W and L White Investments Pty Ltd v Australian International Property Corporation Pty Ltd

[2015] VCC 141

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
 Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-14-02206

W & L WHITE INVESTMENTS PTY LTD	Plaintiff
v
AUSTRALIAN INTERNATIONAL PROPERTY CORPORATION PTY LTD	Defendant

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JUDGE:	HIS HONOUR JUDGE DYER
WHERE HELD:	Melbourne
DATE OF HEARING:	17 February 2015
DATE OF RULING:	17 February 2015
CASE MAY BE CITED AS:	W & L White Investments Pty Ltd v Australian International Property Corporation Pty Ltd
MEDIUM NEUTRAL CITATION:	[2015] VCC 141

REASONS FOR RULING
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Subject:Practice and procedure

Catchwords: Reinstatement of proceeding – Proceeding struck out for parties’ failure to respond to administrative mention – Rules 24.01 and 24.06 of County Court Civil Procedure Rules 2008 – Civil Procedure Act 2010 sections 7, 8 and 9 – Practice Note PNCI 3-2013 – Exercise of discretion – Proceeding reinstated

Cases Cited:Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110; Amara Holdings Pty Ltd v Salta Constructions Pty Ltd& Anor [2011] VCC 507; Scholz & Ors v Shire of Healesville [1998] VSC 62

Ruling:Leave granted to the plaintiff pursuant to Order 24.06 of the County Court Civil Procedure Rules 2008 to set aside the order made by his Honour Judge O’Neill in chambers on 14 November 2014 striking out the proceeding for the parties’ failure to respond to an administrative mention on 16 September 2014

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr G Boas	Madgwicks
For the Defendant	Mr N Greenberger (solicitor)	Lewenberg & Lewenberg

HIS HONOUR:

Introduction

1 The present application seeks to set aside an order striking out the proceeding made in chambers by his Honour Judge O’Neill on 14 November 2014. The application relies upon Order 24.06 of the County Court Civil Procedures Rules 2008. The application to set aside the strike-out order and reinstate the proceeding is opposed.

2       The proceeding was commenced in September 2012 by a generally endorsed writ issued out of the Supreme Court of Victoria.  On 13 September 2013 the defendant filed an appearance.  The plaintiff then served a statement of claim on 11 October 2013, claiming the defendant was indebted to it for a sum in excess of $300,000 said to have arisen from an original agreement made between the parties in March 2004 and subsequent transactions.

3       On 13 November 2013 the defendant filed a defence admitting its own incorporation, denying the agreement or any indebtedness, and objecting to plead to certain paragraphs of the statement of claim as they are “vague, embarrassing to plead to and likely to delay the fair trial and hearing of this matter”.[1]

[1]Defence filed 13 November 2013 at [5]

4       Ultimately the proceeding was transferred to this court on 13 May 2014.  It is common ground that the parties’ solicitors were advised by this court that the proceeding had been transferred, and the plaintiff’s solicitors provided to the court a request to enter a list in accordance with the provisions of Rule 34A.10(i).  This document remains on the court file and is dated 3 April 2014.  It is also common ground that the court sent a document to each of the parties’ solicitors on 6 May 2014 advising:

“You will receive a formal notice of administrative mention for this matter in the near future.”[2]

[2]Exhibit NG-1

5       The matter was then listed for administrative mention on 30 June 2014, when it appears no proposed consent orders were received by the court.  As a result the proceeding was listed for a “warning administrative mention” on 16 September 2014.  Once again no proposed orders were received by the court, and as a result the matter was referred to his Honour Judge O’Neill who struck out the proceeding on 14 November 2014.[3]

[3]The notes relating to the two administrative mentions and the orders made on 14 November 2014 are contained in Exhibit NG2 to the affidavit of Mr Noam Greenberger affirmed on 17 February 2015

6       The application before me is supported by an affidavit sworn by the plaintiff’s solicitor Mr Grant Walker on 23 December 2014.  In substance, Mr Walker deposes that he knew nothing of the strike-out order until 19 November 2014. He contacted the Associate to his Honour Judge O’Neill and advised that he had not received any notice of administrative mention.  On the following day he contacted the defendant’s solicitor and explained the situation.  He followed this up in writing on 21 November 2014, and that correspondence is exhibited to his affidavit.[4]  That letter attached proposed minutes of consent orders seeking to set aside the order made by Judge O’Neill and listing the matter for a further administrative mention, not before 15 December 2014.  Mr Walker’s letter clearly stated:

“If you are instructed not to consent to the matter being reinstated, we will seek the matter to be brought on for directions.  If this is necessary we will advise the court that our client intends to continue with the proceeding and the failure to respond to the administrative mention occurred only due to what appears to be an administrative error.”[5]

[4]Exhibit GJW-4

[5]Exhibit GJW-4

7       The plaintiff’s solicitors again wrote to the defendant’s solicitors seeking a response on 2 December 2014.[6]

[6]Exhibit GJW-5

8       On 4 December 2014 the defendant’s solicitors wrote to the plaintiff’s solicitors refusing to consent to the reinstatement of the proceeding.[7]  I should note that letter raises issues concerning the plaintiff’s failure to prosecute its claim, and raises doubts as to the bona fides of the claim.  It also foreshadows an application to strike out the pleadings or seek summary judgment.

