Hans Pet Constructions Pty Ltd v Cassar

[2009] NSWCA 230

New South Wales

Court of Appeal

CITATION:	Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230
HEARING DATE(S):	16 July 2009
JUDGMENT DATE:	31 July 2009
JUDGMENT OF:	Allsop ACJ at 1; Campbell JA at 49; Young JA at 50
DECISION:	1. Leave to appeal granted. 2. The appellant to file a Notice of Appeal within 7 days. 3. Appeal dismissed. 4. Appellant pay the respondent's costs.
CATCHWORDS:	PROCEDURE - judgments and orders – orders striking out defence – defendants seeking to vacate hearing date – delay in obtaining evidence and particulars from the plaintiff - no notice of motion filed by defendant to vacate hearing date – review of decision of magistrate striking out defence – relevant considerations – Civil Procedure Act 2005 (NSW) s 58 – failure to take into account statutorily required considerations of Civil Procedure Act 2005 (NSW) s 56 and s57 – just determination of the proceedings – matter not given weight as a fundamental element in the decision making process - proportional use of power to strike out defence - Civil Procedure Act 2005 (NSW) – s 56 – s 57 – s 58 – s 61
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules (NSW) Local Court Practice Note No 1 of 2005
CATEGORY:	Principal judgment
CASES CITED:	Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 British American Tobacco Australia Services Ltd v Cowell (Representing the Estate of McCabe (deceased)) [2002] VSCA 197; 7 VR 524 Cassar v Hans Pet Constructions Pty Ltd [2008] NSWSC 1386). Commissioner of Police for New South Wales v Industrial Commission of New South Wales & Raymond Sewell [2009] NSWCA 198 Dennis v Australian Broadcasting Commission [2008] NSWCA 37 House v R [1936] HCA 40; 55 CLR 499 Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; 162 CLR 24 Palmer Tube Mills (Aust) Pty Ltd v Semi [1998] 4 VR 439 Queensland v JL Holdings Pty Ltd [1997] HCA 1; 189 CLR 146 Szczygiel v Peeku Holdings [2006] NSWSC 73
PARTIES:	Hans Pet Constructions Pty Limited (Appellant) Kay Isabel Cassar (1st Respondent) Frank Savior Cassar (2nd Respondent)
FILE NUMBER(S):	CA 40092/09
COUNSEL:	D Talintyre (Appellant) H Altan (Respondents)
SOLICITORS:	Moloney Lawyers. Potts Point (Appellant) Eddelbuttel Law, Cundletown (Respondents)
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	13795/2008
LOWER COURT JUDICIAL OFFICER:	Rothman J
LOWER COURT DATE OF DECISION:	23 December 2008
LOWER COURT MEDIUM NEUTRAL CITATION:	Cassar v Hans Pet Constructions Pty Ltd [2008] NSWSC 1386

40092/09

ALLSOP ACJ
CAMPBELL JA
YOUNG JA

Friday 31 July 2009

HANS PET CONSTRUCTIONS PTY LIMITED v CASSAR

Headnote

The Cassars were defendants in a claim made by Hans Pet Pty Ltd (Hans Pet) in the Local Court of NSW.

Directions were made by the Local Court, allocating a special fixture three day hearing date, setting out a timetable for the parties to prepare themselves for the hearing and listing the matter for pre-trial directions 28 days before the allocated hearing date. Later directions were also given concerning the provision of further and better particulars from Hans Pet and moving back the timetable including pushing the pre-trial directions back to six days before the hearing date.

Hans Pet were late complying with the Court’s directions regarding the serving of further evidence and particulars on the Cassars.

At the pre-trial directions the Cassars sought to vacate the hearing dates without filing a notice of motion. They said that they would not be able to file their expert evidence in time due to Hans Pet’s failure to comply with the timetable.

The Magistrate hearing the pre-trial directions refused to vacate the hearing date, struck out the defence and allocated the hearing dates be used to establish quantum of damages.

The Cassars appealed to the Supreme Court where the order of the Magistrate striking out the defence was quashed by a judge of the Court. The primary judge concluded that the Magistrate had balanced the considerations of the Civil Procedure Act 2005 (NSW), with the one exception of striking out the defence. His Honour held striking out the defence was disproportionate and a punishment for late filing of evidence.

Hans Pet sought leave to appeal from the decision of the Supreme Court.
The issue on appeal if leave was to be granted was whether the primary judge had erred in finding an appealable error in the approach of the Magistrate.

The Cassars put forward a notice of contention submitting the Civil Procedure Act ss 56 – 58 had not been applied in a judicial and proportionate manner.

Held allowing leave to appeal and dismissing the appeal :
(Allsop ACJ, Campbell JA and Young JA)

(i) Civil Procedure Act, s 58(2)(a) requires that in applying the powers of case management the Court must have regard to the provisions of s 56 and s 57 of the Act in determining what are the “dictates of justice” under s 58(1).

(ii) Section 57 (1)(a) requires the Court to have regard to “the just determination of the proceedings” and therefore the matter must be given weight as a fundamental element in the decision making process.

(iii) The Magistrate erred because s 57 was not given weight as a fundamental element in the decision making process and therefore the statutory requirements of s 58(2)(a) were not complied with when the order to strike out the defence was made.

40092/09

ALLSOP ACJ
CAMPBELL JA
YOUNG JA

Friday 31 July 2009

HANS PET CONSTRUCTIONS PTY LIMITED v CASSAR

Judgment

1 ALLSOP ACJ: This is an application for leave to appeal and an appeal (heard concurrently) from orders made by a Judge of the Court (Rothman J) which quashed an order of a magistrate in the Local Court (Magistrate Heilpern) which had struck out the defence of the respondents and ordered the proceedings in the Local Court to proceed to a damages hearing, thereby, in effect, entering judgment for the appellant (the plaintiff in the Local Court) (see Cassar v Hans Pet Constructions Pty Ltd [2008] NSWSC 1386).

