Bamforth v Betcke

[2003] NSWCA 116

CITATION:	Bamforth v Betcke & Ors [2003] NSWCA 116
HEARING DATE(S):	1 May 2003
JUDGMENT DATE:	15 May 2003
JUDGMENT OF:	Mason P at 1; Giles JA at 2; Santow J at 70
DECISION:	(1) In each of proceedings 40023/02, 40024/02, 40027/02 and 40028/02, appeal dismissed with costs. (2) In Pyojed's application: (a) Extend the time for applying for leave to apeal up to and including 1 May 2003; (b) Grant leave to appeal, limited to the question of whether the discretion to reinstate the proceedings was properly exercised in all the circumstances, including the evidence or lack of it, explaining and justifying the cumulative delays, and direct that the notice of appeal be filed within seven days; (c) Appeal dismissed with costs.
CATCHWORDS:	Proceedings in District Court - orders that particulars be provided - failures to provide particulars - dismissal orders under Pt 18 r 3 of the rules - preliminary dismissal orders open to be set aside under Pt 1 r 7A(5) - applications made but after the 28 day period in the rule - orders made - appeals by leave by two defendants - cross-defendant made late application seeking to appeal - standing of cross-defendant - whether should be permitted to appeal - should be permitted because would not put plaintiffs further at risk - whether time properly extended - whether orders setting aside dismissal orders properly made - discussion of significance in application under Pt 1 r 7A(5) of explanation excusing the original failures - and in application for extension of time - held error not shown in exercises of discretion. D
CASES CITED:	Agtrack (NT) Pty Ltd v Hatfield [2003] VSCA 6; Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389; FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; Ho v Powell (2001) 51 NSWLR 572; House v The King (1936) 55 CLR 499; Insurance Exchange of Australasia v Dooley (2000) 50 NSWLR 222; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315. Technical Team Projects Pty Ltd v Noble Dunn Pty Ltd (1990)20 NSWLR 221;
PARTIES :	Ronald Barlow Bamforth v Violet Ann Betcke, Pyojed Pty Ltd and Peter Morris Ronald Barlow Bamforth v Raylene Betcke, Pyojed Pty Ltd and Peter Morris Peter Morris v Violet Ann Betcke, Pyojed Pty Ltd and Ronald Barlow Bamforth Peter Morris v Raylene Betcke, Pyojed Pty Ltd and Ronald Barlow Bamforth
FILE NUMBER(S):	CA 40023/02; 40024/02; 40027/02; 40028/02
COUNSEL:	I Faulkner SC - Ronald Barlow Bamforth G Miller QC - Peter Morris L King SC & P Regattieri - Raylene Betcke C Evatt QC & A Canceri - Violet Ann Betcke R A Pepper - Pyojed Pty Ltd
SOLICITORS:	Harris Wheeler Lawyers, Newcastle - Ronald Barlow Bamforth Riley Gray-Spencer Lawyers - Peter Morris Peacocke, Dickens & Price, Dubbo - Raylene Betcke Andrew Fegent & Co - Violet Ann Betcke James Solicitors - Pyojed Pty Ltd

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 1296/00
LOWER COURT JUDICIAL OFFICER :	Bowden DCJ

CA 40023/02
CA 40024/02
CA 40027/02
CA 40028/02
DC 1296/00
DC 1297/00

MASON P
GILES JA
SANTOW JA

Thursday 15 May 2003

BAMFORTH v Violet Ann BETCKE & ORS

BAMFORTH v Raylene BETCKE & ORS

MORRIS v Violet Ann BETCKE & ORS

MORRIS v Raylene BETCKE & ORS

Judgment

1 MASON P: I agree with Giles JA.

2 GILES JA: In proceedings in the District Court preliminary dismissal orders were made following the plaintiffs’ defaults in complying with orders or directions. On the plaintiffs’ applications, orders were later made setting aside the preliminary dismissal orders. In issue is whether the discretion to set aside the preliminary dismissal orders was properly exercised in all the circumstances, with particular attention to the adequacy of explanation for the plaintiffs’ delays in prosecuting their proceedings.

The proceedings and the orders

3 On 26 February 1998 a Cessna aircraft piloted by Mr Warwick Bamforth crashed on landing at the Osborne Mine airstrip in Queensland. Mr Bamforth and his two passengers, Mr Clements Betcke and Mr Anthony Betcke, were killed.

4 On 25 February 2000 separate proceedings were commenced in the District Court at Sydney by the de facto widow of Mr Clements Betcke, Mrs Violet Betcke, and the widow of Mr Anthony Betcke, Mrs Raylene Betcke. The Betckes claimed damages under the Civil Aviation (Carrier’s Liability) Act 1959 (C’th) (“the Aviation Act”) and the Compensation to Relatives Act 1897, in the case of Mrs Violet Betcke on her own behalf and in the case of Mrs Raylene Betcke on her own behalf and on behalf of the children of the marriage. They claimed against Pyojed Pty Ltd (“Pyojed”), the owner of the aircraft, and “The Estate of the Late Warwick Noel Bamforth”. The latter claims should have been claims against Mr Bamforth’s executor, and the records in this Court were appropriately amended.

