Schenscher v Adelaide Mushrooms (Nominees) Pty Ltd
[2020] SASC 101
•16 June 2020
SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
SCHENSCHER v ADELAIDE MUSHROOMS (NOMINEES) PTY LTD
[2020] SASC 101
Judgment of The Honourable Justice Bampton
16 June 2020
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
MAGISTRATES - COMMENCEMENT OF PROCEEDINGS - WITHDRAWAL, STRIKING OUT AND REINSTATEMENT OF INITIATING PROCESS - REINSTATEMENT
MAGISTRATES - COMMENCEMENT OF PROCEEDINGS - WITHDRAWAL, STRIKING OUT AND REINSTATEMENT OF INITIATING PROCESS - STRIKING OUT AND DISMISSAL OF PROCEEDINGS
Appeal against Magistrate’s refusal to set aside an order dismissing a claim for damages – where alleged cause of action arose in 2009 – where multiple applications for extension of time to serve the claim were filed – where no affidavit of service filed – where claim was dismissed for want of prosecution on 25 May 2015 – where claim reinstated on 27 April 2016 – where claim dismissed again on 28 September 2016 – where an application for reinstatement filed 10 April 2018 and served 10 months later – whether Magistrate erred in finding that reasonable excuse for not having complied with the Magistrates Court (Civil) Rules 2013 or Court orders had not been established pursuant to r 87(2)(b) of the Magistrates Court (Civil) Rules 2013 – whether exercise of judicial discretion miscarried.
HELD: Appeal dismissed – the delay in the prosecution of the claim is inordinate and inexcusable – no reasonable excuse for the delay has been established – the discretion prescribed by r 87(1) to set aside the order dismissing the claim has not been enlivened.
Magistrate Court (Civil) Rules 2013 (SA) r 28, r 87, referred to.
Williams v SF Evans & Sons (1988) 52 SASR 237; Maramidis v Germain [2017] SASC 103; In the matter of K-Bek Motors Pty Ltd [2017] NSWSC 183; Re: Harris Scarfe Ltd (in liq) & Harris Scarfe Wholesale P/L (in liq) [2006] SASC 277; Langanis v Roberts (Unreported, 15 July 1993, S4043), discussed.
Watson v Anderson (1976) 13 SASR 329; Brisbane South Regional Health Authority v Taylor (1996) 139 ALR 1; House v The King (1936) 55 CLR 499; Schenscher v Adelaide Mushrooms (Nominees) Pty Ltd [2020] SASC 19, considered.
SCHENSCHER v ADELAIDE MUSHROOMS (NOMINEES) PTY LTD
[2020] SASC 101Magistrates Appeal: Civil
BAMPTON J: Over 11 years ago, on 15 February 2009, Beverley Schenscher alleges that she slipped on a mushroom and fell onto the ground landing on her buttocks (“the fall”). At the time of the fall, Ms Schenscher was employed by Labour Contract Solutions Pty Ltd (“Labour Solutions”) and working as a mushroom picker at the premises of Adelaide Mushrooms (Nominees) Pty Ltd (“Adelaide Mushrooms”).
Ms Schenscher claims that as a result of the fall she suffered personal injuries (“the injuries”) and has been unable to work since August 2009. She commenced a claim for damages in the Magistrates Court on 15 February 2012, just prior to the expiry of the limitation period, against Adelaide Mushrooms and Labour Solutions (“the claim”).
The claim was dismissed for want of prosecution on 25 May 2015, reinstated on 27 April 2016, and dismissed again on 28 September 2016. Eighteen months later on 10 April 2018, Ms Schenscher filed an application seeking to reinstate the claim. Ten months later that application was served on Adelaide Mushrooms and Labour Solutions. The application was heard by Magistrate Jackson (“the Magistrate”) on 16 May 2019 and dismissed on 11 June 2019.
On 1 July 2019, Ms Schenscher filed a notice of appeal against the Magistrate’s dismissal of her application to reinstate the claim. A second notice of appeal was filed on 23 September 2019.
Background
Ms Schenscher first instructed Mason Westover Homburg in November 2010 regarding a common law and WorkCover action in respect of the injuries. In an affidavit sworn 9 May 2019 Philip Westover, now a solicitor at Tindall Gask Bentley, deposed that throughout the 2000s Mason Westover Homburg had a relationship with the firm Johnston Withers whereby Johnston Withers provided advice and assistance in WorkCover matters and personal injury matters. Ms Schenscher’s WorkCover claim form was lodged on 23 June 2011 and the claim was filed on 15 February 2012 by Johnston Withers as agent for Mason Westover Homburg.
On 21 January 2013, the Magistrates Court Registry sent Ms Schenscher’s solicitors a notice of intent to inactivate action.
First ex parte application (13 February 2013)
On 13 February 2013, Ms Schenscher made an ex parte application for an extension of time of six months to serve the claim. In the affidavit filed in support sworn 12 February 2013, a solicitor employed by Johnston Withers deposed that:
workers compensation claim involving both the first and second defendants concluded in mid 2012. … the plaintiff has recently completed a formulated claim to be forwarded to the Defendants for their consideration … We seek a further six months to serve … The plaintiff is hopeful that an informal conference may be convened in the near future and that the matter may be resolved”
On 14 February 2013, Magistrate Gumpl granted the 13 February 2013 ex parte application.
Second ex parte application (12 August 2013)
On 12 August 2013, Ms Schenscher filed an ex parte application seeking a further six months to serve the claim. In the affidavit in support sworn 12 August 2013, Ms Schenscher’s solicitor who was employed by Johnston Withers and acted as an agent for Mason Westover Homburg (“the solicitor” or “Ms Schenscher’s solicitor”) repeated matters deposed to by his colleague in the affidavit sworn 12 February 2013 filed in support of the first ex parte application. Over the course of this matter, the solicitor has been employed by Johnston Withers, Maurice Blackburn, and Grope Hamilton whilst acting for Ms Schenscher as an agent for Mason Westover Homburg.
On 13 August 2013, Magistrate Eldridge granted Ms Schenscher’s ex parte application for a further six-month extension to serve the claim.
On 17 February 2014, the Magistrates Court Registry sent a second notice of intent to inactivate action.
Third ex parte application (12 February 2014)
On 12 February 2014, Ms Schenscher filed an ex parte application for an extension of time to serve the claim. In the affidavit sworn 12 February 2014 filed in support, the solicitor deposed that Ms Schenscher:
… had some difficulties in being able to fund the purchase of up to date medical evidence.
The Workcover insurer has arranged for appointments coming up in the next two months after which time it will be possible to complete the formulated claim with up to date medical evidence which there has been a delay in obtaining.
The other issue that has arisen is that in May 2013 the defendant may have gone into liquidation and we are ascertaining the status of the company whether it is going to be necessary to take out an application to seek leave to proceed and to ascertain the identity of the appropriate insurer behind the company via the administrator.