2 The prospective appeal raises some important considerations concerning the operation of the Civil Procedure Act 2005 (NSW), in particular the consequences of failure to comply with directions. For that reason, leave to appeal should be given, even though I would dismiss the appeal.

The litigation in the Local Court

3 The appellant, Hans Pet Constructions Pty Ltd (“Hans Pet”), is a builder which subcontracted tiling work on a job to the respondents, Mr and Mrs Cassar. Hans Pet alleged that the work of the Cassars was defective. These assertions of Hans Pet were made in mid-2007 and substantiated at that time by the delivery of an expert’s report as to deficiencies in the work.

4 In November 2007, proceedings were commenced in the Local Court by way of statement of claim in which Hans Pet claimed unliquidated damages, but quantifying same in the sum of $55,884.74, being the asserted cost of removing the tiles laid by Mr Cassar and replacing them with new tiles.

5 On 3 January 2008, the Cassars filed a defence which was summarised by the primary judge at [4] of his reasons as follows:

“[4] … That defence, which is in evidence before this Court, denied the existence of a contract to perform tiling sub-contract work, admitted a duty to use reasonable care, skill and diligence if sub-contracting tiling work was performed for Hans Pet, admitted that they offered to undertake tiling sub-contract work, denied the terms of the contract and ‘admitted’ that tiling services ‘on a labour only basis’ were provided and otherwise denied faulty workmanship. Further, the defence claimed contributory negligence, estoppel, failure to mitigate and the defence also put the quantum of damage in issue. As one would expect, Hans Pet bore the onus of proof in the proceedings before the Local Court, at least on the substantive question before the Local Court.”

6 On 26 February 2008, directions were made by the Local Court, setting the matter down for hearing for three days by way of a special fixture commencing Monday 28 July 2008 and requiring the plaintiff to serve its evidence in chief (including expert evidence) by 18 April 2008, the defendants to serve their evidence by 30 May 2008 and the plaintiff to file evidence in reply by 20 June 2008. The matter was also listed for “review”, by way of pre-trial directions, on 1 July 2008.

7 At this point, it should be noted that the Local Court had been able, by February 2008, to allocate a hearing date for a modest claim within eight months of filing of the initiating process, with an orderly regime for preparation enabling the parties a reasonable time to prepare themselves for the resolution of the dispute. It also should be noted at this point that the Local Court has a practice note (Practice Note No 1 of 2005) issued on 15 August 2005 and amended 16 February 2007 which, amongst other matters, lists objectives of the Court to finalise 90 per cent of civil proceedings within six months of commencement and 100 per cent of proceedings within 12 months. I mention this at this point in the narrative to emphasise, as early as possible in these reasons, the entirely legitimate and salutary considerations involved in the speedy resolution of disputes. Hans Pet’s claim was modest, but no doubt important to it as a matter of recovery of a not insignificant sum of money for a small builder. The reforms of the system of civil litigation in New South Wales in recent years, typified by the Civil Procedure Act and the Uniform Civil Procedure Rules reflect the deliberate governmental (Parliamentary, executive and judicial) aims of promoting and facilitating the speedy disposition of proceedings in order that citizens of the State can obtain prompt resolution of their complaints. These matters must be steadily borne in mind at all times. Though I am of the view that the learned Magistrate erred in making the order he did, nothing that I say in explication of my reasons for that view should be taken as undermining or weakening the considerable authority of judicial officers to control and manage litigation in order that it proceed with the utmost expedition in the interests of both private and public resources in the State. It is necessary, however, in managing and supervising litigation to that end to ensure that proper consideration is given to all factors identified by the Parliament of New South Wales as compulsory to consider and have regard to in the exercise of the powerful case management tools now given to judicial officers at all levels in the State.

8 The directions that had been given here also concerned further and better particulars. There was a complaint by the solicitors for the Cassars that these had not been provided by Hans Pet. The matter was brought back to the Court on 10 April 2008. Directions were made varying those made earlier on 26 February as to the provision of particulars and the timing of filing and service of evidence in chief, response and reply. The timetable was pushed back so that the evidence in reply was to be served no later than 11 July 2008 and the review date was moved to 22 July 2008.

9 The Cassars did not receive the answers to their requests for further and better particulars as directed or in the time directed. There was correspondence between the parties. The answers to particulars were provided on 5 June 2008 some seven weeks after the date provided by the court orders. Further, it was not until 16 June 2008 that Hans Pet served the remainder of evidence and indicated that it would not rely upon any further evidence. That evidence had been due on 23 May 2008. The expert evidence of Hans Pet, however, had been served on 23 May 2008 in accordance with the directions, and it should be recalled that a body of expert evidence had been provided the previous year.

10 On 23 June 2008 the solicitors on behalf of the Cassars wrote to the solicitors for Hans Pet noting the hearing date and asserting that Hans Pet’s delay in providing answers to the particulars had caused the Cassars not to be able to meet the present timetable and, necessarily, a new date was required. The letter sought consent to the matter being relisted before the Local Court for the purpose of securing a new timetable and, necessarily, a new date. The letter also informed Hans Pet that the particulars that had been provided had necessitated further investigation and that the expert who had been engaged by the Cassars would not be able to provide his report by the dates specified in the Court’s directions. An amended defence was filed which expanded on the grounds relied on for mitigation and repleaded the issue of quantum and raised causation.

