| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : BELENDAINE PTY LTD -v- PRIMARY CONSULTING SERVICES PTY LTD [2014] WADC 74 CORAM : STEVENSON DCJ HEARD : 19 MAY 2014 DELIVERED : 19 MAY 2014 PUBLISHED : 23 MAY 2014 FILE NO/S : BUN 21 of 2010 BETWEEN : BELENDAINE PTY LTD Plaintiff
AND
PRIMARY CONSULTING SERVICES PTY LTD
Defendant
KINGSLEY RAYMOND PALMER
Third party
Catchwords: Practice and procedure - Case management - Inactive cases list - Appeal by defendant against registrar's decision to order the plaintiff's action be taken off the inactive cases list - Whether court satisfied the case will be conducted in a timely way - Exercise of discretion - Turns on own facts Legislation: District Court Rules 2005 Result: Defendant's appeal dismissed
Representation: Counsel:
Plaintiff : Mr D T McCashney
Defendant : Mr L Hager
Third party : No appearance
Solicitors:
Plaintiff : Margaret River Law
Defendant : Metaxas & Hager
Third party : Not applicable
Case(s) referred to in judgment(s):
Austasia Real Estate Pty Ltd v Myra Pty Ltd [2013] WADC 185
Hall v Hall [No 2] [2011] WASC 110
Lashansky v The Legal Practice Board [No 2] [2010] WASC 159
1 STEVENSON DCJ: [This judgment was delivered extemporaneously on 19 May 2014 and has been edited from the transcript.]
2 This is an appeal by the defendant from a decision made by Deputy Registrar Harman on 15 January 2014, in respect to an application by chamber summons by the plaintiff, which was filed on 20 December 2013, pursuant to r 44F of the District Court Rules 2005 for the matter to be removed from the inactive cases list and for entry of the trial milestone to be extended to 30 June 2014. 3 Rule 44Fprovides: Removing cases from Inactive Cases List (1) If a Form 1 (Entry for trial), or a consent order finalising the case, is filed in a case on the Inactive Cases List, the case is taken to have been taken off the list. (2) Any party to a case on the Inactive Cases List may apply to the Court for an order that the case be taken off the Inactive Cases List. (3) The Court may order a case be taken off the Inactive Cases List if satisfied the case will be conducted in a timely way or for any other good reason. (4) An order that a case be taken off the Inactive Cases List may include any conditions necessary to ensure the case is conducted in a timely way. 4 Pursuant to a notice of default, dated 3 July 2013, the parties were informed by the court that the plaintiff had not entered the action for trial as required. In particular, the plaintiff was advised that unless it entered the action for trial on or before 18 July 2013, the action would become inactive. 5 No application was made by any party, in particular the plaintiff to respond to the notice of default by seeking to change the milestone entry date for trial to a later date. As a result of no action being taken, pursuant to a court order dated 24 July 2013, the matter was transferred to the inactive cases list on 19 July 2013. 6 As mentioned, by chamber summons filed on 20 December 2013, the plaintiff sought removal of the action from the inactive cases list. In support of the application the plaintiff filed initially an affidavit in support sworn by the plaintiff's solicitor, David Thomas McCashney, on 10 January 2014. 7 Subsequently a further affidavit was sworn by Stuart Gordon Scott on 12 February 2014, he being a director of the plaintiff and authorised by the plaintiff to swear the affidavit on its behalf. That supplementary affidavit was sworn in support of the appeal before the court today. It was therefore not before Deputy Registrar Harman when he made his initial decision on 15 January 2014. There is no objection to the court receiving the affidavit of Mr Scott. In any event, the court is permitted to receive additional evidence and materials given the nature of the appeal. 8 So, before the court and the learned deputy registrar on 15 January 2014, when the plaintiff's chamber summons was heard for the first time was the affidavit of Mr McCashney only. The matter was argued before the learned deputy registrar and he made an order that the matter be removed from the inactive cases list. 9 At the same time he made orders that the defendant file and serve a summons for directions in the third party proceedings within 21 days; that the entry for trial milestone be extended to 31 October 2014; that the plaintiff's application to join parties to the action be listed at Bunbury on 30 January 2014; and finally, that the plaintiff pay the defendant and third party's costs of the application in any event. 10 Following the making of those orders by the learned deputy registrar on 15 January 2014 (which were not extracted), the defendant filed its notice of appeal, dated 22 January 2014. 11 The defendant relies on the affidavit of Mr Luke Hager, the defendant's solicitor, which was before Deputy Registrar Harman when he heard the matter at first instance. 12 The third party also appeared and filed submissions before Deputy Registrar Harman but, as indicated to the court, that with respect to this appeal it is not desirous of being heard and will abide by the decision of the court. 13 It is common ground that pursuant to r 15 of the District Court Rules, this being an appeal from a decision of a registrar, it is a new hearing. It is to be decided afresh or de novo and it is not necessary for the defendant as the appellant to demonstrate any error of law or principle in the decision of the deputy registrar. 14 In addition because it is a hearing de novo the court may exercise its discretion to admit additional evidence. In this case the court has had regard to the parties' written submissions for the purpose of the appeal and has also had regard to the supplementary affidavit referred to of Mr Scott. 