Richards v Cornford (No 3) - [2010] NSWCA 134

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Richards v Cornford (No 3) [2010] NSWCA 134
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 6 May 2010

JUDGMENT DATE:
11 June 2010

JUDGMENT OF: Allsop P at 1; McColl JA at 127; Basten JA at 128

DECISION: Orders on 6 May 2010
1. Order 3 in the notice of motion dated 8 March 2010 and filed by QBE Insurance (Australia) Limited (QBE) to the effect that QBE pay the costs of the respondents to the motion.
2. Otherwise dismiss the said motion seeking an extension of time within which to file and serve a notice of cross appeal.

CATCHWORDS: PROCEDURE - Supreme Court procedure - New South Wales - out of time for filing of notice of cross-appeal under rules of court - application for extension of time - delay caused by party's own conduct - no steps taken for timely preparation of cross-appeal - Civil Procedure Act 2005 (NSW) ss 56-60 - duties of parties in the conduct of litigation - just and efficient determination of proceedings

LEGISLATION CITED: Civil Liability Act 2002 (NSW) ss 5F, 5G, 5H and 5I
Civil Procedure Act 2005 (NSW) ss 56-60
Court Procedures Rules 2006 (ACT) r 21, r 501
District Court Act 1973 (NSW) s 127
Motor Accidents Compensation Act 1999 (NSW)
Uniform Civil Procedure Rules 2005 (NSW) Part 51
Workplace Injury Management and Workers Compensation Act 1998 (NSW)

CATEGORY: Principal judgment

CASES CITED: Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175
Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243
Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; 225 CLR 364
Bi v Mourad [2010] NSWCA 17
Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379
Cropper v Smith (1884) 26 Ch D 700
Dennis v Australian Broadcasting Corporation [2008] NSWCA 37
GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710
Halpin v Lumley General Insurance Ltd [2009] NSWCA 372
Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230
Ketteman v Hansel Properties Ltd [1987] AC 189
Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116
Richards v Cornford [2010] NSWCA 99
Richards v Cornford (No 2) [2010] NSWCA 112
Sali v SPC Ltd [1993] HCA 47; 67 ALJR 841
Toll Pty Ltd v Dakic [2006] NSWCA 58
Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193
White v Overland [2001] FCA 1333
Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894

PARTIES: Danielle Richards (Appellant)
Ian Cornford (First Respondent)
Taringha House Pty Ltd (Second Respondent)
QBE Insurance (Australia) Ltd (Third Respondent)

FILE NUMBER(S): CA 2009/298373

COUNSEL: Ms S Norton SC, Mr M Daley (Appellant)
Mr J E Rowe (First and Second Respondents)
Mr P J Deakin QC, Mr J G Stewart (Third Respondents)

SOLICITORS: Brydens Law Office (Appellant)
John Carmody & Co (First and Second Respondents)
A R Connolly & Company (Third Respondent)

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 4344/2005

LOWER COURT JUDICIAL OFFICER: Murrell DCJ

LOWER COURT DATE OF DECISION: 7 May 2009

LOWER COURT MEDIUM NEUTRAL CITATION: Richards v Cornford [2009] NSWDC 60

2009/298373

ALLSOP P
McCOLL JA
BASTEN JA
Friday 11 June 2010

RICHARDS v CORNFORD (No 3)

Judgment

1 ALLSOP P: On 6 May 2010, the Court refused an application by QBE Insurance (Australia) Limited (“QBE”) to extend time within which to file and serve a notice of cross-appeal against orders made by the District Court on 7 May 2009 that required it to indemnify Mr Ian Cornford and his company Taringha House Pty Limited (“TH”) in respect of their legal liability to Ms Danielle Richards as found by the District Court. The refusal of the Court to extend the relevant time under the Uniform Civil Procedure Rules had the effect of preventing QBE from contesting its legal responsibility for a verdict in May 2009 of $772,818, and now, after a successful appeal by Ms Richards as to the jurisdictional limit of the District Court, of over $1 million: see Richards v Cornford [2010] NSWCA 99 and Richards v Cornford (No 2) [2010] NSWCA 112.

2 At the conclusion of argument on the application by QBE, the Court refused the application, dismissing QBE’s notice of motion with costs. The Court indicated that it would give reasons in due course. These are my reasons for refusal of the application.

3 The application and its resolution raised important issues of approach to litigation in this State, in particular the operation of the Civil Procedure Act 2005 (NSW) (the “CP Act”), ss 56-60.

4 It is essential to appreciate the complete factual background to the application. The facts are taken from the records of the District Court and of this Court and the affidavit evidence read on the motion sworn by the lawyer from the firm of solicitors handling the matter for QBE (to whom I will refer both individually and collectively, as appropriate as “QBE’s solicitor”), Mr Lee Hagipantelis the partner of Brydens, the lawyers for Ms Richards and Ms Richards herself.

Factual background

The handing down of draft reasons and the making of orders

5 On 7 April 2009, Murrell DCJ provided draft reasons in the resolution of a personal injuries claim brought by Ms Richards against Mr Ian Cornford and TH. The draft reasons provided for judgment for the plaintiff for over $700,000. By the provision of draft reasons, her Honour provided the parties with an opportunity to adduce further evidence on domestic assistance and to provide submissions on interest.

6 Her Honour made orders on 7 May 2009 ordering a verdict for Ms Richards against the defendants including pre-judgment interest, for $772,818, plus costs. The balance of the orders made on 7 May concerned the resolution of the cross-claim between the defendants and QBE. The two orders made in this respect were:

“2. Cross-Defendants [sic: cross-defendant] to pay the costs ordered against the defendants (i.e. plaintiff’s costs in 1.)

3. Cross-Defendant to pay the defendants costs on an indemnity basis.”

7 The orders made on 7 May did not expressly deal with liability on the cross-claim. The primary judge’s reasons, however, concluded with the sentence: “There will be a verdict for the cross-claimant [sic: cross-claimants] against the cross-defendant.”

8 No issue was raised as to any defect in the orders making QBE responsible to indemnify Mr Cornford and TH.

The proceedings and their background

The accident and injury to Ms Richards

9 On or about 22 August 2004, Ms Richards was standing on the tailgate loader of a truck approximately four feet above ground level and was attempting to manoeuvre a pallet containing milk. She slipped on the loader and fell to the ground thereby sustaining a serious knee injury. Ms Richards was not an existing employee of Mr Cornford or TH, rather she was engaged in a trial for (the statement of claim expressing it, “trying out in respect of”) a job offer that TH may have made to her (if they were satisfied with her after the trial) as a truck driver in a milk delivery business carried on by TH.

The pleadings

10 In October 2005, Ms Richards filed a statement of claim suing Mr Cornford and TH. Paragraph 2 of the statement of claim pleaded that the plaintiff brought the proceedings pursuant to the Motor Accidents Compensation Act 1999 (NSW) (the “MAC Act”) or alternatively at common law if the accident was not a motor accident as defined in that Act.

11 Ms Richards pleaded, in para 5, that she was not employed by either defendant, that no promise of employment had been held out to her and that she was not paid for anything she did on the day in question. The defendants filed their defence on 22 April 2006. Although remarkable otherwise for its brevity and lack of information, the defendants admitted para 5 of the statement of claim.

12 At the time of filing the defence, the defendants also filed a cross-claim against the underwriting agency that had put in place an insurance policy called a “Milk Vendor’s Business Package Policy” (the “Policy”). Indemnity was claimed under the Policy. In June 2006, by amended cross-claim, the defendants discontinued the proceedings against the underwriting agent and repeated its claim to indemnity under the Policy, this time against QBE.

13 QBE filed a defence to the amended cross-claim in September 2006 under which it admitted the Policy, but denied the allegation contained in para 5 of the statement of claim (repeated against it for the purposes of the cross-claim) that Ms Richards was not employed by the defendants or one of them at the time of the accident. QBE pleaded (in para 3 of the defence to cross-claim) that Ms Richards was a “worker” pursuant to the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the “WIM Act”) and, further (in para 4) pleaded that:

“… the Policy … does not cover:

‘(i) Employment Liability;

(ii) Personal injury imposed:

(a) by any workers’ compensation law

…

(c) for and in respect of Employment Practices’

and that by reason of the Plaintiff being a worker or deemed worker that the claim under the Policy is excluded from indemnity under the Policy.”

14 Later, in another version of the cross-claim, QBE pleaded that the claim by the defendants was excluded by “Exclusion 3.3.1 [sic: 3.1] Employment Liability of the Policy” which the primary judge relevantly recited as follows:

“3.1 Employment Liability
Personal Injury to any employee arising directly or indirectly out of or in the course of their employment in Your Business …
(c) which You are or would have been entitled to seek indemnity under any policy of insurance required to be taken out pursuant to any legislation relating to workers’ or workmen’s compensation …
For the purpose of this Exclusion 3.1 ‘employee’ shall mean any person engaged under a contract of service or apprenticeship with You but does not include any person employed under such a contract who is excluded from the definition of worker under any workers compensation legislation.”

