Collendina Pty Limited & Ors v Murray Darling Basin Commission & Ors

[2007] NSWSC 1053

CITATION:	Collendina Pty Limited & Ors v Murray Darling Basin Commission & Ors [2007] NSWSC 1053
HEARING DATE(S):	18 September 2007
JUDGMENT DATE :	20 September 2007
JUDGMENT OF:	Harrison J
DECISION:	See paragraphs 29 and 30.
CATCHWORDS:	PRACTICE & PROCEDURE - application in nature of show cause - plaintiffs' ability to prosecute proceedings - failure to file lay and expert evidence over extended period - failure to comply with orders to do so - whether proceedings should be dismissed for want of due despatch - prospect of fair and proper determination of issues despite delay
LEGISLATION CITED:	Civil Procedure Rules 2005 - rule 36.15
PARTIES:	Collendina Pty Limited (first plaintiff) Rohan Geoffrey Cranney (second plaintiff) David Kenneth Cranney (third plaintiff) Cranney Properties Pty Limited (fourth plaintiff) Wongala Holdings Pty Limited (fifth plaintiff) Murray Darling Basin Commission (first defendant) John Lovering (second defendant) Geoff Gorrie (third defendant) Phillip Toyne (fourth defendant) Kevin Sheridan (fifth defendant) Michael Taylor (sixth defendant) David Stringer (seventh defendant) Edward Phipps (eighth defendant) Dennis Mutton (ninth defendant)
FILE NUMBER(S):	SC 20005 of 2003
COUNSEL:	N Obrart (plaintiffs) F Kunc (defendants)
SOLICITORS:	Sydney Cove Law Group (plaintiffs) Blake Dawson Waldron (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HARRISON J

20 September 2007

20005 of 2003 Collendina Pty Ltd & Ors v Murray-Darling Basin Commission & Anor

JUDGMENT

1 HARRISON J: On 22 August 2006, orders were made for the filing by the plaintiffs of evidence and experts’ reports by 30 March 2007. These orders were not complied with and so on 24 April 2007 further orders were made by consent. These included an order that all affidavits and expert reports in chief upon which the plaintiffs proposed to rely at the hearing were to be filed and served by 29 June 2007. It was a term of the orders that if the plaintiffs failed to comply with that order, the proceedings would be dismissed with effect on 30 June 2007. One of the orders made on that day gave liberty to the plaintiffs to file on or before 1 May 2007 any motion to vacate, inter alia, the order requiring them to file evidence by 29 June 2007. On 2 May 2007 [sic] the plaintiffs filed a motion seeking to vary the orders made on 24 April 2007. That motion came before Associate Justice Harrison on 15 August 2007.

2 On that day her Honour made the following orders: -

1. The plaintiffs’ Notice of Motion filed 2 May 2007 be dismissed;

2. The plaintiffs pay the defendants’ costs of today;

3. Order 3 made on 24 April 2007 be vacated;

4. The plaintiffs file and serve an affidavit on before 17 September 2007 to include :

(a) Identifying what types of experts will be relied upon by the plaintiffs;


(b) What inquiries have been made in relation to instructing experts;



(c) Whether any experts have been retained and any estimate obtained from those experts as to the time required to prepare their reports;

(d) When the plaintiffs’ lay evidence can be filed.


5. In the absence of the Court being satisfied of the plaintiffs’ ability to prosecute these proceedings by the affidavit referred to in Order 4, the proceedings be dismissed with costs with effect on and from 30 September 2007.

6. Any further orders for the plaintiffs to file and serve their lay and expert evidence in chief be made subject to an order that non-compliance will result in the proceedings being dismissed with costs with effect the day after such evidence is to be filed and served;

7. The proceedings be listed before Harrison J at 9.30am on 18 September 2007.

(Emphasis added)

3 In the course of her judgment her Honour made the following remarks: -

"5. It is an extraordinary state of affairs that this matter could go on so long, have such a history and still be no further advanced. In my view the plaintiffs, and those in the plaintiffs’ camp, should be aware that if they want to pursue litigation they cannot do so in such a leisurely manner.

6. I accept that the defence was filed late, but at this stage the matter has been languishing in the plaintiffs’ camp five years. So far as the experts’ evidence is concerned, there appears to be no way forward. It is my view that the matter should stand; I want it to be made clear to the plaintiffs themselves that the matter will be struck out if there is no further advancement.

7. I will stand the matter over for one month, extend the self executing order, and direct that the plaintiffs, through their solicitors, file an affidavit which details what type of reports be obtained, the types of experts, who is retained, what enquiries are made to retain them; basically a schedule as to when they think they will serve those reports. That leaves aside the lay evidence and there appears to be no reason why that cannot be complied [with] now."

