Acetime Pty Ltd v Homestyle Pty Ltd - [2006] WADC 65

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: ACETIME PTY LTD -v- HOMESTYLE PTY LTD [2006] WADC 65

CORAM: STAVRIANOU DCJ

HEARD: 12, 20 APRIL 2006

DELIVERED : Delivered Extemporaneously on 20 APRIL 2006 typed from tape and edited by Trial Judge

FILE NO/S: CIV 2168 of 2004

BETWEEN: ACETIME PTY LTD
Plaintiff
AND
HOMESTYLE PTY LTD
Defendant

ON APPEAL FROM:
For File No               :  CIV 2168 of 2004
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :DEPUTY REGISTRAR HEWITT
File No  :CIV 2168 of 2006

Catchwords:

Practice and procedure - Appeal - Extension of time - Abuse of process - Delay by solicitor

Legislation:

District Court Rules 2005

Result:

Appeal allowed

Representation:

Counsel:

Plaintiff: Mr B N Ashdown
Defendant: Mr C A Luck

Solicitors:

Plaintiff: A J Lloyd
Defendant: Chambers Westgarth

Case(s) referred to in judgment(s):

Bourke v Kecskes (1967) VR 894
Christie v Harvey (1900) 2 WAR 146
Christmas Island v Geraldton (No 5) (1997) 18 WAR 334
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Packer v Maher (1984) 3 NSWLR 486
West Coast Clothing Co Pty Ltd v Sail America Foundation unreported, SCt of WA; Library number 940482; 7 September 1994

Case(s) also cited:

Nil

STAVRIANOU DCJ: This is an appeal against a judgment of Deputy Registrar Hewitt delivered on 14 September 2005 by which the learned Deputy ordered that (1) the plaintiff's writ of summons and statement of claim be struck out and; (2) the plaintiff do pay the defendant's costs of the application and the costs of the action to be taxed on an indemnity basis.
By this appeal the plaintiff seeks orders that the orders of the learned Deputy be set aside and in lieu thereof there be orders that:
1.The time for commencement of the appeal pursuant to Order 6 Rule 11 of the Rules of District Court of Western Australia be extended until the date of filing of this notice of appeal.
2.The defendant's Chamber summons dated 20 June 2005 be dismissed.
3.The plaintiff to have leave to amend its statement of claim in this action in terms of a minute of substituted statement of claim dated 28 December 2005 filed herewith.
4.Further filing and service of the minute of substituted statement of claim be dispensed with.
The jurisdiction exercised by a Registrar of the District Court in relation to interlocutory matters is a delegated jurisdiction. Rule 15(6) of the District Court Rules 2005 provides that the appeal is to be by way of a new hearing of the matter that was before the Registrar.
The defendant opposes the plaintiff's application to extend time within which to appeal and opposes the appeal. The plaintiff in this action seeks to recover $199,725 being the balance of an account in respect of earthworks undertaken by the plaintiff at the defendant's request.
The defendant, as part of its submissions, referred extensively to the conduct of the plaintiff in the action and the plaintiff's conduct in action 407 of 2003 ("the first action") commenced in this Court. It is therefore necessary to provide a brief history of each action.
One of the submissions made by the defendant was that when the history was considered it was clear that the plaintiff did not have a genuine desire to progress the action, rather the desire was to proceed against its former solicitors.
On 6 March 2003, the plaintiff commenced the first action. The claim made was for $199,725. A statement of claim was filed and delivered on 29 July 2003. The defendant applied to strike out the pleading and on 9 September 2003, an order was made striking out the statement of claim and allowing the plaintiff 21 days to file a fresh pleading.
No fresh pleading was filed and on 20 November 2003 an order was made requiring compliance with the order of 9 September 2003 within seven days of service, failing which the action would be dismissed. The order was served on 4 December 2003.
The plaintiff did not file and serve a further pleading and on 12 January 2004 judgment was entered in the first action in favour of the defendant plus costs. The costs were subsequently taxed and have been paid by the plaintiffs then solicitor Mr Peter Ward.
The plaintiff commenced this action on 24 September 2004 and sought by the writ of summons to recover $199,725.
The statement of claim was filed on 28 April 2005 and claimed $194,657.78. A conditional appearance was entered on 13 June 2005 and on 20 June 2005 the defendant made application to strike out the action pursuant to O 20, r 19(1)(d) of the Rules of the Supreme Court. One of the grounds of the written application was that the action was identical to the first action in which judgment had been entered.
That ground, which was expressed to be based upon the principal of res judicata was not pursued on the appeal by the defendant. However, what was submitted was that the maintenance of the second action was an abuse of process. The defendant's application came on for hearing before the learned deputy on 14 September 2005.
There was no appearance on behalf of the plaintiff and the learned Deputy struck out the action as an abuse of process. On 28 December 2005 the plaintiff filed the application for an extension of time within which to appear in this action.
Rule 15(1) of the District Court Rules 2005 provides that if a party is dissatisfied with a decision of a registrar, the party may appeal to a judge.
Rule 15(2) provides that the appeal must be commenced within 10 days after the date of decision or such longer period as a Judge or Registrar may allow. It is accepted in this case that the appeal was approximately 90 days out of time.
The principles applicable to an application for an extension of time within which to appeal are well known. In Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196, Kennedy J at 198 identified what he described as the major factors to be considered in the exercise of the Court's discretion as being (1) the length of the delay, (2) the reason for the delay, (3) whether there is an arguable case and (4) the extent of any prejudice suffered by the respondent.
An issue which arose in this appeal was the extent to which the plaintiff should be responsible for the failure of its solicitors to proceed diligently with the first action, the second action and the appeal. The defendant's submission was that the plaintiff must accept responsibility for the delays. It was further submitted that the plaintiff was well aware the matter was being delayed and it had power to do something about it.
Reliance was placed by the defendant upon the decision of Master Adams in West Coast Clothing Co Pty Ltd v Sail America Foundation unreported, SCt of WA; Library number 940482; 7 September 1994. In Christie v Harvey (1900) 2 WAR 146 at 150 Hensman J referred to it "being very hard that a party should suffer because of the blunder of a solicitor, his client or counsel." Christie was a case in which a bona fide mistake had been made.
In Esther Investments (above) both Kennedy J at 199 and Rowland J at 204 described as a material factor in the exercise of the Court's discretion to extend time to be that the fault was that of the appellant's solicitors rather than of the appellant.
