AJI Services Pty Ltd v Manufacturers' Mutual Insurance Limited [2005] NSWSC 709

New South Wales Supreme Court

CITATION : AJI Services Pty Ltd v Manufacturers' Mutual Insurance Limited [2005] NSWSC 709

HEARING DATE(S) : 14/7/05

JUDGMENT DATE : 22 July 2005

JUDGMENT OF : Bell J at 1

DECISION : Without prejudice to any further application by the defendant invoking the inherent jurisdiction of the Court, pursuant to Pt 63 r 5(2) of the SCR I direct that no step is to be taken in the proceedings by or against the second plaintiff until a tutor for him has been appointed by the Court

District Court Rules 1973 LEGISLATION CITED : Mental Health Act 1990 Supreme Court Rules 1970

Gibbons v Wright (1954) 91 CLR 423 Martin v Azzopardi (1973) 20 FLR 345 Herron v McGregor (1986) 6 NSWLR 246 CASES CITED : Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 Murphy v Doman [2003] NSWCA 249 Newcastle City Council v Batistatos [2005] NSWCA 20

AJI Services Pty Ltd (First Plaintiff) PARTIES : Alan John Andrews (Second Plaintiff) Manufacturers' Mutual Insurance Limited (Defendant)

FILE NUMBER(S) : SC 12823/92

Alan John Andrews (First and Second Plaintiff) COUNSEL : G. Curtin / P. G Fisher (Defendant)

In person (First and Second Plaintiff) SOLICITORS : Phillips Fox (Defendant)

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

BELL J

Friday 22 July 2005

12823/92 AJI Services Pty Limited v Manufacturers Mutual Insurance Limited

JUDGMENT 1 BELL J: By further amended notice of motion filed in court on 20 October 2003 the defendant sought orders dismissing the proceedings pursuant to the Court's inherent power or under Pt 33 r 6 of the Supreme Court Rules 1970 (SCR). In the alternative it sought an order that the proceedings be permanently stayed. 2 The proceedings were commenced by statement of claim filed on 26 May 1992. The current pleading is the further amended statement of claim filed on 26 July 1996 (FASOC). At the commencement of the proceedings and up until and including the filing of the FASOC the plaintiffs were represented by Bassi & Co, Solicitors. 3 The FASOC pleads that the second plaintiff, Alan John Andrews (Mr Andrews) was at all relevant times the Managing Director of the first plaintiff, AJI Services Pty Ltd, a company carrying on business as insurance investigators and marketers of security systems. It is the plaintiffs' case that the defendant agreed to indemnify the first plaintiff against certain risks, including burglary, in respect of its offices. In or about September 1986 the first plaintiff made a claim against the policy seeking indemnity from the defendant in the amount of $95,877 in respect of losses incurred as the result of a burglary. It is alleged that the defendant appointed Messrs Blessington Judd, solicitors, as its agent to investigate the claim. Shortly put, it is the plaintiffs' case that the defendant maliciously procured the police to charge Mr Andrews with making a fraudulent claim on it. The proceedings arising from this charge terminated in Mr Andrews' favour in October 1988 when the Director of Public Prosecutions "no billed" the matter. The plaintiffs plead that on the date when the charge was laid and thereafter the defendant had in its possession material by virtue of which it knew, or ought to have known, that the charge was false. The plaintiffs also plead that the defendant owed them a duty to act with the utmost good faith throughout the management of the insurance claim and that it breached that duty thereby occasioning to them loss and damage. 4 The defendant's motion came on for hearing before me on 14 July 2005. Mr Andrews appeared on his own behalf and on behalf of the first plaintiff. He applied for the hearing of the motion to be adjourned. When his application was refused he left the Court in circumstances that I will set out more fully below. The defendant's counsel acknowledged that before I would grant the relief that it seeks it would be necessary for me to consider whether Mr Andrews is an incompetent person within the meaning of the SCR. In the event that I were to determine that he is an incompetent person it was the defendant's submission that notwithstanding the provisions of Pt 63 r 5(2) of the SCR I would, nonetheless, make an order permanently staying the proceedings. 5 It is necessary to set out the history of the proceedings in some detail. 6 There has been very considerable delay that has attended the conduct of these proceedings. Little focus has been directed to the delay in the period prior to 1 April 2003 when Master Harrison made directions for the future conduct of the proceedings. From that time on, it is to be observed that the defendant has made every effort to have the claim against it brought on for hearing. 7 The proceedings were commenced in May 1992. On 3 January 1995, Mr Andrews swore an affidavit in the proceedings which was directed to delays that had occurred up until that time. In that affidavit he stated that following his committal for trial on 2 May 1988 he had suffered a major nervous breakdown and was not able to attend to his affairs. From 1992 onwards he said that he had been partially capable of attending to his affairs, although he had not been able to devote "proper energy" to the conduct of the proceedings. He said that in or about July 1994 he had felt able, from a psychological point of view, to properly attend to his legal affairs. He went on to assert, "I am now able, with the assistance of my legal advisers, to properly prosecute the conduct of this matter." 8 On 20 September 1996, following the filing of the FASOC in July 1996, the plaintiffs filed a notice of motion seeking to challenge claims of client legal privilege in respect of a number of documents identified in the list of documents produced by the defendant. Thereafter, the proceedings appear to have been again prosecuted in a somewhat dilatory fashion. The matter came before Adams J on 24 August 1998 and directions were given with respect to the plaintiffs' motion. The motion ultimately came on for hearing before Master Harrison on 1 April 2003. I am unaware of the reasons for the lengthy delay between the filing of the FASOC and the hearing of April 2003. 9 On 28 November 2003 the defendant's counsel informed me that the application to dismiss the proceedings for want of prosecution was based on the plaintiffs' failure to prepare the case since 1 April 2003 (28/11/03 T 12.55-13.1). 10 Before examining the history of the proceedings since 1 April 2003, it is necessary to refer to some other proceedings. In April 2003 proceedings were instituted in the Local Court against Mr Andrews seeking the issue of an apprehended personal violence order for the protection of Mr Curtin, counsel for the defendant. Subsequently Mr Andrews was charged with a criminal offence, which it would seem is related in some way to the apprehended violence order proceedings. His trial on this charge is fixed to commence in the District Court on Monday 25 July 2005. 11 The plaintiffs did not adhere to the timetable fixed on 1 April 2003. 12 The need to adhere to the timetable had been brought to the plaintiffs' attention. Mr Andrews swore an affidavit in the proceedings on 27 November 2003 to which he annexed a copy of a letter sent to him by Mr Levet, the barrister who appeared on his behalf (and on behalf of the 1st plaintiff) before Master Harrison on 1 April 2003. In his letter dated 2 April 2003 Mr Levet set out the directions made by Master Harrison and advised Mr Andrews (at p 2): "I must stress to you that it is in your interests to comply with this timetable."