New South Wales Supreme Court CITATION : John Huyshe Greaves v CGU Insurance Ltd [2004] NSWSC 912 HEARING DATE(S) : 24 September 2004 JUDGMENT DATE : 24 September 2004 JURISDICTION: Commercial List JUDGMENT OF : Bergin J DECISION : See para 18 CATCHWORDS : DISCONTINUANCE OF PROCEEDINGS - Whether discontinuance of proceedings will lead to an incurable injustice or disadvantage - Whether conditions should be imposed before leave granted to plaintiff to discontinue proceedings Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 CASES CITED : Running Pigmy Productions Pty Ltd v AMP General Insurance Co. Ltd [2001] NSWSC 431 SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 Trade Practices Commission v Manfal Pty Ltd & Ors (No.3) (1991) 33 FCR 382 PARTIES : John Huyshe Greaves (Plaintiff) CGU Insurance Ltd (Defendant) FILE NUMBER(S) : SC 50096/02 COUNSEL : MW Watson (solicitor) (Plaintiff) AW Street SC; E Romaniuk (Defendant) SOLICITORS : Watson Mangioni (Plaintiff) Colin Biggers & Paisley (Defendant) - 6 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST BERGIN J 24 September 2004 050096/02 JOHN HUYSHE GREAVES –v- CGU INSURANCE LTD JUDGMENT 1 This is an application brought by the defendant to impose upon the plaintiff a condition in respect of the leave to be granted to discontinue these proceedings. 2 The plaintiff seeks leave to discontinue the proceedings on the basis that he pay the defendant's costs of the proceedings. In addition the plaintiff proffers an undertaking that he will preserve and not destroy or dispose of, prior to 24 September 2007, any documents which are or come into his possession which are or would be discoverable in proceedings numbered 50096/02 had they continued. 3 Mr Street SC argues for the defendant that the appropriate condition to be imposed is that the plaintiff be prevented from bringing fresh proceedings or to claim the same relief in fresh proceedings as in these proceedings, and be prevented from bringing further proceedings on the same or substantially the same cause of action as in these proceedings without the leave of the Court. 4 Mr Street submitted that it is envisaged by the very wording of Part 21 Rule 7 that such a condition may be imposed. That is not controversial. Where there may be injustice caused by discontinuance of proceedings appropriate conditions may be imposed on the discontinuing party to remove that prospect. 5 In support of its application the defendant relied upon what Graham J said in Covell Matthews & Partners v French Wools Ltd [1997] 1 WLR 876 at 879: The Court should therefore grant, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved. 6 In SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 the decision of Graham J was referred to an in 182 Sheppard J said: It seems to me that the Court in deciding whether to grant leave and, if so upon what terms that leave should be granted, has a wide discretion to do justice between the parties … if a party seeks to discontinue proceedings, a Court should, in my opinion lean towards giving him leave unless to do so will cause manifest injustice to his opponent … but the starting point for the discussion of it is the Court's greater ability to do justice to both parties if the central question is upon what terms leave to discontinue should be granted. 7 Reliance was also placed upon Trade Practices Commission v Manfal Pty ltd & Ors (No.3) (1991) 33 FCR 382 in which after referring to the unfettered discretion and to Covell, Lee J said at 383: The Court will give consideration to the need to refrain from compelling a party to litigate against its will but will also consider the extent to which the proceedings have developed and whether discontinuance against one respondent may impose injustice on another respondent by removing an advantage that respondent may otherwise enjoy in the proceedings or by imposing a disadvantage. In considering the undesirability of an applicant being forced to continue litigation unwillingly, it is relevant to have regard to whether the discontinuance would make any difference to the burden of litigation undertaken by the applicant and whether the application to discontinue results from a conclusion that the litigation cannot succeed against the respondent or is inspired by other reasons. 8 In Running Pigmy Productions Pty Ltd v AMP General Insurance Co. Ltd. [2001] NSWSC 431, Palmer J referred to Lee J's statement at par [29] as encapsulating all the principles upon which a Court acts in deciding whether to grant leave. 9 The defendants submitted there were a number of disadvantages that could not be removed by an order that the plaintiff pay the defendant's costs of the proceedings. The first is an alleged loss of the advantage of concurrent hearing of the proceeding brought by Messrs Rich and Silberman against the defendant. This case has been travelling in this List with those other cases. In those proceedings separate questions have been answered by McClellan J, the former List Judge, in which the defendant was successful both at first instance and on appeal. Special Leave has been granted in those cases and the High Court will hear those Appeals next week. 10 This particular alleged loss of advantage, or to put it another way, this alleged disadvantage, is combined with a claim that there is a loss of binding effect of the outcome of the High Court Appeal in the Rich and Silberman cases. Firstly, there has been no order for concurrent hearings nor for consolidation of the proceedings. There has, perhaps rightly so, been an expectation by the defendant that when the cases come on for hearing the Court would allow the concurrent hearing and perhaps have the evidence in one as evidence in the other but that is, at the moment, speculation. 