Cosenza v Gill - [2016] SASC 154

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
COSENZA & ANOR v GILL & ORS
[2016] SASC 154
Judgment of The Honourable Justice Stanley
28 September 2016
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - PRINCIPLES ON WHICH COURT ACTS - INTERFERENCE WITH DISCRETION
MAGISTRATES - GENERALLY - STAY OF PROCEEDINGS AND ABUSE OF PROCESS
This is an appeal from a magistrate. The magistrate struck out the appellants’ claim as an abuse of process.
On 19 March 2015 the appellants filed a claim seeking damage for anguish, distress and aggravation to pre-existing depression, anxiety and post-traumatic stress disorder as a result of a trespass on their land by the first respondent. The appellants claim that the second and third respondents are vicariously liable for the tort of the first respondent.
The third respondent applied to the Court to strike out the appellant’s claim on the basis that the proceedings are a duplication of proceedings previously issued by the appellants in 2012 which were dismissed for want of prosecution in November 2013. The only difference between the two proceedings is that in accordance with the change in the jurisdictional limit of the Magistrates Court, the second claim seeks damages in the sum of $100,000 rather than $40,000. The third respondent’s application was supported by the second respondent.
The material before the magistrate evidenced that, as the magistrate described it, this was not an isolated claim. The appellants have initiated several claims for damages in trespass against a number of defendants. Those claims are almost identical to the present proceedings and to the claim which was dismissed in November 2013. In addition, there was evidence that the appellants had also been engaged in litigation in the Magistrates Court and District Court in at least nine actions commencing in 2011, 2012 and 2014.
The appeal is three days out of time. The appellants seek an extension of time within which to institute the appeal.
Held (per Stanley J):
1. Extend the time within which to institute the appeal (at [27]).
2. Allow the appeal (at [27]).
3. Set aside the order of the magistrate striking out the 2015 proceedings (at [27]).
4. Remit the matter to the Magistrates Court for any further pre-trial matters to be dealt with (at [27]).
5. Any further pre-trial matters and the trial should be heard by another magistrate (at [27]).
Magistrates Court (Civil) Rules 2013 (SA) r 3, referred to.
AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Cox v Journeaux (No. 2) (1935) 52 CLR 713, discussed.
Lujans v Yarrabee Coal Company Pty Ltd (2008) 249 ALR 663; Wrightville Operations Pty Ltd trading as Jarvis Ford v Lisman [2007] SASC 259; Warren v Coombes (1979) 142 CLR 531; Fox v Percy (2003) 214 CLR 118; Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75; Hunter v Chief Constable of West Midlands Police [1982] AC 529; Walton v Gardiner (1993) 177 CLR 378; Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; Brocx v Hughes (2010) 41 WAR 84; Beverage Bottlers (SA) Ltd (In Liq) & Anor v Abode Enterprises Pty Ltd [2009] SASC 272; Hughes v Gales (1995) 14 WAR 434; T v Medical Board (1992) 58 SASR 382, considered.

COSENZA & ANOR v GILL & ORS
[2016] SASC 154
Magistrates Appeal
STANLEY J:
Introduction

This is an appeal from a magistrate. The magistrate struck out the appellants’ claim as an abuse of process.
The appeal is three days out of time. The appellants seek an extension of time within which to institute the appeal.
Both before the magistrate and before this Court there was no appearance by the first respondent. I am informed the first respondent has not been served with the proceedings.
Background to the application
On 19 March 2015 the appellants filed a claim seeking damage for anguish, distress and aggravation to pre-existing depression, anxiety and post-traumatic stress disorder as a result of a trespass on their land by the first respondent. The appellants claim that the second and third respondents are vicariously liable for the tort of the first respondent.
The third respondent applied to the Court to strike out the appellant’s claim on the basis that the proceedings are a duplication of proceedings previously issued by the appellants in 2012 which were dismissed for want of prosecution in November 2013. The only difference between the two proceedings is that in accordance with the change in the jurisdictional limit of the Magistrates Court, the second claim seeks damages in the sum of $100,000 rather than $40,000. The third respondent’s application was supported by the second respondent.
