Fenwick v Wambo Coal Pty Limited
[2011] NSWSC 176
•18 March 2011
Supreme Court
New South Wales
Medium Neutral Citation: Fenwick v Wambo Coal Pty Ltd [2011] NSWSC 176 Hearing dates: 3 March 2011 Decision date: 18 March 2011 Before: White J Decision: Refer to para 74 of judgment.
Catchwords: PRACTICE AND PROCEDURE - application for extension of time to review Registrar's decision under r 49.20 Uniform Civil Procedure Rules - where Registrar refused application for extension of time for filing defence and cross-claim
PRACTICE AND PROCEDURE - application for review of Registrar's decision under r 49.20 Uniform Civil Procedure Rules - where Registrar refused application for extension of time for filing defence and cross-claim -whether the need for just determination of the issues requires leave be granted - where defendant guilty of exorbitant delay in filing defence and cross-claim and treated the orders of the court with disdain - defendant should prima facie not be given leave to file defence and cross claim - if leave not granted to file defence plaintiff prima facie entitled to such relief as it appears to be entitled to on statement of claim under r 16.10 Uniform Civil Procedure Rules - plaintiff's pleading deficient - risk that judgment in default of defence would not determine all the real issues - direct plaintiff to file and serve amended statement of claim and leave to defendant to file defence to amended statement of claim - leave to file cross-claim granted - cross-claim to be heard after determination of plaintiffs claim - defendant ordered to pay part of plaintiff's costs of proceedings on indemnity basisLegislation Cited: Conveyancing Act 1919
Real Property Act 1900
Civil Procedure Act 2005Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Hartigan v International Society for Krishna Consciousness Inc [1999] NSWSC 57
Tomko v Palasty (No. 2) [2007] NSWCA 369; (2007) 71 NSWLR 61
Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230
Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543Category: Interlocutory applications Parties: Ronald Wayne Fenwick (Plaintiff)
Wambo Coal Pty Ltd (Defendant)Representation: Counsel:
M Heath (Plaintiff)
A Spencer (Defendant)
Solicitors:
Sneddon & Partners (Plaintiff)
Maddocks Lawyers (Defendant)
File Number(s): 2009/291521
Judgment
HIS HONOUR : On 13 October 2010 these proceedings were set down for hearing before me for five days commencing 11 April 2011. The proceedings were commenced by a statement of claim filed on 30 November 2009. The plaintiff claims to be entitled to a right of way over land of the defendant in the Hunter Valley. The defendant is a mining company. The plaintiff alleges that he and the defendant agreed to vary the location of and to extend the right of way. He seeks orders, amongst others, that the defendant co-operate with him to take all necessary steps to have the varied right of way recorded in the register. The plaintiff seeks an injunction to restrain the defendant from obstructing access to the right of way. He also claims that the defendant is required to remove, replace and maintain a crossing over South Wambo Creek on which the right of way passes.
On reviewing the file I observed that no defence had been filed. Moreover, JusticeLink recorded that the defendant had filed a submitting appearance, although a signed submitting appearance was not on the file. On 9 February 2011 my associate wrote to the parties to arrange for the matter to be listed for further directions or final orders as might be appropriate.
The matter came before me on 18 February 2011. I was informed that the defendant had not filed a submitting appearance. The signed notice of appearance on the court file is not a submitting appearance. It appears from subsequent inquiries made by my associate that the entry on JusticeLink was due to a data processing error by a clerk in the registry. However, no defence had been filed.
On 18 February 2011 the defendant was given leave to file in court a notice of motion by which it sought leave to file a defence and cross-claim. Those documents were annexures to an affidavit of the defendant's solicitor, Mr Peter Meades, sworn on 17 February 2011. The notice of motion and affidavit had only been served on the plaintiff the previous day. The notice of motion was stood over to 3 March 2011, being the earliest available day.
On 3 March 2011 I gave the defendant leave to file an amended notice of motion. The defendant now seeks to review a decision made by Registrar Walton on 13 October 2010. On that day the learned Registrar refused an oral application by the defendant for an extension of time for filing a defence and cross-claim. The defendant seeks an extension of time for its application to review the Registrar's decision.
The defendant has been guilty of exorbitant delay. The plaintiff commenced proceedings by a detailed statement of claim. He also served an affidavit of 146 paragraphs that is a detailed statement of his evidence in chief. The statement of claim, the plaintiff's affidavit in support of the statement of claim, and the exhibit to the plaintiff's affidavit, were served on the defendant by registered post on 2 December 2009.
On 13 January 2010 the plaintiff provided to the defendant a schedule of documents of which it sought discovery.
The defendant filed its appearance on 22 January 2010. Under the rules its defence was due 28 days after service of the statement of claim or such other time as the court might direct (Uniform Civil Procedure Rules, r 14.3(1)). The time for making a cross-claim was the time limited for filing a defence (Uniform Civil Procedure Rules, r 9.1(1)(a)).
