White v Attwells; Attwells v White

[2019] NSWSC 1278

Supreme Court

New South Wales

Medium Neutral Citation:

White v Attwells; Attwells v White [2019] NSWSC 1278

Hearing dates:

24 June 2019(Final written submissions 16 July 2019)

Decision date:

25 September 2019

Before:

Gleeson J

Decision:

2017/239938 (Fees proceeding)

 

The Court orders:

 

(1)   Subject to the following conditions:

 

(a)   the heading to the cross-claim being amended to only refer to the cross-defendant, Mr White; and

 

(b) certification by the solicitor for the cross-claimant as to reasonable prospects pursuant to cl 4(2) of schedule 2 of the Legal Profession Uniform Law Application Act 2014 (NSW),

 

grant leave to the defendant (Mr Attwells) to file a defence and cross-claim cross summons against Mr White, in the form of MFI 1.

 

(2)   Otherwise dismiss the defendant’s amended notice of motion filed 7 June 2019.

 

(3)   The plaintiff to pay the defendant’s costs of the amended notice of motion filed 7 June 2019, except in relation to the claim for relief in par 3 of that motion.

 

(4)   The defendant to pay Mr Kelly SC’s costs of the amended notice of motion filed 7 June 2019.

 

2017/382284 (Negligence proceeding)

 

The Court orders:

 

(1) Pursuant to UCPR, r 1.12, extend the time for service of the statement of claim on the second defendant (Mr Kelly SC) to 13 June 2018.

 

(2) Pursuant to UCPR, r 36.16(2)(b), vary the order made by the District Court on 18 June 2018 such that the time for service of the statement of claim on the first defendant (Mr White) is extended to 16 August 2018.

 

(3) Pursuant to UCPR, r 10.14(2), direct that the statement of claim be taken to have been served on the first defendant (Mr White) on 16 August 2018.

 

(4) Subject to certification by the solicitor for the plaintiff as to reasonable prospects pursuant to cl 4(2) of schedule 2 of the Legal Profession Uniform Law Application Act 2014 (NSW), grant leave to the plaintiff to file an amended statement of claim dated 13 September 2018, in the form of annexure C to the affidavit of Leonardo Muriniti sworn 17 September 2018.

 

(5)   The plaintiff to pay each defendant’s costs thrown away by reason of the amendments to the statement of claim.

 

(6)   Otherwise dismiss the plaintiff’s amended notice of motion filed 7 June 2019.

 

(7)   The first and second defendants to pay the plaintiff’s costs of the amended notice of motion filed 7 June 2019, except in relation to the relief claimed in pars 7, 8 and 9 of that motion.

 

(8)   Otherwise dismiss the first defendant’s notice of motion filed 23 August 2018 with costs.

 (9)   Dismiss the second defendant’s notice of motion filed 12 October 2018 with costs.

Catchwords:

CIVIL PROCEDURE – originating process – statement of claim for damages – expiry before valid service on defendants – whether service of stale statement of claim on second defendant subsequently authorised – whether service a procedural irregularity within s 63 of Civil Procedure Act 2005 (NSW) – where time for service extended but personal service never effected on first defendant – whether proceeding should be set aside, the time for service be extended or first defendant be taken to have been served – leave to amend pleadings

CIVIL PROCEDURE – registrars – power of District Court registrar – extension of time to serve originating process under UCPR, r 1.12 – where assistant registrar lacked delegated power to dispense with requirement to serve notice of motion on affected party – effect of purported order under UCPR, r 1.12 – consideration of procedural irregularities under s 63 of the Civil Procedure Act 2005 (NSW) – whether order extending time for service should be set aside or varied under UCPR, r 36.16(2)(b)

Legislation Cited:

Bankruptcy Act 1966 (Cth), s 60(4)(a)
Civil Procedure Act 2005 (NSW), ss 13, 56, 63, 144
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 20, 21
Contracts Review Act 1980 (NSW)
Legal Profession Act 2004 (NSW), s 347
Legal Profession Uniform Law Application Act 2014 (NSW)
Limitation Act 1969 (NSW), s 14(1)(b)
Uniform Civil Procedure Rules 2005 (NSW), rr 1.2, 1.12, 6.2(4)(b)(ii), 12.7, 12.11, 14.28, 18.1, 18.2, 28.5, 36.16

Cases Cited:

A & N Holdings (NSW) Pty Ltd v Andell Pty Ltd [2006] NSWSC 55
Agricultural & Rural Finance Pty Ltd v Kirk [2011] NSWCA 67
Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104
Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16
Attwells v Jackson Lalic Lawyers Pty Ltd [2013] NSWSC 1510
Choy v Tiaro Coal Ltd (in liq) (2018) 98 NSWLR 493; [2018] NSWCA 205
FAI Insurance Ltd (in liq) v Mainprize [2006] NSWSC 554
Hunter v Hanson [2014] NSWCA 263
Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335
Northey v Bega Valley Shire Council [2012] NSWCA 28
NSW Insurance Ministerial Corporation v Anderson (NSWCA, 14 June 1994, unreported)
Pell v Hodges [2007] NSWCA 234
Phornpisutikul v Mileto [2006] NSWSC 57
Rich v Long [2008] NSWSC 487
Rich v Packer; Rich v Long [2007] NSWSC 1290
Tolcher v Gordon [2005] NSWCA 135; (2005) 53 ACSR 442
Van Leer Australia Pty Limited v Palace Shipping KK & anor (1981) 180 CLR 337
Wakim v Coleman [2010] NSWCA 221
Weston v Publishing and Broadcasting Ltd [2011] NSWSC 433

Texts Cited:

District Court of New South Wales, Practice Note DC (Civil) No 1 – Case Management in the General List, 28 August 2009

Category:

Principal judgment

Parties:

2017/239938
Gary Alan White (Plaintiff)
Noel Bruce Attwells (Defendant)

  2017/382284
Noel Bruce Attwells (Plaintiff)
Gary Alan White (First Defendant)
John Kelly SC (Second Defendant)

Representation:

2017/239938
Counsel:
Plaintiff in person
Mr R D Newell (Sol) (Defendant)

 

Solicitors:
G A White (Plaintiff)
L C Muriniti & Associates (Defendant)

 

2017/382284
Counsel:
Mr R D Newell (Sol) (Plaintiff)
Ms P A Horvath (First Defendant)
Mr I Griscti (Second Defendant)

  Solicitors:
L C Muriniti & Associates (Plaintiff)
Gilchrist Connell (First Defendant)
Mills Oakley (Second Defendant)

File Number(s):

2017/2399382017/382284

Judgment

1. GLEESON J: Before the Court are applications in two proceedings which were transferred from the District Court of New South Wales to the Common Law Division of this Court on 16 April 2019 by order made by McCallum J (as her Honour then was) pursuant to s 144 of the Civil Procedure Act 2005 (NSW). The applications arise out of a dispute between the parties concerning service of a “stale” statement of claim in one of the proceedings; whether an order of the District Court extending the time for service of the statement of claim was validly made, or is a procedural irregularity and if so, what are the consequences, including should that order be set aside; whether an order should now be made extending the time for service on the defendants, or otherwise confirming the position with respect to service; and whether the proceedings or the statement of claim should be struck out or dismissed. There is also a question as to whether amendments to the pleadings in both proceedings should be permitted.

Overview

Jackson Lalic proceedings

2. Gary White, solicitor, acted for Gregory Attwells and Barbara Lord in proceedings commenced on 6 June 2011 against their former solicitors, Jackson Lalic Lawyers Pty Ltd (Jackson Lalic), claiming for damages for alleged negligent advice given in connection with a consent judgment in proceedings against them by a bank for enforcement of guarantees given by them. Mr White had retained John Kelly SC in May 2011 to advise in relation to the likelihood of success of proceedings against Jackson Lalic in negligence and for breach of fiduciary duty. He gave written advice on 26 May 2011.

3. Both Gregory Attwells and Barbara Lord became bankrupt in late 2011. It seems Gregory Attwells became bankrupt either on 19 November 2011 or 19 December 2011; the precise date is unclear on the evidence. In March 2012, Noel Attwells became the assignee of the rights of Gregory Attwells against Jackson Lalic pursuant to a deed, following his bankruptcy. In August 2012, Noel Attwells became a plaintiff in the Jackson Lalic proceedings upon filing of an amended statement of claim. Importantly, Gregory Attwells remained a plaintiff; although a bankrupt, he claimed damages to the extent of damages to his reputation, relying upon the operation of s 60(4)(a) of the Bankruptcy Act 1966 (Cth).

4. Mr White also acted for Noel Attwells and Mr Kelly SC appeared in the Jackson Lalic proceedings before Harrison J on the hearing of a separate question concerning the defence of advocate’s immunity which had been pleaded by Jackson Lalic: Attwells v Jackson Lalic Lawyers Pty Ltd [2013] NSWSC 1510. Mr Kelly SC also appeared on the appeal by Jackson Lalic to the Court of Appeal: Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335.

5. On 4 May 2016, the High Court held that the defence of advocate’s immunity was unavailable to Jackson Lalic on the facts: Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16. However, following advice from Mr Leonardo Muriniti that Gregory Attwells and Barbara Lord had suffered no loss, Noel Attwells entered into a deed of settlement with Jackson Lalic in November 2016 agreeing to dismiss the proceedings and not to bring fresh proceedings. It is convenient for the balance of these reasons to refer to Noel Attwells as Mr Attwells, unless the context otherwise requires.

District Court proceedings

6. In proceeding 2017/239938 (the fees proceeding), Mr White claims against his former client, Mr Attwells, unpaid legal fees relating to the Jackson Lalic proceedings of $329,603 plus interest and costs totalling $353,332.61. Mr Kelly SC is not a party to this proceeding. The statement of claim was filed in the District Court on 7 August 2017.

7. In proceeding 2017/382284 (the negligence proceeding), Mr Attwells claims damages against Mr White and Mr Kelly SC for alleged negligent advice that there were good prospects of recovering damages from Jackson Lalic, and says that he incurred substantial costs as a result of becoming a plaintiff in the proceedings against Jackson Lalic on 16 August 2012 in maintaining and funding those proceedings and in connection with the legal costs of settling those proceedings. The statement of claim filed in the District Court on 18 December 2017 contains a notation that it does not require a certificate under cl 4(2) of Sch 2 to the Legal Profession Uniform Law Application Act 2014 (NSW). This notation is incorrect, as Mr Attwells ultimately acknowledged.

8. Mr Muriniti, the solicitor for Mr Attwells, mistakenly believed up until mid-August 2018 that the statement of claim filed in the negligence proceeding was valid for service for six months. The correct position is that the statement of claim was only valid for service for one month after the date of filing: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 6.2(4)(b)(ii).

9. The statement of claim was purportedly served upon Mr Kelly SC, by consent, by email on 13 June 2018. Solicitors acting for Mr Kelly SC filed a notice of appearance on 19 June 2018.