5 The claims were made on three bases. First, it was alleged that Pyojed and/or Mr Bamforth were a carrier within the meaning of the Aviation Act, liable for damage sustained by reason of the deaths of their passengers resulting from an accident which took place on board the aircraft. Secondly, it was alleged that Pyojed by Mr Bamforth was guilty of negligence causing the deaths. Thirdly, it was alleged that Mr Bamforth was guilty of negligence causing the deaths.

6 The claims under the Aviation Act were distinct from the other bases of claim. The liability of a carrier given the force of law by the Aviation Act is in substitution for any other civil liability of the carrier. The damages are subject to statutory limits, but proof of negligence is not required. It seems that the alternative bases for the claims were because there was doubt whether the carriage of the Messrs Betcke was relevantly the carriage of passengers for the purposes of the Aviation Act.

7 On 31 August 2000 Mr Bamforth (as I will call the wrongly named defendant) filed a defence. On the same date he filed a cross-claim against Pyojed claiming contribution or indemnity under the Law Reform (Miscellaneous Provisions) Act 1946. On 9 February 2001 Pyojed filed a second cross-claim against Mr Peter Morris as representative of Underwriters who had provided insurance in respect of the aircraft, claiming indemnity under the insurance against the Betckes’ claims. On 15 February 2001 Pyojed filed a defence and a defence to Mr Bamforth’s cross-claim.

8 On 12 March 2001 Bowden ADCJ ordered that the proceedings be dismissed. The orders were made pursuant to Pt 18 r 3 of the District Court Rules, relevantly providing -

“3.(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 dispatch, the Court may, on application by any party or of its own motion, dismiss the proceedings or make such other order as the Court thinks fit.”

9 The orders were preliminary dismissal orders within Pt 1 r 7A of the District Court Rules, open to being set aside on timely later applications pursuant to Pt 1 r 7A(5). Part 1 r 7A provided -

“7A (1) In this rule:
`preliminary dismissal order’’ means an order made by the Court dismissing proceedings other than an order dismissing proceedings after there has been a trial or hearing on the merits of the case or an application to dismiss the proceedings.
(2) The Court is not to make a preliminary dismissal order in respect of any proceedings unless it is satisfied that the parties to the proceedings have been appropriately notified that the order may be made.
(3) A preliminary dismissal order does not have effect:

(a) if an application is not made under subrule (5) - until a period of 28 days has elapsed after the making of the order; or

(b) if an application is made under subrule (5) - unless the Court confirms the order under subrule (6) or (7).
(4) The Court may, at the time it makes a preliminary dismissal order or subsequently, make such other orders as it thinks fit to ensure that any party to the proceedings in respect of which the dismissal order is made is appropriately notified of the making or consequences of the order.
(5) Any party to proceedings in respect of which a preliminary dismissal order is made may, within the period of 28 days after the making of the order, apply to the Court to set aside the order.
(6) On any such application, the Court may set aside the preliminary dismissal order or confirm the order as it thinks fit.
(7) The Court may, if it thinks fit, confirm a preliminary dismissal order if:

(a) the party who has made an application to have the order set aside does not appear at the hearing of the application; or

(b) an application to set aside the order is withdrawn or otherwise not proceeded with.”

10 The Betckes did not make application within the period of twenty eight days after 12 March 2001. Their solicitor, Mr Andrew Fegent, did write to the solicitors for Pyojed and Mr Bamforth on 5 April 2001, referring to the dismissal orders and stating, “We advise that we intend to apply to the Court to re-instate proceedings and notify you accordingly to prevent any prejudice to your client.”

11 By notices of motion filed on 9 October 2001 the Betckes claimed orders -

“1. The Preliminary Dismissal Order of His Honour Judge Bowden made on 12 March 2001 be set aside pursuant to Part 1, Rule 7A(5) of the District Court rules.
2. Costs be costs in the cause.”

12 In the endorsements on the notices of motion the respondents were named as Pyojed and Mr Bamforth. However, Mr Morris was also represented and participated when the applications were heard on 7 December 2001, as it happened by Bowden ADCJ.

13 Amended notices of motion were filed on that day, claiming the same substantive orders and a different costs order. At an early time his Honour drew to the attention of counsel for the Betckes that the period of twenty eight days from 12 March 2001 had long expired. No express reference was made to Pt 3 r 2 of the District Court Rules, and no further amended notices of motion were filed, but the applications appear to have proceeded on the basis that an extension of the twenty eight day period was sought and could be granted pursuant to that rule.

14 The judge reserved his decision, and gave judgment on 14 December 2001. He made orders extending the time for the Betckes to set aside the preliminary dismissal orders, setting aside those orders, and as to costs. He directed that the Betckes not be permitted to rely on any report not already served or give evidence of any claim not already particularised.

The appeals

15 All of Pyojed, Mr Bamforth and Mr Morris filed holding summonses for leave to appeal. Pyojed went no further. Mr Bamforth and Mr Morris in due course filed summonses for leave to appeal, and on 6 September 2002 leave to appeal was granted “limited to the question of whether the discretion to reinstate these proceedings was properly exercised in all the circumstances, including the evidence or lack of it, explaining and justifying the cumulative delays”. The limitation was intended to exclude any question of power to extend the twenty-eight day period in Pt 1 r 7A(5).

