Commonwealth v Australasian Correctional Services Pty Ltd - [2013] ACTSC 37

COMMONWEALTH OF AUSTRALIA v AUSTRALASIAN CORRECTIONAL SERVICES PTY LTD (ACN 050 054 389)
[2013] ACTSC 37 (8 March 2013)

PROCEDURE – Miscellaneous procedural matters – application for strike-out for want of prosecution – application for plaintiff to put on its evidence – application for order that plaintiff provide particulars – principles for determining strike-out applications – relevance of defendant’s conduct – plaintiff’s delays in providing particulars – prejudice not established by defendant – strikeout application refused – plaintiff ordered to put on its evidence – no orders made for provision of particulars.

Limitation Act 1985 (ACT), s 11
Court Procedures Rules 2006 (ACT), rr 21, 75, 425(1)(d), 430, 431, 433, 435, 1110, 1404, 1452

Judiciary Act 1903 (Cth), s 55ZG(3)
Civil Procedure Act 2005 (NSW), ss 56 to 59

Aon Risk Services Aust Ltd v ANU
Bellgrove v Eldridge (1954) 90 CLR 613
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283
Caterina Raso & Anor v Mark Ronald Bayliss & Ors [2005] ACTSC 94
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 81 ALJR 1107
McKanna v Aspect Homes Pty Ltd (1983) 51 ALR 603
Ulowski v Miller [1968] SASR 277
Vidler v Merit Engineering Pty Ltd (1987) 86 FLR 213
Weston v Publishing and Broadcasting Ltd [2011] NSWSC 433

No. SC 656 of 2006

Judge: Penfold J
Supreme Court of the ACT

Date: 8 March 2013

IN THE SUPREME COURT OF THE )
) No. SC 656 of 2006
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN:
COMMONWEALTH OF AUSTRALIA Plaintiff
AND:

AUSTRALASIAN CORRECTIONAL SERVICES
PTY LTD (ACN 050 054 389) Defendant

ORDER

Judge:  Penfold J
Date:  19 October 2012
Place:  Canberra

THE COURT ORDERS THAT:

The defendant’s application for the plaintiff’s originating claim and statement of claim to be struck out is refused.

By 9 November 2012, the parties are to prepare and file short minutes of orders setting out timelines for the plaintiff to put on its evidence and for discovery by the parties.

The defendant’s application for orders requiring the plaintiff to provide further particulars is refused.

The costs of the applications are reserved.

The parties have liberty to apply on five days notice.

IN THE SUPREME COURT OF THE )
) No. SC 656 of 2006
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN:
COMMONWEALTH OF AUSTRALIA Plaintiff
AND:

AUSTRALASIAN CORRECTIONAL SERVICES
PTY LTD (ACN 050 054 389) Defendant

REASONS FOR JUDGMENT

Judge:  Penfold J
Date:  8 March 3013
Place:  Canberra

Introduction

In the period between August 2000 and December 2002 there were a number of disturbances at detention centres used by the plaintiff in this matter, the Commonwealth of Australia (the Commonwealth), to house people who had arrived in Australia without appropriate immigration papers or visas, including those commonly referred to at that time as boat people or asylum seekers.

Those detention centres were managed, under several contracts with the Commonwealth, by Australasian Correctional Services Pty Ltd (ACN 050 054 389) (ACS), the defendant in this matter.

As a result of the disturbances, damage was caused to the various detention centres. The Commonwealth says that under its contract with ACS, ACS was liable for the damage caused to the Commonwealth, during the disturbances, by the acts or omissions of the detainees. ACS failed to make necessary repairs, and refused to pay the Commonwealth. The Commonwealth alleges a breach of contract constituted by ACS’s failure to pay the Commonwealth the costs of the repairs, and the Commonwealth has now sought damages for ACS’s breach.

On 27 June 2012, I began hearing an application by the defendant ACS for the claim to be struck out because of delay or, failing that, for the making of other orders to move the matter along.

On 19 October 2012 I refused the strike-out application, and made orders for the preparation of short minutes of orders setting out timelines for the Commonwealth to put on its evidence and for discovery by the parties. I also refused the application for orders requiring the Commonwealth to provide further particulars of its claims. The costs of ACS’s application were reserved.

I undertook to give reasons for my decision in relation to the strike-out application. These are those reasons.

Likely issues in the trial

Before turning to the applications, it is necessary to describe the major issues that will be raised if this matter ever goes to trial, and the relevance of delay to those issues.

Interpretation of contract between parties

First, there is a question about the interpretation of the contracts between the Commonwealth and ACS. ACS says that the contracts impose a far narrower range of obligations on it than those relied on by the Commonwealth in its pleadings, such that it may be liable for little or none of the relevant damage (there is, for instance, an argument whether the contracts required ACS to repair damage to the “Detention Facilities” or only damage to “services” to or in those facilities).

ACS conceded that the interpretation of the contract does not depend on evidence that may have become less readily available, or less reliable, over time, and that it is not prejudiced by delay in relation to this issue.

Proof of damage

If the interpretation of the contracts leaves ACS liable for some or all of the damage covered by the Commonwealth’s claim, the Commonwealth will then need to prove each relevant item of damage. ACS said that depending how the contracts are interpreted, it may be necessary to establish the particular kind of damage caused and the nature of the property damaged in order for liability to be determined (for instance, it might be necessary to determine whether particular damage was to a “Detention Facility” or to a “service”).

ACS queried the availability of documentary evidence of specific damage to the detention centres, noting that a scarcity of such evidence would make the recollections of witnesses important in dealing with this issue.