The material before the magistrate evidenced that, as the magistrate described it, this was not an isolated claim. The appellants have initiated several claims for damages in trespass against a number of defendants. Those claims are almost identical to the present proceedings and to the claim which was dismissed in November 2013. In addition, there was evidence that the appellants had also been engaged in litigation in the Magistrates Court and District Court in at least nine actions commencing in 2011, 2012 and 2014.[1]
[1] Affidavit of Catriona Louise Mahony sworn 4 February 2016, paragraph 4.
The first appellant filed an affidavit sworn 18 January 2016 on the application to strike out the proceedings as an abuse of process. In his affidavit he deposed to the appellants having ongoing health issues that restricted their ability to pursue the proceedings when originally filed. He deposed that both appellants had been hospitalised during this time and continued to suffer from physical and mental health issues that affected their respective abilities to reasonably manage their personal and business affairs generally. He said that his mother was regularly treated and managed for renal failure, depression, PTSD, anxiety, chronic pain and attended various medical appointments weekly. She has mobility issues and uses a wheelchair to move about. He said that he was regularly treated for chronic pain, depression, anxiety, PTSD, spinal pain and had undergone spinal surgery and that he expected to undergo spinal surgery again. He said that the appellants were preoccupied with their health issues, realised the date to serve these proceedings had lapsed and so refiled. The magistrate received a medical report from the first appellant’s treating general practitioner, Dr Vinci.
Before the magistrate the respondents challenged the appellants’ reasons for the failure to prosecute the 2012 claim. However, no application was made to cross-examine the first appellant on his affidavit.
The magistrate’s reasons
In granting the application to strike out the appellant’s claim as an abuse of process the learned magistrate said:[2]
I am not persuaded by the plaintiff’s explanation for their failure to prosecute their 2012 claim. The many other actions which the plaintiffs were maintaining during 2012, 2013 and 2014 suggest the plaintiffs made a conscious decision to allow the claim to wither on the vine whilst they concentrated on other actions. This was not a case where the plaintiffs’ failure to prosecute their case was due to any extraneous circumstances or matters beyond their control. They were already conducting many other claims simultaneously with this matter. The additional effort in maintaining this claim would have been minimal. I think there was a deliberate decision to allow the claim to lapse which demonstrates a disregard for the processes and procedures of the court. I am satisfied the 2015 proceedings are an abuse of process and I order the plaintiff’s claim is struck out. The prejudice which flows from the plaintiff’s delays applies equally to all defendants and so the claim against all defendants, not just the third defendant, is struck out.
[2] Cosenza & Cosenza v Gill & AGL South Australia Pty Ltd & CPM Australia Pty Ltd, Reasons for Decision of Magistrate Fahey, 11 March 2016 at [9].
Approach on appeal
The appeal is an appeal by way of re-hearing and not an appeal de novo. On appeal the court is required to make an independent assessment of the material that was before the learned magistrate and may draw any inference from the facts which may be appropriate. The court is obliged to conduct a real review of the evidence and the magistrate’s reasons. The court is to consider all the evidence and reach what it considers is the proper conclusion.[3]
[3] Lujans v Yarrabee Coal Company Pty Ltd [2008] HCA 51, (2008) 249 ALR 663; Wrightville Operations Pty Ltd trading as Jarvis Ford v Lisman [2007] SASC 259; T v Medical Board (1992) 58 SASR 382; Warren v Coombes (1979) 142 CLR 531.
