Duncan-Strelec v Tate

[2009] NSWSC 1252

CITATION:	Duncan-Strelec v Tate [2009] NSWSC 1252
HEARING DATE(S):	30 October 2009
JUDGMENT DATE :	20 November 2009
JURISDICTION:	Equity
JUDGMENT OF:	White J
DECISION:	Refer to para 49 of judgment.
CATCHWORDS:	PROCEDURE – evidence - plaintiffs seek leave to serve lay evidence in chief and expert evidence – repeated defaults by plaintiffs in complying with orders for service of affidavits – failure to seek directions for the adducing of expert evidence – leave given to rely on lay affidavit – leave refused to rely on expert evidence - PROCEDURE – summary dismissal - first and second defendants seek summary dismissal of proceedings – consideration of dictates of justice – limitation period not expired - summary dismissal may cause further delay and add additional costs – summary dismissal refused
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW)
CATEGORY:	Procedural and other rulings
CASES CITED:	Duncan-Strelec v Tate [2008] NSWSC 1145 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14 Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 Birkett v James [1978] AC 297 Stollznow v Calvert [1980] 2 NSWLR 749 Hartigan v International Krishna Consciousness [1999] NSWSC 57 Beverage Bottlers (SA) Ltd (in liq) v Abode Enterprises Pty Ltd [2009] SASC 272 Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 Field t/as M & N Waterproofing & Restoration Services v Luxor Products Pty Ltd [2009] QSC 218 Batistatos v Roads & Traffic Authority of New South Wales [2006] HCA 27; 226 CLR 256 In re Jokai Tea Holdings Ltd [1992] 1 WLR 1196 Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 753 State Pollution Control Commission v Australian Iron & Steel Pty Ltd (1992) 29 NSWLR 487 GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710
PARTIES:	1st Plaintiff: Amanda Duncan-Strelec 2nd Plaintiff: David Strelec 3rd Plaintiff: Dunlec Pty Ltd 1st Defendant: Thomas Richard Tate 2nd Defendant: Ruth Tate 3rd Defendant: Wamego Pty Ltd
FILE NUMBER(S):	SC 6428/06
COUNSEL:	Plaintiffs: R Bellamy Defendants: A Lo Surdo
SOLICITORS:	Plaintiffs: Kemp Strang Defendants: Jackson Lalic Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Friday, 20 November 2009

6428/06 Amanda Duncan-Strelec & 2 Ors v Thomas Richard Tate & 2 Ors

JUDGMENT

1 HIS HONOUR: Two applications were heard together. The plaintiffs seek leave to serve lay evidence in chief on or before 6 November 2009 and expert evidence on or before 14 December 2009. The first and second defendants seek an order pursuant to s 61 of the Civil Procedure Act 2005 (NSW) that the proceedings against them be dismissed.

2 Section 61 relevantly provides:

“ 61 Directions as to practice and procedure generally

(1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings.
...
(3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following:
(a) it may dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim,
...
(4) Subsection (3) does not limit any other power the court may have to take action of the kind referred to in that subsection or to take any other action that the court is empowered to take in relation to a failure to comply with a direction given by the court. ”

3 There are three defendants to the proceedings. The third defendant did not appear on either application.

4 Both applications arise from repeated defaults by the plaintiffs in complying with orders for service of affidavits. The first such order was made on 15 November 2007 and required the plaintiffs to file and serve their evidence by 30 January 2008. There have been seven subsequent orders, none of which has been complied with.

5 The plaintiffs’ statement of claim was filed on 21 December 2006. It has been amended partly by reason of matters occurring since the proceedings were commenced.