On 3 March 2014, Magistrate Milazzo granted the ex parte application for a further six-month extension from 14 February 2014. The Court Record records that on 3 March 2014 Magistrate Milazzo noted that the solicitor:
… assures the Court that the employer of the plaintiff is on notice in relation to the present claim. It is possible that the name of the defendant may need to be amended. If this occurs the application to amend will need to be inter-parties (sic), it is appropriate to grant an extension of time to preserve the status quo at this stage.
On 20 March 2014, the solicitor swore an affidavit deposing that Magistrate Milazzo had asked that he file an affidavit confirming that notice had been given to Adelaide Mushrooms and Labour Solutions. The solicitor deposed that the claim against Labour Solutions was likely to be discontinued and annexed copies of letters dated 10 February 2013 and 18 November 2013 addressed to Adelaide Mushrooms at 77 Palmer Place North Adelaide.
On 18 August 2014, the Magistrates Court Registry sent a third notice of intent to inactivate action.
On 19 August 2014, a notice of acting was filed notifying that Grope Hamilton Lawyers now acted for Ms Schenscher.
Fourth ex parte application (20 August 2014)
On 20 August 2014, Ms Schenscher filed an application for an extension of time of three months to serve the claim. In the affidavit filed in support sworn 19 August 2014, the solicitor deposed that, on 8 May 2014, he changed his employment from Johnston Withers to Grope Hamilton Lawyers and that at all times he has acted as agent solicitor for Mason Westover Lawyers from Murray Bridge. The solicitor said:
… both defendants have notice of the claim. The defendant has gone into administration and it took some time to ascertain the correct name of the company and that the business is still operating in Monarto as at April 2014.
… As at the date of this affidavit we still heard nothing from either defendant in relation to letters written to them as referred to in earlier affidavit.
I ask that the extension of 3 months be given so that the plaintiff can finalise and formulate the claim and to submit the same
There are related matters in the Workers Compensation Tribunal currently which are also being dealt with pertaining to the same injuries and therefore make the matter somewhat involved in terms of resolving it.
On 21 August 2014, Magistrate Schammer granted Ms Schenscher’s ex parte application for an extension of time to serve the claim for a further three months.
On 17 November 2014, the Court Registry issued a fourth notice of intent to inactivate action.
Fifth ex parte application (4 December 2014)
On 4 December 2014, Ms Schenscher filed an ex parte application for an extension of time to serve the claim for three months. In the affidavit filed in support, the solicitor deposed that he still acted as agent solicitor for Mason Westover Lawyers and that he attempted to make contact with both defendants and that no response:
… has been received in respect of any common law proceedings …
…The plaintiff requires time to complete Worker’s Compensation proceedings which may well occur on 17 December 2014 then to press ahead with the common law claim proceedings after that time if in fact such proceedings are viable from a damages point of view thereafter.
The plaintiff seeks until 31 January 2015 to sort out the issue of the common law claim and apply for judgment if service has been effected once it knows what the result of the Workers Compensation claim.
On 8 December 2014, Magistrate Gumpl granted the appellant’s ex parte application for an extension of time to serve the claim until 31 January 2015.
On 5 January 2015, the Magistrates Court Registry issued a fifth notice of intent to inactivate action.
Sixth ex parte application (29 January 2015)
On 29 January 2015, Ms Schenscher filed an ex parte application seeking an extension of time to serve the claim until 27 February 2015. In the affidavit filed in support sworn 29 January 2015, the solicitor deposed:
I await a report from our process servers, Mercantile Commercial Investigations (MCI), that service has been effected upon one of the two defendants
…
I received a phone call from Mr Kevin Moffatt, the principal of [MCI], on 27 January 2015 and he informed me that 77 Palmer Place, the registered office of [the respondent] is vacant.
Annexed to that affidavit “is a company search of Adelaide Mushrooms (Nominees) Pty Ltd, now Fulham Fungi (Nominees) Pty Ltd” dated 19 January 2015 which records “77 Palmer Place, North Adelaide SA 5006” as the registered office of Fulham Fungi (Nominees) Pty Ltd. Also annexed to the affidavit is an email dated 29 January 2015 from Mr Moffatt of Mercantile Commercial Investigations to the solicitor wherein Mr Moffatt confirmed that he attended at 77 Palmer Place on 27 January 2015 and that the premises were “vacant and devoid of signage”. Mr Moffatt further stated that “I know this address was that of an accountancy firm” and that he had undertaken searches that revealed that there were two accountancy firms previously at the address namely, “Hughes AJ Chartered Accountant, now at 46 Greenhill Road Wayville….” and “Letcher Jeffrey and Moroney Chartered Accountants – now Letcher Moroney Chartered Accountants at 46 Greenhill Road, Wayville SA 5034. Telephone (08) 26704066”. Mr Moffat concluded his email saying it is too early to follow up (I note the email appears to have been sent at 7.40 am) “but we could do so if required”.
On 30 January 2015, Magistrate Eldridge granted Ms Schenscher’s ex parte application for an extension of time to serve the claim until 27 February 2015.
On 2 March 2015, the Magistrates Court Registry issued a sixth notice of intent to inactivate action.
Seventh ex parte application (2 March 2015)
On 2 March 2015, Ms Schenscher filed an ex parte application for an extension of time of “an extra month to 27 March 2015”. In the affidavit filed in support sworn 27 February 2015, the solicitor deposed that “the first defendant has not yet been served due to the registered office of the first defendant, 77 Palmer Place, being vacant”. The solicitor deposed that “the second defendant has been served” and that an affidavit of service will be filed “if not filed as at the date of this affidavit”.
On 3 March 2015, Magistrate Eldridge extended the time for service to 27 March 2015.
Eighth ex parte application (27 March 2015)
On 27 March 2015, Ms Schenscher filed an ex parte application seeking an extension of time for service on Adelaide Mushrooms for three months to 27 June 2015. The solicitor deposed in the affidavit filed in support that there were difficulties with service and that there had not been sufficient time to conduct inquiries.
On 30 March 2015, the Magistrates Court Registry issued a seventh notice of intent to inactivate action.
On 30 March 2015, Magistrate Milazzo ordered that the application filed 27 March 2015 be listed before him on 14 April 2015. On 14 April 2015, the application was adjourned to 30 April 2015.
At the hearing on 30 April 2015, Magistrate Milazzo made no order on the application. As detailed later in these reasons, it would appear that Magistrate Milazzo was informed that service was effected on Adelaide Mushrooms on 30 April 2015 and his Honour indicated that an affidavit of service should be filed.
The first dismissal of the claim
On 25 May 2015, the claim was dismissed for want of prosecution.
Ninth ex parte application (22 April 2016) – first reinstatement application
On 22 April 2016, 11 months after the dismissal of the claim, Ms Schenscher filed an ex parte application seeking reinstatement of the claim. In the affidavit filed in support sworn 22 April 2016, the solicitor deposed:
… that conducting an audit on this file recently indicated that the matter was dismissed on or about 14 April 2015.