15 By a further defence to the cross-claim, QBE pleaded a further exclusion under the Policy: cl 3.7 which excluded indemnity in relation to claims for injury or damage arising out of the ownership, possession, operation, maintenance, or use of a motor vehicle.

The hearing and the primary judge’s reasons

16 The matter was called on for hearing before the primary judge on 4 March 2009 and proceeded for three days.

17 The nature and seriousness of the fall can be understood from [8] of the reasons of the primary judge:

”[8] The mechanics of the injury are readily inferred. Ms Richards was an untrained and inexperienced operator who was permitted to work in a precarious location. She was visually and mentally focused on a delicate operation involving a heavy load. She was facing towards the front of the truck, rather than the rear. At the worst possible time, she was startled by a shout from her left. She involuntarily moved or twisted to her right. In that move, she lost her balance, probably because she inadvertently stepped from the flat part of the tailgate loader onto the sloping part. The right knee injury may have occurred when she moved or twisted on the tailgate loader but, as Ms Richards was a very large woman who fell more than a metre and landed on her right side, it is very likely that the injury occurred when she landed.”

18 The primary judge found the defendants negligent in the manner described in [9] of the primary judge’s reasons:

“[9] The defendants breached their duty of care to Ms Richards in that, knowing that she was inexperienced in the task, they permitted her to undertake a difficult operation in a precarious location without adequate instruction and without the opportunity to first practise in safety (for example, using an unladen pallet at ground level). Further, without prior warning and at a critical stage, Mr Cornford yelled at Ms Richards from a distance of ‘a couple of feet’ and startled her.”

19 The primary judge rejected the submission of the defendants that the risk was “obvious” or “inherent”: Civil Liability Act 2002 (NSW) (“CL Act”), ss 5F, 5G, 5H and 5I.

20 The primary judge rejected the submission that Ms Richards was contributorily negligent.

21 The primary judge rejected QBE’s policy arguments concerning employment in [23]-[27] of her Honour’s reasons, as follows:

“[23] The Workplace Injury Management and Workers Compensation Act 1998 requires that any ‘worker’ be insured. Under section 4, ‘worker’ is defined to mean ‘a person who has entered into or works under a contract of service …’ (emphasis added). QBE submitted that Ms Richards was working under a ‘contract of service’. As a ‘worker’, she should have been indemnified under a workers compensation policy. Consequently, liability was excluded under clause 3.1. QBE relied upon TNT Australia Pty Ltd v Christie [2003] NSWCA 47.

[24] The facts in TNT differed from the present case. In TNT , the employer had full day-to-day control over work activities. Even where work is subject to direction and control, that fact does not necessarily establish a contract of service: Helmers vDepartment of Corrective Services (1997) 14 NSWCCR 248. A contract of service involves a mutuality of obligation: Birkett v Tubbo Estate Co Pty Ltd (1997) 14 NSWCCR 369. When considering whether there is a contract of service, the critical question is whether the arrangement between the parties evidences an intention to enter into legal relations: Teen Ranch Proprietary Ltd v Brown (1995) NSWCCR 197. Respectively, in Helmers , Birkett and Teen Ranch , it was determined that a prisoner, a work experience student and a volunteer working with a non-profit Christian organisation had not entered contracts of service because an intention to enter into legal relations was lacking.

Dietrich v Dare

‘A contract of service is of its nature a bilateral contract. It may be conceded that merely to say that the parties had agreed upon a trial does not necessarily rule out its formation. The answer in that respect will depend upon the detail of the arrangement. In particular, the answer will be affected, among other things, by the discovery in the arrangement of the assumption by the “worker” of an obligation to perform some work, it being the purpose of the trial to determine whether the work is performed in a satisfactory manner. But in the present case we cannot discover an obligation on the appellant to perform any work at all.’

[26] Apart from the obligation to perform work, circumstances that may support a contract of service include the payment of wages and agreement as to hours of work. Drzyzga v G & B Silver Pty Ltd [1994] NSWCC 12 concerned a work experience situation. The Court determined that there was no contract of service because no relevant consideration flowed to the ‘employer’. There was only the possibility that the ‘employer’ might acquire ‘a worker who knew (the work) if (the “employer”) ever decided to offer him more casual work or a permanent position’.

22 At [28]-[35], the primary judge rejected QBE’s policy argument concerning the MAC Act, rejecting the argument that there was a defect in the motor vehicle. In doing so, her Honour referred to Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568; Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193; and Toll Pty Ltd v Dakic [2006] NSWCA 58.

23 Her Honour concluded at [35] of her reasons that even if there was a defect in the vehicle as argued by QBE:

Allianz

‘Where a person directs another person to take a step that places a person in proximity to a passive condition of danger, it is often the case that it is the direction rather than a condition that causes any subsequent harm.

24 I have set out these aspects of the primary judge’s reasons not to demonstrate their correctness – no argument was directed to that, but rather to reveal that there was no manifest or egregious error in the primary judge’s analysis. I will return to this in due course.

25 The primary judge then turned to Ms Richards’ damages which were to be assessed under the CL Act.

26 The primary judge recorded that Ms Richards was a truthful witness, whose credibility was not challenged. The primary judge, if I may respectfully say, succinctly and lucidly explained the relationship between Ms Richards’ knee injury and her physical and mental well-being and personal circumstances. I am not able to improve upon the clarity of the primary judge’s reasons at [39]-[48]:

“[39] In 1991, Ms Richards injured her left knee. For about two years, she was unemployed and inactive. She used a walking stick. She was advised to avoid employment that involved heavy lifting or climbing up or down stairs. In 1991, Dr Courtney of St Vincent's Clinic ominously reported ‘a girl of her size cannot afford to lose much of her muscle power in her legs before she becomes almost immobile’.

[40] In 1994, Ms Richards returned to courier work. Periodically, her left knee was painful. It continued to grind and crack. Sometimes, it ‘locked’. She could not squat. She took painkillers. Her left knee ‘was very, very slowly getting worse’.

[41] In 2003, Dr Dave made a provisional diagnosis of patello femoral dysfunction and medial meniscal tear. In his view, her main problem was patellofemoral joint degeneration that would not benefit from surgical intervention (Exhibit 1).

[42] Prior to the accident, Ms Richards was diagnosed as suffering from bilateral patella femoral joint arthritis. Although her left knee was symptomatic, her right knee was asymptomatic.

[43] In the 1990s, Ms Richards sustained a muscular injury to her back and was off work for a short period. In 2000, she completed a work application in which she stated ‘no heavy lifting over 12 kg bad back but Dr given ok’ (Exhibit 6).

[44] At the date of the accident, Ms Richards had an eating disorder and weighed about 130 kg (Exhibit 7).

[45] Prior to the accident, Ms Richards was psychologically vulnerable. In 1996 she experienced an episode of depression caused by multiple stressors (Exhibit 8).

[46] Ms Richard derived considerable self-confidence and enjoyment from her status as a truck driver. She enjoyed lifting heavy weights and driving heavy vehicles. Her self-image was that of a strong, active, hard-working person who was ‘one of the boys’. Indeed, prior to the accident Ms Richards obtained a ‘heavy rigid’ truck licence. She hoped to progress from driving a medium rigid truck to driving a heavy rigid truck, thereby improving her income. In 2004, a dietician reported that ‘for a female she is exceptionally muscular’ (Exhibit 1, Ms Deshpande).

[47] Despite obesity and physical and psychological vulnerability, prior to the accident Ms Richards had an excellent employment history in the field of moderate to heavy work and she enjoyed an active life.

27 With the exception of one doctor, the medical evidence was that Ms Richards would never be able to return to labouring work.

28 Apart from her knees and back, Ms Richards had psychological sequelae from the accident and subsequent pain and unemployment. The primary judge dealt with the psychiatric evidence at [53]-[58] of her reasons:

“[53] After the accident, pain and unemployment made Ms Richards depressed and argumentative. She sought solace in food. In March 2006, she was admitted to Liverpool Hospital expressing suicidal thoughts arising from frustration over chronic knee pain and various social stressors. She was diagnosed with a recurrence of major depression against a background of multiple psychosocial problems. She was admitted for three days. The provisional diagnosis was dysthymia and a depressive episode secondary to her medical condition.

