Fonseka v Epic Holels Pty Ltd (No 2) [2009] NSWIRComm 178 (27 October 2009)

Last Updated: 13 November 2009

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Fonseka v Epic Holels Pty Ltd (No 2) [2009] NSWIRComm 178



FILE NUMBER(S):
IRC 1367

HEARING DATE(S):
Written submissions

DATE OF JUDGMENT:
27 October 2009

PARTIES:
Nandini Fonseka (Applicant)
Epic Hotels Pty Ltd trading as Swiss Grand Hotel Bondi Beach (First respondent)
Swiss Garden International Limited (Second respondent)

CORAM:
Boland J President


CATCHWORDS: DISMISSAL OF PROCEEDINGS – unfair contract – want of prosecution – applicant’s failure to progress proceedings – principles concerning case management and administration of justice – effect of delayed proceedings on litigants, the court and the public – applicant afforded opportunities to progress claim – no advancement in claim for extended period of time – proceedings dismissed for want of prosecution.

WANT OF PROSECUTION – unfair contract – dismissal of proceedings – applicant’s failure to progress proceedings – principles concerning case management and administration of justice – effect of delayed proceedings on litigants, the court and the public – applicant afforded opportunities to progress claim – no advancement in claim for extended period of time – proceedings dismissed for want of prosecution.

LEGAL REPRESENTATIVES
Mr G H Healey, solicitor (Applicant)
G H Healey & Co.
Mr J Dawson, solicitor (Respondents)
Carneys Lawyers

CASES CITED:
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14
Hakim v Hakcom Investments Pty Limited [2004] NSWIRComm 405
Hoser v Hartcher [1999] NSWSC 527
Koprivnjak v Body Corporate Services (NSW) Pty Ltd (1999) 87 IR 49
Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 259 ALR 319
Mealey v Council of the City of Sydney [2004] NSWIRComm 58
Nandini Fonseka v Epic Hotels Pty Ltd [2008] NSWIRComm 79
Paskin v City and Industrial Demolitions (NSW) Pty Ltd [2009] NSWSC 1027
Piriz v AAPT Ltd [2005] NSWIRComm 374; (2004) 132 IR 177
Razvan v Berechet (Court of Appeal, 23 February 1990, unreported)
Sedrak v Starr [2009] NSWSC 996
State of Queensland v J L Holdings Pty Limited [1997] HCA 1; (1997) 189 CLR 146
Stollznow v Calvert [1980] 2 NSWLR 749

LEGISLATION CITED:
Industrial Relations Act 1996


TEXTS CITED:




JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: BOLAND J, President

Tuesday 27 October 2009

Matter No IRC 1367 of 2003

NANDINI FONSEKA v EPIC HOTELS PTY LIMITED TRADING AS SWISS GRAND HOTEL BONDI BEACH AND ANOR

Application under section 106 of the Industrial Relations Act 1996

INTERLOCUTORY JUDGMENT

[2009] NSWIRComm 178

1 Nandini Fonseka (‘the applicant’) has sought relief under s 106 of the Industrial Relations Act 1996 (‘the Act’) against Epic Hotels Pty Ltd and Swiss Garden International Limited (‘the respondents’). The applicant alleged that the contracts under which she performed work for the respondents were unfair, harsh and unconscionable and contrary to the public interest.

2 The applicant’s summons for relief was filed on 12 March 2003. The matter has a long history, which was summarised in the respondent’s chronology of proceedings. A modified version of the chronology (incorporating information extracted from the Industrial Registry's records) is set out below:

DATE	EVENT
12-03-2003	Summons for Relief filed
20-05-2003	Reply filed
02-07-2003	Amended Reply filed
29-10-2003	Response to Amended Reply filed
29-03-2004	Conciliation unsuccessful
19-07-2004	Amended Summons for Relief filed
27-05-2005	Directions Hearing - Directions made: (i) Any party wishing to rely on oral evidence must give notice by 3 June 2005.
28-10-2005	Directions Hearing - Directions made: (i) Matter stood over to 17 November 2005; (ii) Parties to file Certificate of Readiness.
17-11-2005	Directions Hearing - Directions made: (i) Certificate in accordance with practice note 14 handed up. (ii) Parties indicated matter ready for hearing. (iii) Matter referred for a hearing date to be allocated.
05-12-2005	Matter set down for hearing for 3 days in August 2006.
07-08-2006	Applicant filed Notice of Motion, seeking orders, amongst other things, for leave to adduce evidence from current employees of the Respondent, and issue Summons to Produce and file Further Amended Summons for Relief.
15-08-2006	Return date of Notice of Motion. Applicant given leave to file and serve Further Amended Summons.
16-08-2006	Affidavit of Gregory Harrison Healey filed attaching draft proposed further amended summons for relief.
17-08-2006	Notice of motion heard. Orders made: 1. The notice of motion filed by the applicant on 7 August 2006 is dismissed, except for order 4 sought in that notice of motion in relation to a grant of leave to the applicant to further amend the amended summons for relief, which will be stood over until Monday, 28 2006 at 11am. 2. The proposed evidence in affidavit form of the three unidentified witnesses for the applicant is to be filed and served on the respondents no later than by 4 pm on Monday 21 August 2006. 3. Any further evidence to be relied upon by the applicant is to be filed and served on the respondents no later than by 4 pm on Monday 21 August 2006. 4. The respondents are granted liberty to apply to make any application at any time between Tuesday, 22 August 2006 until 28 August 2006. 5. No order as to costs.
21-08-2006	Two (2) Affidavits served by the Applicant on the Respondent: one by the Applicant (now alleging underpayment), the other by Obaidur Rahman.
25-08-2006	Matter re-listed on Respondent's Application. Hearing dates set down for 28 August 2006 to 30 August 2006 vacated. Respondents sought costs order in favour of Respondents for costs thrown away by reason of the hearing dates being vacated.
28-08-2006	Conciliation conference.
21-09-2006	Hearing re Costs - the Court made orders as sought by the Respondent: 1. The applicant is to pay the respondent's costs on a party/party basis, as agreed or assessed, in respect of the applicant's notice of motion filed on 7 August 2006. 2. The applicant is to pay the respondent's costs on an indemnity basis, as agreed or assessed, thrown away by reason of; 2.1 The further amended summons for relief; 2.2 The late filing of affidavit evidence; 2.3 The vacation of the hearing dates of 28 August 2006 to 30 August 2006, inclusive. 3. The applicant is to pay the costs referred to in the preceding orders within 28 days of the costs being agreed or assessed.
06-11-2006	Directions hearing – orders made for filing of further evidence: 1. The respondents to file and serve any amended reply by 5 December 2006; 2. The respondents file and serve any evidence in reply by 31 January 2007; 3. The matter be listed for further directions on 7 February 2007.
06-02-2007	The Court ordered (in Chambers): (a) that the orders made on 6 November, 2006 be vacated; (b) that the Respondents file and serve evidence on or before 7 March, 2007; (c) that the Applicant file any evidence in reply by 28 March, 2007; (d) that the matter be relisted for further directions on 6 April, 2007.
08-03-2007	Respondents filed and served their evidence.
30-04-2007	Judgment entered for Costs against Applicant in Supreme Court proceedings 11824 / 2007.
16-07-2007	Directions hearing - the Court ordered: (a) the Applicant's Affidavit be filed and served by 4.00 pm 10 September, 2007; (b) the Respondents file and serve Affidavits by 4.00 pm on 22 October, 2007; (c) that hearing dates be set for 5, 6 and 7 December, 2007.
03-08-2007	Respondent wrote to the Applicant regarding hearing dates change due to unavailability of Counsel; agreed to by Applicant.