I enquired of the Court as to what occurred in relation to that notice and was advised that it was forwarded to Grope Hamilton Lawyers, my previous law firm, where I have not worked since 24 March 2015.
Service has been effected against both defendants and I am in the process of filing an affidavit of service.
The defendants were served within time, by 27 March 2015
The plaintiff has been involved in a Workcover matter involving one or both of the defendants as there was a dispute as to who was the employer for a time and that case finalised in terms of an agreement in or about October 2015.
The plaintiff wishes to proceed with her claim and in the circumstances I am instructed to apply to this Honourable Court for an Order that this claim be re-instated.
On 26 April 2016, a notice of acting was filed notifying that Maurice Blackburn now acted for Ms Schenscher.
On 27 April 2016, Magistrate Gumpl granted the application ex parte in chambers reinstating the action and extending the time for service to 31 May 2016. I note that the Record of Outcome for 27 April 2016 bears the following handwritten notation dated 20 May 2016:
RTS 3/5/16
Resent to defendant
2nd Defendants solicitors c/o Sparke Helmore Lawyers
Tenth ex parte application (1 June 2016)
On 1 June 2016, Ms Schenscher filed an application for an extension of time for service for one month to 30 June 2016. In the affidavit filed in support sworn 31 May 2016, the solicitor deposed that:
… an application was sought to extend the time and reinstate the matter due to confusion as to the status of the within claim.
The time allowed has been insufficient once clarified with the Court as to what was occurring on the file to be able to serve the claim upon the Defendant. It may be necessary to take out other Applications in respect of Adelaide Mushrooms Nominees Pty Ltd if in fact they have gone into liquidation which is a factor I am ascertaining.
On 2 June 2016, Magistrate Milazzo refused to deal with the application on an ex parte basis and ordered that it be heard inter partes. The matter was adjourned to a contentious application hearing before Magistrate Schammer on 29 June 2016. The application was adjourned on 29 June 2016 and 28 July 2016.
At the adjourned hearing on 25 August 2016, there was no appearance for any party. The application was adjourned to a directions hearing on 28 September 2016 and the Magistrate ordered that registry notify the parties. The letter dated 25 August 2016 notifying Adelaide Mushrooms was returned to sender.
The second dismissal of the claim
On 28 September 2016, there was no attendance for any party and Magistrate Schammer dismissed the claim.
The second reinstatement application (10 April 2018)
On 10 April 2018, 18 months after the order dismissing the claim, Ms Schenscher filed her second application to reinstate the claim (“the application”). In the affidavit sworn 9 April 2018 filed in support, the solicitor deposed to having the care and conduct of the matter on behalf of Ms Schenscher as an agent solicitor for Mason Westover Homburg. The solicitor said that his firm Maurice Blackburn contacted the Adelaide Magistrates Court to ascertain the status of the matter and was informed that as there was no appearance on 28 September 2016 the claim was dismissed. The solicitor further deposed:
I personally effected service upon the first defendant at its registered office.
The plaintiff has not received any communications from the first defendant since service was effected.
… the plaintiff’s enquires regarding the second defendant are not yet complete.
…
I have had limited contact with the plaintiff since September 2016 and there has been inordinate delay due to solicitor oversight.
…
I am instructed that the plaintiff has experienced financial hardship to the extent that she cannot maintain her mortgage repayments and may lose her home.
Annexed to the solicitor’s affidavit is a copy of an ASIC Company Extract dated 6 April 2018 which records the registered office of Fulham Fungi (Nominees) Pty Ltd formerly Adelaide Mushrooms as Letcher Moroney, 46 Greenhill Road Wayville from 17 December 2015.
On 15 May 2018, a notice of acting was filed notifying that Grope Hamilton Lawyers now acted for Ms Schenscher.
On 1 November 2018, the solicitor wrote to the Adelaide Magistrates Court referring to the notice of acting filed on 15 May 2018 and stating that he believed he had filed an application and affidavit seeking to reinstate the action “which had apparently lapsed”. The solicitor referred to having received a phone call from a Magistrate’s clerk in May 2018 indicating that the Court file could not be found and that he told the clerk that he would forward a copy of the claim. The solicitor said, “I do not believe that has happened to date and I now do so”. A copy of the claim was enclosed and the solicitor asked that the application seeking an order reinstating the claim be filed at the earliest opportunity.
The application was listed for hearing on 22 November 2018.
Ms Schenscher’s solicitor appeared before the Magistrate on 22 November 2018. The Magistrate ordered that the application be served on Adelaide Mushrooms and Labour Solutions and adjourned the matter to 11 December 2018. On 11 December 2018, only Ms Schenscher’s solicitor appeared and the application was adjourned to 25 January 2019. On 25 January 2019, it was further adjourned to 8 February 2019.
On 8 February 2019, Ms Schenscher’s solicitor appeared before the Magistrate and there was no appearance for the defendants. Ms Schenscher was ordered to serve the defendants with the application within seven days. The Magistrate noted that in the event service had not been effected within seven days the Court would consider dismissing the application. The application was adjourned to 25 February 2019.
On 25 February 2019, Ms Schenscher’s solicitor appeared and there was no appearance for the defendant. The Magistrate noted that Ms Schenscher intended to discontinue against Labour Solutions. The Magistrate ordered the solicitor to file and serve an affidavit setting out the history of the matter in relation to service on or before 1 March 2019. The matter was adjourned to 12 March 2019 and Registry was directed to notify the parties of the orders “noting that the registered address of the first defendant is care of Lecher and Maroney Accountants 46 Greenhill Road Wayville 5034”.
On 13 March 2019, a notice of discontinuance was filed against Labour Solutions and a notice of acting was filed by Gilchrist Connell for Adelaide Mushrooms.
Affidavits filed on behalf of Adelaide Mushrooms opposing the application for reinstatement
Ms Schenscher’s application to reinstate the action was opposed by Adelaide Mushrooms.
On 1 April 2019, Adrian John Honan, an accountant, swore an affidavit deposing that he is a director of the firm Letcher Moroney and that Letcher Moroney has been the accountant and registered office of Adelaide Mushrooms since 1983. Mr Honan further deposed that:
(1)prior to 10 October 2014, the office of Letcher Moroney and the registered office of Adelaide Mushrooms was 77 Palmer Place, North Adelaide.
(2)since 10 October 2014, Letcher Moroney’s address and the registered office of Adelaide Mushrooms has been 46 Greenhill Road, Wayville.
(3)on 12 March 2013, the trading name of Adelaide Mushrooms and its various assets were purchased by another entity and the Adelaide Mushrooms therefore changed its trading name to Fulham Fungi (Nominees) Pty Ltd.
(4)since 12 March 2013, Adelaide Mushrooms has not traded in any meaningful way and it has had no employees since that date.
