Howell v Weston

[2001] NSWCA 174

CITATION:	HOWELL v. WESTON [2001] NSWCA 174 revised - 11/07/2001
FILE NUMBER(S):	CA 40947/99
HEARING DATE(S):	08/06/2001
JUDGMENT DATE:	10 July 2001
PARTIES :	Paul Roch Howell (Appellant) William Weston (Respondent)
JUDGMENT OF:	Powell JA at 1; Beazley JA at 45; Hodgson JA at 51

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 7767/97
LOWER COURT JUDICIAL OFFICER :	Garling DCJ

COUNSEL:	D. T. Kennedy SC/J. Klarica (Appellant) L. G. Foster SC/G.A. Sirtes (Respondent)
SOLICITORS:	Dennis & Company (Appellant) Deacons Lawyers ( formerly Deacons Graham & James) (Respondent)
CATCHWORDS:	COURTS AND JUDGES - District Court - Action for damages alleging professional negligence - Application for dismissal on grounds of want of prosecution - Application adjourned on application of plaintiff - Show cause notice given for adjourned day - No appearance of plaintiff on adjourned day - Action dismissed with costs - No formal reasons given - Whether error of law - Whether, if Court of Appeal called upon to exercise discretion, action should be dismissed. D
DECISION:	(By majority) Appeal allowed.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40947/99
DC 7767/97

POWELL JA

BEAZLEY JA

HODGSON JA

10 July 2001

HOWELL v. WESTON


JUDGMENT

1    POWELL JA: By leave granted by this Court on 24 July 2000, the Appellant appealed against an order made by Garling DCJ in the District Court on 8 October 1998, on which day his Honour dismissed with costs the proceedings which had been brought by the Appellant seeking to recover from the Respondent damages which he claimed to have suffered as a result of what was alleged to have been the Respondent's professional negligence.

2 Garling DCJ's order was made on the application, pursuant to the provisions of DCR Pt 18 r 3, of the Respondent upon the ground of the Appellant's failure to prosecute those proceedings with all due dispatch.

3 DCR Pt 18 r 3 provides as follows:

"3(1) Where a plaintiff makes default in complying with any order or direction as to the conduct of the proceedings, or does not prosecute the proceedings with due dispatch, the Court may, on application by any party or of its own motion, dismiss the proceedings or make such other order as the Court thinks fit.
(2) Where proceedings are dismissed under subrule (1), rules 7 and 8 apply as though the dismissal were a discontinuance.
(3) The Court may not make an order under subrule (1) without giving the plaintiff a reasonable opportunity to be heard.
(4) The Court may, on application by any party, set aside an order that is made on the Court's own motion under subrule (1)."

4    The Appellant's claim for damages as set out in the Statement of Claim filed on his behalf to commence the proceedings, arose out of his retaining the Respondent, in mid-1986, to act for him, as his solicitor, in connection with a loan of $110,000.00 proposed to be made to a company known as Deonmero Pty. Limited ("Deonmero"), such loan to be secured by a registered second mortgage over a property in Wyee Street, Albury, which property Deonmero was said then to be in the process of purchasing, the first mortgage over the property being intended to be given to AGC (Advances) Limited ("AGC") which it was proposed would also advance moneys to enable the purchase to be completed.

5    In that Statement of Claim, the Appellant alleged (inter alia):

"4. On or about 25 August 1986, the plaintiff instructed the defendant that he would consent to the said first mortgage securing advances by AGC to Deonmero Pty. Ltd. up to $280,000.00, but no more. He further instructed the defendant that the said proposed loan of $110,000.00 to Deonmero Pty. Limited was to be repaid to him within one month of the date of loan and was to attract interest at 21% reducible to 18% for prompt monthly payment, until the said loan was repaid.
………
7. In breach of contract and in breach of the before mentioned duty of care, the defendant failed:
(a) to comply with the plaintiff's instructions that the said first mortgage to AGC secured advances by it to Deonmero Pty. Limited not exceeding $280,000.00;
(b) to inform the plaintiff prior to settlement of the sale of the property that the said first mortgage in fact secured advances from AGC to Deonmero Pty. Ltd. in the sum of approximately $500,000.00;
(c) to obtain a duly executed mortgage document from Deonmero Pty. Ltd. in registrable form securing the sum of $110,000.00, plus interest as aforesaid, over the property in favour of the plaintiff prior to settlement of the sale of the property;
(d) to obtain a formal Priority Agreement executed by AGC and the plaintiff or alternatively, a written confirmation or undertaking from AGC, providing, inter alia, for the said first mortgage to secure advances from AGC to Deonmero Pty. Ltd. up to $280,000.00 but no more and further providing for the said second mortgage to rank immediately behind the said first mortgage in priority on any mortgagee sale of the property and securing advances from the plaintiff to Deonmero Pty. Ltd. in the sum of $110,000.00, plus interest as aforesaid;
(e) to obtain the consent of AGC to registration of the said second mortgage securing the sum of $110,000.00, plus interest as aforesaid, over the property prior to settlement of the sale of the property;
(f) to cause the said second mortgage to be registered on the title to the property following immediately upon registration of the said first mortgage;
(g) to take reasonable precautions on behalf of the plaintiff, such as the obtaining of a formal valuation of the property or otherwise, such as to ensure that on any mortgagee sale of the property the plaintiff's interests as proposed second mortgagee, in the circumstances, were adequately and properly protected;
(h) to obtain a written personal guarantee from a director of Deonmero Pty. Limited, to adequately and properly protect the plaintiff's interests as proposed second mortgagee, in the circumstances."

