Pritchard Associates v Stevenson

[2001] NSWSC 463

CITATION:	Pritchard Associates v Stevenson & Anor [2001] NSWSC 463
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	SC 11597 of 1997
HEARING DATE(S):	4 June 2001
JUDGMENT DATE:	6 June 2001
PARTIES :	Pritchard Associates Pty Limited (Plaintiff) v David Stevenson (First Defendant) Harvey Wong (Second Defendant)
JUDGMENT OF:	Master Malpass

COUNSEL :	Mr I Wales SC (Plaintiff) Mr J Downing (First Defendant) N/A (Second Defendant)
SOLICITORS:	Truman Hoyle (Plaintiff) Holman Webb (First Defendant) N/A (Second Defendant)
CATCHWORDS:	Dismissal of proceedings - what appears from records maintained by the court - special circumstances - setting aside dismissal order - discretionary considerations - application for payment out.
LEGISLATION CITED:	Supreme Court Rules 1970 Pt 32A, Pt 32A r 2.
CASES CITED:	N/A
DECISION:	See Paragraphs 24 - 25.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

WEDNESDAY 6 JUNE 2001

11597 of 1997 PRITCHARD ASSOCIATES PTY LIMITED v DAVID STEVENSON & ANOR

JUDGMENT


1   These proceedings were commenced in May 1997. A claim for fees is brought (in the order of half a million dollars). It relates to the provision of consultancy services for a project in Papua New Guinea. Whilst there are two defendants, the court is presently concerned with the first defendant only. At all material times, he has resided overseas.

2   During 1997 and 1998, the court gave directions on a number of occasions. The defendants did not comply with the directions.

3   On 5 May 1998, default judgment was entered against both defendants. Subsequently, the judgment was registered in British Colombia.

4   On 12 November 1998, the first defendant made application to set aside the default judgment. The application came on for hearing on 10 December 1998. The judgment was set aside on terms (inter alia the first defendant was required to pay the sum of $100,000 into court on or before 4.00pm on 15 January 1999).

5   Time for compliance with the payment into court was extended on two occasions.

6   There has been relatively little activity in the matter. The first defendant made an unsuccessful application for separate determination of questions. The plaintiff has provided a list of documents. The first defendant has neither filed nor served any experts’ reports. In the earlier part of 2000, some communication passed between the solicitors for the parties. By the latter part of 2000, the solicitors for the plaintiff took the view that the matter was ready for hearing. Some abortive activity was taken to have the matter listed for hearing.

7 By letter dated 12 January 2001, the court gave notice to the parties of intention to dismiss the proceedings pursuant to Pt 32A of the Supreme Court Rules 1970. The solicitor for the plaintiff responded to the notice by attending the Court Registry. He sought to see a Duty Registrar (inter alia he wanted to find out how he could have the matter fixed for hearing). Unfortunately, no Duty Registrar was available at that time. In an affidavit, he said that “Thereafter, the matter slipped my mind”.

8 On 22 February 2001, Assistant Registrar Howe dismissed the proceedings pursuant to Pt 32A r 2. The order has been recorded by endorsement on the file copy of the letter dated 12 January 2001. It seems that the parties were not notified of the making of this order.

9   The first defendant became aware of the order. By Notice of Motion filed on 10 April 2001, the first defendant applied to the court to have the balance of the sum of $100,000 paid out of court. This led to the plaintiff bringing a Notice of Motion seeking to have the dismissal order set aside. Both applications were heard on 4 June 2001.

10   It is common ground that the court has power to set aside the order. The dispute between the parties concerns whether or not the discretionary power should be exercised in favour of the plaintiff.

11 Part 32A is headed “DISMISSAL OF INACTIVE PROCEEDINGS IN A DIVISION”. It is in the following terms:-

“ [32A.1] r 1 Application
1 This Part applies to proceedings in a Division that have not been disposed of by judgment, final order, discontinuance or dismissal.

[32A.2] r 2 Dismissal
2 (1) If no party to proceedings has, for over 1 year, taken any step in the proceedings that appears from records maintained by the Court, the Court may of its own motion dismiss the proceedings, or part of the proceedings, unless a party satisfies the Court that special circumstances exist that render it desirable that such an order should not be made.
(2) The Court may not make an order under subrule (1) without giving the parties a reasonable opportunity to be heard.