The striking out of a proceeding as an abuse of process does not involve the exercise of a discretion. The court does not have a discretion to refuse to strike out proceedings if they constitute an abuse of process or to strike out proceedings if they are not. To describe the exercise of the power to strike out proceedings as an abuse of process as discretionary merely indicates that, although there are some clear categories, the circumstances in which proceedings will constitute an abuse of process cannot be exhaustively defined and, in some cases, minds may differ as to whether they do constitute an abuse. However, as with discretionary decisions, properly so-called, appellate review of its exercise is controlled by House v The King type considerations. In deciding the appeal the court is to look to whether the magistrate acted upon a wrong principle, was guided or effected by extraneous or irrelevant matters, mistook the facts, or failed to take into account some material consideration. If so, this Court may reach its own decision in substitution for that of the magistrate, where there are before it the materials for so doing.[4]
[4] Batistatos v Road Traffic Authority of New South Wales [2006] HCA 27 at [7], (2006) 226 CLR 256 at 264.
In this context, the magistrate made findings of fact on the affidavits without the benefit of viva voce evidence or cross-examination on the affidavits. Accordingly, this Court is in as good a position as the magistrate to draw inferences from the materials before the magistrate and make findings of fact.[5]
[5] Warren v Coombes (1979) 142 CLR 531; Fox v Percy (2003) 214 CLR 118.
Abuse of process
The power of a court to deal with abuse of its process is one aspect of its more general power to control its own process. An abuse of process is prevented by the striking out of proceedings or the grant of a stay of proceedings. The exercise of the power to deal with abuse of process is not restricted to defined and closed categories but may be exercised as and when the administration of justice demands.[6] In Hunter v Chief Constable of West Midlands Police[7] Lord Diplock said that the court had inherent power “to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people”. That statement has been approved by the High Court in Walton v Gardiner[8] and in Batistatos v Roads and Traffic Authority of New South Wales.[9] Most recently in Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd,[10] French CJ, Gummow, Hayne and Crennan JJ said that the characterisation of some conduct of a party in relation to judicial proceedings as unfair does not mean that conduct is an abuse of process. However, abuse of process extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging”, or “productive of serious and unjustified trouble and harassment”. Categories of conduct which have attracted the intervention of the courts as an abuse of process include successive proceedings which cause or are likely to cause “improper vexation or oppression”. [11]
[6] Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at [57].
[7] [1982] AC 529 at 536.
[8] (1993) 177 CLR 378 at 393.
[9] (2006) 226 CLR 256 at 264.
[10] (2009) 239 CLR 75.
[11] (2009) 239 CLR 75 at 93.
Those principles have been subsequently applied by the Court of Appeal of the Supreme Court of Western Australia in Brocx v Hughes.[12]
[12] [2010] WASCA 57, (2010) 41 WAR 84.
Buss JA discussed the circumstances in which the Supreme Court’s power to prevent an abuse of process could be exercised where a second action has been commenced within the relevant limitation period after a previous action had been dismissed for want of prosecution. He said whether or not the second action should be characterised as an abuse of process and struck out or permanently stayed will depend on the facts and circumstances of the case. Those factors requiring consideration include any explanation for the plaintiff’s failure to prosecute the first action; the conduct of the plaintiff and the defendant in relation to the first action, including any failures to comply with the rules of court or interlocutory (including case management) orders and directions and any delays in the progress of the first action; whether any non-compliance with the rules of court or any (including case management) orders or any delays in the first action by the plaintiff or the defendant were intentional or contumelious; any explanation for a failure to explain any such non-compliance or delays in the evidence or absence of evidence as to who was responsible for any such non-compliance or delays; the prejudice to the plaintiff if the second action were to be struck out or permanently stayed; and the prejudice to the defendant if the second action were not to be struck out or permanently stayed.[13]
[13] [2010] WASCA 57 at [15] - [16], (2010) 41 WAR 84 at 88.