The plaintiff filed in this case in support of the application for an extension of time an affidavit sworn by its managing director, Mr Trevor Robert Collins, on 28 November 2005. An affidavit sworn by the plaintiff's current solicitor, Anthony James Lloyd, on 22 December 2005 was also relied upon. This being an interlocutory application there was no cross‑examination of either deponent on the contents of their affidavits.
The facts as outlined below are from the affidavits relied upon by the plaintiff. In his affidavit, Mr Collins deposed that he at all times believed the plaintiff had a good claim against the defendant. Further, he deposed that at all times instructions were provided to the defendant's solicitors to prosecute the claim against the defendant with all haste possible. The defendant submits that the plaintiff has demonstrated a consistent disregard for the Rules of Court and wasted the Court's time and resources.
Mr Collins deposed that in July 2002 he instructed Mr Ward to act on behalf of the plaintiff in relation to the claim against the defendant. Mr Collins' affidavit details that he prepared documents and that in November 2002 he instructed Mr Ward to issue a writ of summons. In January 2003, Mr Collins rang Mr Ward and asked how the matter was progressing. Mr Ward assured Mr Collins that "everything was in hand and it" ‑ being a reference to the writ ‑ "would be issued shortly."
The writ in the first action was in fact issued on 6 March 2003. There were complaints by the defendant about the statement of claim which was delivered on 29 July 2003 and ultimately the statement of claim was struck out. Mr Collins deposed that sometime in 2004 Mr Ward told him that the case had been dismissed. Mr Collins deposed that he was concerned over the matter, but it was not until September or early October 2004 that he was told the writ had been reissued.
Mr Ward gave advice in late November 2004 to Mr Collins that a summary judgment application should be made in this action. Mr Collins then provided information requested by Mr Ward and in mid-December 2004 a draft affidavit in support of the summary judgment application was prepared. Mr Collins deposed that he continued to ask Mr Ward about the progress of the action. Mr Ward's response was that the matter was in hand and that there was nothing to worry about.
In July 2005, Mr Ward told Mr Collins that the second action was not successful and advised him to speak to another solicitor. This was not the case, as the application which had been filed on 20 June 2005 had not been heard and determined. On 12 July 2005, Mr Ward wrote to Mr Collins in the following terms:
"You will recall that in 2004 the initial action by Acetime Pty Ltd was struck out by reason of my default in filing particulars of claim. I acted on the view that the action could be recommenced and steps were taken to achieve that with a writ being issued and a writ and claim filed and served. Preparations were made for a detailed application for summary judgment.
It appears that the original striking out is an answer to the fresh writ and in those circumstances Acetime Pty Ltd should seek independent legal advice concerning its position with respect to my handling of this matter."
In response to the letter of 12 July 2005, Mr Collins sought the advice of his current solicitor Mr Lloyd. Mr Collins has deposed that he first saw Mr Lloyd on 1 August 2005 to seek his advice about the situation. Mr Lloyd wrote to Mr Ward on 2 August 2005 in the following terms:
"Mr Collins came to see me today. You will recall you wrote to him in relation to the above matter recommending he seek independent legal advice with respect to your handling of the matter.
As I am sure you will appreciate, the striking out of the initial action by reason of the default in filing documents may give rise to a claim against you. Before I give considered advice I would appreciate being provided with a copy of your file relating to the matter."
Mr Lloyd has deposed that when he saw Mr Collins he was told by him that the claim had been dismissed in the first instance due to some fault of Mr Ward and that a second action faced a similar fate. Mr Lloyd deposed that he then attempted to obtain the papers from Mr Ward.
On an unknown date Mr Lloyd spoke to Mr Ward during which Mr Lloyd learnt that the defendant had applied to strike out the action on the basis that the matter had been finally decided by the first proceedings and Mr Ward considered there was no answer to that issue. Mr Lloyd deposed that eventually documents were obtained from Mr Ward but these were insufficient to enable an understanding of the history of the matter to be obtained.
Copy documents were then obtained from the registry of the court on 30 September 2005 and 4 October 2005. Mr Lloyd deposed that after receipt of the copy documents he conferred with Mr Collins who gave instructions to brief counsel. Eventually counsel's advice was obtained and followed and the application for an extension of time to appeal was then made.
Counsel continues to be instructed in relation to the matter. The appeal was required to be commenced by 24 September 2005. The notice of appeal and application to extend time were not filed and served until 28 December 2005 and were therefore nearly three calendar months late. The defendant submits that in the circumstances the delay was inordinate and inexcusable.
The plaintiff contends that it has always intended to proceed with the action and wished to do so. Mr Collins has deposed in his affidavit that he wishes to proceed with the action. The non‑appearance on the hearing before the learned Deputy was at a time when solicitors were retained by the plaintiff. The delay in filing the notice of appeal and application to extend time is significant. I am not satisfied on the evidence before me that the plaintiff does not intend to proceed with the action diligently.
Whilst there were delays in the first action and in the lodgement of the appeal in the second action the evidence of delays does not as submitted by the defendant indicate the plaintiff has no genuine desire to progress the action. I am further not satisfied on the evidence that the plaintiff desires not to proceed with the action but to pursue a claim against its solicitors.