The first return date was 26 February 2010. On that day the Registrar, over opposition of the defendant, ordered that the defendant file and serve its defence by 9 April 2010. Both parties were ordered to provide verified discovery by 23 April 2010. Inspection of discovered documents was to take place by 30 April 2010.
The defendant did not comply with those orders. On 10 May 2010 the Registrar made orders by consent. The time for the defendant to file its defence and any cross-claim was extended to 31 May 2010. The Registrar noted that the parties agreed that the matter should be referred to private mediation to take place before 5 July 2010. The matter was relisted for 5 July 2010.
The defendant did not file or serve a defence or cross-claim in compliance with the order of 10 May 2010. Mediation did not take place at that time. On 5 July 2010 when the matter was again listed for directions, the Registrar made orders (not by consent) that the defendant was to file its defence by 13 August 2010. The Registrar's orders note that " Mediation to take place on before 24/25 August 2010 ". The matter was stood over to 26 August 2010.
The parties attended a mediation on 25 and 26 August 2010. The defendant had still not filed its defence, although a defence was obviously an important document for the purposes of the mediation. The mediation was not concluded. On 26 August 2010 the Registrar made further orders by consent. The orders made were that the defendant file its defence on or before 3 September 2010, and serve its list of documents for discovery and its evidence by 6 October 2010.
Again, the defendant failed to comply with those orders.
The mediation concluded on 27 September 2010. It was unsuccessful.
On 13 October 2010 the matter again came before the Registrar. Counsel for the defendant sought a further extension of time for the filing of a defence and for the filing of a cross-claim seeking orders under s 89 of the Conveyancing Act 1919 for the extinguishment of the right of way. The application was unsupported by any affidavit evidence to explain the delays, which were already exorbitant. According to a filenote of a Mr Nicholas Rozenberg, a solicitor employed by Maddocks Lawyers, the solicitors for the defendant, the Registrar rejected the defendant's proposed orders and listed the matter for hearing. On 13 October 2010 Mr Rozenberg advised his supervising partner, Mr Meades, that " to file a defence/cross-claim and further orders (for instance, evidence etc), we will need to put on a notice of motion. Please let me know when we should start on this. "
No notice of motion to review the Registrar's decision, to seek leave to file a defence and cross-claim, or to extend the time for the service of evidence and giving of discovery, was made until the notice of motion seeking leave to file a defence and cross-claim was filed in court on 18 February 2011. As at the hearing on 3 March 2011, the defendant had still not served any affidavits. It led no evidence that it had complied with the orders for discovery.
The defendant's solicitor, Mr Meades, deposed that:
"Whilst it may appear at first that the delay to date has been considerable, the ability to properly plead to the statement of claim has required the need to examine a complex number of issues and interview a number of people regarding events that date back to 1915."
It does not only " appear at first " that the defendant's delay has been considerable. The delay is exorbitant.
Mr Meades deposed that prior to the first directions hearing on 26 February 2010, extensive instructions were taken regarding the background to the proceedings. This was not the first time the defendant had had to consider issues regarding the right of way. The plaintiff seeks to enforce an agreement he alleges was entered into in 2002. The defendant had investigated the issues raised by the plaintiff concerning the right of way in at least 2001 and 2002. On 7 March 2001, a Mr Robin Hopps, project manager for the defendant, advised the plaintiff that, " We have completed our research into the right of way issue ".
Mr Meades deposed that counsel was briefed in March 2010. He deposed that in about April 2010 a large quantity of documents were produced by means of subpoenas issued by the plaintiff. This included material produced by the Singleton Shire Council, the Department of Lands, and the defendant's former solicitors. It should be noted that it was the plaintiff, not the defendant, who issued the subpoenas.
Mr Meades deposed that the documents produced on subpoena were " critical to the factual content of the defence ". He deposed that in late April 2010 he and counsel attended the defendant's premises to investigate " a number of the allegations pleaded in the statement of claim" . This was about five months after service of the statement of claim. The orders of 10 May 2010 extending the time for the defendant to file its defence and any cross-claim to 31 May 2010 were made by consent. The defendant and its legal advisers must by that time have known what was required in order to prepare the defence and any cross-claim. Mr Meades deposed that as further work on the large quantity of documents produced in around April 2010 progressed, it became clear by June 2010 " that further information was required before the defence could be finalised with any confidence as to accuracy of a number of facts set out in the statement of claim ." He deposed that, " That work was progressed and further analyses conducted to enable the defence, which needed to address certain issues from 1915 onwards, to be accurately prepared. "
The evidence as to the work done was given at a very high level of generality. Mr Meades did not say how much time was spent in preparing the defendant's case. He did not say who was interviewed, nor describe with any particularity what documents were inspected, or what further documents if any were thought to be required. He gave no real explanation as to why the defendant could not comply with the orders.
Mr Meades deposed that he appeared at the directions hearing on 5 July 2010 and advised the court that:
"(a) that there has always been an intention for the Defendant to file a full and complete defence;
(b) that the delays in filing a defence were largely due to the factual complexity of the matter, the relevant facts spanning a significant period of time; and
(c) that, to date, the plaintiff's legal representatives had indicated that their paramount priority was for a mediation and that the filing of a defence was a lesser concern."
