Vasram v Falcord

[2002] NSWSC 495

CITATION:	Vasram v Falcord [2002] NSWSC 495
FILE NUMBER(S):	SC 10686/02
HEARING DATE(S):	27/5/02
JUDGMENT DATE:	29 May 2002
PARTIES :	Chiman Vasram Pty Ltd Falcord Pty Ltd & 2 ors
JUDGMENT OF:	O'Keefe J at 1

LOWER COURT JURISDICTION :	Local Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER :

COUNSEL :	Mr K C Ramrakha (solicitor) - Plaintiff Ms K A Rees - Defendants
SOLICITORS:	Ramrakha Jenkins, Sydney -Plaintiff Jamnadas & Assoc, Parramatta - Defendants
CATCHWORDS:	Local court - general division - Appeal - Delay in service of Statement of Claim - Statement of Claim invalid for service - Motion to revive - Delay - Prejudice to defendants - No error of law disclosed
LEGISLATION CITED:	Justice's Act 1902 s.104(5) Local Courts (Civil Claims) Act 1970 s.69(2) Local Courts (Civil Claims) Rules Pt 5 r 5(1)
CASES CITED:	Burkett v James (1978) AC 297
DECISION:	Appeal dismissed; Plaintiff to pay the defendants' costs.

- 6 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

O’KEEFE

Wednesday, 29 May 2002

10686/02 CHIMAN VASRAM PTY LTD v FALCORD PTY LTD & ORS

INTRODUCTION

1 This is an appeal from a decision of a Magistrate given in the General Division of the Local Court on 14 February 2002 by which the proceedings which had been instituted by Chiman Vasram Pty Ltd (the plaintiff) were dismissed for want of prosecution.

2 The appeal is brought in accordance with s 104(5) of the Justices Act 1902, which provides that:

“A party to any proceedings under the Local Courts (Civil Claims) Act 1970 may appeal under this division to the Supreme Court as provided for by section 69 of that Act.”

3 Section 69(2) of the Local Courts (Civil Claims) Act 1970 (the Act) provides that:

“A party to proceedings under this Act who is dissatisfied with the judgment or order of the court as being erroneous in point of law may appeal to the Supreme Court therefrom.”

4 The history of the matter is that the plaintiff claims that in August 1988 it advanced an amount of $12,263.42 to, or in favour of, Falcord Pty Ltd, Mahendra Kumar Lodhia and Chandrakant Lodhia (the defendants), for the purposes of their making payments of premiums for superannuation policies, which lapsed in November 1993. A Statement of Claim seeking to recover this amount, together with interest, was filed on 8 August 1996 but was not served. The claim was amended in August 1998 to include claims for advances made to enable the payment of premiums on life policies, car insurance, and for a bank draft and a bank loan application fee. The amount claimed was increased to $18,589.32, not including interest. The Amended Statement of Claim was not served either.

5 According to the claim lodged by the plaintiff in the Local Court on 8 August 1996, payment of the alleged debt fell due in August 1990, interest being claimed from that date at varying rates.

6 Part 5 r 5(1) of the Local Courts (Civil Claims) Rules 1998 provides:

“For the purposes of service, a statement of claim is valid for 2 years from the date on which it is filed or such further period as the court may direct.”
The Statement of Claim as amended therefore was invalid for service as from 9 August 1998.

7 Almost 3 years after the Statement of Claim had become invalid for service the plaintiff filed a Notice of Motion dated 23 July 2001 seeking to restore, revive and further amend the Statement of Claim. This motion was heard ex parte on 30 August 2001, on which date the Registrar of the Local Court allowed the plaintiff a further six months in which to serve a further Amended Statement of Claim. By that time the period limited by the Limitation Act 1969 for commencing an action had expired. On 24 September 2001, a further Amended Statement of Claim was filed. It was served. This was effected on 26 October 2001, that is, more than 11 years after the cause of action is alleged to have arisen. Thereafter, the first and second defendants filed motions by which they sought to set aside service and to have the proceedings dismissed for want of prosecution.

8 The motions came on for hearing before a Magistrate on 14 February 2002. He discharged the orders that had been made by the Registrar on 30 August 2001 and dismissed the proceedings for want of prosecution.

9 An affidavit of Mahendra Kumar Lodhia was filed in support of the defendants’ motions. He deposed to being a director of Falcord Pty Ltd as well as a defendant in his own right. In his affidavit, he stated:

“The defendants are prejudiced by the delay in serving the Statement of Liquidated Claim, as follows:
(a) Records which would be relevant to defending the action have been lost or destroyed as they go back as far as 1988;
(b) It is difficult to remember the transactions in question given the passage of time, particularly as no diary notes were made or kept;
(c) My brother, Himat Lodhia, who also had information about the present claim, and therefore an important witness, died in a car accident in 1994;
(d) …”


No objection was raised to any of the affidavit nor was the deponent cross examined on its contents.

The Appeal

10 The grounds on which the plaintiff appeals are as follows:

i. The issue was of a simple money count, and the learned Magistrate erred in law in not making a finding as to whether on the evidence before him, it was likely that the plaintiff made the loans and payments alleged in the claim, especially none of the defendants in that action alleged that they, or either of them had made the payments.

ii. The learned Magistrate erred in law in holding the previous decision of the court extending the life of the Statement of Claim was ex parte, in as much as the court had purported to serve a copy of the application on the defendants.

iii. The learned Magistrate erred in law in holding that on the evidence before him, the defendants had lost or destroyed their records and were therefore prejudiced.”