[54] In April and November 2006 and October 2007, Mr Glancey, a psychologist qualified on behalf of Ms Richards, diagnosed a major depressive disorder that had somewhat improved by 2007. Mr Glancey stated that her greatest stressor was physical incapacity associated with the accident (Exhibit F). In October 2007, he reported that she was suffering from an adjustment disorder with mixed anxiety and depressed mood. Her prognosis was ‘bleak’. There was little prospect of further improvement. Her confidence was ‘severely depleted’ and she had a ‘poor self image’.

[55] Dr Broster, a psychiatrist with NSW Health, saw Ms Richards in early 2007 and noted her low sense of self-worth due to physical incapacity which resulted in decreased independence and decreased ability to look after her son, leading to angry outbursts (Exhibit D). In February 2008, Dr Causer, a psychiatrist with NSW Health, opined that Ms Richards was suffering from depression/adjustment disorder secondary to injury (Exhibit D).

[56] In March 2008, Ms Richards [sic] general practitioner, Dr Wong, reported (Exhibit B) that Ms Richards had a depressive illness punctuated by periods of anxiety and emotional instability and that ‘a fragile mental state has a significant effect on her life in general’. He did not foresee any short-term improvement. Ms Richards was referred to a chronic pain program at the Liverpool Hospital Pain Clinic.

[57] In April 2007, Dr Roberts, a clinical psychologist, undertook a lengthy review of medical and other material on behalf of the defendants. She concluded that the 2004 injury was one factor that contributed to her ‘current emotional presentation’. Dr Roberts reported elevated anxiety and depression scores on testing but considered that Ms Richards was exaggerating (Exhibit 1). Although Dr Roberts [sic] opinion that Ms Richards was exaggerating her emotional problems was based on psychological tests, other psychologists and psychiatrists have not reported significant exaggeration. Dr Roberts [sic] view differed from that of the psychiatrists with NSW Health, who reported at about the same time. Ms Richards impressed me as honest. Consequently, I do not accept Dr Roberts [sic] opinion that Ms Richards was exaggerating.

29 The primary judge’s conclusions on non-economic loss were set out at [59]-[61] of her reasons, as follows:

“[59] In summary, at the date of the accident Ms Richards was a 33-year-old woman who had bilateral patellofemoral joint arthritis that was symptomatic in her left knee. The symptoms were worsening very gradually. Her right knee was asymptomatic. Some years earlier, she had experienced a back problem that had restricted her ability to lift. Neither her left knee symptoms nor any ongoing occasional back problem prevented her from undertaking relatively heavy work as a truck driver. She was obese, but her obesity was to some extent controlled by the heavy work that she undertook in the course of her employment. She was psychologically vulnerable but had only experienced one significant episode of depression, eight years before the accident.

[60] As a result of the accident, Ms Richards [sic] right knee became symptomatic, virtually immobilising her with pain, swelling and stiffness, and contributing to her left knee and back problems. The chronic pain and loss of the ability to work in a field that she loved made her depressed. Immobility and depression aggravated her obesity. Increased obesity exacerbated her pain and depression. As she will continue to experience significant pain in her right knee and is incapable of returning to her former occupation, it is most unlikely that the cycle of pain, obesity and depression will be broken. Ms Richards [sic] physical and psychological condition has greatly impacted on her working and personal life.

30 It can be noted in passing at this point that, in the light of her Honour’s discussion of Ms Richards’ position, the conclusion of 38 per cent of a most extreme case was not, on its face, obviously erroneous.

31 The primary judge then turned to Ms Richards’ employment prospects. At [66]-[68] of her reasons, the primary judge set out her essential findings:

“[66] Ms Richards had an excellent employment history up to the date of the accident, undertaking moderate to heavy work. She was an enthusiastic worker. She had training and experience as a truck driver. She had no other qualification. Since the accident, she is physically incapable of undertaking any work other than light office type work. She has made reasonable efforts to obtain such work, without success. She may yet obtain some type of light work, possibly on a part-time basis. However, for all practical purposes, she has little residual earning capacity. I estimate her residual earning capacity as no more than $100 per week.

[67] In the period 1 July to 13 August 2004, Ms Richards earned approximately $565 per week net. She was seeking a position that offered better pay. It was agreed that the position offered by the defendants would have paid $20 per hour for a 40-hour week, or approximately $621 net per week in 2005 and $662 net per week now. The position would have been casual for 3 months and then permanent. In 2005, average female weekly earnings were approximately $695 net. They are now approximately $800 net. I find that, but for the accident, that Ms Richards would have earned at least $600 net per week, rising to $700 net per week at the present time. Allowing for a small residual earning capacity, I allow $600 per week from the date of the accident and continuing.

32 Once again, nothing on the face of the reasons bespeaks obvious error.

33 The primary judge then dealt with past and future out of pocket expenses, assessing them at $10,000 and $30,000, respectively; and past and future gratuitous attendant care services, assessing them at $41,184 and $128,858, respectively.

34 On their face the out of pocket expenses appear modest (the $10,000 for the past was agreed). The sums for attendant care services were nominally large. The evidence to support them and the primary judge’s conclusions about them were set out at [76]-[81] of the reasons:

“[76] Before and since the accident, Ms Richards, her partner, her son and a female friend have lived in a rented four-bedroom home on a 4 1/2 acre block.

[77] Before the accident, Ms Richards lead a very busy life. When she returned home after work, she attended to several horses, undertook housework, and assisted her son with his homework while preparing the evening meal. Sometimes, she played with her son. She did all the shopping. Her partner worked long hours and did little housework. Ms Richards and her partner shared the outside work, including the ride-on lawn mowing.

[78] Since the accident, Ms Richards has had difficulty with any work below waist level. She has a ‘grabber’ to assist her to pick up things from ground level. Ms Richards and her partner have installed rails on the front and back steps of their residence and Ms Richards utilises a laundry trolley so that she does not have to bend to a laundry basket. Ms Richards [sic] partner and 15 year old son are responsible for much of the housework. They do most of the sweeping, vacuuming, bathroom cleaning and making of beds. Her partner does all the outside work. He assists with the shopping, which Ms Richards undertakes in a wheelchair. Ms Richards [sic] partner works long hours and her son assists after school until her partner returns home from work.

[79] Ms Richards [sic] partner estimated that he spent about 10 hours per week on domestic duties that he had not undertaken prior to the accident and that Ms Richards [sic] son undertook another 10 hours per week of domestic duties. Ms Richards said that her partner and son were occupied for one to 1.5 hours per day with domestic tasks that she used to perform. Dr Ellis accepted a need for domestic assistance eight hours a week from the date of the injury and continuing.

[80] Having regard to the tasks in question, eight hours per week for past and future assistance is conservative. The threshold prescribed by the CLA of six hours per week over a six-month continuous period is satisfied.

35 Once again, there was no obvious or egregious error in the reasons.

36 The primary judge then turned to the question of the jurisdictional limit. This has been dealt with in Richards v Cornford [2010] NSWCA 99.

The parties and the litigation

37 For the purposes of the later discussion as to the operation of the relevant statutory and legal principles and of the full appreciation of the facts, it is apposite and appropriate to note the characteristics of the parties and some elementary considerations about the litigation that affected them.

38 QBE is a substantial commercial insurer which, as part of its every-day operations, has recourse to the courts to vindicate and defend its rights. That is a self-evident proposition. The purpose of noting it is to recognise QBE’s assumed general familiarity with the legal process and basic obligations and responsibilities in the conduct of litigation, which it carries on in the ordinary course of its business.

39 Ms Richards is not a commercial organisation. She is a working woman who suffered a significant injury that had a deep and serious impact upon her health, including her psychological and psychiatric health, and upon her life generally. The detail of the significant impact of the injury and its consequences upon Ms Richards was plain to QBE at least by 7 April 2009 when the draft reasons were available, if not before.

40 Ms Richards was able to obtain competent solicitors and counsel for the vindication of her rights in litigation which took three and a half years to resolve in the District Court. I am not intending to be critical of the District Court or the parties in identifying that length of time. Personal injury litigation has its own pace. Doctors must be qualified and attended upon. Symptoms develop and must resolve. Procedural complexities sometimes have to be resolved. (There were such complexities here with the motor vehicle insurer which are unnecessary to recount.)

41 Nevertheless, four and three quarter years passed from the time of her injury to the vindication of Ms Richards’ rights in the District Court.

42 The litigious process is inherently stressful for any party, in particular an individual. Ms Richards embarked upon a time-consuming, stressful and potentially very expensive process. Litigation can be described as “a costly and stressful, though necessary, evil”: White v Overland [2001] FCA 1333 at [4]. The wider passage and the paragraph in which this appeared as part of the reasoning were approved by this Court in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116 at [1], [28] and [39]. That stress includes the uncertainty and concern as to the effects of legal costs that can lead to bankruptcy and financial ruin. The reality of the personal strain of litigation is now clearly recognised by the Courts: Ketteman v Hansel Properties Ltd [1987] AC 189 at 220; Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; 225 CLR 364 at [37]; GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 715-716; Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [100].