The plaintiff's position was that it required a defence to be filed so it would know the defendant's position before the mediation. The court made an order accordingly. The Registrar ordered the defendant to file its defence by 13 August 2010. The mediation was to take place on 24 and 25 August 2010. Mr Meades deposed that:
"The work on the defence continued, in particular the establishment of facts that could allow a denial to a number of the claims asserted. That however was not concluded within the time of the court order although I had [an] outline prepared intending to discuss that at the forthcoming mediation."
Again, no particulars are provided of the asserted difficulties in establishing relevant facts. It is not surprising, given the defendant's continual default, that the mediation was unsuccessful.
Further orders were made on 26 August 2010 for the defendant to file and serve its defence, to give discovery and to serve its evidence. None of those orders was complied with. Mr Meades deposed that:
"Given the opportunity to resolve the matter that the mediation presented I did not pursue the finalisation of the draft defence that had been prepared. Much time was taken up advising on the potential settlement and awaiting instructions which I am informed required a number of internal senior employees of the defendant considering the matter."
Mr Meades deposed that following the directions hearing on 13 October 2010:
"[W]ork continued on both the defence and cross-claim in order to apply for leave at the same time regarding both pleadings. The work on the cross-claim took longer than I anticipated. I was not in a position to provide the pleadings to the defendant until December at which time, given the significance of the matter to the defendant, I am informed that an internal decision as to whether to proceed on the cross-claim required time."
Thus it seems that by December pleadings had been prepared. This was a year after the statement of claim had been served.
Witnesses had been interviewed in April 2010. Mr Meades deposed that in November 2010 he, together with his employed solicitor, Mr Rozenberg, and counsel, interviewed an historian for the purposes of ascertaining information relating to the village of Warkworth and surrounding properties. Mr Rozenberg inspected further documents at Singleton Shire Council, the Singleton Public Library and the Singleton Historical Society between 3 and 4 November 2010. The defendant received further documents from the council on 24 November 2010. Mr Meades gave further evidence of telephone conversations and conferences with local historians.
Mr Meades also deposed that, " On around 16 November 2010 Mr Rozenberg attended on site at the Wambo mine to review documents in its possession that might be relevant to the proceedings ."
There was no explanation as to why all documents at the Wambo mine had not been reviewed months earlier. The defendant had been obliged to give discovery by 23 April 2010.
Mr Meades deposed that on around 14 December 2010 he and counsel met with Mr Robin Hopps, the former deputy general manager employed by the defendant. Mr Hopps was the author of correspondence with the plaintiff in 2001 and 2002 on which the plaintiff relies. It was he who advised the plaintiff on 7 March 2001 that the defendant had completed its research into the right of way issue. If this was the first time Mr Hopps was interviewed (and Mr Meades' evidence does not descend to such particularity), there is no explanation as to why it took over a year after service of the statement of claim for that interview to take place.
Even though draft pleadings were prepared and submitted to the defendant in December 2010, it was not until 17 February 2011 that the proposed defence and cross-claim were made available to the plaintiff by being annexed to Mr Meades' affidavit of that date. That was the day before the matter was listed before me.
Mr Meades deposed:
"61 I believe that the Defence narrows the issues in dispute significantly, namely to the following:
(a) Whether the absence of the right of way granted under memorandum of transfer dealing number A154688, dated 13 January 1915 ( Disputed Right of Way ), from the certificates of title for the land burdened by the right of way in dispute, being lots 82 and 83 of Deposited Plan 548749, deprives of the Plaintiff of any entitlement to the Disputed Right of Way;
(b) Whether there is any agreement between the plaintiff and defendant and/or any representations by the defendant that vary the original grant of the Disputed Right of Way under dealing A154688;
(c) Whether there are any obligations on the part of the defendant to maintain the Disputed Right of Way.
62 I believe that the delay in the defendant filing the Defence has been due in large part to the following:
(a) the complexity in ascertaining an accurate and detailed chronology of the facts:
(i) in and around 1971 that led to, and followed, the absence of the disputed right of way from the certificates of title for lots 82 and 83 of Deposited Plan 548749;
(ii) in and around the period 2000 to 2002 to determine the Defendant's position as to whether the disputed right of way has been varied by agreement of the representations and/or conduct of the Defendant; and
(iii) necessary to determine the Defendant's position as to whether an obligation to maintain the disputed right of way arises; and
(b) the Plaintiff's statement of claim seeking a broad and extensive range of relief under a variety of causes of action.
...
64 The Cross Claim applies to extinguish or modify the Disputed Right of Way pursuant to s89 of the Conveyancing Act 1919 (NSW).
65 I believe that the delay in the Defendant filing the Cross Claim has been due to the following:
(a) the need to provide a well particularised cross-claim, which requires a detailed knowledge and dissemination of:
(i) the history of the use of the Disputed Right of Way between 1915 and the present;
(ii) the change in the use and ownership of the Plaintiff's land between 1915 and the present; and
(iii) the change in the neighbourhood between 1915 and the present, including the neighbouring properties, local roads and tracks (including their change in condition, quality and legal status), the local village, and local industries."
