave the appeal in a significantly truncated form and the focus of the question is on that of remitter.
13	Paragraph 3 of the amended notice of motion is in a different category. It seeks an order in accordance with Uniform Civil Procedure Rules 2005, Pt 51 r 51 to adduce fresh evidence on the appeal. The particulars in the amended notice of motion state as follows:

"The appellant seeks [sic: The appellants seek] leave to read in this appeal, the affidavit of Virginia Nemeth sworn 20 January 2011 and the affidavit of Darlene Mendoza sworn 22 June 2008."

14	Much of the debate that occurred today revolved around the legitimacy of that motion. I was tempted initially to take the view that, like most applications for fresh evidence, the appropriate venue and vehicle was the appeal court and the appeal proper. However, having heard the parties, I am not prepared to make an order in accordance with paragraph 3 for the following reasons.
15	First, with respect, no coherent basis for the leading of this evidence has been propounded. As is shown by the debate and discourse between Mr Robertson and Mr Washington and myself during the course of argument, the question before the referee was the reasonable cost of repair to a house undermined by adjacent construction work. It was a house which at the time of the referee's report and at the time of the adoption hearing was lived in by the Nemeths. It is said by reference to aspects of the proposed evidence that Mr Nemeth did not have any bona fide intention to remain in the premises and that his decision so to do was in some fashion capricious, designed, it was said, (as I understand the submissions) to enable him to obtain a sum of money for the repairs all the while intending to tear down the house and redevelop to the land's highest and best use for multi-storey apartments. It is common ground I think that the location in Mona Road would be one in which such valuable multi-storey apartments could be built.
16	It is also said within in that additional evidence, as I understand the position, that Mr Nemeth behaved in a fashion which could be said to be either dishonourable or dishonest in relation to the invoices that he propounded to either his insurance company or in the claim.
17	If the referee had approached the matter on the basis of those invoices as substantiated then the evidence, if it were in proper form, might have some cogency, subject to its being late. However, the referee awarded in her report an amount, not based on the actual cost, but on what would be a reasonable sum for the repairs based on expert evidence before her and, as I said, Mr and Mrs Nemeth were living in the premises at the time. I am simply not persuaded of any relevance of the material.
18	That relevance might arise at two levels of analysis.
19	It is first put, and I make no comment on the strength or weakness of the argument, that this later evidence somehow could undermine the legitimacy of the exercise of power by the Associate Judge on the material before him not to remit.
20	As I said, I do not comment on the strength or weakness of that other than to say I have some difficulty with the analysis that the material could somehow affect his exercise of power. However, if it were the case that the appellants were able to impugn the approach of the Associate Judge on the material that was before him the appeal court might then be called upon to re-exercise the power or discretion. Thus, if a House v R [1936] HCA 40; (1936) 55 CLR 499 error were otherwise shown on the material before the learned Associate Judge it is said that this material could then be used by the appeal court in the re-exercise of discretion.
21	The difficulty with that submission was clearly illuminated by Mr Robertson's submissions: in the way the referee dealt with the matter, how could it be relevant in deciding whether to remit the matter that there were disconformities and serious discrepancies in the way Mr Nemeth approached the matter when that was irrelevant to the assessment made by the referee. There is considerable force in that submission.
22	In any event, and most cogently for my purposes for this motion, in addition to those considerations is the fact that it would be oppressive in my view to permit 216 pages of the affidavit and annexure of Mrs Nemeth, which is exhibit A on the amended notice of motion, and which contains the affidavit of Ms Mendoza, to be brought forward as further evidence or even the identification of scope of further evidence. In many places it is utterly ex facie irrelevant, it is hopeless in many places in form, no attempt has really been made, whether through lateness of the affidavit or otherwise, to identify with any precision the true substance and nature of the evidence to be led that was not before the Associate Judge.
23	In circumstances where I am deeply unpersuaded of any relevance in the appeal, in the light of the form of the material, I think it would be quite inappropriate to permit an order to be made under paragraph 3 of the amended notice of motion. It may be that the appellants are able to rectify the latter difficulties in form of the evidence if another motion were brought, but it would be quite inappropriate in my view for this material to go forward in this form.
