Erhard v Bhatia - [2002] NSWCA 388

NEW SOUTH WALES COURT OF APPEAL

CITATION: Erhard v Bhatia [2002] NSWCA 388 revised - 3/12/2002

FILE NUMBER(S):
40487/01

HEARING DATE(S): 04/11/02

JUDGMENT DATE: 03/12/2002

PARTIES:
Bente Ravelle Erhard (Appellant)
Satya Pal Bhatia (Respondent)

JUDGMENT OF: Sheller JA Heydon JA Campbell J

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 5823/99

LOWER COURT JUDICIAL OFFICER: Bowden ADCJ

COUNSEL:
Mr K P Rewell/Ms A Beardow (Appellant)
Mr S D Kalfas (Respondent)

SOLICITORS:
Kells The Lawyers (Appellant)
Mr David Brown (Respondent)

CATCHWORDS:
Courts - inferior courts - administration of justice - case management - right to be heard - dismissal of case for want of appearance - application for setting aside dismissal order - whether proper - relevant matters - paramountcy of administration of justice - D

LEGISLATION CITED:

DECISION:
See paragraph 70

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40487/01
DC 5823/99
SHELLER JA
HEYDON JA
CAMPBELL J
3 December 2002

ERHARD v BHATIA

Courts – inferior courts – administration of justice – case management – right to be heard – dismissal of case for want of appearance – application for setting aside dismissal order – whether proper – relevant matters – paramountcy of administration of justice

The plaintiff underwent several surgical procedures to effect a change from male to female gender. She initiated proceedings in negligence against the operating surgeon in the District Court of New South Wales in relation to his performance of those procedures.
The District Court Rules provided for certain case management procedures. One procedure required a Registrar, on a “review date” or at a “status conference”, to be satisfied of parties’ readiness for trial in compliance with the Rules. If not so satisfied, the Registrar could refer the matter to a Judge for directions, or the action would be liable to being “struck out (or worse)”: Practice Note 33. On 4 April 2000 the plaintiff’s case was stood over by a Registrar for directions before McLachlan ADCJ on 23 May 2000. McLachlan ADCJ dismissed the action pursuant to Pt 18 r 3(1) of the Rules for want of appearance by the plaintiff. Under Pt 18 r 3(4) an application by any party could be made to have that order set aside. A Notice of Motion seeking such an order was returned before Bowden ADCJ on 7 July 2000 but the motion was dismissed.
A second Notice of Motion was heard before Bowden ADJC on 8 June 2001. Pt 18 r 3(4) had by then been replaced by Pt 1 r 7A which required applications to set aside dismissal orders to be made within 28 days of the order setting proceedings aside. Bowden ADCJ dismissed the second motion on grounds including that an extension of time would be required under Pt 1 r 7A for the plaintiff to be able to apply for an order setting aside McLachlan ADCJ’s order. The plaintiff obtained leave to appeal against Bowden ADCJ’s second decision. On appeal, she argued that even if an extension of time had been necessary and Bowden ADCJ granted it, he would have refused the application on grounds showing appellable errors of law.

Held (Heydon JA, Sheller JA and Campbell J agreeing), allowing the appeal,

If there were no other matter of which complaint could be made, the trial judge’s apparent view that the plaintiff would have failed before McLachlan ADCJ even if her legal representative had been present was an error requiring that the discretion be re-exercised: [46],
John v Rees [1970] 1 Ch 345, applied.
The issue of whether a case was ready to take a hearing date would often be important, and it was in this particular instance. It was not clear whether Bowden ADCJ found that the plaintiff had further medical evidence and was not ready to take a hearing date. If he did, the finding was contradicted by affidavit evidence. If he saw matter as being in doubt, the plaintiff’s denial of the existence of further medical evidence was not clarified by inquiry secured by an undertaking or condition, making it necessary for Bowden ADCJ to resolve the issue by a decision. He did not do this. Either way, there was an error affecting the exercise of discretion: [51].
On the plaintiff’s application to set aside McLachlan ADCJ’s orders, Bowden ADCJ was required to consider, but did not consider, whether the interests of the District Court and the defendant in the efficient operation of the Court’s case management procedures, coupled with delays of which the plaintiff’s solicitor or the plaintiff had been guilty even after the expert’s report was obtained and even after the file from the former solicitors for the plaintiff had been received, should have prevailed over the interests of the plaintiff in having her claim against the defendant determined on its merits. Even if complete justice to the party in default was not necessarily the paramount consideration, justice to the party in default was at least a relevant consideration. Here the demands of justice between the parties favoured setting aside of the dismissal order in view of the injury it caused to the plaintiff and in view of the want of prejudice to the defendant which would flow from setting it aside: [52]-[58].
Queensland v J L Holdings (1997) 189 CLR 146, considered; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274, distinguished.
The orders of Bowden ADJC should be set side and the discretion re-exercised. Here the Court of Appeal was in as good a position as the District Court to do so. Taking into account the fact that the proceedings are from the plaintiff’s point of view ready for trial, the fact that if not all, at least many of the delays for which the plaintiff or her solicitor were responsible had been explained, the fact that no actual prejudice to the defendant had been established, and the fact that from a period immediately after the making of McLachlan ADCJ’s order the plaintiff had made it plain that she desired to have the matter reinstated, it was just to set aside the order of McLachlan ADCJ: [68].