6    Further in that Statement of Claim, the Appellant alleged, first, that Deonmero defaulted in its obligations under the first mortgage to AGC; second, that, thereafter, AGC, exercising its power of sale, sold the property and appropriated the whole of the proceeds of sale to its own use; third, that, in or about July 1989, the Supreme Court of Victoria ordered that Deonmero be wound up; and, finally, that no part of the loan of $110,000.00 made by him to Deonmero or any interest thereon had been, or would in the future be, repaid or paid to him.

7    Despite the fact that it must have been clear to the Appellant by no later than January 1989 that it would be unlikely in the extreme that he would recover any part of the $110,000.00 which he had advanced to Deonmero, no proceedings were commenced on his behalf against the Respondent until 9 July 1992 when the Statement of Claim was filed in the Common Law Division of the Court and given proceeding number CLD 014178 of 1992.

8    The Appellant asserts - which assertion may be open to some doubt (see Christopoulos v. Angelos (1996) 41 NSWLR 700; Registrar-General v. Cleaver (1996) 41 NSWLR 713; cf. Scarcella v. Lettice [2001] Aust Torts Reports 66,476) - that the limitation period in respect of the causes of action on which he sued expired on 18 November 1992, which date appears to have been derived from the date on which the contract for the purchase by Deonmero of the subject property was completed. But whether that assertion be correct or not, it seems clear enough that the limitation period in respect of those causes of action has long since expired.

9    An Amended Statement of Claim was filed on 6 April 1993.

10    Thereafter, little appears to have been done on behalf of the Appellant to ready the proceedings for hearing until 9 September 1997 when his present solicitors commenced to act on his behalf in the place of his original solicitors.

11    Although, in July 1993, the Respondent's solicitors had served on the Appellant's original solicitors a Notice for Discovery, and although on a number of occasions over the following two years, the Respondent's solicitors had pressed the Appellant's original solicitors to have a Verified List of Documents filed and served, no such list had been filed or served by November 1995, when there was filed on behalf of the Respondent a Notice of Motion seeking orders that the proceedings be dismissed or stayed, or in the alternative, an order for discovery. The latter order appears to have been made on 22 November 1995.

12    Despite the fact that, thereafter, a Verified List of Documents was filed on behalf of the Appellant, the Respondent's solicitors asserted that the discovery which had been given by the Appellant was deficient in a number of respects of which they advised the Appellant's original solicitors in May 1996. However, by September 1997, nothing further appears to have been done on the Appellant's behalf to deal with the matter.

13 In October 1997, following the coming into operation of the provisions of the District Court Amendment Act 1997, the proceedings were, pursuant to the provisions of s.143(5) of the District Court Act as amended by the Amendment Act, transferred from the Supreme Court to the District Court where they were given proceeding number DC 7767 of 1997.

14    Notwithstanding the change in the Respondent's solicitors and the transfer of the proceedings to the District Court, little, if anything, appears to have been done on behalf of the Appellant to ready the proceedings for trial - this, so it seems to have been said, was due to the fact that the Appellant's original solicitors claimed a lien over their file and documents.

15    The proceedings appear to have been listed before the Registrar of the District Court for call-over on 17 December 1997, on which day, because the Appellant's solicitors had not obtained the file and because of the outstanding question of discovery, the proceedings were adjourned until 26 May 1998.

16    In a letter written by them to the Appellant's present solicitors on 1 April 1998, the Respondent's solicitors, after referring (inter alia) to the call-over before the Registrar of the District Court on 17 December 1997, and to the outstanding question of discovery, wrote (inter alia):

"The plaintiff's former solicitors advised on 20 November 1996 that they had discovered everything that was in their possession. We indicated that, if it was alleged that the above documents had been destroyed or otherwise disposed of, this was a matter which must be addressed by the plaintiff in his list of documents. To date this matter has not been addressed. Based on our instructions, it is essential that the issue of these missing documents be finally resolved. We are instructed to issue a Notice of Motion seeking the discovery of these documents in the event that the plaintiff is not prepared to consent to their provision or provide an affidavit deposing as to the whereabouts of these documents.
Could you please advise us by 5.00 p.m. Wednesday 8 April 1998 whether the plaintiff is prepared to provide further discovery or an affidavit deposing as to the whereabouts of the missing documents. In the event that the plaintiff is not prepared to comply with our client's request, we are instructed to issue a Notice of Motion seeking the provision of this further discovery without further notice to you. This letter will be produced on the question of costs of such an application."

17    The proceedings appear to have been listed again before the Registrar of the District Court on 26 May 1998, on which day directions as to the future conduct of the proceedings appear to have been given and the proceedings were listed for further directions on 16 July 1998. Those directions appear to have been complied with by the Respondent but not by the Appellant.

18    On 7 July 1998 there was filed on behalf of the Respondent a Notice of Motion, returnable on 16 July 1998, in which were sought the following (inter alia) orders:

"1. The proceedings by the plaintiff against the defendant be dismissed for want of prosecution pursuant to Part 18 rule 3.
2. The plaintiff pay the costs of the defendant of this proceeding.
3. Alternatively, the plaintiff be compelled to provide the further and better discovery sought by the defendant.
4. The plaintiff pay the costs of the defendant of this application."