24	The parties, principally the appellants, have failed for eighteen months to show any real organisational aptitude in preparing this appeal. I make the same qualification about the current solicitor for the appellant. This is the second date for this appeal. In my view the date should not be held for the reasons I have otherwise identified. The Judges of this Court have a hard enough job dealing with the proper appeals brought before them in the number that they are without having to deal with matters on the run latterly put together in the last weeks after 18 months of preparation time.
25	The vacation of that date will permit, first, the notice of appeal to be amended in proper form; two, the submissions to be adjusted in proper form and relevant books prepared; three, consideration to be given by the appellants for the clear identification of any coherent basis for any further evidence in the light of the matters to which I have referred and which appear to me to make it irrelevant; and, four, to permit Mrs Nemeth to obtain assistance from the Bar Association should she want it, she having now made on application.
26	At the risk of speaking overly harshly, and without reflection on the honesty of the solicitors involved, given the conduct in the appeal, I give little credence to the assurances that I have been given such as they are by the appellants that the matter could properly be ready on the 21 February or would properly be ready on the 22 February I do not have any doubt that it could be, but, given the history of this matter, I am simply not prepared to accept that it would be and thus, to put it bluntly, to waste the Judges' time.
27	Therefore, the orders that I will make are as follows. The notice of motion of the first respondent will be dismissed.
28	The court vacates the hearing dates of 21 and 22 February. Costs of the respondents' motion (of the first respondent and the fourth respondent) should be paid by the appellants. This is so notwithstanding that I have refused to make the order. It was entirely legitimate to bring it and the circumstances are not far from my being willing to make the order to dismiss and I do not repeat what I said earlier about the future.
29	Secondly, I grant leave to amend the notice of appeal and I order that the further amended notice of appeal be filed within 14 days.
30	I order that orange, blue and black books be prepared on that basis and that they be filed with the Court on or before 28 February 2011.
31	I refuse to make order 3 in the amended notice of motion, that being the order in accordance with UCPR, Pt 51 r 51.
32	The appellants are to pay the costs of the first respondent and fourth respondent thrown away by the vacation of the hearing date on an indemnity basis with leave to assess such costs forthwith.
33	As to the costs of the abandoned issues, I initially thought it was appropriate to leave these costs to the appeal bench. No question of power arises and no question of power of my being able to make an order was agitated. Leave to amend the notice of appeal is required and the costs of those issues abandoned are attendant upon my granting the leave that I have in relation to paragraphs 1 and 2 of the amended notice of motion. The communications between the solicitors and the general conduct of the matter in my view make it appropriate that I make an order for the appellants to pay the costs thrown away by the abandonment of the issues that have been abandoned. I do not propose to make any order giving leave to assess such costs forthwith.
34	It may be that in hearing the whole of the appeal an appeal court would take the view that there is some legitimate connection between the issues argued and the issues abandoned such that my order should be reviewed in the light of the argument of the whole of the appeal and, to the extent that it is not otherwise implicit, I would condition that order on the ability of the appeal court to revisit it should the appeal court be of the view that aspects of the appeal affect the just awarding of costs for the abandoned issues.
35	As to the costs of the amended notice of motion, I order the appellants, the applicants on the notice of motion, to pay the costs of the first and fourth respondents of the motion.
36	The only aspect of those orders that I have not dealt with in my reasons is the order for costs of the amended notice of motion.
37	Paragraph 3 was refused and was contested and the costs of that should follow the event. The costs of the indulgence in 1 and 2 should be paid in the usual way as the price of the indulgence. Those costs are separate from the consequential costs of the issues thrown away, but I have made an order in relation to those with the qualification in my earlier reasons.
38	The amended notice of motion is otherwise dismissed and I direct that the matter be relisted at the earliest opportunity after the 28 February, assuming the orders are complied with, for the obtaining of a hearing date at the earliest opportunity. If the orders that I have made today are not complied with in terms of procedural directions the parties are to, by a joint letter, inform my associate of that fact and the matter will be relisted.
39	I should add, not by way of order, to the extent that Mrs Nemeth is seeking legal assistance and that the progress of that application would or might affect a hearing date to be given, if there is difficulty in the obtaining of that legal assistance and that difficulty in due course begins to impede the giving of a hearing date I will need to understand from Mrs Nemeth, given the approach she took today, what issues she needs assistance on.

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