10. Mr Attwells then applied ex parte by notice of motion filed 15 June 2018 for an order for substituted service on Mr White and for an extension of time for service of the statement of claim. On 18 June 2018, an assistant registrar of the District Court refused to make an order for substituted service on Mr White and instead made an order extending the time for service of the statement of claim to 28 September 2018 (the 18 June order).

11. It is common ground that a Registrar of the District Court has delegated authority under the Civil Procedure Act 2005 (NSW), s 13 to make an order under UCPR, r 1.12 to extend time for service; however, there is no delegation of power to a Registrar to dispense with the service of a notice of motion on an interested party under UCPR, r 18.2(c): District Court, Delegated power of registrars – Uniform Civil Procedure Rules 2005.

12. Attempts at service of the statement of claim upon Mr White in July and August 2018 were unsuccessful. In mid-August 2018, solicitors acting for Mr White indicated that they did not have instructions to accept service, and asserted that the statement of claim was stale, referring to UCPR, r 6.2(4)(b)(ii). Mr Muriniti replied pointing to the 18 June order and indicating that Mr Attwells would seek an order for substituted service. Before that application was filed, Mr White filed a notice of motion on 23 August 2018 seeking relief which included striking-out the statement of claim.

13. Mr Attwells filed a notice of motion on 5 September 2018 seeking a variety of relief including a direction pursuant to UCPR, r 10.14 that the statement of claim be taken to have been served on Mr White on 12 April 2018, or alternatively 7 August 2018, or alternatively an order for substituted service on Mr White. In addition, leave was sought to serve an amended statement of claim dated 5 September 2018.

14. On 13 September 2018, Mr Muriniti sent a letter to the solicitors for Mr White and Mr Kelly SC enclosing an amended statement of claim dated 13 September 2018 “in its final form”. The proposed pleading included an additional claim of misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law. Mr White and Mr Kelly SC did not consent to the filing of the amended pleading.

15. Mr Kelly SC filed a motion on 12 October 2018 seeking relief similar and also additional to that sought by Mr White: see [53] below.

16. Mr Attwells filed an amended notice of motion on 7 June 2019 seeking additional relief: see [54] below.

17. In the fees proceeding, Mr Attwells filed an amended notice of motion on 7 June 2019 seeking leave to file an amended defence and cross-claim cross summons: see [59] below.

18. It is necessary to refer to the procedural background in some greater detail, before considering the applications now before the Court.

Procedural background

The fees proceeding

19. On 17 October 2017, Mr White entered default judgment against Mr Attwells for $353,332.61.

20. On 18 December 2017, Mr Attwells applied by notice of motion to set aside the default judgment. A draft defence was attached to Mr Attwells’ affidavit of 18 December 2017.

21. On 19 March 2018, Acting Judge Balla set aside the default judgment. However, Mr Attwells did not file his draft defence as he was contemplating making amendments and a cross-claim. To this end, Mr Attwells sought access to documents held by Mr White, relevantly, his client file.

22. A dispute arose in relation to access to documents following notices to produce issued to Mr Attwells dated 23 March 2018 and 17 April 2018, and a notice to produce issued to Mr White dated 12 April 2018 and a subpoena issued by Mr Attwells to the NSW Law Society. Mr White filed various motions, including a notice of motion on 25 May 2018 seeking to set aside the subpoena and notice to produce issued by Mr Attwells.

23. In connection with the access dispute, Mr White and Mr Muriniti filed affidavits in the fees proceeding which have present significance. Mr Muriniti deposed in his 12 April 2018 affidavit, which annexed the statement of claim in the negligence proceeding, that he had asked his in-house counsel to consider the facts and circumstances and to settle the statement of claim before it was served on Mr White and Mr Kelly SC (par 25), and that after an amended statement of claim was filed, service would be effected on both defendants (par 26). Mr White did not dispute that he received this affidavit and the annexed the statement of claim, which had not yet been served on him.

24. Mr White deposed in his 12 May 2018 affidavit (par 21) that he would be absent overseas until 4 July 2018 and would be hospitalised and rehabilitating from surgery from 31 July until the end of August 2018.

The negligence proceeding

25. It is common ground that Mr White first became aware of the negligence proceeding on or about 12 April 2018, upon receipt of Mr Muriniti’s affidavit served in the fees proceeding. It seems that Mr Kelly SC first became aware of the negligence proceeding no later than 21 May 2018, as on that date he notified his insurer of circumstances that might give rise to a claim against him: Exhibit A. There is no evidence, however, that Mr Kelly SC received a copy of the statement of claim before 12 June 2018 when Mr Muriniti sent him a letter by email enquiring whether he would be prepared to accept service by email of the attached statement of claim. Mr Kelly SC confirmed in an email sent on 13 June 2018 that he would accept such service. Service was effected on Mr Kelly SC by email a short time later on 13 June 2018.

26. Also on 12 June 2018, Mr Muriniti sent a letter by email to Mr White at an address in Casuarina in northern New South Wales, noting that Mr White was presently overseas and enquiring whether he would acknowledge receipt of a copy of the statement of claim that had been filed and provided to him in the context of the motions in the fees proceeding. Alternatively, the letter enquired whether Mr White required personal service or would accept electronic service of the statement of claim, and requested a response by no later than 4 pm on 13 June 2018.

27. Mr White replied by email on 13 June 2018 stating that he had not been served with the statement of claim, and advised:

As you are aware, I am overseas. I will be back in Sydney for several days after 5 July 2018. I am happy to advise you of a time and date for service upon me in the Sydney CBD on my return.

28. On 15 June 2018, Mr Attwells filed a notice of motion in the District Court seeking an order for substituted service of the statement of claim on Mr White by email at his email address, and also orders pursuant to UCPR, r 1.12 and 12.7 that the proceeding not be struck out for want of prosecution and extending the time for service of the statement of claim. No time period for the requested extension was specified in the motion.

29. In his supporting affidavit of 14 June 2018, Mr Muriniti deposed that the statement of claim had been filed to “protect time” and that service had been delayed because of the failure of Mr White to produce the entirety of Mr Attwells’ file. Mr Muriniti annexed his email communications with Mr Kelly SC and Mr White concerning whether they would accept service of the statement of claim. Mr Muriniti deposed that, in light of the response received from Mr White, an order was sought for substituted service on Mr White by email at his email address, and to the extent necessary, an order was sought extending the time for service of the statement of claim. The 15 June 2018 motion and the 14 June 2018 affidavit were not served on Mr White.

18 June order

30. On 18 June 2018, an assistant registrar of the District Court made orders in the following terms:

Re: Notice of Motion e-filed 15 June 2018

I decline to make an order for substituted service on the first defendant. In lieu:

1.   Order that the time for service of the statement of claim be extended [sic] 28 September 2018.

2.   A sealed copy of this order is to be served with the statement of claim.

Correspondence with solicitors for Mr Kelly SC

31. On 10 July 2018, Mr Muriniti sent a letter to Mills Oakley, the solicitors for Mr Kelly SC, headed “Without prejudice – save as to costs”, although it seems common ground that this letter did not contain any settlement offer. Mr Muriniti described the statement of claim as having been filed in order to “protect time”. He referred to the difficulty arising from Mr White having consistently failed to produce the entirety of the client file despite numerous requests. He acknowledged that it would be necessary to file and serve an amended statement of claim given that he was now privy to information which was not previously in his possession because of Mr White’s failure to provide the client file.

32. On 27 July 2018, Mills Oakley replied to Mr Muriniti in a letter raising a number of issues with the statement of claim. One was that the claim was described as “Mercantile Law – Other” when clearly it was a claim of alleged negligence and should have been filed as a “Torts – Professional Negligence – Legal Profession” claim. Another issue related to service; the letter stated “[i]f it had been filed correctly, your client would have been required to serve the defendants within 28 days and the matter would have been listed for pre-trial conference on a date two months from filing”. Yet another issue related to the notation in the statement of claim that certification as to reasonable prospects of success was not required. Mills Oakley also requested further and better particulars of the statement of claim.

31. On 16 August 2018, Mr Muriniti replied to Mills Oakley informing them that he was presently in the process of drafting the amended statement of claim that had been foreshadowed and that the particulars requested would be taken into consideration in that context.

32. On 17 August 2018, Mr Muriniti informed Mills Oakley that he had been delayed in completing the amended statement of claim as Mr White had failed to provide the entirety of the client file, that it had been necessary to source missing documents by other means, and that a large quantity of documents had been obtained only two days earlier sourced from the computer of the late Gary Attwells, with the assistance of an IT expert.

33. On 27 August 2018, Mr Muriniti informed Mills Oakley that the process of drafting the amended pleading had been delayed. On 28 August 2018, Mr Muriniti informed Mills Oakley that work had been completed on the draft amended pleading and he expected to have the amended pleading available shortly.

34. The draft amended statement of claim was provided to Mills Oakley on 5 September 2018, and a draft in “final form” was provided on 13 September 2018. Both drafts contained the incorrect notation that the amended statement of claim did not require a certificate under cl 4 of Sch 2 to the Legal Profession Uniform Law Application Act.

35. On 26 September 2018, the solicitors for Mr Kelly SC gave notice to Mr Muriniti under s 35A of the Civil Liability Act 2002 (NSW) that both Mr White and L C Muriniti & Associates were considered a “concurrent wrongdoer”.

Attempts at service on Mr White

38. Mr Muriniti deposed that when he had not heard from Mr White after his foreshadowed return from overseas on 5 July 2018, he instructed a process server on 10 July 2018 to arrange for urgent service of the statement of claim on Mr White at the Casuarina address.

39. On 18 July 2018, Mr Muriniti sent a letter to Mr White by email stating that he had attempted to contact him by email several times but had received no reply. The letter asked Mr White to inform Mr Muriniti what arrangement Mr White proposed for service.

40. On 19 July 2018, Mr Muriniti sent an email to Mr White complaining that affidavits and other documents which Mr White had filed in the fees proceeding did not disclose a complete address for service. Mr White responded promptly by email that day that the building in Gunnamatta Avenue, Kingscliff, where he resided, was the only building in the street and gave the name of the unit complex, “Mantra on Salt”. He stated that he would be there “from 30 July 2018” and was currently visiting friends on his way up the North Coast. He offered to pick up the documents from an agent after 30 July 2018, if Mr Muriniti provided an address and telephone number for an agent. On the same day, Mr Muriniti gave further instructions to the process server in relation to the address for service of Mr White at Kingscliff.

41. The process server unsuccessfully attempted to serve Mr White on 19 July 2018 and 6 August 2018. On the first occasion, service was attempted at the address at Casuarina and the process server was informed by the occupant that Mr White was no longer at that address. This was several hours after Mr White had informed Mr Muriniti by email on 19 July 2018 that he was residing at Kingscliff. On the second occasion, service was attempted at the Kingscliff address, but the process server found no one at home. As mentioned, Mr White had indicated in his 19 July 2018 email that he would be at the Kingscliff address from 30 July 2018.