4 The matter came before me on 18 September 2007 as arranged. Ms Obrart of counsel appeared for the plaintiffs. Mr Kunc of counsel appeared for the defendants.

5 The affidavit anticipated by order 4 made by her Honour is an affidavit of Katherine Doust sworn 17 September 2007. In that affidavit Ms Doust dealt with the four categories contemplated by order 4. For reasons that will emerge, it is in my opinion important to have regard to, and to set out in these reasons, all of the relevant material to which Ms Doust deposes. That material is as next follows.

" EXPERT WITNESSES

Orders 4 (a) and 4 (b)

4. Having consulted with counsel, I verily believe the following evidence will be required in the plaintiffs’ case.

The management of large dams

5. The plaintiffs will require evidence as to the management of the Hume Dam ("the Dam"), in particular, evidence as to management of the dam prior to, during and subsequent to releases of water from the dam by the defendants in October and November 1996. The 17 volumes of discovered documents provided to us by the defendants contain several expert reports in relation to the management of the dam during the relevant period including reports from experts in the United States of America.

6. I believe more than one expert will be required to provide evidence as to the management of the dam and I believe we may require two to three experts in dam management.

7. I refer to my affidavit of 15 August 2007. As stated therein, all of the Australian persons contacted to that date capable of giving evidence in relation to large dam management have expressed a conflict of interest. Subsequent to that affidavit, this firm has located a further 11 potential Australian experts in large dam management and this office has sent letters by post on 14 September 2007 to those potential experts inquiring whether they would be available to provide evidence in the plaintiffs’ case.

8. This firm has also located large dam experts in the United States of America in the States of California, Colorado, Washington, Georgia, Ohio, New York, Kentucky, Michigan, West Virginia, Illinois, Pennsylvania, Plymouth [sic] and Florida and has similarly sent letters to 43 potential experts enquiring whether they would be available to provide evidence in the plaintiffs’ case.

9. This firm has also contacted Intota Expert Knowledge Services in the United States of America ("Intota") and has received confirmation from Intota with respect to providing their assistance by responding with expert contact instructions and details.

Annexed hereto and marked with the letter "A" is a copy of an email from Intota.

10. This firm has also located a large dam expert in New Zealand and has sent a letter on 14 September 2007 enquiring whether they would be available to provide evidence in the plaintiffs’ case.

Hydrology

11. The plaintiffs will also require an expert in hydrology. This expert is required in relation to the defence that the plaintiffs’ property is affected by an easement in favour of the first defendant. The easement does not in terms refer to the Dam but to another structure, being the Yarrawonga Weir and the defendants contend the topography of the land between the Dam and the Yarrawonga Weir has the effect that waters released from the Yarrawonga Weir can be said to be covered by the easement.

12. This firm has written 2 letters to experts in hydrology to ascertain whether they are able to act for the plaintiff in this matter.

Agronomist

13. I believe the plaintiffs will require expert evidence from an agronomist in relation to damages caused to the plaintiffs’ property, livestock, crop loss as a result of the releases of water the subject of these proceedings.

14. A report obtained by the plaintiffs from Mr John Sykes of John Sykes Rural Consulting dated 25 August 1997 is currently I believe in the possession of the defendants.

15. This office has written to another agronomist to ascertain whether he is available to act for the plaintiff in this matter.

Forensic Accountant

16. I believe the plaintiffs will require a forensic accountant to prepare a report on the financial loss suffered by the plaintiffs based on the losses incurred to the property, crops, livestock and the tourism venture.

17. I have also made telephone enquiries in relation to researching all the expert witnesses referred to above.

18. I have also retained the services of Expert Opinion Services in relation to Orders 4(a) and 4(b) above.

19. On 17 September 2007 I had a telephone conversation with Barbara Yanatsis, Senior Account Executive from Expert Opinion Services. She said words to the effect:

Barbara: "The experts I have contacted so far have either been unavailable to assist you, conflicted or have not returned my call".


Annexed hereto and marked with the letter "B" is a copy of a letter from Expert Opinion Services dated 14 September 2007.

Order 4(c)

20. No experts have been retained by the plaintiffs as at today's date as we are awaiting replies from potential experts.

Order 4(d)

21. The plaintiffs will have 2 to 3 lay witnesses.

22. I am instructed, subject to Mr Geoffrey Cranney being declared medically fit, the plaintiffs’ lay evidence can be filed within six (6) weeks. Mr Geoffrey Cranney is the person who has throughout the course of this proceeding, provided this firm with instructions on behalf of the plaintiffs.