16 The orders made on 12 March 2001 included that “the action be dismissed” and the Betckes pay “all parties [sic] costs of the action”. The orders made on 14 December 2001 included that the orders “dismissing the proceedings” be set aside and the Betckes pay “the defendant’s costs of the proceedings” to 12 March 2001 and “the respondent’s [sic] costs of the Notice of Motion”. The reach of the orders is unclear. On one view, only the Betckes’ claims against Pyojed and Mr Bamforth could have been and were the subject of dismissal and reinstatement, in which case consequential orders were necessary to deal with Mr Bamforth’s cross-claim against Pyojed and Pyojed’s cross-claim against Mr Morris. At the least, however, the Betckes’ claims against Pyojed and Mr Bamforth were dismissed and reinstated.

17 Mr Bamforth was a defendant to the Betckes’ claims, and undoubtedly had standing to appeal against the reinstatement of the claims.

18 Mr Morris was not a defendant to the Betckes’ claims, but a cross-defendant to Pyojed’s cross-claims. Pyojed’s cross-claims against Mr Morris depended on the Betckes’ claims against Pyojed, in that Pyojed claimed indemnity against the Betckes’ claims. The cross-claims were brought under Pt 20 of the District Court Rules. Although by 12 March 2001 or 7 December 2001 Mr Morris had not been given leave to defend the Betckes’ claims (Pt 20 r 4(b)), he was permitted to participate in the applications heard on those dates. As in Insurance Exchange of Australasia v Dooley (2000) 50 NSWLR 222, in my view the proper course is to treat the matter as if an order giving leave had been made, and on the authority of that case and the reasoning found in it Mr Morris had standing to appeal against the reinstatement of the Betckes’ claims (see in particular at [28]-[47]).

19 Pyojed was named as a respondent in the appeals of Mr Bamforth and Mr Morris. At the hearing of the appeals Pyojed moved, through notices of motion filed in court, for orders extending the time for applying for leave to appeal from Bowden ADCJ’s decision of 14 December 2001, for extensions of time, for leave to appeal, and that its appeals be heard together with the appeals of Mr Bamforth and Mr Morris. (It should have proceeded by summons, see Pt 3 r 1 and Pt 51 r 4 of the Supreme Court Rules, but no point was or need be taken.) Its draft notices of appeal were in the same form as those on which Mr Bamforth relied, and it said that it would rely on and adopt the submissions of the other appellants and would not make independent submissions.

20 Pyojed’s applications were supported by an affidavit of its solicitor. He referred to the holding summons for leave to appeal filed on 26 February 2002. He said that in May 2002, at that time the agent for Queensland solicitors, he had “considered the merits of an appeal” with Pyojed’s Queensland solicitor “and concluded that they were limited”. He said -

“4. A relevant consideration at the time the above decision was Pyojed’s concern at the cost of running an appeal, which I had advised them, had no clear certainty of success.
5. Since that time and on closer scrutiny, I have had an opportunity to reconsider the merits of the appeal and in early April 2003 I came to the view that it was in Pyojed’s best interests to proceed with an appeal.”

21 The Betckes opposed the applications whereby Pyojed sought to appeal. They said that Pyojed had made a considered decision not to appeal, and that it should not be permitted, following an eleventh hour change of mind, to seek to take from them their ability to prosecute the proceedings against Pyojed.

22 It would generally not be a proper exercise of discretion to extend time or grant leave to appeal to a party which had assessed the prospects of an appeal and, having concluded that they did not warrant the necessary expenditure, decided not to appeal. A last-minute change of mind and attempt to overturn the opposing party’s success below would normally not attract a favourable exercise of discretion.

23 The present case, however, is unusual. Mr Morris is appealing against the orders setting aside the dismissal orders. He has standing to do so, and to have orders on appeal confirming the orders dismissing the Betckes’ proceedings against Pyojed. If Mr Morris’ appeals succeed, the Betckes can not prosecute their actions against Pyojed. It may not be necessary for Pyojed to appeal in order to protect its interests, but it seeks to do so, and because they are already relevantly at risk the Betckes will not be prejudiced if it is permitted to do so. In the interests of a complete record, I consider it appropriate that orders be made whereby it can do so.

The dismissal orders

24 There was some informality in the making of the dismissal orders, with the parties and the judge acting in part on a procedural history known to them but not fully stated. Affidavits before the judge sworn by Mr Fegent on 12 March 2001 also provided history and other information. It is not easy to construct the history from the appeal papers.

25 The proceedings were subject to Practice Note No 33. The statement of the objective of the Practice Note referred inter alia to expeditious disposal of civil actions, and said -

“2.2. Expeditious disposal also requires that actions are expeditiously prepared by the parties. Actions must not be commenced until they are ready to meet the requirements of the timetable as to preparation and hearing.
2.3. Where it can be shown that an action has to be commenced despite its not being able to be prepared, the registrar has a discretion to issue the statement of claim, and any refusal by the registrar is reviewable on application to a Judge.” (emphasis in original)

26 The standard timetable in the Practice Note, stating the maximum periods allowed, required service of a statement of claim within two months of filing, a defence within three months of filing; certification by the plaintiff that all preparations required to that point are complete within four and a half months; and a status conference within seven months, leading to a hearing date within ten months. If the certificate as to preparation was not filed, the proceedings were to be listed before the registrar for directions on a review date within five months from the filing of the statement of claim.