3 The respondents filed a notice of motion on 23 January 2008 seeking the following:

1. The proceedings are dismissed for want of prosecution.

2. The Applicant pays the Respondents’ costs as agreed or as assessed.

3. Further and in the alternative to orders 1 and 2, the matter be stayed until the Applicant complies with the orders of Her Honour Justice Backman of 21 September 2006 and the NSW Supreme Court in proceedings 11824/2007.

4. Further and in the alternative to orders 1, 2 and 3, the hearing of the proceeding is adjourned until after the Applicant files and serves her evidence in Reply.

5. Further and in the alternative to orders 1, 2 and 3, the Applicant provides security of costs in the amount of $50,000.00 by 5 February 2007.

6. In the alternative to order 5, that the Applicant provide security of costs in the amount ordered by the Court by the date ordered by the Court.

7. The proceedings are stayed in the event security of costs is not paid by the required date.

8. Costs.

9. Any other order the Court believes to be appropriate.

4 The applicant subsequently filed a notice of motion on 30 January 2008 seeking the following:

1. The Respondents create a fund of money of no less than $250,000.00 in proceedings 1367 of 2003 secured to the satisfaction of the Court.

2. With respect to the fund of money of no less than $250,000.00 the Respondents Solicitors Carneys have access in respect to payment to the Applicant should there be Orders for payment in favour of the Applicant

3. In relation to the Respondents earlier Cost Orders against the Applicant, pending Hearing of proceedings 1367 of 2003 the Applicant to pay a monthly sum of $3,009.00 to the Respondents

4. The within proceedings be adjourned for a period of no less than four (4) months

5. Costs

5 The above motions were heard on 28 March 2008 and judgment delivered on 24 April 2008 in Nandini Fonseka v Epic Hotels Pty Ltd [2008] NSWIRComm 79 ('the 2008 judgment'). The Court made the following orders:

(1) In relation to the applicant's motion:

(a) Orders 1, 2, 3, 4 and 5 are refused.

(b) Costs are reserved.

(2) In relation to the respondents' motion:

(a) Orders 1, 2, 4, 5, 6, 7 and 8 are refused.

(b) The proceedings are stayed until the applicant complies with the orders of Backman J of 21 September 2006 and the New South Wales Supreme Court in proceedings 11824/2007.

(c) Costs are reserved.

6 The Court did not receive any further information as to the progress of the matter from the delivery of the 2008 judgment up until a directions hearing on 2 September 2009. On that date the applicant indicated her position as wanting to progress the matter to hearing, and the respondents indicated their position as seeking to have the proceedings dismissed and costs orders in their favour. The Court made orders that the parties file and serve written submissions in support of their respective positions.

Respondents’ case

7 The respondents relied on evidence filed in the 2008 proceedings in submitting that the applicant had failed to comply with numerous orders of the Court and had failed to prosecute her case in a timely manner. The respondents identified the provisions of the Industrial Relations Commission Rules 1996 (‘the Rules’) granting the Court power to dismiss proceedings for want of prosecution. The Rules provide, relevantly:

146 Want of prosecution

Where any party has not done any act required to be done by or under the Act or any other Act or otherwise has not pursued the proceedings with due diligence, a tribunal may:

(a) order that the application be dismissed for want of prosecution, or

(b) fix a definite time for the doing of the act and at the same time order that upon non-compliance the application shall stand dismissed for want of prosecution or subsequently, in the event of non-compliance, order that it be dismissed, or

(c) make such further or other order as in the circumstances may seem just.

147 Effect of dismissal

Subject to any right of appeal, where a tribunal dismisses an application for want of prosecution the applicant shall not claim the same relief in fresh proceedings.

8 The respondents referred to several decisions of this Court and other courts outlining the principles to be applied where an application is made to dismiss proceedings for want of prosecution, including: Koprivnjak v Body Corporate Services (NSW) Pty Ltd (1999) 87 IR 49, Hakim v Hakcom Investments Pty Limited [2004] NSWIRComm 405, Piriz v AAPT Ltd [2005] NSWIRComm 374, Mealey v Council of the City of Sydney [2004] NSWIRComm 58; (2004) 132 IR 177, State of Queensland v J L Holdings Pty Limited [1997] HCA 1; (1997) 189 CLR 146, Hoser v Hartcher [1999] NSWSC 527, Stollznow v Calvert [1980] 2 NSWLR 749 at 751, Razvan v Berechet (Court of Appeal, 23 February 1990, unreported).