The Plaintiffs’ Claims

6 The first and second plaintiffs are wife and husband. They control the third plaintiff. The third plaintiff, Dunlec Pty Ltd (“Dunlec”), owns land at Lavington near Albury in New South Wales. The plaintiffs allege that in November 2005 they entered into an oral agreement with the first and second defendants for a joint venture for the acquisition and development of land to be acquired by a company in which both families would have an equal interest, being land adjacent to the land owned by Dunlec. The plaintiffs allege that it was orally agreed that the land so to be acquired would be developed, marketed and sold in conjunction with the land owned by Dunlec which had already been approved for development by the Albury City Council. The plaintiffs allege that the first defendant, Mr Tate, was to arrange the finance for the purchase of the adjacent land and when the plaintiffs had refinanced their assets they would reimburse him for a half share of the deposit. The plaintiffs plead that the third defendant, Wamego Pty Ltd (“Wamego”), purchased land adjoining Dunlec’s land at auction on 11 November 2005 for $970,000. Mr Tate was then the sole shareholder of Wamego. The plaintiffs allege that in June 2006 they reimbursed Mr Tate for a half share of the deposit and for a half share of the costs incurred up to that date, presumably the costs incurred in connection with the purchase of the land. They allege that it was a term of the joint venture agreement that the plaintiffs would prepare and lodge the development application to the Albury City Council for approval for development of the land.

7 The plaintiffs allege that it was a term of the joint venture agreement that the costs of the joint venture would be borne equally between the plaintiffs and the defendants and that the profits would also be shared equally. They allege that the first and second defendants failed to cause half of the share capital of Wamego to be issued to Dunlec. They say that this was a breach of the joint venture agreement.

8 The plaintiffs also allege that on or about 30 November 2006 the first and second defendants entered into an agreement with a Mr Kovacevic to sell to him all of the shares in Wamego. They say this was a repudiation of the joint venture agreement which they have accepted. The plaintiffs plead that the sale to Mr Kovacevic was completed in November 2007 and that the defendants are required to account for the profit made on the sale of the shares. (They have not alleged that the parties stood in a fiduciary relationship or that the sale was a breach of fiduciary duty.)

9 The plaintiffs claim damages for breach of the alleged joint venture agreement, being the loss of the chance of sharing in profits which would have been derived had the joint venture agreement been performed. It is not clear from the pleading whether the alleged loss of profit is a loss of profit from the development and sale of the land acquired by Wamego, or a loss of profit on the development, marketing and sale of that land in conjunction with the adjoining land owned by Dunlec. As the plaintiffs allege that it was a term of the joint venture agreement that the land to be acquired by Wamego would be developed, marketed and sold in conjunction with adjoining land owned by Dunlec, which adjoining land had already been approved for development by the Albury City Council, I presume that the claim is put on the latter basis, at least in the alternative.

10 The plaintiffs separately plead that the first defendant required the second plaintiff, Mr Strelec, to provide his professional services as an engineer and project manager to Wamego. They alleged that this requirement was made orally in November 2005 when Mr Strelec was asked to prepare and lodge a development application with Albury City Council in relation to the development of the land acquired by Wamego. The plaintiffs claim a quantum meruit for a reasonable sum for the work carried out by Mr Strelec at the request of Mr Tate in connection with that work. An amount of approximately $50,000 is sought on this basis. This appears to be an alternative claim.

11 The defendants deny that a joint venture agreement was entered into. They admit that in November 2005 there were discussions between the parties as to the possibility of Wamego purchasing the land on terms that the land would be developed by Wamego and marketed in conjunction with the adjoining land owned by Dunlec, and that the plaintiffs and defendants would share the acquisition and development costs and profits equally. The defendants plead that the first plaintiff, Ms Duncan-Strelec, refused that proposal and as a consequence Wamego proceeded to purchase the land on 11 November 2005. The defendants allege that on 11 November 2005, after Wamego had successfully bid for the land at auction, the parties agreed that in consideration of the plaintiffs paying to the defendants expeditiously, and no later than the settlement of the purchase, one half of the deposit and one half of the costs incurred by Wamego in acquiring and developing the land, that Wamego would cause to be issued to Dunlec shares equivalent to 50 percent of the issued share capital of Wamego, and that the land would be developed by Wamego and marketed in conjunction with the adjoining land owned by Dunlec. The defendants plead that the purchase of the land acquired by Wamego was completed on 14 February 2006, but the plaintiffs did not comply with their obligations to provide half of the costs.