43 This being the nature of the process of litigation, the courts in this country in modern times, have sought to exercise control and supervision over litigation in order to see cases resolved in a relatively timely fashion. It cannot always be done. Parties, practitioners, courts and judges sometimes fall behind by reference to appropriate standards of efficiency and timeliness. Nevertheless, the need for the due despatch of the cases of litigants is ever-present and is a fundamental aim of the administration of justice.

44 To put the matter simply and bluntly, parties are entitled to expect that the costly and stressful, though necessary evil that is litigation be resolved with reasonable despatch so as to minimise, where reasonably possible, the time during which people are subjected to its rigours and strains.

45 Considerations of this character lay behind the decision of Parliament to pass the CP Act, to which I will return in due course.

46 Ms Richards and QBE should both be taken to have understood the above elementary legal and human aspects of their respective positions as at April and May 2009 when the District Court resolved the controversy that involved them.

The events after judgment

47 On the day the draft reasons became available, 7 April 2009, QBE’s solicitor provided a copy of them to the relevant QBE claims manager.

48 A conference was held two days later with junior counsel for QBE. The claims manager attended. Junior counsel gave advice that if Ms Richards filed a notice of appeal on the issue of jurisdictional limit “a cross appeal would be warranted”: the affidavit of QBE’s solicitor dated 15 April 2010 para 5. The claims manager apparently accepted that advice and gave instructions to QBE’s solicitor recounted by her in para 5 of her affidavit of 15 April:

“… that if a Notice of Appeal was filed the Third Respondent would retain Senior Counsel to provide a written advice in relation to the grounds of the Cross Appeal to a Notice of Cross Appeal, and prepare Submissions in response to the Appeal on the Cross Appeal.”

49 It must have been understood by the claims manager that preparation of such advice and the execution of such instructions within the time provided by the rules of court might require timely attention to steps by way of preparation.

50 The views of junior counsel that were accepted by the claims manager implicitly recognised that the reasons were not obviously or egregiously wrong. QBE was content to rest with its liability for nearly three quarters of a million dollars if Ms Richards did not press the point on the jurisdictional limit.

51 No doubt with considerations of the need for preparation in mind, QBE’s solicitor rang Mr Hagipantelis on 9 April to ask him whether there would be an appeal. She said in a later letter of 29 May 2009 to Mr Hagipantelis that he said to her on 9 April that Ms Richards would not be appealing. This response by Mr Hagipantelis was in contest in the evidence, but Mr Deakin QC, who appeared for QBE on the motion (but who did not appear at the trial and who was not involved in the case until after the notice of motion was filed) accepted that Mr Hagipantelis’ version was more likely to be correct in this respect. Mr Hagipantelis said in a letter to QBE’s solicitor on 2 June 2009, in response to her letter of 29 May that he did not recall the conversation as she did. He said in the letter:

“… We could not nor would not categorically state on behalf of a client that there would be no appeal. We are of course subject to our client’s instructions and it may have been at that case [sic] we had not instructions to file a Notice of Intention to Appeal.”

52 Orders were made in the District Court on 7 May 2009.

53 Preparations for repayment to Medicare and Centrelink were then made. On 26 May 2009, QBE’s solicitor sent a cheque for $6,682.75 to Medicare and cheques for $60,237.79 and $7,494.50 to Centrelink. On the same day, QBE’s solicitor sent a cheque for $698,403.46 to Brydens, being the balance of the judgment.

54 Also on 26 May 2009, Brydens sent a notice of intention to appeal, filed on 22 May, to the solicitors for the defendants.

55 On 29 May the solicitors for the defendants forwarded the notice of intention to appeal to QBE’s solicitor. On that same day, as noted above, QBE’s solicitor wrote to Brydens, referring to the notice of intention to appeal, stating that she had spoken to Mr Hagipantelis on 9 April and on that date Mr Hagipantelis advised that the plaintiff would not file a notice of appeal. I have already dealt with that assertion. Importantly for this application, the letter expressly put Brydens on notice that QBE proposed to file a cross-appeal. The letter also contained the following paragraph:

“We advise that 50% of the Judgment Monies should be retained in trust by your firm to protect the interests of QBE Insurance (Australia) Limited.”

56 Irrespective of whether Mr Hagipantelis’ recollection of the 9 April conversation was more likely to be accurate, QBE’s solicitor’s understanding gave her and QBE a good reason not to commence any preparation for a cross-appeal until 29 May. Until that date, she thought there would be no appeal by Ms Richards.

57 Looking at the matter objectively, it might well be inferred that the cross-appeal only related to damages. The “advice” that 50 per cent of the judgment moneys should be held in trust would not have fully protected QBE from use and dissipation of half of the judgment by Ms Richards. Certainly there was no express indication that QBE intended to challenge its liability in full. There was no evidence as to what Mr Hagipantelis or anyone else at Brydens or Ms Richards thought about this matter. This was the first of three occasions in which someone on behalf of QBE put Brydens and thus Ms Richards on notice that a cross-appeal was being contemplated.

58 On 2 June 2009, Mr Hagipantelis wrote to QBE’s solicitor about the asserted conversation on 9 April. I have dealt with this. The letter referred to the “advice” to keep half the judgment sum in trust, stating that Brydens had been instructed by Ms Richards to account to her for the judgment moneys to which she was entitled.

59 Its request having been rejected, QBE made no application in relation to the judgment moneys.

60 On 6 August 2009 the appellant filed a notice of appeal. The time for filing a notice of cross-appeal therefore expired on 20 August 2009.

61 The evidence before this Court is clear that no step whatsoever was taken by QBE prior to 20 August 2009 in preparation of any aspect of the cross-appeal. From 9 April, QBE’s solicitor’s had instructions to prepare a cross-claim if Ms Richards appealed. Until late May it can be inferred that QBE thought there would be no appeal. From 29 May, however, QBE knew that Ms Richards had the intention to appeal. QBE had the time provided by the notice of intention to appeal to begin preparation for a cross-appeal. No explanation whatsoever was given for the lack of utilisation of that time by QBE. The failure of QBE to give instructions to begin preparation for a cross-appeal, by obtaining senior counsel’s advice and by undertaking any other relevant matters by way of preparation, is to be understood against the background that I have earlier set out. The rules provided for only two weeks to file a notice of cross-appeal should (as was to be expected) Ms Richards file a notice of appeal. No material was placed before the Court to explain the failure of QBE to undertake preparations as an oversight. The only inference that can be drawn is that QBE deliberately chose not to give specific instructions and therefore begin the expenditure of money on the prospective cross-appeal until the time it did. There was no collection of material in June, July or August for the preparation of any advice. There was no evidence of any step being taken to prepare for the timely compliance with rules of court for the anticipated cross-appeal.

62 As QBE and its solicitor knew, the rules provided for fourteen days for the filing of any cross-appeal. They also both knew that no step whatsoever had apparently been taken since 9 April for its preparation.

63 The fourteen day period expired on 20 August, but it was not until 25 August that QBE’s solicitor received instructions from the claims manager to obtain advice from junior counsel and from senior counsel on the grounds of the proposed cross-appeal. There was no explanation of why QBE’s solicitor did not receive instructions from the claims manager until 25 August 2009, then five days out of time, and then only to obtain advice from junior and senior counsel on the grounds of the proposed cross-appeal.

64 QBE’s solicitor stated in her affidavit that senior counsel’s advice was required for her firm to provide instructions to QBE. She said in her affidavit that to proceed with an application for leave to file a notice of cross-appeal she would require advice of senior counsel, the proposed notice of cross-appeal and submissions. She had known this since 29 May, and had done nothing, I would infer, on instructions. QBE’s solicitor said that to brief senior counsel she required the red appeal book and exhibits. She was not cross-examined. I do not suggest for one moment that she was being less than frank in her evidence. However, the justification of her actions must be judged objectively. The preparation of Ms Richards’ appeal did not require all the evidence from the trial. It was a case about the jurisdictional limit of the District Court. The relevant material for that appeal comprised the various iterations of the statement of claim and letters of particulars that had been sent and whether or not they satisfied the relevant rule. The red appeal book would not have included the evidence below, rather it would have included only the pleadings, judgment and notice of appeal. As QBE’s solicitor knew, or should have known, and indeed as the claims manager knew, or should have known, if it were desired to attack the judgment root and branch on liability, as QBE now seeks to do (which attack was not made clear in any correspondence with Brydens) the gathering of the evidence in the case (which evidence, or copies thereof, QBE’s solicitor had, or should have had) and the formulation of any brief to advise for senior and junior counsel would take some time for preparation, for delivery and for advising upon. There is simply no excuse for QBE or its solicitors not to have begun these preparations before 25 August. If it be the case, as one may infer from QBE’s solicitor’s affidavit, that she did not have instructions to commence that preparation, the blame for this delay is to be sheeted home to QBE, and no one else.