11 There was a further exchange of correspondence between the solicitors and by 8 July 2008 it became apparent that there was no agreement to vacate the hearing dates.

12 On 9 July 2008 the solicitors for the Cassars advised the Local Court of the difficulties and sought a directions hearing date for the purpose of vacating the hearing date set. On 15 July 2008 the legal representatives of the Cassars once again rang the Registrar of the Local Court to follow up the letter of 9 July 2008 and to request a relisting before 22 July 2008. The evidence before the primary judge was that the Cassars solicitors were advised that it was likely that the matter would be dealt with on 22 July at the review date. No notice of motion was filed seeking the vacation of the dates.

13 It was in these circumstances that the matter came before the learned Magistrate on 22 July 2008.

14 Before turning to the transcript of what occurred it is perhaps appropriate to say the following. Any judge who has had experience in either running a list or in case managing litigation will be familiar with the kinds of dispute apparently raised by the parties and described above. It is often very difficult to ascertain the legitimacy of the complaints of both defendants and plaintiffs when they assert a failure to provide particulars and when they assert they are not able to put on evidence or pleadings until they have particulars. The legitimacy of those kinds of assertions are sometimes questionable and can, on occasions, be a diversion from the real reasons for timely preparation, which are sometimes a failure to attend to the task in hand because of either busyness or, in some cases, idleness. I am not concluding that any of these illegitimate considerations attended the conduct of the file by the Cassars’ solicitors. There was no detailed investigation of the legitimacy of these complaints by the learned Magistrate. That is not a criticism of him. Very often the time and trouble and expenditure of energy in resolving these kinds of dispute can outweigh any utility in doing so. That said, however, a judge or registrar will often act upon the sense or intuition of who is responsible in tailoring directions in circumstances where those directions are unlikely to prejudice irretrievably a party. Where, however, a party is to be prejudiced irretrievably in the conduct of its litigation by the failure to comply with a timetable it will rarely be appropriate so to affect the party without an investigation and a conclusion that it was the party involved who was at least in part responsible for the default, so as to justify such irretrievable prejudice. With those introductory remarks, I turn to the record of the hearing before the Magistrate.

15 A brief explanation of the history of the matter was given by the legal representatives. The barrister for the defendant said:

“ZICKMAN: Your Honour, the position is this. If you look at the file you’ll see that on 10 April it was a motion requesting particulars. It’s a building case. Four months have been wasted trying to get those particulars. They were ordered to provide particulars then unfortunately the plaintiff was sick for two months so we didn’t get the particulars for almost two months, so we lost two months in the window in which everybody would’ve been moving towards a hearing date. When those particulars were provided an amended defence were put on, subpoenas were issued. It became clear that discovery was necessary. Expert evidence was going to have to be required that wasn’t anticipated. So the reality is we’ve lost two months because of the delay in getting the particulars. As I understand it there is a letter on the file from my instructing solicitor at least two weeks ago advising the court that we anticipated that this date was going to be lost and also prior three letters to the other side as early as possible advising them that we were going to require relisting and the vacation of the hearing date on account of the fact that we haven’t got the particulars.”

16 The Magistrate responded in an exchange to the following effect which also involved the solicitor for the plaintiff:

“HIS HONOUR: Where is the notice of motion to satisfy the hearing? I don’t see it. Today’s the review date, that’s the first point. The second point is the particulars were ordered on 10 April and the defence was then given leave to file an amended defence upon receipt of those matters. The amended defence was by 2 May. I see that happened. So you’ve had since 2 May or at least since 16 June since you received the lay evidence. If this is a building case as far as I can see it’s all about the expert evidence at any rate. Where is your notice of motion to satisfy the hearing?
ZICKMAN: There is no notice of motion on at the moment, your Honour.
HIS HONOUR: Why shouldn’t I simply strike out the defence? You’ve not bothered to put on a notice of motion, you’ve not served any evidence and the matter is for hearing .. (not transcribable) .. report and the magistrate allocated to hear this matter.
ZICKMAN: I’m extremely aware of that, your Honour.
HIS HONOUR: Well, if you’re extremely aware of that where is the notice of motion and why hasn’t it been filed well before today?
ZICKMAN: Your Honour, my understanding is that there were three attempts to get consent, to approach the court for further directions et cetera on that regard and then the solicitor rang up -
HIS HONOUR: Let me assure you, it is not a question of consent by vacating a hearing date.
ZICKMAN: I understand that, your Honour.
HIS HONOUR: That is not the role of the parties to agree to the vacation of a hearing date. It has nothing to do with the parties. It has to do with the court.
ZICKMAN: I understand that, your Honour.
HIS HONOUR: So why should I simply not strike out the defence?
ZICKMAN: Your Honour, we just say that the situation is a complicated building case notwithstanding the amount in dispute. Till we got the particulars we weren’t in a position to know whether we needed to amend our defence. The defence was then amended.
HIS HONOUR: On 21 May, that’s two months ago.
ZICKMAN: I believe the particulars were only provided in June.
MALONEY: The particulars were 18 days late. They were served on 5 June and they were 18 days late and the plaintiff accepts that they were 18 days late. My client was hospitalised.
HIS HONOUR: When was the amended defence filed?
ZICKMAN: 24 June, your Honour.
HIS HONOUR: So you’ve had a month since the filing of the amended defence?
ZICKMAN: That’s correct, your Honour.
HIS HONOUR: To put on any evidence.
ZICKMAN: Well, your Honour, also subpoenas had to be issued which became clear once we received the particulars. That’s the first time it became clear where we knew who the parties were that we had to issue the subpoenas to. Your Honour will note that subpoenas were returned on 16 June but no orders were made for access so we don’t have access to those subpoenas to be able to properly put our evidence together. That’s the position, your Honour. It’s regrettable. We want this matter heard as much as anybody else but unfortunately we have lost this period. We just aren’t in a position to be ready to go on, on Monday.