42. On 7 August 2018, Gilchrist Connell sent a letter by email to Mr Muriniti stating that they had received instructions from Mr White to act on his behalf in relation to the (negligence) proceeding; that Mr White had not been served with any pleadings; and requested “copies of all pleadings filed and documents served in the proceedings without delay”.

43. On 16 August 2018, Mr Muriniti sent a letter by email to Mr Haslam of Gilchrist Connell enclosing a copy of the statement of claim. He noted that Mr White had not been served formally because all attempts to serve him had been unsuccessful, and referred to Mr White’s consistent failure to provide the client file. He said that work was underway to obtain all necessary documents to enable preparation of an amended statement of claim.

44. On 17 August 2018, Gilchrist Connell responded to Mr Muriniti stating that they did not have instructions from Mr White to accept service of the statement of claim, and in any event, the statement of claim was “stale” and no longer valid for service and it would be inappropriate to accept service.

45. Mr Muriniti replied to Gilchrist Connell on 17 August 2018 asserting that the statement of claim was not stale, and referring to the 18 June order extending the time for service to 28 September 2018. The letter enclosed copies of the statement of claim and a letter from the District Court dated 21 June 2018 stating the terms of the 18 June order. Mr Muriniti again invited Gilchrist Connell to confirm that they would accept service of the statement of claim. Mr Haslam of Gilchrist Connell replied by email on 17 August 2018 requesting copies of the notice of motion of 15 June 2018 and supporting affidavit. Mr Muriniti emailed copies of these documents to Mr Haslam of Gilchrist Connell on 20 August 2018.

46. On 20 August 2018, Mr Muriniti sent a further letter by email to Mr Haslam enclosing a copy of a report from a process server advising that attempts to contact Mr White by telephone had been unsuccessful. The letter foreshadowed an application for substituted service at the office of Gilchrist Connell.

47. There then followed email correspondence between Mr Muriniti and Mr Haslam debating whether sufficient time had been afforded to Mr Haslam to obtain instructions as to whether to accept service on behalf of Mr White.

48. On 23 August 2018, Mr Muriniti sent an email to Mr White referring to attempts to serve him with the statement of claim and noting that Mr White and Gilchrist Connell had each been provided with a copy of the statement of claim. He requested urgent advice as to where service may be effected on Mr White and foreshadowed an application for an order for substituted service. Mr Muriniti sent a follow-up email to Mr White less than two hours later. Mr White did not respond to either email. On the same day, that is, 23 August 2018, Gilchrist Connell filed the notice of motion referred to below seeking, among other relief, to strike out the statement of claim.

Transfer of proceedings from District Court to Supreme Court

49. The three motions in the negligence proceeding came before the District Court on 19 October 2018. Mr Attwells raised a jurisdictional issue with the statement of claim and the motions were adjourned to a date to be fixed upon the undertaking of his counsel to file a summons (for transfer of the proceeding to the Supreme Court) within seven days.

50. On 1 and 2 November 2018 respectively, Mr Attwells filed a summons relating to each proceeding seeking orders for transfer of both proceedings to this Court. As indicated, orders transferring both proceedings to this Court were made on 16 April 2019.

Applications before the Court

51. There are four applications before the Court.

Negligence proceeding

52. Mr White seeks, by notice of motion filed 23 August 2018, the following relief:

(1) The orders of the assistant registrar of the District Court extending the time for service of Mr Attwells’ statement of claim filed on 18 December 2017 to 28 September 2018 be discharged pursuant to UCPR, r 36.16(2)(b);

(2) An order setting aside the statement of claim pursuant to UCPR, r 12.11(1)(a);

(3) Alternatively, an order declaring that the statement of claim has not been duly served on Mr White pursuant to UCPR, r 12.11(1)(c);

(4) In the further alternative, an order setting aside service of the statement of claim on Mr White pursuant to UCPR, r 12.11(1)(b).

No written or oral submissions were advanced by Mr White in support of the claims for relief referred to in (2), (3) or (4) above. Written submissions, but no oral submissions, were advanced by Mr White in support of the relief referred to in (1) above.

53. Mr Kelly SC seeks, by notice of motion filed 12 October 2018, the following relief:

(1) An order pursuant to UCPR, r 12.11(1)(b) that Mr Attwells’ originating process be set aside (While the motion referred to UCPR, r 12.11(1)(b), it is accepted that it should have referred to UCPR, r 12.11(1)(a));

(2) Alternatively, pursuant to UCPR, r 12.7(1) an order that the proceedings be dismissed for failure to prosecute with due dispatch;

(3) In the further alternative, an order pursuant to UCPR, r 14.28 that the proceedings be struck out.

54. Mr Attwells seeks, by amended notice of motion filed 7 June 2019, the following relief (the amendments are underlined):

(1) That pursuant to Part 10 Rule 10.14(3) of the Uniform Civil Procedure Rules that the Court make an order directing that the Statement of Claim filed in these proceedings be taken to have been served on Gary White, the First Defendant in these proceedings on 12 April 2018 or in the alternative on such other day between the 12 April 2018 to date as this Honourable court deems appropriate; or

(2) In the alternative, an order that pursuant to Rule 10.14(2) of the Uniform Civil Procedure Rules that the Statement of Claim filed on the 10th December 2017 in these proceedings be deemed to have been served upon the First Defendant, upon Gilchrist Connell being instructed by the First Defendant to write to the Plaintiff’s solicitors, L.C. Muriniti & Associates, Solicitors by letter dated 7 August 2018; or

(3)   In the alternative, an order that service pursuant to Rule 10.14 that service can be effected (for the purposes of bringing the document to the notice of the First Defendant) by posting a copy of the Statement of Claim by ordinary post to his nominated address being Unit 2212, 9 Gunnamatta Avenue, Kingscliff NSW 2487 or in the alternative by forwarding a copy of the Statement of Claim by way of service to the First Defendant’s solicitors, Gilchrist Connell by email addressed to Mr Alex Haslam at the following email address: [email protected]; and

(4) In the event that this Motion has not been determined and appropriate orders made by the 28th September 2018 that pursuant to Rule 1.12(2) of the Uniform Civil Procedure Rules that time for service of the Statement of Claim be extended for a sufficient period of period of time necessary to give effect to any orders which the court may determine to make pursuant to Notice of Motion for the purposes of substituted or deemed service.

(5)   That an exparte order be made instanter extending time for service to such date that this motion is determined.

(6) An order that pursuant to Section 64 of Civil Procedure Act 2005 the Plaintiff be granted leave to file and serve an Amended Statement of Claim in the form annexed to the affidavit of Leonardo Carlo Muriniti sworn in support of this Notice of Motion.

(7)   Pursuant to Part 28, Rule 28.5 of the Civil Procedure Rules that proceedings 2017/239938 and 2017/382284 be consolidated.

(8)   That pursuant to s64 and s65 of the Civil Procedure Act and Part 19, Rule 19.5 and Part 19, Rule 19.6 of the Civil Procedure Rules that the Plaintiff be granted leave to file and serve and rely upon the Amended Defence and Cross-Claim Cross Summons a draft of which is annexed hereto and marked “A” (“the Defence and Cross-Claim”).

(9)   That the Cross-Claim pleaded in the Defence and Cross-Claim be by way of amendment or in substitution for the Statement of Claim in District Court proceedings 2017/392284 now Supreme Court proceedings 2017/392284.

(10)   Such further and other orders as his Honourable court deems fit.

55. The relief sought in pars 4 and 5 was not pressed at the hearing (T 13 (32-34)), however, Mr Attwells confirmed in his supplementary submissions that, so far as necessary, he sought an order extending the time for service of the statement of claim pursuant to UCPR, r 1.12. The relief sought in par 7, relating to consolidation of the proceedings, was ultimately not pressed (T20 (25-26)).

56. The relief sought in par 6 and pars 8 and 9 is related. The document referred to in par 6 is the amended statement of claim dated 13 September 2018, being Annexure C to Mr Muriniti’s affidavit of 17 September 2018. The document referred to in pars 8 and 9 is the draft defence and cross-claim cross summons which Mr Attwells seeks leave to file in the fees proceeding: see [60] below.

57. The intention of pars 8 and 9 seems to have been to have a single pleading in both proceedings by “adopting” as the statement of claim in the negligence proceeding, the proposed “cross-claim” in the fees proceeding. That course was inappropriate. If an amendment to the pleading was to be made in the negligence proceeding, then an amended statement of claim was required.

58. Mr Attwells confirmed in his supplementary submissions that he sought to amend the statement of claim in the form of the draft pleading dated 13 September 2018.

Fees proceeding

59. Mr Attwells seeks, by amended notice of motion filed 7 June 2019, the following orders (the amendments are underlined):

(1)   …

…

(3)   Pursuant to Part 28, Rule 28.5 of the Civil Procedure Rules that proceedings 2017/239938 and 2017/382284 be consolidated.

(4)   That pursuant to s 64 and s 65 of the Civil Procedure Act and Part 19, Rule 19.5 and Part 19, Rule 19.6 of the Civil Procedure Rules that the Plaintiff be granted leave to file and serve and rely upon the Amended Defence and Cross-Claim Cross Summons a draft of which is annexed hereto and marked “A” (“the Defence and Cross-Claim”).

60. Again, the relief sought in par 3 relating to consolidation of the proceedings was not ultimately pressed by Mr Attwells.

61. With respect to par 4, a revised “amended defence and cross-claim cross summons” was provided by Mr Attwells after the conclusion of the hearing, in conformity with the directions of the Court. It has been marked MFI 1, to distinguish it from earlier drafts. The proposed cross-claim no longer seeks to join Mr Kelly SC as a cross-defendant in the fees proceeding.

Statement of issues

62. Although there are a number of sub-issues (see [65] below), the debate between the parties primarily centred upon three issues:

1. service issues;

2. an extension of time for service of the statement of claim on the defendants in the negligence proceeding; and

3. dismissal or striking out of the negligence proceeding.

63. After the conclusion of the hearing, the Court sought further submissions from the parties on the service issues relating to matters which had not been addressed in argument. One matter was whether the failure to comply with the requirement in UCPR, r 18.2(1) for service of the 15 June 2018 motion on Mr White is to be treated as a procedural irregularity under s 63 of the Civil Procedure Act with the consequence referred to in s 63(2)(b), subject to any order made by the Court under s 63(3)(a). The Court drew attention to Choy v Tiaro Coal Ltd (in liq) (2018) 98 NSWLR 493; [2018] NSWCA 205.

64. The other matter concerned the practice of the District Court in considering applications for an extension of time for service, and whether the exception referred to in UCPR, r 18.2(2)(d) was potentially satisfied. The Court drew attention to the apparent practice of the Supreme Court to consider applications for an extension of time for service on an ex parte basis: Rich v Packer; Rich v Long [2007] NSWSC 1290; Rich v Long [2008] NSWSC 487; FAI Insurance Ltd (in liq) v Mainprize [2006] NSWSC 554; Hunter v Hanson [2014] NSWCA 263.