65 Junior counsel provided his written advice dated 14 September 2009 under cover of a letter of 22 September 2009 (having conferred with QBE’s solicitor on 9 and 10 September). The written advice was delivered to the claims manager. That advice was not in evidence. QBE’s solicitor said that she next received instructions from the claims manager on 14 September 2009 to brief a particular senior counsel to provide advice on the grounds of cross-appeal, draft the notice of cross-appeal and draft the submissions. QBE’s solicitor said at this point that she needed the exhibits to brief senior counsel. There is no explanation as to why there had not been the collection of the trial material well in advance of the time she was briefing the first senior counsel.

66 QBE’s solicitor said that the exhibits were not at the Supreme Court. They were with the District Court. She did not explain why she and her firm or QBE did not have their own copy of the exhibits that were tendered in the trial.

67 On 22 September 2009, Brydens requested QBE to provide its copy of the exhibits. The exhibits were then located at the District Court, where they no doubt had been during 2009.

68 The matter was listed for callover in the Court of Appeal on 24 September 2009. It can be accepted that there was some delay by Ms Richards in the preparation of the red appeal book in relation to that appeal. That appears in QBE’s solicitor’s affidavit to be relied on as an excuse for the delay in QBE preparing its cross-appeal. For the reasons that I have already indicated, the two matters are not so related.

69 At the callover on 24 September, the solicitor for Ms Richards said that the red appeal book had been filed, that senior counsel was now Ms Norton SC, that the black appeal book containing the transcript was almost ready and that the appellant was preparing the blue appeal book which included the exhibits. Brydens sought and was granted by consent an extension of time in which to file and serve Ms Richards’ written submissions until 16 October 2009. The respondents to the appeal were ordered to file and serve written submissions in reply by 13 November 2009. It is to be recalled that all these submissions related to Ms Richards’ appeal on the jurisdictional limit and had nothing whatsoever to do with the underlying liability findings or quantum findings. At the callover, a representative of QBE’s solicitor said to the Registrar that “the third respondent (QBE) intends to file a notice of cross-appeal”. The solicitor did not seem to appreciate that an extension of time would be required.

70 The red appeal book was received by QBE’s solicitor on 24 September. She said that the red appeal book was incomplete when served. Her letter of 29 September 2009 to Brydens complained about various defects in the contents of the red appeal book. Once again, the red appeal book had no bearing upon the timely preparation of a cross-appeal, as QBE’s solicitor’s affidavit sought to say.

71 QBE’s solicitor said that she received the exhibits on 2 October 2009.

72 Ms Richards’ submissions on her jurisdictional limit appeal were filed on 14 October and served immediately thereafter.

73 QBE’s solicitor’s affidavit recounted that the first senior counsel had commitments which did not enable him to deal with the brief that had been delivered to him. Her affidavit did not disclose any prior inquiry as to his availability. She briefed the second senior counsel on 4 November 2009. The brief was delivered to him on 6 November 2009. A conference was held with him and junior counsel on 10 November 2009. The affidavit was silent as to any inquiry as to when advice and draft documents might be forthcoming or as to discussion that the cross-appeal was already well out of time and the reasons therefor.

74 The matter came before the Registrar of the Court of Appeal again for callover on 19 November 2009. The time for filing QBE’s written submissions on the appeal was extended until 27 November 2009. These submissions were QBE’s submissions in the jurisdictional limit appeal. The matter was listed for further callover on 3 December 2009.

75 In her affidavit, QBE’s solicitor set out in some detail the telephone calls and attempted communications with the second senior counsel asking for not only the submissions in the jurisdictional limit appeal but the advice and draft notice of cross-appeal.

76 At the callover on 3 December 2009, a solicitor from QBE’s solicitor’s firm sought an extension of time in which to file its submissions until 11 December 2009. That extension was given. Once again, these submissions were in relation to the jurisdictional limit appeal. The solicitor said to the Court: “The third respondent will be filing a notice of cross-appeal”. QBE’s solicitor said in her affidavit that it was noted at the callover (quite possibly, I infer, by the Registrar) that QBE would need to file a motion for leave to file a notice of cross-appeal if consent were not forthcoming. Further, there was no indication as to what would be put in issue by that notice of cross-appeal. QBE’s solicitor in her affidavit also seemed to say that the matter was set down for hearing for five days commencing on 5 May 2009. In fact, the matter was set down for half a day on 5 May 2009 to deal only with the jurisdictional limit appeal.

77 QBE’s solicitor said that on 21 December 2009 she received the advice of the second senior counsel (which was not in evidence) and on 22 December 2009 she received the submissions drawn by him which were filed on 22 December 2009. I infer that the submissions were the submissions in the jurisdictional limit appeal. From the balance of her affidavit, it is to be inferred that the advice of the second senior counsel received on 21 December 2009 was in relation to the proposed cross-appeal.

78 QBE’s solicitor conferred with the second senior counsel and the claims manager in early January 2010 in relation to the grounds of the proposed cross-appeal.

79 QBE’s solicitor then set out in her affidavit the communications from January through to March with the second senior counsel for provision of the notice of cross-appeal and submissions and a letter in support of the application for leave to file the notice of cross-appeal.

80 The draft notice of motion, notice of cross-appeal and submissions in support of the cross-appeal were received from the second senior counsel in mid-March. A notice of motion was filed on 18 March.

81 Before turning to the position of Ms Richards, a number of things should be said about this chronology.

82 First, the second senior counsel caused delay from November to March in the preparation of the advice and draft notice of cross-appeal. He knew the matter was urgent. He knew the application was out of time. That delay is not without its significance. However, QBE found itself in a position it did through its own culpability. It did nothing from early June until late August (after the relevant time had expired) to give instructions to begin preparation of the notice of cross-appeal. It knew that it would need such material from the trial as related to the possible grounds of cross-appeal. No explanation was given in the affidavits for the lack of steps taken from early June. With the greatest respect to QBE’s solicitor, the constant references in her affidavit to the red appeal book in the jurisdictional limit appeal and the absence of the exhibits being a problem in briefing senior counsel were matters that were either irrelevant (the red appeal book) or that should have been dealt with far earlier than they were (the exhibits).

83 It was not until 14 September 2009 that QBE’s solicitor received instructions from QBE to brief senior counsel to advise on the notice of cross-appeal. The first senior counsel approached was busy. Another five weeks passed before the second senior counsel was approached on 4 November 2009. The two months approaching the summer break, as is notorious, is one of the busiest times of the year.

84 It is fair to say, with due respect to the second senior counsel who is highly experienced and no doubt having a practice of a size reflecting that, that he was slow to deal with the matter. However, he also had to deal with the submissions in reply on the appeal.

85 It is now necessary to turn to the position of Ms Richards. She received the balance of the judgment moneys after payment of Medicare and Centrelink. Her solicitors retained the sum of $30,000 on account of their costs and expenses. From the net sum she then bought a car most suitable to her in the light of her disabilities. The car cost $55,000 after she had traded in another vehicle. She purchased a block of land near Narellan. She purchased that property in the name of her partner who is her de facto husband with whom she has lived for nine years. The property cost $245,000. She then engaged a builder to build a house on the property, which house will cost in excess of $240,000. Up to 1 April 2010, she had paid the builder $24,000 to be held as retention money. She has also paid the builder a sum of almost $50,000 in progress payments. As at 1 April 2010, she was to make further payment to the builder within the next two to four weeks of $62,000. She has previously paid a sum in the order of $3,000 for plans and a sum of approximately $1,000 for Council fees. She has also paid insurance on the motor vehicle which she purchased.

86 Ms Richards gave evidence that her partner and she were planning to marry in September 2010 and that she had paid moneys towards that wedding, including for photographers, a celebrant, hire cars and a wedding dress.

87 Ms Richards no longer draws Centrelink benefits and has been living on the balance of the judgment moneys. She has one child aged 16 who lives with her and her partner. Another 16 year old lives with them, who is the child of a friend. She is responsible for the care and maintenance of both her child and her friend’s child.

88 Since completion of the District Court proceedings, she has been entirely responsible for payment for her continuing treatment. Some of the expenses she has undertaken have been met by Medicare, but she has been responsible for payment of many expenses including medication which cannot be recovered under Medicare. She took out private health insurance in August 2009, but is not eligible to claim any benefits until August 2010.