Newnes JA, considering the question whether there was an abuse of process in that case, referred to the principles in AON Risk Services Australia Ltd v Australian National University.[14]He said:[15]
Where a party demonstrates a disregard for the orders or procedures of the court and as a result their claim is dismissed, their right again to invoke the jurisdiction in respect of that same claim cannot be unlimited if the public interest in the efficient use of court resources and the rights of other litigants are to be given due recognition. It cannot be the case that so long as the limitation period has not expired a party can ignore the rules and orders of the court, secure in the knowledge that if the worst happens and the action is struck out they can simply start again. It would bring the administration of justice into disrepute, and be “productive of serious and unjustified trouble and harassment” to the defendant, if a party whose action had been dismissed by reason of their contumacious conduct could simply institute and proceed with a fresh action and, until the limitation period ran out, could continue to repeat that if and when the same fate befell them.
[14] (2009) 239 CLR 175.
[15] [2010] WASCA 57 at [97], (2010) 41 WAR 84 at 102.
Newnes JA accepted that the onus was on the party seeking the strikeout to show that the other party’s conduct in the first action was contumacious, but the particular circumstances which result in default occurring will generally be a matter peculiarly within the knowledge of the defaulting party. In the absence of a credible and satisfactory explanation by the defaulting party as to how the default came about, he considered the court is entitled to infer that the conduct concerned was contumacious.
In Beverage Bottlers (SA) Ltd (In Liq) & Anor v Abode Enterprises Pty Ltd[16] Kourakis J (as he then was), with whom Vanstone J agreed, said[17] that the Court’s power to dismiss or stay an action as an abuse of process is “exceptional”. He referred to the oft-cited observation of Dixon J (as he then was) in Cox v Journeaux (No. 2)[18] where he said:[19]
A litigant is entitled to submit for determination according to the due course of procedure or claim which he believes he can establish, although its foundation may in fact be slender. It is only when to permit it to proceed would amount to an abuse of jurisdiction, or would clearly inflict unnecessary injustice upon the opposite party that a suit should be stopped.
[16] [2009] SASC 272.
[17] [2009] SASC 272 at [146] – [149].
[18] (1935) 52 CLR 713.
[19] (1935) 52 CLR 713 at 720
Consideration
It is well recognised that the fact that a previous action has been dismissed for want of prosecution will not of itself justify the dismissal of a subsequent action based upon the same cause of action as an abuse of process.[20] However, in Brocx v Hughes[21] the Court of Appeal found there was an abuse of process in those circumstances because the only inference reasonably open on the evidence was that the conduct of the party in default was contumacious. No satisfactory explanation had been provided for it. As the conduct had not been explained, the Court held that it could not be satisfied that it would not occur again. On that basis the Court was satisfied that the subsequent proceedings constituted an abuse of process.
[20] Hughes v Gales (1995) 14 WAR 434 at 438 – 439.
[21] [2010] WASCA 57, (2010) 41 WAR 84.
Although the magistrate did not say so expressly, it appears he proceeded to find that the 2015 proceedings constituted an abuse of process on the basis that the appellants’ failure to prosecute the 2012 proceedings diligently, resulting in the dismissal of those proceedings for want of prosecution, was contumacious. The magistrate held that he was not persuaded by the appellant’s explanation for their failure to prosecute the 2012 claim. He appears to reason that the other actions they were maintaining during 2012, 2013 and 2014 suggests they made a conscious decision to allow the 2012 claim to wither on the vine while they concentrated on other actions. He held that this was not a case where the appellants’ failure to prosecute the 2012 claim was due to any extraneous circumstances or matters beyond their control. He noted they were already conducting many other claims simultaneously with the 2012 claim. He found that the additional effort in maintaining this claim would have been minimal. It appears that on that basis he found there was a deliberate decision to allow the claim to lapse, which demonstrated a disregard for the processes and procedures of the Court. On that basis he found there was an abuse of process.
With great respect, I consider this reasoning discloses error.