The proposed cross-claim would join three other persons as cross-defendants. Although not pleaded in the proposed defence or raised by Mr Meades, counsel for the defendant submitted that an answer to the plaintiff's claim that he and the defendant had agreed to vary the right of way was that other persons (namely, Mr and Mrs Brosi and Ms McLaughlin) were entitled to the benefit of the right of way said to have been varied (if that right of way exists) and they were necessary parties to the proceedings.
I do not know what Mr Meades means when he says that the defence " narrows the issue in dispute significantly ". He did not attempt to explain what wider issues were in dispute.
The defence does not admit that the plaintiff's land presently has the benefit of a right of way over lots 82 and 83 in Deposited Plan 548749 (being land owned by the defendant), although the reason for that contention is not pleaded. It appears from Mr Meades' affidavit and from correspondence from the defendant of 23 October 2008 and 19 February 2009 that the defendant relies upon the fact that the certificates of title for those two lots do not state that they are subject to an easement for the benefit of the plaintiff's land. That however is not pleaded.
The plaintiff's statement of claim did not come out of the blue. It arose from the correspondence written by the defendant on 23 October 2008 and 19 February 2009 by which the defendant appears to have resiled from the position it took in 2001 and 2002. The plaintiff responded to the defendant's correspondence of 23 October 2008 by accusing the defendant of not having made a proper attempt to investigate the history of the dispute or the documentation relevant to it. The defendant could be expected to have done so before writing its letter of 23 October 2008, given that it there asserted that the plaintiff did not have the benefit of the northern right of way because it was not recorded on the titles to two of the northern lots. However, one of the exceptions to indefeasibility of title is the case of an easement validly created that is omitted from the folio of the register ( Real Property Act 1900, s 42(1)(a1)). I deal with this correspondence further below.
The explanation for the delay in serving the proposed defence and cross-claim is quite unsatisfactory. Mr Meades gave no evidence as to what steps, inquiries and investigations the defendant had carried out in 2008 and 2009. The evidence as to steps taken to investigate the position after service of the statement of claim was generalised. Mr Meades did not explain why the defendant consented on 10 May and 26 August 2010 to further timetables for filing the defence, except to say that as at 10 May 2010 it was anticipated that the defence could then be prepared. There was no explanation for the delay in filing the present notice of motion, notwithstanding Mr Rozenberg's observation of 13 October 2010 to Mr Meades that if a defence or cross-claim were to be filed, the defendant would need to file a notice of motion.
Mr Meades gave no evidence to explain the default in giving discovery.
The defendant has treated the plaintiff and the orders of the court with disdain.
The defendant needs an extension of time for its application to review the decision of the Registrar of 13 October 2010 refusing its application for a further extension of time in which to file its defence and cross-claim. The court must seek to act in accordance with the dictates of justice in deciding whether it should have that extension of time, in carrying out the review of the Registrar's decision, and in deciding whether the defendant should now have leave to file a defence and cross-claim ( Civil Procedure Act 2005, s 58). In making that assessment I must have regard to the matters in ss 56 and 57. I must have regard to the overriding purpose of the Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The proceedings are to be managed having regard to the objects in s 57(1). It is also appropriate to have regard to each of the matters in s 58(2)(b)(i)-(vi).
A further relevant consideration is the need to maintain respect for the court's authority. In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [30], French CJ observed that the potential for loss of public confidence in the legal system which arises if a court is seen to accede to applications made without adequate explanation or justification is a relevant consideration in dealing with applications for adjournment, or for amendments giving rise to adjournment, or the vacation of trial dates or the like. Bryson J (as his Honour then was) put the matter eloquently in Hartigan v International Society for Krishna Consciousness Inc [1999] NSWSC 57 at [11]. His Honour said:
"'Court efficiency' is a terse mnemonic indeed for the public and private interests involved in conducting Court business according to a known and predictable course, on which expensive preparations can reasonably be based, and with due use of publicly-owned resources, paid for by taxation levied under stern laws and for the most part out of the proceeds of personal exertion of persons who make no use of the Court. 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."
Extension of time to review Registrar's decision
Part 49, r 49.20 of the Uniform Civil Procedure Rules provides that an application for the review of a decision of a Registrar is to be instituted by filing a notice of motion within 28 days after the material date. The court may extend that time. That period expired on 10 November 2010. If the Registrar's decision is not reviewed, it stands as a barrier to the defendant now having leave to file a defence and cross-claim, unless the defendant can point to a material change in circumstances.
Notwithstanding the delay between 10 November 2010 and 3 March 2011, I think that time for making the application to review the Registrar's decision should be extended. The issue of whether the defendant should be allowed to defend and should be allowed to bring its cross-claim is of high importance. The delay in the defendant's bringing the application for review of the Registrar's decision is partly explained by Mr Meades' evidence that he had not appreciated there could be a need to do so until I raised the question on 18 February 2011. That is not a satisfactory explanation. Nonetheless, notwithstanding the delay, I think justice requires that the question whether the defendant should have leave to defend should be determined on its merits as they now exist.