(5)the only documents Letcher Moroney had received relating to the claim are the following documents received in February 2019 copies of which are annexed to Mr Honan’s affidavit:
(a) a letter from Ms Schenscher’s solicitors Grope Hamilton dated 22 February 2019 with various documents attached.
(b) a notice from the Court in respect of a hearing date.
On 1 April 2019, Adelaide Mushrooms’ solicitor swore an affidavit deposing that no response had been received to a letter sent by her to Ms Schenscher’s solicitors on 14 March 2019 and that Ms Schenscher’s solicitor had not filed and served an affidavit setting out the history of the matter in relation to service as ordered by the Magistrate on 25 February 2019.
Affidavits filed in support of the application for reinstatement
Ms Schenscher’s solicitor swore an affidavit 3 April 2019 deposing that:
(1)after the claim was issued it “was held in abeyance on the file whilst WorkCover matters were dealt with”;
(2)he sent a letter to Adelaide Mushrooms dated 13 February 2013 at its registered address at 77 Palmer Place, North Adelaide and that no response received nor was the letter returned to sender;
(3)he sent a letter to Adelaide Mushrooms dated 18 November 2013 at its registered address and that no response was received;
(4)instructed Mercantile Commercial Investigators on 22 January 2015 to serve the claim;
(5)he received a response from Mercantile Commercial Investigators on 29 January 2015 reporting on service and stating that the investigator was aware that accountants used to occupy the now vacant offices;
(5)following a company search regarding Fulham Fungi Nominees Pty Ltd, found the company’s registered address was 77 Palmer Place and forwarded a letter to the company on 29 April 2015 “in the event mail was being redirected”;
(6)on 30 April 2015, he personally attended at 77 Palmer Place, North Adelaide to inspect the premises and found they were vacant and there was no signage, and that at the hearing on 30 April 2015 Magistrate Milazzo indicated to a solicitor who appeared for Ms Schenscher that an affidavit of service should be filed and made no orders on the application filed 27 March 2015;
(7)on 17 June 2015, he drafted an affidavit of service in his name;
(8)delays were occasioned when he changed employment and awaited transfer of Ms Schenscher’s file to his new firm;
(9)personal injury particulars were sought from Ms Schenscher on 1 August 2017 as well as a list of documents created;
(10)whilst he was employed by Maurice Blackburn, Ms Schenscher’s file was supervised by him and handled by other solicitors;
(11)the hearing on 28 September 2016 when the claim was dismissed was not diarised.
Ms Schenscher swore an affidavit on 14 May 2019 deposing that she understood that she had “initially instructed Mason Westover Homburg who then engaged agents Johnston Withers, then Grope Hamilton then Maurice Blackburn and now Grope Hamilton Lawyers again”. She said that she understood that the solicitor had supervision of the file at those firms. She deposed that:
·she relied on her lawyers at all times;
·she suffers injuries as a result of the fall which incapacitate her and has suffered significant loss of income;
·it was after she received compensation from WorkCover that she understood that her common law action would proceed;
·she is in poor financial circumstances and that HomeStart is presently threatening to sell her home as she is in arrears of mortgage repayments.
In his affidavit sworn 9 May 2019, Mr Westover deposed that the solicitor:
… handled the plaintiff’s WorkCover claim and he handled the common law claim which other than the filing of the Claim did not move forward until the WorkCover matter had concluded. Prosecution of the common law claim was deferred until after the determination of the WorkCover claim because an assessment needed to be made as to whether the common law action would be a commercially viable one.
Mr Westover further deposed that he relied upon advice from the solicitor and that he “took instructions from Ms Schenscher all of which are privileged”. He said the solicitor had authority to act as agent, had acted as de facto principal because of his expertise and had communicated directly with Ms Schenscher from time to time with his consent.
The dismissal of the application and the Magistrate’s reasons
The Magistrate heard argument on the application on 16 May 2019 and dismissed it on 11 June 2019.
As Magistrate Schammer did not give reasons for dismissing the claim on 28 September 2016, the Magistrate proceeded on the basis that the dismissal was pursuant to r 28(3)(a) of the Magistrate Court (Civil) Rules 2013 (“the Rules”). Rule 28(3)(a) provides that if after 21 days after the time for service of an action judgment is not signed or a defence has not been filed the action will stand dismissed for want of prosecution.
The Magistrate stated in her reasons:
[21]By order dated 27 April 2016, Magistrate Gumpl extended the time for the service of the Claim to 31 May 2016. The Claim had to be served by the date, and if no defence was filed in the following 21 days, then the plaintiff was obliged to file a Request to Registrar. The Registry’s Notice of Intent to Inactivate Action, issued on 6 June 2016, alerted the plaintiff’s solicitors that they had not filed an affidavit of service in relation to the Claim, and the plaintiff would need to comply with r 28(3)(a). By that time, the plaintiff’s solicitor had filed the eleventh application for an extension of time (1 June 2016), and on 2 June 2016 the application to deal with it on an ex-parte basis was refused. The application for the extension of time was not granted (nor refused) at that time, it was listed and then adjourned until the plaintiff’s solicitor failed to attend on two occasions. The claim was then dismissed. Whilst Magistrate Schammer did not deliver any reasons on 28 September 2016 when the claim was dismissed, the non-compliance is essentially not in relation to the failure to attend at Court on 28 September 2016, but rather from the failure to have filed an affidavit of service and a Request to Registrar.
[22]When the action was dismissed on 28 September 2016, the plaintiff’s solicitor had previously advised the Court that the Claim had been served on the first defendant in accordance with the Rules on 30 April 2015.
Having found Ms Schenscher’s non-compliance with the Rules established, the Magistrate considered the application under r 87 of the Rules.
Rule 87(2) of the Rules provides that the Court must not set aside a judgment unless the party seeking to set it aside establishes that he or she:
(a)has an arguable case on the merits; and
(b)has a reasonable excuse for not having complied with these Rules, or an order of the Court, or any time limit fixed by these Rules or order of the Court, in respect of the action or proceeding.
The Magistrate found that there was no reasonable excuse for Ms Schenscher’s non‑compliance with r 28 and therefore dismissed the application. The Magistrate further held that, even if Ms Schenscher were to have satisfied r 87(2), she would have to refused to reinstate the application, having regard to lengthy delay in bringing the application and the prejudice to Adelaide Mushrooms in the event the claim was permitted to proceed.[1]
[1] Watson v Anderson (1976) 13 SASR 329 [333].
It is noted that the Magistrate accepted:
(1)that Ms Schenscher had difficulty in attending to her affairs as a consequence of her injuries, but noted that she understood her common law claim would proceed after her worker’s compensation matter, and had responded to requests for information from her solicitors from time to time; and
(2)the prejudice to Ms Schenscher, in not allowing the application, was “clear and actual”.