9 The respondents submitted the following:

(a) The Applicant has a history of inordinate and inexcusable delay in prosecuting her claim....The Applicant was terminated on 14 March, 2002. The proceedings were not commenced until 12 March, 2003. Hence some 7½ years have elapsed since the date of termination and 6½ years since proceedings were commenced.

(b) In contrast the Respondents have taken all proper steps to secure progress in the proceedings and where possible to activate an apparently inactive Applicant.

(c) There is a real risk of prejudice to the Respondents in that the elapse of such a long period there is likely to be a fading of the recollections of the Respondents' witnesses.

(d) The default by the Applicant in complying with orders and directions of the Court is intentional and contumelious. On 17 August, 2006 Her Honour Justice Backman granted leave to the Applicant, amongst other things, to file a further Amended Summons and further Affidavit material. That Further Amended Summons has still not been filed by the Applicant in accordance with Her Honour's Orders....

(e) On 6 February, 2007 Justice Boland made orders that required the Respondents to file their evidence and the Applicant to file any evidence in reply by 28 March, 2007. The Respondents filed and served their evidence as required by the Orders. The Applicant did not file her evidence in reply.... On 16 May, 2007 His Honour Justice Boland again made orders which required the Applicant's Affidavit to be served by 10 September, 2007. The Applicant did not comply with that order.

(f) The Applicant has not satisfied the Costs Order made against her which became an Order of the Supreme Court in proceedings 11824/2007 on 30 April, 2007.

(g) The matter was last before the Court on 28 March, 2008. The Applicant has taken no action since that date to prosecute her claim.

(h) The Applicant has little prospect of success. In the first place the Applicant's employment is subject to a Federal Award since she was employed by a member of the Australian Hotels Association. As such the Applicant's employer was at all relevant time a respondent to Federal Awards and she was covered either by the Hotel Managerial Staff (Federal) Award 1974 or the Hospitality Industry – Accommodation, Hotels Resorts and Gaming Award 1995. Where an Applicant is covered by a Federal Award this Court has no jurisdiction to determine the Applicant's claims and her matter should be dismissed: Everett v Cuscal Shared Services Pty Limited & Anor [2005] NSWIRC Comm 319 and Hansen Yuncken Pty Limited v. Andreas Costopoulos [2004] NSWIR Comm 249.

(i) Secondly, the Applicant was paid a fair notice and redundancy benefit based upon the "New South Wales Scale" prescribed in Schedule 1 to the Employment Protection Regulations 1995....

(j) Thirdly, much of the Applicant's claims have little or no evidentiary support....

10 The amount of moneys that have been paid by the applicant to the respondents since the costs orders made in the Supreme Court on 30 April 2007 is $352.45. That payment was made in April 2008.

Applicant’s case

11 Mr G H Healey, solicitor for the applicant, submitted that the matter should proceed to hearing. The applicant’s submissions outlined her position regarding the delays in the progress of the matter due to the sensitive nature of the evidence she wished to adduce from her witnesses. The applicant contended that she did not want to jeopardise the witness’ positions with their employer, the respondents.

12 The applicant sought to rely upon her affidavit sworn on 30 January 2008 wherein she stated:

I say this as I earlier instructed my Solicitor that I have had difficulties in preparing the evidence in my matter as I did not want to put at risk the employment of various staff members of the Respondents.

I say the foregoing as despite assurances this does not happen, personally having had various senior employment positions within the hospitality industry I am aware that staff members who side with an employee against an employer can have their employment put at risk.

13 The position taken by the applicant was despite the respondents’ advice that they would not jeopardise any person's employment if they gave evidence against the Swiss Grand.