MALONEY: Your Honour, the expert evidence of the plaintiff was served before the proceedings commenced. It hasn’t changed. It was served on 19 March 2007 together with an offer that the defendant might want to come and rectify the works before my client did. That expert evidence hasn’t changed. So in reality I accept that the plaintiff was late because he was hospitalised and couldn’t provide replies to particulars. However, I mean this case would truly run on the expert evidence and that expert evidence has been on for a very, very long time.”

17 The non-transcribable matters are likely to have concerned the fact that the hearing date was a few days away and a Magistrate had been specially brought in to hear the matter.

18 The plaintiff’s solicitor then recognised, when asked what his attitude to vacating the dates was, that the plaintiff could be placed in a difficult position if there was service of expert evidence on the day of the trial.

19 The Magistrate then had the following exchange with counsel for the defendant:

“HIS HONOUR: Why should the good citizens of New South Wales have to put up with that, really, Mr Zickman. This is outrageous. Three-day hearing next week, that means a magistrate ... (not transcriable) .. criminal notice, civil notice, people are in custody awaiting hearings, and no notice of motion to vacate the hearing date .. (not transcriable) .. upon the review date and say, well, we haven’t filed any evidence and we can’t make the hearing. That’s effectively it.
ZICKMAN: Your Honour, with respect, that’s not it. The true position is that we’ve been wanting to put on our evidence once we know the case we have to meet. You’ll see when our defence .. (not transcribable) .. if we don’t, your Honour.
HIS HONOUR: But you know and I know that when a matter is set for special fixture rules are provided. Those rules have been negotiated, settled and agreed to by the president of the Bar Association, by the president of the Law Society and that is that you notify the court with a special fixture well before the review date and to say, especially when the review date has been adjourned to today, so that a special fixture hearing can be reallocated. It’s a three day hearing. So the hearing is when?
ZICKMAN: Beginning Monday, your Honour.

…

ZICKMAN: My understanding is that on 9 July the solicitor did write to the court advising that he believed that the hearing had to be vacated. He then rang the following week because he was so concerned.
HIS HONOUR: Even if I had seen that letter I would have written back to the solicitor and simply said ‘read the rules’. It would’ve been a three-word response. You don’t just write to the court and say, we’re going to have to vacate the hearing date. The letter is an indictment of the solicitor’s ignorance of the rules. This hearing date has not been vacated, let me assure you. There’s two choices, either you come back to me today with a timetable for getting that material on by Thursday or I’m striking out the defence. Three-special fixture, no way, it’s not been vacated. You two can talk about the evidence that you can get, you can get instructions from your client, find out how quickly you can get your evidence on. I expect it to be on by Thursday and I’ll adjourn the matter to Thursday, just make sure the evidence is on otherwise I’ll consider striking out the defence. I have no notice of motion before me to vacate the hearing date. I’ve got a three-day special fixture. In fact I have relieving magistrate that’s specially being paid to come in and hear this matter. It has not been vacated. You can get your evidence in or not get your evidence, it’s a matter for you. I’ve got no notice of service .. (not transcribable) .. and you can either get your evidence on or I’ll strike out the defence. You go and get some instructions from your client or from your instructing solicitor for not vacating.”

20 A matter was interposed. After the adjournment, the following exchange took place:

“ZICKMAN: Your Honour, we’re somewhat in the court’s hands. I’ve made some inquiries as your Honour requested. The position is that we could probably have our lay evidence completed by the end of this week, but the expert has just returned from overseas and we would not be able to have our expert evidence completed by the end of this week. Your Honour, in regard to – your Honour was asking why you should not strike this matter out. My instructions are that particulars weren’t provided eighteen days late, but were some seven weeks late. We are in this position not because of choice. First of all, we are here because we’ve lost seven weeks in the programme, not through our fault.
MALONEY: My instructions are that they were eighteen days late as I submitted before. Having said that, as much as I want to accept your Honours urging that the matter proceed, in reality, the plaintiff accepts that if expert evidence is served upon my client on Friday, or lay evidence, the matter cannot proceed. My client will end up prejudiced, my client will end up running this matter with evidence it has received the last business day prior to the commencement of the hearing. As much as don’t want to make this submission, I can’t place my client in a position where my client is going to be prejudiced by having all this material put on the last minute. I accept that the court wants these matters dealt with expeditiously, certainly in the spirit of the new Act. Having said that, I’m going to bite the bullet and say, this is a matter that probably cannot proceed on Monday, simply because my client will be put in a situation where my client will not be able to respond properly to this. We can’t really have a hearing that starts off dealing with some issues and then goes over for the balance of it; it just really doesn’t work.
HIS HONOUR: As I understand it, the defendant is saying that they cannot have their evidence on by the hearing date.

MALONEY: That’s the case. They say they can have some of it on, but they can’t have any of the expert evidence. It’s really, when it all boils down to it, I don’t think there’s really going to be a great issue on the facts of this case. The case relates to a tiling job, a whole house was tiled. The tiles started to lift. The expert for the plaintiff says, you know, it was caused by various things. It is going to be a case that is going to be dealt with by experts ultimately. What I’m saying to your Honour is, without the expert evidence, the matter cannot properly be determined by the court.

