New South Wales Supreme Court CITATION : ROZENE v RAINE & HORNE [1999] NSWSC 672 CURRENT JURISDICTION : COMMON LAW FILE NUMBER(S) : 12765/1989 HEARING DATE(S) : 15 June 1999 JUDGMENT DATE : 6 July 1999 ROZENE PTY LIMITED PARTIES : v RAINE & HORNE COMMERCIAL PTY LIMITED JUDGMENT OF : Master Malpass COUNSEL : PLAINTIFF: MR M J SLATTERY QC/MR M J WALSH DEFENDANT: MR C GEE QC/MR J SIMPKINS SOLICITORS : PLAINTIFF: MUSGRAVE PEACH DEFENDANT: PHILLIPS FOX CATCHWORDS : Dismissal for want of prosecution; defendant lets sleeping dogs lie; no question of principle. ACTS CITED : Supreme Court Rules 1970, Pt. 5 r 12, Pt. 33, Pt. 33 r 6. Australian Guarantee Corporation v Reid (Supreme Court of Victoria - Court of Appeal - 19 March 1996). Stollznow v Calvert (1980) 2 NSWLR 749. CASES CITED : Cooper v Hopgood and Anor (Supreme Court of Queensland - Court of Appeal - 2 June 1998). Hartigan v International Society for Krishna Consciousness Incorporated (Bryson J, 15 February 1999). Tricon Industries Pty Ltd v Abel Lemon and Company Pty Ltd (No 2) (1998) 2 Qd. R 551. DECISION : SEE PARAGRAPH 31 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS TUESDAY 6 JULY 1999 12765/1989 ROZENE PTY LIMITED v RAINE & HORNE COMMERCIAL PTY LIMITED JUDGMENT 1 The defendant has filed a Notice of Motion seeking an order that these proceedings be dismissed for want of prosecution. The opposed application was heard on 15 June 1999. 2 In support of the application, the defendant has read a number of affidavits (the deponents are Messrs Joyce, Wilkinson, McCarney and Sharpe). Mr Joyce was cross-examined. The plaintiff relies on an affidavit sworn by Mr Andrews (the Managing Director of the plaintiff). Further, there has been a tender of documentation. 3 At the relevant time, the defendant carried on the business of a Real Estate Agent. It acted as agent for the plaintiff in respect of a sale of certain real estate (the property). The defendant introduced a purchaser and in May 1988 contracts were exchanged for the sale of the property for a price in the order of 8.25 million dollars. This contract was completed in November 1988 simultaneously with a further contract for sale. This contract was for the sale by the purchaser for a price in the order of 12.5 million dollars. 4 These proceedings were commenced by Summons filed in the Commercial Division on 22 June 1989. The Summons claimed inter alia damages for breach of agreement. It is alleged that the agreement was made between Mr Andrews (on behalf of the plaintiff) and Mr Walters (on behalf of the defendant). It is alleged inter alia that there was a breach of duty to obtain the best price. 5 At the time of the commencement of the proceedings, Diamond Peisah & Co were the solicitors acting for the plaintiff. Largely, the conduct of the proceedings was in the hands of Mr Michael Diamond and employed solicitors. 6 The defendant filed a Notice of Appearance in July 1989. On 21 July 1989, the proceedings were transferred to the Common Law Division. Thereafter, no steps were taken in the proceedings for many years. 7 There are no pleadings. There has not been a request for particulars. The matter has not been set down for trial. It has not been listed for directions. 8 It appears probable that the plaintiff's sale file has been lost. This may have occurred in about 1990. It may have been given to Mr Marriott (the Managing Director of the defendant) for the purpose of the bringing of proceedings to recover a claim for commission. 9 It appears that in April 1992, a meeting took place between Messrs Marriott and Andrews to explore settlement of the proceedings. This meeting did not lead to their resolution. There was no contact between the plaintiff or its solicitors and Phillips Fox (the solicitors for the defendant) during the period 21 July 1989 to September 1993. In or about September 1993 Phillips Fox closed and archived its file. 10 Thereafter, until August 1996, there was no contact between plaintiff and defendant. On or about 21 August 1996, the plaintiff filed and served a Notice of Change of Solicitor. Musgrave Peach then became the solicitors for the plaintiff. Thereafter, communication took place between Phillips Fox and Musgrave Peach. The plaintiff issued a number of subpoenas. On 16 April 1997, the plaintiff filed a Notice of Motion seeking the granting of access in respect of material produced in response to the subpoenas. The Notice of Motion has not been brought to hearing. 11 On 28 April 1997, the defendant filed the Notice of Motion which brings the present application before the Court. It came before the Court on 5 May 1997 and 8 May 1997 and was then stood over generally. It did not come back before the Court until 9 March 1999. A hearing date was given on 20 April 1999. 12 The defendant seeks relief under either Pt. 5 r 12 or Pt. 33 r 6 of the Supreme Court Rules 1970 (it does not look to the inherent jurisdiction of the Court). The latter rule has no application in the present case. Part 33 is expressed to apply to proceedings commenced by Statement of Claim. In this case, the originating process was a Summons and there are no pleadings. 13 Part 5 r 12 is in the following terms:- "(1) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may, on application by any party or of its own motion, stay or dismiss the proceedings. (2) The Court may not make an order under subrule (1) without giving the plaintiff a reasonable opportunity to be heard. (3) The Court may, on application by any party, set aside an order that is made on the Court's own motion under subrule (1)." 14 This rule confers a discretionary power upon the Court to stay or dismiss proceedings when any of the relevant threshold requirements have been satisfied. In the present case, the relevant threshold requirement is that of failure to prosecute the proceedings with due despatch. 15 It is not (and could not be) in dispute that the threshold requirement has been satisfied. The question at issue is whether or not the discretionary power should be exercised in favour of the defendant. 