Mr Collins in his affidavit has deposed to his attempts to obtain information from Mr Ward. He was reassured by Mr Ward from time to time that everything was in hand. When he instructed Mr Lloyd he relied upon his advice. In his affidavit Mr Collins deposed as follows:
"22.On 1 August 2005 I attended the office of Anthony James Lloyd, solicitor, to seek his advice about the situation given the notification I had received from Mr Ward.
23.I then rang Mr Lloyd every week to see what was happening. Initially he told me he was having difficulty in getting hold of the file from Mr Ward.
24.In or about September 2005 Mr Lloyd told me he had received a small number of documents from Mr Ward but not the complete file. He said he would have to send someone to the District Court to make photocopies of what was on the court file.
25.In October 2005 Mr Lloyd told me he had obtained copies of documents from the District Court file. Mr Lloyd advised me that the court documents showed that a Registrar had struck out the Second Action.
26.Mr Lloyd advised me that on the face of the documents, it would appear that Mr Ward's conduct of the proceedings had been negligent but that it might be necessary to exhaust Acetime's remedies against the defendant before a successful claim could be made against Mr Ward and Mr Ward's professional indemnity insurer.
27.Mr Lloyd advised me that he recommended advice be obtained from counsel as to whether there were further avenues for Acetime to pursue a claim against the defendant. Mr Lloyd explained that if Acetime had such avenues, they could then be pursued, but if counsel's advice was that there was no such reasonable avenues, it would accelerate the claim against Mr Ward if we had advice from counsel to that effect.
28.I accepted Mr Lloyd's advice and authorised him to obtain counsel's advice. He subsequently told me that he had forwarded a brief to counsel.
29.I am informed by Mr Lloyd and verily believe that a brief to counsel was prepared and originally forwarded to Mr Lloyd's initial choice of counsel on 22 November 2005.
30.In early December 2005 Mr Lloyd said he had received initial advice that Acetime had reasonable prospects of successfully appealing the registrar's decision striking out the second action and that this course ought to be pursued before any claim was made against Mr Ward and his professional indemnity insurer. Mr Lloyd asked that I attend at his office to discuss counsel's advice.
31.On 8 December 2005 I attended at the office of Mr Lloyd. I accepted his recommendation, that the approach which ought to be taken was for Acetime seek to appeal the decision of the Registrar striking out the Second Action.
32.On 9 December 2005 I attended with Mr Lloyd at the offices of counsel and following that I instructed Mr Lloyd to make the necessary applications and take the necessary action on behalf of Acetime to seek to appeal the decision of the registrar and to continue with the action against the defendant.
33.At all times in these proceedings I believed I had a good claim against the defendant. I have never received directly or through Mr Ward any indication that the defendant had a defence to Acetime's claim.
34.My instructions to Mr Ward were at all times that he should prosecute Acetime's claim against the defendant with all possible haste.
35.Until I was advised of the applications of the defendant and the matters relating to these applications by Mr Lloyd I was unaware of the alleged defects in the statement of claim in the first action, the making of the order for filing a fresh statement of claim, the springing order for non-compliance with this order which led to the dismissal of the first action. Further, until such time I was also unaware of the alleged complaints and bases for the application to dismiss the second action brought by the defendant.
37.I wish on behalf of Acetime to continue with the action against the defendant and intend to prosecute the action, if allowed to do so as expeditiously as possible. In this regard, having discussed these matters with my new solicitor Mr Lloyd and counsel, the plaintiff desires to amend the statement of claim in accordance with the minute of substituted statement of claim, a copy of which is annexed to this affidavit."
I do not accept that any blame can be fairly attributable to the plaintiff for the delay in filing the notice of appeal. The plaintiff had been advised in writing that he should seek independent advice on 12 July 2005, which he did. Mr Collins in his affidavit annexed a minute of substituted statement of claim which had been settled by counsel. The statement of claim in the first action and in this action was signed by the plaintiff's former solicitor, Mr Peter Ward.
The facts as set out in the minute of proposed substituted statement of claim have been verified by Mr Collins in his affidavit. Mr Collins has deposed that work was done for the defendant between December 2001 and June 2002 and that payment has been made for part of the work. The affidavit of Mr Collins also exhibits a bundle of copy invoices which are particularised in the minute. Counsel for the defendant submits that the minute of substituted statement of claim does not properly plead out a claim. I am not satisfied that the proposed pleading is so defective that it fails to plead out a reasonable cause of action.
The claims now sought to be pleaded are in contract in the alternative on a quantum meruit and in the further alternative unjust enrichment. Mr Collins has deposed that he intends to prosecute the action if allowed to do so as expeditiously as possible. The defendant submits that the plaintiff has a more appropriate remedy against its former solicitors and that this is the motivation in appealing the orders of the learned deputy. The evidence of Mr Collins, as I have said, is that the plaintiff wishes to expeditiously prosecute its claim against the defendant.
I am not satisfied that because a possible claim against Mr Ward was considered by Mr Lloyd that this demonstrates that the plaintiff does not wish to properly pursue a claim against the defendant. The defendant further submits that it will be prejudiced if the extension of time to appeal is granted.