27 The limitation period for a claim under the Aviation Act was two years from 26 February 1998. In the hearing of the appeals it was said that the limitation period can not be extended, although see Agtrack (NT) Pty Ltd v Hatfield [2003] VSCA 6 at [73]-[74] which supports a power to amend proceedings outside the limitation period, so long as the proceedings remain on foot. The issue is being addressed by this Court, differently constituted, in Air Link Pty Ltd v Paterson CA 40487/02 (judgment reserved). The proceedings were commenced the day before the expiry of the limitation period. As events showed, they were not ready to meet the requirements of the timetable as to preparation and hearing. We do not know what occurred, if anything, about the actions nonetheless commencing, but it seems that there was no approach to the registrar concerning commencement.

28 There must have been failure to file certificates as to preparation, since the proceedings were listed for directions on 30 August 2000. Whether there was an earlier listing, as the standard timetable would have required, did not appear.

29 On 30 June 2000 Pyojed had requested particulars of the statement of claim in Mrs Raylene Betcke’s proceedings, and the particulars had not been provided. At the directions hearing on 30 August 2000 Mrs Raylene Betcke was ordered to reply to the request for particulars within twenty one days. It seems that there was no similar request for particulars in Mrs Violet Betcke’s proceedings, and that the request for particulars in that matter came only in September 2000.

30 The next event was the status conference held on 1 November 2000. Again, whether there had been an earlier listing, as the standard timetable would suggest, did not appear.

31 The particulars requested on 30 June 2000 had still not been provided. On 29 September 2000 Pyojed had requested particulars of the statement of claim in Mrs Violet Betcke’s proceedings, and the particulars had not been provided. According to Mr Fegent’s affidavits, on 17 October 2000 he wrote to the Australian Taxation Office (“the ATO”) to obtain copies of Mrs Violet Betcke’s taxation returns, and on 27 October 2000 he wrote to Mrs Raylene Betcke’s accountant reiterating an earlier request for financial information and to the ATO as before, all apparently in order to provide particulars of financial loss. The earlier request to the accountant had been on 26 June 2000. He had received no replies.

32 What happened at the status conference on 1 November 2000 is not clear, but it seems that the Betckes were ordered to reply to the requests for particulars within twenty-one days and that the proceedings were adjourned to a “show cause” directions hearing on 15 January 2001. This shorthand was not explained, but can be understood from Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [31]. The Betckes were put on notice that the proceedings were at risk of dismissal if they failed to provide the particulars or show cause why, despite that failure, the proceedings should not be dismissed.

33 What happened at the directions hearing on 15 January 2001 is also not clear. The particulars had not been provided. It seems that another order was made that they be provided within twenty-one days, and that the proceedings were adjourned to another “show cause” directions hearing on 12 March 2001.

34 We do not know what was said to the registrar or judge conducting the status conference or directions hearings about the Betckes’ difficulties in providing the particulars, or why the various twenty-one day periods were thought appropriate. The defendants had themselves been far from active.

35 The proceedings then came before Bowden ADCJ on 12 March 2001. All parties were represented, including the recently joined Mr Morris.

36 Although they were not formally read, there was reference to the affidavits of Mr Fegent sworn that day. In the affidavits Mr Fegent gave evidence of the earlier letters to the ATO and the accountant, and of what had been done since 1 November 2000. In summary -

(a) the ATO had still not replied;

(b) Mrs Raylene Betcke’s accountant had still not replied;

(c) On 15 November 2000 he had written to Mrs Violet Betcke’s accountant requesting financial information; the accountant had not replied;

(d) On 15 November 2000 he had written to Mrs Violet Betcke’s local solicitor asking for financial information; the solicitor had not replied;

(e) On 1 December 2000 he had provided particulars to Pyojed in response to the requests of 30 June 2000 and 29 September 2000, broadly the particulars requested other than as to financial loss;

(f) On 5 February 2001 Pyojed had taken issue with the adequacy of some of the particulars and had asked for more; this had not been answered.

37 In his affidavit in Mrs Violet Betcke’s proceedings, repeated in substance in his affidavit in the Mrs Raylene Betcke’s proceedings, Mr Fegent said -

“16. I verily believe the death of the Plaintiff’s de facto husband has caused significant trauma and has caused difficulty in obtaining accurate instructions and evidence to respond to the First Defendant’s requests. This has been exacerbated by the fact the Plaintiff resides at 2 Fourteenth Street, Cobar, presenting considerable communication difficulties.

17. I believe the answers to the First defendant’s request for particulars by letter dated 15 [sic: 5] February will be provided within four weeks.

18. I believe all expert reports and material upon which the Plaintiff intends to rely will be served within 12 weeks.

19. It is requested that this matter be adjourned for fourteen weeks in order that all material upon which the Plaintiff intends to rely may be obtained and served.

20. The Court is respectfully requested to accept that the Plaintiff has shown sufficient cause as to why the Statement of Claim should not be struck out.”

38 Counsel for the Betckes said -

“CAPOLUPO: Your Honour, the plaintiff’s position is that they aren’t ready at this point. I apologise for the lateness of the affidavits. To cut it short, the position is the plaintiff has encountered difficulties obtaining particulars to answer the first defendant’s requests. Those difficulties lie mainly in the fact that we’ve requested information from the clients, local accountant, solicitor, who to date hasn’t provided a response to particularise the claims in terms of the economic component. We feel as thought that will be provided shortly, in fact this morning we did receive some information. The claim was commenced the last day before the limitation period expired so a lot of the normal enquiries made had not been made prior to the claim being commenced.”