Before the magistrate, the appellants put forward an explanation for the failure to diligently prosecute the 2012 claim. There was evidence in the affidavit of Mr Cosenza of 18 January 2016 that at the relevant time he and his mother were suffering from ill health which restricted their ability to conduct their affairs. There was some corroboration for this evidence, at least in the case of Mr Cosenza, in the medical report of his treating general practitioner, Dr Vinci. The respondents sought to challenge this explanation by evidence that during the relevant period the appellants had been actively engaged in a myriad of other legal proceedings. It appears that the magistrate rejected the appellants’ explanation on the basis of the evidence that they were engaged in other litigation at the time. On this basis he inferred a conscious and deliberate decision to allow the 2012 claim to wither on the vine while the appellants concentrated on other actions. That was not the only inference reasonably open on the evidence. As I have observed, Mr Cosenza was not cross-examined on his affidavit. There was no reasonable basis upon which the magistrate could conclude that the appellants were not suffering from ill health at the relevant time. The inference drawn by the magistrate involves a logical fallacy. The fact that the appellants were able to maintain a number of other actions at the relevant time does not mean that their ill health did not prevent them from giving the attention that the 2012 claim required in order to avoid it being dismissed for want of prosecution. There is no inconsistency in the proposition that their ill health eventually overwhelmed them. There appears no evidentiary basis for the magistrate’s conclusion that the additional effort in maintaining the 2012 claim would have been minimal. If the evidentiary foundation for the finding that the dismissal of the 2012 proceedings was the result of a deliberate and conscious decision on the part of the appellants to allow that claim to wither on the vine is flawed, the appellants’ conduct cannot be regarded as contumacious. In those circumstances, the basis for the conclusion that the 2015 proceedings are an abuse of process is undermined.

The exercise of the Court’s power to protect its processes by keeping a litigant from having a court quell his or her controversy which is otherwise within the court’s jurisdiction is, as Kourakis J observed in Beverage Bottlers, exceptional. It should only be exercised where an abuse of process is clearly established. In this case the magistrate erred in finding there was an abuse of process. He mistook the facts. This Court must intervene to set aside the order striking out the proceeding.
Before leaving this matter it is necessary to address a submission put by the second respondent in reliance upon the provisions of r 3 of the Magistrates Court (Civil) Rules 2013 (SA). Rule 3 provides:
(1) (a) In interpreting, applying and enforcing observance of these Rules, the Court and Registrar must in all things promote the expeditious, economical and just conduct and resolution of an action or proceeding by negotiated agreement or judicial determination.
(b) These Rules are not intended to defeat the proper action brought in good faith of any party and are to be interpreted accordingly.
(2)A person may not commence more than one action in respect of the same or a substantially similar cause of action and the Court must attempt to resolve multiple actions involving a party and determine all matters in dispute in an action so as to avoid multiplicity of actions.
Ms D’Arcy, counsel for the second respondent, submits that the magistrate was correct to find that the second action by the appellants was an abuse of process by reason of the operation of r 3(2). She submits that the second action was an abuse because the appellants were prohibited from commencing more than one action in respect of the same cause of action. I do not accept this submission for two reasons. The first is that r 3(2) is concerned to avoid a multiplicity of actions. In my view the rule is concerned with the commencement of more than one action in respect of the same or a substantially similar cause of action while another action is on foot. That does not detract from the Court’s ability, outside of r 3(2), to address the question of whether the commencement of a second action in respect of the same or a substantially similar cause of action after the disposition of an earlier action is an abuse of process, but I do not consider that is the work to be performed by r 3(2). The second is that, in any event, the operation of r 3(2) is to be understood in the light of the operation of r 3(1). Rule 3(2) is not intended to defeat a proper action brought in good faith in accordance with the rubric in r 3(1)(b).
Extension of time
The appeal was instituted three days out of time. In the circumstances I would grant an extension of time.
Conclusion
I would extend the time within which to institute the appeal. I would allow the appeal. I would set aside the order of the magistrate striking out the 2015 proceedings. I would remit the matter to the Magistrates Court for any further pre-trial matters to be dealt with. In the circumstances I consider it appropriate that any further pre-trial matters and the trial should be heard by another magistrate.