New South Wales Supreme Court CITATION : Preston Erection Pty Ltd v Favelle & ors [2002] NSWSC 181 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1440/87 HEARING DATE(S) : Monday, 18 February 2002 JUDGMENT DATE : 18 February 2002 Preston Erection Pty Limited (Plaintiff) Edward Hastings Favelle (First Defendant) PARTIES : Edward Lewis Mogridge (Second Defendant) Victor George Burns (Third Defendant) Pieter Van Der Kwaak (Fourth Defendant) JUDGMENT OF : Master McLaughlin R. Butler (Plaintiff) COUNSEL : F. Lever (First Defendant) M. Rollinson (Second Defendant) G. Blake (Fourth Defendant) Colquhoun & Colquhoun Solicitors (Plaintiff) SOLICITORS : KPNW Lawyers (First Defendant) Mulally Mylott Solicitors (Second Defendant) Emil Ford & Co. Solicitors (Fourth Defendant) DECISION : 1. Note that these proceedings were by order of the Court made on 9 September 1992 struck out, and that in consequence any purported orders or directions made thereafter are of no effect.; 2. No order as to costs of any party after 9 September 1992, to the intent that each party will bear its or his own costs incurred since that date. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN MONDAY, 18 FEBRUARY 2002 1440/87 PRESTON ERECTIONS PTY LIMITED -V- FAVELLE & ORS JUDGMENT 1 MASTER: There are presently before the Court three notices of motion, filed respectively by the first defendant, Edward Hastings Favelle on 24 January 2002, the second defendant, Edward Lewis Mogridge on 29 November 2001 and the fourth defendant, Pieter Van Der Kwaak on 24 January 2002. 2 In respect to the notice of motion filed by the fourth defendant, it should be noted that that notice of motion is returnable on next Thursday, 21 February 2002. However, all parties who have been represented at today's hearing have consented to that notice of motion being dealt with today. 3 Each of the foregoing notices of motion seeks substantively an order that the proceedings be dismissed for want of prosecution. The substantive proceedings were instituted on 17 February 1987 by a statement of claim filed on that date by the plaintiff, Preston Erections Pty Limited. 4 That statement of claim sought redress against the four defendants named therein upon the basis that each of those defendants was a director of a company, Favelle Cranes and Services Pty Limited, that the plaintiff had performed certain work at the request of and on behalf of that company and that the company had failed and neglected to pay to the plaintiff an amount of almost $36 000 in respect of that work. 5 Further, that that indebtedness arose in circumstances which attracted the provisions of the Companies (New South Wales) Code in respect to the liability of directors of a company being personally liable in circumstances where, at the time when an indebtedness was incurred, there were reasonable grounds to suspect that the company would not be able to pay all its debts as and when they became due, or there were reasonable grounds to suspect that if the company incurred the indebtedness it would not be able to pay all its debts as and when they became due. 6 The third defendant, Victor George Burns, appears never to have been served with the statement of claim. However, defences were filed on behalf of each of the first, second and fourth defendants. 7 Some years later, the plaintiff apparently having done little, if anything, in the interim, the matter was listed before the Registrar on 8 July 1992. By consent it was on that date stood over to 9 September 1992. On that latter date there was no appearance for the plaintiff. The Court file is endorsed with the order that on that date the proceedings were "struck out". 8 Some nine years later, on 25 January 2001, the Court, for reasons which are not readily apparent but which may well have been due to inadvertence, sent to the solicitors for various parties to the proceedings, a notice indicating that the Court would of its own motion invoke the provisions of Part 32A of the Supreme Court Rules. 9 The matter then came before the Court on a number of occasions in 2001. Various directions were made on 21 September 2001. It is apparent that the various adjournments which had preceded those directions and the directions themselves were made by the Registrar (and on one occasion by a Master) in apparent unawareness that some nine years earlier the proceedings had been struck out. 10 The applicants/defendants rely firstly upon the fact that, the proceedings having been struck out, any action which might thereafter have been taken in the proceedings is a nullity; further, that even if the proceedings were to be treated as being on foot, the failure of the plaintiff to prosecute its claim in the period from the filing of the defences in 1988 until the present time would cause significant and substantial prejudice to each of the defendants. 11 It would appear from the affidavits which have been filed on behalf of the applicants/defendants, that they have had no contact with each other, or with the affairs of the company (which went into liquidation in November 1986) since the latter part of the 1980s. It would appear that most of the documentation relating to the company is no longer in existence. 12 Counsel for the plaintiff was not aware until this morning of the order which had been made on 9 September 1992. In those circumstances I suggested that he have the opportunity of seeking instructions in respect to the present position of the proceedings. After a short adjournment I was informed by Counsel for the plaintiff that he did not have any instructions to attempt to reinstate, or in any other fashion resurrect, the proceedings. 13 I am satisfied that the proceedings, having been struck out on 9 September 1992 by order of the Registrar, have never in any way been reinstated. In consequence, therefore, any orders or directions which might have been made in the past year are of no effect and are a nullity. 14 Even if the proceedings be somehow treated as remaining on foot, I consider that there would be very grave prejudice to the defendants if the proceedings were allowed to continue, on account of the very considerable and totally unexplained delay on the part of the plaintiff from the late 1980s until at least the year 2001. 15 Quite obviously, in the absence of any explanation, the Court is entitled to infer that the plaintiff was no longer interested in pursuing these proceedings. 16 Accordingly, even if, contrary to the conclusion which I have just expressed, the proceedings were treated as still being on foot, I would have no hesitation in making an order for the dismissal of the proceedings for want of prosecution. 17 In the circumstances, however, I will merely note that the proceedings were ordered to be struck out on 9 September 1992 and that they are no longer on foot. 18 I make the following orders: (1). I note that these proceedings were by order of the Court, made on 9 September 1992, struck out, and that in consequence any purported orders or directions made thereafter are of no effect. (2). I make no order as to the costs of any party after 9 September 1992, to the intent that each party will bear its or his own costs incurred since that date. 19 The exhibits may be returned. ********** Last Modified: 03/06/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.