19    On 15 July 1998, the Appellant's present solicitor had prepared, and had had sworn, two Affidavits, one by the Appellant and the other by himself. The Affidavit sworn by the Appellant was as follows:

"1. I am the plaintiff herein.
2. I previously employed Mr. John Rose as my solicitor, but now employ Bruce Dennis of Dennis and Company Solicitors.
3. I have previously given an affidavit of discovery. At the time the affidavit of discovery was prepared I had given my solicitor, John Rose, all of the documents in my possession which were relevant to this case.
4. I understand that a question arose as to the adequacy of the discovery in that the defendant requested copies of communications between myself and my creditors at the time preceding the sale of the property. I do not have any such copies of correspondence in my possession. I do not recall any such written correspondence at that time. If there was correspondence it has been disposed of as the incident was over ten (10) years ago.
5. I further understand the documentation between myself and Dr. Bhowal was also requested. I do not have any copies of correspondence between myself and Dr. Bhowal. I do recall writing one (1) letter to Dr. Bhowal, but I do not recall a reply. I believe that I handed a copy of this letter to the defendant who was then acting for me as a solicitor.
6. I further understand that a request has been made for copies of correspondence between myself and the Law Institute of Victoria, and in respect of my letter of complaint to the Law Institute of Victoria in April 1998. I do not have a copy of this letter. I understand that the defendant has a copy of this letter and, in any event, correspondence from the Law Institute would no doubt be readily available directly from themselves. This correspondence occurred after the event of fault (sic) complained of in the Statement of Claim, but did relate to the same subject matter.
7. In relation to the letter of 16 December 1991 from my former solicitors to Messrs. Murphy Moloney (sic), I was lead (sic) to believe by my former solicitor, Mr. John Rose, that he had forwarded a copy of that letter to the solicitors for the defendant. I do not have a copy of this letter in my possession as the file of my former solicitor, Mr. John Rose, is still in his possession and he is a claiming a lien for legal costs not only in this matter but a number of other matters which he has acted for me. If this letter is not in the hands of the solicitors for the defendant, then no doubt a copy of it could be obtained from Messrs. Murphy Moloney (sic) or from Mr. John Rose.
8. I am keen to have this matter finalised and request that it be set down for hearing."
while the Affidavit sworn by Mr. Dennis was as follows:

"1. I am the solicitor for the plaintiff herein.
2. I spoke to my client's former solicitor, Mr. John Rose on 15th July 1998. He informed me that he believed that all questions of discovery had been resolved with the defendant, and that the defendant had been given photocopy access all documents (sic) which the defendant required.
3. Mr. Rose stated words to the effect that he would consider making the file available, subject to advice from another solicitor that he is instructed to advise him in relation to his lien, should the matter be set down for hearing."

20    On 16 July 1998, both the proceedings and the Notice of Motion which had been filed on behalf of the Respondent were listed before Garling DCJ. The transcript record for that day records (inter alia) the following:

"DENNIS: … It's a case where I've taken over from another firm. I'm not yet on the record and I don't yet have the file.
HIS HONOUR: What do you want to do about it?
DENNIS: I would ask for the matter to go over for a period of time in relation to my friend's notice of motion. He's seeking some further documentation from us and I'll attempt to find out if that documentation does exist. As far as my client is aware he gave all the documentation he had to his former solicitor who itemised that in a list of documents. However, my friend quite rightly points out that some documents must exist because they're referred to in other documents but they hadn't been particularised. But I don't have copies of them.
HIS HONOUR: What do you say to that. Are you content for it to go over to another day?
HALL: The first contact that my friend made with our office was yesterday evening …
HIS HONOUR: Just give me a yes or no.
HALL: No I'd like to pursue the motion to have the matter dismissed pursuant to Part 18.
………
HIS HONOUR: I will leave it in the list. Can I have what you've got there please.
DENNIS: Yes your Honour, it's an affidavit of myself and an affidavit of the plaintiff.
HIS HONOUR: Fill in a form with your telephone numbers but don't go away please and I'll consider what we'll do with it in a short while."
then, after a short adjournment:

"DENNIS: (sic) Now I've agreed to stand the matter over for a fourteen day period and I will …
HIS HONOUR: I thought you wanted to go on.
DENNIS: (sic) I've just sought a few instructions and we've come to an agreement that provided that the plaintiff either provides the further discovery requested within fourteen days or file and serve an affidavit about those documents
HIS HONOUR: I'm not standing it over for fourteen days. The matter can go over to 6 October at 11.00 a.m. and it's listed to show cause why the statement of claim of the defences (sic) shouldn't be struck out and we hand you a notice which must be very strictly complied with please."

21    Although the documents which are before the Court do not include any copy of the Notice referred to by Garling DCJ, it would seem that it was, in part, as follows:

"This matter is listed to show cause as to why the statement of claim, third party notice, cross-claims or any defence thereto should not be dismissed for want of prosecution. Should any party wish the court to consider any submissions, they should be placed in writing and filed and served at least five days prior to the directions hearing date. All parties are reminded that this is now a very serious matter and the orders of the court must be complied with."

22    On 17 July 1998, the Respondent's solicitors wrote to the Appellant's solicitors as follows:

"We refer to the show cause hearing at the District Court before Garling J on 16 July 1998 and to the conversations between Matt Hall and Bruce Dennis on that day.
We note that it was agreed between the parties that the show cause hearing and the hearing of the applicant's notice of motion filed on 8 July 1998 be adjourned provided that within 14 days the plaintiff either:
(a) provide further discovery of those documents referred to in paragraphs 4 and 5 of the defendant's submissions filed on 8 July 1998, or
(b) file and serve an affidavit of discovery in relation to same.
We further note that Garling J adjourned the show cause hearing and hearing of the defendant's above motion until 6 October 1998.
We look forward to hearing from you in relation to the plaintiff's further discovery."

23    On 18 September 1998, the Respondent's solicitors wrote again to the Appellant's solicitors, on this occasion as follows:

"We refer to our letter of 17 July 1998.
We note that we still have not heard from you regarding the plaintiff's further discovery. We are particularly concerned about the plaintiff's failure to discover the enclosures referred to in its expert report from Murphy & Moloney. These documents have never been received by our office. It is essential that at least the issue of these documents is resolved. If you have been provided the plaintiff's file from his former solicitor, we cannot understand why you have not discovered these documents. The report from Murphy & Moloney is incomprehensible without their inclusion.
If you have still not obtained the plaintiff's file from his former solicitors, we fail to understand how you can advise the Court that you are of the opinion the matter is ready to be set down for hearing.
We put you on notice that at the show cause hearing on 6 October 1998 we will be proceeding with the defendant's Notice of Motion to have the plaintiff's Statement of Claim be (sic) struck out.
This letter and our letter of 17 July 1998 will be produced on the issue of costs at this application."