89 She said she had commenced seeing a psychologist again. This is being paid for by her. She has also seen a neurosurgeon and paid for that consultation, but did receive a rebate from Medicare. She also said that she had been having hydrotherapy three times per week which was paid for by her.

90 She said in her affidavit that as a result of the injuries and the loss of her mobility she gained a significant amount of weight. Following the completion of the District Court proceedings and receipt by her of the judgment moneys, she made arrangements to undergo a surgical procedure in relation to her weight. This procedure was paid for and cost $9,000. She has also expended money on new clothes, shoes and general household maintenance including payment of bills, rent and the engagement of a house cleaner each week.

91 Her partner is self employed as a courier. Ms Richards said that before completion of the District Court proceedings her partner was almost entirely responsible for all household expenses and maintenance including care for herself and her son. She said that since she came into the judgment moneys after completion of the District Court proceedings, she has felt personally obligated to contribute as much as she could to the household expenditure and to provide for herself, her son and for her partner.

The application for an extension of time to file the notice of cross-appeal

92 The draft notice of cross-appeal challenged the conclusions of the primary judge as to duty of care owed by, and the negligence of, Mr Cornford and TH; it also challenged the conclusions that the relationship was not one of contract of service and that the Policy exclusions did not apply. No challenge was made to quantum.

93 The matter came before me as referrals judge on Monday 29 March 2010. It was plain that the cross-appeal could not be heard conveniently on 5 May 2010 with Ms Richards’ appeal. I ordered that that appeal proceed and indicated that if an extension of time were given to file the notice of cross-appeal and if the appeal on 5 May were made irrelevant by the result of the cross-appeal (if an extension of time were to be granted), QBE would pay the costs of all parties to that appeal in any event and on an indemnity basis. I referred the application to extend time to a bench of three judges.

94 On 29 March 2010, Mr Rowe indicated that if QBE’s application were allowed his clients may have to consider joining other parties, such as the motor vehicle insurer or the workers compensation insurer. Quite why any such applications were not made or pressed further at the trial (the motor vehicle insurer had appeared as an intervenor in the proceeding) was not made clear.

95 After 29 March 2010, a legal representative of the workers compensation insurer (another company in the QBE group) approached the Court and indicated that if leave were given it would seek to be joined to the proceeding and would agree to be bound by any result. This was not, as the Court understood, intended for the advantage of Ms Richards. Ms Richards had taken no step under the relevant workers compensation legislation to advance a work injury claim. It is unnecessary to dwell on any aspect of these matters. It is sufficient to indicate that were leave to be granted various legal complexities would arise.

96 One of those legal complexities which would arise if QBE were successful on its cross-appeal would be an application for restitution of the judgment sum. A significant proportion of the judgment moneys was given directly to Ms Richards by QBE. Strictly QBE was a cross-defendant indemnifying its insured, TH. Any restitutionary action would raise questions of change of position on the faith of the receipt. Mr Deakin QC, on behalf of QBE, submitted that the evidence as to Ms Richards’ position was relevant at the stage of restitution and not at the stage of leave to extend time. For the reasons which will become apparent I do not agree with that submission.

97 The jurisdictional limit appeal was heard on 5 May 2010 and judgment was delivered on 10 May 2010.

The rejection of the application

98 The statutory framework for the exercise of the power and discretion to extend or not to extend time as sought in the motion is constituted by the CP Act, ss 56-60.

99 The importance of these provisions has been stressed by this Court. See for example Dennis v Australian Broadcasting Corporation [2008] NSWCA 37; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[161]; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; Halpin v Lumley General Insurance Ltd [2009] NSWCA 372; and Bi v Mourad [2010] NSWCA 17.

100 Section 56 is central, and vital, to understanding how litigation is to be conducted in this State. It provides for an overriding purpose in s 56(1) as follows:

“(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.”

101 Section 56(2) contains a statutory command to the courts of this State to seek to give effect to the overriding purpose:

“(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.”

102 Section 56(3) creates a duty upon litigants to assist the court to achieve that purpose:

“(3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.”

103 Section 56(4) forbids practitioners causing their clients to be put in breach of the clients’ duty:

“(4) A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty identified in subsection (3).”

104 The duty upon the client can be seen to be one of imperfect obligation, but it is nevertheless real. The capacity, by s 56(5), to take breach of the duties in s 56(3) and (4) into account in the making of a costs order, does not prevent a breach of the duty in s 56(3) or (4) being taken into account in the exercise of other powers by the Court, indeed s 58(2)(a) requires that to be done and s 58(2)(b)(iv) expressly permits it to be done.

105 Section 57 describes the object of case management as follows:

“ 57 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).”

106 As I sought to make clear in Hans Pet and Bi v Mourad, the question of efficiency is not the imposition of mere managerial standards. Rather, the timely disposition of litigation is central to the provision of justice in the individual case, and generally. I repeat what I said in Bi v Mourad at [47]:

Civil Procedure Act

107 The considerations in s 57(1)(a)-(d) are inextricably related. Together with s 56(2), s 57(2) requires this Court to apply rules of court as best to ensure the attainment of the objects in s 57(1). Those objects include, of course, the “just determination of the proceedings”: s 57(1)(a). There can be no doubt, however, that that means “just” for both parties: Aon at [94].

108 Section 58(2) is also important. It states in s 58(2)(a) what are mandatory considerations and in s 58(2)(b) what are non-mandatory considerations:

(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.”

109 Sections 59 and 60 deal with elimination of delay and costs:

“ 59 Elimination of delay

In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.

60 Proportionality of costs

110 All these provisions are to be read against the background of the modern approach to despatch of litigation and the need for reasonable expedition contained in cases such as Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379; Sali v SPC Ltd [1993] HCA 47; 67 ALJR 841 at 844 and Aon.

111 The just determination of the proceedings was stressed by Mr Deakin QC in his submissions. He referred to the “shutting out” of QBE from its rights and the necessary injustice of that position. This should not be visited up on QBE, he submitted, by reason of the delay of its retained solicitors and counsel. The appeal could be heard this year, with a judgment likely in the last two to three months of 2010, or, at the latest early 2011. Any wasted costs would be borne by QBE. There was, therefore he submitted, no contrary “injustice” countervailing to the injustice to QBE of being shut out from vindicating its legal rights.

112 I disagree.

113 First, QBE by its own conduct in breach of its duty under the CP Act s 56(3), failed to protect its right under the UCPR to cross-appeal. The rules reflect the prima facie entitlement QBE had for a proper opportunity to vindicate its rights in the controversy. It lost those rights, by its own conduct. Thereafter, it had a right to seek the discretionary exercise of a power by the Court to have time extended for the filing of its notice of cross-appeal. The approach of QBE to the cross-appeal was the antithesis of the overriding purpose. QBE’s approach, from early June to late August was one in which time did not matter. It led to the result that parties would have to wait for it and once it had prepared itself it would bring forward its application to vindicate its rights.

114 Secondly, QBE failed (again in breach of s 56(3)) to pursue that application to the Court with any despatch. Whilst the solicitors can be criticised for a lack of alacrity from 25 August, and likewise the second senior counsel from November, the position QBE then found itself in was referable and due to its own failure to give instructions in June, July and early August to get on with the preparation of a possible cross-appeal.

115 The delay from August to November was that of QBE’s solicitors. They did not need red appeal books. There was a delay as to exhibits, but why they did not have their own or why they did not promptly after 25 August (knowing QBE was already out of time) obtain them from the District Court was not explained.

116 The second senior counsel was briefed regarding a notice of cross-appeal now over two months out of time. If he was not likely to be able to respond timeously, it was the solicitors’ responsibility to find senior counsel to advise promptly. The solicitors could have acted on junior counsel’s advice, if so instructed.

117 Delay took place until March. In the evidence, the solicitors blame the second senior counsel. Senior counsel took responsibility. However, as I have said, QBE placed their legal practitioners in this position by failing to give timely instructions in June, July and August.