Review
The review of the Registrar's decision is not an appeal. It is not necessary for the defendant to show that the Registrar made an error of principle. The court can take into account the facts as they presently exist. This includes that the defence and cross-claim have now been formulated. As the decision may have a decisive impact on the parties' rights, the court may be willing to intervene to substitute its own discretionary decision for that of the Registrar ( Tomko v Palasty (No. 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [5]-[9], [50], [52]).
In the present case there are no reasons available for the Registrar's decision except that it is clear that she referred to the fact that the defendant did not adduce any evidence by way of an affidavit to support its submission that time for filing and serving a defence and cross-claim, a verified list of documents and evidence should be extended. That would be in itself a sufficient reason for refusing the extension sought by the defendant. However, the defendant has now led some evidence and it is necessary to consider the matter afresh. In Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230, Young JA said (at [52]) that an order striking out a defence is an extreme measure to be taken as a last resort. Campbell JA agreed with this observation. Each of the matters in ss 56 and 57 of the Civil Procedure Act must be given weight as a fundamental element in the decision-making process (at [41]). The power to strike out, and similarly the power to refuse to grant leave for the filing of a defence and cross-claim out of time, is not to be used to punish a litigant (at [46]). That does not mean that the need to maintain respect for the court's authority in ensuring that orders are obeyed is not a relevant consideration.
The first (and, in this case, decisive) consideration required by both s 56 and s 57 is that an order should be made to facilitate the just determination of the real issues in the proceedings. Where issues have not been formulated because pleadings have not been filed in breach of the rules and the court's orders, I think the real issues are to be determined from the plaintiff's affidavit and statement of claim, and the proposed defence and cross-claim as elaborated upon in Mr Meades' affidavits and in submissions by counsel for the defendant. The need for a just determination of those issues does not mean that the defendant is to have unlimited opportunity to propound a defence and cross-claim whatever the delays, and whatever the prejudice to the plaintiff, the court and other litigants. In Aon Risk Services Australia Limited v Australian National University , the plurality of the High Court (Gummow, Hayne, Crennan, Kiefel and Bell JJ) observed in relation to r 21 of the Court Procedures Rules 2006 (ACT) that what is a "just resolution" is to be understood in the light of the purposes and stated objectives of those rules in which a minimum of delay and expense are seen as essential to a just resolution of proceedings (at [98]). Their Honours also observed that orders for costs, even orders for indemnity costs, would not always undo a prejudice a party suffers by a late amendment, or, I might add, a late pleading (at [98] and [99]).
I do not think the defendant could properly complain that there was not a just determination of the real issues in the proceedings if it is refused leave to file a defence and cross-claim and is not heard on whether the plaintiff should be given the relief sought in the statement of claim. It has been given multiple opportunities to put its case and has only belatedly done so, spurred, it would seem, by my having the matter listed for the purposes of either giving directions or making final orders.
The efficient disposal of the court's business and use of judicial administrative resources, the timely disposal of the proceedings at an affordable cost, the defendant's lack of expedition and breach of its duties under s 56(3), would also prima facie indicate that the defendant should not be given the indulgence it seeks. Nor do the proposed pleadings indicate issues of such complexity or difficulty as to excuse the delay.
However, there is a complicating factor. Whilst the bases on which some of the claims for relief sought in the statement of claim are clearly pleaded, the basis (or bases) of other claims for relief have not been pleaded at all.
The plaintiff contends that an agreement was made in about 2002 for the relocation and extension of part of the northern right of way over the defendant's land. That claim is put in various ways. Amongst other things, the plaintiff says that the defendant is estopped from denying such an agreement. The terms of the agreement are said to be contained in letters written by the defendant to the plaintiff on 7 March 2001 and 13 December 2002. In the latter letter, Mr Hopps " confirmed " that the right of way had been relocated away from the defendant's open cut activities to an alignment close to Wollombi Brook as per an attached plan. The plan shows the relocation of the easement.
In the letter of 7 March 2001 Mr Hopps, for the defendant, stated:
"We have completed our research into the right of way issue and have come to a position on this matter.
The facts appear to be as follows:
You have two rights of way across Wambo property - one to connect with the Wambo Road (to the south) and another to the north as far as old Lot 8, DP3030 which used to provide access to Warkworth via crown or council roads.
The position of the right of way across old Lots 8, 9 and 10 has never been defined and maps and aerial photographs over time show a variety of tracks have been used.
The Bulga to Warkworth road, which the right of way accessed, was closed through Lot 8 in 1971 and the crown and council roads to Warkworth were rendered impassable some years ago. The land title to those roads also indicates that they were not practically trafficable.
Wambo wishes to resolve the above issues and proposes the following:
As the landowners we propose that the existing track shown on the attached map in red is to be the right of way through Lots 8, 9 and 10.
The southern right of way is as per the existing track, shown in green through our land.