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40487/01
DC 5823/99
SHELLER JA
HEYDON JA
CAMPBELL J
3 December 2002

ERHARD v BHATIA

Judgment

SHELLER JA: I agree with Heydon JA.
HEYDON JA: This is an appeal, pursuant to leave granted on 24 April 2002, from orders of Bowden ADCJ made on 7 July 2000 and 8 June 2001. Those orders dismissed applications by the plaintiff below to set aside an order of McLachlan ADCJ made on 23 May 2000 dismissing the proceedings.
Background
Events before 8 February 2000
On 5 August 1999 the plaintiff filed a Statement of Claim in the District Court. That document alleged that the plaintiff had been born a male, had decided to change gender, and had consulted the defendant, a plastic and reconstructive surgeon. It alleged that the defendant performed various procedures on the plaintiff negligently on 12 August 1996 and on various later dates.
On 21 February 2000 the defendant filed a Defence putting the primary allegations in issue.
The firm of solicitors who had filed the Statement of Claim on behalf of the plaintiff were McCrohon Bergseng Lawyers. Later they were replaced by Kells The Lawyers. The actual solicitor handling the matter in each firm was identical: she left the first and went to the second with several clients, including the plaintiff. Kells The Lawyers requested McCrohon Bergseng Lawyers for the file on 17 January 2000.
On 3 February 2000 the plaintiff’s solicitor arranged for the plaintiff to be examined for medico-legal purposes on 17 March 2000 by Dr Peter Haertsch, a plastic surgeon.
Under the procedures then in force in the District Court, in particular pursuant to Practice Note No 33, the “standard timetable” contemplated that five months after the date of filing there would be a “review date”. Paragraph 12.7 of the Practice Note provided:
“Where the registrar on the review date or at a status conference is not satisfied as to the preparations for trial the action will (if not struck out) be listed before a Judge for directions. Registrars will not in general have a discretion to adjourn review dates or status conferences. Judge-management involves detailed directions, with compliance compelled, and a plaintiff whose action is referred by the registrar for directions is generally facing a last opportunity to avoid the action being struck out (or worse).”
Paragraph 12.9 provided:
“The plaintiff is required to file and serve a certificate, 2 weeks before the review date, that all preparations required to that point are complete, and as to progress of settlement negotiations and suitability for arbitration. In general, all experts’ reports must be served before the review date. If, but only if, no adequate certificate is filed, the action is listed before the registrar for directions on the review date.”
The matter was listed for review before the Registrar on 8 February 2000. It would appear that that step was taken because no “adequate certificate” of the kind called for by paragraph 12.9 had been filed.
Events between 8 February 2000 and 23 May 2000
On 8 February 2000 the Registrar was informed by the plaintiff’s solicitor of the change of solicitors and of the fact that the plaintiff would be attending medical appointments in March 2000. The Registrar ordered the defendant to file and serve a Defence within fourteen days, and confirmed that there would be a Status Conference on 4 April 2000. Outside the court the solicitor acting for the defendant’s insurer was told by the solicitor for the plaintiff that the medical appointments were with Dr Haertsch (a plastic surgeon) and a psychiatrist.
On 28 February 2000 the solicitor for the defendant forwarded the medical records of the plaintiff in possession of the defendant to the plaintiff’s solicitors.
On 23 March 2000 the plaintiff’s solicitor lodged a complaint with the Legal Services Commission against McCrohon Bergseng Lawyers for the failure of the latter to transfer the plaintiff’s file to the former.
On 4 April 2000, according to a note made by the solicitor for the defendant’s insurer, there was no appearance by the plaintiff or any representative of the plaintiff at the Case Management List Status Conference conducted before the Registrar. No expert evidence of the type foreshadowed on 8 February 2000 had been served. The Registrar stood the matter over to 23 May 2000 to a judge. A Notice was supplied by the Registrar. Materially, it read as follows:
“DIRECTIONS HEARING BEFORE A JUDGE
1.This matter has been listed for a Directions Hearing before a Judge:-
for the plaintiff to show cause why the action should not be dismissed for want of prosecution.
2.At least five days before the Directions Hearing, the solicitor for the party in default or the party should file and serve an affidavit setting out the reasons for failure to comply with the timetable and/or Practice Note 33.
Special Notes:
(i)A plaintiff in default should also satisfy the Judge by way of affidavit that the action was not commenced in contravention of clause 2.2 of Practice Note 33.
(ii)It may be necessary for medical evidence to be annexed to the affidavit.
(iii)Attention is also drawn to clause 12.4 of Practice Note 33 and to the reference to special circumstances.”
Clauses 2.2 and 12.4 of the Practice Note deal with the importance of not commencing actions until they are ready to proceed in accordance with the District Court timetable.
The Notice was plainly indicating that the reference of the matter by the Registrar to a Judge for directions on 23 May 2000 meant that the plaintiff was being given “a last opportunity to avoid the action being struck out (or worse)”.
The Registrar also directed the defendant to notify the plaintiff of the show cause Notice with seven days; and directed the plaintiff to serve all the expert evidence on which she intended to rely within twenty-one days.
The solicitor acting for the defendant’s insurer met the solicitor for the plaintiff outside the court, informed her of what had happened and gave her the Notice supplied by the Registrar. The plaintiff’s solicitor said that the plaintiff had an expert report but it was on “different issues”, and another one was needed.
In view of the circumstances just set out, it is strange that the solicitor for the plaintiff on 24 May 2000 swore the following in relation to the Status Conference of 4 April 2000:
“I attended the Status Conference on behalf of the plaintiff and advised the Registrar that the matter was not ready to proceed as we were awaiting transfer of the file from the plaintiff’s former solicitors.”
What the Registrar contemplated on 4 April 2000, and what the solicitor acting for the defendant’s insurer appreciated that the Registrar contemplated, was the real possibility of dismissal of the proceedings on 23 May 2000. The plaintiff’s solicitor ought to have appreciated this too.