Annexed hereto and marked with a letter "C" is a copy of a medical report from Dr Louise Baird from Albury Base Hospital dated 13 September 2007.”

6 The plaintiffs also tendered 68 copy letters dated 14 September 2007 that together became Exhibit A before me. It can be assumed for present purposes that these letters have been written to prospective expert witnesses in the plaintiffs’ case. With due allowance for the differing disciplines in respect of which assistance is sought, the letters are all relevantly in identical terms. The following is an example of one of these letters.

"We refer to the above matter and confirm we act for the plaintiffs . . .

This proceeding is a claim against the Murray Darling Basin Commission . . . in respect to the operation of the Hume Dam in or around October 1996.

We are seeking to retain the services of an expert in hydrology with experience in flooding to prepare a report with respect to damage caused to our clients’ property the result of releases of water from the Hume Dam authorised by the Commission in or around October 1996.

The issues on which we require expert advice relate to the effect of flooding and inundation of the plaintiffs’ property, the result of releases of water from the Hume Dam authorised by the Commission in or around October 1996.

We write this letter as a preliminary enquiry as to whether you are available to assist us in this proceeding as an expert for our case.

Relevant matters for your consideration for your suitability to assist us in this case would be:

(a) Your qualifications in hydrology.

(b) Your availability and willingness to assist.

(c) Any real or perceived conflict of interest.

We thank you for your consideration and await your response."

7 The plaintiffs sought also to rely upon two earlier affidavits of Katherine Doust sworn 2 May 2007 and 15 August 2007. There was no objection to that course by the defendants. Those affidavits had been read before Associate Justice Harrison. I have had regard to the material to which they refer.

8 The plaintiffs also sought to rely upon an affidavit of Rohan Geoffrey Cranney sworn 18 September 2007. That affidavit annexes a medical report from Dr Louise Baird dated 13 September 2007. Dr Baird expresses the opinion that Mr Geoffrey Cranney would be unable to appear in court for one month by reason of the fact that he was an inpatient at Albury Base Hospital undergoing investigations to determine the severity of his illness. She does not describe his illness.

9 The circumstances in which this matter came before me are slightly unusual. It is agreed between the parties that the question I am required to consider is whether or not I can be "satisfied of the plaintiffs’ ability to prosecute these proceedings by the affidavit referred to in Order 4”. If I cannot be so satisfied, the proceedings are to be dismissed with costs with effect on and from 30 September 2007. Presumably, although not explicitly, if I am so satisfied, the plaintiffs will face the further prospect that the proceedings will be dismissed if they fail to comply with any further orders for the filing and serving of their lay and expert evidence in chief: see order 6.

10 It was urged upon me by Mr Kunc that order 6 had to be considered in conjunction with, or as a function of, order 5. According to this argument, the extent to which the plaintiffs are, for the purposes of order 5, required to satisfy me that they have an ability to prosecute the proceedings, has to be determined having regard to a specific or ascertained date by which they might be expected to comply with order 6. In other words, I should not be satisfied that the plaintiffs have the ability to prosecute the proceedings if, having regard to all of the evidence, I could not at the same time specify a date by which they might reasonably be expected to have filed and served their lay and expert evidence in chief. This argument was fortified by the submission that no such date was established by the evidence, thereby leading to the conclusion that I should not be satisfied of the plaintiffs’ ability to prosecute the proceedings.

11 In response to this argument Ms Obrart made an application to vary the terms of the orders by setting aside order 6. Mr Kunc opposed this.

12 The matter was further complicated by one of the bases upon which the plaintiffs’ application was made. It was suggested that the orders that were made on 24 April 2007 were all liable to be set aside pursuant to rule 36.15 upon the basis that they were made irregularly, illegally or against good faith. This contention drew upon the circumstances in which those orders came about, in particular the suggestion that the plaintiffs were represented only by their solicitor and not by counsel. It was submitted that the plaintiffs would not have agreed to the orders if counsel had represented them.

13 The circumstances are relevantly referred to in the affidavits of Ben Cramer sworn 15 August 2007. Mr Cramer is a solicitor employed by the solicitors for the defendants and instructed Mr Kunc at the directions hearing befor Registrar Bradford on the day in question. It emerges from that affidavit that order 5, which gave liberty to the plaintiffs to file a motion to vacate the orders on or before 1 May 2007, was inserted in order to palliate Ms Doust's concerns that the orders may have been too severe.