In order to facilitate your access to Warkworth we propose that you use the current mine access road through Lot 7 DP3030 across the Hales Bridge and then across Lot 10 DP113343 to connect with a Council-owned road which connects to the Golden Highway - this is shown in blue on the attached plan.
Assuming you are agreeable to this then we would propose to close and then purchase the lands occupied by the old crown and council roads which are no longer trafficable.
With regard to the section of our proposed route which occupies the recently (1998) built mine service road, which is now no longer required, it will be necessary to remove the crossing over South Wambo Creek to effect further creek repairs. It is proposed at this time not to replace the culverts but it is our intention to retain a creek crossing in this area which will be more trafficable than the former crossing which you indicate was used for access prior to the construction of the mine service road.
With regard to future requirements it may be necessary sometime in the future to relocate this proposed route of the right of way to enable mining operations in the area.
In that case it would be our intention to provide an agreeable alternative to the standards of the right of way prior to the installation of the mine's service road as required by the Development Consent for the Underground Fill Project.
In regard to access along these routes, some of which comprise part of the operating mine, for safety reasons you are informed that in general, NSW road rules apply with an additional provision that you must give way to mine site vehicles (that is unregistered equipment not normally allowed access to state roadways) which have poorer lines of sight and braking distances than registered vehicles. This paragraph is based on your use of the right of way for the purpose of accessing the Golden Highway at Warkworth. As discussed with R Hopps recently, should you have a need for others to use the [a]forementioned route through the mine site (indicated in purple) it would be necessary, for safety reasons, for you to inform others of the requirements and advisable for you to contact the mine. In addition we will inform you if we become aware of any abnormal hazards to be avoided along this section of the route we propose for your use.
We trust the above is satisfactory in formalising the right of way across our property as the current situation of the location of the right of way not being formally documented is unsatisfactory."
The plaintiff says that he accepted that proposal and the proposal was implemented. He says that he refrained from taking objections to later developments of the defendant's mine on the basis of the matters there set out. This part of the plaintiff's claim is adequately pleaded.
At its southern end, the northern right of way crosses South Wambo Creek. In his affidavit, the plaintiff deposed that in June 2007 after significant rain, the approaches to the causeway that cross the South Wambo Creek along the right of way were washed away. He deposed that this required the defendant to apply for a permit to repair the causeway approaches and that he was advised that such a permit had been granted. He deposed that after the flooding, a fence was placed across the roadway to the crossing at South Wambo Creek, that is, across the right of way, and that he was unable, and remains unable, to access the right of way because of the fence. He deposed that he waited for the creek causeway to be repaired and the fence to be removed. On 14 March 2008 he sent an email to a Ms Sarah Bailey of the defendant. He later said that this email was sent to provide her with supportive information to assist her justifying repair to the crossing damaged in June 2007. In that email he referred to what he called " the company's withdrawal from the repairs to the ROW crossing damaged during the flooding of June last year ". I infer that he provided Ms Bailey with the correspondence of 7 March 2001 and the attached plan. The plaintiff said " Hope this assists in ensuring the crossing is restored as was assured in June last year and we see the roads repaired to a suitable standard soon. We have been denied access via this ROW for longer than is considered reasonable ... ".
The defendant responded to this email on 23 October 2008, that is more than seven months later. It asserted that the plaintiff was not entitled to the northern right of way over lot 83 which was part of the defendant's mining operations. So far as appears from the letter, the only basis for this contention was that the certificates of title to lots 82 and 83 in DP548749 did not record the right of way. However, in the proposed defence the defendant admits that pursuant to a memorandum of transfer dated 13 January 1915, the plaintiff's land had the benefit of a right of way over land in lots 8 and 9 in DP3030. It seems that that land was subdivided in 1971 into lots 82 and 83 in DP548749. In its proposed defence the defendant does not admit that the plaintiff's land presently has the benefit of the right of way, but the reason for the non-admission is not given. Given that easements omitted from the register are an exception to indefeasibility, there does not seem to be a real issue that the right of way created in 1915 exists, whether or not the defendant is bound by an agreement in 2002 for the relocation and extension of the easement.
In its proposed defence the defendant pleads that if its land is burdened by the right of way then pursuant to the 1915 transfer, it was entitled to determine the position or positions of the right of way from time to time, and that in 2002 it exercised that right to determine the position of the right of way from time to time. In other words, the defendant pleads that the agreed relocation of the right of way was not fixed for all time, but could be relocated. However, the plaintiff's complaint is that the defendant has refused to acknowledge the northern right of way and has barred his access to it. The 1915 transfer provided that the right of way was to be " in such position or positions as the owner for the time being of the lands through which the same are reserved shall reasonably determine Provided that in the event of any dispute arising as to the reasonableness of the position of such rights of way or roads of access or any of them such dispute shall be settled by arbitration ... ". According to the plaintiff's evidence, the defendant has not proffered an alternative northern route over the land that was formerly lots 8 and 9 in DP3030 to give access to Warkworth. It is doubtful whether the defence raises arguable grounds for resisting parts of the relief claimed by the plaintiff.