ACS’s defence – Commonwealth negligence

Finally, ACS has raised a defence to the Commonwealth’s claim, to the effect that it is not liable under the contracts for the damage arising from negligent, wilful, or reckless acts or omissions of the Commonwealth, or for the costs of repairs so necessitated. ACS says that the damage to the detention centres resulted from the negligent, wilful or reckless actions of the Commonwealth (the Commonwealth’s negligence), specifically:

(a)delays in processing visa applications made by detainees;
(b)delays in removing detainees after their visa applications had been determined;
(c)failure to make arrangements for police to respond to detention centre disturbances; and
(d)failure to respond to ACS’s request for assistance in managing and sanctioning detainees who had behaved violently, creating “an environment of escalating criminal activity”.

Much of the proof of this claim, ACS said, would depend on the recollections of witnesses, especially former detainees.

I note at this point that whether the Commonwealth’s actions had inappropriately created the environment in which the detention centre disturbances occurred seems to have only the most tenuous connection, if any, with the issues arising in proving which if any of the required repairs to detention centres were, under the relevant contracts, ACS’s responsibility apart from any defence relating to Commonwealth negligence. For instance, whether a disturbance occurred because of the Commonwealth’s treatment of detainees would seem to be irrelevant to whether any damage caused was to a “Detention Facility” or to a “service”.

The current application

On 23 September 2011, ACS filed an application that the originating claim and statement of claim be struck out or, alternatively, that the Commonwealth be ordered to provide particulars in response to a letter from ACS dated 8 November 2007, or to file and serve its evidence in chief.

An amended application was filed five days later; it identified an order that the Commonwealth file and serve its evidence as the first alternative to the striking out, and included a specification of the particulars sought rather than a reference to the earlier request for particulars.

The original listing of the application in the applications list for 28 October 2011 was vacated by consent, and in due course the matter came before me on 27 June 2012. It was adjourned part-heard to 16 July 2012, and then again, after further argument, to 10 August 2012, at which point I reserved my decision, which was then given on 19 October 2012 with reasons to be provided later.

The elements of the application

As noted, the application before me encompassed three different applications, the second and third being alternatives to the first.

The first application, that the Commonwealth’s originating claim and statement of claim be struck out, was based in general terms on the Commonwealth’s alleged lethargy in prosecuting the matter, and particularly on the Commonwealth’s alleged unwillingness or inability to provide particulars of its claim for damages.

In the alternative to the first application, ACS sought an order that the Commonwealth file and serve all its evidence in chief; the Commonwealth’s counsel, who at the hearing did not oppose the making of such an order, suggested initially that four months would be an appropriate period to allow if such an order were made.

In the alternative to the first and second applications, ACS sought orders for the Commonwealth to provide particulars relating to the damage alleged by it.

These three applications raised different, although to some extent overlapping, issues. In particular, the Commonwealth’s approach to the provision of particulars was argued at length in the context of the strike-out application.

Application for strike out

ACS based its application for strike-out on the primary ground that because of the effluxion of time, ACS would not have a fair trial of major issues that would arise; the Commonwealth’s delay in providing, and alleged failure to provide, particulars sought by ACS was also relied on in support of the strike-out application.

ACS said that unfairness in the trial might arise specifically in relation to the difficulties that would arise, so long after the events concerned, in proving the damage done to the detention centres, and also in relation to making out ACS’s defence based on the Commonwealth’s negligence in relation to the detainees and their visa applications.

In relation to proof of damage, ACS submitted that the Commonwealth’s failure, despite repeated requests for particulars of damage, to provide anything except a quantity surveyor’s report about repairs needed to the detention centres raised questions whether that report, to the extent that it evidenced damage to the detention centres, was the only documentary evidence of that damage and more generally of the physical consequences of the detention centre disturbances. If that were the case, ACS said, the difficulties of establishing damage by reliance on the evidence of witnesses who were present at relevant times, being difficulties arising from the passage of time since relevant events, might prejudice the fairness of the trial.

As to the causes of the disturbances that resulted in the damage, ACS said that in the absence of documentary material, the recollections of those involved in the events at the detention centres, the lead-up to those events, and their aftermath, would be crucial, and those recollections were inevitably failing. As well, ACS raised the possibility that some witnesses might not be able to be found at all, or might be otherwise unavailable to give evidence. In particular, ACS said that the Commonwealth had refused to provide names or other information about former inmates, thereby delaying ACS’s investigations and its assessment of the evidence that it might be able to tender in support of its defence.

The law

Power to strike out

There is no doubt that under the Court Procedures Rules 2006 (ACT), the court has power to strike out a proceeding:

(a)under r 1110 for want of prosecution;
(b)under r 1452 for a failure to comply with a court order to take a step in the proceeding; or
(c)under r 1404 for a failure to comply with directions.

ACS also relied on r 425(1)(d), the power to strike out a pleading as an abuse of the process of the court, and the inherent jurisdiction of the court.

I am not persuaded that s 425(1)(d), which refers to a pleading rather than the manner in which the matter instituted by that pleading has been pursued, is relevant in this case. Given the availability of explicit rules, I do not see any need to consider the court’s inherent jurisdiction (but see [36] below).

ACS also mentioned rr 430, 433 and 435, which relate to the obligation to provide particulars, and confer power on the court to “make the order, including give the judgment, it considers appropriate” if a party does not comply with an order to provide better particulars (r 435). In the event, I did not need to consider whether those provisions provided any useful powers in this case.