…

ZICKMAN: Your Honour, the position is this. That when the directions were made, the hearing date was set. We had an extra seven weeks in that period. Experts were available to do certain things. We only received those, on my instructions, particulars, some seven weeks late. We foreshadowed to the other side and you will see when you look at the notice of motion and the orders that were made, that we were given leave to amend our defence because we just didn’t know what the case was we had to meet up to that point. So we are saying we will get the expert evidence, but what’s the answer to these twenty-five questions which they have been resisting. Once we finally got those particulars in June, we were able to brief our expert and say, well, here’s this, then we received their expert evidence. He started to prepare a response to this.
Your Honour, we are completely mindful of the fact that your Honour is rightly annoyed about this.
HIS HONOUR: The situation is this, as I understand it. The last communication where all the particulars were in, correct me if I’m wrong, all the particulars were in and all the evidence was in by 16 June.
MALONEY: That’s right. The final lay evidence for the plaintiff was filed, that was the last step that’s been done in the proceedings, it was on 16 June. Particulars pre-dated that. The expert evidence was a year ago.
ZICKMAN: Your Honour, the reality is that we have had an expert engaged in this matter who -
HIS HONOUR: Do you agree with me that all evidence and all particulars were to you by 16 June?
ZICKMAN: Your Honour, that sounds about correct. But your Honour, if I can just say this -
HIS HONOUR: In that case, what you have is from 16 June to 22 July, a period of six weeks, in which to get your evidence together, based on particulars and based on the expert’s report that, as I understand it, was served in May 2007. So you’ve had particulars for six weeks, but you’ve had the expert’s report, this is correct since May 2007?
MALONEY: March 2007, your Honour.
HIS HONOUR: March 2007. So, you’ve had six weeks to completely prepare your case and you’re telling me now on the review date, that you can’t complete your evidence by the time the matter is set for hearing.
ZICKMAN: My instructions are that my expert went out when this matter first surfaced, so he was someone who went out and had a look before the remedial work was done, so we weren’t in a position to get any other expert. So he went out and he prepared a preliminary response, but not an expert report. Once we got the particulars, it became clear there was a lot of things that the expert failed to deal with. I wasn’t involved in this, but as I understand it, the expert has subsequently been away overseas for the best part of the protracted period. Your Honour, with respect, he couldn’t deal with it. We could not get another expert because he was the only person who went and looked before all the tiles were pulled up. Once the tiles had been pulled up, there wasn’t anyone else in a position to do that.
HIS HONOUR: I will consider it over morning tea. I must say I am minded to simply strike out the defence. I just cannot justify a three-day hearing with a magistrate allocated to sit, being thrown away four days before the hearing is meant to start. It’s just an outrageous waste of public money. The courts are not that flexible that we can just – and I have at the forefront of my mind – that what we are effectively doing is throwing away three days of court time, because of non-compliance, when you’ve had six weeks since the particulars are in and you have had since March 2007 since the expert’s report is in. But I will re-read the correspondence on my file and I will give you a determination at, say, 12 o’clock.
ZICKMAN: Sorry, your Honour, might I just be heard on two other matters?
HIS HONOUR: Yes.
ZICKMAN: Your Honour, the first thing is that, we would ask your Honour to look at the defence which has been put, and the amended defence, and we say that you are assuming, when you look at the defence, notwithstanding these other issues which are of great concern to your Honour and rightly should be, the defendant has a good defence. That’s the first point. The second point is that if your Honour were against me, rather than striking out the defendant’s defence which is a fairly extreme measure because it means the defendant will not have the opportunity to have his case put.
HIS HONOUR: The defendant has had the opportunity to have his case heard. This is not a natural justice issue. The defendant has had every opportunity to file and serve its evidence in accordance with the directions of the court. It takes six weeks. This is not a question, and I disagree entirely that the defendant has not had an opportunity to have its case heard. Natural justice prescribes that people have to have the opportunity to have their case heard, but in this case they have had their opportunity and they’ve blown it.
ZICKMAN: Your Honour, I wasn’t suggesting that the defendant would be denied the chance to have natural justice.
HIS HONOUR: You say that the defendant hasn’t had the opportunity to file a defence, and it is simply wrong on the papers. They have had the opportunity.
ZICKMAN: Your Honour, I am just submitting respectfully, that when you look at the defence, you will see that the defence does make out that the makings of a good defence and that you would consider that. The second thing, your Honour, is that if your Honour is mindful as to what to do about next week, we submit that your Honour might consent that we would go ahead on Monday, that the plaintiff would start its case. It would make good use of the first and second hearing dates -
HIS HONOUR: You mean the plaintiff ought to start their case without knowing what the defendant’s expert’s report is, or the evidence? It’s one thing to have a forensic advantage by not serving your documents; it’s another thing asking the plaintiff to start its case before you’ve even filed your documents. Not happening. I’ll consider those points.”

21 I have set out the debate at length because it reveals what might be said to be a not uncommon set of circumstances – almost an archetypal example of the tension between the need for compliance with timetables and the common experience of their not being complied with for reasons that are debatable. Here, there was a small building case, with the mechanics of its conduct reduced to a dispute about particulars, when in all likelihood, an exchange of views of experts early would have helped to resolve the matter. The protestations of counsel for the defendants might be thought, possibly, to cover a less than diligent application to the task at hand by the defendants. The Magistrate was less than impressed. He was fully entitled to take that view. Importantly, the Court’s resources and the speedy disposition of the matter had been compromised. Whether or not that consequence was one for which the defendants were solely to blame may, however, be open to question. Nevertheless, his Honour returned and delivered an oral judgment.