A further matter raised by counsel for the defendant, although not pleaded in the proposed defence, is that, according to counsel, other landowners are entitled to the benefit of the right of way and the alleged 2002 agreement could not be binding, as they were not parties to it. That proposition is not self-evident.
If the existence of the northern right of way, and the existence or enforceability of the alleged agreement to relocate and extend the right of way were the only real issues, I would not give the defendant leave to file the defence.
Part 16, r 16.10 provides:
"Whatever the plaintiff's claims for relief against a defendant in default, the court may, on application by the plaintiff, give such judgment against the defendant as the plaintiff appears to be entitled to on his or her statement of claim."
The difficulty in the present case is that the relief claimed in the statement of claim includes an injunction restraining the defendant from obstructing the right of way or otherwise interfering with the plaintiff's use and enjoyment of the right of way as varied, and an order that the defendant remove, replace and maintain the crossing over South Wambo Creek pursuant to and in accordance with a permit issued to the defendant by the Department of Natural Resources.
In his affidavit the plaintiff deposes that the defendant has blocked access to the right of way by erecting a fence or fences and locking gates. The plaintiff also deposes that in June 2009 the defendant caused excavation work to be carried out at the creek which makes it impossible to cross the creek without a four-wheel drive vehicle. The statement of claim does not plead the facts on which the plaintiff will rely to justify the claim for an injunction against obstruction and interference with the right of way.
Nor does the statement of claim plead the facts on which the plaintiff will rely to contend that the defendant is obliged to replace and maintain the crossing over South Wambo Creek. The letter of 7 March 2001 stated that it would be necessary for the defendant to remove a crossing over South Wambo Creek to effect creek repairs, but that it would retain a creek crossing which would be more trafficable than the former crossing. The plaintiff does not plead the terms of the letter of 7 March 2001 as giving rise to an obligation for the defendant to replace and maintain the crossing. The plaintiff might be relying upon the terms of the letter of 7 March 2001. He might be relying upon other facts. In argument counsel for the defendant suggested that the plaintiff was relying on conditions of a development consent the subject of a development application in 1998 which, it might be said, requires the defendant to maintain the right of way in a safe and trafficable condition. It may be that the plaintiff claims a mandatory injunction to require the defendant to restore the crossing to the condition in which it was before the defendant is said to have carried out works between 2007 and 2009 based simply on an allegation that the defendant did work that interfered with the right of way.
Had the defendant served its defence in good time, and served its evidence and given discovery, these matters would doubtless have been addressed and the statement of claim could have been amended to bring it in line with the evidence. That has not happened. The plaintiff's difficulty, and the court's difficulty, is that prima facie , if, in the absence of a defence, the court gave such judgment against the defendant as the plaintiff appears to be entitled to on the statement of claim, that might not deal with all the real issues of dispute between the parties. That may be so because the statement of claim does not plead the basis on which the plaintiff claims an order to require the defendant to maintain the crossing, or to an injunction against obstructing access. It would not be appropriate to give relief on the basis of an amended statement of claim which the defendant did not have the opportunity to address. Rule 16.10 permits the giving only of such judgment in default of defence as the plaintiff appears entitled to on the statement of claim.
It is therefore appropriate to direct that the plaintiff file and serve an amended statement of claim within seven days. I will give leave to the defendant to file its defence to the amended statement of claim within seven days after service of the amended statement of claim.
The defendant is also in breach of orders requiring it to serve its evidence and to give discovery. So far as service of evidence is concerned, I do not propose to extend the times last fixed for the service of the defendant's evidence. If at the hearing the defendant seeks to lead any evidence in its own case, I will deal with that application as it arises. Whether the interests of justice would require or permit the defendant to have leave to rely upon evidence served late is a question that can be determined if and when it arises.
Of more concern is the defendant's default in giving discovery. That is unexplained. I will not further extend the time. If the defendant remains in breach of the court's orders that breach should be remedied forthwith. If the breach has not been remedied, or if the previous default is sufficiently serious, then the defendant faces the risk of an application under s 61 of the Civil Procedure Act to strike out any defence that it might file, and for judgment accordingly on an amended statement of claim.
Leave to file cross-claim
The cross-claim raises additional issues. As noted above, the cross-claim joins additional parties. The defendant seeks an order extinguishing the northern right of way and a declaration that the southern right of way was extinguished on 29 December 1961. Counsel for the plaintiff submitted that the defence of the cross-claim would require consideration of an amount of historical and other evidence and that the plaintiff could not be in a position to respond to the matters raised by the cross-claim before the hearing. I accept that submission.