Relevant considerations

The parties agreed that the matters to be considered in deciding whether to exercise the power to strike out for want of prosecution were as set out in Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 433 (13 May 2011) by Ward J, who noted first at [498] that:

It has been held that the principles the court applies are the same whether it acts under the rules or the inherent jurisdiction. (citations omitted)

Her Honour went on:

499.The power to dismiss an action for want of prosecution is not confined by rigid guidelines. Although delay is the threshold circumstance that potentially enlivens the discretion to dismiss an action, delay is a relative concept and the significance of any delay must depend on the particular circumstances of the case involved.
500.The proposition that the power to dismiss an action for want of prosecution should be exercised only where the plaintiff’s default has been intentional and contumelious or where there has been inordinate and inexcusable delay giving rise either to a substantial risk that a fair trial would not be possible, or to a risk of serious prejudice to the defendant has been rejected as unduly restrictive of the true scope of the power.
501.The ultimate question (keeping in mind the overriding purposes mandated by ss 56-59 of the Civil Procedure Act) is whether, balancing the prejudice to the respective parties by making or not making an order dismissing the proceedings, justice demands that the action be dismissed. (citations omitted)

Sections 56 to 59 of the Civil Procedure Act 2005 (NSW) cover similar ground to r 21 of the Court Procedures Rules 2006 (ACT), although the NSW provisions are more detailed and appear to impose more specific obligations on parties.

Ward J went on to identify the specific matters to be considered in deciding whether justice demands that an action be dismissed:

502.Simpson J in [Hoser v Hatcher [1999] NSWSC 527] at [21] - [30], with whose analysis Levine J agreed in Gill v Eatts [1999] NSWSC 1056 at [61] said this of the balancing exercise to be undertaken on such an application:
(2.) the discretion should be exercised only in a clear case where it is manifestly warranted; per Kirby P; as is generally the case with discretionary decisions, each case depends upon its own facts. Rigid formulae should not be applied to the exercise of the discretion; (citations omitted)
(3.) any explanation offered by the plaintiff for the delay in proceeding must be considered; (citations omitted)
(4.) personal blamelessness on the part of a plaintiff (as distinct from any tardiness or other fault on the part of his/her/its legal representative) is relevant. (citations omitted)
(5.) a defendant who takes no steps to secure progress in the proceedings, or to activate an apparently inactive plaintiff or who stands by in the hope that the passage of time will ensure the quiet death of the proceedings or that the longer delay will strengthen the case for striking out, runs the risk that that very behaviour will operate to his/her/its disadvantage. A defendant has two choices: to attempt to prod the plaintiff into action, or to stand by, doing nothing, trusting that time will bring about the slow death of the action. Either choice represents something of a gamble, dependent upon future events that the defendant is unable with any degree of confidence to predict. If the defendant opts for the former course, of prodding the plaintiff into action, it may succeed in doing so, precluding an application to strike out. On the other hand, if the plaintiff remains inert, the defendant’s case for striking out strengthens with passing time. If the defendant chooses the latter option and takes no action, the plaintiff may take no further steps, or may take no further steps until such irremediable prejudice is caused to the defendant that the application to strike out will succeed; if, however, some other event galvanises the plaintiff into action the defendant, having done nothing to progress the matter, can hardly be heard to complain of the plaintiff’s earlier inactivity; (citations omitted)
(6.) delay between the date the cause of action arose and the commencement of the proceedings may be a relevant factor. But in my view, this circumstance must be treated with some caution. The weight that can be accorded to that delay is limited. Where an action is commenced within the period provided for by an applicable statute of limitations, it would not ordinarily be appropriate to take that period into account. However, if a plaintiff has delayed significantly in the commencement of the proceedings, and that delay is followed by further lethargy in the advancement of the proceedings, the effect of the initial (but permissible) delay is compounded. The real question is not the length of the delay, but the impact that delay has upon the defendant’s capacity properly to defend the plaintiff’s claim. That will be a question of fact in each case. While there may be some prejudice presumed by reason of the passage of time, much will depend upon the nature of the proceedings, and the identification of the issues involved in the litigation. Where, for example, at the close of pleadings it can be seen that there are disputed questions of fact dependent upon the oral evidence of witnesses, or their recollections, the prejudice will plainly be greater than in cases that depend essentially upon the application of legal principle to largely undisputed facts, or upon disputed questions of fact that will be resolved by reference to documentary or other objective evidence not likely to be affected by the effluxion of time; (citations omitted)
(7) the onus lies on the defendant to establish any prejudice upon which reliance is placed. The disappearance or death of witnesses, the fading of their recollections, or the destruction of records, are some obvious examples of the kind of prejudice that might arise;
(8) prejudice to a defendant caused by delay has to be balanced against prejudice to a plaintiff deprived of an otherwise valid claim; delay in the commencement of proceedings by a plaintiff is sometimes taken as evidence contra-indicating prejudice to the plaintiff in the sense that he/she/it has evinced no interest in his/her/its own case. Such an inference may be contra indicated by explanatory evidence; in this regard the plaintiff’s personal responsibility for the delay is an important factor as is any explanation provided for the delay; (citations omitted)
(9) what the defendant has (or has not) done by way of preparation for trial may be a factor. This is a distinct question from that concerning any steps taken (or not taken) by the defendant in prompting the plaintiff to action. A defendant who has not interviewed witnesses, taken statements or collected documents, after being served with the claim, has a less meritorious complaint about the effect of prejudice caused or presumed by reason of delay; (citations omitted)