65. The following issues are raised by the applications:

1. Did the statement of claim in the negligence proceeding become stale on 19 January 2018?

2. Was the purported service of the statement of claim on Mr Kelly SC on 13 June 2018 valid and effective?

3. If no to (2), should the Court extend the time for service of the statement of claim on Mr Kelly SC pursuant to UCPR, r 1.12?

4. Was the 18 June order made without authority?

5. Was the failure to serve the 15 June 2018 motion on Mr White a procedural irregularity within s 63 of the Civil Procedure Act, and if so what are the consequences, in particular, should an order be made under s 63(3)(a) setting aside the 18 June order?

6. Alternatively, should the 18 June order which was made ex parte be discharged pursuant to UCPR, r 36.16(2)(b)?

7. Should the Court extend time for service of the statement of claim on Mr White pursuant to UCPR, r 1.12?

8. Should the Court make an order pursuant to UCPR, r 10.14 directing that service was effected on Mr White on 12 April 2018 or alternatively, 7 August 2018, or alternatively, for substituted service on Mr White?

9. Should the Court make an order setting aside Mr Attwells’ originating process pursuant to UCPR, r 12.11(1)(a), or dismiss the proceedings for failure to prosecute with due dispatch pursuant to UCPR, r 12.7(1), or strike out the proceedings pursuant to UCPR, r 14.28?

10. Should leave be granted to Mr Attwells to file an amended pleading in the negligence proceeding and a defence and cross-claim in the fees proceeding?

(1)   Did the statement of claim in the negligence proceeding become stale on 19 January 2018?

66. UCPR, r 6.2(4)(b) provides:

6.2 How proceedings commenced

…

(4)   Subject to subrule (5), originating process is valid for service:

(a)   …

(b)   in the case of proceedings in the District Court:

(i)   for 6 months after the date on which it is filed:

(A)   if it is a statement of claim seeking relief in relation only to a debt or other liquidated claim, or

(B)   if the defendant (or at least one of the defendants) is to be served outside New South Wales, or

(ii)   for one month after the date on which it is filed, in any other case. (Emphasis added.)

67. UCPR, r 6.2(5) provides that the failure to serve an originating process within the time limited by the rules does not prevent the plaintiff from commencing fresh proceedings by filing another originating process.

68. The statement of claim was an “originating process”: see definition in Civil Procedure Act, s 3. It is not in dispute that it sought relief in relation to damages and that Mr White was and is ordinarily resident in New South Wales. Accordingly, the effect of UCPR, r 6.2(4)(b)(ii) is that the statement of claim was valid for service on Mr White and Mr Kelly SC for one month after the date on which it was filed. The period for valid service expired on 18 January 2018. The statement of claim was thereafter stale, at least up until the 18 June order extending the time for service to 28 September 2018. The validity of that order is addressed in Issue (4) below

(2)   Was the purported service of the statement of claim on Mr Kelly SC on 13 June 2018 valid and effective?

69. Although a stale originating process is not a nullity (Van Leer Australia Pty Limited v Palace Shipping KK (1981) 180 CLR 337 at 341 (Stephen J)), service of a stale statement of claim is not “authorised” by the Court, and any subsequent service is neither valid, nor effective, absent further order: Weston v Publishing and Broadcasting Ltd [2011] NSWSC 433 (Weston) at [127] (Ward J).

70. Mr Attwells advanced two arguments seeking to avoid this conclusion. Neither should be accepted.

Whether service subsequently authorised by the 18 June order?

71. First, Mr Attwells sought to rely on the 18 June order as a subsequent order of the District Court having the effect of extending the time for service of the statement of claim on Mr Kelly SC to 13 June 2018. I do not agree.

72. The construction of the 18 June order does not depend on the subjective intention of Mr Muriniti, who plainly did not seek an extension of time for service as against Mr Kelly SC. The Court’s intention is to be ascertained from the language of the orders made: NSW Insurance Ministerial Corporation v Anderson (NSWCA, Gleeson CJ, Kirby P and Priestley JA agreeing, 14 June 1994, unreported).

71. Although the language of the 18 June order extending the time for service to 28 September 2018 is expressed in general terms, the order did not purport to extend the time for service on any defendant who had already been purportedly served. The better view is that the 18 June order is to be read as speaking prospectively only. Since the purported service on Mr Kelly SC on 13 June 2018 was not authorised, and no attempt was made to subsequently serve him on or before 28 September 2018, there has been no valid service of the statement of claim on Mr Kelly SC, unless an order is now made to extend the time for service pursuant to UCPR, r 1.12: see Issue (3) below.

Procedural irregularity?

74. Second, Mr Attwells submitted in his supplementary submissions that service of a stale statement of claim is a procedural irregularity within the meaning of s 63 of the Civil Procedure Act and of no consequence because of s 63(2)(b), unless an order is made under s 63(3)(a) setting aside the 18 June order.

75. Section 63 of the Civil Procedure Act provides:

63 Directions with respect to procedural irregularities

(1)   This section applies to proceedings in connection with which there is, by reason of anything done or omitted to be done, a failure to comply with any requirement of this Act or of rules of court, whether in respect of time, place, manner, form or content or in any other respect.

(2)   Such a failure:

(a)   is to be treated as an irregularity, and

(b)   subject to subsection (3), does not invalidate the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings.

(3)   The court may do either or both of the following in respect of proceedings the subject of a failure referred to in subsection (1):

(a)   it may, by order, set aside the proceedings, any step taken in the proceedings or any document, judgment or order in the proceedings, either wholly or in part,

(b)   it may exercise its powers to allow amendments and to make orders dealing with the proceedings generally.

(4)   The court may not take action of the kind referred to in subsection (3) (a) on the application of any party unless the application is made within a reasonable time and, in any case, before the party takes any fresh step in the proceedings after becoming aware of the failure.

76. Mr Kelly SC submitted that s 63 does not apply to the late service of the statement of claim on him because there has not been within the terms of s 63(1) “a failure to comply with any requirement”, relevantly, of the rules of the Court. The submission continued that UCPR, r 6.2(4)(b) does not impose any requirement on a plaintiff; it merely states the time period during which a plaintiff can validly serve an originating process and, should the plaintiff not do so, the plaintiff is at liberty to seek an extension of time for service under UCPR, r 1.12. I accept this submission.

77. I do not consider that the reference in UCPR, r 6.2(5) to a “failure to serve originating process within the time limited by these rules ...”, requires a different characterisation of r 6.2(4).

78. Rule 6.2(4) is distinguishable from Corporations Rule 2.7, which was considered in Choy v Tiaro Coal Pty Ltd. The latter rule imposes on a plaintiff an express requirement to serve an originating process and supporting affidavit as soon as practicable after filing it, and at least five days prior to the date fixed for hearing. By contrast, r 6.2(4)(b) does not impose a stipulation on a plaintiff. Contrary to Mr Attwells’ submission in reply, the distinction between service of a statement of claim outside the time delimited by the UCPR and a failure to comply with any requirement of the UCPR within the meaning of s 63(1) is a real one.

79. If I am wrong in concluding that service of the stale statement of claim on Mr Kelly SC is not a procedural irregularity within s 63 of the Civil Procedure Act, a question would arise as to whether an order should be made under s 63(3)(a) to set aside service of the statement of claim on Mr Kelly SC. If it were necessary to determine that question, I would not make such an order because I am satisfied that an order should be made under UCPR, r 1.12 extending the time for service on Mr Kelly SC: see Issue (3) below.

(3) If no to (2), should the Court extend the time for service of the statement of claim on Mr Kelly SC pursuant to UCPR, r 1.12?

80. Without conceding that the service of the statement of claim on Mr Kelly SC was neither valid, nor effective, Mr Attwells sought, so far as necessary, an extension of time for service on Mr Kelly SC pursuant to UCPR, r 1.12.

81. UCPR, r 1.12 provides:

1.12   Extension and abridgment of time

(1)   Subject to these rules, the court may, by order, extend or abridge any time fixed by these rules or by any judgment or order of the court.

(2)   The court may extend time under this rule, either before or after the time expires, and may do so after the time expires even if an application for extension is made after the time expires.

Principles

82. The principles relevant to an extension of time for service are not in dispute.

83. UCPR, r 1.12 confers a discretion which is not in terms fettered, but a plaintiff seeking an extension of time must establish a proper reason for it being granted: Pell v Hodges [2007] NSWCA 234 at [30] (Handley AJA, Tobias JA agreeing).

84. The plaintiff has the burden of satisfying the Court that good reasons exist for exercising the discretion to extend time: Wakim v Coleman [2010] NSWCA 221.

85. In Pell v Hodges, Handley AJA stated at [32]: “Whilst a defendant has no right to retain the benefit of expiry of the limitation period, this is a relevant factor” where a plaintiff is seeking an extension of time.

86. In Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104 (Buzzle), the Court of Appeal (Ipp JA, Tobias and McColl JJA agreeing) emphasised at [28] that the discretion in r 1.12 was to be exercised:

… [i]n the context of, and by reference to the statute by which it is conferred (and any other statute that is relevant to the legislative context) and in accordance with the principles developed by judicial decisions.

87. In Buzzle, the Court concluded at [43]:

Accordingly, the Court should consider, when exercising a discretion such as that under UCPR r 1.12, the attempts that have been made at service, the length of the delay, the reasons for the delay, whether the delay was deliberate, whether notice was given to the defendant, the conduct of the parties generally, and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it.

88. In Agricultural & Rural Finance Pty Ltd v Kirk [2011] NSWCA 67 (Kirk) at [62], [94]-[112], Tobias JA (Macfarlan JA and Sackville AJA agreeing) described this summary in Buzzle as setting out the “governing principle” for the Court when exercising the discretion in UCPR, r 1.12.

89. In Weston in Capacity as Special Purpose Liquidator of One.Tel Ltd (in liquidation) v Publishing and Broadcasting Ltd [2012] NSWCA 79; (2012) 88 ACSR 80, after referring to Kirk and Buzzle, Sackville AJA (Campbell and Young JJA agreeing) relevantly summarised the principles at [20], including:

…

(3) The discretion is to be exercised in the context of, and by reference to, the statute by which it is conferred: Buzzle, at [28]. Consequently, in New South Wales, ss 56-59 of the Civil Procedure Act 2005 ('CP Act') require a judge exercising the discretion to have regard to whether the relevant party has:

(a)   diligently pursued the object of disposing of the proceedings in a timely way;

(b)   used, or could reasonably have used, available opportunities under the rules or otherwise, to avoid delay; and

(c)   reasonably implemented the practice and procedure of the court with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination: Buzzle, at [36].