22 His Honour first recited the facts, emphasising a three day special fixture. He noted that the plaintiff was at fault to some degree, but that the defendants had had since 16 June to deliver all their evidence. He noted the inappropriateness of seeking to vacate a date without a notice of motion, referring to Practice Note 1. The next point dealt with was the over-riding provisions of the Civil Procedure Act, s 56. Dennis v Australian Broadcasting Commission [2008] NSWCA 37 at [28] and [29] was referred to and quoted from. These paragraphs involved a specific point being made by the Court that Queensland v JL Holdings Pty Ltd [1997] HCA 1; 189 CLR 146 had been the subject of, at least partial, statutory change by s 56. The Magistrate emphasised the relevant case management considerations in the following passages:

“Such authority also applies to vacation of hearing dates where there is no notice of motion and where there has been a failure to comply with the orders of the court. After all, if the orders of the court are not complied with, it brings the law into disrepute. More than that, it delays matters; and more than that, where a magistrate has been specially allocated to a special fixture and three clear working days apply to that, a party who have been non-compliant seeks to vacate the hearing date without a notice of motion, without any warning by the way of appropriate process through the court, then the allocation of resources to the community of New South Wales must be .. (not transcribable) .. case management, must be able to take into account and determine whether the parties will have a further opportunity to comply with orders of the court.
After all, if the party has not complied with an order of the court, that is if the matter has been listed since February for hearing in July, then one has to wonder whether there is ever going to be compliance. Of course when a matter is simply moved in court as it were, or more appropriately moved, of course, it is difficult for the court to know what evidence there is. All I can see is submissions as to why the matter ought to be vacated, and those submissions essentially seem to me from my notes that I took, that the expert is overseas and will not be returning in time, that because of the loss of some weeks because of the plaintiff’s failure to comply, nothing has been done. The defendant simply cannot get its evidence on within the timeframe that has been set by the court. Keep in mind that that timeframe was set by the court in February and there has been substantial compliance by the plaintiff in the sense that six weeks ago, they had completed all their particulars, over twelve months ago they had served their .. (not transcribable) .. statements.”

23 The Magistrate returned to the question of the failure to file a motion. He then said the following:

“ … It is a question, in my view, of balancing the two obligations to the court.
(1) to provide a forum for parties, the fundamental duty as it is often described, provide a forum for the parties to resolve their disputes and giving them an opportunity to them to be heard and determined according to the rules and according to law.
(2) is providing for the quick, just and cheap resolution of those problems .. (not transcribable) .. that compliance with the Practice Notes and compliance with directions of the court.
Further, if necessary, with a view to ensuring that there is efficient and effective case management of these matters and in the case of .. (not transcribable) .. the magistrate is not left to pick up work or having to pick up other work or be reallocated other work if it is at all possible in such a short time-frame prior to the hearing date.”

24 His Honour then referred to Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 and the effect of delay in denying justice and the decision of Campbell J (as his Honour then was) in Szczygiel v Peeku Holdings [2006] NSWSC 73 in support of his Honour’s emphasis on s 56. He then said:

“… But in considering all of those factors, in my view, the defendant has had a .. (not transcribable) .. of complying within a very reasonable timetable, say, in particular, since 16 June 2008 it has not complied with the court’s directions, it has not complied with practice directions, it rises to seek a vacation of a hearing date without a notice of motion and thus in breach of not only the rules of the court, but also in breach .. (not transcribable) .. overriding obligation to ensure a quick, just and cheap resolution of matters, and its overriding obligation to ensure that the people of New South Wales are served by a system of justice that does not allow parties to simply obtain a vacation of hearing dates in such an expensive and wasteful manner as in this case.
Taking into account all of those factors and the balance of tests that I must apply between the fundamental duty of this court to resolve disputes and the s 56 and .. (not transcribable) .. type considerations, in my view, it is .. (not transcribable) .. that the defence is to be struck out.”

25 His Honour then went on to make the following order:

“The defence is struck out, the hearing is vacated. The hearing of 28, 29 and 30 July is vacated.”

26 This order would have put the parties in the following position:

(a) the plaintiff could have moved for judgment under Uniform Civil Procedure Rules 2005 Part 16 r 16.3, or r 16.7;

(b) the defendants could have moved the Court for leave to file a defence with the attendant difficulties that it may have had, even if it were not accompanied by all final evidence to be relied on.

27 Another course that could plainly have been taken would have been not to vacate the dates and force the defendants on, leaving it to the Magistrate at trial (if application were made) to admit evidence on behalf of the defendants that was brought forward outside the terms of the existing timetable.

28 The matter did not end with the order first made. Mr Maloney (solicitor for the plaintiff) said the following:

“MALONEY: This is an unliquidated claim. It is a claim for damages. In the ordinary course, if a defence is struck out, liability would be entered. The court would still require a hearing date in respect of assessment of damages. In my respectful submission, we should hold on to one of those dates so that the court can determine the damages.

HIS HONOUR: How is the defendant going to file any evidence on the damages?
MALONEY: I suppose that is a problem. It’s the same problem we faced at the beginning of this hearing. The court will have to adjudicate damages at some point, otherwise the plaintiff’s claim -
HIS HONOUR: The hearing is vacated, but the matter is still listed for 28 July 2008 for assessment of liquidated damages only.”

29 Thus, the hearing on liability was vacated but a hearing on damages was fixed. In effect, the defence was struck out and judgment on liability entered. This approach terminated the possibility of the defendants having their case heard once and for all, even if only on the plaintiff’s evidence.

30 The appeal to the Supreme Court in a large number of paragraphs raised three essential complaints:

(a) The first was that the Magistrate gave undue weight to case management and insufficient weight to the consequence of depriving the defendants of a hearing on the merits, in circumstances where Hans Pet had been partially to blame for the delay.