24    The proceedings and the Notice of Motion were again listed before Garling DCJ on 6 October 1998, on which day there was no appearance for the Appellant but Ms. K.M.F. Raymond appeared for the Respondent. The transcript for that day records:

"HIS HONOUR: Do you seek to have it struck out?
RAYMOND: Yes I do your Honour and I move on a Notice of Motion that was filed but it was returned on 16 July and has been stood over until today.
HIS HONOUR: The matter is struck out pursuant to Part A (sic) (2)?
RAYMOND: Yes.
HIS HONOUR: Rule three. Do you seek costs?
RAYMOND: Yes I do, your Honour.
HIS HONOUR: Plaintiff to pay defendant's costs.
RAYMOND: Your Honour are those orders made pursuant to the Notice of Motion or are they just the costs of today.
HIS HONOUR: No, no, they are costs of the case.
RAYMOND: Thank you, if the Court pleases.
HIS HONOUR: In toto. It's actually - it is not struck out, its dismissed. Dismissed."

25    Thereafter, on 2 November 1998, there was filed on behalf of the Appellant a Notice of Motion in which was sought the following (inter alia) order:

"1. That the matter be restored to the list."

26    The Notice of Motion was listed for hearing before Garling DCJ on 6 April 1999, on which day his Honour purported to discharge the order which had been made by him on 6 October 1998 and to "reinstate" the Notice of Motion which had been filed on behalf of the Respondent, the hearing of which Notice of Motion he then purported to adjourn to 23 April 1999, and purported to list the proceedings for directions on 26 July 1999.

27    The Respondent then sought leave to appeal from the order purportedly made by Garling DCJ on 6 April 1999, leave to appeal being granted, and the appeal being upheld by the Court (Meagher, Stein and Fitzgerald JJA) on 2 November 1999 on the ground that, the proceeding having been dismissed - and not struck out - on the Motion of the Respondent, Garling DCJ had no power to restore it.

28    Thereafter, as I have noted, the Appellant sought, and was granted, leave to appeal from the order made by Garling DCJ on 6 October 1999.

29    When the appeal was called on for hearing, D.T. Kennedy SC appeared with Mr. Klarica for the Appellant, while Mr. L.G. Foster SC appeared with Mr. Sirtes for the Respondent.

30    In the Written Submissions which were filed on behalf of the Appellant, four grounds of error on the part of Garling DCJ were advanced, they being:

(a) no Affidavit was read and admitted into evidence in support of the Notice of Motion. The orders sought in the Notice of Motion were not consented to by the Appellant and therefore his Honour could not make orders on the Notice of Motion without some evidence in support of the Motion being formally tendered in the proceedings;

(b) whatever the reason for the non-appearance of the Appellant's legal representatives, his Honour should have stood the proceedings down for the legal representatives of the Appellant to attend before making an order dismissing proceedings which then (sic) became statute barred under the Limitation Act 1969. In those circumstances natural justice either required his Honour to stand the proceedings down to locate the Appellant's legal representatives or adjourn the proceedings so that the Appellant himself could attend and make submissions as to why the orders sought in the Notice of Motion should not be granted;

(c) given that the effect of dismissing the proceedings on the Respondent's Notice of Motion had the consequence that the proceedings then became statute barred and could not be reinstated, his Honour was under an obligation to give reasons for dismissing the proceedings. His failure to give reasons for his decision to dismiss the proceedings constituted an error of law as the Appellant had a statutory right of appeal which could not be properly exercised unless his Honour gave reasons ( Pettitt v. Dunkley [1971] 1 NSWLR 376 );

(d) His Honour erred in dismissing the proceedings on the Respondent's Notice of Motion because he failed to take into account a most relevant consideration, i.e. that the effect of his order was to terminate the proceedings so that further proceedings were barred by virtue of the provisions of the Limitation Act 1969. By dismissing the proceedings on the Respondent's motion, rather than of his own motion, his Honour deprived the Court of any power to reinstate the proceedings.

31    The Written Submissions which were filed on behalf of the Respondent proceeded along the following lines:

(a) there is no inviolate principle that a judge must base every decision on Affidavit evidence. In the instant case, Garling DCJ had specifically fixed the matter for the Appellant to show cause as to why the proceedings should not be dismissed. There was no appearance by the Appellant. It was within the discretion of the Court to dismiss the proceedings on the self evident absence from the Court of the party directed to attend and explain why that very thing - dismissal - should not occur. The Respondent's Motion was for dismissal for want of prosecution. Absence from Court is by itself an indicia (sic) of want of prosecution;

(b) the Appellant was not denied a fair hearing. The Appellant was made aware of the precise day and time of the hearing. A party is not denied natural justice if it fails to attend its own hearing, after being advised and reminded of the hearing date. Judges do not have the responsibility to ensure that a party attends a hearing. A judge, in this case the List Judge of the District Court, is not required to stand down or adjourn a matter if a party fails to appear;

(c)(i) judges are not required to give reasons for every decision made. Furthermore, the effect of the decision does not govern whether reasons are warranted. The subject matter, circumstances and issues govern the need for reasons;

(ii) the Appellant did not appear at a show cause hearing. There was no contested evidence or question of law to determine. The Appellant had not even filed submissions before the show cause hearing. Even if reasons were required, or given, it is doubtful that Garling DCJ needed to say anything other than:

"This is a show cause hearing for the plaintiff to show cause as to why its proceedings should not be dismissed. The plaintiff has not attended the hearing or filed an affidavit (sic) as required five days before the hearing explaining why the proceedings should not be dismissed. The defendant applies under Part 18 r 3 to dismiss the proceedings . In the circumstances, I grant the application and dismiss the proceedings".