(10) the plaintiff’s prospects of success is a relevant factor. If it appears that the prospects are minimal, the discretion is more likely to be exercised in favour of the defendant. Conversely, where the plaintiff’s case is strong (absent the kind of prejudice to the defendant to which I have referred) it is less likely that justice will be done by striking the action out; (citations omitted)
(11) the exercise of the discretion to strike out should not incorporate any element of punishing a tardy plaintiff, or of excluding one who may appear to have some unworthy characteristics. The ultimate aim of a court is the attainment of justice. To adapt the words of the High Court in [The State of Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146], discretions such as that presently invoked ought not to be used to supplant the overall aim of the attainment of justice. (other citations omitted)
503.Applying those principles to the case at hand, I accept that rigid formulae should not be applied and the discretion should be exercised only in a clear case (a conclusion that can only be reached having regard to the other factors to which reference is there made). (emphasis in original)

The summary quoted by Ward J identifies both factual issues that may be relevant, and principles to be applied, in exercising the strike-out power.

An earlier consolidation of relevant matters was referred to in the ACT case of Caterina Raso & Anor v Mark Ronald Bayliss & Ors [2005] ACTSC 94 (Raso), in which Gray J, considering a case in which the plaintiffs had taken no steps for 14 years after bringing their action, said at [18]:

In Tyler v Custom Credit Corp Ltd [2000] QCA 178, before the Full Court of Queensland, Atkinson J (with whom McMurdo P and McPherson JA agreed) set out a helpful list of matters to be considered (at [2]). These include:
(1) How long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced;
(2) How long ago the litigation was commenced or causes of action were added;
(3) What prospects the plaintiff has of success in the action;
(4) Whether or not there has been disobedience of Court orders or directions;
(5) Whether or not the litigation has been characterised by periods of delay;
(6) Whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant;
(7) Whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff’s impecuniosity;
(8) Whether the litigation between the parties would be concluded by striking out [in this case, dismissing] of the plaintiff’s claim;
(9) How far the litigation has progressed;
(10) Whether or not the delay has been caused by the plaintiff’s lawyers being dilatory ...;
(11) Whether there is a satisfactory explanation for the delay; and
(12) Whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial. [Footnotes omitted]

These matters show the wide ambit of matters that the court is to consider in the exercise of its discretion.

Factual matters

The factual issues mentioned by Ward J and by Atkinson J before her are, generally:

(a)the nature and circumstances of the delays in the proceedings;
(b)the explanations for those delays; and
(c)the impact of those delays.

Nature and circumstances of delays

In relation to the nature and circumstances of the delays, relevant issues include:

(a)the history and progress of the litigation, including:
(i)how long ago the relevant events took place;
(ii)whether there was delay before the litigation started;
(iii)how long ago the litigation was started;
(iv)whether there have been delays through the period of the litigation; and
(v)how far the litigation has progressed; and

(b)whether and if so how the defendant has prepared for trial.

History and progress of litigation

It is fair to say that until recently, neither party has shown any particular enthusiasm for progressing this matter.

The damage to the detention centres was done between 2000 and 2002. There was correspondence between the parties in 2004 and 2005 about ACS’s liability to the Commonwealth for that damage; notably on 10 June 2004 the Commonwealth’s solicitors wrote to ACS advising that Comcover (the Commonwealth government’s self-managed insurance fund) considered ACS liable for “detainee damage to a number of processing and detention facilities” operated by ACS, and on 24 June 2004 ACS’s solicitors replied, saying that “ACS denies any liability in relation to the matters referred to in your letter”.

A statement of claim was filed in August 2006, just less than six years after the first relevant incident in a detention centre.

Much of the argument on the strike-out application, and some of the documents before me (for instance, an affidavit made by the Commonwealth’s solicitor Matthew Roser in 2007 in reinstatement proceedings), seemed to assume that the six-year limitation period ran from the date of each detention centre incident. However, I note that the statement of claim identifies the breach of contract as ACS’s refusal to pay the damages claimed by the Commonwealth in 2004, and there may also be an argument to be made, based on the terms of the relevant contracts, that any breaches arose, for instance, only after ACS had failed to make repairs required by a detention centre incident “promptly” after the incident (Detention Services Contract cl 3.9.1(d)).

The exact date on which the limitation period expired was not relevant in this application to the extent that it related to the impact of striking out the Commonwealth’s claim; it was undisputed that by 2012 there was no scope for the Commonwealth to initiate a new claim if this one were struck out. Whether the Commonwealth had delayed filing its claim until the last possible moment, or had in fact filed as “early” as two years into a six-year limitation period (if the cause of action arose when payment was refused in 2004) might have been of marginal relevance in other aspects of the strike-out application (see item (6) in the material quoted at [39] above). However, that issue would not have been as significant as the basic effluxion of time since the detention centre incidents, and was not pursued. Nor would a finding that the limitation period began to run some time after the detention centre incidents concerned have changed my decision.

Once filed, the statement of claim was not served for almost 12 months. Several months of that delay was attributed to the Commonwealth’s wish to undertake further investigations about the claims and to obtain an opinion from particular counsel, who were not able to provide their advice until July 2007, citing by way of explanation their other commitments and “the sheer volume of documents” involved.

In September 2007, about a month after the claim was served, the matter was struck out under r 75 of the Court Procedures Rules as a result of an absence of action on the court file for more than 12 months. In October that year the matter was reinstated, and shortly afterwards ACS filed a notice of intention to respond. A defence and counterclaim, and the reply, were filed quite quickly thereafter, and a few days later, on 8 November 2007, ACS wrote to the Commonwealth listing in some detail the further particulars it required.