On 18 May 2000 the solicitor acting for the defendant’s insurer wrote to the plaintiff’s solicitor requesting further and better particulars of out-of-pocket expenses and economic loss. This request was triggered by the fact that paragraph 7 of the Statement of Claim had not supplied any of these particulars, but had said they would be provided “in due course”.
On 18 May 2000 the solicitor acting for the defendant’s insurer also informed the solicitor for the plaintiff that it had been able to reschedule the plaintiff’s appointed time for examination by Dr S Ceber on behalf of the defendant to 20 June 2000.
On 22 May 2000 the plaintiff’s solicitor supplied certain documents requested by Dr Haertsch to him.
Events of 23 May 2000
On 23 May 2000 the matter was called on before McLachlan ADCJ. There was no appearance for the plaintiff. The action was dismissed pursuant to Part 18 rule 3(1) of the District Court Rules, which provided:
“Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due despatch, the Court may, on application by any party or of its own motion, dismiss the proceedings or make such other order as the Court thinks fit.”
As at 23 May 2000, the plaintiff was in default of the Registrar’s orders of 4 April 2000 to file expert evidence within twenty-one days, and had served no medical report of any kind. The plaintiff had not supplied the particulars requested on 18 May 2000. No explanation had been given for this state of affairs.
On 23 May 2000 the solicitors acting for the defendant’s insurer wrote to the solicitor for the plaintiff describing what had happened before McLachlan ADCJ.
Events from 23 May 2000 to 7 July 2000
On 25 May 2000 a mediation took place under the auspices of the Legal Services Commissioner between the plaintiff’s former and current solicitors about the transfer of her file. It failed.
On 26 May 2000 the solicitor for the plaintiff filed a motion seeking an order under Part 18 rule 3(4) of the District Court Rules, which at that time provided:
“The Court may, on application by any party, set aside an order that is made under sub rule (1).”
In support of it, the plaintiff’s solicitor swore an affidavit on 24 May 2000 which was filed on 26 May 2000. After referring to difficulties in relation to the transfer of the file from the plaintiff’s former solicitors to the plaintiff’s current solicitors, the affidavit said:
“This matter was listed for a Directions Hearing on 23 May 2000. Unfortunately, due to an administrative oversight, this date was not entered into the Kells diary. This office had a manual diary but changed to an electronic diary during April 2000. There were some technical difficulties with the system as we are networked with the main Kells office in Wollongong, and four other branch offices.
As a result the Directions Hearing was not entered into the manual diary (no longer being used) or the electronic diary. Consequently, the Status Conference was overlooked and there was no attendance on behalf of the plaintiff.
There has been regular correspondence between the plaintiff and the defendant including three letters from the defendant dated 18 May 2000 and a telephone attendance by myself with a person named ‘Lee’ on 18 May 2000 regarding this matter and specifically arranging for the plaintiff to travel to Melbourne for a medical appointment.
On behalf of the plaintiff I submit there has not been a want of prosecution. Kells on behalf of the plaintiff, and United Medical Protection on behalf of the defendant have been in regular contact regarding this matter.
It is submitted that there is no prejudice to the defendant should this matter be allowed to proceed. There has been no lack of attention to this matter on behalf of the plaintiff and it is submitted that the plaintiff should not suffer because of an administrative problem in the office of the plaintiff’s solicitors.
It is respectfully requested that the Order made on 23 May 2000 be vacated and this matter be stood over for further directions in July, pending receipt of the file from the plaintiff’s former solicitors.”
On 9 June 2000 the solicitor for the plaintiff and the solicitor for the defendant’s insurer had a telephone conversation in which the latter apparently said that her client might consent to the plaintiff’s Notice of Motion if all outstanding steps were taken.
A further affidavit of the solicitor for the plaintiff, after referring to the difficulties about the file, said:
“A report has been requested from a medical expert. The expert had a consultation with the Plaintiff in March 2000. Further documents have been forwarded to the expert for his consideration. We have not to date received the expert’s report.
The Defendant served his Notice of Grounds of Defence on 23 February 2000.
It is submitted on behalf of the Plaintiff that although the Plaintiff is experiencing some delays in preparing her claim, there is no prejudice to the Defendant.
It is further submitted the delays are not caused by the fault of the plaintiff or by the plaintiff’s failure to prosecute her claim.”
On 23 June 2000 the solicitor acting for the defendant’s insurer indicated the following attitude to the Notice of Motion:
“Given the history of this matter, my client is not prepared to consent to the orders sought. This decision may be reviewed if your client’s expert evidence is served on or before Monday, 3 July 2000. Alternatively, if this office receives written assurance by 3 July 2000 that your client does not intend to file any further expert evidence in this matter. If nothing further is heard from you in this regard, we will, of course, set these matters out in affidavit form for the benefit of the court. We will also seek our client’s costs of attending on the Motion.”
In early July 2000 the plaintiff’s solicitor was advised by Dr Haertsch’s secretary that Dr Haertsch was overseas and would not be returning until 27 July 2000.
On 5 July 2000 the solicitor for the defendant’s insurer filed an affidavit setting out the background.
On 6 July 2000 the solicitor for the plaintiff swore a third affidavit, which was served at court on 7 July. It annexed a letter dated 29 May 2000 (though in fact it was sent on 5 or 6 July, since it was sent in response to a letter from the solicitors for the defendant’s insurer of 5 July “received … this morning”) which stated that it supplied particulars in answer to the letter of 18 May 2000 from the solicitor for the defendant’s insurer, that these were all it was possible to supply, and that the balance would be supplied when the file was handed over by the plaintiff’s original solicitors.
Paragraphs 5 and 6 said:
“I am still awaiting a medical report on behalf of the Plaintiff. A report has been requested from Dr P Haertsch. I have been advised this week by the doctor’s secretary that the doctor is overseas and will not return until 27 July 2000.
I am presently making enquiries as to an alternative doctor to provide us with a report, however I am experiencing difficulties because of the unusual nature of the surgery and the difficulty in finding an alternative surgeon with experience in the field, preferably in New South Wales.”
The reasoning in the 7 July 2000 judgment