(d) the fact that the effect of the dismissal gave rise to a time bar is not a factor that required deliberation by the Court prior to dismissing the proceedings. The time bar was purely a function of the Appellant's own conduct in the carriage of its claim. The extinguishment of the cause of action arising upon the dismissal was a direct consequence of the Appellant's carriage of the matter. The Court is not required to treat a derelict party with extra care. Had the Appellant commenced proceedings promptly, and thereafter prosecuted them efficiently, it would not, twelve years after the alleged accrual of the action, be required to show cause nor suffer a time bar when dismissal occurred.

32 On the hearing of the appeal, counsel for both the Appellant and the Respondent appeared to accept that the exercise by a Judge of the District Court of the power, whether on the application of the party or upon his own motion, to dismiss proceedings pursuant to the provisions of DCR Part 18 r 3 involved the exercise of a judicial discretion. This being so, it is perhaps convenient to recall the well known passage in the joint Judgment of Dixon, Evatt and McTiernan JJ in House v. The King (1936) 55 CLR 499, 504-505 which is as follows:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing an appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide of affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

33    Despite the apparent acceptance by counsel for the Appellant of those principles, the oral submissions which were advanced on behalf of the Appellant on the hearing of the appeal were not directed to demonstrating that the exercise by Garling DCJ of the discretion vested in him miscarried for one or other of the reasons set out in the passage to which I have just referred. Rather, those submissions appeared to be directed toward establishing that his Honour erred by failing to comply with one or other of two duties said to be imposed upon him by law, they being:

(a) a duty to accord procedural fairness to the Appellant, the alleged failure being said to lie in his Honour's failure to adjourn the proceedings in order to give the Appellant an opportunity to appear and make submissions in opposition to the Respondent's application; and

(b) a duty, notwithstanding the Appellant's absence, to give reasons for ordering the dismissal of the proceedings;

and, further, that his Honour failed to comprehend that, on 6 October 1998, he was being asked by the Respondent to dismiss the proceedings pursuant to the provisions of DCR Part 18 r 3, and believed that he was exercising the power conferred on him of his own motion.

34 Even if - which, in my view, they were not - such errors on the part of Garling DCJ were established, they would not, in my view, demonstrate that his Honour's exercise of the discretion conferred on him by the provisions of DCR Part 18 r 3 had miscarried.

35    Given that the Appellant's present solicitors had been served with the Notice of Motion which had been filed on behalf of the Respondent and had - albeit but belatedly - prepared Affidavits dealing with the question of discovery prior to the return of that Notice of Motion, and given that, on 16 July 1998, the Appellant's solicitors was handed by Garling DCJ a Notice to Show Cause and was advised of the date to which the Notice of Motion was to be adjourned and on which the Notice to Show Cause would be dealt with, it could not, in my view, be said that, in not adjourning the matter in order that the Appellant might make submissions in opposition to the orders sought on behalf of the Respondent, Garling DCJ had wrongly deprived the Appellant of the opportunity to oppose the making of the order sought.

36    Nor can it, in my view, be said that Garling DCJ misapprehended what it was that he was asked to do when the Notice of Motion and the proceedings were listed before him on 6 October 1998. Quite apart from the fact that a fair reading of the transcript for that day makes it clear, first, that Ms. Raymond moved on the Notice of Motion and that his Honour then proceeded to dismiss the proceedings pursuant to that Notice of Motion and award the Respondent the costs of the proceedings, this issue was concluded against the Appellant when, on 2 November 1999, this Court set aside the order made by Garling DCJ on 9 April 1999 (see transcript of Judgment of Stein JA, with whom Meagher and Fitzgerald JJA agreed, para. 19).

37    Although the Appellant's submission - basing itself upon the judgments of this Court in Pettitt v. Dunkley supra and Palmer v. Clarke (1989) 19 NSWLR 158 - seemed to be that the duty imposed upon a judicial officer to give reasons attached to every exercise of judicial power, I do not accept that that is so. Thus, in the Judgment delivered by Asprey JA in Pettitt v. Dunkley, his Honour said supra at 382:

"In my respectful opinion the authorities to which I have referred and the other decisions which are therein mentioned establish that where in a trial without a jury there are real and relevant issues of fact which are necessarily posed for judicial decision, or where there are substantial principles of law relevant to the determination of the case dependent to their application upon the findings of fact in contention between the parties, and the mere recording of a verdict for one side or the other leaves an appellate tribunal in doubt as to how those various factual issues or principles have been resolved, then, in the absence of some strong compelling reason, the case is such that the judge's findings of fact and his reasons are essential for the purpose of enabling a proper understanding of the basis upon which the verdict entered has been reached, and the judge has a duty, as part of the exercise of his judicial office, to state the findings and the reasons for his decision adequately for that purpose. If he decides in such a case not to do so, he has made an error in that he has not properly fulfilled the function which the law calls upon him as a judicial person to exercise and such a decision on his part constitutes an error of law.
Manning JA who agreed with Moffitt JA said supra at 384 :

"… if it can be established that a judge has failed or declined to give any reasons for his decision in circumstances where there was a judicial duty, express or otherwise, to do so, then there has been an error of law."
Moffitt JA based the duty of a judge upon the existence of a right of appeal, saying supra at 388 :

"Although some observations may be made to suggest that reasons are desirable for the information of parties ( Brittingham v. Williams ([1932] VLR 237 at p239)) I do not think there is any judicial duty to give reasons except so far as such duty can be related to a right of appeal."
and, later supra at 390 :

"… if a case involves mixed questions of fact and law and is such that once the facts are determined in a particular way or ways its resolution will involve some considerations of law, it is the duty of the judge, unless there are exceptional circumstances, to give some indication of the basis of his decision. The purpose of so doing, of course, is directed to indicating his decision on the law either directly or by inference from the facts he has found."