(b) The second focused upon the weight given by the Magistrate to the failure to file a notice of motion to vacate the date and upon the proposition that striking out the defence was disproportionate to the default of the defendants.

(c) The third was that the decision of the magistrate constituted a denial of procedural fairness.

31 The learned primary judge recognised the caution that should be exercised in the review of exercises of discretion in practice and procedure, referring to House v R [1936] HCA 40; 55 CLR 499 at 504-507. The primary judge thought that the Magistrate had considered all relevant matters, saying at [21]:

“[21] … The learned Magistrate, who is extremely experienced, took into account all of the relevant matters about which Mr and Mrs Cassar now complain. Further, he did not take into account any irrelevant matters. While an appellate court, either as presently constituted or otherwise, may have come to a different view as to the balance of justice as between the parties, the learned Magistrate took a view, understandably, that sufficient opportunity had been given to Mr and Mrs Cassar to adduce such evidence as was required, and that the Local Court was not going to grant an indulgence that would allow them to put on evidence at a later time, except in relation to quantum, thereby delaying the proceedings.”

32 The primary judge concluded that, with one exception the magistrate had balanced the considerations in the Civil Procedure Act; saying at [28] and [29]:

“[28] As earlier stated, the Magistrate has taken into account all relevant matters. He has not taken into account matters that were irrelevant. He has exercised his discretion bearing in mind the statutory injunctions in the Civil Procedure Act 2005. He has, save as to one aspect, exercised a discretion which was available to him and with which this Court should not interfere. The result, again save as to one aspect, is not manifestly unreasonable.
[29] Notwithstanding the foregoing, it is fair to say that Hans Pet was significantly late in the provision of essential particulars that were required by the Local Court. Further, some of the evidence that was directed to be served, by Hans Pet, was not served until well after the date ordered by the court. It is understandable that Mr and Mrs Cassar may feel a sense of grievance that their inability, because of the failure to have further and better particulars, to serve their affidavits should be ‘punished’ in a manner more severely than was the delay of Hans Pet that caused it. Notwithstanding the feeling of grievance, each of those matters were matters considered by the learned magistrate and his exercise of discretion was informed by those factors.”

33 That one exception was the striking out of the defence. The primary judge, in effect, concluded that the striking out of the defence (in circumstances, that implicitly carried with it an order for judgment) was disproportionate and was a punishment for the late filing of evidence. He expressed himself in terms of natural justice, as follows at [32] to [35]:

“[32] It would seem that a proper application of the principles, without denying to Mr and Mrs Cassar their ability to present the case that they put before the court, in accordance with the court’s directions, would be confined to refusing to allow an indulgence for the filing of evidence by Mr and Mrs Cassar, and requiring Mr and Mrs Cassar to proceed with the hearing in the absence of their evidence.
[33] Mr and Mrs Cassar have filed a defence. They were entitled to file that defence, without adducing any evidence. The failure to adduce evidence has been ‘punished’ by striking out the defence. The defence has been filed in accordance with the court’s directions.
[34] In my view, Mr and Mrs Cassar have been denied natural justice, because they have been denied the opportunity of presenting their case based upon the defence filed and served in accordance with the court’s directions. It is not suggested that the defence is either embarrassing or does not disclose a proper defence. The refusal to grant an indulgence, where there has been adequate opportunity to comply with directions, is not a denial of procedural fairness. By the striking out of a defence, already filed, is such a denial.
[35] The difficulty for this Court is that the alternative, namely, the exercise of discretion by the Local Court to allow the matter to proceed, while refusing to allow Mr and Mrs Cassar to adduce evidence that may be available, is a very different exercise than the discretionary judgment of the Local Court now subject to challenge. The qualitative difference in the exercise of discretion was, quite properly, conceded by counsel for Hans Pet in the proceedings before this Court, who suggested that such a course may be a denial of natural justice. It is unnecessary for the Court to comment.”

34 Hans Pet complains that his Honour erred in finding any vitiating or appealable error in the approach of the Magistrate, in particular in circumstances of an express power in the Civil Procedure Act, s 61 to take the very step of striking out the defence.

35 The Cassars put forward a Notice of Contention supported by the same submissions put to the primary judge which included submissions that the Civil Procedure Act, ss 56-58 had not been applied in a judicial and proportionate manner.

Disposition of the appeal

36 The arguments before this court illuminated the difficulty of review of a decision such as that made by the Magistrate. The Civil Procedure Act, ss 56-61 brings about a new statutory balance among various factors in litigation including court and party efficiency and the delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering justice, they corrode the ability of the courts to provide individual justice. Especially in a court as busy as the Local Court, it is vital that the judicial system work in a way that denies, categorically, the party against whom a legitimate claim or grievance is brought the opportunity to say, with justification: “So I owe you $x, what are you going to do about it? Sue me in Court? That will take years.” The reforms that have taken place under the Civil Procedure Act and the evident attempt by the Local Court to ensure efficiency of service for the public can thus be seen not merely to reflect worthy governmental and judicial efforts for efficiency, but also to be vital for the provision of timely individual justice. To these salutary ends significant powers of case management have been placed in the hands of judicial officers which, if exercised, can often be seen to have sharp, and sometimes detrimental effects on the claims of parties. Such consequences can be seen in the very nature of the powers in the Civil Procedure Act, s 61(3):

“61 (3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following:

(a) it may dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim,

(b) it may strike out or limit any claim made by a plaintiff,

(c) it may strike out any defence filed by a defendant, and give judgment accordingly,

(d) it may strike out or amend any document filed by the party, either in whole or in part,

(e) it may strike out, disallow or reject any evidence that the party has adduced or seeks to adduce,

(f) it may direct the party to pay the whole or part of the costs of another party,

(g) it may make such other order or give such other direction as it considers appropriate.”