15 Rule 44F(3) provides that the court may order a case be taken off the inactive cases list, if satisfied the case will be conducted in a timely way or for any other good reason. It is plain that this action has had a lengthy and protracted history since proceedings were commenced by the plaintiff against the defendant in 2010. 16 The history of the various interlocutory applications, which have bedevilled the action and the timely disposal of the matter, have been referred to by the parties in their written submissions and amplified in counsels' oral submissions today. 17 It would appear that the last substantive action involving the matter arose out of an appeal which was heard by his Honour Judge Keen on 6 December 2012. As a result of the disposition of that appeal by the defendant, certain costs orders were made, and pursuant to those costs orders the plaintiff's costs and the third party's costs were taxed. 18 In particular, the plaintiff's costs were taxed and allowed at a total of $9,789.32. Subsequent to the taxation of the plaintiff's costs pursuant to the orders of his Honour Judge Keen on 6 December 2012, the plaintiff's solicitors wrote to the defendant's solicitors on two occasions to request payment of the costs. Although the orders referred to in the material before the court for the purpose of this application do not say, it appears to be common ground between counsel today that the costs orders were made in terms of the costs being payable forthwith. This is the usual order made on interlocutory applications in this jurisdiction in recent times. There is obviously no good reason why a successful party who has the benefit of a costs order in their favour should be required to wait until the completion of the action to receive payment. Indeed the requirement to pay the other party costs can have a sobering effect on the party concerned and cause parties to have a reality check on positions being advanced which might have little utility in ensuring preparation of the matter so the real issues can determined. 19 The plaintiff's solicitor's letters were written to the defendant's solicitors on 11 April, and again on 26 April 2013, requesting payment of the costs. On 29 April 2013, the defendant's solicitors responded to the plaintiff's solicitors and informed them in general terms that the defendant was unable to meet the costs orders and, perhaps importantly, that the defendant had ceased trading. 20 The defendant's solicitor’s letter of 29 April is not exhibited to the plaintiff's affidavits in support of its application. I was informed by counsel for the defendant that the communication is subject to without prejudice privilege. But the general content of the letter to the extent to which I have referred to it is not disputed. As a result of this communication, the plaintiff then caused its solicitors to conduct Australian Security and Investments Commission (ASIC) searches on 3 May 2013. 21 According to par 6 of Mr Scott's affidavit those searches established that on 24 April 2013, Mr Bosustow became a director and shareholder of a new company called Primary Business Services Pty Ltd. 22 Not surprisingly that information together with the alleged assertion by the defendant's solicitors about the ability of the defendant to meet the costs orders in favour of the plaintiff caused the plaintiff and, more particularly, its directors to consider their position with respect to the action, and the utility of pursuing their claims. 23 Paragraph 7 of Mr Scott's affidavit is as follows: As a result of the contents of the defendant's solicitor's letter, 29 April 2013, and the searches carried out and referred to above, I became increasingly concerned that the defendant has embarked upon a course of action by which it had ceased trading and that no matter what the outcome of these court proceedings it would not be in a position to meet any judgment that might be awarded against it. 24 Paragraph 8: My wife and I considered the implications of the defendant having ceased to trade and its apparent financial position at length, and whilst concerned about the possibility that any judgment awarded in favour of the plaintiff might not in fact be recoverable, have decided on balance to pursue the current action. In making that decision we took some comfort from the fact that the defendant has joined Mr Palmer as a third party to these proceedings. I am conscious however that given the defendant's financial position and the unpaid cost orders that the plaintiff's best interests are served by the third party action being determined at the same time as the plaintiff's action against the defendant. 25 That is as close as the plaintiff goes to explaining the delay in bringing its chamber summons to have the action removed from the inactive cases list. 26 The delay from 18 July 2013 to 20 December 2013 is five months and two days, or 155 days. It can be inferred that in at least May 2013 the plaintiff, by its directors, was, as a result of information received in late April 2013 from the defendant’s solicitors, considering its position and the utility in pressing its action against the defendant, given the alleged impecunious nature and position of the defendant at that point in time. 27 It appears from counsel's submissions today that the defendant may have paid the third party's costs of the appeal, although that was asserted from the bar table and there is no proper evidence before the court of that fact. 28 The defendant says that the plaintiff has not provided any proper reason or explanation for the delay in bringing this application. In addition, the defendant says that there is a complete absence of any explanation for the delay, in particular, for the five-month delay in bringing the application and quite properly indicates that the decision referred to in par 8 of Mr Scott's affidavit is not dated by him as to when the plaintiff made that decision. 