12 The defendants admit the payment by the plaintiffs in June 2006 of the sum of $205,815 representing one half of the costs then incurred by Wamego in the acquisition and development of the land. The defendants plead that this payment was made pursuant to an agreement that if the payment were made, Wamego would consider the request of the plaintiffs to enter into a new agreement in the terms of the old agreement. The defendants plead that the plaintiffs paid Wamego $205,815 in about late June 2006. They plead that in July 2006 Mr Strelec asked for the return of that sum. They plead that in accordance with his request the payment was returned by Wamego on 25 July 2006.

13 According to affidavits of Ms Duncan-Strelec, the return of the moneys was intended by the plaintiffs to be a temporary arrangement. In an affidavit affirmed on 20 December 2006 by her in support of an application for interlocutory injunctive relief, she deposed that the plaintiffs were prepared to return the sum to Wamego or to allow it credit for that sum.

14 In a case in which the plaintiffs rely upon an alleged oral agreement for a joint venture for the acquisition and development of land, one would expect that before proceedings were commenced, or if not before, at a very early stage, detailed proofs of evidence from at least the plaintiffs would have been taken.

Lack of Progress of Proceedings

15 Directions hearings for the matter were adjourned on six occasions between January and June 2007. The first and second defendants’ solicitor deposes that the reason for these adjournments was due to “certain commercial transactions occurring which may have had an impact upon the manner in which the parties dealt with the dispute”. On 14 June 2007 orders were made for the filing of amended pleadings. In August 2007 orders were made for discovery.

16 On 15 November 2007 orders were made that the plaintiffs file and serve their evidence by 30 January 2008 and the defendants file and serve their evidence by 29 February 2008. On 3 March 2008 the time for the service of the plaintiffs’ evidence was extended to May 2008. On 12 May 2008 the time was further extended to 30 May 2008. On 30 June 2008 orders were made for the plaintiff to serve a proposed further amended statement of claim by 9 July 2008. No evidence from the plaintiffs had by then been served.

17 The first and second defendants proposed to sell their shares in the third defendant. On 23 January 2007 orders had been made by consent and until further order restraining them from doing so unless $247,000 from the proceeds of sale was paid into an interest bearing account to await further order of the court and certain “forestry bonds” were held by the defendants’ solicitors on trust pending further orders of the court. The orders also restrained the third defendant from dealing with the land. On 30 November 2007 the share sale agreement was completed. On the same day the third defendant by its new director mortgaged the land. A further mortgage was given by the third defendant in February 2008. This led to contempt proceedings being instituted by the plaintiffs against the third defendant. A notice of motion seeking orders to punish the third defendant for contempt was filed on 15 July 2008. On 24 October 2008 Young CJ in Eq (as his Honour then was) declared the third defendant to be in contempt of court (Duncan-Strelec v Tate [2008] NSWSC 1145).

18 Further orders in relation to the service of the plaintiffs’ evidence were not made until 15 December 2008. The plaintiffs were required to serve their affidavits by 2 March 2009. Orders extending the time for service of the plaintiffs’ evidence were made on 4 March 2009, 28 May 2009 and 10 August 2009. The effect of these orders was that the time of the filing and service by the plaintiffs of all their affidavits was extended to 31 August 2009. On 10 August 2009 the court ordered that if no evidence were filed by the plaintiffs by 31 August 2009, no further evidence was to be relied upon by them without leave of the court. The matter was listed for further directions on 19 October 2009. Orders were made for the defendants to file their affidavits by 12 October 2009.

19 No affidavits were served by the plaintiffs by 31 August 2009. On 19 October 2009 the Registrar referred the proceedings to Bergin CJ in Eq as duty judge. The plaintiffs sought leave to rely upon evidence in chief to be served by 6 November 2009. In support of the application the plaintiffs relied upon two affidavits of their solicitor, Ms Rae. Her Honour was not satisfied with the evidence to explain the delay. Nor did the plaintiffs produce the evidence upon which they sought leave to rely. Her Honour said that if the plaintiffs wished to seek leave to rely on any further evidence they would have to annex that evidence to an affidavit to show the court what they had done, and then seek the leave in an application to rely on that evidence as prepared. On 19 October 2009 Bergin CJ in Eq directed that a notice of motion for such leave be filed by 26 October 2009. On 29 October 2009 the plaintiffs filed and served a notice of motion for leave to rely upon affidavits in chief served by 6 November 2009. On 30 October 2009 the matter came before me as duty judge. The plaintiffs then filed an amended notice of motion which sought leave to rely upon expert evidence served by 14 December 2009 and lay evidence in chief served by 6 November 2009. The first and second defendants filed in court a notice of motion for summary dismissal of the proceedings. Both applications were heard together. I reserved my decision and subsequently invited submissions from counsel on the question of the significance for the defendants’ application of the fact that the limitation period for the plaintiffs’ causes of action has not expired.