38    Similar expressions of view may be found in other decisions of the Court. Thus, in Housing Commission of New South Wales v. Tatmar Pastoral Co Pty. Ltd. [1983] 3 NSWLR 378 Mahoney JA (as he then was) said supra at 386:

"In determining whether, in a particular case, there is a duty to give reasons and the extent of it, regard should, in my opinion, be had to the function to be served by the giving of reasons. Thus, the statement of reasons may be necessary to enable a party to exercise his right of appeal or such other rights as he may have to contest the decision: this is one of the conventional functions of the requirement: see Pettitt v. Dunkley (at 387, 388). But in my opinion, the requirement that reasons be given should not be limited to cases where there is an appeal. There is as yet no finally authoritative decision on this question. I think that the requirement should be seen as a incident of the judicial process. However, the fact that the function of the requirement is, at least in part, to allow a party to exercise appeal rights is of significance in determining the extent of the duty and what will be a discharge of it. Thus, in some cases where ordinarily an appeal is not contemplated there may not be a need for reasons. Thus, in England it has been said that reasons need not be given for certain procedural applications: see Capital and Suburban Properties Ltd v. Swycher [1976] Ch 319, at 325, 326. In such cases, and in cases of, eg, applications for leave, where the considerations of fact and law are clear, reasons need not ordinarily be given.
Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemise, for example, in the assessment of damages for tort, each of the factual matters to which he has had regard …"

39    In the present case, Garling DCJ was not, on 6 October 1998, called upon to determine some contested question of fact nor to determine some question of law the resolution of which depended upon findings of fact to be made by him. On the contrary, his Honour was called upon to determine an application, of which proper notice had been given to the Appellant, to dismiss the proceedings for want of prosecution, that application having been made in the context - of which, in my view, his Honour was entitled to take notice (see, for example, Lane v. Lane [1952] 1 AER 223 ) - first, that the proceedings related to a cause of action said to have arisen almost twelve years previously; second, that the proceedings themselves had been commenced over six years previously; and third, that, despite the fact that an order for discovery had been made almost three years previously it was claimed - and apparently accepted - discovery had been deficient. Further, on 16 July 1998, and despite the assertion by the Appellant, in the Affidavit which he had sworn the previous day, that "(he was) keen to have this matter finalised" it was clear that the Appellant's present solicitors did not then have the Appellant's previous solicitor's file. Finally, the fact is that, despite the fact that that Affidavit, and the Affidavit sworn by the Appellant's solicitor, were made available to Garling DCJ on 16 July 1998, his Honour thought it appropriate to give to the parties the Show Cause Notice to which I have earlier referred and to give the directions as to the filing of submissions which directions had, clearly enough, not been complied with by 6 October 1998. In these circumstances, so it seems to me, his Honour, in the absence of any appearance on behalf of the

Appellant on 6 October 1998, and in the absence of any explanation for the failure of the Appellant to appear on that day, was entitled to conclude that there was a continuing failure on the part of the Appellant to prosecute the proceedings with due dispatch which continuing failure justified the making of the order sought by the Respondent.

40    For these reasons, I conclude that the submissions advanced on behalf of the Appellant have failed to demonstrate that the exercise by Garling DCJ of the discretion vested in him miscarried.

41    However, in the course of argument, Hodgson JA suggested that, Garling DCJ not having recorded the reasons for his making the orders which had been sought, it was not possible for this Court to know upon what materials his Honour relied for making those orders or "whether his Honour had asked himself the correct question" before making those orders, it following, if I understood his Honour's suggestion aright, that it was open to this Court to conclude that the exercise by Garling DCJ of the discretion vested in him had miscarried.

42    If this were the consequence which, in Hodgson JA's view, ought to follow, then I regret to say that I am unable to share his Honour's view. On the contrary, it seems to me that that consequence would flow only if, upon the facts, the order made by Garling DCJ was unreasonable or plainly unjust (see House v. The King supra at 505). It does not seem to me that, in the circumstances which I have recorded above, the order made by Garling DCJ can properly be regarded as having been unreasonable or plainly unjust.

43    But even if Garling DCJ's discretion were to be regarded as having miscarried, the consequence would be that it would fall to this Court to exercise its own discretion in substitution for his. In that event, so it seems to me - particularly if one adds into the scale all the relevant facts - including the Appellant's failure to comply with the agreement made with the Respondent's solicitors on 16 July 1998, and the clear warning, given to the Appellant's solicitor in the letter of 18 September 1998, that the Respondent proposed to move on the Notice of Motion when the matter was relisted before Garling DCJ on 6 October 1998, I would, if called upon, exercise the discretion in the same way as did Garling DCJ.

44    For these reasons, I would propose that the appeal be dismissed with costs.

45    BEAZLEY JA: I have had the opportunity to read in draft the judgments of Powell JA and Hodgson JA.

46 As Powell JA has stated, the starting point for this matter is Pt 18 r 3 District Court Rules (NSW) 1973, under which the plaintiff’s claim was dismissed. In that regard an immediate observation must be made. Had the claim not been statute barred at the time it was dismissed, the appellant could, subject to questions of costs, have recommenced his action against the respondent. That course was closed to him in the circumstances. Before the claim could be dismissed, however, the Court was required under Pt 18 r 3, to give to the appellant an opportunity to be heard.

