Commissioner of Main Roads v Highway Construction Pty Ltd
[2001] WASCA 158
•22 MAY 2001
COMMISSIONER OF MAIN ROADS -v- HIGHWAY CONSTRUCTION PTY LTD [2001] WASCA 158
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 158 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:191/2000 | 11 APRIL 2001 | |
| Coram: | STEYTLER J McKECHNIE J | 22/05/01 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | COMMISSIONER OF MAIN ROADS HIGHWAY CONSTRUCTION PTY LTD |
Catchwords: | Appeal Limitation of actions Leave granted to respondent to bring action out of time Consideration of test to be applied in determining whether to grant leave Whether arguable that tender process contract came into being and was breached by appellant Turns on own facts |
Legislation: | Limitation Act 1935, s 47A |
Case References: | Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 Gallo v Dawson (1990) 93 ALR 479 Halliday v SACS Group Pty Ltd (1993) 67 ALJR 678 Jackamarra v Krakouer (1998) 195 CLR 516 Minister for Community Welfare v Bennett, unreported; SCt of WA; Library No 5060; 2 September 1983 Palata Investments Ltd v Burt & Sinfield Ltd (1985) 1 WLR 942 Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 C M Van Stillevoldt BV v EL Carriers Inc [1983] 1 WLR 207 Dalcon Constructions Pty Ltd v State Housing Commission (1998) 14 BCLC 477 Hall v Nominal Defendant (1966) 117 CLR 423 Hughes Aircraft Systems International v Airservices Australia (1997) 146 ALR 1 Pratt Constractors Ltd v Palmerston North City Council [1995] 1 NZLR 469 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : COMMISSIONER OF MAIN ROADS -v- HIGHWAY CONSTRUCTION PTY LTD [2001] WASCA 158 CORAM : STEYTLER J
- McKECHNIE J
- Appellant
AND
HIGHWAY CONSTRUCTION PTY LTD
Respondent
Catchwords:
Appeal - Limitation of actions - Leave granted to respondent to bring action out of time - Consideration of test to be applied in determining whether to grant leave - Whether arguable that tender process contract came into being and was breached by appellant - Turns on own facts
Legislation:
Limitation Act 1935, s 47A
(Page 2)
Result:
Appeal dismissed
Representation:
Counsel:
Appellant : Mr W S Martin QC & Mr A W Willinge
Respondent : Mr L E James
Solicitors:
Appellant : Blake Dawson Waldron
Respondent : Kott Gunning
Case(s) referred to in judgment(s):
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Gallo v Dawson (1990) 93 ALR 479
Halliday v SACS Group Pty Ltd (1993) 67 ALJR 678
Jackamarra v Krakouer (1998) 195 CLR 516
Minister for Community Welfare v Bennett, unreported; SCt of WA; Library No 5060; 2 September 1983
Palata Investments Ltd v Burt & Sinfield Ltd (1985) 1 WLR 942
Case(s) also cited:
Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
C M Van Stillevoldt BV v EL Carriers Inc [1983] 1 WLR 207
Dalcon Constructions Pty Ltd v State Housing Commission (1998) 14 BCLC 477
Hall v Nominal Defendant (1966) 117 CLR 423
Hughes Aircraft Systems International v Airservices Australia (1997) 146 ALR 1
Pratt Constractors Ltd v Palmerston North City Council [1995] 1 NZLR 469
Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
(Page 3)
1 JUDGMENT OF THE COURT: This is an appeal against the decision of a Master of this Court arising out of his grant of leave to bring proceedings under s 47A(3)(b) of the Limitation Act 1935.