The Magistrate noted that there was no evidence before her indicating that Ms Schenscher was aware that the claim had been dismissed or that the application to reinstate it had been made. Her Honour also noted that there was no affidavit from a director of Adelaide Mushrooms which she suggested may have been due to the fact it has not traded in any meaningful way since 12 March 2013. She further noted that Adelaide Mushrooms did know the details of any WorkCover investigations conducted and whether such investigation was pertinent to the claim. Counsel for Adelaide Mushrooms submitted to the Magistrate that as soon as Adelaide Mushrooms had become aware of the claim it notified its insurer.
The Magistrate referred to the prejudice to Adelaide Mushrooms, noting the limitation period for a personal injury claim is three years and Adelaide Mushrooms became aware of the claim in February 2019 – just over 10 years after the injuries were allegedly sustained. The Magistrate referred to following comment of Dawson J’s in Brisbane South Regional Health Authority v Taylor,[2] which concerned the commencement of a proceeding outside a limitation period:
The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less available evidence than was available to the parties at the time the cause of action arose.
[2] (1996) 139 ALR 1.
The appeal
The notice of appeal was filed on 1 July 2019 and a second notice of appeal was filed on 23 September 2019. On 8 November 2019, a Judge of this Court heard Adelaide Mushrooms’ application for security for costs. That application was refused on 15 February 2020.
I heard the appeal on 12 March 2020.
The appeal is by way of rehearing. In rehearing, the Court:
(1)is required to make an independent assessment of the material that was before the Court below and may draw inferences from the facts which may be appropriate;
(2)is obliged to conduct a real review of the evidence and the Magistrate’s reasons – the Court is to consider all the evidence and reach what it considers is the proper conclusion; and
(3)is not entitled to substitute its own discretion for that of the Court below unless an error in the exercise of the discretion can be detected. For this purpose, there will be such an error where matters which should have been taken into account were not taken into account, or where matters which should have been taken into account were not taken into account.
The decision to refuse reinstatement involved a discretionary judgment. As such, there must be an error made in the exercise of the discretion of the kinds articulated in House v The King.[3]
[3] (1936) 55 CLR 499.
Ms Schenscher’s submissions
Ms Schenscher argued two grounds of appeal. First, that the Magistrate erred in finding that r 87(2)(b) was not made out. Secondly, that the Magistrate’s exercise of the judicial discretion miscarried.
Ms Schenscher submitted that there are essentially three periods of delay. First, the period in which the claim was in abeyance whilst she was awaiting the outcome of the WorkCover claim. This period commenced on 15 February 2012 when the claim was filed until the WorkCover claim was ultimately resolved in December 2015.
The second period is between December 2015 and 28 September 2016, when Magistrate Schammer dismissed claim. Ms Schenscher says this period of delay is explicable by the solicitor’s attempts of service.
The third period of delay is the period between 28 September 2016 and the application for reinstatement filed on 28 April 2018. Ms Schenscher’s submission is that this period of delay was due to the default of the solicitor.
Ground 1 – reasonable excuse
The Magistrate noted the explanation for the delay between the dismissal and the filing of the application for reinstatement as being due to “solicitor oversight” and that Ms Schenscher had explained that she relied on her lawyers completely in relation to her claim, but then was critical of the absence of evidence of active steps that Ms Schenscher took to progress her claim since it was filed. Ms Schenscher’s explanation that she relied completely on her solicitors and that she was awaiting the outcome of her WorkCover claim was submitted by Ms Schenscher as providing a complete and reasonable explanation for both the absence of evidence of steps taken by her and an explanation as to why there was a delay in the filing of the application. It was submitted that the relevant conduct to be excused under r 87(2)(b) is that of the litigant and if the default is that of the solicitor properly instructed, the party will not usually bear the consequences of such a default.[4]
[4] Langanis v Roberts (Unreported, 15 July 1993, S4043) at [8].
Ms Schenscher further submitted that – due to her injuries – she was not attending to her affairs. In that vein, Ms Schenscher argued that the fact that she relied so heavily on her solicitors explains her inactivity. Having established that the period of delay was due to solicitor default, Ms Schenscher submitted that the default of a properly instructed solicitor should not be brought home to her.
Ms Schenscher relied on the judgment of Mullighan J in Langanis v Roberts, wherein his Honour stated:[5]
Despite the paucity of information in the affidavit of the appellant’s solicitors in support of the assertion that the appellant has a reasonable excuse for not filing the Defence in time, it appears that he did instruct his solicitors, but they did not act, within time. Usually, in this context, a party will not have to bear the consequences of the neglect of his solicitor: Collins Book Depot Pty Ltd v Bretherton, Gamble v Killingsworth & Mclean Publishing Co Pty Ltd and Kostokranellis v Allen, Taylor v Taylor, Hill v Parke Davis & Co Ltd and Davies v Pagett are examples of neglect, and in some instances substantial neglect, on the part of legal practitioners and where the party in default has been permitted to prosecute or defend claim. Of course, these cases were not decided in the context of a threshold test before the exercise of a discretion is to be considered, but they do accept that the conduct to be excused is usually that of the litigant, not the solicitor. The delay of the solicitor, in the present case, although amounting to default, when measured in terms of time was only relatively slight and, in my view, the Learned Special Magistrate was correct in her conclusion that the appellant had established a reasonable excuse for not filing the Defence within time.
(Citations omitted)
[5] Langanis v Roberts (Unreported, 15 July 1993, S4043).
Ground 2 – discretion miscarried
Ms Schenscher said that to the extent that the Magistrate refused the application more generally under r 87(1) involved the exercise of the judicial discretion and was in error.
Ms Schenscher referred to the decision in Williams v SF Evans & Sons,[6] a decision in relation to renewal of summons, as being relevant to the consideration in this matter. In Williams, White J said:[7]
If the principles governing the exercise of the discretion to dismiss an action for want of prosecution apply by analogy, as I think they do, to the exercise of the discretion not to renew a writ or summons (which is the equivalent of dismissal where the time limit has expired), the discretion should only be exercised adversely to the plaintiff when the plaintiff's default has been intentional and contumelious or where there has been inordinate and inexcusable delay on his or his lawyers part giving rise to a substantial risk that a fair trial would not be possible or to substantial risk of serious prejudice to the defendant.
(Emphasis in original)
[6] (1988) 52 SASR 237.
[7] (1988) 52 SASR 237 at 243.
Ms Schenscher said that there is no evidence and no suggestion before the Magistrate that her default was intentional and contumelious. Whilst there has been inordinate delay, this was explained by Ms Schenscher’s difficulties in attending to her affairs as a consequence of her injuries and her solicitor’s oversight.
It was submitted that there was no evidence of a substantial risk that a fair trial would not be possible or a substantial risk of prejudice to Adelaide Mushrooms, particularly when the accident giving rise to Ms Schenscher’s injuries was investigated by WorkCover and medical reports had been obtained contemporaneously and progressively in relation to her injuries.