There was apparently no response to this letter until, on 30 April 2008, the Commonwealth wrote to ACS requesting particulars of its defence and counterclaim. ACS replied on 15 May 2008 to the effect that it was not in a position to provide any particulars until the Commonwealth had provided its particulars.

After several more months of apparent inaction, the Commonwealth applied to the Supreme Court in October 2008 for an order that the matter be case-managed by the Master. On 31 October 2008 consent orders for case management by the Master were made by the Master himself. On 2 November 2008, the solicitors for the Commonwealth emailed ACS’s solicitors indicating that, because no directions date had been set when the case management order was made, they would propose dates and draft consent directions for the first case management mention. However, it seems that after this email, nothing further was done by the Commonwealth about case management, and nor did ACS, or indeed the Court, pursue the issue.

In February 2009 the Commonwealth wrote to ACS providing particulars described as being in response to ACS’s November 2007 request. Five weeks later (27 March 2009) ACS replied, saying that the particulars provided were not adequate in specified respects, and seeking further particulars.

In September 2009 the Commonwealth filed a notice of intention to proceed, and it filed further such notices in August 2010 and 2011 (presumably to avoid any further automatic striking out).

In March 2010, there was an informal settlement conference convened by the Commonwealth’s solicitors, but it seems to have come to nothing.

On 11 July 2011, the Commonwealth’s solicitors proposed non-binding neutral evaluation of certain liability issues relating to the relevant contracts. ACS rejected this proposal on 17 August 2011, raising objections which on their face did not appear to be relevant to the matters proposed for neutral evaluation. That point was made by the Commonwealth in a reply dated 29 August 2011, only a few days before the strike-out application was foreshadowed at a directions hearing on 2 September 2011.

On 20 July 2011, by consent, the Master ordered that by 17 August 2011 the parties respond to each other’s letters seeking particulars, and relisted the matter for directions in September 2011.

On 17 August 2011, ACS wrote to the Commonwealth explaining that it had not provided its particulars because the Commonwealth had not yet provided full particulars to it (a matter apparently not raised when the consent orders were made giving each party the same deadline for providing particulars).

A week later, on 24 August 2011, the Commonwealth wrote to ACS, responding to the March 2009 letter by providing further documents sought in March 2009 and indicating that other particulars sought could be found in specified parts of its February 2009 letter, and proposing certain consent orders about the provision of quantity surveyors’ reports to ACS. This proposal was rejected by ACS, but on 2 September 2011 the matter came before Higgins CJ, who ordered the Commonwealth to provide “all quantity surveyors reports in relation to quantum” to ACS by 16 September 2011 (Order 1), ACS to file any strike-out application it wished to make, and the Commonwealth to file any response, and adjourned the matter to 28 October 2011. The bench sheet records that those orders were made by consent, but both parties have suggested that Order 1 was opposed by ACS.

The quantity surveyor’s reports were provided on behalf of the Commonwealth on 13 September 2011. Oddly, the solicitor’s covering letter simply noted that it enclosed copies of “files prepared for the Commonwealth” by a quantity surveyor, Heymann-Cohen Pty Limited; there was no reference to Order 1 of the orders made by the Chief Justice on 2 September 2011.

ACS wrote back on 23 September 2011 (the day on which the strike-out application was filed) asserting that the provision of files prepared for the Commonwealth by a particular quantity surveyor did not seem to satisfy Order 1 of 2 September 2011. In case the provision of the files was intended as an answer to ACS’s request for further particulars, the letter also pointed out the inadequacies of the files for that purpose. ACS sought clarification of the Commonwealth’s position in relation to the files, and repeated a request for the Commonwealth to file a Scott Schedule under r 431.

In summary, then, by the time the matter came before me, the incidents giving rise to the claim were 11 or 12 years in the past, it seemed to be assumed (not necessarily correctly) that the litigation had been initiated close to the end of the limitation period, the litigation was by then six years old, there had been delays by both parties in the provision of particulars, and almost all that had happened in the litigation had been ongoing, slow-moving disagreement about the provision of particulars by each party. The Commonwealth had made two attempts to move the matter along separately from the argument about particulars (arranging the informal settlement conference and proposing non-binding neutral evaluation of the contract interpretation issues). There had been no applications for discovery. Despite the order for case management by the Master made at the Commonwealth’s instigation, there had been no attempt by either party to draw on the court’s case-management powers to resolve the dispute about particulars until shortly before the strike-out application was made.

ACS’s preparation for trial

Apart from evidence of ACS’s repeated requests for particulars, there was before me little information about preparations ACS had made for trial.

An affidavit by an officer of ACS (at [120] below) referred to an approach he had made to Kevin Corcoran, a person who had been involved in investigating detention centre incidents on behalf of the Commonwealth, asking whether Mr Corcoran had retained any relevant records. That approach was made on 21 September 2011, after the strike-out application had been foreshadowed at a directions hearing.

On 12 September 2011, ACS had written to the Commonwealth asking for documents and other information. There was a letter from the Commonwealth’s solicitors dated 21 September 2011, in reply to that letter, querying whether ACS’s requests for documents and other information indicated that it did not have “any proper evidentiary basis” for the allegations made in its defence and had only recently begun looking for an evidentiary basis for the defence that relied on asserting the Commonwealth’s negligence.