14 The applicant further submitted that, notwithstanding the concession that her financial circumstances have not improved since the 2008 judgment, the matter should proceed to hearing:

In relation to the preparation of the matter for Hearing, I am instructed that as indicated in the then employed solicitor, Ms Ng’s Certificate under Practice Direction 14 that:

The likely Court time necessary for the Hearing of the proceedings is estimated to be three (3) days depending on the extent that the Applicant has indicated that she may elect to call oral evidence.

I believe that with appropriate economy of time that the matter could be concluded as to witnesses in two (2) days.

It is noted that in addition to the evidence of the Forensic Accountant, Mr Prior, there would be the evidence of:

the Applicant, and

John Rodrigo, and

Obaidur Rahman.

The Applicant, Mr Prior, Mr Rodrigo and Mr Rahman have provided Affidavits which have been filed in the proceedings 1367 of 2003.

If evidence is required of Mr Rupp telling the Applicant to “fuck off” in front of Ms Emma Treadmill then a subpoena will need to be issued to Ms Treadmill.

15 It was further submitted for the applicant that:

This is not the first time that the Respondents have sought to have the matter dismissed.

Formerly the Applicant relied upon the 78(b) Notice which they did not issue with the Respondents stating they were relying upon Section 109 of Constitution as a Defence.

... Mr Dawson in his Affidavit sworn 27 March 2008 referred specifically to four (4) Federal Awards and claimed that:

“in these circumstances the Court has no jurisdiction to determine the Applicant’s claim and the matter should be dismissed.”

If the Respondents considered that section 78(b) of the Constitution was relevant, a 78(b) Notice should have been issued by the Respondents which they did not do.

Even accepting the fact that it is a balancing act to ensure there is no prejudice to either the Applicant or the Respondent party and notwithstanding the non payment of costs, it clearly is not a case where justice demands that the action be dismissed.

In relation to the Respondents the onus clearly lies on them apart from the payment of money to the Applicant to show the kinds of prejudice that may arise which they have not at all indicated in their submissions.

In relation to the Respondents’ Chronology notwithstanding the non payment of costs, in circumstances where there has been a chronic underpayment of overtime to the Applicant notwithstanding the hours she was required to work citing a redundancy situation was incorrect.

The Commission is referred to the Affidavit of Robert Benjamin Prior sworn on 16 August 2006 to which he annexes his report dated 15 August 2006 and to the calculation paragraph on page 3 of that report where the sum of $80,027.00 is set out.

The period 17 March 1999 to 14 March 2002 meant that for the Applicant she worked hours for which she was not remunerated of no less than $80,027.00.

It is not denied that an unreasonable act or omission may lead to a costs order. It is necessary however to look at the state of the evidence at the time.

Further, as indicated in Australian and International Pilots Association v. Qantas Airways Limited (No. 3) [2007] FCA 879; (2007) 162 FCR 392; 165 IR 46 whilst the actions may well have been unsuccessful costs do not arise unless the case is hopeless.

The weakness of the Respondent’s case only became apparent upon the filing of the Respondent’s evidence and the submissions of the Respondent.

It is submitted that the High Court of Australia in the matter of State of Queensland and Anor & JL Holdings Pty Ltd has dealt with the issues at hand...

16 Mr Healey submitted that the ‘respondents will only benefit financially should the matter be dismissed from the hearing list’. Mr Healey indicated that given the financial circumstances of his client, he would appear for the applicant on a ‘successful conclusion basis’, as would counsel that he has conferred with concerning this matter.

17 Mr Healey filed an affidavit in the Court annexing a further amended summons for relief that the applicant intended to file if granted leave to do so and proceed with her case. The substance of the amendment seeks to increase the applicant’s claim for unpaid hourly wages from $20,000, to $80,027, incorporating evidence from a forensic accountant filed 16 August 2006.

