Citation: Marquette v Byrne & 7 Ors [2001] NSWSC 148 revised - 14/03/2001
Court: Supreme Court of NSW, Equity Division
Date: 5 March 2001
Judge(s): Santow J
Background
The plaintiff commenced proceedings in 1997 against eight defendants in the Equity Division, filing a statement of claim in May 1998. Several defendants filed a defence and cross-claim in July 1998. After that point, nothing appeared on the court file for these proceedings for over two years.
In August 2000, the Court wrote to the parties warning that it proposed to dismiss the proceedings under Part 32A of the Supreme Court Rules, which permits dismissal where no step has appeared on the court record for more than 12 months. The plaintiff's solicitors responded, explaining that activity had been occurring in a closely related file involving largely the same parties, and requesting that the matter be listed for directions. A Master dismissed the proceedings in November 2000, and the plaintiff appealed.
The dispute on appeal centred on whether the Master correctly assessed the circumstances, and in particular whether steps taken only in the related proceedings could amount to "special circumstances" sufficient to avert dismissal.
Legal Issues
- Whether steps taken in related proceedings (but not in the proceedings themselves) can constitute "special circumstances" under Part 32A, Rule 2(1) of the Supreme Court Rules.
- Whether the Master erred by proceeding on the factual basis that the plaintiff had done nothing after the Court's August 2000 warning letter, when in fact the plaintiff's solicitors had responded to that letter.
- Whether additional affidavit evidence, not before the Master, should be admitted on appeal under section 75A of the Supreme Court Act 1970.
- What conditions and undertakings should attach to any reinstatement of the proceedings.
Decision
Santow J upheld the appeal, finding that the Master had made a factual error that was material to his reasoning. The Master had concluded that the plaintiff chose to do nothing after the Court's warning of 29 August 2000. In fact, the plaintiff's solicitors had written to the Registry on 26 September 2000, explaining the connection to the related file and requesting directions. That letter appeared on the court file but was not addressed in the Master's judgment.
On the question of additional evidence, Santow J admitted two further affidavits filed by the plaintiff. His Honour reasoned that, while section 75A of the Supreme Court Act 1970 generally restricts fresh evidence on appeal, the Part 32A procedure is not a "trial hearing on the merits" in the conventional sense. Fairness warranted admission of the limited further material, though his Honour ultimately found it was not central to the outcome.
On the substantive question, Santow J accepted that activity in the closely related proceedings involving substantially the same parties could form part of the "special circumstances" supporting a conclusion that dismissal was not appropriate. The overriding purpose of the Supreme Court Rules, described as achieving outcomes that are "just, quick and cheap," informed this assessment, as did the fact that the related file had been actively litigated through interlocutory steps including a contested security for costs application and discovery.
Reinstatement was not unconditional. Santow J imposed undertakings on the plaintiff to file a defence to the cross-claim by 12 March 2001, to file any further affidavits by 19 March 2001, and to prosecute the proceedings with all due expedition. His Honour noted expressly that the undertakings did not excuse the defendants from their own obligations to prosecute their defences diligently.
Orders Made
- The plaintiff's appeal from the Master's judgment of 24 November 2000 was upheld.
- The defendants were ordered to pay half the plaintiff's costs of the application before the Master and the whole of the plaintiff's costs of the appeal (subject to a stay of 14 days in the case of the Sixth Defendant to allow that party to file affidavit evidence and submissions in opposition).
- The orders were conditional on the plaintiff's undertakings to:
- File a defence to the defendants' cross-claim in proceedings 3563/97 by 12 March 2001.
- File any other affidavits on which the plaintiff presently anticipated relying by 19 March 2001.
- Otherwise prosecute the proceedings with all due expedition.
- The matter was stood over to the Registrar's list at 9:30 am on 13 March 2001 for further directions.
Key Takeaways
- Part 32A of the Supreme Court Rules permits dismissal of proceedings where no step has appeared on the court record for over 12 months, but parties may avert that outcome by demonstrating special circumstances.
- Activity in closely related proceedings involving substantially the same parties can contribute to "special circumstances" within the meaning of Part 32A, even where the proceedings themselves show no recorded steps.
- A factual error by a Master as to whether a party responded to a dismissal warning can vitiate the Master's reasoning and support a successful appeal, particularly where a letter on the court file was not addressed in the judgment.
- Reinstatement of proceedings under Part 32A may be made conditional on binding undertakings for expeditious prosecution, reflecting the Rules' overriding purpose of achieving just, quick, and cheap resolution of disputes.
- Costs in Part 32A proceedings are not automatic: a plaintiff who allowed the court file to become dormant may bear some costs of any application to avert dismissal, even where that application ultimately succeeds.
Legislation and Cases Referenced
Legislation:
- Supreme Court Rules (NSW), Part 32A (introduced 21 August 1998)
- Supreme Court Act 1970 (NSW), sections 63 and 75A
Cases:
- State Rail Authority of NSW v Earthline Constructions Pty Limited (in liq) (1999) 73 ALJR 386