2 The respondent wanted to commence an action against the appellant. However it was too late. Section 47A(1) of the Limitation Act required it to give to the appellant, as soon as practicable after its alleged cause of action accrued, notice in writing giving reasonable information of the circumstances upon which its proposed action would be based, together with other ancillary information, and then to commence the action before the expiration of one year from the date on which the cause of action accrued. It did not comply with this provision. Its solicitors had overlooked it. However, by virtue of subs (3)(b), where the court considers that the failure to give the required notice or the delay in bringing the action was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in its defence or otherwise by the failure or delay, the court may, if it thinks it is just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose. The respondent asked the Master to grant it this indulgence. It contended that its omissions were occasioned by mistake and that the appellant was not materially prejudiced in its defence by the delay. Both of these propositions were accepted by the appellant. However the appellant opposed the application upon the grounds that it would not be "just" for leave to be given. It said that this was so because the respondent's cause of action was devoid of merit. The Master declined to uphold this objection. He granted the respondent leave to bring its action. This led to an application by the appellant for leave to appeal. That application was granted by the learned Master (who reserved the costs of the application for later decision). The parties are consequently before this Court.
3 The circumstances said by the respondent to give rise to its causes of action against the appellant relate to a tender which it submitted for the construction of road and bridge works at Loftus Street in Mount Lawley. The appellant invited the respondent to submit its tender in or about May 1998. It did so on 24 July 1998. On 31 August 1998 it was told by the appellant that, although its tender price was the lowest, it would not be awarded the tender. Dismayed by this, the respondent, after examining the tender process, decided to institute proceedings against the appellant.
4 The respondent says that it has various causes of action against the appellant. One of these is for breach of a contract which, it says, came into being in the course of the tender process. Another is for an estoppel
(Page 4)
- which, it says, arose. Yet another is for damages for misleading and deceptive conduct. Finally, it seeks equitable compensation for what it says (rather optimistically) were breaches of fiduciary duties owed to it by the appellant.
5 The respondent had, by the time of the hearing of the application by the Master, prepared a draft statement of claim in which it set out these causes of action. It has since filed an amended version of that document. The Master was not impressed by the quality of the then proposed statement of claim. He said that there was no doubt that, had the application been a pleading summons, the statement of claim would have been struck out with liberty to replead. However he also said that, once it was conceded (as it had been) that the respondent's acceptance of the appellant's invitation to tender gave rise to the possibility of a so-called "tender process contract", it would be inappropriate to shut the respondent out merely because the first version of its statement of claim was unsatisfactory when there was the prospect of a claim based upon this tender process contract. He made no real examination of what that claim might be. This was so because he had some doubts as to the utility of undertaking any detailed analysis of it at that early stage.
6 The appellant raises various grounds of appeal. Without setting all of them out it is, we think, fair to say that they amount to the following propositions:
1. Having concluded that the pleading would be struck out on a pleading summons, the Master erred in law in finding that it was just to grant unconditional leave and should have refused leave or, at the very least, confined the grant of leave to those causes of action which were not patently unarguable (grounds 1, 3 and 6).
2. The Master applied the wrong test in finding (as he appears to have done) that it was enough, in determining whether to grant leave, that the claim was not brought mala fide and was not absurd or a "try on", without any real examination of the merits, when he should have applied the criterion, after paying proper regard to the merits of the respondent's case, whether or not the proposed causes of action were reasonably arguable (grounds 2 and 5).
3. The Master erred in finding (as he did) that the principles of case flow management were irrelevant to the application before him and in concluding (as he also did) that a failure
(Page 5)
- to grant leave to the respondent to bring an action against the appellant would preclude the respondent from bringing any action against the appellant (grounds 4 and 7).
- 4. The Master erred in reserving the costs of the application in circumstances in which he should have ordered that the respondent pay the appellant's costs thereof.
7 As regards the test to be applied, the Master was referred to what has been said by the High Court in Jackamarra v Krakouer (1998) 195 CLR 516. That case dealt with a somewhat different (and purely procedural) question, being that of whether there had been an error in refusing to extend the time for entering an appeal. However the court also considered what should be the test in respect of an application to extend the time for lodging an appeal against a judgment determining the substantive rights of the parties.
8 Brennan CJ and McHugh J, in the course of considering this last kind of application, said (at 521) that it is understandable that, where the applicant's right of appeal has gone, courts should insist, as they do (see Gallo v Dawson (1990) 93 ALR 479 at 480; Halliday v SACS Group Pty Ltd (1993) 67 ALJR 678 at 679), that the time for appealing will not be extended unless the proposed appeal has some prospects of success.