47    An initial question arises whether the appellant was given that opportunity in circumstances where his solicitor was aware of the date of the hearing of the defendant’s notice of motion to have the proceedings dismissed but failed to appear to represent the appellant’s interests on that date. The reason he failed to appear was, it seems, because he had wrongly diarised the date of hearing of the motion. There was no issue that he was well aware of the nature of the hearing and of the serious consequences to his client that could flow if orders were made on the respondent’s motion.

48    There is no express power in the District Court for that court to restore the proceedings. An order by Garling DCJ to that effect was quashed by this Court: Weston v Howell [1999] NSWCA 411. In that case Stein JA noted that it was common ground between the parties that the proceedings could not be reinstated. It appears that the Court’s attention was not drawn to the principle in Cameron v Cole (1944) 68 CLR 571. In that case Rich J said at 589:

“… It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside; and a court which finds that it has been a failure to observe the principle has inherent jurisdiction to set its determination aside (Craig v Kanssen[ [1943] KB 256 at 262]). In such a case there has been no valid trial at all. The setting aside of the invalid determination lays the ghost of the simulacrum of a trial, and leaves the field open for a real trial …”

49    In this case the appellant’s claim was struck out due to an error by his solicitor for which he, the appellant, bore no responsibility. The question could have arisen, therefore, as to whether Garling DCJ might have had power to reinstate the proceedings under this principle: see Hoskins v Van Den-Braak (1998) 43 NSWLR 290; cf Regina v Home Secretary, Ex parte Al-Mehdawi [1990] 1 AC 876. However, as the appellant had accepted before this Court in Weston v Howell that there was no such power, I do not consider the Court should now embark on the question.

50    That leads me then to a consideration of the judgments of Powell JA and Hodgson JA. Like Hodgson JA, I find myself compelled to the conclusion that whilst Garling DCJ’s order may not have been surprising, given the history of the litigation, it is not apparent why his Honour came to the conclusion he did. There was an obligation on his Honour to give reasons, even in the barest terms. The failure of his Honour to do so means the appellant must succeed. I would, therefore, agree with the orders proposed by Hodgson JA.

51    HODGSON JA: The circumstances of this case are set out in the judgment of Powell JA. I agree with Powell JA that, for reasons he has given, the circumstances of this case, at the time it came before Garling DCJ on 8th October 1998, were such that his Honour would have been entitled to conclude that there was a continuing failure of the appellant to prosecute such as would justify an order dismissing the proceedings, and that the order actually made on that day by Garling DCJ was neither unreasonable or plainly unjust.

52    However, my opinion is that these findings are not sufficient to determine this appeal in the respondent’s favour.

53    Although, as Powell JA says, Garling DCJ was not on 8th October 1998 called upon to determine any disputed question of fact or any question of law, he was required to make a decision which could have the practical effect of finally determining the rights of the parties. It is true that a dismissal for want of prosecution is classed as an interlocutory decision, is not a conclusive determination of the legal rights of the parties, and does not prevent the bringing of further proceedings on the same cause of action; but such a dismissal does, in cases where the cause of action would be statute-barred, effectively conclude the matter. That was the position in this case.

54    In those circumstances, in my opinion, the obligation to give reasons was engaged, unless such reasons were apparent without needing to be stated. The content of the obligation to give reasons varies with circumstances; and even if the reasons for an order are not entirely apparent without being stated, there can be circumstances in which a minimal statement of reasons is sufficient. In my opinion, it is necessary in this case to consider whether the primary judge’s reasons were apparent without being stated, or whether there was a statement of reasons which was sufficient in the circumstances.

55    My reading of the transcript of what happened on 8th October 1998, together with the Court file as it existed at the time, leaves me uncertain as to the following matters: (1) Garling DCJ’s subjective belief as to the question posed for his decision; (2) the evidence or other factual material on the basis of which he acted; (3) whether or not he took into account the effective finality of his decision; (4) whether or not he based his decision on delays generally, or on default in discovery, or on the non-appearance of the appellant on that day, or on some combination of these factors.

56    In relation to the first matter, Garling DCJ subsequently asserted that he was acting, not on the respondent’s Notice of Motion, but on the Court’s own motion. The importance of that distinction is that the District Court does not have power to set aside a dismissal for want of prosecution made on the motion of a party, even if that order for dismissal is made in the absence of the other party, but does have the power to set aside such a dismissal if made on the Court’s own motion. However, the Court of Appeal in Weston v. Howell [1999] NSWCA 411 found that the court record demonstrated that the orders made on 8th October 1998 were made on the respondent’s Notice of Motion and thus could not be set aside by the District Court.

57    Powell JA is of the view that the possibility that Garling DCJ misapprehended what he was asked to do on that day is excluded by that decision of the Court of Appeal. With respect, I do not agree. As shown by paragraphs 19 and 20 of the Court of Appeal’s judgment, the Court of Appeal proceeded on the basis of the intention manifested by the court record, not on the basis of Garling DCJ’s subjective intention. Although the Court of Appeal decision is conclusive as to the intention manifested by the record, it is not conclusive as to Garling DCJ’s subjective intention. Even disregarding Garling DCJ’s later assertion as to his understanding, in the absence of reasons given by Garling DCJ I am uncertain as to his subjective intention and in particular his subjective understanding as to whether he was acting on the respondent’s Notice of Motion or on the Court’s motion, and accordingly as to his subjective understanding as to whether the order he was making was final and could not be set aside. One reason for my uncertainty is that the absence of stated reasons would have been entirely appropriate if the order could have been set aside, but arguably inappropriate if it could not be.