Relevant law

18 The applicant referred to the decision of the High Court in J L Holdings in submitting that the Court should be minded to hear the applicant’s case. In that decision, the High Court held, per Dawson, Gaudron and McHugh JJ at 154 and 155:

Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.

...

Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.

19 The principles espoused in J L Holdings regarding case management and the attainment of justice have been recently considered by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14. Notwithstanding the different factual settings before the High Court, French CJ said of J L Holdings ‘to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative’. His Honour went on to say at [30]:

It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.

20 Their Honours Gummow, Hayne, Crennan, Kiefel and Bell JJ considered the purpose of case management in the context of litigation:

[94] It will be recalled that in J L Holdings the plurality said that nothing in Sali v SPC suggested that principles of case management might be employed "except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable". Their Honours said that case management was not to be seen as an end to itself and that the ultimate aim of the court remained the attainment of justice, even in changing times. In Gale v Superdrug Stores Plc Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd, said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.

[95] The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question. The statement is consistent with what was said in Sali v SPC, which reflected a proper understanding of case management. The statements in J L Holdings do not reflect such an understanding and are not consistent with what was said in Sali v SPC. To say that case management principles should only be applied "in extreme circumstances" to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others.

...

[99] In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all. Such a view may largely explain the decision of this Court in Shannon v Lee Chun, which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh.

[100] The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd, that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also now generally accepted. In Bomanite Pty Ltd v Slatex Corp Aust. French J said of Bowen LJ's statements in Cropper v Smith:

"... That may well have been so at one time, but it is no longer true today ... Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary."

[101] In Ketteman Lord Griffiths recognised, as did the plurality in J L Holdings, that personal litigants are likely to feel the strain more than business corporations or commercial persons. So much may be accepted. But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings.

[102] The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.

21 Their Honours concluded at [111]-[114]:

[111] ... The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

[112] ... It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

[114] Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.

22 Since the decision in August 2009, Aon Risk Services has been applied in a number of cases in the Supreme Court and other jurisdictions. Many of those cases have concerned the procedural issues governing the amendment to pleadings, apposite to the facts of Aon Risk Services. The principles to be applied by courts in governing case management and procedural issues have similarly been applied. Schmidt J discussed the principles in the decision of Paskin v City and Industrial Demolitions (NSW) Pty Ltd [2009] NSWSC 1027. In that case, her Honour dealt with a situation where a defendant had applied for the dismissal of proceedings in circumstances where the plaintiff had a history of non-compliance with court orders and directions. Given the extenuating circumstance of a serious car crash injury sustained by the plaintiff in 2007, her Honour granted the plaintiff a final opportunity to adhere to previous court orders. However, in doing so, her Honour stated at [11]-[13]:

[11] ... I observe that no matter how sympathetic one might be for Mr Paskin’s difficulties, given his very unfortunate situation, and the challenges which they undoubtedly present his legal advisers, there comes a point where indulgences granted to accommodate his problems result in injustice to the defendants, which cannot be remedied by costs orders. That point has well and truly been reached. The defendants are plainly not the author of Mr Paskin's current problems, or his ongoing failure to prosecute his case, or to comply with the Court’s orders. As the High Court recently discussed in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 83 ALJR 951, costs orders cannot always outweigh the consequences of ongoing delay, such as is present in this case.

[12] The Civil Procedure Act 2005 emphasises the obligations which the parties have to assist the Court in achieving the objects of the Act, specified in s 56 to be the 'just, quick and cheap resolution of the real issues in the proceedings'. Mr Paskin's ongoing failure to adhere to his obligations in these proceedings may no longer be accommodated.

[13] I have thus concluded that while Mr Paskin should be given a final opportunity to put his case on a footing where a hearing date may be given, if he fails to comply with the orders which I now make, his proceedings will stand dismissed. Those orders reflect what was agreed by the parties in May 2009 and what the Registrar then also directed be done. Neither Mr Paskin, nor his lawyers should proceed in the expectation that they will be relieved of the consequences of any further failure to prosecute his case, in accordance with this order.