Adelaide Mushrooms’ submissions
Adelaide Mushrooms submitted that the procedural history of the claim in the Magistrates Court is remarkable. It was submitted that there is a self-evident want of prosecution of the action which has worked obvious prejudice to it. Further, Ms Schenscher was in serial default of the Rules and Court orders with the effect that her action was dismissed on two occasions.
It was submitted that there is a balance to be struck between Ms Schenscher’s interests, prejudice to the Court’s resources when any litigant declines to conform to the Rules and Court orders, and a respondent’s right to finality in the action. Adelaide Mushrooms submitted that the Magistrate was correct in finding that Ms Schenscher had no reasonable excuse for her failure to comply with the Rules.
It was contended that litigants are responsible for the conduct of their agents and while it is regrettable that a litigant will bear the consequences for the conduct of her lawyers, dereliction by a legal advisor is not an answer in every case. It was submitted that repeated inaction over a course of years by Ms Schenscher’s solicitor in this matter does not constitute a reasonable excuse and the Magistrate’s reasoning is not so obviously wrong in that regard to comprise an error of fact.
Adelaide Mushrooms submitted that given the Magistrate’s finding that Ms Schenscher did not have a reasonable excuse for her failure to comply with the Rules, the discretion to reinstate the claim did not arise. In the alternative, if the Magistrate ought to have found that Ms Schenscher had a reasonable excuse for not having complied with the Rules, she would have exercised her discretion and declined to reinstate the action.[8]
[8] Schenscher v Adelaide Mushrooms (Nominees) Pty Ltd at [44].
It was submitted that there is no House v The King type error in the Magistrate’s reasoning.
Adelaide Mushrooms asserted that due to the inordinate delay in Ms Schenscher pursuing the claim, it would suffer actual prejudice if her claim was reinstated.
Ground 1 – in relation to finding that there was reasonable excuse
Adelaide Mushrooms pointed to Ms Schenscher’s contention that the Magistrate gave insufficient weight to the fact that she relied at all times on her lawyers to properly prosecute her action and too much weight on the absence of evidence of steps taken by her to progress her claim is incorrect.
At [38] of her reasons, the Magistrate said:
I accept that [Ms Schenscher] in this action has difficulty at times in attending to her affairs as a consequence of her injuries. However she has deposed that she understood her common law claim would proceed when her worker’s compensation matter resolved in 2015, and has responded to requests for information from her solicitors from time to time. I have no evidence of any active steps that she has taken to progress her claim since it was filed in 2012 save for responding to the request for information in 2017, but even then it is not clear whether [Ms Schenscher’s] solicitors ever received comprehensive responses to the requests relating to particulars and discovery in 2017.
It was submitted that the Magistrate expressly acknowledged and gave due deference to the fact that the Supreme Court has been reluctant to hold a party responsible for the default of its legal advisor, with reference to three authorities. That, of course, it was argued, does not mean that such a reluctance must prevail whatever the facts of the case.
Ground 2 – the discretion did not arise
It was submitted that, as Ms Schenscher failed to satisfy r 87(2)(b), the discretion to reinstate the claim did not arise.
If the discretion did arise, the Magistrate did not err in declining to reinstate the claim
The Magistrate indicated at [44] that even if Ms Schenscher could satisfy the requirement of reasonable excuse, that she would decline to reinstate the action on the grounds of:
(1)the length of delay in bringing the application for reinstatement; and
(2)the prejudice suffered by Adelaide Mushrooms if the claim was reinstated.
At [32] to [34] of her decision, the Magistrate referred to the submissions of Adelaide Mushrooms to the effect that Adelaide Mushrooms would suffer actual prejudice if the claim was reinstated due to:
(1)Adelaide Mushrooms not knowing the detail of any WorkCover investigation conducted;
(2)the time that had lapsed since the date of the alleged injury and since the claim was struck out in 2016; and
(3)Adelaide Mushrooms having sold its business in 2013 and consequently no longer having access to the former premises or its former employees.
Accordingly, Adelaide Mushrooms asserted that the Magistrate did not err in indicating that she would exercise her discretion to refuse the application if the discretion did arise.
Adelaide Mushrooms reiterated on appeal that it would suffer actual prejudice if the claim were reinstated.
Consideration
The Court’s discretion to set aside or vary a judgment (not being a final judgment) prescribed by r 87(1) is not enlivened until Ms Schenscher establishes that she has both an arguable case on the merits and a reasonable excuse for not having complied with the Rules, or an order of the Court, or any time limit fixed by the Rules or order of the Court, in respect of the claim.
In determining this matter the fundamental duty of the Court is to do justice between the parties. If I am satisfied that that the discretion should be exercised, I will make an order setting aside the 28 September 2016 order dismissing the claim and then make an order reinstating it.
In assessing whether Ms Schenscher has a reasonable excuse for the failure to comply with the Rules and the inordinate delay in the prosecution of this matter, I need to consider whether the excuse given is one which in all the circumstances the ordinary person would consider warrants forgiveness for non‑compliance. As Hinton J said in Maramidis v Germain:[9]
As to rule 87(2)(b), a reasonable excuse is one which in all circumstances the ordinary person would consider warrants forgiveness for non-compliance. Here it is necessarily the case that the ordinary person will appreciate the high premium that the community places upon compliance with rules of courts and orders of courts in order that justice be administered effectively and efficiently. That appreciation reflects an understanding of the importance to the functioning of the community of the effective and efficient exercise of judicial power to quell controversies arising in the community. With this understanding, the community, no less than the courts, expects litigants to discharge the obligations placed upon them by the law and the courts.
[9] [2017] SASC 103 at [83].
It is not in dispute that Ms Schenscher has an arguable case. In determining whether she has a reasonable excuse for the inordinate delay and the failure to comply with the Rules, I will consider the issue by reference to the three periods of delay identified by her counsel.
The first period of delay – 15 February 2012 to December 2015
Ms Schenscher maintained that during this period following the issuing of the claim, the matter was in abeyance whilst she was awaiting the outcome of the WorkCover claim. Ms Schenscher deposed in her affidavit 14 May 2019 that “The WorkCover claim ran from about 2010, possibly into 2015 when I received compensation”.
It is to be noted that during this period eight applications for extension of time were made and the claim was dismissed on 25 May 2015. The solicitor in support of the various applications for extension of time to serve:
·deposed in an affidavit sworn 12 August 2013 that Ms Schenscher had completed a formulated claim to be forwarded to the defendants.
·deposed in an affidavit sworn 12 February 2014 that:
The Workcover insurer has arranged for appointments coming up in the next two months after which time it will be possible to complete the formulated claim with up to date medical evidence which there has been a delay in obtaining.
The other issue that has arisen is that in May 2013 the defendant may have gone into liquidation and we are ascertaining the status of the company whether it is going to be necessary to take out an application to seek leave to proceed and to ascertain the identity of the appropriate insurer behind the company via the administrator.