29 However, it is of course reasonable for a party to be afforded some opportunity to consider its position with respect to legal proceedings it has commenced, in light of any developments in those proceedings as they are progressed. 30 The defendant also points out that the milestone for entry for trial of the plaintiff's action has been extended on previous occasions and that can be seen from the extensive interlocutory proceedings between the parties, and the extension of that milestone by his Honour Judge Keen on 6 December 2012, when he extended it again to 30 June 2013 as part of his orders made in the disposition of the defendant's appeal at that time. 31 On the other hand the plaintiff says that it has not caused any of the material delay in the progression of its action against the defendant. It points to the various interlocutory hearings and appeals and the delay on the part of the defendant to comply with positive orders of the court, as a general explanation for the reason why the action commenced in late 2010 has not yet been entered for trial. 32 The plaintiff's action has, on any view, been impacted by the third party proceedings. The defendant has not, as required by the rules, taken out a chamber summons for directions in relation to those proceedings. It would appear, without have heard detailed argument, that it is appropriate that the third party proceedings be heard immediately following the plaintiff's action because it would appear to concern the same or similar issues raised by the plaintiff in its claim against the defendant. It is curious that the defendant may have paid the third party's costs but not the plaintiffs, but then on the other hand maybe it is not. 33 Plainly, if the plaintiff's application to remove the action from the inactive cases list is unsuccessful, and more correctly the defendant's appeal is allowed, then the plaintiff will suffer irreparable prejudice because the effect will be to, subject to the operation to other rules of the court applying, in the course of time, presumably result in the action being dismissed. 34 The plaintiff in support of its application for removal from the inactive cases list has indicated its intentions with respect to the future conduct of the matter if its application is successful. In that regard the plaintiff intends to progress the action by making an application for leave to join Mr Bosustow and Mr Palmer as additional defendants to its claim, and has indicated through Mr Scott that it will in any event pursue its current action against the defendant no matter what the outcome of that application is with leave to join further parties. 35 The plaintiff has also stated on oath that if the appeal is unsuccessful, that is if the plaintiff is permitted to have the fruit of the deputy registrar's order of 15 January 2014, then it will within seven days of determination of the appeal relist its application seeking to join Mr Bosustow and Mr Palmer as additional defendants, and will file and serve a minute of proposed amended statement of claim itself within 14 days prior to the hearing of that application. 36 I note that the defendant's current solicitors came on record after the matter had been substantially defended by a defence and counterclaim filed on behalf of the defendant, and it would appear likely that the defendant's current solicitors will, at some point in the future in any event, seek leave to amend the defendant's pleadings if the matter proceeds to a trial. 37 The law in relation to the discretion contained in r 44F(3) has been referred to by the parties in their written submissions and oral submissions. In particular I note the views of his Honour Beech J in Lashansky v The Legal Practice Board [No 2] [2010] WASC 159, where at [74] his Honour said: In exercising power under O 29A r 20(2) it will be relevant to inquire whether there is evidence to explain how the case came to be on the Inactive Cases List and why it should not be expected that, if it is removed from the list, it would return to the list. It will be relevant whether there is some evidence about the state of the action and how it is proposed that it will be progressed through to a trial. 38 In addition, the court has been referred to the decision of his Honour Simmonds J in Hall v Hall [No 2] [2011] WASC 110, where his Honour took into account what Beech J said in Lashansky. 39 Finally, learned deputy Registrar Kingsley, in his reasons for decision in Austasia Real Estate Pty Ltd v Myra Pty Ltd [2013] WADC 185, made some comments about the application of the rule. 40 The rule of course is a procedural rule. It needs to be understood in the context of the District Court Rules as a whole and the underlying import of the provisions. That of course is to ensure that actions commenced in this court are conducted efficiently by the parties thereby enabling the court itself to ensure that its business is conducted effectively and efficiently in the disposal of civil actions. 41 The rule is a relatively new rule intended to bite if a matter is left to languish without proper reason or without good reason so that the court, as I have said, can ensure that its business is managed efficiently and effectively, it being a public institution with an obligation to the public in that regard. 