ACS had made no request for discovery at any stage.

In short, ACS appeared to have done virtually nothing in preparation for the trial until shortly before filing the strike-out application, except to the extent that requesting particulars from the Commonwealth was a necessary preliminary for such preparations; as well, ACS appeared to have had no particular interest in obtaining those particulars in order to make a start on trial preparation.

Explanation for delays

Relevant to this issue were:

(a)whether relevant delays were attributable to the plaintiff, the defendant or both;
(b)whether there had been delay by the plaintiff’s lawyers as such; and
(c)the adequacy of any explanation for delay.

The Commonwealth’s responsibility for delay

The Commonwealth’s contribution to delay was apparent from the chronology set out at [45] to [61] above. Apart from delaying service of the statement of claim, the Commonwealth’s main contribution to delay seems to have been in the extended periods taken before responding to ACS’s requests for particulars. Counsel for the Commonwealth did not seek to deny that contribution.

Impact of the defendant’s conduct

The significance of the defendant’s role in delay was the subject of detailed submissions from both parties.

ACS argued that the defendant’s conduct in proceedings was not generally relevant to the exercise of the strike-out power. ACS’s argument relied on the ACT case of Vidler v Merit Engineering Pty Ltd (1987) 86 FLR 213 (Vidler). This was a case in which a plaintiff builder sued for payment for some building work, then took no steps in the action for six years after the defendant filed a defence; Miles CJ said that the plaintiff bore a persuasive burden to explain why the matter should not be dismissed. In that case, the Chief Justice at 218-219 adopted, with one qualification, a summary by Bray CJ in Ulowski v Miller [1968] SASR 277 of the “five paramount matters” to be considered in relation to striking out a claim for want of prosecution, being:

the length of the delay, the explanation for the delay, the hardship to the plaintiff if the action is dismissed and the cause of action left statute-barred, the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay, and the conduct of the defendant in the litigation

Miles CJ’s qualification was expressed in reliance on comments made by the Full Court of the Federal Court in McKanna v Aspect Homes Pty Ltd (1983) 51 ALR 603 at 606 (McKanna), to the effect that a defendant who has deliberately refrained from seeking the dismissal of an action for want of prosecution until after the end of an applicable limitation period should not thereby be disadvantaged, but that the position “may well be different if the defendant’s conduct is misleading, or in breach of an undertaking”. By reference to these comments, Miles CJ held that in the absence of an allegation or suggestion of misleading conduct or breach of an undertaking by the defendant, the conduct of the defendant in the litigation had to be excluded from the five matters set out by Bray CJ.

Despite Gray J’s adoption of the proposition in Raso at [18], I am not convinced that McKanna should be read as authority for the general principle that the conduct of the defendant, unless misleading or in breach of an undertaking, must be excluded from consideration of a strike-out application. The Full Court in McKanna at 606:

(a)noted English authority to the effect that “as a rule the non-expiry of the limitation period is a conclusive reason for not dismissing an action for want of prosecution”;
(b)said that for that reason a defendant should not be put at a disadvantage because he “advisedly refrained from applying for the dismissal of the action” before the end of the limitation period; and
(c)then, as already mentioned, said that the situation might be different if the defendant’s action had been misleading or in breach of an undertaking.

However, the basis of the Full Court’s decision in McKanna was (at 606) that the judge at first instance had based his decision on the defendant’s failure to seek earlier dismissal of the proceedings, and that his Honour had therefore exercised his discretion on a wrong principle in finding that that particular failure by the defendant “contradicted any justification based on prejudice to the defendant”.

To say that it is wrong to treat a failure to seek an order at a point when it was very likely to be refused as establishing that a defendant would not be prejudiced by delay is a much narrower proposition than the proposition that a defendant’s conduct in general is only relevant if it is misleading or in breach of an undertaking.

I am not convinced that the broader proposition, that a defendant’s conduct is only relevant if misleading or in breach of an undertaking, can be made out. It is not a principle identified either by Ward J (at [39] above) or by Atkinson J (at [41] above), and it seems unlikely that a case could now be made that such a principle is applicable only in the ACT (Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 81 ALJR 1107 at [38]).

Rule 21 of the Court Procedures Rules is also relevant. It is as follows:

21       Purpose of ch 2 etc
(1)       The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense.
(2)       Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving—
(a)       the just resolution of the real issues in the proceedings; and
(b)       the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(3) The parties to a civil proceeding must help the court to achieve the objectives.
(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.
Example for r (4)
The court may dismiss a proceeding or make a costs order if a plaintiff fails to proceed as required by the rules in ch 2 or an order of the court.
Note 1 See esp div 2.14.2 (Failure to comply with rules or order).
Note 2 An example is part of these rules, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

Rule 21(3), with its focus on “the just resolution of the real issues” and the obligation on the parties (that is, both of them) to help the court achieve the objectives set out in ss 21(1) and (2), is significant in the context of the statement by the plurality in Aon Risk Services Aust Ltd v ANU at [113] that:

The purposes stated in r 21 cannot be ignored. The Court Procedures Rules make plain that the Rules are to be applied having regard to the stated objectives of the timely disposal of the proceedings at an affordable cost. There can be no doubt about the importance of those matters in litigation in the courts of the Australian Capital Territory.

I considered that r 21 permits broader attention to the role of a defendant in seeking to have a matter resolved without delay than was appropriate in 1987 when Vidler was decided.

As to the nature of ACS’s role in the delay, the evidence before me suggests that it was both active and passive.