(4)   The court must take into account the policy considerations underlying the relevant limitations statute. Thus, defendants or potential defendants should be made aware of claims against them within a reasonable time and liquidators who do not commence proceedings until just before expiry of the limitation period should be especially diligent in pursuing prompt service: Buzzle, at [37] - [39]; cited with approval in Kirk, at 410 [98] - [99].

(5)   It is for the court and not one of the litigants to determine whether there should effectively be a stay of proceedings. Accordingly, it is generally:

'Inappropriate to allow an extension of time for the service of a ... statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court's duty to exercise, alone, the discretion conferred upon it.'

Buzzle, at [82] cited with approval in Kirk, at 411 [101].

(6)   Ordinarily, it is not a good reason for delay that a plaintiff wishes to hold up proceedings while some other case is tried: Buzzle, at [90]. However, this is not an inflexible rule: Kirk, at 411 [102].

(7)   If a defendant knows that claims have been made against him or her and understands the nature of the claims that have been made, that may mitigate the prejudice the defendant might otherwise suffer by reason of a delay in service: Kirk, at 415 [123].

...

[21]   In Buzzle, Ipp JA referred (at [32]) with approval to IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2006] QCA 407; [2007] 1 Qd R 148 ('IMB'). In IMB, Keane JA (with whom McMurdo P and Cullinane J agreed), observed (at 160 [54]) that no case had held that the Queensland rules or their equivalents authorise renewal of a claim in favour of a party who:

'chooses not to serve a claim where the facts of the case sufficient to enable the claim to be pleaded are known to the plaintiff.'

This observation was made having regard to the requirement in the Queensland rules that a party impliedly undertakes to the Court and to the other parties to proceed in an expeditious way. In Buzzle, Ipp JA pointed out that (at [35]) the provisions of the CP Act are 'akin to (and, in some aspects, go further than) the Queensland ... rules'. In Kirk, Tobias JA distinguished IMB on the facts, but cast no doubt on the applicability of the reasoning in that case in New South Wales."

Decision

90. It is common ground that there was no attempt at service on Mr Kelly SC prior to the statement of claim becoming stale on 19 January 2018, and that the first attempt at service occurred on 12 June 2018. The delay in the attempted service of the statement of claim of almost five months after it became stale is considerable.

91. While the delay was deliberate, there was no challenge to Mr Muriniti’s explanation for the delay, which I accept. First, he was mistaken until mid-August 2018 that the statement of claim was valid for service for six months, that is, up until 18 June 2018. The delay between mid-August 2018 and the filing of Mr Attwells’ motion on 5 September 2018 seeking orders as to service, including an extension of time, is adequately explained by the time taken to finalise the amended statement of claim in the context of the difficulties in obtaining documents, including from Mr White. That further delay is not significant.

92. Second, Mr Muriniti was concerned that the statement of claim required amendment before service, and to that end, had sought Mr Attwells’ client file held by Mr White, but had been refused access. Mr Kelly SC submitted that seeking the client file is not a proper reason for delaying service. I do not agree given the circumstances of this case: Mr Muriniti was mistaken as to the period for valid service, and the facts of the case were not sufficiently known to him enable the claim to be adequately pleaded. In my view, Mr Muriniti was well justified in his concern that the pleading in the statement of claim required amendment.

93. Whilst Mr Attwells could have attempted to serve the statement of claim earlier and then sought opportunities under the rules to obtain documents from Mr White, there is no reason to think that Mr White’s response to any such request for documents would have been any different to his response to the notice to produce and the subpoena issued by Mr Attwells in the fees proceeding, which Mr White contested and sought to set aside. That Mr Attwells could have taken a different approach, than delaying service of the statement of claim, does not mean that the delay in service on the defendants was “improper”. Accepting that his solicitor Mr Muriniti was mistaken as to the period for valid service of the statement of claim, I find that Mr Attwells acted with reasonable diligence in seeking documents for the preparation of an amended statement of claim from Mr White and other sources, including with the assistance of an IT expert from the computer of the late Gary Attwells.

94. Although notice of the claim was first given to Mr Kelly SC on 12 June 2018, as indicated, it seems that he was aware of the negligence proceeding by no later than 21 May 2018.

95. As to the respective conduct of the parties, I accept that Mr Kelly SC had nothing to do with the cause of the delay in service of the statement of claim. Insofar as Mr Muriniti sought to amend the statement of claim prior to service, the refusal of access to documents only involved Mr White.

96. While the statement of claim and the proposed amended statement of claim did not include, as they should have, a certification as to the reasonable prospects of success pursuant to cl 4(2) of Sch 2 of the Legal Profession Uniform Law Application Act, Mr Attwells now accepts that such certification is required. This factor is neutral.

97. Mr Kelly SC complained that the proposed amended statement of claim included a new cause of action for misleading or deceptive conduct and there is no reason why this claim was not included in the original pleading. This complaint is of little weight given that the proposed new cause of action is based on essentially the same facts as the revised negligence pleading in the amended statement of claim, as to which no pleading complaint is made.

98. As to the balance of hardship or prejudice, I accept that there is a presumptive prejudice to Mr Kelly SC arising from the delay and that as a barrister he is potentially in a more difficult position, given that he does not have the benefit of a detailed file. However, there is no evidence that the presumptive prejudice to Mr Kelly SC, when he was served with the statement of claim in June 2018, is any greater than as at 18 January 2018 when the statement of claim was last valid for service.

99. Counsel for Mr Kelly SC acknowledged that for the purpose of an interlocutory application, it is necessary to be cautious in dealing with limitation periods (T 55 (47-48)), and that a valid proceeding had been commenced by Mr Attwells in December 2017 (T 56 (14-17)). It was not submitted that any limitation period had expired prior to the purported service on Mr Kelly SC on 13 June 2018. If an extension of time for service on Mr Kelly SC is not granted, Mr Attwells would suffer prejudice as any new proceeding would likely face a limitation defence. Mr Attwells accepted that the cause of action in negligence expired no earlier than on 16 August 2018 when Mr Attwells became a party to the Jackson Lalic proceedings, and submitted that damage was first suffered because of things done consequent upon the filing of the statement of claim in those proceedings (T 20 (35-40)). That may be taken to be a reference to Mr Attwells incurring costs in maintaining those proceedings.

100. Taking into account the above considerations and the dictates of the Civil Procedure Act, ss 56-59, noting that some considerations point in different directions, on balance, I am satisfied that the discretion to extend time for service of the statement of claim should be exercised under UCPR, r 1.12. It is sufficient that the time for service of the statement of claim on Mr Kelly SC be extended to 13 June 2018, being the date upon which he was served with the statement of claim by email, having consented to that form of service.

(4)   Was the 18 June order made without authority?

101. Mr White is a person affected by the proposed orders sought in Mr Attwells’ 15 June 2018 motion.

102. UCPR, r 18.2(1) provides that a person “may not move the court to make any order” unless a notice of motion has been filed and served on each person affected by the proposed order. It thus distinguishes between the application itself, which is made by moving (usually orally) on the motion when the party is before the court, and the giving of notice of intent to do this.

103. There are four exceptions to the requirement in r 18.2(1) of giving notice of intent to make an application for an order on persons affected. UCPR, r 18.2(2) provides:

18.2 Requirement for notice

…

(2)   Despite subrule (1), a person may move the court to make an order without notice of motion having been filed or served on a person if:

(a)   that person consents to the making of the order, or

(b)   the preparation, filing or service of the notice would cause undue delay or other prejudice to the person by whom the order is sought, or

(c)   the court dispenses with the requirement for such notice to be filed or served, or

(d)   under these rules or the practice of the court, the motion may be made without the prior filing or service (as the case may be) of notice of motion.

104. Accepting that the assistant registrar of the District Court implicitly dispensed with the requirement for service of the motion on Mr White as a person affected by the proposed orders, the assistant registrar had no delegated power to exercise the dispensation power in r 18.2(2)(c): see [11] above.

105. Mr White complained that Mr Attwells had conceded at the hearing that the 18 June order was beyond power and that he sought to resile from that position in his supplementary submissions by calling in aid UCPR, r 18.2(2)(d) and s 63 of the Civil Procedure Act, as well as raising a new point seeking to relying on UCPR, r 18.2(2)(b).

106. Given that the parties had overlooked the potential application of r 18.2(2)(d) and s 63 of the Civil Procedure Act and the Court has sought assistance by way of further submissions, it is appropriate to consider Mr Attwells reliance on these provisions.

107. The position is different, however, in relation to Mr Attwells’ attempt to rely on r 18.2(2)(b). The Court’s directions did not invite submissions on this rule; it had not been previously raised by Mr Attwells; no application was made to re-open to raise a new point; and if such an application had been made, it would have been necessary to consider the potential prejudice to Mr White if a new point was permitted, given the absence of cross-examination relating to the asserted prejudice to Mr Attwells’ claim. However, against the possibility that I am wrong in this regard, I will also indicate my views on whether this exception was satisfied.

UCPR, r 18.2(2)(b) and (d)

108. As to undue delay and prejudice (r 18.2(2)(b)), Mr Attwells pointed to Mr White being overseas at the time the 15 June 2018 motion was filed, and submitted that Mr White was refusing to confirm that he had been served with the statement of claim on 12 April 2018. The submission continued that it was plainly impractical to contemplate serving Mr White with a notice of motion as a preliminary to moving the Court for an extension of time to serve the statement of claim.

109. As to the practice of the District Court in relation to applications for an extension of time for service (r 18.2(2)(d)), Mr Attwells submitted that there was no reason to doubt that the procedure adopted by the assistant registrar is the usual practice of the District Court; that is, the motion for an extension of time for service may be made without prior service of the motion on the party affected by the proposed orders. The basis of this submission seems to be inferentially drawn from the apparent practice of the Supreme Court: see the authorities referred to at [65] above.

Decision

110. Contrary to Mr White’s submissions, the exceptions in r 18.2(2)(a), (b) and (d) to the requirement in r 18.2(1) for filing and service of the motion on each person affected by the proposed order do not, in terms, require any order by the Court confirming that service of the notice of motion is not required under r 18.2(1). Only the exception in r 18.2(2)(c) is expressed in terms of an order by the Court dispensing with the need for service of the motion.

111. Importantly however, if the requirement for filing or service of the motion is not dispensed with by the Court under r 18.2(2)(c), the Court cannot proceed to determine the motion, unless one of the other circumstances referred to in r 18.2(2)(a), (b) or (d) is satisfied. Given the limits of the delegated authority of a Registrar of the District Court under s 13 of the Civil Procedure Act, an assistant registrar had no delegated power to determine that the circumstances referred to in either r 18.2(2) (a), (b) or (d) were satisfied.

112. In any event, there are real difficulties with Mr Attwells’ belated attempt to rely upon the exceptions in UCPR, r 18.2(b) and (d) having been satisfied.