Explanations for Delay

20 On 19 October 2009 Ms Rae deposed that the lay evidence of the first and second plaintiffs had been substantially drafted. She deposed that the plaintiffs were both ordinarily resident in Albury-Wodonga, but that the first plaintiff had been resident in Alaska between mid-March 2009 until late July 2009 and during that period she was unable to take instructions from the first plaintiff. She deposed that the second plaintiff was currently residing in south-western Sydney where he was engaged as a project manager for the construction of a major road upgrade in south-western Sydney and that this occupation required his full-time presence at site between five to six days a week. In her first affidavit of 19 October 2009 Ms Rae deposed that:

“ ... the Plaintiffs may seek to file expert valuation evidence in support of their allegations of loss arising from the alleged failed joint venture.
I have arranged to retain a valuation expert on behalf of the Plaintiffs should the Plaintiffs seek to file expert evidence. The Plaintiffs cannot instruct the expert valuer until their lay evidence has been filed as the valuer will need to be provided with the Plaintiffs’ factual evidence in support of any expert report on loss and damage. ”

21 In her second affidavit, also sworn on 19 October 2009, Ms Rae deposed that in the week of 17 August 2009 she asked the second plaintiff if a solicitor could visit him at the site office as he was not available to travel to the solicitor’s office to draft his evidence. She was told that that was not possible, partly for occupational health and safety reasons. She deposed that there were about 20 folders of documents for review by witnesses. She deposed that the second plaintiff had been working at the Narellan site since about July 2009. She deposed that “Previously in these proceedings, I have taken instructions only from one Plaintiff [the first plaintiff] on behalf of the three Plaintiffs.” There is no explanation as to why this course was thought appropriate. She deposed that she and another solicitor in the employ of Kemp Strang commenced drafting the evidence of the plaintiffs following a directions hearing on 15 December 2008. (The proceedings were commenced in 2006.) She deposed that she could not “substantially progress and finalise the Plaintiffs[‘] evidence” until after she knew whether the third defendant intended to amend its defence substantially or at all as any amendments might have an impact on the evidence to be filed on behalf of the plaintiffs. She said that it was not until 11 March 2009 that it became clear that the third defendant was not defending the proceedings.

22 Ms Rae deposed that she was informed by another solicitor in the employ of Kemp Strang, a Mr Crossley, that on 4 March 2009 he informed the Registrar that the plaintiffs might have difficulty in complying with the timetable for which directions were then given requiring the plaintiffs to serve their evidence in chief by 14 April 2009 due to the unavailability (at the time) of the plaintiffs’ expert witness and the unavailability of the first plaintiff overseas. I assume therefore that by March 2009 the plaintiffs had engaged an expert witness.

23 Rule 31.19 of the Uniform Civil Procedure Rules requires that any party intending to adduce expert evidence at trial, or to whom it becomes apparent that he or she, or any other party, may adduce expert evidence at trial, must promptly seek directions from the court in that regard. No such directions were sought.

24 It was not until 23 October 2009, after the hearing before Bergin CJ in Eq, that the plaintiffs’ solicitors wrote to the defendants’ solicitors to enquire about the obtaining of a joint expert report. In that letter Kemp Strang stated that if the defendants were found liable for breach of the joint venture agreement, there would need to be expert evidence as to the plaintiffs’ loss. They advised that the plaintiffs would allege that their consequential loss and damage included not only loss of profits in the joint venture agreement, but also losses which have arisen and continue to arise due to the plaintiffs’ having delayed the development of the Dunlec land because of their entry into the joint venture agreement. They advised that they were seeking the plaintiffs’ instructions in relation to the retention of a joint expert. They also floated the prospect of a separate hearing on liability and damages. The response of the defendants’ solicitors was to oppose any separation of issues and to state that it was premature to consider the retention of a joint expert when the question of whether the plaintiffs should have leave to rely upon any evidence was still unresolved.