[32A.3] r 3 Effect of dismissal
3 (1) An order for dismissal under rule 2 shall not prevent a party from:
(a) bringing fresh proceedings; or
(b) claiming in fresh proceedings relief that has been claimed in the dismissed proceedings.
(2) Where:
(a) proceedings are dismissed under rule 2;
(b) a party is, by reason of the dismissal, liable to pay the costs of another party occasioned by the proceedings; and
(c) before payment of the costs, the party so liable brings against that other party further proceedings on the same or substantially the same cause of action as that on which the dismissed proceedings were brought,
the Court may stay the further proceedings until those costs are paid.”

12   Three affidavits have been sworn by Mr Leonard (the solicitor for the plaintiff). One affidavit has been sworn by Mr Allsop (the solicitor for the first defendant). The plaintiff has tendered a copy letter (Exhibit A).

13 It is not said that the court was not empowered to make the order pursuant to Pt 32A. The parties proceeded on the basis that an order had been validly made. The discretionary power had by the court to set aside that order is exercised having regard to the particular circumstances of the case before the court and so that justice is best served between the parties. The onus rests with the party seeking the order.

14 In proceeding under Pt 32A, the court acts on what appears from records maintained by it. The relevant period is “over 1 year”. It may act of its own motion but it is required to give the parties a reasonable opportunity to be heard. The object of the Part is expeditious dismissal of inactive proceedings. The order does not have the effect of precluding the bringing of fresh proceedings for the same cause of action.

15   The plaintiff has a significant claim which may well have been ready for hearing at the time of the dismissal of the proceedings. The plaintiff himself had given instructions to get the matter on for hearing. The dismissal came to pass because of extraordinary conduct on the part of his solicitor. He accepts that he was at fault.

16   On the first defendant’s side, there has been a history of delay and non-compliance. For him, the dismissal order was a windfall. Apart from losing this windfall, he is not prejudiced by the granting of relief to the plaintiff.

17   In my view, in the particular circumstances of this case justice is best served if the dismissal order is set aside. I consider that the plaintiff has discharged the relevant onus.

18 The first defendant contends that Pt 32A enables the bringing of fresh proceedings and that this is the course that should be followed if the plaintiff wishes to continue the prosecution of his claim. Although the dismissal order is no bar to the commencement of fresh proceedings, I do not consider that justice is best served if the plaintiff is left to follow that course in this case.

19   The proceedings were at a stage where they may well have been ready for hearing. The commencement of fresh proceedings would put the plaintiff to further needless expense and there would be further delay (inter alia he may have difficulty in effecting service on the first defendant).

20 Rule 2 of Pt 32A speaks of “special circumstances”. The Rules require that these be shown to exist for the purposes of resisting an order under that provision.

21   The word “special” is defined to include that which is extraordinary or exceptional (that which is different from what is ordinary or usual). It does not seem to me to be helpful to seek to further define what are “special circumstances”. In my view, a determination of what satisfies such a requirement is best done on a case by case basis.

22 There may be a question as to whether or not on this application the plaintiff needs to show the existence of special circumstances in the sense contemplated by r 2. This question was not fully argued. However, I am of the view that if the plaintiff does bear a burden of showing the existence of such circumstances, then that burden has been discharged in this case.

23   The first defendant seeks an order for payment out whatever may be the result of the plaintiff’s application. The evidence put forward in support of this application is parsimonious. Likewise were the submissions. I am not satisfied that the first defendant has demonstrated an entitlement to any order for payment out. Indeed, the retention of the moneys continues to serve the purposes for which the term was imposed.

24   The order made on 22 February 2001 is set aside. I dismiss the Notice of Motion filed by the first defendant. It is common ground that the plaintiff should pay the costs of both Notices of Motion and I so order.

25   In the circumstances, it is common ground that the plaintiff is to have leave to file an Amended Statement of Claim. I direct that any Amended Statement of Claim be filed within fourteen days. The proceedings are to be listed before a Registrar. I will appoint a date convenient to the parties. Any further directions then required may be given and the matter can be put on course for a hearing date. The Exhibit may be returned.
**********

Last Modified: 06/07/2001