The Notice of Motion was returned before Bowden ADCJ on 7 July 2000. After describing the problem relating to the original solicitors for the plaintiff not releasing their file he said:
“It is said that the plaintiff is personally quite without fault in this regard. That may or may not be so, I do not know. I have not got any evidence about that. Nonetheless, because there is a dispute between solicitors and the plaintiff, that cannot hold up the matter for months or years or until that dispute can be solved. There are ways of solving it. The ways chosen would not seem to me on the face of it to have been a terribly effective or appropriate way to go about obtaining the necessary access or to go about reconstructing things if that is the case.
The evidence discloses that at least since April, no great attempts have been made to comply with the orders of the Court. The matter was obviously commenced at a time when the plaintiff was not in a position to comply with the requirements of practice note 33. It might be regarded as a special circumstance in that it needed to be commenced at that time or else the Limitation Act would execute the matter. Nonetheless that only means that the plaintiff’s solicitors were obliged to spend perhaps an even greater degree of diligence to make sure that the matter was put back onto the rails and was in a position to proceed as soon as might reasonably be practicable.
As is stated in the practice note, the intention is that the vast majority of matters would be completed within twelve months of the statement of claim being filed. Here it is proposed that the matter would be at the very early stages twelve months after the statement of claim was filed, in that all experts’ reports have not even been served.
There is no explanation as to why any expert report other than that of Dr Haertsch has not been provided. The matter is just not in a position to proceed, and it is suggested that it will not be in any such position until 1 September, whereupon presumably the defendant would be looking to arrange medical examinations. The history of the matter leaves me with no great degree of confidence that any timetable set now would be adhered to.
It is not to the point, in my view, to say that the plaintiff did her best to answer the request for particulars as soon as it was received. Those are the sorts of particulars that are required by the rules to be provided in any event, and there is no explanation as to why the plaintiff has apparently made no attempt to assemble that information before May of 2000.
I think this application is premature. If the plaintiff’s solicitors can get the matter into a situation where they are able to comply with the timetable of the Court, then we might entertain an application to restore it to the list, but I am not going to restore a matter to the list when the evidence discloses that the plaintiff is not in a position to proceed in accordance with the rules in the practice note. Accordingly, this application will be dismissed. The plaintiff will pay the respondent’s costs.”
Events between 7 July 2000 and 8 June 2001
On 10 and 28 August 2000 the solicitor for the plaintiff wrote to Dr Haertsch seeking his report. On 29 September 2000 the solicitor for the plaintiff demanded the plaintiff’s file from her former solicitors, and it was transferred on 13 October 2000. On 14 November 2000 the plaintiff and her solicitor had a conference with Dr Haertsch with a view to obtaining a report on liability (an earlier report had been supplied but had not dealt with liability issues). After that conference, Dr Haertsch said he required payment of his fee before releasing his report; the plaintiff said she could not pay it; and her solicitor agreed to advance funds to her for this purpose, as had been done in relation to the earlier report. On or after 13 December 2000 Dr Haertsch supplied the report. Counsel was asked to consider whether it was satisfactory and whether the medical evidence was complete. He responded to that request in February 2001. On 11 April 2001 the plaintiff’s solicitor supplied further particulars of economic loss.
On 12 April 2001 the plaintiff’s solicitor filed a further Notice of Motion seeking an order setting aside McLachlan ADCJ’s order of 23 May 2000. It was supported by an affidavit sworn by the plaintiff’s solicitor on 11 April 2001. The only additional point it made was put thus:
“This is an unusual matter involving gender reassignment surgery. Because of the unique nature of the surgery there are very few specialist doctors skilled in the field. The Plaintiff was not in a position to afford the services of an overseas or interstate medical expert.
The Plaintiff has now obtained a suitable medical expert’s report which has been served. Particulars have been provided to the defendant and the Plaintiff is in a position to take a Hearing date in this matter.”
The reasoning in the 8 June 2001 judgment
On the hearing of the second Notice of Motion on 8 June 2001 before Bowden ADCJ, he inquired when the particulars had been supplied and when the expert report had been served. Counsel for the plaintiff did not know. There is evidence before this Court that a report from Dr Haertsch dated 13 December 2001 was served on 6 March 2001; that it was served again on 11 April 2001, together with further particulars of economic loss; and that on 17 May 2001 the report was served yet again. There is a real question whether it was ever in fact received by the solicitor for the defendant’s insurer until 17 May 2001. Before Bowden ADCJ counsel for the defendant’s insurer asserted that the letter of 11 April 2001 did not contain the report, and that it was not served until 17 May 2001. Counsel for the plaintiff did not deny this, but this non-denial lacked significance in view of counsel’s ignorance of anything except what was in his instructing solicitor’s affidavits.
Bowden ADCJ’s reasoning was as follows:
“It should be noted that the particulars that were requested and were supplied on 11 April were in relation to economic loss. There was no explanation whatsoever as to why such particulars could not have been supplied earlier and in fact they should have been. Contrary to the statement in the affidavit of 11 April that the medical reports had been served a medical report was not in fact served until 17 May 2001. That medical report is dated 13 December 2000. In fact there is evidence that at least by October 1998 the plaintiff was going to see Dr Haertsch. Again there is no explanation as to why it took until December to get a report, nor as to why it took from December until May to serve that report.