39 In the discussion which followed counsel for the Betckes said that what was outstanding was Pyojed’s request for particulars “in terms of what we rely on to establish economic loss claim” by the letter of 5 February 2001 (erroneously stated or recorded as 6 February 2000), and -

“That material has been difficult to obtain because the various institutes require the signature of the deceased which isn’t possible. We had to go around that by trying to get letters of administration passed, probate and we rely on a lot of other parties to get that information. It’s coming together.”

40 The transcript continues -

“HIS HONOUR: Where do I see what you’ve been doing about that. When did you start to do that.
CAPOLUPO: Immediately after the request of the first defendant.
HIS HONOUR: Weren’t you going to provide – weren’t you going to call any evidence about these things if you weren’t past particulars.
CAPOLUPO: Yes, your Honour. A lot of the economic loss component was particularised in the statement of claim. Arising from that, further requests were made and then to that, that’s where our enquiries went. We have evidence to support the statement of claim but there’s further requests which we intend to answer.
HIS HONOUR: That you haven’t.
CAPOLUPO: Sorry, your Honour.
HIS HONOUR: That you haven’t answered it, that’s what you’re saying.
CAPOLUPO: We had answered the first one. From that there was another request which we haven’t answered, so there is one request for particulars that is outstanding. That’s the letter dated 6 February 2000 from the solicitor for the first defendant. Sorry to interrupt, your Honour, there’s also a cross-claim arising from these proceedings which is delaying further progress and we still haven’t been served with a defence from the first defendant.”

41 Counsel for Mr Morris and Pyojed addressed, then counsel for Mr Bamforth -

“FODA: Your Honour, one other matter. These proceedings have come before the court, as you can probably tell from the file, several times. On 1 November last year the plaintiff was issued with a show cause notice which was supposed to be addressed on 15 January. The plaintiff didn’t address it on 15 January and it was before yourself and it was stood over till today. Once again the plaintiff has chosen not to address that show cause notice. It’s the second defendant’s position that this is a serious matter and that the plaintiff should be made to address that notice, chooses not to and as such the appropriate action should be taken.”

42 The transcript continues -

“CAPOLUPO: My position to that, your Honour, is that we have addressed the show cause. We accept that the particulars haven’t been answered but the reasons being that the plaintiff is relying on other parties and it would be my submission that that is the position as far as showing cause goes and that is the reason.
HIS HONOUR: That’s what I don’t see. I don’t see where you say that.
CAPOLUPO: I can take your Honour to --
HIS HONOUR: Paragraph 10, “15 November I sent a letter to the plaintiff’s accountant, I haven’t got the reply”.
CAPOLUPO: Yes, your Honour, also paragraph 9 --
HIS HONOUR: So we stand the matter over until the plaintiff’s accountant decides it’s time to answer things do we, is that the idea.
CUNNINGHAM [Counsel for Pyojed]: Your Honour, I don’t have the privilege of seeing this document. The plaintiff hasn’t provided a copy to the first or the second defendants as yet.
HIS HONOUR: The plaintiff is in default of the orders made on the last occasion. No cause has been shown. The action will be dismissed under Part 18.
CUNNINGHAM: Your Honour, we’d be seeking costs.
HIS HONOUR: The plaintiff is to pay the defendants’ costs. That of course will be a preliminary dismissal order and the plaintiff can take such steps as it might see as appropriate.
MCPHERSON [Counsel for Mr Morris]: Your Honour, might the cross-defendant also have its costs.
HIS HONOUR: Yes certainly.”

The reinstatements

43 Counsel for the Betckes read before his Honour Mr Fegent’s earlier affidavits of 12 March 2001 and further affidavits of Mr Fegent sworn 4 December 2001. Notice had been given for Mr Fegent to attend for cross-examination, and he was present, but he was not cross-examined.

44 In his December affidavits Mr Fegent gave evidence that on 11 April 2001 he had provided the particulars requested by Pyojed, including by a Pt 9 r 27 statement, that on 18 October 2001 he had sent to Pyojed an accountant’s report as to financial loss, and that on 1 December 2001 he had sent to Pyojed and Mr Bamforth an aviation expert’s report. The reports, which were detailed, were annexures to the affidavits. The affidavits concluded that the Betckes were “in a position to proceed to a Hearing of this action”.

45 The judge was told from the bar table, without dissent, that Mr Fegent had been first instructed on 18 February 2000, seven days before the expiry of the limitation period. He was told a number of other matters from the bar table as to the Betcke’s being “country widows” and “bush people and having difficulties in raising money to pay for aviation and accounting expertise and otherwise”. The judge said on several occasions, spurred on by opposing counsel, that there was no evidence of their difficulties before him. The letters of 5 April 2001 were tendered.

46 The judge was then addressed at some length; I do not think it profitable to go to the addresses, as in this instance the judge’s reasons are to be found in his judgment.