16 The parties have referred the Court to a number of decided cases (including Australian Guarantee Corporation v Reid (Supreme Court of Victoria - Court of Appeal - 19 March 1996), Tricon Industries Pty Ltd v Abel Lemon and Company Pty Ltd (No 2) (1998) 2 Qd.R 551, Cooper v Hopgood and Anor (Supreme Court of Queensland - Court of Appeal - 2 June 1998), Stollznow v Calvert (1980) 2 NSWLR 749 and Hartigan v International Society for Krishna Consciousness Incorporated (Bryson J, 15 February 1999)). 17 The discretionary power is exercised having regard to the relevant circumstances of the particular case before the Court and so that justice is best served between the parties. Whilst other decided cases provide guidance, each case can be expected to turn on its own particular facts. The onus of demonstrating an entitlement to relief rests on the applicant. 18 As is usually the case, the discretionary considerations of inter alia delay, explanation for the delay and prejudice are material. 19 The relevant events happened about 11 years ago. However, the proceedings were commenced with reasonable promptitude. The defendant did have the opportunity to prepare its case whilst the events were relatively fresh. 20 There has been protracted inactivity by both parties. Largely, the matter has not progressed during a period of about 10 years. This situation seems extraordinary when regard is had to the magnitude of the claim. The plaintiff seeks to recover damages and interest. The damages component is said to be in excess of 4 million dollars. An interest calculation puts that component in excess of 6 million dollars. The quantum of the claim is now well in excess of the limit of the defendant's relevant professional indemnity insurance policy. 21 The material advanced to explain the plaintiff's delay is to be found in the affidavit sworn by Mr Andrews. Mr Andrews principally blames his former solicitors Diamond Peisah & Co. Clearly, they did very little whilst the matter was in their hands, whilst leading him to believe that it was proceeding normally. By August 1995, he had begun to have doubts about the diligence of their prosecution of the proceedings. Ultimately, in April 1996, he gave instructions for the transfer of his file to the present solicitors. Some activity then ensued during 1996. 22 For completeness, I should mention that during the many years they had the conduct of the proceedings, one of the partners (Jack Diamond) of Diamond Peisah was struck off the Roll of Solicitors. This event however does not appear to be related to the delay in this case. 23 In my view, the matters advanced by the plaintiff fall short of sufficiently explaining the delay both prior to August 1996 and thereafter. There has been lack of diligence on the part of the plaintiff itself (inter alia it should have acted much earlier in relation to its problems with Diamond Peisah and despite a change of solicitors a lack of diligence persists). It must bear part of the blame for the delay. 24 It can be expected that oral evidence will be of significance in determining the issues. It is reasonable to expect that memories will have faded over the years. The delay can be expected to make the determination of factual issues more difficult. 25 The loss of the relevant sales file means firstly that the case may have to be determined without the advantage of having relevant documentation before the Court. Secondly, there is a loss of a source for refreshing recollection. For completeness, I should record that it is not said that the delay bears any responsibility for this loss. 26 It seems that the defendant has taken some advantage of the opportunity had to prepare its case. Whilst there are no signed statements from witnesses, there is material which records what has been said in conference with potential witnesses. 27 Prior to 1997, the defendant adopted the stance of letting sleeping dogs lie. It made no attempt to activate the matter or complain about delay and warn of prejudice. It took the course of closing its files in the hope that the matter would not be activated thereafter. It had "lain silent" and now claims prejudice by reason of the delay (see Calvert at 754 ). 28 Although the present application was brought more than 2 years ago, steps were not taken to bring it on for hearing until this year. It remains unclear as to why it has taken the parties so long to bring it on for hearing. 29 During that time, nothing appears to have been done by the plaintiff to advance the matter. There had been the minor flurry of activity which took place before the application was brought. Even that activity, has not been pursued to date. As to the future, the Court is left with the unchallenged statement made by Mr Andrews in paragraph 48 of his affidavit ("I have been and I remain anxious to prosecute these proceedings"). 30 The relevant circumstances of this case place the Court in somewhat of a dilemma. The discretionary exercise is not an easy one. Ultimately, after considerable deliberation, I have come to the view that I am not satisfied that justice would be best served by dismissing the proceedings at this stage. However, I should make it clear that, if the plaintiff does not take advantage of what may be seen as a final opportunity to expeditiously pursue this litigation, it can expect that the proceedings may well be the subject of a dismissal order in the future. The continuing unsatisfactory situation cannot be allowed to persist. 31 I dismiss the Notice of Motion. The proceedings are to be listed before the Acting Prothonotary on 12 July 1999 for directions. The question of costs is not an easy one. In the circumstances of this case, it seems to me to be appropriate to order that each party pay its own costs and I so order. The exhibits may be returned. ********** Last Modified: 07/06/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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