ACS refused to provide particulars of its defence, as requested by the Commonwealth, on the grounds that it could not do so until the Commonwealth had provided further and better particulars of its claim. This approach was taken despite the fact that a significant element of ACS’s defence (that which relied on the Commonwealth’s negligence in its treatment of detainees) did not appear to depend on the additional particulars ACS had sought from the Commonwealth in relation to the damage for which it said ACS was liable.

ACS did not provide any substantive rely to the Commonwealth’s 30 April 2008 request for particulars until 17 August 2011, following a court order that it do so. The 17 August 2011 reply was made before further Commonwealth particulars were provided. It provided little or nothing in the way of particulars of the negligence defence, asserting instead either that appropriate particulars had already been given or that for one of a variety of reasons, the request for particulars was not a proper request. None of those responses purported to refer to, or could have depended on, the Commonwealth’s provision of further particulars of its claim, as ACS had initially asserted. There is no apparent reason why that response could not have been provided in 2008. I can only assume that in refusing to provide particulars without receiving further particulars from the Commonwealth, ACS was not identifying a genuine obstacle to providing particulars but was in fact seeking to avoid particularising its defence.

Apart from responding quite quickly (albeit negatively) to most approaches from the Commonwealth, ACS took few or no active steps in the proceedings. In particular, despite the order for case management having been made relatively early, ACS made no effort to call the court in aid of its allegedly unsuccessful attempts to obtain adequate particulars from the Commonwealth over a period from November 2007 until the matter was listed for direction in July 2011.

I mention also the rather curious matter of the quantity surveyor’s reports. It is not apparent from the material before me who sought the order made by the Chief Justice for provision of the quantity surveyor’s reports, or for what purpose, but certainly there was nothing I could find that suggested those reports were ordered to be provided instead of particulars. Accordingly, I cannot understand why ACS challenged whether the quantity surveyor’s reports later provided were provided in compliance with that order, or why ACS in the course of this application persistently referred to the provision of those reports as indicating that the Commonwealth could not or would not be able to particularise or establish the damage in issue.

At [76] and [79] above I concluded that it was permissible to consider ACS’s conduct, even though there was no suggestion that ACS had breached any undertaking, and ACS’s conduct did not seem to me to have been misleading.

The Commonwealth had submitted that if I found that ACS’s conduct was only relevant if misleading or in breach of an undertaking, I should also find that ACS had been misleading in continuing to engage with the Commonwealth while also working towards a strike-out application. However, this conduct does not seem to me to have been “misleading” in the necessary sense; rather, it simply reflected any lawyer’s obligations to continue to pursue the ordinary course of litigation on behalf of the client even while examining options for resolving the issues between the parties otherwise than by the litigation running that ordinary course.

Accepting that ACS’s conduct had not been misleading or in breach of an undertaking, I considered that ACS’s approach to providing particulars of its defence was a positive contribution to delay. As well, if ACS genuinely wanted the particulars it sought from the Commonwealth, rather than wanting to burden the Commonwealth with the task of preparing a large amount of possibly unnecessary material, it is surprising that it did not, after receiving the Commonwealth’s first and allegedly inadequate attempt at particulars, apply to the court for appropriate orders.

Role of the plaintiff’s lawyers

No submissions were made to the effect that the Commonwealth’s solicitors were specifically responsible for any relevant delay.

The plaintiff’s explanation for delays

No explanation for the delays on the part of the Commonwealth was put forward, and counsel for the Commonwealth was frank in conceding as much, although his comment that any evidence explaining the delays “got lost by and large in the passages of time” did not add to my understanding of the position.

Impact of delays

As to the impact of the delays, relevant issues are:

(a)the plaintiff’s prospects of success if the action proceeds;
(b)what the effect would be on the litigation between the parties, and in particular whether litigation between the plaintiff and the defendant would be concluded by striking out the plaintiff’s claim; and
(c)whether the delay has prejudiced the defendant or will prevent a fair trial (noting that the onus is on the defendant to establish such prejudice or lack of fairness).

Prospects of success

The somewhat obscure nature of ACS’s defences, and the absence of particulars of those defences, made it impossible at this stage to reach any useful conclusions about the Commonwealth’s prospect of success in this action, beyond accepting that the Commonwealth clearly had an arguable case that should not lightly be dismissed without an investigation of its merits.

Effect of strike-out

Despite some uncertainty about when the Commonwealth’s cause of action arose (at [48] above), it is not in dispute that the six-year limitation period (Limitation Act 1985 (ACT), s 11) expired several years ago, and there was no suggestion of a basis on which that period could be extended. Striking out the Commonwealth’s claim would terminate the proceedings.

Prejudice

The core of ACS’s submissions in favour of striking out the Commonwealth’s claim was that the passage of time since the detention centre incidents meant that ACS would be seriously prejudiced in defending that claim.

That serious prejudice, ACS said, would relate to the proof of the damage claimed by the Commonwealth, and to the proof of ACS’s defence relating to the Commonwealth’s liability for the detention centre disturbances. It would arise from the unavailability of documentary and other physical evidence, the unavailability of witnesses, and the fading memories of those witnesses who could be found.

The well-known statement of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, in relation to the importance of limitation periods, bears repeating:

The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, “what has been forgotten can rarely be shown”. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now “knowing” that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. (citations omitted)

In Vidler, Miles CJ noted that the defendant’s defence involved a set-off or counter-claim or both, and that the onus was on the defendant to establish such a defence, concluding at 219 that “where the onus lies on the defendant, the prejudice caused by the plaintiff’s delay is likely to be the greater”.