23 For application of Aon Risk Services to procedural matters in general, see Sedrak v Starr [2009] NSWSC 996 and Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 259 ALR 319.

Consideration

24 In the decision of Fonseka v Epic Hotels delivered in April 2008, the Court considered the respondents’ application to dismiss the proceedings for want of prosecution. I do not propose to revisit the principles that are set out at [12]-[15] of that judgment, other than to highlight my conclusion regarding the applicant’s conduct at [14]:

[14] In my opinion, this is a case that comes very close to warranting dismissal. The claim was initiated in 2003. It is now 2008. There has been such a degree of procrastination and delay on the part of the applicant that, despite attempts by the respondents to progress the proceedings, one may be forgiven for believing the applicant simply could not make a decision about whether she wished to press her case for relief. The applicant has also breached the Court's orders and directions.

25 At that stage, the Court allowed the applicant to pursue her claim by staying the proceedings until previous orders were complied with. There is no evidence before the Court that demonstrates the applicant has made any attempt to progress her claim since April 2008. Indeed, the applicant’s solicitor concedes that is the case.

26 No proper basis has been put to the Court as to why it should now change the position it adopted in April 2008 in requiring the applicant to comply with the orders of Backman J of 21 September 2006 and the New South Wales Supreme Court in proceedings 11824/2007. There has, as the respondents submitted, been a complete absence of any activity or interest by the applicant in prosecuting these proceedings. The only reason the matter came again before the Court is because the Court called the matter on in order to discover what progress had been made towards clearing the way for the matter to proceed. The answer is: none.

27 The proceedings cannot be left to languish indefinitely in the Court's list. Given the applicant's history of delay, procrastination and default and the failure to take reasonable steps to comply with the orders made by the Court in April 2008, the applicant leaves the Court with no choice but to grant the respondents' application to dismiss for want of prosecution.

28 The applicant's reliance on J L Holdings is misplaced. It has relevantly been overtaken by Aon Risk Services. There has been very substantial delay in these proceedings. They have been in the Court's list since 2003. Recognition has to be given to the deleterious effects of delay on the respondents, the Court and the public and to the need for the timely disposal of cases.

29 In circumstances where an applicant has had sufficient opportunity to plead their case and has a history of non-compliance with court orders and procedures, the delay and costs associated with permitting the prolongation of a matter may mean that it is ‘necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants’: Aon Risk Services at [94].

30 The applicant submitted that the ‘onus clearly lies on them [respondents], apart from the payment of money to the Applicant, to show the kinds of prejudice that may arise’. This submission is rejected. Aon Risk Services emphasises that the delay and costs associated with litigation such as the one before the Court is in fact the type of ‘injustice’ or ‘prejudice’ that the respondents suffer in this situation.

31 The applicant further submitted that this ‘clearly is not a case where justice demands that the action be dismissed’. The Court must reject this submission in light of Aon Risk Services. The applicant has been afforded ample opportunity to pursue her claim since its initiation in 2003. The history of the matter illustrates some procedural issues both parties faced, the kind that often cause minor delays in a matter progressing expeditiously. However, this matter has been 'on foot' for over six and a half years, the last 19 months of which the applicant has failed to progress the matter at all. The Court has no option other than to dismiss the proceedings, in the interests of administering justice for the respondents, other litigants in this jurisdiction and to maintain ‘public confidence in the legal system’ (Aon Risk Services at [30]). These issues are not ameliorated in any way by the applicant’s procurement of legal representation on a pro bono or ‘successful conclusion’ basis, nor are there any extenuating circumstances such as those described in Paskin that would warrant providing the applicant with further time.

ORDERS

32 The Court makes the following orders:

(1) Matter number IRC 1367 of 2003 is dismissed for want of prosecution pursuant to Rules 146 and 147 of the Industrial Relations Commission Rules 1996.

(2) The applicant is to pay the respondents’ costs of the motion dated 23 January 2008 as agreed or assessed.

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LAST UPDATED:
28 October 2009