47 The submissions in the appeals make it desirable to set out the bulk of his Honour’s reasons -

“The first problem for the plaintiff is that such application under the rules is to be made within twenty-eight days. It was not made until 9 October 2001. No application to extend the time was made prior to the hearing before me. Nothing was said by the plaintiff until the issue was raised by the respondent. Even then the attitude of the plaintiff was that the Court had power under Pt 3 and by implication the Court would exercise that power in the plaintiff’s favour, even unasked.
It was said that before the expiration of the twenty-eight day period the plaintiff wrote to the defendants notifying them of the plaintiff’s intention to apply to set aside the order. So that there was no prejudice. This argument quite overlooks the fact that despite the terms of r 7A(5) no application was made until 9 October and the defendants continued presumably until that time in believing that there was no application to be made.
No evidence was called by the plaintiff as to why the time should be extended. The plaintiff’s counsel said that any application under Pt 1 r 7A made within the time would have been doomed to failure. The fact that the plaintiff was a ‘country widow’ and was now ready, even though not ready when the application was filed, seemed to be in the opinion of the plaintiff’s counsel all that was required.
Before returning to this I think I should look at other evidence.
The first thing to say is that there is none whatsoever from the plaintiffs. The affidavit from the plaintiff’s solicitor is little more than a chronology. Orders to dismiss or to confirm a preliminary dismissal order are not made by way of punishment of the plaintiff or of the plaintiff’s solicitors. They are not made to deter others or indeed to deter the party or that solicitor. It is clear that the fault of the solicitor should not be attributed vicariously to the plaintiff, but here there is no evidence at all as to the blamelessness of the plaintiffs.
Having said that I do not understand Stollznow v Calvert to decide that the actions of a party’s legal representatives are irrelevant. There is no evidence of actual prejudice by the defendants in the sense that they are now deprived of the opportunity to call a witness or some such thing, but there is clearly prejudice in the delay. There is also prejudice in that from the enquiry of twenty-eight days from the preliminary dismissal order the defendants were entitled to feel that the matter was not proceeding and to make arrangements for their businesses accordingly.
There will of course be prejudice to the plaintiffs if the order is not made. But that does not mean that the plaintiff must necessarily succeed. The provisions of the rules and of practice note 33 contemplate that indeed there are circumstances where if the plaintiff fails to comply with them the matter may be dismissed without a hearing on the merits.
Reference has been made to El Ali v GIO and that of course was a matter in which there had already been a determination. On the merits of the dispute. And the comments in relation to time limits must be understood in that light.
Micallef was a decision of the Court of Appeal on 21 August of this year. I take it to be the binding and guiding authority in matters such as this, although in Micallef there was no need for the plaintiff to seek an extension of time as the application had been properly made.
Besides the matters previously referred to I take into account that the deceased died on 26 February 1988. There has been a Coronial enquiry into the death. The action was commenced on 25 February 2000 and although the plaintiff has not complied with practice note 33, some explanation has been given as to why the proceedings were commenced at that time. Further, I take into account that the time that has elapsed is not of the order of Micallef for instance. I do not think that an order quite as draconian as that is called for. Though the plaintiffs’ representation has shown scant regard for the need to comply with the orders and ought to provide an explanation other than the cry that ‘we are ready now’, some might think that it is the Christmas spirit, but I am not prepared to dismiss the proceedings or even dismiss it at this stage.”


Error in the exercise of discretion?

48 Mr Bamforth and Mr Morris made in effect joint submissions, which Pyojed adopted.

49 At the heart of their submissions was that the judge erred in law in setting aside the dismissal orders in the absence of explanations (in the sense of excusing explanations) for the Betckes’ failures to comply with the directions to provide particulars and for their failures to apply within the twenty-eight day period in Pt 1 r 7A(5). They submitted that the judge had been prepared to dismiss the proceedings on 12 March 2001, and had dismissed them, and that unless the defaults then making it proper to dismiss the proceedings were explained the judge should still have been prepared to dismiss the proceedings; this particularly took up the closing words of the judge’s reasons. They submitted that the judge should not have condoned the delay in applying to have the proceedings reinstated without explanation of the delay. Some of the ways in which the submissions were put were, with respect, extravagant. It was said that the Betckes were following a deliberate strategy of silence until they applied, and of declining to give explanations. It was said that they were “in contumelious disregard” of the twenty-eight day period, and that by declining to give explanations they were abusing the court’s process.

50 Elements of these submissions were put in different ways. It was said that as the Betckes were seeking indulgences it was incumbent on them to explain their failures, and that on the reasoning found in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418 and Ho v Powell (2001) 51 NSWLR 572 at [16] it should be inferred that there was nothing they could put forward by way of excuse. It was said that the judge failed to adhere to the guidance found in Micallef v ICI Australia Operations Pty Ltd at [54] as to the need for explanation on affidavit testable by cross-examination. Reference was made to the observations by Cole J in Technical Team Projects Pty Ltd v Noble Dunn Pty Ltd (1990) 20 NSWLR 221 at 227-8 as to the need for reasonable explanation for failure to comply with rules of court. It was said that the judge failed to give sufficient weight to the absence of explanations from the Betckes or to “the cumulation of default through to December 2001”, so much so that his discretion had miscarried.