14 The plaintiffs’ application to vacate the self-executing order was the subject matter of the proceedings before Associate Justice Harrison on 15 August 2007. The plaintiffs did not seek leave to appeal from that decision. It was in any event a decision made with the benefit of the evidence of Mr Cramer in his affidavit of 15 August 2007. Mr Cramer was not cross-examined. In my opinion there is no proper basis upon which that issue can be revisited.

15 Ms Doust, on the other hand, was cross-examined about steps that had been taken by her on behalf of the plaintiffs to prepare or to assemble lay and expert evidence on behalf of the plaintiffs since 22 August 2006. That was the date on which the plaintiffs consented to orders including a timetable that they file lay and expert evidence by 30 March 2007. The orders made on 24 April 2007 were, in effect, consent orders extending the time for the filing of that evidence until 29 June 2007 but with the addition of the so-called self-executing order dismissing the proceedings in the event of non-compliance. Accordingly, by the time the matter came before Associate Justice Harrison, the plaintiffs had been the subject of a regime for the filing of evidence for approximately one year. Cross-examination of Ms Doust reveals that nothing much occurred during that period.

16 The starting point for an understanding of that evidence, however, is Ms Doust's affidavit sworn 15 August 2007. It would appear that the first occasion upon which the plaintiffs attempted to locate an expert on dams was in December 2002. That attempt produced no result. Mr Chris Thomas was subsequently retained and inspected numerous documents produced by the first defendant on discovery. In January 2003 Mr Geoff Cranney contacted Mr John Winton, chairman of Sinclair Knight Pty Ltd, Consulting Engineers. Apparently Mr Winton was well known to the Cranney family. Mr Winton advised that his firm had been retained by the first defendant and was unable to assist. Thereafter, on a date which is unspecified, “Chris Thomas was engaged but subsequently following discussions with Counsel it was decided to seek a more formidable Dam Expert": par 14. No date is given for Mr Thomas’ engagement and no date is given for the decision to look elsewhere. Nothing would appear to have occurred until 18 July 2007 on which date "in desperation", to use Ms Doust's words, John Winton was again contacted for help. This was nearly three weeks after the significant date of 29 June 2007 and slightly less than a month before the matter came before Associate Justice Harrison on 15 August 2007.

17 Cross-examination of Ms Doust revealed that no steps had been taken to instruct an agronomist on behalf of the plaintiffs. An enquiry was made about an hydrologist "about 12 months ago". All attempts to obtain the assistance of an expert on dams had proved unsuccessful. During the course of Ms Doust’s cross-examination, her Honour asked the following question: -

"Q. As I read your affidavits, there has been no progress, no step forward, you don't know who the experts are?

A. At this point the clients are still looking into it. They are having great difficulty because all the people they have approached in Australia have a conflict of interest and they won't act, that is why we are now looking to get, there is a company in New Zealand, they have gone to New Zealand so far, also somebody who was retired who may be able to assist who is in Australia."

18 Ms Doust's cross-examination concluded with the following answers to questions from her Honour: -

"Q. My main concern is, I think I did a judgment about a year ago, and so far as I can see nothing has been advanced to get the matter advanced?
A. We have done a lot of discovery, an enormous amount of discovery produced by the clients.

Q. What I'm more interested in, is what is the way forward. It is no use coming to Court and saying we will get something done in three months. How would you find out who the experts are and at least have a program when you can get the reports?

A. All I can do is just ask the clients. I can make the enquiries. I don't know who to enquire to."

19 It seems reasonably clear that order 5 was framed in the shadow of the wholly unsatisfactory situation described by Ms Doust in her affidavit, a situation that became no less unsatisfactory following her cross-examination. The order bespeaks an intention on the part of Associate Justice Harrison to give the plaintiffs a further opportunity to demonstrate an ability to prosecute the proceedings.

20 Contrary to the submissions on behalf of the defendants, and despite the attractive nature of the argument, I consider that orders 5 and 6 are directed to separate and distinct issues and do not form part of the same enquiry. For example, the issue of the plaintiffs’ ability to prosecute the proceedings is not to be determined by reference to a particular date or period. Order 5 does not contemplate the Court being satisfied of the plaintiffs’ ability to prosecute the proceedings "in a timely way" or "within the next six months" or anything similar. The issue is in terms directed to ascertainment of the plaintiffs’ ability to prosecute in a wholly open-ended fashion.