113. As to undue delay and prejudice, assuming power to make such determination, it is difficult to see how the assistant registrar could have been satisfied that this exception was established. First, and contrary to Mr Attwells’ submission, it was not unreasonable for Mr White to refuse to confirm that he had already been served on 12 April 2018, given that Mr Muriniti’s 12 April 2018 affidavit was not an attempt to serve the statement of claim on Mr White. Indeed, Mr Muriniti deposed in that affidavit that the statement of claim had not yet been served on the defendants.

114. Second, Mr White had informed Mr Muriniti on 13 June 2018 of his intended return date from overseas and his availability for service of the statement of claim upon him in the Sydney CBD after 5 July 2018: see [27] above. The evidence on the motion did not establish that a delay in personal service of the statement of claim on Mr White until early July 2018, being a period of about three weeks, would cause undue delay or prejudice to Mr Attwells.

115. As to the suggested practice of the District Court of considering applications for an extension of time for service on an ex parte motion, I am not persuaded on the evidence that such a practice existed in the District Court, at least with respect to the powers exercisable by a Registrar of the District Court dealing with notices of motion.

116. Just as there is no delegation of power to a Registrar of the District Court to dispense with service of the motion under r 18.2(2)(c), there is no delegation of power to a Registrar to determine whether the circumstances referred to in r 18.2(a), (b) or (d) is satisfied. And, nothing in Practice Note DC (Civil) No 1 – Case Management in the General List, in particular pars 7.1-7.3, supports Mr Attwells’ submission as to the suggested practice of the District Court.

117. Given the above analysis, the question which arises is whether the failure to serve the 15 June 2018 motion on Mr White invalidated the 18 June order: see Issue (5) below.

(5)   Was the failure to serve the 15 June 2018 motion on Mr White a procedural irregularity within s 63 of the Civil Procedure Act, and if so what are the consequences, in particular, should an order be made under s 63(3)(a) setting aside the 18 June order?

118. Mr Attwells submitted that the failure to serve the 15 June 2018 motion on Mr White as a person affected by the proposed orders was a procedural irregularity within the meaning of s 63 of the Civil Procedure Act and the non-compliance with r 18.2(1) did not invalidate the 18 June order, given the operation of s 63(2)(b). It was submitted that it would fall to the defendants affected by the order to bring an application under s 63(3)(a) to have the 18 June order set aside. Whilst Mr White has brought such an application (albeit relying upon a different rule), it was submitted that there are no sound reasons to set aside the 18 June order.

119. Mr White accepted that “late” service of the notice of motion could be treated as an irregularity under s 63(1), as occurred in Choy v Tiaro Coal. It was submitted that what occurred with the 15 June 2018 motion was not late service, but “non-service” and that s 63(1) should not be called in aid to assist Mr Attwells to deem that service of the motion occurred when it did not, or to retrospectively dispense with service under UCPR, r 18.2(2)(c). It was submitted that the purpose of s 63 is not to retrospectively validate a purported order made beyond power.

120. Mr White also submitted that, if non-service of the 15 June 2018 motion was regarded as an irregularity under s 63(2), thus validating the 18 June order, Mr Attwells’ position is not particularly advanced because, even if validly made, the 18 June order as an ex parte order is liable to be set aside pursuant to UCPR, r 36.16(2)(b). The submission continued that, in any event, Mr Attwells did not in fact serve Mr White with the statement of claim prior to it becoming stale for a second time on 28 September 2018.

121. Mr Attwells submitted in reply that if the 18 June order is a nullity (more accurately, invalid), then the issue of UCPR, r 36.16 does not arise, and if it is only a s 63 irregularity, then Mr White retains all of his rights to bring an application under UCPR, r 36.16.

Decision

122. In Choy v Tiaro Coal, Leeming JA observed at [37]-[38] in relation to non-compliance with Corporations Rules, r 2.7:

[37] ... However, s 63 of the Civil Procedure Act makes express provision for the legal consequences of the failure to comply with, relevantly, r 2.7. The effect of s 63(2) and (3) is twofold. Subsection (2) means that the non-compliance is an irregularity and is of no consequence unless subsection (3) applies. Subsection (3) empowers the court to make an order which, unlike the non-compliance, will have immediate and direct consequences for the parties. These two subsections reinforce the basic conception that what ultimately matters is not mere non-compliance with the rules per se, but the exposure to a court order consequent upon such non-compliance.

[38]   Subsection 63(4) conditions the court’s power to make orders converting the irregularity into something which is of legal consequence by the party (a) making application within a reasonable time and (b) not waiving the non-compliance by taking a fresh step after becoming aware of the non-compliance. ... (Empasis in original).

123. In the present case, r 18.2(1) was a requirement in the UCPR, subject to the exceptions in sub-rule (2), that Mr Attwells serve the 15 June 2018 motion on Mr White as a person affected by the proposed orders.

124. The effect of s 63(2)(b) is that non-compliance by Mr Attwells with the requirement in r 18.2(1) is an irregularity and is of no consequence, unless sub-section (3) applies. Mr Attwells did not suggest that Mr White did not satisfy the qualifications in s 63(4).

125. Insofar as Mr White sought to set aside the 18 June order, I am not persuaded that the irregularity in obtaining the extension of time for service of the statement of claim on an ex parte basis requires that consequence under s 63(3)(a), given that Mr White is not precluded from seeking, as he has done, to set aside the 18 June order as an ex parte order relying upon UCPR, r 36.16 and my conclusion that the 18 June order should be varied: see Issue 6 below.

(6)   Should the 18 June order which was made ex parte be discharged pursuant to UCPR, r 36.16(2)(b)?

126. UCPR, r 36.16(2)(b) provides that the Court may set aside or vary a judgment or order after it has been entered if it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order.

Submissions

127. Mr White submitted that the 18 June order was patently unjust because he had no notice of the application being made and therefore no ability to be heard on the application. It was submitted that if he had been served with the motion he would have contended that the limitation period of Mr Attwells’ claim had expired prior to the filing of the statement of claim on 18 December 2017 or possibly that it had expired in the six months between December 2017 and June 2018.

128. The limitation argument focussed on one sub-par of the particulars of damage in the statement of claim (par 28). Sub-par (4) particularised as damages monies lent by Noel Attwells to Gregory Attwells to finance the Jackson Lalic proceedings. Mr White submitted that, whilst the dates of those loans were not particularised, it could be safely inferred that the relevant loans were advanced prior to 19 November 2011, the date on which it is pleaded (in par 6) that Gregory Attwells was declared bankrupt.

129. In oral argument, counsel for Mr White acknowledged that it was not suggested that the rest of the claim by Mr Attwells for damages was out of time (T 44 (7-9)).

130. Mr Attwells responded that Mr White had not shown that the District Court’s discretion miscarried producing an unjust outcome, or that it would have been exercised differently if Mr White had been present and brought matters to the attention of the District Court not otherwise brought to the Court’s attention. Mr Attwells pointed to disclosures in Mr Muriniti’s 14 June 2018 affidavit that he was concerned about the limitation period, and that proceedings had been brought to “protect time”.

131. With respect to the limitation point, Mr Attwells submitted that no claim was made against Mr White other than upon the basis that the alleged professional duties were owed directly to him, and that the first relevant measurable loss would have occurred sometime after the service of the amended statement of claim in the Jackson Lalic proceedings on 16 August 2012, which joined Mr Attwells as the plaintiff. It was emphasised that Gregory Attwells remained a party to the Jackson Lalic proceedings, and submitted that the claim for monies loaned to Gregory Attwells only related to money paid to, or on behalf of, or for the benefit of, Gregory Attwells, following upon the filing of the amended statement of claim in the Jackson Lalic proceedings on 16 August 2012 (T 62 (44-50) - 63 (1-3)).

Decision

132. The central question is whether it is unjust to let the 18 June order stand: Northey v Bega Valley Shire Council [2012] NSWCA 28 at [16] (Barrett JA), referring to Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR NSW 239 at 243-244 (Jordan CJ, Davidson and Roper JJ agreeing).

133. As Barrett JA observed in Northey v Bega Valley Shire Council at [12], r 36.16(2)(b) reflects what Griffith CJ, in Owners of SS Kaliba v Wilson (1910) 11 CLR 689 at 694; [1910] HCA, called “an elementary rule of justice”. It is not sufficient however that Mr White was absent to justify setting aside the 18 June order. There must be some additional factor that makes it unjust for the order to stand

134. Here, Mr White asserts that he lost the opportunity to advance a limitation argument against the making of the 18 June order. Subject to one qualification (see [140] below), I do not agree.

135. Although the pleading of the negligence claim in the statement of claim is not a model of clarity or without criticism, any limitation defence which Mr White has in respect of any statute barred claims based on asserted loans by Noel Attwells to Gregory Attwells prior to 19 November 2011 is not affected by the 18 June order. It should be immediately said that the pleading did not particularise the dates of any loans by Noel Attwells to Gregory Attwells, and, as indicated, Mr Attwells disavowed that the particulars of damage included any such loans prior to 16 August 2012. Nor does it appear that any relevant limitation period expired between 18 December 2017 and 18 June 2018.

136. The statement of claim pleads in par 4 that Gregory Attwells induced Noel Attwells from time to time to loan him monies to finance the Jackson Lalic proceedings. No dates of such loans are given. Par 7 pleads that Noel Attwells sought and received certain advice from Mr White following the bankruptcy of both Gregory Attwells and Barbara Lord in November 2011. Par 11 pleads that Mr White and Mr Kelly SC advised Noel Attwells that the Jackson Lalic proceedings had good prospects of success and, if successful, Mr Attwells stood to recover substantial amounts of damages. Par 12 pleads that Noel Attwells relied upon this advice in obtaining an assignment of rights to the Jackson Lalic proceedings in March 2012, and continued to prosecute the proceedings in his own name and at his own expense. Par 13 pleads that on 16 August 2012 Mr Attwells filed an amended statement of claim in the Jackson Lalic proceedings. Par 14 pleads that in reliance on the advice given to him by Mr White and Mr Kelly SC, Mr Attwells prosecuted the Jackson Lalic proceedings which were unsuccessful and dismissed with costs against Mr Attwells by the Court of Appeal.

137. Contrary to the assumption implicit in Mr White’s submissions, there is no pleaded allegation that Noel Attwells loaned money to Gregory Attwells in reliance upon advice given to Gregory Attwells by Mr White or Mr Kelly SC, which was “passed on” by Gregory Attwells to Noel Attwells. That is to be distinguished from a possible broader reading of the particulars of damage in sub-par (4). Nor is there any pleading of a duty of care owed by Mr White or Mr Kelly SC to Noel Attwells prior to 19 November 2011. The first allegation of advice given by Mr White to Noel Attwells is after that date. The first allegation of reliance upon such advice is Mr Attwells entering into the deed of assignment of rights to the Jackson Lalic proceedings on 5 March 2012 and filing an amended statement of claim in the Jackson Lalic proceedings on 16 August 2012 and pursuing those proceedings. The pleading in par 12 that Mr Attwells “continued to prosecute the proceedings in his own name …” is to be read together with par 13 relating to the filing of the amended statement of claim in the Jackson Lalic proceedings on 16 August 2012 which joined Mr Attwells as a plaintiff.