25 Ms Rae deposed that the plaintiffs had arranged to retain a Mr Toohey of Knight Frank Valuers, to prepare expert evidence on damages and had done so “prior to 27 October 2009”. She said that on that day she was informed by Mr Toohey that he did not consider he had the necessary expertise. On the same day she telephoned the office of a registered valuer in Wagga Wagga. He was on leave until 16 November 2009. She deposed that in May and June 2009 she contacted three registered valuers in Sydney but was told that it was more appropriate to obtain evidence from a valuer in or around the Albury-Wodonga region who had greater local knowledge.

26 Mr Strelec deposed that he had been working full-time since February 2009 on the south-western Sydney project which required his attendance at site. He said that for approximately three months (that is, from July 2009) he had been working five or six days a week from 7am to 5pm or later. He deposed that he had not been able to meet with his solicitors during normal working hours due to his work responsibilities. He deposed that a final substantial draft of his affidavit was completed on 22 October 2009. He said that his affidavit remains in draft as there were a number of matters he needed to check against other records before he finalised his affidavit.

27 The plaintiffs’ solicitors rendered an invoice for costs in February 2009 which was not paid until about 27 August 2009. Mr Strelec deposed that the plaintiffs’ solicitors continued to work on the matter until approximately 14 August 2009 at which time they indicated that the tax invoice needed to be paid before they could advance the matter further. The delay in payment of the tax invoice therefore does not explain the delay in service of the plaintiffs’ affidavits, although it might provide an explanation as to why an expert witness was not retained earlier in 2009. The fact remains that it should have been apparent to the plaintiffs from the outset that expert evidence would be required and directions should have been sought in 2007 in accordance with r 31.19.

28 An affidavit of the first plaintiff has been prepared and has been served. It is undated but was provided in October 2009 shortly before the hearing on 29 October 2009.

29 There were some mitigating factors for the delay between July and October 2009 in serving Mr Strelec’s affidavit and for the delay between March to July 2009 in preparing Ms Duncan-Strelec’s affidavit. Those factors do not explain the entirety of the default.

30 Ms Rae deposed that she was told on 15 December 2008 by the solicitor for the third defendant that subject to the outcome of the contempt proceedings, the third defendant might wish to substantially amend its defence. I do not accept her evidence that “I could not substantially progress and finalise the Plaintiffs’ evidence until after I knew whether the Third Defendant intended to amend its defence substantially (or at all) as any amendments may have had an impact on the evidence to be filed on behalf of the Plaintiffs.” The plaintiffs were subject to a timetable requiring the service of their evidence. It was not for the plaintiffs to ignore the court’s orders because of the possibility that the third defendant might seek leave to amend. In any event, the core of the plaintiffs’ case against all defendants would be unaffected by any amendments to the third defendant’s defence. Nor is there any explanation for the plaintiffs’ failure to obtain directions at an early time in relation to expert evidence. If a claim for loss of profits from not having the opportunity to share in the development of the land acquired by Wamego required expert evidence, then that should have been apparent from the outset. If an additional or an alternative claim for damages is made arising from the alleged delay in developing the Dunlec land, which presumably is attributed to the defendants’ breach, no doubt expert evidence to establish such damages would be required. But the need for such evidence must have been apparent from the outset. There is no satisfactory explanation as to why the necessary directions were not sought, nor as to why no adequate steps to obtain such evidence have been taken.

31 This case is another illustration of the need, or at least desirability, for plaintiffs’ lawyers to obtain proofs of evidence before a case is started.