37 The placing of the kinds of power found in the Civil Procedure Act, s 61 in the hands of all judicial officers has been made expressly subject to s 58, the terms of which are important. In s 58(1) it is made clear that the Court must seek to act “in accordance with the dictates of justice”. Section 58(2) then gives content to this phrase:

“58(2) For the purpose of determining what are the dictates of justice in a particular case, the court:

(a) must have regard to the provisions of sections 56 and 57, and

(b) may have regard to the following matters to the extent to which it considers them relevant:

(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,

(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case.”

38 What is vital to appreciate is that the regard to both ss 56 and 57 is statutorily compulsory: s 58(2)(a). They are considerations that are relevant in the sense discussed in Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; 162 CLR 24. That is, they are relevant in the sense that the statute requires them to be taken into account. The factors in s 58(2)(b) may be taken into account but whether they are is a matter for the tribunal.

39 Section 57 is in the following terms:

“Objects of case management

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects:

(a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).”

40 For the disposition of this appeal what appears in s 57(1), and in particular para (a), is vital.

41 The content of the statutory requirement “to have regard to” a specific matter has been discussed often and is not in dispute. Spigelman CJ (with whom Macfarlan JA and Young JA agreed) said the following in Commissioner of Police for New South Wales v Industrial Commission of New South Wales & Raymond Sewell [2009] NSWCA 198 at [73]:

“[73] A statutory requirement to ‘have regard to’ a specific matter, requires the Court to give the matter weight as a fundamental element in the decision-making process. ( R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329; R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 333, 337-338; Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589 at [71]-[73]). An equivalent formulation is that the matter so identified must be the focal point of the decision-making process. (See Evans v Marmont (1997) 42 NSWLR 70 at 79-80; Zhang supra at [73].)”

42 Here the primary judge characterised the error of the Magistrate as the denial of natural justice. Of course, there was no denial of any opportunity to be heard at the procedural argument before the Magistrate. Rather, the Cassars had been denied an opportunity to be heard on the substantive claim. Yet, as Hans Pet pointed out on appeal, such is the very kind of consequence contemplated by s 61. For these reasons, the use of the phrase “natural justice” might be seen to have its difficulties: cf Palmer Tube Mills (Aust) Pty Ltd v Semi [1998] 4 VR 439 at 452. The primary judge’s conclusion as to a denial of procedural fairness can be seen to be a conclusion that the response of the Magistrate was disproportionate to the conduct of the Cassars.

43 In my view, the Magistrate did err for reasons that are advanced under the notice of contention. There is no record in the transcript of the Civil Procedure Act, s 57 being expressly referred to. It is possible that one of the “not transcribable” sections contained a reference to s 57. Practice Note 1 contains a reference s 57 and it (the practice note) was referred to. However, nowhere in the reasons of the Magistrate and discussion that preceded can one find the Magistrate having regard to s 57(1)(a) as a matter to be given weight as a fundamental element in the decision making process. If he had given it weight, it may well have been outweighed by other factors, though it is difficult to see how any proportionate response to a failure to file evidence could require more than a refusal to vacate the dates and a decision that the resolution of the parties’ controversy should proceed on the evidence then filed.

44 It was submitted that the Cassars had the opportunity to choose that course and rejected it. The transcript does not reveal this; and, in any event, it was not a matter of choice for them.

45 The effect of the Magistrate’s orders was not to vacate the dates but also to deny the Cassars the use of the dates even without evidence, except as to quantum. This order was made without giving the kind of weight Parliament has said was compulsory to the factor in s 57(1)(a).

46 As the Court of Appeal of Victoria said in British American Tobacco Australia Services Ltd v Cowell (Representing the Estate of McCabe (deceased)) [2002] VSCA 197; 7 VR 524 at 588 [178] about the power to strike out pleadings for default, the power is not intended to be used to punish the litigant. The proportional use of the powers in s 61 is brought about by giving the fundamental weight to the (sometimes competing) considerations in ss 56 and 57 required by s 58(2)(a) and bringing to bear such of the matters set out in s 58(2)(b) as the Tribunal thinks appropriate.

47 My reasons should not be taken as undermining, in the slightest, the authority and rigour ss 56-61 give to judicial officers in the just, quick and cheap disposal of controversies. This will often require the hacking away of a morass of technicalities and excuses for delays often put forward by less than diligent litigants. That said, the terms of s 58 (and the consequential importance of s 57, as well as s 56) should be borne in mind when exercising these case management powers.

48 The orders I propose are :

(a) leave to appeal granted;

(b) the appellant to file a Notice of Appeal within 7 days;

(c) appeal dismissed;

(d) appellant to pay the respondent’s costs.

49 CAMPBELL JA: I agree with Allsop ACJ and with the additional remarks of Young JA.

50 YOUNG JA: I agree with Allsop ACJ.

51 I would add to his Honour's remarks in [36] that unless litigants can be assured of a timely hearing of their claims, the way is opened for self help or worse.

52 The "remedy" of striking out a defence has been included in Court rules for over a century. Virtually all the learning on it tells us that it is an extreme measure to be taken as a last resort; see for example Twycroft v Grant [1875] Eng WN 201; Haigh v Haigh (1885) 31 Ch D 478.

53 If a court does order a defence to be struck out, it must consider what consequences it intends should follow. The direct consequence is often merely that the defendant is in the same position as if it had never filed a defence; see generally Oskar v Bank of New South Wales [1984] WAR 262.

54 With respect, the learned magistrate does not appear to have directed his mind to this last matter.

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