118 Thirdly, there is considerable countervailing injustice. As QBE knew from the litigation and the reasons, Ms Richards had a degree of psychological and psychiatric vulnerability which was real, uncontrived and directly related to and consequent upon her injury. She received the judgment moneys and, as could reasonably be expected, she began to repair her life. I will not repeat the evidence about this. It is relevant to this application, and not just to any restitution action for the recovery of the judgment moneys. The consequence of granting an extension of time in late March or May 2010 would have been to place Ms Richards back into a position of uncertainty and stress about this litigation and its consequences for another six to nine months. This stress and uncertainty would not only be about winning or losing a case, being compensated or not for her significant injuries, possibly having costs awarded against her and perhaps being made bankrupt, but also about possibly losing the land, house, car and refunding moneys spent on living expenses, including her wedding. These are not considerations capable of being dealt with by costs. They are not answered by saying that her solicitors were told of an intention to cross-appeal. With the utmost respect to QBE and its solicitors, the view that merely saying this, that is stating an unparticularised intention, was appropriate in September and December borders on arrogance to Ms Richards and to the Court. There was a right to cross-appeal if the rules were complied with. If QBE chose, as appears to be the case here, not to comply with the rules, the leave of the Court was required to extend time. Ms Richards had the judgment moneys and was entitled to use them. A timely cross-appeal before 20 August with its grounds illuminated would have required Ms Richards to recognise that the fight was not over. Instead, matters proceeded for another seven months.

119 As Gummow, Hayne, Crennan, Kiefel and Bell JJ recognised in Aon at [94], referring to what Waller LJ said in Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894, where a party has had a sufficient opportunity to plead its case it may be necessary for the court to make a decision which may produce a sense of injustice in that party for the sake of doing justice to the opponent and other litigants.

120 I will deal with other litigants shortly. For an extension of time now to be given to QBE seven months out of time after QBE had done nothing from early June until late August to protect its own rights and to prepare a possible cross-appeal would reasonably create a sense of injustice in Ms Richards as to how the legal system operated. Someone in her position could reasonably think that the strain and uncertainty imposed on her by such a decision (if made) would reveal that the strictures of the CP Act, ss 56-60, the duty on parties to assist to further the overriding purpose and the general statements of principle as to the conduct of modern litigation were no more than empty and pious rhetoric. They are not. Ms Richards and QBE were entitled to a determination that was just and timely. Ms Richards’ entitlement to that would be undermined by granting to QBE, in all the circumstances, an extension of time that would lengthen the duration of the controversy by another six to nine months.

121 In addition, there are considerations of other litigants. The consequences of the late application by QBE would include the separate listing of the cross-appeal in the last quarter of this year. If the cross-appeal had been put on within time it could have been heard with Ms Richards’ appeal and together they would have taken little more than one day. As it is, Ms Richards’ appeal took half a day on 5 May and the cross-appeal would take the best part of a day later this year. This is not, in itself, a significant body of extra time. However, if one considers it as the product of an exercise of a discretion which would be made in other cases a significant factor would have to be built into the Court’s operations to take account of parties who, like QBE in this case, did not take timely steps for the vindication of their rights. This would be a significant impediment to other litigants in the running of this Court’s list.

122 There are other matters which confirm me in the view that in the balancing of interests between QBE and Ms Richards a decision should be made refusing QBE’s application. Apart from the fact that QBE took no steps from early June to protect its rights, from early April it was not concerned to appeal if Ms Richards did not appeal herself. One can infer from this that, at least as advised in early 2009, QBE did not feel any sense of injustice as to the verdict of the primary judge. Further, though I am prepared to approach the application on the basis that QBE’s cross-appeal was reasonably arguable, as I have earlier said, there was no obvious or egregious error in the approach of the learned primary judge.

123 It is unnecessary to consider in any detail the position that would have obtained had the facts demonstrated that QBE was guiltless in the default that has occurred and that it was only the legal practitioners who were the instruments of delay. For the reasons that I have given, that is not the position here. In large and significant part, the failure by QBE to give appropriate instructions from early June to prepare a likely cross-appeal can be seen as instrumental in the problems that it faced. There was a lack of alacrity in the second senior counsel dealing with an application already out of time. The same can be said of the solicitors. Although they, on many occasions, sought to hurry the second senior counsel (as they were at pains to demonstrate in the evidence) their responsibility went further than that and they should have recognised the need to deal with the matter either after instructions upon junior counsel’s advice or after obtaining a senior counsel who could deal with the matter promptly.

124 It is also unnecessary to consider what would have been the position had the case concerned another commercial entity, rather than a person in the position of Ms Richards. Different considerations would obtain, though not necessarily with a different result. Commercial parties are expected to propound their commercial disputes with despatch. Here, a commercial party did not do so, preferring what can only be described as a languid approach from June to the end of August. This put an individual, otherwise placed at psychological risk by the injuries she had received in the accident in question, in a position of risk of significant personal strain.

125 In all the above circumstances, I was of the view on 6 May that QBE should not be given an extension of time to file its notice of cross-appeal and that it should pay Ms Richards’ costs of the motion (which costs order it conceded in paragraph 3 of the notice of motion.)

126 Since completing these reasons, I have read the reasons in draft of Basten JA. I agree with his Honour’s additional observations.

127 McCOLL JA: I agree with Allsop P.

As the President has noted, on 6 May 2010 the Court refused an application by QBE Insurance (Australia) Ltd (“QBE”) to extend the time for filing a notice of cross-appeal. I agree with his Honour’s reasons and would add the following observations in support of the approach outlined by the President. These observations are directed to two specific matters, namely the statutory regime engaged by the application and the evidential basis for the application.

Statutory regime

129 The rules regulating applications for leave to appeal, appeals and cross-appeals to this Court are to be found in Uniform Civil Procedure Rules 2005 (NSW), Part 51. All applications and appeals are subject to prescribed time limits. The time limits run from the “material date” which, in the case of a judgment of the District Court, is identified as “the date on which the decision is pronounced or given”: r 51.2, material date (e). The judgment of Murrell SC DCJ was given on 7 May 2009. If QBE were aggrieved by the judgment, it had a right of appeal pursuant to s 127 of the District Court Act 1973 (NSW). Given the amount of the judgment, no leave was required: cf s 127(2)(c). QBE had three courses open to it in order to exercise such a right. First, if in doubt as to whether it wished to pursue an appeal, it could have filed and served on the prospective respondents, a notice of intention to appeal, within 28 days after the material date: r 51.8. If it wished to pursue that intention, it would have been required to file and serve a notice of appeal within three months after the material date, namely by 7 August 2009. It did not take that course and does not now seek to do so.

130 The second course available to it was to file a notice of appeal which, absent the preliminary step of giving notice of intention to appeal, was required to be undertaken “within 28 days after the material date or such other time as the Court may fix”: r 51.16(1)(c). The Court would have power to extend time under sub-r (1)(c), “at any time”: sub-r (2). QBE did not ask the Court to exercise that power.

131 The third alternative was to file and serve a notice of cross-appeal seeking to discharge or vary the judgment below: r 51.17(1). There being no requirement to seek leave to cross-appeal, the notice was to be filed and served in accordance with the following subrule:

51.17 Filing and service of notice of cross-appeal

132 The powers of the Court to extend time are substantially in identical terms in relation to appeals and cross-appeals. Nevertheless, QBE sought support for its application from the differential treatment of appeals and cross-appeals with respect to the stated temporal restriction. Thus, a party wishing to appeal had either 28 days, or, if notice of intention were given, three months, from the date of judgment. By contrast, QBE noted, a cross-appellant had only 14 days, albeit from the date on which the appeal was filed. (The rule might better provide that the 14 days run from the date on which the notice of appeal was served, if later than the date of filing, and no doubt an extension of time would readily be granted to accommodate any difference: that was not an issue in the present case.)

133 The temporal variation may be conceded, but the shorter period for filing a cross-appeal is understandable, given the nature of the procedure. A cross-appeal is in the nature of an appeal, in that it seeks discharge or variation of the orders of the Court below. Where both parties to proceedings wish to challenge the orders below, it is not uncommon for each to appeal. The procedure by way of cross-appeal is conducive to avoidance of appeals where a party is, in effect, content to accept less than complete success at the trial, so long as the other party does not seek to improve its position as determined at trial. The cross-appellant is not in a worse position, with regard to time, than the appellant. The rule requires, in effect, that a party willing to abide by the outcome unless the other party appeals must be in a position to move promptly in the event that the other party does take that step. As the President has fully explained, QBE failed to act in accordance with the underlying requirement in that respect.

134 In considering the exercise of the power to extend time, this Court is required to give effect to the “overriding purpose” of the Civil Procedure Act 2005 (NSW) and the rules, which is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”: s 56(1). The requirements, as expressed in ss 56, 57 and 58 of the Civil Procedure Act (set out above at [99]-[102], [104] and [107]) are in similar, but arguably stronger terms, than r 21 of the Court Procedures Rules 2006 (ACT), applied in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 (“Aon”).