11 The grounds of appeal on their face do not appear to raise a question of law. The first ground asserts what is in effect an error in a factual finding. A determination as to whether an event is or is not “likely”, ie probable, is one of fact. The second ground also involves a question of fact, namely whether notice was given to or received by the defendants to the proceedings in the Local Court. There was no evidence of service of the application and the motion to extend time was in fact heard ex parte. Furthermore, this consideration was not one on which the Magistrate relied in arriving at his conclusion. The third ground also raises a question of fact, namely, whether the Magistrate was correct or not in determining that certain records had been lost or destroyed. The statement in the grounds of appeal that the decision on such subject matter resulted in the Magistrate having “erred in law” does not convert a determination of fact into a point of law as is required by s 69(2) of the Act.

12 Nonetheless, it was argued on behalf of the plaintiff that the Magistrate erred in his determination and that such error was in point of law within the meaning of s 69(2) of the Act. No precise error of law was isolated on behalf of the plaintiff in the course of argument.

13 An examination of the decision of the Magistrate shows that he correctly stated the rule pursuant to which the application was made. The terms in which he expressed the test to be applied were unexceptional, at least as far as the plaintiff was concerned. He stated that for delay on the part of the plaintiff in prosecuting the action to be relevant it had to be inordinate or inexcusable, to be likely to result in prejudice to the defendants and be such as to result in there being a risk to the fair trial of the action. In his statement of the test to be applied, the Magistrate did not make any error which was adverse to the plaintiff.

14 Having stated the test to be applied, his Worship analysed the facts. He accepted the evidence that the very long period of time between the making of the agreement alleged and the application for extension of time for service and, a fortiori the time of service, had the effect of making it “difficult to remember the transactions in question … particularly as no diary notes were made or kept.” He further accepted that the brother of the second defendant had information about the claim, and had died in 1994, thus compounding the difficulties for the defendants created by the effluxion of time. In these circumstances, it is quite unremarkable that he concluded that recollections were “likely to be very severely prejudiced or diminished as a result of the passage of time”.

15 The Magistrate also accepted that “(t)he defendants do not have their own records” any longer, and that “they ought not be forced to rely on the authenticity of the plaintiff’s record”. Such a finding is well supported by the affidavit referred to in paragraph 9 above.

16 The foregoing considerations caused the Magistrate to conclude that there was “a danger … of prejudice to the defendants”. There was evidence on which such a conclusion could be based.

17 Having examined the delay itself and the excuses proffered by the plaintiff for such delay, the Magistrate held:

“I think the delay itself is inordinate, and I do not think that the excuse that he (the plaintiff) was simply a very patient person who did not want to rock the apple cart … within the family, really excuses that inordinate delay.”
and
“I do not think it (the delay) really can be excused. But even if it could be … I think that there is too much prejudice or too much danger of prejudice to the defendants to enable there to be a fair trial of the issues … and I simply do not think that this matter can fairly go forward.”

18 The findings of the Magistrate, therefore, were that he was satisfied that there had been inordinate delay which had not been adequately explained and that prejudice would result to the defendants as a consequence of such delay which would prejudice the fair trial of the action.

19 Such findings were undoubtedly open to his Worship on the evidence before him.

20 Reference was made on behalf of the plaintiff to the decision in Burkett v James (1978) AC 297. However, that case was very different from the present case for a number of reasons. First, the dismissal of that action for want of prosecution occurred at a time that was within the period of limitation, so that it was open to the plaintiff, should the action be dismissed for want of prosecution, to institute a further action on the same cause of action (supra at 322 per Lord Diplock; at 325 per Lord Salmon; at 334 per Lord Edmund Davies). Second, the delay in that case was nothing like the delay in the present case. In Burkett v James (supra), the action was commenced approximately two years after the monies claimed had fallen due. The action proceeded with reasonable dispatch over the course of the following year, but then no further steps were taken for approximately two years, at which time the motion for dismissal was filed. This period of delay is in marked contrast to the period of some 11 years that elapsed between 1990 when the debt is claimed to have fallen due and the application for extension of the time for service. Furthermore, in the present case there was a delay of nearly 3 years between the date when the Statement of Claim as amended became invalid for service and the date on which the application to restore the matter and extend the time for service was made. Third, in Burkett v James (supra) the defendants, having been apprised of the plaintiff’s claim at an early date, filed a defence and were in a position to gather together documents and take statements to deal with the claim. There was no suggestion of particular prejudice arising from any delay on the part of the plaintiff in that action. That is in marked contrast to the present case.

Conclusion

21 In my opinion, the reasons given by the Magistrate do not disclose any error of law as is required by s 69(2) of the Local Courts (Civil Claims) Act 1970.

22 In these circumstances, I am of opinion that the appeal should be dismissed.

Orders

23 The orders of the court are:

1. Appeal dismissed;

2. The plaintiff is to pay the defendants’ costs.

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Last Modified: 06/11/2002