The affidavit of 11 April 2001 states that the plaintiff is ready to take a hearing date, but from the particulars provided and the schedule of medicals that have been served one could infer that the plaintiff has further medical evidence to serve.
When it was last before the Court I declined to set aside the dismissal order in part because the plaintiff was still not ready. No details have been provided as to what has been done since then, only that it is a difficult matter. No basis has been put forward as to why the application could not have been made earlier, by December 2000 at the very latest.
It is said that no prejudice to the defendant has been shown. It is true that no actual prejudice has been shown, but the defendant, since 23 May 2000 or 7 [July] at the very latest, has been going about his life on the basis that this case is over. In any event, it is not for the defendant to show prejudice. This is not an application to extend the time for commencement of proceedings, this is an application by the plaintiff to show why the order made on the previous occasion, in effect, should not have been made or why a fresh order should be made in relation to it. There will, of course, be prejudice to the plaintiff in that the plaintiff will need to bring an application to extend the time to commence fresh proceedings. The question as to prejudice could be considered then along with all the other relevant factors that are to be considered in such applications.
This is an application to extend time for an application to set aside the order of 23 May 2000 and then to set aside that order. The applicant, in my view, has not shown an entitlement to either order and the notice of motion will be dismissed with costs.”
Extension of time
In both the first and the second applications to Bowden ADCJ, the plaintiff relied on Part 18 rule 3(4). By the time of the second application, heard on 8 June 2001, that provision had ceased to exist. It had been replaced on 1 September 2000 by Part 1 rule 7A. Part 1 rule 7A(5) provides:
“Any party to proceedings in respect of which a preliminary dismissal order is made, may, within the period of 28 days after the making of the order, apply to the Court to set aside the order.”
Sub rule (1) defines “preliminary dismissal order” to mean an order made by the court dismissing proceedings other than an order dismissing proceedings after a trial or hearing on the merits of the case or an application to dismiss the proceedings. Hence McLachlan ADCJ’s order was a “preliminary dismissal order”.
The plaintiff argued to this Court that Part 1 rule 7A(5) was prospective, and applied only to “preliminary dismissal orders” made on or after 1 September 2000. Hence the parties and Bowden ADCJ were in error in assuming on 8 June 2001 that an extension of the twenty-eight day period was needed. If correct, this argument would point to an error of law in Bowden ADCJ’s reasoning. However, the plaintiff did not rely on any error of this kind. The plaintiff conceded that even if the error existed, it was immaterial. It was immaterial because Bowden ADCJ’s refusal to set aside McLachlan ADCJ’s order did not turn on any refusal to extend time considered as a discrete matter. The reasons which commended themselves to Bowden ADCJ for refusing to set aside McLachlan ADCJ’s order would have had that result whether or not time had to be extended.
The plaintiff’s position in this Court
The plaintiff’s interests require:
(a)that there be a demonstration that one or other of Bowden ADCJ’s decisions miscarried for one of the reasons on which discretionary decisions on matters of practice and procedure can be set aside;
(b)that this Court re-exercise the discretion which miscarried below, or, alternatively, that this Court remit the matter to the District Court for the discretion to be re-exercised there.
Evidence is relied on before this Court of a kind which is considerably more detailed than that which was before Bowden ADCJ. It should have been before Bowden ADCJ. Many of the defendant’s arguments to this Court turned on the failure of the plaintiff adequately to explain what had been done by the time each of the Notices of Motion were heard. At least in relation to the second Notice of Motion, those arguments, as far as they go, have force. Bowden ADCJ’s task would have been easier if he had received superior testimonial assistance. The new evidence is admissible in this Court in the event that this Court seeks to re-exercise the discretion, and it is admissible on the question of whether the matter should be remitted to the District Court for a re-exercise of discretion.
Events before McLachlan ADCJ
In hindsight, it can be seen that it was unfortunate that events happened as they did before McLachlan ADCJ. What precisely did happen is not clear: there is no transcript and no explicit affidavit evidence, though there are notes of the solicitor for the defendant’s insurer. It does not seem that any attempt was made to contact the plaintiff’s solicitor after her failure to appear. If it is correct that no attempt was made, it can be said, without offering any criticism of McLachlan ADCJ (whose decision is not attacked by the plaintiff in any way) or of the solicitor for the defendant’s insurer (whose approach to the Notice of Motion filed after McLachlan ADCJ’s orders was, while properly solicitous for the interests of the defendant, both reasonable and generous), that some courts might have taken a different course from that which was taken on that day. The solicitor for the defendant’s insurer had been in touch with the solicitor for the plaintiff over the preceding weeks, both face to face and by letter. It is common for the legal representatives of one party to fail to be present when a matter is called on in the presence of a legal representative of another party. There can be many reasons for the non-attendance of the first representative. The absent representative may be outside the court, or engaged for a short time in another court, or delayed in a lift in the court building, or otherwise delayed on the journey to court, or have overlooked the matter for some reason. Some acute personal