51 When made on 12 March 2001 the dismissal orders were in suspense: by Pt 1 r 7A(3) they did not have effect until a period of twenty-eight days had elapsed and, if an application was made under Pt 1 r 7A(5), unless thereafter confirmed. Applications were not made under Pt 1 r 7A(5), in that the Betckes’ applications were not made within the twenty-eight day period, and so the dismissal orders had effect. For the purposes of the appeals the effect must be taken to have been still defeasible, through extensions of the twenty-eight day period pursuant to Pt 3 r 2 and applications to set aside the dismissal orders, since the question of power was excluded from the grants of leave to appeal. Cf FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268.

52 Part 1 r 7A applies to preliminary dismissal orders made in many different circumstances, and what follows is directed only to dismissal orders following a plaintiff’s failure to comply with orders or directions.

53 I first assume application under Pt 1 r 7A(5) within the twenty-eight day period. Where a dismissal order was because of the plaintiff’s failure to comply with orders or directions, explanation and excuse before the dismissal order can be set aside does not have the same significance as it has in other circumstances. The gravity of the failure may count for or against the plaintiff, and if an explanation excusing the failure is given the plaintiff may enjoy greater prospects of success in the application. But the purpose in giving the dismissal order suspended effect, and making it open to be set aside or confirmed, is not just to give the plaintiff an opportunity to explain the failure. The plaintiff has had that opportunity, and the making of the dismissal order marks that the plaintiff has not provided a satisfactory explanation. Rather, the primary purpose is to enable the plaintiff to put his house in order and persuade the court that, notwithstanding the failure, the proceedings should be permitted to continue. In an application under Pt 1 r 7A(5), the focus is on curing the failure, not explaining it.

54 When there is added failure to apply under Pt 1 r 7A(5) within the twenty-eight day period, and extension of that period is necessary, again what matters is not explanation and excuse for the failure leading to the dismissal order, but explanation and excuse for the delay in making the application. Explanation for the original failure, of course, may colour and be relevant to any explanation for the delay, but the focus is on the latter.

55 The judge’s reasons do not particularly distinguish between extension of the twenty-eight day period and confirming or setting aside the dismissal orders, and some of his reasoning is not entirely clear. He did, however, consider competing prejudice to the Betckes and the other parties, such explanations as there were (in his view not much), and other matters he thought relevant. There was no error in this approach. He concluded that, although the Betckes’ prosecution of the proceedings had been wanting, in all the circumstances the end result that their proceedings stand dismissed was not warranted. This was an exercise of discretion, as to extension of time and setting aside the dismissal orders, attracting the usual restraints in appellate intervention.

56 It is convenient to consider extension of time before setting aside the dismissal orders.

57 The judge considered that the defendants (in which he presumably included Mr Morris) were prejudiced by the delay, apparently having in mind extension of time. He noted some unspecified prejudice plus prejudice “in that from the expiry of twenty-eight days from the preliminary dismissal order the defendants were entitled to feel that the matter was not proceeding and to make arrangements for their businesses accordingly”.

58 The letters of 5 April 2001 told Pyojed and Mr Bamforth that the Betckes proposed to apply to have the dismissal orders set aside. The letters were sent only four days before the expiry of the twenty-eight day period, and they could not reasonably have been read as referring to applications within that period. There was no evidence of a similar letter to Mr Morris, but it is unlikely that Underwriters fashioned their conduct according to the pendency of the Betckes’ claims. No doubt a time would have come when it could reasonably have been thought that the foreshadowed applications would not be made, but I do not think that, prior to October 2001, Pyojed and Mr Bamforth would have been entitled to order their affairs, without further enquiry, on the basis that the applications would not be made. In my view the judge’s finding of prejudice was rather harsh to the Betckes. In the result, however, the prejudice to which he referred did not cause the scales to weigh against the Betckes.

59 The judge said that no evidence was called by the Betckes “as to why the time should be extended”. Whether or not it was satisfactory, the Betckes’ position was fairly clear. They had been unable to provide the particulars as at 12 March 2001. They had provided the particulars and the accountant’s and expert’s report, in April 2001, October 2001 and December 2001. As their counsel submitted on 7 December 2001, there would have been little point in applying under Pt 1 r 7A(5) within the twenty-eight day period, other than by formal applications which could not then not be supported, because they had not then got or advanced in getting their houses in order. They applied when they had got (or were getting) their houses in order. That was their explanation for the delay, and the question was whether or not it was satisfactory. The absence of evidence went to its satisfactoriness, whatever difficulties they had in getting the particulars prepared and obtaining the reports.

60 The Betckes’ position now has some support from National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315, decided in August 2002. The plaintiff failed to comply with directions. An order was made striking the proceedings out of the list. The plaintiff applied to have the proceedings restored to the list, without rectifying his failures, and his application was dismissed. He rectified his failures and applied again, this time successfully. Palmer AJA, with whom Mason P and Santow JA agreed, observed at [18] -

“18 Where a plaintiff has made default in complying with an order or direction of the Court as to the conduct of proceedings, an application to restore the matter after it has been struck out under Part 18 r.3 of the District Court Rules or stayed under Part 33 r.6 of the Supreme Court Rules (1970) (NSW) should only be made when the plaintiff's default which led to the proceedings being struck out or stayed has been cured. If an application is made but is dismissed because the plaintiff's default has not been cured, a second application made prior to the default being cured will usually be dismissed out of hand as an abuse of process because there will have been no relevant change of circumstance since the first application. On the other hand, a second application made after the default has been cured cannot, per se , be regarded as an abuse of process because there will have been a change in the circumstance which led to the refusal of the first application.”