11 The so called "advantage" of a concurrent hearing is really one that might have occurred if the defendant had been able to achieve an order for evidence in this case being evidence in the Rich and Silberman cases and vice versa, however that has not happened and it will not happen now because this case is to be discontinued. I do not see it as an advantage to the point where it would persuade me that I should impose a condition on this plaintiff in the terms sought by the defendant. 12 As to the loss of binding effect of the High Court Appeal, that, once again, requires some speculation because it is not patently clear to me that the High Court decision will not put an end to arguments in respect of the policy that Mr Greaves may or may not bring in due course. It will all depend upon so many things. I am of the view that it is not appropriate to regard that matter as a loss of advantage or a disadvantage that would be described as substantial and for which the defendant would be entitled to the imposition of the condition sought. 13 There is then a claim that there is a disadvantage to the defendant because of the exposure to increased time and cost in litigating that which would have been determined in proceedings with Messrs Rich and Silberman. That is an interesting submission but also one that really does not lend itself to precision in analysis. What may happen is that Mr Greaves might bring some proceedings in the future. If he were to do so or try to do so in terms similar to the relief sought in these proceedings and/or arising out of the same or substantially the same cause of action at a time prior to the hearing of the Rich and Silberman proceedings against the defendant, it would be anticipated that the defendant would then seek to have that matter heard at the same time as the Rich and Silberman proceedings. So there would be little disadvantage if that were the case. 14 If, however, Mr Greaves sought to bring an application of the same kind to which I have just referred, after the proceedings brought by Messrs Rich and Silberman were concluded and judgment either reserved or delivered, the defendant would be, it would seem, in a position to make any application that it wished in respect of restricting Mr Greaves from bringing those proceedings on the basis that he may have left his run too late in the circumstances where the defendant had been put to proof of various matters in other proceedings that may have been relevant to Mr Greaves. Once again, it is, as I say, difficult to be precise. 15 The next matter that Mr Street SC raised was the disadvantage, as he put it, of legitimate relevant evidence that may otherwise have been adduced in the Rich and Silberman proceedings. Once again, I do not regard that as a disadvantage that would require the imposition of the conditions sought. It is once again a matter of detail that would need to be put before the Court as to what is the actual disadvantage to the defendant in allowing this discontinuance and in entertaining further proceedings. There is always the prospect that a defendant against whom there has been a discontinuance may be able to seek a stay of future proceedings should a plaintiff take advantage of waiting for the outcome of other proceedings that may ultimately disadvantage the defendant. 16 In my view Mr Street's other claims have more force. They are the absence of preservation of discoverable material, and the increased costs from uncertain focus and further documentary review. It is the first of these that is an appropriate basis upon which to seek this condition. This disadvantage is cured by the undertaking that has been proffered by the plaintiff in respect of such documents. 17 The next point, increased costs, is one that can be cured to the point of costs being awarded in these proceedings. Costs that have been incurred by reviewing the documentary material that was required for these proceedings will be paid for by the plaintiff. It seems to me that the review of the documentary material in respect of Mr Rich and Mr Silberman would have had to occur in any event, and the focus may or may not be very different now that Mr Greaves will not be in the litigation. Having regard to the undertaking and the matters to which I have just referred, I am satisfied that it is appropriate to grant the leave on the condition that the undertaking is in place. 18 On the plaintiff, through his solicitor, providing an undertaking to the Court that he will preserve and not destroy or dispose of prior to 24 September 2007 any documents which are or come into his possession in that period, which would have been discoverable in these proceedings, I grant leave to the plaintiff to discontinue the proceedings. The plaintiff is to pay the defendant's costs of the proceedings. ********** Last Modified: 10/06/2004 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.