Walter Family Trust v National Australia Bank Ltd
[2001] VSC 441
•14 November 2001
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 4486 of 2001
| WALTER FAMILY TRUST | Plaintiffs |
| - and - | |
| NATIONAL AUSTRALIA BANK LTD | Defendant |
---
JUDGE: | EAMES, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 14 November 2001 | |
DATE OF JUDGMENT: | 14 November 2001 | |
CASE MAY BE CITED AS: | Walter Family Trust & Others v. National Australia Bank | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 441 | |
---
Appeal from Master - Application under R.S.C. 0.29.12.1 to strike out defence - Non compliance with order for discovery - Notice under Rule 29D - complex litigation - lengthy affidavit of documents delivered one day after expiry of 7 days grace permitted by 0.29.12.1(2) and (3) - discretionary considerations.
---
| APPEARANCES: | Counsel | Solicitors |
| Ms C. Walter appeared in person for the Plaintiffs | ||
| For the Defendant | Mr J. Moore | Russell Kennedy |
HIS HONOUR:
This is an appeal brought by the plaintiffs against a decision of a Master made on 2 November 2001.
The plaintiffs made application pursuant to Rule 29.12.1(3)(b) of the Rules of the Supreme Court to have the defendant's defence struck out for failure to comply with an order for the discovery of documents. The application sought a consequential order under Rule 29.12.1(5), read with Rule 21.02(1), to have judgment in default of a defence entered on behalf of the plaintiffs.
These proceedings have a short but complex history. The plaintiffs comprise a number of individuals in their own right, and as trustees of a family trust, and a brewing company, and their action arises out of the financial arrangements between those parties and the defendant, the National Australia Bank, which purported to exercise its rights as creditor under various instruments of security for funds advanced to or for the benefit of the plaintiffs, and pursuant thereto to conduct a mortgagee sale of the land, building and chattels of the brewery.
The plaintiffs, who represent themselves in these proceedings, had their first statement of claim struck out, and by leave of the court filed an amended statement of claim on 9 June 2001. It is sufficient to say that that document presents a very wide ranging number of claims against the Bank and the defence filed by the Bank discloses that there is significant dispute between the parties.
On 6 September 2001 Master Bruce made an order providing a timetable for interlocutory steps in the proceeding. He ordered that the defendant give discovery of documents by 15 October 2001. The defendant did not meet that timetable.
On 16 October 2001 the plaintiffs served a Form 29D notice on the defendant pursuant to Rule 29.12.1(2) thus giving the defendant a further seven days to comply with the order or to be at risk of the court exercising its discretion under Rule 29.12.1(3)(b) to strike out the defence.
On the afternoon of the seventh day, commencing at about 5:10 p.m., the secretary to the solicitor for the defendant attempted to fax the affidavit of documents to the plaintiffs at their address in Wodonga. In accordance with Rule 6.07 service of documents by way of fax had been agreed to by the plaintiffs and documents had in the past been successfully sent by fax and were accepted in that way. On this day the attempt to fax the document failed, with "no answer" being recorded on the fax transmission note.
The solicitor made attempts to telephone one of the plaintiffs (who takes charge of these proceedings for the other plaintiffs) and got an answering machine, on which he left a message requesting that the plaintiffs’ fax machine be turned on. At 5:45 p.m. on the evening of the seventh day the solicitor spoke to that defendant, Ms Carmen Walter, and told her of the difficulties he had experienced in faxing the document. In response to her query he said he had not filed the affidavit at court but would do so the following morning.
On the morning of the eighth day, at 9:12 a.m., the fax was successfully sent to the plaintiffs, that is, at a time before the court's registry was opened, but on that day the plaintiffs issued the summons under Rule 29 seeking to have the defence struck out.
The plaintiffs, therefore, seek the exercise of my discretion under Rule 29.12.1(3)(b) so as to have the defence struck out.
Counsel for the defendant submits that in all the circumstances it would be unreasonable to make that order. The Master agreed, and the plaintiffs now appeal against that order. I must consider the matter de novo, and exercise my own discretion.