138. Given that Gregory Attwells remained a plaintiff in the Jackson Lalic proceedings in respect of his own claim for damage to reputation, and the acknowledgment by Mr Attwells that the particulars of damage referred to in sub-par 4 only relate to monies loaned by Noel Attwells to Gregory Attwells to finance the Jackson Lalic proceedings after the filing of the amended statement of claim on 16 August 2012, the limitation point, which Mr White says he was denied the opportunity to advance in opposition to the extension of time for service of the statement of claim, goes nowhere.

139. If, contrary to my view, the statement of claim is to be read as alleging a statute barred cause of action in negligence against Mr White in respect of advice given to Gregory Attwells prior to 19 November 2011 which Gregory Attwells passed on to Noel Attwells (Limitation Act 1969 (NSW), s 14(1)(b)), the cause of action in negligence which Mr Attwells pleads against Mr White relies upon a fresh breach based on a duty of care owed directly by Mr White to Noel Attwells causing loss on or after 16 August 2012 going beyond the loss resulting from any barred cause of action: Hawkins v Clayton (1986) 5 NSWLR 109 at 124-125 (Glass JA).

140. One further matter should be mentioned. It arises from the acknowledgment by Mr Attwells in this Court that the limitation period expired no earlier than 16 August 2018, and that damage was first suffered because of things happening consequent upon the filing on 16 August 2012 of the amended statement of claim in the Jackson Lalic proceedings (T 20 (35-40)). Although the fact that the statement of claim was filed to “protect time” was adverted to in correspondence annexed to Mr Muriniti’s 14 June 2018 affidavit, the affidavit did not draw the District Court’s attention to the potential expiry of the limitation period on or shortly after 16 August 2018, in circumstances where an extension of time for service of the statement of claim was sought. Whilst I do not regard this omission as deliberate, if the matter had been drawn to the District Court’s attention, as it should have been on an ex parte motion, it would have been a significant factor in the exercise of the discretion as to the date on which any extension of time for service of the statement of claim should be granted. Accepting the potential prejudice to Mr White should service of the statement of claim be extended beyond any limitation period for the negligence claim, no substantive argument was advanced by Mr Attwells in this Court seeking to justify an extension of time for service of the statement of claim beyond 16 August 2018. Given Mr Attwells acceptance that the limitation period expired no earlier than 16 August 2018, and the absence of any pleading that Mr Attwells first expended moneys in continuing the Jackson Lalic proceedings on a later date, it is appropriate to proceed on the basis that the cause of action in negligence potentially expired on 16 August 2018.

141. In the circumstances, I am satisfied Mr White has established that it would be unjust not to vary the 18 June order so as to limit the extension of time for service of the statement of claim to 16 August 2018.

142. If I am wrong in this conclusion and the 18 June order should be set aside, it would be necessary to consider Mr Attwells’ application for an extension of time for service of the statement of claim on Mr White: see Issue (7) below.

(7) Should the Court extend the time for service of the statement of claim on Mr White pursuant to UCPR, r 1.12?

143. Mr Attwells confirmed in his supplementary written submissions that he seeks, as far as necessary, an order pursuant to UCPR, r 1.12(2) extending the time for service of the statement of claim on Mr White.

144. The applicable principles and factors relevant to an extension of time for service have been addressed above in Issue (3) relating to Mr Kelly SC.

Decision

145. In addition to the factors considered at [90]-[98] above, which are in broad terms also relevant to Mr White’s position, the following additional considerations pertain specifically to Mr White.

146. Notice was first given to Mr White in mid-April 2018 in the context of the dispute as to access to documents. That was about 12 weeks after the statement of claim became stale. The first attempt to serve Mr White was on 12 June 2018. While Mr White professed his preparedness in mid-June 2018 to accept service upon his return from overseas on 5 July 2018, he did not follow up that offer of cooperation by contacting Mr Muriniti upon his return, nor did his travel movements after his return make him easily amenable to personal service. Unsuccessful attempts were made to serve Mr White in July and August 2018, albeit the difficulties experienced on the first occasion arose because service was attempted at Mr White’s previous address, and on the second occasion Mr White was absent from his Kingscliff address.

147. Insofar as Mr White complained that Mr Attwells has not acted with due expedition in pursuit of the negligence proceeding, that needs to be viewed in context. Mr White is not blameless in the difficulties experienced by Mr Attwells in obtaining sufficient information to adequately plead an amended statement of claim. The dispute relating to access to documents continued from March to June 2018. While Mr White eventually produced part of the client file in June 2018, even then, there was a continuing dispute that the production of the client file was incomplete: par 8, Muriniti affidavit, 14 June 2018.

148. Further, it is hardly compelling for Mr White to assert that Mr Attwells had sufficient information to prepare and file the proceedings on 18 December 2017 and to verify that pleading, when there has been no challenge to Mr Muriniti’s evidence, which I accept, that he was lacking information and he considered that the statement of claim needed to be revised prior to service. The sparse pleading of the negligence claim well-justified Mr Muriniti’s concern that the statement of claim needed to be revised prior to service.

145. Plainly, Mr Muriniti was conscious that the limitation period was approaching when the statement of claim was filed in December 2017. It is uncontroversial that an important aspect of the public policy behind the limitation period is that potential defendants should be made aware of claims against them within a reasonable time: Buzzle at [37], citing the remarks of Hodgson JA in Tolcher v Gordon [2005] NSWCA 135; (2005) 53 ACSR 442 at [3]. Here, Mr White was aware of the terms of the claim on or about 12 April 2018, about 12 weeks after the period for valid service expired. That mitigates the prejudice which Mr White asserts he has suffered because of the delay in service of the statement of claim.

146. I do not accept Mr White’s submission that he would suffer prejudice in the form of defeating any limitation defence he might have otherwise had in relation to the particulars of damage in sub-par (4), if an extension of time is granted, up to the date on which the statement of claim was provided to his solicitors on 16 August 2018: see [134]-[141] above.

147. Mr White submitted that Mr Attwells is able to pursue his claim against Mr Kelly SC, and this limits any potential prejudice to Mr Attwells if an extension of time is refused. Whilst a relevant consideration, this is not determinative. It was also submitted that any prejudice that Mr Attwells may suffer if he is deprived of the possibility of pursuing his claim against Mr White by reason of expiry of the limitation period has a ready cure, being the availability of an action against his current legal representatives, because Mr Muriniti has admitted the error on affidavit. The difficulty with this submission is that it assumes that any extension of time for service would deprive Mr White of a limitation defence. That is not the case, if any extension of time for service is only to 16 August 2018.

148. If it were necessary to decide, I would extend the time for service of the statement of claim on Mr White to 16 August 2018 pursuant to UCPR, r 1.12(1).

(8) Should the Court make an order pursuant to UCPR, r 10.14 directing that service has been effected on Mr White, or alternatively, for substituted service on Mr White?

153. Mr Attwells seeks an order under UCPR, r 10.14(3) against Mr White confirming that service has already been effected on Mr White, or alternatively, an order for substituted service under UCPR, r 10.14.

154. The premise of this relief is that the time for service of the statement of claim was validly extended by the 18 June order, or has been extended by an order made by this Court pursuant to UCPR, r 1.12.

155. UCPR, r 10.14 provides:

10.14 Substituted and informal service generally

(1)   If a document that is required or permitted to be served on a person in connection with any proceedings:

(a)   cannot practicably be served on the person, or

(b)   cannot practicably be served on the person in the manner provided by law,

the court may, by order, direct that, instead of service, such steps be taken as are specified in the order for the purpose of bringing the document to the notice of the person concerned.

(2)   An order under this rule may direct that the document be taken to have been served on the person concerned on the happening of a specified event or on the expiry of a specified time.

(3)   If steps have been taken, otherwise than under an order under this rule, for the purpose of bringing the document to the notice of the person concerned, the court may, by order, direct that the document be taken to have been served on that person on a date specified in the order.

(3A)   An application for an order under this rule must be supported by an affidavit by the applicant that includes:

(a)   a statement as to the applicant’s knowledge of the whereabouts of the person to be served, and

(b)   a statement as to any communications that have occurred between the applicant and the person to be served since the cause of action in the proceedings arose (including any communications by telephone, fax or electronic mail).

(4)   Service in accordance with this rule is taken to constitute personal service.

156. Mr Attwells first relied on the fact that notice of the statement of claim had been given to Mr White by Mr Muriniti in his 12 April 2018 affidavit in the fees proceeding. It is not appropriate to treat that notice as service of the statement of claim. Mr Attwells was not relying on Mr Muriniti’s 12 April 2018 affidavit in the fees proceeding to bring the statement of claim to the attention of Mr White, as a substitute for personal service.

157. Next, Mr Attwells relied upon Mr White having instructed Gilchrist Connell, in relation to the negligence proceeding, to write to Mr Muriniti by letter dated 7 August 2018: see [42] above. The argument seems to be that Mr White must have given those solicitors a copy of the statement of claim that had been annexed to Mr Muriniti’s affidavit of 12 April 2018. However, there is no evidence that this in fact occurred.

158. The earliest date upon which the evidence discloses that Gilchrist Connell received a copy of the statement of claim is 16 August 2018, when Mr Muriniti sent those solicitors a copy of the statement of claim by email, as they had requested: see [43] above.

159. Given the difficulties experienced by Mr Muriniti in arranging personal service of the statement of claim on Mr White in July and August 2018 upon his return from overseas, whilst Mr White was travelling up the New South Wales coast to the Kingscliff area, that on 16 August 2018 a copy of the statement of claim was provided to the solicitors acting for Mr White “in relation to [the negligence] proceedings” at their request, no useful purpose would be served in requiring Mr Attwells to effect personal service of the statement of claim on Mr White in circumstances where both Mr White and his solicitors acting for him in relation to the negligence proceeding already received a copy of the statement of claim by 16 August 2018.

160. An order should be made under UCPR, r 10.14(2) directing that the statement of claim be taken to have been served on Mr White on 16 August 2018.

161. In light of the above conclusion, it is not necessary to consider the further and alternative order sought by Mr Attwells for substituted service of the statement of claim pursuant to UCPR, r 10.14(1).

(9) Should the Court set aside the originating process, or set aside service of the statement of claim pursuant to UCPR, r 12.11(1), or dismiss the proceedings for failure to prosecute with due dispatch pursuant to UCPR, r 12.7(1), or strike out the proceedings pursuant to UCPR, r 14.28?

162. Given the conclusions above, it is inappropriate to set aside the originating process, or to set aside service of the statement of claim under r 12.11(1)(a) or (b). Mr Kelly SC accepted that whether the originating process should be set aside is to be determined by whether the Court should exercise its discretion to extend time for service of the statement of claim. Mr White seemed to adopt a similar position, as noted, he did not make any submissions in support of the relief claimed under r 12.11(1)(a) or (b).

