C & F Development Company Pty Ltd v North West Regional Water Authority

[1990] TASSC 100

Serial No B23/1990
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:C & F Development Company Pty Ltd v North West Regional Water Authority [1990] TASSC100; B23/1990

PARTIES:  C & F DEVELOPMENT COMPANY PTY LTD
  v
  NORTH WEST REGIONAL WATER AUTHORITY

FILE NO/S:  69a/1990
DELIVERED ON:  25 May 1990
JUDGMENT OF:  Master Southee

Judgment Number:  B23/1990
Number of paragraphs:  24

Serial No B23/1990
List "B"
File No 69A/1990

C & F DEVELOPMENT COMPANY PTY LTD v
THE NORTH WEST REGIONAL WATER AUTHORITY

REASONS FOR JUDGMENT  MASTER SOUTHEE

25 May 1990

1. The plaintiff filed an interlocutory application on 14 February 1990, seeking that the order staying the action, made by the Master on 14 March 1980, be removed.

1. It is within the discretion of the court to order the removal of a general stay of proceedings. (See Halsbury's Laws of England 4th Ed, Vol 37, Para 438).

1. An affidavit of Richard Manningham Foster was tendered in support of the application. No affidavit was tendered by the defendant. Mr Foster (hereinafter called "the director") was formerly a director of Consulting Engineers (Tas) Pty Ltd trading as R M Foster & Associates, which, during the course of this action, changed its name to C & F Development Company Pty Ltd of which he is a director. The director was cross–examined upon his affidavit.

1. The plaintiff's claim against the defendant, as specifically endorsed in the writ dated 1 August 1979, is for the sum of $45,091.54, plus interest, for fees allegedly due for services rendered and work and labour done as a consulting engineer pursuant to an agreement dated 23 May 1977. The work referred to in the agreement involved the construction of a water supply for the town of Penguin. The agreement contained an arbitration clause upon which the Master ordered the stay of proceedings in this action.

1. The plaintiff made another claim against the defendant in 1979 for survey fees. The claim was refused and, after protracted communications, a writ was issued on 10 November 1983 in the sum of $2,606.38. The defendant lodged a defence and counterclaim in the sum of $7,819.14. On 25 September 1984, it was ordered by consent that the further proceedings in this action, which counsel referred to as "the minor arbitration", be stayed and be submitted to arbitration. The arbitrator handed down his award on 27 March 1986, in which he found for the plaintiff on both the claim and counterclaim and ordered that the defendant pay the costs of the arbitration in the sum of $3,003.00. The director estimated the total costs to both parties in this arbitration was $43,000.00.

1. The history of the communications between the parties and solicitors in respect of both disputes is set out in the annexures "A" to "ZD" of the director's affidavit. During the course of these negotiations between the parties the plaintiff was at various stages represented by four different firms of solicitors.

1. The gist of the director's evidence relating to the initial delay in the advancement of the plaintiff's present claim is that he was advised by his first solicitor, Mr Bugg, that the latter had agreed with Mr Proctor, the solicitor for the Crown that the minor arbitration would be determined first (see para13 of the director's affidavit). Thereafter, since 1979, the director caused monthly accounts, together with a claim for accrued interest, to be forwarded to the defendant in the belief that this action would keep the claim alive and prevent it being barred by any statute of limitations.

1. On 4 August 1982, Crown counsel wrote to the plaintiff's then solicitor, Mr Shott, asking him whether the plaintiff was ready to proceed with the arbitration "in the near future" on the present claim (D1). On 14 September 1982, Mr Shott replied, but only raised matters dealing with the minor arbitration (D2). Crown counsel replied on 25 October 1982 (D3). On 12 November 1982, Mr Cropp, another director of the plaintiff, wrote to the Crown direct solely in relation to matters concerned with the minor arbitration (D4). In a reply dated 15 November 1982, Crown counsel, in addition to raising matters relating to the minor arbitration, again requested whether the plaintiff was prepared to refer the present claim to arbitration as provided for in Clause 22 of the agreement (D5). Crown counsel forwarded a further letter dated 3 March 1983 to the plaintiff in which he again asked about the plaintiff's intention to refer the present claim to arbitration and also advising that the defendant had a substantial counterclaim (D7). The director deposed in his affidavit (para15) that in a letter dated 1 March 1983, the defendant raised a counterclaim in the sum of $65,069.67, together with an unspecified sum for interest, and that thereafter the plaintiff received regular accounts, until September 1988, for the defendant's counterclaim.