135 The order under challenge in Aon was said to have involved an application to amend pleadings to permit the “real issues in the proceeding” to be decided: Court Procedures Rules, r 501. (It was held otherwise in the High Court.) Permitting that course would (and did in Aon at first instance) lead to the vacation of trial dates and other consequences in the proceedings then on foot. This case was different: Ms Richards’ appeal was heard on the date for which it had been fixed and has been determined. Once the appeal proceedings had been determined by final orders, there may have been a question as to whether QBE was any longer entitled to file a notice of cross-appeal. That issue was not raised and, to avoid the issue arising, this Court made orders disposing of the application prior to deciding the appeal. It was also unnecessary to decide whether the final determination of Ms Richards’ appeal, and the entry of orders in respect of that appeal, would constitute an obstacle to the prosecution of a cross-appeal.

136 There may also have been an issue as to whether, for the purposes of the Civil Procedure Act, “the proceedings” were the appeal, the cross-appeal or both taken together. The submissions proceeded on the basis that the appropriate course was to treat the proceedings as the combination of the appeal and the cross-appeal. That was sensible, in a practical sense, because, if successful in its proposed cross-appeal, QBE sought restitution of the moneys paid by it to Ms Richards.

137 Although s 56 purports to identify a single “overriding purpose”, what is in fact required by an application of the statutory mandate is a balancing exercise. In some cases, compromise will be possible; in other cases, of which this is an example, there is a binary choice. Either Ms Richards is entitled to the consequences of finality and is not at risk as to the proceeds of her judgment, in which case QBE will be denied its right of appeal, or Ms Richards’ judgment will be placed at risk, so that QBE may pursue its challenge to liability. There is a tension to be resolved: see Halpin v Lumley General Insurance Ltd [2009] NSWCA 372 at [28] (in my judgment) and [93]-[95] (Sackville AJA, Tobias and I agreeing).

138 In written submissions on the motion, QBE made no reference to the provisions of the Civil Procedure Act discussed above. They were relied on in passing, in submissions filed for Ms Richards. At the hearing, counsel for QBE did not suggest they were inapplicable. However, their consideration was essential to the identification of the criteria to be applied in determining the application. More broadly, QBE did not expressly identify criteria by which its application was to be determined. Such criteria had to be gleaned from the matters discussed in the submissions. These included:

(a) potential prejudice to each party from acceptance or rejection of the application;

(b) the reasons for the applicant not bringing the cross-appeal in a timely manner, and

139 The applicant also sought to exclude certain considerations, namely:

(a) withholding relief as a form of discipline or punishment for disobedience to the rules, and

140 It may be added that little consideration was given to the available responses of other parties to the cross-appeal, if it were to run. For example, an order was sought in the draft notice of cross-appeal seeking judgment in favour of QBE against Mr Cornford and his company, together with interest. (Neither had received any payment from QBE.) However, their counsel advised the Court that they would seek to challenge the finding of negligence in the original proceedings if the cross-appeal proceeded. Whether they were entitled to do that was unclear, but QBE did not argue that they could not, or should not be permitted to seek to take that step. There was also acceptance by QBE that the worker’s compensation insurer would wish to be joined. It is sufficient to say that the procedural consequences of an extension of time were not clearly identified or addressed by QBE, with the result that the Court could not be satisfied that they would be as limited as suggested by counsel for QBE.

141 QBE also sought to rely in its submissions on the proposition expressed by Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710, said to have been cited with approval in the judgment of Gummow, Hayne, Crennan, Kiefel and Bell JJ in Aon at [73]. To the extent that Bowen LJ stated that the courts were to decide the rights of the parties and “not to punish them for mistakes they make in the conduct of their cases”, the proposition should be accepted. The High Court did not, however, give wholehearted support to what followed. However, importantly for present purposes, the relevance of the passage depended upon whether QBE did in fact make an “error or mistake”. That requires attention to the evidential basis upon which the present application was made.

Evidential basis of application

142 QBE relied upon three affidavits of its solicitor, one of which annexed a draft notice of cross-appeal and the cross-appellant’s submissions in support thereof, and added two paragraphs as to the history of the matter. The second identified one further matter of history and set out searches undertaken to ascertain the assets of Ms Richards. The third affidavit (sworn on 15 April 2010) set out the detailed history of the matter together with some statements as to why steps were or were not taken at a particular time. It is the last affidavit which formed the basis of the principal arguments for QBE. Its contents have been discussed in detail by the President and need not be repeated.

143 Two aspects of the affidavit should be noted. First, the solicitor stated at par 17:

“I was aware of the requirement of Rule 51.17 of the Uniform Civil Procedure Rules [which?] requires that a Notice of Cross-Appeal must be filed and served on each necessary party within 14 days after the filing of a Summons seeking leave to Appeal or a Notice of Appeal, whichever is the earlier.”

144 The affidavit was set out chronologically, but I would infer that the statement as to the solicitor’s state of knowledge applied at all material times.

145 The affidavit was prepared on behalf of QBE, the solicitor noting that throughout “these proceedings” she had received instructions from a named senior claims officer of QBE: paragraph 2. No evidence was proffered from the senior claims officer, nor from any other officer of QBE. It should be inferred that, as an experienced solicitor, the deponent would have provided information, with advice where necessary, to the instructing officer of QBE. It is not possible on the evidence to draw a line between that which QBE knew, understood or required and that which the solicitor stated in her affidavit.

146 Secondly, at no point in the affidavit did the solicitor indicate that she was under any misapprehension or made any mistake or error. It should similarly be inferred that QBE was under no misapprehension and made no mistake or error. Its course of conduct was therefore deliberate and was undertaken in full understanding of the requirements of rules of the Court. The only proffered explanation or excuse for non-compliance with the temporal requirements of the rules, was the material outlined by the President, seeking to pass the responsibility for the later stages of the delay to senior counsel. In relation to the period after 6 November 2009, there was no statement as to when she (and therefore QBE) expected to receive the advice on any cross-appeal; there is no evidence that counsel was given instructions in that regard. Even the subject-matter of the possible cross-appeal, then under consideration, was not identified.

147 The evidential basis was inadequate to warrant the extension of time sought.

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18/06/2010 - Counsel incorrect - Paragraph(s) Coversheet

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Richards v Cornford (No 3) [2010] NSWCA 134

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CITATION:	Richards v Cornford (No 3) [2010] NSWCA 134 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	6 May 2010
JUDGMENT DATE:	11 June 2010
JUDGMENT OF:	Allsop P at 1; McColl JA at 127; Basten JA at 128
DECISION:	Orders on 6 May 2010 1. Order 3 in the notice of motion dated 8 March 2010 and filed by QBE Insurance (Australia) Limited (QBE) to the effect that QBE pay the costs of the respondents to the motion. 2. Otherwise dismiss the said motion seeking an extension of time within which to file and serve a notice of cross appeal.
CATCHWORDS:	PROCEDURE - Supreme Court procedure - New South Wales - out of time for filing of notice of cross-appeal under rules of court - application for extension of time - delay caused by party's own conduct - no steps taken for timely preparation of cross-appeal - Civil Procedure Act 2005 (NSW) ss 56-60 - duties of parties in the conduct of litigation - just and efficient determination of proceedings
LEGISLATION CITED:	Civil Liability Act 2002 (NSW) ss 5F, 5G, 5H and 5I Civil Procedure Act 2005 (NSW) ss 56-60 Court Procedures Rules 2006 (ACT) r 21, r 501 District Court Act 1973 (NSW) s 127 Motor Accidents Compensation Act 1999 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Part 51 Workplace Injury Management and Workers Compensation Act 1998 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; 225 CLR 364 Bi v Mourad [2010] NSWCA 17 Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379 Cropper v Smith (1884) 26 Ch D 700 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 Halpin v Lumley General Insurance Ltd [2009] NSWCA 372 Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 Ketteman v Hansel Properties Ltd [1987] AC 189 Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116 Richards v Cornford [2010] NSWCA 99 Richards v Cornford (No 2) [2010] NSWCA 112 Sali v SPC Ltd [1993] HCA 47; 67 ALJR 841 Toll Pty Ltd v Dakic [2006] NSWCA 58 Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193 White v Overland [2001] FCA 1333 Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894
PARTIES:	Danielle Richards (Appellant) Ian Cornford (First Respondent) Taringha House Pty Ltd (Second Respondent) QBE Insurance (Australia) Ltd (Third Respondent)
FILE NUMBER(S):	CA 2009/298373
COUNSEL:	Ms S Norton SC, Mr M Daley (Appellant) Mr J E Rowe (First and Second Respondents) Mr P J Deakin QC, Mr J G Stewart (Third Respondents)
SOLICITORS:	Brydens Law Office (Appellant) John Carmody & Co (First and Second Respondents) A R Connolly & Company (Third Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 4344/2005
LOWER COURT JUDICIAL OFFICER:	Murrell DCJ
LOWER COURT DATE OF DECISION:	7 May 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Richards v Cornford [2009] NSWDC 60