9 Gummow and Hayne JJ, in their dissenting judgment (and nothing turns, for present purposes, on the fact that they were in dissent), referred to the cases which deal with summary determination of actions before trial. Their Honours said (at 528) that, although various expressions have been employed in this context, all of them may be seen as different ways of saying that a court should not exercise its powers of summary determination of a proceeding except in clear cases (see Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91).
10 Kirby J (at 539) considered that it was impossible to lay down fixed and binding rules for the exercise of discretions to enlarge time. However he said (at 540) that courts have often drawn a distinction between the approach which they take to time limits of a substantive character and those appropriate to procedural rules. His Honour referred (at 542 - 543) to the case of Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 at 198 in which the Full Court of this Court had embraced, as relevant to applications for an extension of time, the four "major factors" which had been identified in Palata Investments Ltd v Burt & Sinfield Ltd (1985) 1 WLR 942 at 946, namely the length of the delay, the reasons
(Page 6)
- for the delay, whether there is an arguable case and the extent of any prejudice to the respondent. He said in that respect (at 542):
"It was those principles which the Full Court applied in the present case. I would point out that Palata Investments was concerned with an application for an extension of time for appealing, not for extending the period within which an appeal, already lodged within time, might be entered for hearing. The distinction is important. In the latter case, the scope for review of the merits is necessarily more limited. The main object of the scrutiny is to obviate a hearing which would clearly be futile or to reinforce a preliminary view that a time default should be cured because of the apparent merits or arguability of the matter. I do not doubt that the four considerations mentioned in Esther Investments are relevant. But they are by no means exhaustive. Several others have from time to time been thought relevant. These include whether the delay was intentional or contumelious (Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229; Birkett v James [1978] AC 297 at 318); or merely the result of a bona fide mistake or blunder (Esther Investments (1989) 2 WAR 196 at 204); and whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled (Sophron v Nominal Defendant (1957) 96 CLR 469 at 474; Hall v Nominal Defendant (1966) 117 CLR 423 at 435; [R v Secretary for the Home Department; ex parte] Mehta [1975] 1 WLR 1087 at 1091, 1092; [1975] 2 All ER 1084 at 1088, 1089). It may also be relevant, where the default is that of a party's legal representatives, to take into account any considerations personal to the party which might have affected its ability to safeguard its own interests, for example, by applying pressure to its lawyers. Similarly, the extent to which any such prejudice may be remedied by an appropriate costs order is another consideration that has sometimes been treated as relevant."
(Page 7)
- "It has been held by the Full Court of the Supreme Court of Victoria in Victorian Railways Commissioner v Casaccio [1961] VR 157, that a finding that it is 'just' to make an order granting leave is not conditioned by the applicant for leave satisfying the Court that he has 'a prima facie case of liability'. Leave will be refused if the Court is of the positive opinion that the applicant has no case or, as is put in the Victorian decision to which I have referred, that the Court is of the opinion that it is a 'try on', but subject to that, once the application is brought within sub-s (3)(b) 'it may be quite enough if it appears that the claim is not mala fides or merely speculative or absurd'."
12 For present purposes, we need only say that it seems to us that, in considering whether or not it is 'just' to grant leave under subs (3)(b), one of the factors which will be considered by the court is that of whether it is clear that the applicant has no case (or, to use the words of Burt CJ in Bennett, whether the court is of the positive opinion that the applicant has no case). If it is clear that the applicant has no case then it is difficult to think that it could be just to grant leave.
13 The Master, albeit he made, as we have said, no real analysis of the respondent's claim, was not of the positive opinion that the respondent had no case. Having examined the statement of claim which has now been filed by the respondent, and the various documents respectively relied upon by the appellant and the respondent, we are likewise unable to form that opinion with the requisite degree of confidence (although we would not wish to be taken to be suggesting that the redrawn statement of claim is in an acceptable form).