1. On 16 August 1983, the plaintiff's present solicitors, Messrs Zeeman, Kable and Page, wrote to Messrs J K Levis & Co., who were at that stage acting for the defendant, about the minor arbitration and which resulted in a writ in that matter which was subsequently stayed.

1. Apart from the monthly exchange of accounts between the parties no further steps appear to have been taken by either of them from 1983 to 1988 in relation to the present claim.

1. On 21 October 1988 the defendant wrote, after receiving a request from the plaintiff, to the plaintiff advising that in view of the long delay which had occurred it regarded the arbitration on the present claim as having been abandoned and that it was statute barred. (Annexure "X" to the director's affidavit). In a reply dated 13 December 1988, the plaintiff took issue with the proposed abandonment of the arbitration upon the present claim and alleged that the delay in proceeding with it arose out of the need to first settle the minor arbitration. The plaintiff suggested that in view of the costly outcome of the minor arbitration, the parties should negotiate for a settlement of the present claim (Annexure "Y1"). This letter brought a response dated 23 February 1989 that the defendant regarded the present claim as abandoned and statute barred and would not enter into any correspondence with the plaintiff in relation to it (Annexure "Y2").

1. The plaintiff then instructed its solicitor, Mr Zeeman, to seek an arbitration of the claim or failing this to have the stay removed. Mr Zeeman wrote to the defendant on 3 August 1989 to this effect and, when no reply was received, a further letter was forwarded on 4 October 1989, together with a notice referring the matter to arbitration. (Annexure "ZA"). This brought responses from Messrs Little, Walsh and Day, the solicitors for the defendant, dated 11 October 1989 (Annexure "ZB") and 13 October 1989 (Annexure "ZC"). In the latter letter the solicitor for the defendant stated, inter alia, as follows:–

"In the light of the above I am instructed to advise that should your client intend to proceed with an application to the Court to appoint an Arbitrator pursuant to the notice then the Authority proposes to make a cross–application seeking the following declarations:–

(a)       that the submission to Arbitration has been abandoned.

(b) that any claim under the Arbitration is barred by the Limitation Act 1974.

(c)       that insofar as any claim is not statute–barred as it has been referred to Arbitration such Arbitration has been abandoned by the parties thereto".

1. The solicitor for the defendant also advised the plaintiff's solicitor that he was instructed to seek an injunction restraining the plaintiff from taking any further steps in the arbitration and to apply for the action to be dismissed for want of prosecution if the plaintiff applied for a removal of the stay of proceedings in the action (Annexure "ZC").

1. The plaintiff then filed this application. The director deposed in his affidavit that he believed that an agreement existed between the parties that the arbitration of the present claim and counterclaim would await until after the determination of the minor arbitration which was not concluded until March 1986. Although the defendant had made requests in 1982 and 1983 for the present claim to be arbitrated upon at an early date, these requests were not pursued and after 1983, when notice of a substantial counterclaim had been given to the plaintiff, the parties exchanged accounts for the claim and counterclaim until September 1988. The director said that this also, apart from any agreement led him to believe that the present claim was "being kept alive". It was of course open to the defendant, in the absence of any agreement with the plaintiff, to have applied to the court for the appointment of an arbitrator pursuant to the provisions of the Arbitration Act 1892, until its repeal in 1986, and thereafter under the Commercial Arbitration Act 1986. It chose not to do so.

1. The director deposed in his affidavit (para14) and said in cross–examination he was so dismayed at the professional time and legal expenses incurred upon recovery of the sum of $2,506.00 on the minor arbitration that he desired to negotiate with the defendant before proceeding to a formal arbitration on the present claim. He also deposed that delay occurred on his part from the conclusion of the minor arbitration in March 1986 until September 1988 because he was involved in the winding up and sale of his business which he had operated for 35 years, but he was not cross–examined as to the delay which occurred during that period.