Summary Dismissal for Want of Prosecution

32 In deciding whether to make orders for summary dismissal as sought by the first and second defendant, or to make the orders as sought by the plaintiffs for leave to rely on other evidence, the court must seek to act in accordance with the dictates of justice (Civil Procedure Act, s 58(1)). Section 58(2) provides:

“58 Court to follow dictates of justice

...
(2) For the purpose of determining what are the dictates of justice in a particular case, the court:
(a) must have regard to the provisions of sections 56 and 57, and
(b) may have regard to the following matters to the extent to which it considers them relevant:
(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case. ”

33 Section 56 requires the court when exercising any power given to it by the Act or by rules of court, to seek to give effect to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings. Section 57 requires the proceedings to be managed having regard to the objects of:

“ (a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. ”

34 Whilst the dictates of justice require that a party have the opportunity of fully putting its case by making submissions and adducing relevant evidence, a party which spurns the opportunities provided does not suffer an injustice if it is refused further opportunities to do so. In this case, the plaintiffs have had multiple opportunities to serve their evidence.

35 The defendants adduced no evidence and made no submission to the effect that the plaintiffs’ delay in serving their evidence has made a fair trial more difficult, because, for example, the defendants’ memory of relevant events may have become dim. Just as one would have expected the plaintiffs to have taken early proofs of evidence (although that was evidently not done), so one would expect the defendants’ lawyers to have taken early proofs of evidence from the defendants. They did not submit that any evidence may no longer be available or point to any specific prejudice from the plaintiffs’ defaults. However, the fact that the litigation remains pending may be presumed to be a significant burden to the defendants. Likewise, the fact that the plaintiffs’ delays will have increased the first and second defendants’ costs is significant. In Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14, French CJ referred (at [5]) to there being “an irreparable element of unfair prejudice in unnecessarily delaying proceedings”.

36 It may be relevant in assessing the “dictates of justice” to consider, but without going too far into the merits, whether the proceeding sought to be struck out appears to be arguable, by analogy to applications to dismiss an appeal for want of prosecution (Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at 530 [36], 540 [66]; but cf 521 [7]). It appears from the statement of claim and Ms Duncan-Strelec’s affidavit that on the plaintiffs’ version of events there would be some serious questions as to whether, objectively considered, the parties would have intended to be bound by the matters to which they allegedly agreed, particularly having regard to the vagueness of the alleged term that the Wamego land would be developed, marketed and sold in conjunction with the adjoining land owned by Dunlec. The plaintiffs do not allege that the defendants agreed to acquire an interest in the Dunlec land, or agreed to any particular terms in relation to the costs for developing the Dunlec land or the division of profits from the development of that land. However, the first and second defendants did not submit that the plaintiffs’ claim is not arguable. It would not be right in the circumstances to come to any conclusion as to the strength of the plaintiffs’ case. It may be observed that if, as the defendants plead, there was no binding agreement for a joint venture for the development of the Wamego land, Mr Strelec would appear to have a plausible quantum meruit claim for the value of the services he provided in anticipation of such an agreement.

37 In Birkett v James [1978] AC 297 the House of Lords held that a court should not exercise its inherent jurisdiction to dismiss an action for want of prosecution where the limitation period had not expired unless the plaintiffs’ default was intentional and contumelious, or there had been both inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and such delay gave rise to a substantial risk that a fair trial would not be possible or was such as was likely to cause or to have caused serious prejudice to the defendants (per Lord Diplock at 318). A test in those prescriptive terms was not adopted in this State (Stollznow v Calvert [1980] 2 NSWLR 749; Hartigan v International Krishna Consciousness [1999] NSWSC 57 at [6]-[8]), nor elsewhere in Australia (Beverage Bottlers (SA) Ltd (in liq) v Abode Enterprises Pty Ltd [2009] SASC 272 at [153]-[157]; Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 at 394; Field t/as M & N Waterproofing & Restoration Services v Luxor Products Pty Ltd [2009] QSC 218 at [57]). Clearly no such prescriptive test is applicable to the exercise of the statutory power under s 61(3)(a). The relevant considerations for the exercise of a power are prescribed by ss 56-58.