or professional problem may have arisen justifying or explaining the failure to attend. And even if the failure to attend is the result of some conduct for which the legal representative or the client can be blamed, to proceed immediately in the absence of the representative is not necessarily the best course. There is nothing to show why McLachlan ADCJ could not have stood the matter in the list pending the making of inquiries by the solicitor for the defendant’s insurer as to why the plaintiff’s solicitor was not present. In the daily tumult of interlocutory litigation, even interlocutory litigation as important as that which took place McLachlan ADCJ, it is often not possible for legal representatives to be present at the precise moment a matter is called on, though it is certainly their duty so to arrange their affairs as to be available very soon after it is called on. The making of inquiries may have revealed the problem about the diary blunder, and may in turn have led either to an adjournment to another day or to the matter being dealt with later that day in the presence of the plaintiff’s solicitor. The difficulty with the course that was taken, of proceeding to make ex parte orders, is that it remained open to the plaintiff to have them set aside. Two days have been consumed before Bowden ADCJ, and two before this Court, in attempts to achieve this result, at considerable cost in time to the parties, to the officials of two courts, and to the judges of two courts.
What would have happened if the plaintiff’s solicitor had appeared before McLachlan ADCJ?
It is convenient to turn to the first of the errors in Bowden ADCJ’s reasoning of which the plaintiff complains. It is an error which is more implicit than to be found in the judge’s express language. The error is an assumption that even if the plaintiff’s solicitor had attended on 23 May 2000 before McLachlan ADCJ, the same result would have flowed. The error led Bowden ADCJ into a failure to give consideration to the explanation for the failure by the plaintiff’s solicitor to attend. It can be seen in the following passage:
“The matter was dismissed essentially because the plaintiff did not appear, but that was at a time when the plaintiff was directed to show cause as to why the matter should not be dismissed for failure to comply with the provisions of Practice Note 33 and the directions of the Registrar. There is no dispute that the plaintiff had failed so to comply.”
That this kind of thinking was present to Bowden ADCJ’s mind emerges from the following exchange at the hearing of the second Notice of Motion:
“[COUNSEL FOR THE PLAINTIFF]: the application on the last time was refused by yourself because the matter was not ready at that time to take a date and there were a number of matters which have been outlined in the affidavit of [the solicitor for the defendant’s insurer] which were yet to be resolved and addressed.
HIS HONOUR: It’s not so much that it was not ready to take a date, it was the fact that the matter would probably have been dismissed by his Honour Judge McLachlan on the May date in any event because the plaintiff had not shown cause and still has not shown any cause as to why it was in that situation, that was the reason.”
Thinking of this type was also relied on in this Court by the defendant in supporting Bowden ADCJ’s conclusions.
The word “but” in the passage quoted from Bowden ADCJ’s reasons reveals a belief that no attention needed to be paid to the explanation given by the plaintiff’s solicitor for failure to attend, and no attention was given to it. In John v Rees [1970] 1 Ch 345 at 402 Megarry J said in a natural justice case:
“It may be that there are some who would decry the importance which the courts attach to the observance of the rules of natural justice. ‘When something is obvious’, they may say, ‘why force everybody to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start.’ Those who take this view do not, I think, do themselves justice. As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events.”
Had the plaintiff been represented on 23 May 2000 by a competent advocate, it cannot be said that the proceedings would certainly have been dismissed in any event. There was a case to be advanced in explanation of the plaintiff’s defaults to that point. It cannot be assumed that McLachlan ADCJ would not have given a fair hearing to that case or that he would not have permitted the proceedings to continue on terms, strict though those terms might have been.
If there were no other matter of which complaint could be made, the trial judge’s apparent view that the plaintiff would have failed before McLachlan ADCJ even if her legal representative had been present was an error requiring that the discretion be re-exercised.
Was there further medical evidence to be served?
In his second judgment, Bowden ADCJ said:
“The affidavit of 11 April 2001 states that the plaintiff is ready to take a hearing date, but from the particulars provided and the schedule of medicals that have been served one could infer that the plaintiff has further medical evidence to serve.”
The plaintiff submitted that if the trial judge did infer that, he was wrong to do so in view of the affidavit of the plaintiff’s solicitor saying she was ready to take a hearing date, since the only person who suggested to the contrary was counsel for the defendant; and if the trial judge did not infer that there was further medical evidence to serve, the observation was irrelevant. It is clear that if the plaintiff had further medical evidence to be served, that would have been a factor strongly militating against her application to have McLachlan ADCJ’s order set aside. If, on the other hand, the matter was ready for trial so far as the plaintiff was concerned, that would have been a factor strongly favouring her application, particularly in view of Bowden ADCJ’s finding that no actual prejudice to the defendant had been shown. The issue was thus, in this case, a potentially crucial one, calling for resolution. Argument in this Court centred on the following three passages. First, in the affidavit of the solicitor for the plaintiff dated 11 April 2001, paragraph 9 stated:
“The Plaintiff has now obtained a suitable medical expert’s report which has been served. Particulars have been provided to the defendant and the Plaintiff is in a position to take a Hearing date in this matter.”