·is recorded in the Court record as having assured a Magistrate on 3 March 2014 “that the employer of the plaintiff is on notice of the claim”. It is also recorded in the record dated 3 March 2014 that “it is possible that the name of the defendant may need to be amended”.
·in an affidavit sworn 8 May 2014 deposed that “both defendants have notice of the claim”.
·in an affidavit sworn 29 January 2015 that Mr Moffatt had informed him that the registered office of Adelaide Mushrooms was vacant and devoid of signage. Further, in his email to the solicitor, annexed to the affidavit, Mr Moffatt said he had undertaken searches that revealed that the two accountancy firms that had previously occupied 77 Palmer Place and had moved to an address on Greenhill Road. Mr Moffatt stated that he was able to follow this up if necessary, but that it was too early to do so. (I infer, noting the email was sent at 7.40 am, that he meant it was too early in the morning to follow up that line of inquiry).
·in an affidavit sworn 27 February 2015 that Adelaide Mushrooms had not been served due to its registered office being vacant.
The solicitor swore in his affidavit 3 April 2019 that he attended personally attended 77 Palmer Place, North Adelaide on 30 April 2015 to inspect the premises and found they were vacant and there was no signage. He also deposed that Magistrate Milazzo indicated to another solicitor who attended the hearing of the eighth ex parte application on 30 April 2015 that an affidavit of service should be filed and made no order on the application seeking an extension of time. I infer no order was made because the Magistrate was informed that service of the claim had occurred. No affidavit of service was filed and there is no evidence that any formulated claim was served or notice of the claim was brought to the attention of Adelaide Mushrooms during this first period of delay.
Mr Moffatt indicated on 27 January 2015 that he could follow up the address of two firms of accountants who had previously occupied 77 Palmer Place, North Adelaide. Mr Moffatt named the two firms, one of which was Letcher Moroney. Notably, Letcher Moroney are recorded as the registered office of Fulham Fungi (Nominees) Pty Ltd formerly Adelaide Mushrooms with a start date from 17 December 2015 on the copy of an ASIC Company Extract dated 6 April 2018 annexed to the solicitor’s affidavit sworn 9 April 2018 filed in support of the application.
It is inexplicable, even though it appears that the registered address of Adelaide Mushrooms was not changed with ASIC until 17 December 2015,[10] that the very strong lead Mr Moffatt referred to in his email was not followed up. It is also inexplicable why the solicitor attended 77 Palmer Place, North Adelaide some three months later and I infer (by reference to the solicitor’s affidavit sworn 3 April 2019 wherein he stated he attended Adelaide Mushroom on 30 April 2015 and the affidavit sworn 9 April 2018 wherein he deposed that he personally effected service at the registered office of Adelaide Mushrooms) left the claim by way of service at the vacant premises.
[10] ASIC Company Extract dated 6 April 2018 annexed to the solicitor’s affidavit sworn on 9 April 2018.
Mr Moffatt’s emailed report, the fact that no response was received to letters dated 22 January 2015 and 29 April 2015 (which enclosed a copy of the claim)[11] the solicitor said he sent to Adelaide Mushrooms at 77 Palmer Place, North Adelaide and the solicitor’s attendance on the vacant premises in combination raised a very real doubt that documents posted or left at that address would come to Adelaide Mushroom’s attention. As such, any purported service of the claim on Adelaide Mushroom’s registered office cannot be relied on. Had Mr Moffatt’s information been followed up, it is highly likely the claim would have come to Adelaide Mushrooms’ attention much earlier than February 2019. It must be pointed out that the letters dated 13 February 2013 and 18 November 2013 that the solicitor deposed he sent to Adelaide Mushrooms would have been posted before Letcher Moroney moved to the Greenhill Road address on 10 October 2014. Neither letter enclosed the claim. The 13 February 2013 letter was sent a month before the trading name of Adelaide Mushrooms was purchased by another entity on 13 March 2013. It is also noted that Mr Honan deposed that the only documents his firm received concerning the claim were received in 2019. Mr Honan’s evidence was not challenged.
[11] I infer that the letter dated 22 January 21015 was the letter enclosing the summons to be served by Mr Moffatt, noting that the solicitor deposed in the affidavit sworn on 3 April 2019 that he instructed Mercantile Commercial Investigations on 22 January 2015.
The New South Wales Supreme Court considered not dissimilar issues regarding service in In the matter of K-Bek Motors Pty Ltd,[12] where a creditor’s statutory demand, which arose from a land tax assessment, issued by the Chief Commissioner of State Revenue (“the Chief Commissioner”), was served on a company by leaving it in the letterbox at 66 Sorrel Street, North Parramatta being the company’s registered office. The person who had served the demand deposed in an affidavit of service:
“[a]t the time of service I was advised that the business who previously occupied the address have moved out and that property had been purchased by a family for residential use”.
[12] [2017] NSWSC 1838.
Upon the company’s failure to comply with the statutory demand, proceedings were commenced to wind up the company. The originating process and supporting affidavits were served on the company by placing the documents at 66 Sorrel Street, North Parramatta. In the affidavit of service, the deponent said:
At the time of the service I had a conversation with a female person in or to the following effect. I asked, “Is this the registered office of K-Bek Motors Pty Limited and will you accept service on their behalf?” The female replied, “No, I bought this place recently. The accountant’s firm were the previous occupants”.
The company then made an application under the Corporations Act 2001 (Cth) for an order that the winding up be terminated. In granting the application, Brereton J said at [11] that the company bore some responsibility through its failure to update its registered office but that it ought to have been evident to the Chief Commissioner from both the affidavits of service that the statutory demand and the originating process, left at the Sorrell Street address, would not come to the attention of the company. Moreover, Brereton J said that the Chief Commissioner had postal addresses at which there had been recent communications with the company, and the business address of the property which was the subject if the land tax assessment, in respect of which some further enquiries might well have made to ensure that all that was reasonable had been done to bring the proceedings to the company's attention.
Similarly, in this matter further enquiries should have been made to ensure that all that was reasonable had been done to bring the proceedings to Adelaide Mushrooms’ attention. In my view, that did not occur and the inaction resulted in the dismissal of the claim on 25 May 2015.
The second period of delay – December 2015 and 28 September 2016
Ms Schenscher said this period of delay between finalisation of the WorkCover claim and the second dismissal of the claim on 28 September 2016 is explicable by the solicitor’s attempts of service.
On my analysis, this period is marked by 11 months of inaction from the date of dismissal 25 May 2015 (which occurred during the first period of delay) to the filing of the first application for reinstatement on 22 April 2016.
In the affidavit filed in support of the first reinstatement application sworn 22 April 2016, the solicitor deposed that service had been effected against both defendants and that he was in the process of filing an affidavit of service.