38 Nonetheless, the considerations which informed the approach of the House of Lords in Birkett v James remain relevant. Because the limitation period for the plaintiffs’ cause of action has not expired, if the proceedings against the first and second defendants are dismissed for want of prosecution, there would be no res judicata or issue estoppel to preclude the plaintiffs from commencing proceedings against the first and second defendants again. Meanwhile the proceeding against the third defendant remains on foot (there being no application by it). Presumably the plaintiffs would be ordered to pay the costs of the first and second defendants. If fresh proceedings were commenced before those costs were paid, the first and second defendants could seek a stay of the further proceedings until the costs were paid (Uniform Civil Procedure Rules, r 12.10). Such fresh proceedings could also be stayed as an abuse of process if, because of the delay, a fair trial was no longer possible (Batistatos v Roads & Traffic Authority of New South Wales [2006] HCA 27; 226 CLR 256). Counsel for the first and second defendants did not submit that any fresh proceedings would be stayed as an abuse of process. If the present proceedings were to be summarily dismissed but fresh proceedings were started, the result would be further delay and additional costs.

39 The court is to have regard to the timely disposal of other proceedings in the court (s 57(1)(d)) and, allied with that, the efficient disposal of the business of the court and efficient use of available judicial and administrative resources. No hearing date has yet been set. The repeated defaults by the plaintiffs in serving their evidence would have created some burden on other litigants who waited for their cases to be called on in the Registrar’s list whilst the Registrar made directions in the present matter. The repeated defaults would have imposed a significant and unfair burden on the Registrar in having to remind herself or himself from time to time of the matter, the previous orders and the degree of compliance on non-compliance. If the proceedings are dismissed but fresh proceedings are brought, there would be no reduction in the burden placed on other litigants or the court flowing from the plaintiffs’ default.

40 The first and second defendants were not themselves free from default in complying with directions. There were minor delays in filing defences and an amended defence. There was a delay of over three months in the defendants’ providing discovery. Discovery was not provided until March 2008. Whilst the court may have regard to the degree of expedition with which both parties have approached the proceedings, I do not regard the defendants’ delays as being in the same order as those of the plaintiffs. Of more significance is that it does not appear that the defendants sought any peremptory order in relation to the plaintiffs’ failure to comply with orders for service of their evidence until a direction was made by the Registrar on 10 August 2009 directing that no further evidence be relied upon by the plaintiffs without leave of the court unless it were filed by 31 August 2009.

41 In giving effect to the objects of case management specified in s 57, regard should be had to the need to maintain respect for the court’s authority. The House of Lords in Birkett v James made it clear that a proceeding would be dismissed for want of prosecution if the plaintiff’s default had been intentional and contumelious, although the examples of such conduct were confined to conduct amounting to an abuse of process of the court or disobedience to a peremptory order that the action be dismissed unless the plaintiff took a specified action within the time limited (at 318); In re Jokai Tea Holdings Ltd [1992] 1 WLR 1196 at 1202). In Field v Luxor Products Pty Ltd, P Lyons J held that repeated failures to comply with court directions against the background of a case-flow management regime were within this principle (at [58]). As Bryson J (as his Honour then was) said in Hartigan v International Krishna Consciousness Inc (at [11]):

“... A lengthy exposition could be made of what is involved in Court efficiency, with an examination of the adverse impact on the private interests of other litigants in the instant proceedings, of other litigants who are claiming the Court's attention, and in the public interest in maintaining the Court's authority by observance of arrangements with which the Court has directed litigants to comply. There is a public interest in the Court's requiring litigants to respect the due exercise of its compulsory powers over litigants, and in itself acting in the same way, and in maintenance of faith with persons who have expended time and energy to conform with the Court's directions. It is injurious to the respect which the Court and others should maintain for the Court's authority if arrangements made with care are set aside for the benefit of persons who have not complied with the rules of Court. ”

42 In similar vein when dealing with the question of late amendments, Bryson J (in a passage approved by Heydon J in Aon Risk Services Australia Ltd v Australian National University at [133]) said:

“ When forbearance and liberality are extended to a delinquent the burden of inconvenience and lost opportunities for preparation tends to fall heavily and without adequate repair on parties who have not been delinquent. A relative disadvantage is imposed on those who proceed methodically and in due time; their interest in procedural justice should claim at least as much consideration as the interests of the applicant for a late amendment who does not have to look far for the creator of his difficulty. ” (Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 753 at [15])

(See also Aon Risk Services Australia Ltd v Australian National University at [30].)

