Citation: Rozene Pty Limited v Raine & Horne Commercial Pty Limited [1999] NSWSC 672
Court: Supreme Court of New South Wales, Common Law Division
Date: 6 July 1999
Judge(s): Master Malpass
Background
The plaintiff, a property vendor, commenced proceedings against the defendant real estate agent in June 1989. The claim centred on an alleged breach of duty to obtain the best price for a property sold in May 1988 for approximately $8.25 million, while the purchaser on-sold the same property shortly afterwards for around $12.5 million. The plaintiff alleged this loss flowed from the defendant's breach of their agency agreement.
Despite the magnitude of the claim (damages sought exceeded $4 million, with interest pushing the total well above the defendant's professional indemnity insurance limit), almost nothing happened in the proceedings for approximately ten years. The plaintiff's original solicitors, Diamond Peisah & Co, took very few steps while apparently assuring their client that the matter was progressing. New solicitors were retained in 1996 and some activity followed, but the matter remained far from ready for trial.
The defendant filed a Notice of Motion in April 1997 seeking dismissal for want of prosecution. That motion itself then sat unheard for over two years before being argued in June 1999.
Legal Issues
- Whether the proceedings should be dismissed under Part 5 rule 12 of the Supreme Court Rules 1970 for failure to prosecute with due despatch.
- Whether the plaintiff had sufficiently explained the lengthy delay.
- Whether the defendant had suffered prejudice caused by the delay.
- How the court should exercise its discretion in circumstances where the defendant had itself remained inactive and made no complaint about the delay for many years.
Decision
Master Malpass found, without dispute from either party, that the threshold requirement under Part 5 rule 12 had been satisfied: the plaintiff had plainly failed to prosecute the proceedings with due despatch. The central question was therefore how the court's discretion should be exercised. The court noted that Part 33 rule 6, also relied on by the defendant, had no application because the proceedings were commenced by Summons, not Statement of Claim.
The plaintiff's explanation for the delay, which primarily blamed the former solicitors at Diamond Peisah & Co, was found to fall short of adequately accounting for the inactivity both before August 1996 and after. However, the defendant's own conduct weighed heavily in the analysis. Prior to 1997, the defendant had deliberately "let sleeping dogs lie," closing its file and making no attempt to activate the proceedings, warn of prejudice, or press for progress.
On the question of prejudice, the court acknowledged some evidentiary difficulties, including the apparent loss of the plaintiff's sale file and the passage of time affecting witness recollection. However, the defendant had taken some steps to preserve evidence through conference notes, and the court noted that the defendant bore some responsibility for its own situation by remaining silent for so many years before complaining of delay.
Ultimately, the court concluded it was not satisfied that justice would be best served by dismissing the proceedings at that stage. The court described the discretionary exercise as genuinely difficult but declined to extinguish a substantial claim in circumstances where both parties had contributed to the prolonged delay. The court issued an express warning that further inactivity from the plaintiff would likely result in dismissal on any future application.
Orders Made
- The Notice of Motion seeking dismissal was dismissed.
- The proceedings were to be listed before the Acting Prothonotary on 12 July 1999 for directions.
- Each party was ordered to pay its own costs.
- Exhibits were to be returned.
Key Takeaways
- A defendant who deliberately adopts a strategy of inaction, closing its file and making no complaint about delay over many years, materially weakens its position on a later application to dismiss for want of prosecution.
- The discretionary power under Part 5 rule 12 of the Supreme Court Rules 1970 requires the court to weigh all relevant circumstances, including delay, explanation for delay, and prejudice, with the onus resting on the applicant to demonstrate entitlement to relief.
- Part 33 rule 6 of the Supreme Court Rules 1970 applies only to proceedings commenced by Statement of Claim; it does not extend to proceedings commenced by Summons.
- Insufficient explanation for a plaintiff's delay does not automatically result in dismissal where the defendant's own conduct contributed to the overall situation.
- In dismissing the motion, the Supreme Court issued a clear warning that the plaintiff's failure to take advantage of what it characterised as a final opportunity to progress the matter expeditiously could result in dismissal on any future application.
Legislation and Cases Referenced
Legislation
- Supreme Court Rules 1970 (NSW), Part 5 rule 12; Part 33; Part 33 rule 6
Cases
- Stollznow v Calvert (1980) 2 NSWLR 749
- Australian Guarantee Corporation v Reid (Supreme Court of Victoria, Court of Appeal, 19 March 1996)
- Tricon Industries Pty Ltd v Abel Lemon and Company Pty Ltd (No 2) (1998) 2 Qd R 551
- Cooper v Hopgood and Anor (Supreme Court of Queensland, Court of Appeal, 2 June 1998)
- Hartigan v International Society for Krishna Consciousness Incorporated (Bryson J, 15 February 1999)