42 Having said that, the operation of the rule, if enlivened, gives rise to a discretion which the court may use to allow a matter to be brought back in an active way into the court's lists so that the action can be progressed to a resolution. That is the underlying intention. 43 The discretion is expressed in wide terms, more particularly, satisfaction by the court that the case will be conducted in a timely way in the future if allowed back into the court's active list. The discretion may also be invoked for any other good reason. 44 At the end of the day the court is the place where litigants in civil cases come for resolution of disputes if they cannot resolve those disputes between themselves using alternative processes. In that sense the court is the proper repository for litigation between parties. 45 The rules ought not to be used in a way which would prevent resolution of sensible and reasonable disputes between parties. And, nor should the rules permit parties who seek to invoke the jurisdiction of the court for the determination of their disputes to be shut out unnecessarily or unreasonably. 46 The discretion is a wide discretion. In exercising the discretion I accept, with respect, the comments of his Honour Beech J that it will be relevant to inquire whether there is evidence to explain why the case is in the active cases list and critically why it should not be expected that if it is removed from the list it would return to the list. 47 In that regard the plaintiff says it has not been the cause directly of any of the previous delay in the action and points to occasions when it has been pro-active in taking out chamber summons to compel the defendant for default in compliance with orders or its obligations under the rules. 48 The plaintiff acknowledges that there has been some delay by it in making its underlying application for removal of the action from the inactive cases list. It is full and frank in making the admission, and accepts that it cannot adequately explain any further the reason the delay. 49 The plaintiff also says that it is not itself in noncompliance with any costs orders as opposed to the defendant which has yet, to this point in time, to pay a costs order in favour of the plaintiff which was made on the basis the costs be payable forthwith, that is, the costs are payable in the course of the proceedings before their conclusion. 50 In my view, the proper test is one which requires a consideration of the history of the matter in general objective terms with a view to being satisfied that if the matter is allowed to continue, it will be conducted in a timely way. The question which the court must be satisfied about is whether the action will be conducted in a timely manner going forward if the discretion is exercised. 51 The discretion, of course, is a beneficial discretion. Like any decision concerning future conduct there is an element of speculation. Counsel have submitted that the court might take comfort by the way in which the parties have conducted themselves to a certain point in time as an indicator as to how they might conduct themselves going forward. This is a valid consideration but is not itself determinative. 52 Importantly, the plaintiff says that, and acknowledges that, on the material before the court there is no answer per se for the delay of about five months in making the application. However, the plaintiff says that is the only delay by it in the conduct of these proceedings which is material and that it ought not to be fatal on its own to its renewed decision to progress its action against the defendant, and if possible against two other parties in relation to issues arising out of the same subject matter. 53 The explanation for the delay is one of the factors the court will have regard to. There is, of course, in the rules an extension of what is referred to in that the discretion can be exercised 'for any other good reason'. It is common ground that there was no further communication between the parties' solicitors for the period following 29 April 2013 when the defendant's solicitors informed the plaintiff's solicitors of the defendant's alleged impecuniosity, and obviously no further applications were commenced by any party to the proceedings including in the third party proceedings. 54 In my view, having regard to the factual circumstances and the fact and extent itself of the delay I am satisfied that the court should exercise its discretion to allow the plaintiff's action to be taken out of the inactive cases list to thereby enable the plaintiff to continue its claim against the defendant and to conduct the action in the future in the way set out in Mr Scott's affidavit against potential other parties. 55 In my view, the defendant's appeal must be dismissed. It is, in my view, in the interests of justice having regard to the history of the matter, the issues between the parties and taking into account the delay which has been explained to the extent that it can be explained by the plaintiff and being satisfied, in particular, that the matter is unlikely to return to the inactive cases list in the future by reason of any inactivity on the part of the plaintiff, that the action be reinstated. 56 I am satisfied on the evidence before the court that the plaintiff will progress the matter in the way it has stated it intends to do so. Therefore the appeal is unsuccessful for these reasons and the notice of appeal must be dismissed. 57 I do propose to make some programming orders in relation to the matter consistent with the material before the court and will hear counsel, including the third party in respect of such matters.
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