43 In the absence of evidence that the defendants may have lost the opportunity to adduce evidence by reason of the delay, or that the delay might weaken the strength of available evidence, it seems to me that the considerations referred to by Bryson J quoted above are the strongest factors in favour of summarily dismissing the plaintiffs’ proceedings against the first and second defendants. My hesitation in doing so does not arise from a concern that the plaintiffs would thereby suffer an injustice, as they have had every opportunity to put their case forward. Rather it is due to my concern that such a course might cause further delay and additional costs to the prejudice of the defendants and third parties. That is particularly so given that the third defendant has not sought a similar order. It may well be possible for the plaintiffs to proceed against the third defendant even in the absence of the first and second defendants. If fresh proceedings against the first and second defendants are instituted before proceedings against the third defendant are resolved, there is likely to be an application that the two proceedings be heard together. There is scope for increased procedural complexity.

44 There are other means by which the court’s authority can be maintained whilst avoiding the spectre of such procedural complexities. One means is by making appropriate costs orders in respect of the additional costs incurred by the first and second defendants by reason of the plaintiffs’ defaults, and making orders to allow such costs to be assessed forthwith. I propose to allow the first and second defendants to apply forthwith for such orders.

45 Although there is unfair prejudice to the defendants from the plaintiffs’ defaults, an order for summary dismissal may exacerbate rather than cure the problem. I do not consider that summary dismissal would be in accordance with the dictates of justice assessed according to the objects at s 56 and the matters in ss 57 and 58(2). I will refuse that application.

Plaintiffs’ Application for Leave to Rely Upon Further Evidence

46 As noted above, on 19 October 2009 Bergin CJ in Eq indicated that the plaintiffs would need to annex the evidence on which they sought to rely in order to obtain leave to rely on that evidence. The plaintiffs have tendered an affidavit of the first plaintiff. The defendants did not submit that they would face any particular difficulty in responding to that evidence and I propose to give the plaintiffs leave to rely upon the affidavit of the first plaintiff, which is undated, but was served in October 2009. The affidavit of the second plaintiff had not been served at the time the application was heard. The plaintiffs’ notice of motion was premised on the second plaintiff’s affidavit being available by now. I will allow the plaintiffs to tender the second plaintiff’s affidavit and consider whether leave should be given for them to rely upon it.

47 I do not give the plaintiffs leave to adduce expert evidence at this late stage. No explanation has been provided as to why directions for the adducing of such evidence were not sought. The attempts to obtain expert evidence were feeble. The plaintiffs’ solicitor says that such evidence could not be sought until the plaintiffs’ lay evidence was finalised. Had the plaintiffs’ case been prepared with reasonable diligence, there is no reason that any facts or assumptions to be put to an expert witness could not have been put.

48 I am conscious that the refusal of leave for the plaintiffs to adduce such evidence is likely to mean that the plaintiffs do not have evidence to support some of the bases upon which they would seek to quantify their loss. However that involves no injustice. It is simply the consequence of the plaintiffs’ neglect. The litigation should not be further delayed on that account. A usual sanction for failure to comply with pre-trial directions regarding the service of affidavits is that the party may be refused leave to rely on evidence that was not served in accordance with the orders (State Pollution Control Commission v Australian Iron & Steel Pty Ltd (1992) 29 NSWLR 487 per Gleeson CJ at 492-493). The defendants are entitled to expect that where the court ordered the plaintiffs’ evidence to be served within a prescribed time, it would be, and that the plaintiffs would be limited to the evidence so served (GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 716). There have already been gross departures from that principle and any further departures arising from the plaintiffs’ wish to adduce expert evidence should not be tolerated.

Conclusion

49 For these reasons I make the following orders:

1. I dismiss the first and second defendants’ notice of motion that the proceedings be summarily dismissed;

2. I give leave to the plaintiffs to reopen to tender the affidavit of the second plaintiff upon which they seek leave to rely;

3. I dismiss the plaintiffs’ application for leave to adduce expert evidence;

4. I will stand the proceedings over to a convenient date for the purpose of dealing with the plaintiffs’ application for leave to adduce evidence of the second plaintiff, and for the first and second defendants to make any application for costs arising from the plaintiffs’ defaults in compliance with orders for them to serve their evidence.

50 I will hear the parties on costs in relation to each application.

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