1. The director also deposed to the fact that the witnesses for both the plaintiff and the defendant, who dealt with the present claim from its inception, are still available and that the substantial matter in dispute, which relates to engineering fees charged by the plaintiff, is capable of resolution in the main by reference to the existing documents rather than on the memory of witnesses (see paras19 and 20).

1. In the exercise of the discretion whether or not to remove the stay of proceedings I am obliged to reach a conclusion which is just to both parties. As Burbury CJ said in Tasmanian Pulp and Forest Holdings Ltd v Woodhall Ltd [1971] Tas SR 330 at p332:

"I would only add that where a judicial discretion is involved it is not appropriate to speak of 'burden of proof' or 'evidentiary burden' in relation to the ultimate question to be decided by the court. There may be issues of fact to be decided, but only as incidental to the ultimate question whether the discretion should be exercised. It is better to speak of the 'burden of persuasion'."

1. I must be satisfied on the whole of the evidence before me that it is just to order the removal of the stay of proceedings. Such a discretion can only be exercised on the facts of this case and not by way of analogy to those found in other cases. (See Hall v The Nominal Defendant (1966) 117 CLR 423 at p.445). The criteria of delay, prejudice and a prima facie case, which are relevant to the exercise in applications for extensions of time under limitation statutes and dismissals for want of prosecution, also require consideration upon this application.

1. If the stay is not removed the defendant has clearly indicated that it would, in addition to arguing that the arbitration had been abandoned by the plaintiff's conduct, plead the limitation statute in any reference by the plaintiff. The consequences of such a decision would not only defeat the plaintiff's reference to arbitration, but also amount to a dismissal of his action for want of prosecution.

1. The defendant has not tendered any affidavit upon this application, although the application was originally adjourned to give it an opportunity to do so. Specific prejudice has not been alleged and, despite the long delay which has occurred since the stay was imposed, I do not, on the material before me, consider that any general prejudice suffered by the defendant through the mere lapse of time, should in the circumstances of this case defeat this application.

1. As to the delay, counsel for the defendant referred to Knight v Smith [1975] Tas SR 83, in which the Full Court held that the criterion of delay must be considered with the other relevant factors rather than as a condition precedent to the granting of an application. In the present application the defendant was also guilty of delay. Although it made some written requests for the dispute to be referred to arbitration, the defendant did not raise its counterclaim until some years after the dispute first arose and did not, after 1983, take any further steps to resolve the dispute. It was content to exchange accounts with the plaintiff relating to claim and counterclaim until September 1988, which led the director to believe that the reference was being kept alive rather than abandoned. In the absence of any significant prejudice to the defendant I am satisfied that the delay which has occurred should not disqualify the plaintiff from obtaining the removal of the order staying proceedings. It follows from the view that I hold relating to the criterion of delay that in the absence of a stay, I do not consider that the defendant would succeed in an application for the dismissal of the action for want of prosecution. Cosgrove J, as a member of the Full Court in The Closer Settlement Board v Thomas [1982] Tas SR 179, said at p.195:

"At the risk of an accusation that I do not take my own advice, I would add that a litigant who applies for the dismissal for want of prosecution of his opponent's action (or counterclaim) should be able to assert and establish at least –

(a)that his opponent has delayed for a significantly long time;

(b)that viewed against the background of the whole matter, including the conduct of both the applicant and his opponent, that delay is inexcusable; and

(c)that in all the circumstances it would be unjust to the applicant to allow the action (or counterclaim) to proceed and that the justice of the case requires the action (or counterclaim) be dismissed."

1. For the reasons stated I do not consider that (b) or (c) referred to above have been established in this action.

1. It is relevant to consider this question upon this application as it would be futile to order a removal of a stay of proceedings if it was likely to result that an application to then dismiss the action for want of prosecution would succeed. The parallel can be seen in applications to extend time where it is evident that a prima facie case does not exist. The claim of a prima facie case by the plaintiff in the present action has not been challenged.

1. At the date of the filing of this application the defendant had refused to agree to refer the present claim and its counterclaim to arbitration. As a result I order that the stay of proceedings made on 14 March 1980 be removed. I shall hear counsel as to any consequential orders which are sought.