21 In my opinion, this interpretation is reinforced by the opening words of order 6. The words "[a]ny further orders for the plaintiffs to file and serve their lay and expert evidence in chief" contemplate both the prospect that no such orders should be made, as well as the prospect that if such orders are made the plaintiffs should be subject to the consequence to which the order refers in the event of default. The wisdom of this approach, it seems to me, contemplates a circumstance where the Court is satisfied of the plaintiffs’ ability to prosecute the proceedings but remains inadequately informed to enable it to make a reasoned decision about when this might be likely to occur.

22 I am fortified in this view by the notion that this Court ought not to make an order having the possible but serious consequence that the rights of a party, together with any prospect of enjoying the fruits of the litigation, may come to an end entirely if and when the order is not complied with, if the Court cannot be satisfied that that party has within its means the ability to comply with the order or that there exists at least some reasonable prospect that it will do so. If the circumstances suggest a certain or even a likely inability to comply, at least two things seem to follow. First, it would be futile to make the order in those circumstances and this Court ought to turn its face from such a prospect. Secondly, if an inevitable consequence is simply being postponed, the Court should make the order immediately rather than participate in a timetable that appears to give the relevant party the benefit of some opportunity which in truth is illusory.

23 Orders of this type would appear to have been made by consent on more than one occasion. Why the plaintiffs would have agreed to such orders being made, where non-compliance was inevitable, is a matter about which it is both unprofitable and inappropriate to speculate. Order 5, however, was not such an order because it contemplated performance by the plaintiffs of something that they had a realistic prospect of achieving.

24 The plaintiffs’ cause of action against the defendants is pleaded in negligence. The plaintiffs allege that their property, known as Collendina and located approximately 80 km west of the Hume Dam, was inundated when the defendants released water from the dam in breach of their duty to take reasonable care in doing so with the result that the plaintiffs suffered loss and damage. The particulars of negligence draw attention to the timing of the releases which allegedly coincided with the time of highest annual rainfall in the Murray Darling Basin, and to the period over which the volume of water was released, which was allegedly insufficient to allow adequate distribution of the water downstream having regard to the relevant carrying capacity of the channel. A somewhat curious allegation of a failure to warn is also made.

25 It appears to be common ground that proof of negligence will necessitate the marshalling of significant expert evidence across a series of disciplines. As outlined above, the plaintiffs have not demonstrated any particular enthusiasm for this process until recently and then only in the face of the looming consequences of non-compliance with the self-executing orders. For all anybody knew, including Associate Justice Harrison, up to and including 15 August 2007, the plaintiffs had no demonstrated capacity to prove that part of their case. The defendants’ suspicions that the plaintiffs have no such capacity has only been heightened by the appearance and departure of Mr Thomas in the plaintiffs camp without so much as the hint of a favourable opinion from him.

26 I was invited by Mr Kunc to compare my task with the principles which would apply on an application by a defendant for dismissal of proceedings for want of due despatch. In such circumstances the court is given the power to order that the proceedings be dismissed or to make such other order as it thinks fit. Dismissal is not, therefore, an inevitable consequence of a finding that a plaintiff has not prosecuted proceedings with due despatch.

27 The essential criterion for the exercise of the power is whether or not, in all the circumstances, justice requires that the proceedings should be dismissed. That involves striking a balance between the interests of the plaintiff and defendant with particular regard to the respective prejudice to each arising from the making of, or the refusal to make, such an order. Striking out for want of due despatch when a fair trial remains possible and the defendant is not otherwise prejudiced would not be an appropriate sanction, even for inordinate delay, in the conduct of litigation.

28 It is difficult to speak highly of the plaintiffs’ approach to the present proceedings having regard to their conduct of the litigation so far. The evidence suggests some circumstantial exculpation, but for the most part the plaintiffs’ efforts to construct even the barest whiff of a case have been explosively punctuated by long droughts of relevant or productive activity. Even so, there does not appear to be any suggestion of serious jeopardy to the prospect of a fair and proper determination of the issues caused by their delay.

29 In all the circumstances I am satisfied of the plaintiffs’ ability to prosecute the proceedings. Consistently with the manner in which I have approached the matter, however, I am not prepared to make orders for the plaintiffs to file and serve their evidence in chief in the way contemplated by order 6 until such time as I can be satisfied that they are in a position to do so. There seems to be no impediment to the plaintiffs’ lay evidence being formulated within a month or so, as Ms Obrart conceded. The true position in relation to the expert evidence will not emerge until some time after replies to the letters that make up Exhibit A are received and processed. Subject to any submissions that the parties may wish to make to the contrary, that is a process that ought to be the object of continual scrutiny by me as case manager.

30 I propose to adjourn this matter for directions before me at 9.30am on Thursday 27 September 2007. I order the plaintiffs to pay the defendants costs of the application before me.

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