Towards the end of the oral argument of counsel for the defendant before Bowden ADCJ, the following was put:
“Now there is a further matter. There is no evidence or insufficient evidence that this matter is really ready to take a hearing date. There is the bare assertion of [the plaintiff’s solicitor] that the plaintiff wants to claim for psychiatric damage and your Honour will see from the affidavit of [the solicitor for the defendant’s insurer] that she was told on 8 February when the matter was in for review that the plaintiff was proposing to serve psychiatric evidence. No such evidence has been served.”
In the course of his final address, counsel for the plaintiff before Bowden ADCJ said:
“The circumstances of justice in this case, in my submission, would require the matter be reinstated, the plaintiff now having satisfied the areas which were in default and the matter proceed. All other issues, namely whatever prejudice may have been caused to the defendant having been adequately addressed.”
Counsel for the defendant in this Court said of his predecessor’s submission: “there were matters raised by counsel for the defendant before his Honour which weren’t contradicted”. He said of counsel for the plaintiff’s submission to Bowden ADCJ: “he doesn’t expressly address the question of psychiatric evidence which was raised as an outstanding matter or potentially outstanding matter by the defendant.” And he said of the assertion in the affidavit that it was only an assertion “by way of submission”. However, the material was not objected to, and the deponent was not cross-examined on it. Counsel for the defendant said to this Court: “the nature of these hearings is such that there are a great many matters to be dealt with and if the consequence for this Court is that that’s an inappropriate course for the District Court to adopt the reality is that there is not in my experience any cross-examination of witnesses on their affidavits.”
This last submission had the ring of truth. The District Court, overburdened with difficult work as it is, must necessarily move through procedural applications of the present kind with some briskness, and there is little time for exquisitely refined rulings on admissibility or very much, if any, cross-examination. However, the issue of whether a case is ready to take a hearing date will often be important, and it was in this particular instance. As to the construction offered to this Court by counsel for the defendant of the exchange before Bowden ADCJ, the better construction is that counsel for the defendant raised the possibility of further medical evidence; counsel for the plaintiff denied it; and the evidence filed on behalf of the plaintiff, in asserting that the plaintiff was in a position to take a hearing date, gave evidentiary support to that denial. In deference to the submissions of counsel for the defendant, however, it must be conceded that the matter could have been left in a clearer state. It must also be said that, given the doubt lurking beneath the observation of Bowden ADCJ under consideration, it would have been appropriate for him to have intervened to resolve the issue by inquiry. The issue would have been easy to resolve by an explicit question from the court to counsel for the plaintiff. If counsel for the plaintiff had said there was no further medical evidence to serve, that position could have been secured by an undertaking or a condition. Since that course was not adopted, it was necessary for the trial judge to resolve the issue by a decision. The ambiguous observation quoted above certainly did not resolve the issue by decision. If the observation is read as a finding that the plaintiff did have further medical evidence to serve, it is contradicted by the affidavit evidence. If the observation is read merely as pointing to an open possibility, the matter should not have been left as an open possibility, but cleared up one way or the other. Either way, there was an error affecting the exercise of discretion.
The interests of justice
The two judgments of Bowden ADCJ, read together, lack congruity. The first concludes by saying that the plaintiff’s application to set aside McLachlan ADCJ’s order was premature. The second concludes by saying that the second application was too late, and should have been made by December 2000. While in one sense it is understandable why Bowden ADCJ formed the first view, in another sense it is difficult to understand. By the time of the first judgment, Dr Haertsch’s report had not been obtained, let alone served; the possibility of the report of a psychiatrist being served remained alive; and full particulars of damage had not been supplied. On the other hand, one sympathises with the desire of the plaintiff and her advisers to mend her hand as soon as and as far as possible and return to the position she was in just before McLachlan ADCJ pronounced the 23 May 2000 order. Normally where parties are in default of procedural obligations they are expected to cure the default speedily. The new rule (Part 1 rule 7A) requires, for example, an application of the type which was heard on 7 July 2000 to be made within twenty-eight days. From these points of view it is difficult fairly to call the application premature, even though success in it might necessarily have caused the plaintiff to be placed on stringent terms with a view to readying the matter for trial. But by the time of the second judgment, Dr Haertsch’s report had been served; the possibility of there being a psychiatric report had been negatived; and full particulars of damage had been served. It is true that there had been delays, not fully explained, in relation to why Dr Haertsch’s report had not been served earlier and why the particulars had not been supplied earlier. A question thus arose: as a matter of justice, should the interests of the District Court and the defendant in the efficient operation of the Court’s case management procedures, coupled with delays of which the plaintiff’s solicitor or the plaintiff had been guilty even after Dr Haertsch’s report was obtained and even after the file from the former solicitors for the plaintiff had been received, have prevailed over the interests of the plaintiff in having her claim against the defendant determined on the merits?
In State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 154 and 155, Dawson, Gaudron and McHugh JJ said:
“Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. …
… Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion.”
That case concerned a refusal to permit an amendment to the Defence before a date was fixed for hearing, and more than six months before the date for hearing which was fixed in due course. While the circumstances are different, they have underlying similarity. Each set of circumstances calls for a consideration of what the relationship is between considerations of case management and the claims of a party seeking to have a substantive hearing of the matter in issue. Just as the High Court saw as a central inquiry the question whether as a matter of justice the defendant should have been permitted to argue a defence which might be a substantial, if not complete, answer to the plaintiff’s claim, so here the question whether as a matter of justice the plaintiff should have been permitted to have her case tried once she had, after the obstacles created by her first solicitors, by Dr Haertsch’s slowness and insistence on payment, and by her second solicitor’s delays, got her house in order.
That question is not one which Bowden ADCJ posed or answered.
The defendant submitted that in the context of Part 18 rule 3, complete justice to the party in default is not the paramount consideration; that the rule contemplates that on occasion it will be right to terminate proceedings without determining the issues before the parties on the merits; that Part 18 rule 3 orders are often made, as here, when the limitation period has expired and it may be difficult to have it extended; and that the result of Bowden ADCJ’s decisions was not so harsh and unjust as in itself to exhibit error. The defendant referred to Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [63], [85] and [92].