163. It remains necessary however, to address the two further claims for relief by Mr Kelly SC.

UCPR, r 12.7

164. UCPR, r 12.7(1) provides that the Court may order the proceedings be dismissed if the plaintiff does not prosecute the proceedings with due dispatch.

165. It is not in dispute that the relevant considerations include the provisions of the Civil Procedure Act, ss 56 (just, quick and cheap resolution of real issues), 57 (objects of case management), 58 (dictates of justice), 59 (elimination of delay), and 60 (costs to be proportionate): A & N Holdings (NSW) Pty Ltd v Andell Pty Ltd [2006] NSWSC 55 at [23]-[25] (Bergin J), a case involving a request for an extension of time to file evidence in Commercial List proceedings; and Phornpisutikul v Mileto [2006] NSWSC 57 at [9] (Campbell J), a case involving a request for an extension of time to file affidavit evidence in Family Provision Act proceedings.

166. Mr Kelly SC submitted that the interests of justice favoured dismissal of the proceedings for failure to prosecute with due dispatch. It was submitted that there had been no real progress in the prosecution of the action in the nine months following the filing of the statement of claim. Complaint was made that particulars of the statement of claim were sought on 27 July 2018, but not provided. However, this complaint ignored Mr Muriniti’s response on 16 August 2018 stating that when drafting the amendments to the pleading, he would take into consideration the particulars that had been requested. No submissions were advanced that the pleading in the proposed amended statement of claim dated 13 September 2018 was inadequate.

167. Next, complaint was made by Mr Kelly SC that it is not clear why the matters included in the proposed amended statement of claim had not been pleaded in the first place. This was a reference to the claim for misleading or deceptive conduct. However, as explained above, this new claim was based on substantially the same facts as the revised negligence claim in the proposed statement of claim.

168. The statement of claim served on Mr Kelly SC in June 2018 has been substantially revised in the form of the proposed statement of claim served on 13 September 2018. The delay in finalising the amended pleading between June and September 2018 has been explained by Mr Muriniti in his correspondence with Mills Oakley. The delay since the filing of Mr Attwells’ notice of motion on 5 September 2018 is attributable to the jurisdictional issue raised on 19 October 2018 and the summons filed on 1 November 2018 seeking to transfer the negligence proceeding to this Court. There is no delay attributable to Mr Attwells in the time taken to determine the transfer application, which was ordered in April 2019, or the time taken in fixing the current motions for hearing at the end of June 2019.

169. Given the procedural history recounted above, taking into account the provisions of the Civil Procedure Act, ss 56-60, I am not persuaded that there has been a failure by Mr Attwells to prosecute the negligence proceeding with due dispatch. The interests of justice do not warrant dismissal of the negligence proceeding.

UCPR, r 14.28

170. UCPR, r 14.28(1), relevantly, provides that the Court may, at any stage of the proceedings, order that the whole or any part of a pleading be struck out if the proceeding:

(1) ..

(a)   discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

(b)   has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c)   is otherwise an abuse of the process of the court.

171. Mr Kelly SC submitted that the statement of claim was initially filed essentially to maintain a “holding pattern” for a number of months until an amended document could be prepared. It was further submitted that there was no justification for the length of time taken by Mr Attwells to produce the amended statement of claim in September 2018 and that the conduct of the action has been inconsistent with the provisions of the Civil Procedure Act, ss 56-59 and, in the circumstances, the Court should exercise its discretion and strike out the plaintiff’s claim.

172. I do not agree. The procedural history has been recounted above. It was not submitted that the amended statement of claim does not disclose a reasonable cause of action. Counsel for Mr White accepted that there is an arguable case (T 47 (14-15)). Counsel for Mr Kelly SC did not suggest otherwise. There has been no challenge to the explanation given by Mr Muriniti for seeking to amend the statement of claim or the difficulties experienced in obtaining the client file from Mr White. Nor has it been suggested that the statement of claim or the proposed amended statement of claim is an abuse of process of the Court.

173. Taking into account the considerations in the Civil Procedure Act, ss 56-59, the delay since the commencement of proceedings in December 2017, including in preparing the proposed amended statement of claim, is not so inordinate as to justify the serious response of striking out the proceeding.

(10)   Whether leave should be granted to file an amended statement of claim in the negligence proceeding and a defence and cross-claim in the fees proceeding?

174. No substantial argument was raised by Mr White or Mr Kelly SC against the form of the proposed amended statement of claim in the negligence proceeding, or by Mr White against the form of the proposed amended defence and cross-claim cross summons in the fees proceeding, which is in the form of MFI 1.

175. Leave should be granted to file the proposed amended statement of claim dated 13 September 2018, subject to a condition requiring certification by the solicitor for the plaintiff as to reasonable prospects pursuant to cl 4(2) of schedule 2 of the Legal Profession Uniform Law Application Act.

176. Leave also should be granted to file the proposed amended defence and cross-claim cross summons dated 1 July 2019, subject to two conditions. One is that the incorrect heading to the cross-claim on page 4 is amended by deleting the words “Against the First and Second Cross-Defendants” and inserting the words “Against the Cross-Defendant”. The other is a condition requiring the correct certification by the solicitor for the cross-claimant as to reasonable prospects. The draft pleading incorrectly included a proposed certification relating to reasonable prospects of success under the repealed s 347 of the Legal Profession Act 2004 (NSW).

Summary of conclusions

177. In summary, I have concluded as follows:

1. the purported service of the “stale” statement of claim on Mr Kelly SC on 13 June 2018 was neither valid, nor effective;

2. service of the stale statement of claim on Mr Kelly SC was not subsequently authorised by the 18 June order, and is not a procedural irregularity within the meaning of s 63 of the Civil Procedure Act;

3. an order should be made extending the time for service of the statement of claim on Mr Kelly SC to 13 June 2018 pursuant to UCPR, r 1.12;

4. the 18 June order was made without authority, given that an assistant registrar of the District Court has no delegated authority to dispense with the need to serve a notice of motion on a person affected by the proposed order under UCPR, r 18.2(2)(c), nor delegated authority to determine that the exceptions in r 18.2(2)(b) or (d) are established;

5. the failure by Mr Attwells to serve the 15 June 2018 motion on Mr White as a person affected by the proposed order is a procedural irregularity within s 63 of the Civil Procedure Act and the non-compliance with r 18.2(1) is of no consequence because of s 63(2)(b). Further, an order should not be made under s 63(3)(a) setting aside the 18 June order;

6. the 18 June order should be varied on Mr White’s application pursuant to UCPR, r 36.16(2)(b), so that the time for service of the statement of claim on Mr White is extended to 16 August 2018;

7. if it were necessary to decide, the time for service of the statement of claim on Mr White should be extended to 16 August 2018, pursuant to UCPR, r 1.12;

8. an order should be made pursuant to UCPR, r 10.14(2) directing that the statement of claim filed 18 December 2017 be taken to have been served on Mr White on 16 August 2018;

9. the claims for relief by Mr White and Mr Kelly SC to set aside the originating process or set aside service of the statement of claim pursuant to UCPR, r 12.11(1) should be dismissed. Similarly, the claims by Mr Kelly SC to dismiss the proceeding for failure to prosecute with due dispatch pursuant to UCPR, r 12.7(1), or strike out the proceedings pursuant to UCPR, r 14.28, should be dismissed;

10. the pleading amendments sought by Mr Attwells in both proceedings should be granted subject to the conditions outlined above.

Costs

178. Subject to the following qualifications, costs should follow the event of each of the motions: UCPR r, 41.2.

179. First, Mr Attwells should pay the costs thrown away by the amendments to the statement of claim in the negligence proceeding.

180. Second, insofar as Mr Attwells did not ultimately press his application to join Mr Kelly SC as a cross-defendant to the proposed cross-claim in the fees proceeding, Mr Attwells should pay the costs of Mr Kelly SC referable to that application.

181. Third, insofar as Mr Attwells did not press some of the claims for relief, relevantly, consolidation of the two proceedings and the adoption of the draft cross-claim in the fees proceeding as the statement of claim in the negligence proceeding, Mr Attwells should pay the respective defendants’ costs of those issues.

182. The combined effect of the last two matters is that Mr Attwells should pay Mr Kelly SC’s costs of the amended notice of motion filed 7 June 2019 in the fees proceeding.

183. Although Mr White had partial success on his claim for relief under UCPR, r 36.16(2)(b), ultimately that had no practical consequence and no costs should be awarded in his favour in this regard.

Orders

2017/239938 (Fees proceeding)

184. The Court orders:

1. Subject to the following conditions:

1. the heading to the cross-claim being amended to only refer to the cross-defendant, Mr White; and

2. certification by the solicitor for the cross-claimant as to reasonable prospects pursuant to cl 4(2) of schedule 2 of the Legal Profession Uniform Law Application Act2014 (NSW),

2. grant leave to the defendant (Mr Attwells) to file a defence and cross-claim cross summons against Mr White, in the form of MFI 1.

3. Otherwise dismiss the defendant’s amended notice of motion filed 7 June 2019.

4. The plaintiff to pay the defendant’s costs of the amended notice of motion filed 7 June 2019, except in relation to the claim for relief in par 3 of that motion.

5. The defendant to pay Mr Kelly SC’s costs of the amended notice of motion filed 7 June 2019.

2017/382284 (Negligence proceeding)

185. The Court orders:

1. Pursuant to UCPR, r 1.12, extend the time for service of the statement of claim on the second defendant (Mr Kelly SC) to 13 June 2018.

2. Pursuant to UCPR, r 36.16(2)(b), vary the order made by the District Court on 18 June 2018 such that the time for service of the statement of claim on the first defendant (Mr White) is extended to 16 August 2018.

3. Pursuant to UCPR, r 10.14(2), direct that the statement of claim be taken to have been served on the first defendant (Mr White) on 16 August 2018.

4. Subject to certification by the solicitor for the plaintiff as to reasonable prospects pursuant to cl 4(2) of schedule 2 of the Legal Profession Uniform Law Application Act2014 (NSW), grant leave to the plaintiff to file an amended statement of claim dated 13 September 2018, in the form of annexure C to the affidavit of Leonardo Muriniti sworn 17 September 2018.

5. The plaintiff to pay each defendant’s costs thrown away by reason of the amendments to the statement of claim.

6. Otherwise dismiss the plaintiff’s amended notice of motion filed 7 June 2019.

7. The first and second defendants to pay the plaintiff’s costs of the amended notice of motion filed 7 June 2019, except in relation to the relief claimed in pars 7, 8 and 9 of that motion.

8. Otherwise dismiss the first defendant’s notice of motion filed 23 August 2018 with costs.

9. Dismiss the second defendant’s notice of motion filed 12 October 2018 with costs.

**********

Decision last updated: 25 September 2019