61 The judge was not impressed, but did acknowledge the submission that any application made within the twenty-eight day period “would have been doomed to failure”. He thought that, despite the explanation or lack of it, in all the circumstances it was appropriate to extend time, because he did extend time.

62 The judge’s reasoning is less than explicit, but I do not think it can be said that he misdirected himself as to the usual need for an explanation excusing the failure to comply with the time limits in rules of court. Such a need underlay his quite strong observations about lack of explanation. The judge considered the competing prejudices if an extension of time were or were not granted, and the explanation for the delay such as it was, as was appropriate when considering extension of time. He plainly enough then asked himself whether in all the circumstances it was just that an extension of time should be granted, doing so in a wrapped-up fashion together with setting aside the dismissal orders, and concluded that it was.

63 In my opinion, the judge’s conclusion did not give so little weight to the explanation or lack of it as to be unreasonable in the House v The King (1936) 55 CLR 499 at 504-5 sense. Nor do I accept the appellants’ more extravagant submissions as to contumelious conduct and abuse of process.

64 I go then to setting aside the dismissal orders. Again it seems to me that the judge was a little harsh in saying that, apart from the assertion that they were now ready, there was no evidence whatsoever from the Betckes, and that the affidavit of Mr Fegent was “little more than a chronology”. Mr Fegent’s affidavits of 12 March 2001 had been read in the December 2001 applications, and they provided some evidence of what Mr Fegent had done in order to meet the requests for particulars and of the difficulties he encountered. Mr Fegent’s affidavits of 4 December 2001 provided some further evidence of what had been done, and of the provision of the particulars and the accountant’s and expert’s report. It is not clear what affidavit or affidavits the judge was describing as “little more than a chronology”, but the description really did not do justice to the affidavits.

65 I have explained why the focus, in my opinion, should have been on curing the Betcke’s failures, not explaining them. The question for the judge was whether, notwithstanding the failures which brought the dismissal orders, in the circumstances as they presented themselves in December 2001 the dismissal orders should be confirmed or should be set aside.

66 The judge said that he took Micallef v ICI Australia Operations Pty Ltd as the guiding authority “in matters such as this”, although not explaining what guidance he found in it. In that case the plaintiff had failed to provide particulars despite directions or orders repeatedly given or made over a period of nearly four years. A dismissal order was made pursuant to Pt 18 r 3 of the District Court Rules. An application under Pt 31 r 12A to set aside the dismissal order was refused. Pt 31 r 12A is the general power to set aside orders if made “irregularly, illegally or against good faith”, and on appeal the plaintiff accepted that she could not successfully challenge the refusal to set aside the dismissal order if the dismissal order had been properly made. The issue was whether the dismissal order had been properly made. Micallef v ICI Australia Operations Pty Ltd was not a Pt 1 r 7A(5) case. It was a Pt 18 r 3 case.

67 On one view, the judge took Micallef v ICI Australia Operations Pty Ltd as the guiding authority only in relation to the Betckes’ failures leading to the dismissal orders, for the relevance that had when considering whether to confirm the dismissal orders or set them aside. However, his Honour qualified his reference to Micallef v ICI Australia Operations Pty Ltd by the words “although … there was no need for the plaintiff to seek an extension of time as the application had been properly made”, from which it would appear that he regarded Micallef v ICI Australia Operations Pty Ltd as the guiding authority on a Pt 1 r 7A(5) application. Just what guidance his Honour found is further obscured by the immediately following references to matters material to the Betckes’ original failures, but also to “the time that has elapsed is not of the order of Micallef for instance”, apparently meaning the time to December 2001.

68 In the end the judge did go to how things stood as at December 2001. Notwithstanding that he was unimpressed by the conduct of the proceedings on behalf of the Betckes, he accepted that they were ready to take a hearing date. He imposed the directions whereby they were confined to the existing particulars and reports. The judge had well in mind the gravity of Betckes’ failures leading to the dismissal orders, and he knew more of them than comfortably appears from the appeal papers. In the light of the overall time that had elapsed and the fact that the Betckes had made themselves ready, the judge considered that his discretion should be exercised by setting aside the dismissal orders rather than confirming them. This was against the background of his consideration of prejudice and explanation or lack of it, and at this point he acknowledged a degree of explanation. I do not think that error has been shown in that exercise of discretion.

Orders

69 It would be unwise for litigants to see in the judge’s exercises of discretion, in the particular circumstances of these cases, any encouragement to failure to comply with directions or orders or to depart from times required by rules of court; nor any lessening of the normal importance of explaining failure or departure. As it is, however, I propose the orders -

1. In each of proceedings 40023/02, 40024/02, 40027/02 and 4028/02, appeal dismissed with costs.

2. In Pyojed’s application -


(a) Extend the time for applying for leave to appeal up to and including 1 May 2003;

(b) Grant leave to appeal, limited to the question of whether the discretion to reinstate the proceedings was properly exercised in all the circumstances, including the evidence or lack of it, explaining and justifying the cumulative delays, and direct that the notice of appeal be filed within seven days;

(c) Appeal dismissed with costs.

70 SANTOW JA: I agree with Giles JA.

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Last Modified: 05/16/2003