In the end it is necessary to consider the prejudice which each party will suffer. The plaintiff will lose the prospect of arguing its claim and having it determined on the merits. The plaintiff's prejudice would, in my view, be greater than that of the defendant's. I have carefully considered the oral and written submissions of each of the parties. Ultimately the exercise of the discretion to grant an extension of time will depend upon a consideration of the interests of justice in each case.
In Seaman Civil Procedure Western Australia at 63.4.2 the following commentary appears:
"The question in each case is whether justice as between the parties would be best served by granting or refusing the application weighing the injustice to the appellant if the application is refused and the possible injustice to the respondent resulting from the disturbance of his vested interest in maintaining the judgment."
I consider in this case that it would be in the interests of justice to allow an extension of time within which to appeal. Whilst the delay is not insubstantial, the explanations for the delay are satisfactory. The plaintiff throughout has relied upon its solicitors. In Bourke v Kecskes(1967) VR 894, Lush J (at p.897) said:
"However, the present case in my opinion does not finally turn upon this question because in my view the plaintiff himself showed a lack of reasonable diligence in attending to his own interests. Making allowances for the fact that he had placed the action in the hands of his solicitor and that his numerous inquiries were answered by saying that there were long delays in the hearing of cases, I think that a man reasonably diligent in the protection of his own interests would have required a more particular explanation of the lack of progress long before five years elapsed from the date of the writ. I think it is fair to place on the facts the interpretation that the plaintiff was passively accepting the situation which he ought to have realised was wrong…"
I am not convinced in this case that the conduct of the plaintiff demonstrated a lack of reasonable diligence in attending to its own interests in the same way as in Burke (above). Whilst there were periods of delay, the plaintiff has been kept advised by its solicitors that progress was occurring and that the matter was in hand. Accordingly I consider that an extension of time should be granted.
It is therefore necessary to now consider the application afresh and I will not read all of the contents of the affidavits and materials which I have referred to previously in the judgment. I am not satisfied that at this stage the plaintiff's conduct is sufficient to justify a finding that the commencement of the second action is an abuse of process.
In Seaman at 20.9.12, the following commentary appears in relation to striking out an action as an abuse of process:
"The jurisdiction to strike proceedings out is one which must be exercised with great circumspection. Lawrence v Lord Norreys (1890) 15 AP 210 at 219, Howden v Truth and Sportsman Ltd (1937) 58 CLR 416 at 418, but although it is a grave step to exercise the jurisdiction, if the factual and legal basis for doing so is made out the court has a view to intervene. McKechnie v Campbell (1996) 17 WAR 62 at 75.
In Christmas Island v Geraldton(No 5) (1997) 18 WAR 334 at 344, in a joint judgment of the Full Court the decision of Hunt J in Packer v Maher (1984) 3 NSWLR 486 at 492 was referred to and adopted. In Packer (above) Hunt J explained what is meant by an abuse of process by identifying three classes of abuse as follows namely where: the legal process of a court is being abused when it is being used to exert pressure to effect an object not within the scope of the process; or where it is used for a purpose other than that for which the proceedings are properly designed and exist or where the plaintiff in those proceedings is a collateral advantage beyond what the law offers.
In that same decision of the Full Court in Christmas Island (above) referring to Justice Hunt's decision the following extract appears:
"At the heart of all three of the above classes of abuse of process is the same problem the processes of the court are being used for a different purpose to purposes for which they are designed. An abuse of process will be an attempt to use the court's processes to achieve a result different to the objects of the court. When a court 'acts effectively' it is achieving results consistent with its objects. Therefore an abuse by definition will prevent the court from 'acting effectively.' …"
As I have said, the plaintiff's claims as pleaded in the minute of proposed substituted statement of claim disclose a reasonable cause of action. It is unnecessary to determine the specific pleading objections made to the minute by the defendant and I do not do so, nor do I make findings as to the merits of the claim. Certainly, the minute filed seeks to meet in its detailed particulars the objections made to the statement of claim filed in the first action. I am satisfied that the plaintiff has acted properly in seeking to put the statement of claim in this action in order.
The plaintiff now has new solicitors retained in this action and counsel has been briefed. The invoices alleged to support the claim have been collated and the plaintiff has expressed that it wishes to proceed with the action expeditiously. The overall circumstances are not, in my view, such as to justify a finding that this action is an abuse of process. The plaintiff was not represented on the hearing when the action was struck out.
The appeal proceeds by way of hearing. On the rehearing, the plaintiff seeks leave to amend in terms of the minute of substituted statement of claim. Given the material now before the Court, it is inappropriate that the writ of summons be struck out. The plaintiff should have an opportunity to have its claim determined on the merits and to proceed with the action as it has indicated it wishes to do. In the circumstances, I consider that the appropriate order is that the plaintiff should have leave to amend the statement of claim and in that regard should have time to file a minute of amended statement of claim.