It is extraordinary that less than two months before the time fixed for hearing, the defendant should seek leave to file a cross-claim which, amongst other things, seeks a declaration that the southern right of way was extinguished on 29 December 1961. The basis for this contention is that it was a term of the easement that the rights of way granted by the 1915 transfer should continue only until proper roads of access to the road leading from Bulga to Warkworth should have been formed and dedicated. The cross-claim alleges that on or about 29 December 1961 a road providing access from farm 3 and farm 4 to the Bulga to Warkworth was formed and dedicated. Farm 3 is the plaintiff's land. Farm 4 is the land of Mr and Mrs Brosi and Ms McLaughlin. The plaintiff is entitled to reasonable time to consider this contention on its merits and to consider potential defences. As late as 31 March 2009 the defendant reiterated that it would " continue to observe the right of way you currently use to access your property from Bulga ", being a reference to the southern right of way. Given that that right of way has been used for nearly 40 years after the time the defendant now says it ceased to operate for the benefit of the plaintiff, the plaintiff is entitled to more than a few weeks to consider the contention.
The balance of the cross-claim contends that the northern right of way should be extinguished pursuant to s 89(2) of the Conveyancing Act . That contention is premised upon the right of way existing (a matter not admitted in the defence). In submissions counsel for the defendant accepted that that claim would be affected by a decision as to whether or not an order were made requiring the defendant to maintain the crossing at South Wambo Creek. The cross-claim also raises questions as to changes in the surrounding neighbourhood of Warkworth and to the dominant and servient tenements. At least the former will require some investigation. It would not be just to the plaintiff to compel him to deal with the cross-claim at the hearing fixed for 11 April 2011.
It does not follow that I should refuse the defendant leave to file the cross-claim. Were I to do so that would not prevent the defendant subsequently filing a fresh proceedings making the same claims and seeking the same relief as in the cross-claim. A defence could potentially arise as to whether the defendant was estopped from bringing the claim on the ground that it was a claim that ought to have been brought in these proceedings. That would unnecessarily complicate the hearing. The circumstances are analogous to those in Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543. Prejudice to the plaintiff is adequately dealt with by giving the defendant leave to file the cross-claim but directing that it be heard after the determination of the plaintiff's claim. The issues raised in the proposed cross-claim are discrete.
Costs
The defendant's defaults are inexcusable. So far as costs can mitigate prejudice to the plaintiff, orders should be made to that end. Although the defendant has had success on this application, it is seeking an indulgence and must pay the plaintiff's costs of the application on the indemnity basis. So far as I can see, the only advances the plaintiff has been able to make since the first return date of the proceedings has been to issue subpoenas for the production of documents. That has been for the benefit of the defendant as much as for the plaintiff's benefit, so far as the evidence and submissions on this application reveal. A mediation has been held, but was unsuccessful. I do not know any details of what happened at the mediation. But the plaintiff was pressing for the defendant to file its defence before the mediation. On the second day the parties agreed to the making of orders for the defendant to file its defence by 3 September 2010, at a time when the mediation was still not concluded. It can be inferred that the absence of the defendant's defence was a material impediment to the progress of the mediation.
The defendant submitted that if leave were given to file the defence and cross-claim, it would agree to meet costs occasioned by delay in filing and serving the cross-claim within seven days of proof that the plaintiff had incurred such costs, without prejudice to the defendant's right subsequently to seek an assessment of such costs. That offer is inadequate. It would leave it to the defendant's judgment in the first instance as to whether the plaintiff's costs were occasioned by the defendant's delay. The defendant should pay the plaintiff's costs of the proceedings (including the mediation) on the indemnity basis from and including the date of the second directions hearing up to and including 3 March 2011, otherwise than in respect of costs incurred:
(a) in connection with the issue of subpoenas and inspection and analysis of subpoenaed documents; or
(b) in the inspection and analysis of any documents discovered by the defendant.
For these reasons I make the following orders:
(1) Extend the time for the defendant to seek an order for the review of the decision of Registrar Walton made on 13 October 2010 up to and including 3 March 2011.
(2) Order that the decision of Registrar Walton made on 13 October 2010 be discharged to the extent that the defendant is granted leave to file a defence and cross-claim in accordance with the orders below.
(3) Order that within seven days the plaintiff file and serve an amended statement of claim pleading the basis or bases upon which he claims the relief in paragraphs 3 and 4 under the heading "Relief Claimed".
(4) Give leave to the defendant within seven days after service of the amended statement of claim to file and serve a defence to the amended statement of claim.
(5) Give leave to the defendant to file a cross-claim in the form of the document which is annexure D to the affidavit of Peter Mark Meades sworn 17 February 2011.
(6) Order that the issues arising on the cross-claim be heard separately from and after the other issues in the proceedings.
(7) Order that the defendant pay on the indemnity basis the plaintiff's costs of the proceedings from and including 10 May 2010 up to and including 3 March 2011, other than costs incurred:
(a) in connection with the issuing of subpoenas and the inspection and analysis of documents produced on subpoena; or
(b) in the inspection and analysis of any documents discovered by the defendant.
(8) Order that the costs payable pursuant to order 7 may be assessed forthwith and will be payable forthwith after agreement or assessment.
(9) Order that not later than five working days before the hearing date the parties' barristers or solicitors cause to be delivered to my associate any affidavits proposed to be relied upon that have not been filed and a list of the affidavits proposed to be read.
(10) Make orders 7, 8 and 9 of the usual order for hearing.
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Decision last updated: 18 March 2011
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