58    As regards the second matter, there was no formal reading or noting of evidence, so I do not know whether Garling DCJ took into account that the applicant had filed affidavits which dealt specifically with all the respondent’s complaints about discovery, and which could possibly be regarded, in substance if not in form, as fulfilling any obligation of the appellant in relation to discovery that was still outstanding. Those affidavits were filed in Court before Garling DCJ on a previous occasion, but in my opinion that does not show that he took them into account. If he had dealt formally with the respondent’s Notice of Motion on 8th October 1998, and was referred only to evidence read by the respondent and notations on the court file, it may well have been proper for him to have had no regard at all to the content of affidavits on the file which were not read, although I think he should then have had regard at least to the fact that affidavits had been filed. However, since he dealt with the matter informally, presumably on the basis of his own reading of the court file, it could at least arguably have been unfair if he had had regard to material in the file from one side but not material in the file from the other side.

59    As regards the third and fourth matters, I have already indicated my uncertainty as to whether Garling DCJ understood that his order of dismissal could not be set aside. The manner in which he dealt with the case, without submissions and without reasons, to all appearances largely on the basis of the appellant’s non-appearance, leads me to suspect either that he did not take into account the finality of the order or that he did not have regard to the possibility of a reasonable explanation for the non-appearance of the appellant. I am also left to speculate as to whether he relied on earlier delays in the matter, or on defaults in discovery, or on a failure to provide written submissions as required by the document which he had given to the parties on the previous occasion, or on some combination of these factors.

60    As explained by Powell JA, there were powerful considerations in support of the order made by Garling DCJ. However, I do not consider that such order was the only order that could reasonably have been made, and for reasons I have given I find myself speculating as to the basis on which Garling DCJ decided to make the order. In those circumstances, I think the error of deficiency of reasons is made out, so that it becomes necessary to consider whether any different order should now be made.

61    In approaching this question, I do not believe that the Court should decline to act on the ground that another two and a half years have passed by, and that the appellant did not take the opportunity, at the time of the earlier appeal, to put on a defensive challenge to the order which is the subject of the present appeal. Those considerations were certainly relevant to the granting of leave in this case, but leave has already been granted.

62    In my opinion, I should first consider what order should have been made on 8th October 1998. If the conclusion is that no different order should have been made, that would be the end of the matter. If the conclusion is that a different order should have been made, then it becomes necessary to consider what order is now appropriate, having regard both to what should have happened on 8th October 1998 and to what has happened since that time.

63    Dealing with the first question, it was submitted for the appellant that there was a denial of natural justice in proceeding in the absence of the appellant or his legal adviser. In my opinion, there was no denial of natural justice, in circumstances where the appellant was clearly on notice that an application for dismissal was going to be dealt with on that day. However, having regard to the finality of a dismissal and the possibility of a reasonable explanation for the non-appearance of the appellant, I think that, even in a busy list, it would have been appropriate first to ask the appellant's solicitor to make a telephone call to the office of the respondent’s solicitor to find out why there was no appearance. If that did not produce any explanation or appearance, then I think it would have been entirely appropriate for the Court to proceed to deal with the matter in the absence of the appellant. In my opinion, it would have been appropriate to ascertain from the respondent’s solicitor whether there was any objection to the judge reading the affidavit material that had been put on by the appellant, and if there was no such objection to read and take account of that material. If there was objection taken, then I think the appropriate course would have been not to read the appellant’s affidavit material, but to take note of the fact that affidavits which were not being read had been filed by the appellant.

64    In making a decision, it would certainly have been appropriate to have regard to the long previous delays, the non-compliance with a direction as to the provision of written submissions, the apparent non-compliance with orders for discovery, and the non-appearance on that day. Having regard to those considerations, I do not think it would have been appropriate for the Court either to have adjourned the matter further, or simply to have made an order concerning discovery. I think the true alternatives facing the Court in that situation would have been to make the order that was made, or alternatively to give the appellant one last chance by means of a self-executing order. On balance, having regard to the circumstance that affidavits had been filed by the appellant and having regard to the possibility that there may have been a reasonable explanation for non-appearance on that day, I think the appropriate order would have been a self-executing order rather than immediate outright dismissal. I think the appropriate order would have been an order that the appellant pay the respondent’s costs of the Notice of Motion, and that the proceedings should be dismissed with costs unless, within fourteen days of notification of the orders to the appellant’s solicitors, the appellant filed and served a supplementary affidavit of discovery and paid to the respondent’s solicitor $500.00 on account of the respondent’s costs of the motion.

65    On the assumption that that was the appropriate order two and a half years ago, what should this Court do now? There is a greater potentiality for injustice, particularly to the respondent, by reason of the passage of a further two and a half years, and this is partially the fault of the appellant, because the appellant did not take the reasonable step of a defensive appeal which could have been determined in November 1999. On the other hand, until November 1999 the appellant had the benefit of two discretionary decisions of District Court judges supporting the continuance of the proceedings, made over the opposition of the respondent, and including the expressed view of Garling DCJ of his understanding that he had acted on his own motion on 8th October 1998. The Court of Appeal has shown that that understanding was wrong, but that expression of understanding has some relevance to the Court’s exercise of discretion now.

66    On the whole, I think the appropriate order is that the appeal be allowed and that Garling DCJ’s order should be set aside. In lieu thereof, there should be an order that the appellant pay the respondent’s costs of the Notice of Motion dealt with by Garling DCJ, and pay $500.00 on account of those costs within fourteen days. It appears that there is no outstanding question concerning discovery, so that the Notice of Motion should otherwise be dismissed.. To a considerable extent, all of the costs involved since October 1998 have been caused by the appellant’s default in failing to attend the hearing before Garling DCJ. I do not think the appellant should receive the costs of the appeal. In my opinion, the appropriate order for costs of the appeal is that each side pay its own costs, and that the respondent have a suitors’ fund certificate in respect of the respondent’s costs of the appeal.

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