[7]Exhibit GJW-6

9       The principles relating to these types of applications are not complex.  Dr Boas, who appeared on behalf of the plaintiff, provided a thorough and well-researched outline of submissions dealing with the legal principles and urging reinstatement of the proceeding.  Clearly the power of the court to set aside an order of this type is available in accordance with the rules.  Dr Boas referred me to the authority of Jorgensen v Slater & Gordon Pty Ltd,[8] which was concerned with the negligence or inactivity of a party’s solicitors leading to a self-executing order putting an end to the proceeding.  The court there stated:

“The court has a wide discretion to relieve a party of the consequences
of non-compliance with a self-executing order. The governing consideration, as in every aspect of practice and procedure, is what justice requires.”[9]

[8][2008] VSCA 110

[9]Ibid, [9]

10      The court went on to set out four principles relevant to such an application:

“The court should have regard at least to the following matters:

(a) the circumstances in which the self-executing order was made;

(b) the reasons for non-compliance with it;

(c) the prejudice to the defaulting party if relief were not granted; and

(d) the prejudice to the innocent party if relief were granted.”[10]

[10]Ibid, [11]

11      As to the reasons for non-compliance:

“[I]t is of the first importance to ascertain whether the failure to comply was wilful, that is, was reflective of deliberate disregard of, or indifference to, the court’s order.”[11]

[11][2008] VSCA 110 [12]

12      I was also referred to a decision of this court in Amara Holdings Pty Ltd, [12] again dealing with the reinstatement of a proceeding struck out for non-compliance with a self-executing order. In that case his Honour Judge Shelton also followed the principles set out in Jorgensen.

[12]Amara Holdings Pty Ltd v Salta Constructions Pty Ltd & Anor [2011] VCC 507

13      In opposing the application, Mr Greenberger, who appeared on behalf of the defendant, sought to raise such matters as the Limitation of Actions Act and matters of pre‑issue delay as were referred to by Beach J in Scholz & Ors v Shire of Healesville,[13] which was quoted at some length.  Neither of these issues had been raised in the defence filed on behalf of Mr Greenberger’s client in September 2013.

[13][1998] VSC 62

14      The circumstances of the striking out are likely to have resulted from administrate oversight. I am unable to say whether this occurred at the Court or within the plaintiff’s solicitor’s office.

15      The plaintiff’s solicitor in this case acted promptly, once he became aware of the action being taken by the court, and his affidavit clearly sets out the circumstances which led up to the proceeding being struck out in November 2014. There was no self-executing order in this case.

16      The prejudice to the “defaulting party” if the relief were not granted is the loss to the plaintiff of the ability to litigate the rights claimed.  In this case the plaintiff’s counsel submitted that potentially the claim amounts to a sum well in excess of $300,000 which is in dispute.

17      The defendant submits that my discretion should not be exercised, and points to what is argued to be an inordinate and inexcusable delay.  The defendant also submitted that the interval of time between the events alleged to constitute the plaintiff’s causes of action and the trial of the action will be so prolonged that there will be a substantial risk that a fair trial of the action is no longer possible.[14]

[14][1998] VSC 62 [39]

18      The facts of this case are quite different from those in Scholz.  In that case, when the application was heard, some ten years had elapsed since the writ was filed with the court, and sixteen years since the plaintiff’s cause of action arose.  The events leading up to that cause of action dated back almost 20 years.  In the present case the proceeding was issued within time, and relates to events alleged to have occurred in 2004 and following.  The delay in this case, accepting that the matter had been dealt with at the first opportunity in the County Court by way of administrative mention in June 2014, would be less than nine months.  In my view it is simply wrong to characterise the facts in this case as amounting to inordinate and inexcusable delay.

19      I should also comment that the broader issues raised by Mr Greenberger during the course of argument are in my view not appropriate for a reinstatement application, although they may be relevant in a trial on the merits.  If this is the case, then the defendant’s defence should be carefully examined by the defendant’s solicitors to ensure that those matters are pleaded so that the trial can ultimately proceed in accordance with the objects of the Civil Procedure Act 2010.

20      I am comfortably satisfied that the plaintiff’s application should be granted.  Apart from the matters raised by Mr Greenberger which are potentially relevant to the overall outcome of the trial, I am unable to identify any substantial prejudice flowing to the defendant by granting this application.  I therefore propose to do so.

Orders

(i)     I order that the order made by his Honour Judge O’Neill in chambers on 17 November 2014 striking out the proceeding be set aside.

(ii)    I order the proceeding to be reinstated.

(iii)   I order the proceeding to be referred to the next directions hearing within the Commercial Division of the court.

(iv)   I reserve the costs of this application.

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