The position of the plaintiffs is a simple one. There was an order made, they say, and the defendant failed to comply with it. Thus, as has happened in other cases, no indulgence should be granted to the defendant.
No argument as to prejudice was advanced save for the obvious one that if the plaintiffs succeed in this application they have defeated what would have been a strenuously fought defence to their action, which would appear to involve a claim for very large sums of money.
For the defendant the following matters were advanced:
1. It was agreed that to have effected service on the seventh day (and thus not been at risk under this order) the fax would have had to have been transmitted before 4 p.m. However, delivery was only a day later than permitted by Rule 29.12.1(3).
2. No explanation was offered for the failure, but counsel noted that the affidavit of documents was a complex document for the defendants to produce, identifying some 540 documents and, as the pleadings disclose, this is a very complex piece of litigation which has already involved a series of interlocutory proceedings, including some rather unusual interlocutory proceedings brought, in the main, by the plaintiffs, but also applications being brought by the defendant. The interlocutory proceedings, it is submitted, have had, in effect, a somewhat distracting impact upon the orderly progress to trial of this action.
3.Counsel for the defendant contends that it would be manifestly harsh to penalise the defendant by striking out their defence for what amounts to a day's lateness in delivery of the documents, especially when the delay would, in reality, only have been of an hour or so had the fax transmission succeeded. In saying that, I recognise that Rule 3.05(2) provides that 4 p.m. constituted the end of the day for the purpose of delivery of documents.
The affidavit of Carmen Walters, dated 23 October 2001, in support of the summons did not disclose the fact that she had been contacted by the solicitor for the defendant on the seventh day and that when she issued her summons the next day she was aware that the affidavit was about to be delivered. Whilst I accept that she is not legally represented, and she was entitled to issue the summons once the seventh day had passed without delivery of the affidavit, by omitting reference to those contacts she was not frank with the court in her affidavit. That is a relevant factor for me to take into account in the exercise of my discretion.
The exercise of my discretion is not confined. It is not necessary for the defendant to show that there are special circumstances which justify the discretion being exercised in its favour.
In my view, it would, in all the circumstances, be an unreasonable exercise of my discretion to strike out the defence for what, in effect, is a day's delay in litigation of this kind. I accept that in other cases Masters may have made such an order notwithstanding for the delay was of a mere day, but all cases must be judged against their own background, and in this case, in the present circumstances, the order is not justified.
In deciding to exercise the discretion in favour of the defendant I wish to make some further observations. The defendant and its solicitors would be wise not to regard this outcome as having been a foregone conclusion. Where the defendant is a major company, represented by a large firm of solicitors, and their opponents are unrepresented, it is not unreasonable to require that timetables be met, especially where, as here, the Order of Master Bruce expressly provided that if the parties were having difficulty complying with the timetable they could make application to the court, upon 24 hours' notice to the other side, to vary the order. The solicitor for the defendant took a very great risk in this case in not making such an application. The defendant and its solicitors should not confidently assume that the court would, in future, grant a similar indulgence if orders were not complied with as required by the court.
The other matter is this: whilst I accept that, upon the Rule 29D notice being served, the defendant and its solicitor would have understood that they had seven further days to comply with the order, and thus might have seen the need to explain delay as being only related to the delay of one day, the affidavit from the solicitor for the defendant (whilst complaining of matters omitted from Ms Walter's affidavit) offered no explanation, at all, for the defendant's failure to deliver the affidavit by the original date, that is, by 15 October 2001, nor explained why no application was made for an extension of time.
Those are also relevant considerations to which I have had regard on this application, and, whilst I have nonetheless exercised my discretion in favour of the defendant, they remain relevant considerations on the question of costs. The Master against whose order this appeal is brought obviously thought so too, and ordered that both sides bear their own costs notwithstanding that the plaintiffs' application failed.
The order, in my view, should be that the appeal against paragraph 1 of the order made by Master Wheeler on 2 November 2001 be dismissed and thus I confirm that the plaintiffs' application brought by summons dated 23 October 2001 should be dismissed.
(Discussions ensued re costs.).
I order that each side pay their own costs.
---
1
0
0