Even if each of these submissions is accepted for the purposes of the present argument, it does not follow from them that the plaintiff’s arguments fail. The majority said in State of Queensland v J L Holdings Pty Ltd that justice was the paramount consideration in applications to amend pleadings well before the trial. Even if it is assumed, as the defendant’s argument contends, that complete justice to the party in default may not necessarily be the paramount consideration, justice to the party in default is at least a relevant consideration even in Part 18 rule 3 cases. Micallef’s case is a case where the appellant did not demonstrate any error in approach on the part of the primary judge. Here the plaintiff has demonstrated errors, including the error under examination, namely, an absence of attention to the relevance of the demands of justice in the circumstances presented. One argument in Micallef’s case was that even if no specific error of law or fact could be identified in the reasoning of the primary judge in that case, and even if all relevant matters, and no irrelevant matters, had been considered, the result was so unreasonable or unjust as to suggest that some error of one of those kinds must have underlain the primary judge’s reasoning. Among the unreasonable or unjust aspects pointed to was the fact that the order had the effect of terminating the plaintiff’s whole case without its ever having been considered on the merits. The court held that Part 18 rule 3(1) contemplates that that result will sometimes occur. Its occurrence did not of itself demonstrate so unreasonable or unjust a result as to suggest error. The present problem is different. The plaintiff in this case does not argue that the result was so unreasonable or unjust as to suggest error. She argues that error is plain without having to resort to that type of reasoning. She argues that Bowden ADCJ failed to take into account, in making an order having the result of preventing any trial of the plaintiff’s claim (subject to a possible application to commence fresh proceedings and apply for an extension of the limitation period, which was fraught with peril), the demands of justice when weighed against the state of readiness of the plaintiff, the explanations and lack of explanations for her delays and the absence of actual prejudice to the defendant.
59 The general circumstances of the two cases are very different. In Micallef’s case, there had been very lengthy delays; there had been a total lack of diligence on the part of the plaintiff or her advisers; an order to supply particulars had been contravened three times; an arbitration date had been fixed and vacated; when the particulars were supplied, they substantially widened the case; and there was actual prejudice to the defendants. Here the delays are much less; the plaintiff and her advisers have been, if not wholly diligent, at least much more diligent; there were explanations for why the orders were contravened; no hearing date has been vacated; the particulars supplied were within the pleaded case; and there was no actual prejudice to the defendant. More fundamentally, while in Micallef’s case, in view of the prejudice to the defendants, the demands of justice between the parties supported the dismissal order and the refusal to set it aside, in this case the demands of justice between the parties favour the setting aside of the dismissal order in view of the injury it causes to the plaintiff and in view of the want of prejudice to the defendant which would flow from setting it aside.
Other errors
The plaintiff alleged that Bowden ADCJ committed the following additional errors.
First, in his first judgment he said, of the contention that the plaintiff was not personally at fault in relation to the difficulties with the file: “That may or may not be so, I do not know. I have not got any evidence about that.” Yet in paragraph 14 of the affidavit of the plaintiff’s solicitor dated 24 May 2000 she said:
“There has been no lack of attention to this matter on behalf of the plaintiff and it is submitted that the plaintiff should not suffer because of an administrative problem in the office of the plaintiff’s solicitors.”
And in paragraph 11 of the affidavit of the plaintiff’s solicitor dated 15 June 2000 she said:
“It is further submitted that the delays are not caused by the fault of the plaintiff or by the plaintiff’s failure to prosecute her claim.”
The defendant contended that this material appeared only to be by way of submission. However, it was not objected to and the deponent was not cross-examined about it.
Secondly, in the first judgment Bowden ADCJ said: “There is no explanation as to why any expert report other than that of Dr Haertsch has not been provided.” Yet in paragraph 6 of the affidavit of the plaintiff’s solicitor dated 6 July 2000, she said:
“I am presently making enquiries as to an alternative doctor to provide us with a report, however I am experiencing difficulties because of the unusual nature of the surgery and the difficulty in finding an alternative surgeon with experience in the field, preferably in New South Wales.”
Thirdly, in his first judgment Bowden ADCJ said:
“It is not to the point, in my view, to say that the plaintiff did her best to answer the request for particulars as soon as it was received.”
The plaintiff submitted that it was to the point, and that the trial judge overlooked the difficulties about obtaining the file.
Fourthly, the first judgment of Bowden ADCJ concluded by indicating willingness to “entertain an application to restore” the matter to the list when the plaintiff was in a position to proceed under the Rules. But the second judgment of Bowden ADCJ, delivered after she was in a position to take a trial date, took a wholly different approach.
Fifthly, in his second judgment, it was erroneous for Bowden ADCJ to find that Dr Haertsch’s medical report was not served until 17 May 2001; or, alternatively, to make a positive finding on the point either way.
Sixthly, in his second judgment, Bowden ADCJ said:
“It should be noted that the particulars that were requested and were supplied on 11 April were in relation to economic loss. There was no explanation whatsoever as to why such particulars could not have been supplied earlier and in fact they should have been.”
This, it was said, was further evidence that the judge ignored the difficulties under which the plaintiff’s solicitor was labouring in relation to the fact that she had to work until 13 October 2000 without access to the plaintiff’s file, which remained with her former solicitors.
Seventhly, towards the end of the second judgment, Bowden ADCJ began to debate what the plaintiff would have to do if she wished to prosecute an application to extend the time to commence fresh proceedings outside the limitation period. This, it was said, illustrates attention to the irrelevant: if he thought that a new application for fresh proceedings to be instituted might succeed, it is strange that he did not give more sympathetic consideration to granting the application before him for existing proceedings to be reinstated, that being not only a cheaper and speedier step, and a step posing fewer difficulties for the plaintiff, but also being the material step calling for immediate consideration.
In view of the conclusions stated earlier as to the errors in the judgments under consideration, it is not necessary to consider the merits of the arguments of the parties in relation to the matters just described.
Re-exercise of the discretion
For the reasons given above, the orders of Bowden ADCJ should be set aside and the discretion which he exercised should be re-exercised. Should that be done by this Court or the District Court? There was no cross-examination before Bowden ADCJ and nothing turns on the credit of any deponent. This Court is in as good a position as the District Court to re-exercise the discretion. Far too much time has already been wasted on procedural disputes, and it is desirable to avoid yet another fixture. Taking into account the fact that the proceedings are from the plaintiff’s point of view ready for trial, the fact that if not all, at least many of the delays for which the plaintiff or her solicitor were responsible have been explained, the fact that no actual prejudice to the defendant has been established, and the fact that from a period immediately after the making of McLachlan ADCJ’s order the plaintiff has made it plain that she desires to have the matter reinstated, it is just to set aside the order of McLachlan ADCJ.
Orders
The following orders are proposed.
1. The appeal is allowed.
2.To the extent necessary, the time within which the plaintiff was to make an application under Part 1 rule 7A(5) of the District Court Rules is extended to 12 April 2001.
3.The orders of Bowden ADCJ made on 7 July 2000 and 8 June 2001 refusing to set aside the order of McLachlan ADCJ made on 23 May 2000 dismissing the proceedings are set aside.
4.The order of McLachlan ADCJ made on 23 May 2000 dismissing the proceedings is set aside.
5.To the extent necessary, the District Court proceedings are reinstated.
6.The respondent is to pay the appellant’s costs of the appeal and of the application for leave to appeal.
7.The court notes that the costs orders made in the District Court against the appellant are not affected by the above orders.
8.The respondent is to have a certificate under the Suitors Fund Act 1951.
CAMPBELL J: I agree with Heydon JA.
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LAST UPDATED: 03/12/2002