Nommack v Pty Limited v FAI Insurances Ltd [2000] NSWSC 877

New South Wales Supreme Court

CITATION : Nommack v Pty Limited v FAI Insurances Ltd [2000] NSWSC 877 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 13048/91 HEARING DATE(S) : 25 August 2000 JUDGMENT DATE : 1 September 2000

Nommack (No 100) Pty Limited (Plaintiff) PARTIES : FAI Insurances Limited (Defendant) JUDGMENT OF : Master Harrison

Mr McAlary QC with Mr K Andranos (Plaintiff) COUNSEL : Mr T Bathurst QC with Mr D Conti (Defendant) Philip J Beazley (Plaintiff) SOLICITORS : Landerer & Company (Defendant) CATCHWORDS : Dismiss proceedings for want of prosecution LEGISLATION CITED : Supreme Court Rules - Part 33 r 6 Stollznow v Calvert [1980] 2 NSWLR 749 CASES CITED : Bishopsgate Insurance Australia Ltd v Deloitte Haskins & Sells (Court of Appeal, Victoria, 9 September 1994 unreported) Department of Transport v Chris Smaller [1989] 1 AC 1197 DECISION : See para 16

8

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MASTER HARRISON

FRIDAY, 1 SEPTEMBER 2000

13048/91 - NOMMACK (No 100) PTY LIMITED v FAI INSURANCES LIMITED

JUDGMENT (Dismiss proceedings for want of prosecution)

1 MASTER: By notice of motion filed 15 June 2000 the defendant seeks an order that these proceedings be dismissed pursuant to Part 33 r 6 of the Supreme Court Rules (SCR). The defendant relied on the affidavit of Robert George Kelly sworn 30 June 2000. The plaintiff relied on the affidavits of Richard Arnold and Philip James Beazley, both sworn 10 July 2000, and a further affidavit of Philip James Beazley sworn 25 August 2000. Mr Kelly and Mr Beazley were cross examined. 2 Briefly, in the summons it is alleged that the plaintiff claims damages for breach of a written contract made by a letter dated 31 March 1988 by which the defendant, in consideration of a fee of $12,950,000, agreed to grant a put option to the plaintiff for a purchase price of $370,000,000 in a form acceptable to prospective lenders to the plaintiff, in respect of a development project for a parcel of land bounded by Pitt, Park and Castlereagh Streets, Sydney, for the purpose of enabling the plaintiff to obtain finance to complete contracts for the purchase of the land and to develop the site. According to the plaintiff, the defendant failed to provide the put option, knowing that the plaintiff could not obtain finance to complete the purchase contracts without the defendant's put option, and knowing that the plaintiff could not obtain alternative finance in the time available before completion of the contracts for the purchase of the land. The vendors of the land terminated the contracts for sale of land to the plaintiff. The plaintiff alleged forfeited deposits totalling $5,960,000 when it failed to complete. 3 I turn to consider whether the proceedings should be dismissed for want of prosecution. Part 33 r 6 of the SCR relevantly reads as follows: "(1) … (2) 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 part or of its own motion, stay or dismiss the proceedings. (3) The Court may not make an order under subrule (2) without giving the plaintiff a reasonable opportunity to be heard." 4 In Stollznow v Calvert [1980] 2 NSWLR 749 Moffitt P held that the discretion to dismiss proceedings for want of prosecution is to be exercised for each case upon its own facts by deciding whether, on striking a balance between the plaintiff and the defendant, justice demands that the action should be dismissed. The judgment makes it clear that the discretion is not confined and that authority does not and cannot establish the weight to be given to particular classes of facts or circumstances. The defendant referred to Bishopsgate Insurance Australia Ltd v Deloitte Haskins & Sells (Court of Appeal, Victoria 9 September 1994 unreported) particularly following the passage by Lord Griffiths in Department of Transport v Chris Smaller [1989] 1AC 1197 where his Lordship stated: "The principles upon which the jurisdiction to strike out for want of prosecution is exercised were settled by the Court of Appeal in Allen v Sir Alfred McAlpine & Sons Ltd. [1968] 2 QB 229, and approved by the decision of this House in Birkett v James. The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants, either as between themselves and the plaintiffs, or between each other, or between them and a third party." 5 The summons was filed on 6 May 1991 and related to events which occurred in 1988, over 12 years ago. On 31 May 1991 (over 9 years ago) these proceedings were transferred from the Commercial division to the Common Law division. In his judgment of 31 May 1991 Giles J (as he then was) noted that the plaintiff agreed to lodge security for costs in the sum of $20,000. His Honour was unimpressed with the plaintiff's explanation for the delay between the cause of action arising and the filing of the statement of claim (a delay of something like three years). The explanation provided by the plaintiff was that in about May 1988 it commenced negotiations with various parties for the financing and sale of the proposed development, naming a number of parties, and that those negotiations continued "until in or about late 1990, but ultimately proved unsuccessful". It was then said that had those negotiations been successful the project would most likely have returned a profit to the plaintiff, and it would not have suffered an "appreciable loss" as a result of the actions of the defendant. Secondly, it was said in bald terms that between late 1990 and in or about April 1991 the plaintiff did not have the funds available to commence the proceedings. 6 In relation to these explanations Giles J stated: "A number of things should be noted about this explanation. First, at the very least, if the plaintiff's claim were correct it had suffered a loss of nearly six million dollars, which ultimate success of the development would not have gainsaid. Secondly, it is said that success in the negotiations would 'most likely' have resulted in there being no 'appreciable loss', which is less than denial of any loss. What this part of the explanation comes down to is the proposition, although not so framed, that it was reasonable to await the outcome of the negotiations so that the measure of any loss would be better known before commencing the proceedings. Secondly, the assertion of lack of funds begins in late 1990, and it is not suggested that there was any lack of funds prior to late 1990. One must wonder what a bald assertion of the kind I have indicated really means, in any event, and I am not sure that it is something which should be given much weight." 7 To date the plaintiff has not properly explained why it agreed to security for costs in the sum of $20,000 if it was not in a position to comply with that obligation. On 24 October 1991 the plaintiff's solicitors, G. Robinson Creais, filed a notice of ceasing to act. Between 1991 to 2000, a period of 9 years, there was no court activity because the proceedings were stayed as the security for costs was not provided. On 16 December 1998 the plaintiff filed a notice of change of solicitor.