The stale claim was reinstated ex parte in chambers on 27 April 2016 and ordered to be served by 31 May 2016. Had the application been refused, Ms Schenscher’s claim for damages would have been statute barred.
In my view, in the circumstances of a stale claim, the fact that no affidavit of service was filed, and a delay of 11 months before making application for reinstatement, the Magistrate should have ordered service of the application for reinstatement on Adelaide Mushrooms and Labour Solutions and heard submissions from the parties in open court. In proceeding ex parte, the defendants were denied procedural fairness.[13]
[13] Re: Harris Scarfe Ltd (in liq) & Harris Scarfe Wholesale P/L (in liq) [2006] SASC 277 (Debelle J).
Following reinstatement of the claim, Ms Schenscher filed the tenth ex parte application seeking an extension of time to serve. In the affidavit sworn 31 May 2016 filed in support of the tenth application, the solicitor deposed that:
The time allowed has been insufficient once clarified with the Court as to what was occurring on the file to be able to serve the claim upon the Defendant. It may be necessary to take out other Applications in respect of Adelaide Mushrooms Nominees Pty Ltd if in fact they have gone into liquidation which is a factor I am ascertaining.
The second period is not explicable by the attempts at service. The solicitor deposed in his affidavit sworn 22 April 2016 that service had been effected against both defendants and that he was in the process of filing an affidavit of service. Having told the Court this, the solicitor then deposed on 31 May 2016 that there was confusion as to status of the claim. He deposed that, once he had clarified with the Court what was occurring on the file to be able to serve the claim upon the defendant, more time to serve was required.
The explanations given regarding this period of delay are confusing and contradictory. Reasonable excuse for this second period of delay is not established.
The third period of delay – 28 September 2016 and 10 April 2018
This is the period of about 18 months delay between the second dismissal of the claim on 28 September 2016 and the filing of the application for reinstatement on 10 April 2018. Ms Schenscher’s submitted this third period of delay was due to the default of the solicitor.
In the affidavit filed in support of the second application for reinstatement sworn 9 April 2018, the solicitor deposed that he had personally effected service of the claim on Adelaide Mushrooms at its registered office and that he had had limited contact with Ms Schenscher since September 2016.
This period of delay is due the solicitor’s inaction. The solicitor deposed that the inaction was due to solicitor oversight. The solicitor deposed that personal injury particulars were sought from Ms Schenscher on 1 August 2017 and a list of documents created. He further deposed that “eventually contact was made with the court and a further application dated 13 April 2017 to reinstate the action was taken out because the matter had not advanced…”. I assume the solicitor is referring to the application dated 10 April 2018.
The solicitor deposed that the hearing date of 28 September 2018 was not diarised. He further deposed that he left Maurice Blackburn on 13 April 2018 and went through a period of authorisations and indemnities that needed to be signed before he could collect Ms Schenscher’s file and bring it to Grope Hamilton.
The reasons given for the third period of delay are not reasonable excuses.
During the hearing of the appeal, I asked Ms Schenscher’s counsel when it is that the solicitor says he served the claim. The response was “that’s not at all clear” and I was referred the solicitor’s affidavit sworn 3 April 2019 detailing attempts at service. The most I can infer from the solicitor’s evidence is that he left the claim at the vacant offices at 77 Palmer Place, North Adelaide when he attended on 30 April 2015.
As the evidence of the accountant, Mr Honan, was not challenged, I conclude that the first notice Adelaide Mushrooms received of the claim was upon receipt of the letter dated 22 February 2019 by its registered office, some 10 months after the application was filed.
Ms Schenscher conceded the delay in prosecuting the claim is inordinate but that the solicitor’s inaction should not rest at her feet. She argued that there is evidence of at least three attempts at service. She asserted any prejudice suffered by Adelaide Mushrooms is mitigated by it being able to access the WorkCover investigation reports, the medical reports and the fact there was an eyewitness to the fall who will be available for cross‑examination. Ms Schenscher submitted that the prejudice she would suffer in not being able to pursue the claim outweighs any prejudice Adelaide Mushrooms suffers in the claim being reinstated.
The delays in this matter are extraordinary and inordinate. They have not been satisfactorily explained. The nature of Ms Schenscher’s communications (without waiving privilege) with her solicitors have not been expanded upon. Ms Schenscher relied on her solicitors. She has deposed to dire financial circumstances. Surely this was discussed with her solicitors in the context of having concluded the WorkCover claim in 2015 and needing to activate and finalise the claim. There is no such evidence before me.
Adelaide Mushrooms was purchased by another entity on 12 March 2013. It has not traded and has had no employees since that date. It was served with the claim 10 years after Ms Schenscher alleges she fell. The recollections of those witnesses it may be able to locate will inevitably have faded. Relevant documentation may not, after 10 years, be available. It has not had the opportunity to conduct its own investigations and have Ms Schenscher examined at a time closer to occurrence of the fall. In the circumstances of this matter and a 10-year delay in bringing the claim to the attention of Adelaide Mushrooms, the prejudice to it is not ameliorated by saying it has recourse to the WorkCover investigations, reports and the witness Ms Schenscher has had available to her. It is entitled to have conducted its own investigations which may be pertinent to it and irrelevant to WorkCover.
Adelaide Mushrooms has been denied procedural fairness in not being served and being given the opportunity to make submissions regarding the first application for reinstatement.
Having regard to the unfortunate history of this matter, the excuses given by Ms Schenscher and the solicitor are not reasonable and are not in all the circumstances excuses “that the ordinary person would consider warrant forgiveness for non‑compliance”. This is not a matter where the delay is slight as it was in Langanis v Roberts. This is a clear case of want of prosecution. The length of the delay and the serial default of the Rules and Court orders has worked an obvious prejudice to Adelaide Mushrooms. The inordinate and inexcusable delay is of the kind referred to by White J in Williams giving rise to a substantial risk that a fair trial would not be possible or to substantial risk of serious prejudice to Adelaide Mushrooms.
The Magistrate was correct to find that Ms Schenscher had no reasonable excuse for her failure to comply with the Rules. While it is regrettable that Ms Schenscher will bear the consequences for the conduct of her lawyers, the repeated inaction over 10 years in this matter does not constitute a reasonable excuse and cannot be countenanced.
As Ms Schenscher does not have a reasonable excuse for her failure to comply with the Rules and Court orders, the discretion to reinstate the claim does not arise. The Magistrate did not err in finding that r 87(2)(b) was not satisfied. Ground 1 of the appeal is not made out. As such, the second ground of appeal does not need to be considered. The Magistrate was not in error in dismissing the application.
At [42] of her reasons, the Magistrate commented that Ms Schenscher may not be without remedy. Counsel for Adelaide Mushrooms submitted on appeal that in the circumstances of the inordinate unexplained delay in this matter that the remedy is not against the proposed defendant in the claim sought to be reinstated but rather the solicitors responsible for the want of prosecution.
Conclusion
I dismiss the appeal.
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