14 It is enough, in this respect, to refer to one aspect of the respondent's claim. It was conceded that it is arguable that a tender process contract came into being between the appellant and the respondent. That limited concession was, in our opinion, rightly made (see, for example, cl CT 2 of the conditions of tendering which provides that, "In consideration of being permitted to Tender, Tenderers shall undertake as a fundamental condition to act in accordance with ... " a specified code of practice). If such a contract did come into being, then one of the documents comprising it is that which contains the conditions of tendering. Clause 8.4.6 of that document reads as follows:
"8.4.6 Construction Program
(Page 8)
- Tenderers shall submit with Tenders, a Construction Program in bar chart form showing the sequence of operations by which it is proposed to execute the Works, together with the planned start and finish time of each separate process and activity, based on the working hours specified in the Special Conditions of Contract. A detailed Construction Program shall be submitted prior to acceptance of Tender (refer CT 13 Notice of Acceptance and Possession of Site)."
15 CT 13, there referred to, reads as follows:
"CT 13 Notice of Acceptance and Possession of Site
Three notices shall be served upon the successful Tenderer by the Principal:
• Notice of Intent to Award subject to submission of an acceptable detailed Construction Program and an acceptable detailed Traffic Management Plan.
• Notice of Acceptance of Tender.
• Notice giving Possession of the Site
After the Notice of Acceptance of Tender has been issued, the Contractor will be required to sign and seal (if appropriate) the Form of Agreement at Tender Schedule C of the Conditions of Tendering.
Until the Form of Agreement is signed, the Tender submission and the Notice of Acceptance of Tender shall be taken as evidence of a binding contract between the Principal and the Contractor."
(Page 9)
17 It seems to us that it is fairly arguable (although we express no other opinion as to the merit of the argument) that the appellant breached the tender process contract (if it did come into being) in rejecting the respondent's lowest tender upon the basis that another tenderer had provided a more detailed construction program when the conditions of tender implied, at least, that a detailed construction program (as opposed to one which merely complied with cl 8.4.6) would only be required after service of a notice accordingly upon the successful tenderer (cl 8.4.6 read with CT 13). We consider that this argument is open notwithstanding the existence of CT 9(g) which, when read with the other provisions to which we have referred, arguably (and we repeat that we say no more than that the point is fairly arguable) requires only that the details, to the extent that they are initially required, and logic of the tender program should be sound.
18 Once it is accepted that a case of this kind might be made good (albeit a cause of action accordingly does not appear as clearly as it might have done from the statement of claim), then it seems to us that it would be an appropriate exercise of discretion, in circumstances in which no other injustice is pointed to, to grant leave to bring the action. We doubt that any purpose would be served by examining the other causes of action pleaded by the respondent in order to see whether or not it might be said of them that they are plainly hopeless. If hopeless causes of action are or have been pleaded then they will, no doubt, be struck out, leaving only those which are (or that which is) fairly arguable. It is difficult, at this stage, to know just how matters will develop. So, for example, we are in no position to foreclose the prospect of a properly pleaded alternative plea of estoppel based upon the conditions of tendering to which we have referred, if that should be open. Other possibilities may emerge. It is enough, in our opinion, for the purposes of a grant of leave, that an arguable cause of action emerges from the materials which have been relied upon and that the other causes of action which have been pleaded rely essentially upon the same materials.
19 This conclusion renders it unnecessary for us to consider any of the other points sought to be made by the appellant, save that as regards the costs of the application before the Master. In that respect we need say no more than that we consider that it was within the scope of the Master's discretion to order that the costs be reserved for later argument. The mere fact that the respondent was seeking an indulgence (as it plainly was) does not, of itself, require an exercise of discretion in the appellant's favour in circumstances in which the granting of that indulgence was opposed upon a basis that was ultimately unsuccessful. We assume (and it would, with
(Page 10)
- respect, have been preferable if the Master had expressed his reasons for reserving the question of costs) that the Master had in mind that a decision in respect of the costs of the application should await further attempts on the part of the respondent to plead a sustainable cause of action. There is, in our respectful opinion, no reason for concluding that this involved a miscarriage of the discretion.
20 We would consequently dismiss the appeal.
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