Prejudice in relation to proof of damage

The main prejudice in relation to proof of damage seemed likely to be suffered by the Commonwealth, in the sense that it would be up to the Commonwealth to establish any damage for which it seeks a remedy. If the Commonwealth does not at this stage have documentary evidence sufficient to establish its claims of damage to specific items of Commonwealth property, then delay might make it difficult to do so in any other way, but this would seem to prejudice the Commonwealth rather than ACS. ACS’s argument that, at most, it is only liable for some rather than all kinds of damage claimed by the Commonwealth, if upheld, would still leave the Commonwealth more at risk of being prejudiced by delay, in that the Commonwealth would still need to establish on the balance of probabilities that particular damage fell within the narrower class of damage for which ACS was liable, rather than ACS being required to prove that some damage was outside that class.

Furthermore, it seems likely that ACS itself kept some kind of records about damage arising from the various detention centre incidents, especially given its apparent contractual obligations to keep detention centre property in good repair (see [124] below).

ACS did not pursue Commonwealth records about damage (as distinct from particulars of damage) until on 12 September 2011, ACS wrote to the Commonwealth seeking, among other things, confirmation that:

... all records of the incidents made by or on behalf of the Commonwealth or any agencies of the Commonwealth (including the Australian Federal Police) relating to all of the incidents listed at paragraph 6 of your client’s statement of claim have been preserved and have not been destroyed.

This letter was answered on 21 September 2011, but the Commonwealth’s response to the request for confirmation was to point out that “any issue of the disclosure of relevant documents is a matter to be dealt with in the discovery process”.

ACS’s argument about prejudice in relation to damage relied on an affidavit made by its solicitor Paul Forbes on 27 September 2011 and on reports by a quantity surveyor served on ACS by the Commonwealth in accordance with orders made by Higgins CJ in September 2011 (possibly by consent, but see [59] above).

Mr Forbes’ affidavit contained the following paragraphs, said to be evidence of his concerns in relation to proof of damage to the detention centres:

30.One difficulty which I anticipate arising is that even if proper particulars were now to be provided along with clearly identified documents in support of each item of damage claimed, due to the passage of time any witnessses who were present at the centres immediately before the damage occurred may have difficulty in commenting on the documents that the Commonwealth in fact seeks to rely upon. In particular, I anticipate that it may be difficult for those witnesses to be able to now say whether or not they agree with the descriptions and valuations of the facilities contained within the contemporaneous material to be relied upon by the Commonwealth in support of its claim. On the other hand if they are matters that were, in fact, the subject of particular correspondence at the time then any difficulties may be minor.
31.Accordingly, the full extent of any prejudice that might be suffered with respect to the delay in providing particulars of loss and damage may not be known until all of the Commonwealth’s evidence in chief is served.

As Mr Forbes himself makes clear, his concerns are highly speculative.

The exchange of requests for further particulars is described at [50], [51], [53] and [57] to [61] above; at no stage was there any attempt to ask the court to resolve the ongoing dispute about what matters sought by ACS were properly matters for particulars rather than evidence.

Nor has ACS at any stage sought discovery.

Prejudice in relation to proof of negligence

As to the difficulties for ACS in making out its defence based on Commonwealth negligence, Mr Forbes in his affidavit dated 27 September 2011 made the following comments:

ACS wishes to consider the evidence of the cause of the damage including by reference to the conditions in which the detainees were accommodated, the facilities available to them, the length of time they were detained and all the other relevant circumstances of their environment including the consequences (or lack thereof) of detainees committing criminal acts while in detention and the role of the Federal and State Police in that regard. This evidence may be adduced through documents that were created at the time (assuming they have been retained and their accuracy is able to be confirmed) and the testimony of witnesses who were present at the time the damage occurred. The witnesses will include ACS’s employees at the time, the Commonwealth’s employees at the time, the State and Federal Police who attended some of the incidents and the detainees themselves.

ACS made no claim about any risk that evidence of any relevant Commonwealth decisions would not be available.

Matters of causation, specifically whether any particular actions or neglect on the Commonwealth’s part caused the disturbances, are more complex, and this is a point at which the recollections of witnesses may be significant.

Possible sources of prejudice

Several ways in which ACS might be prejudiced in relation to addressing the matters discussed above were suggested.

ACS relied on the affidavit from its solicitor Mr Forbes dated 27 September 2011, as well as an affidavit made on the same date by Richard Laws. Mr Laws was at the time of the detention centre disturbances an investigator engaged by ACS to investigate the various disturbances but in September 2011, he was the General Manager Operations of the GEO Group Australia. That body was formerly Australasian Correctional Management Pty Ltd (ACM), the corporation through which ACS provided detention services to the Commonwealth represented by the then Department of Immigration and Multicultural and Indigenous Affairs (DIMIA).

Both deponents commented on the possibility that the memories of witnesses would have been affected by the passage of time since the events of 2000 and 2001. The risk of memories fading with the passage of time is undoubted, and probably a suitable subject for judicial notice rather than evidence.

Both deponents also made assertions, or express opinions, about the difficulties of identifying and locating witnesses and the possibility that some witnesses may now be unwilling to testify.

Mr Laws deposed that as Investigations Manager for ACM in 2001-2002, he reviewed the circumstances surrounding major incidents occurring in immigration detention centres. His reviews were intended, in general terms, to enable the making of “recommendations aimed at remediating risk of future occurrences and achieving continuous improvement in service delivery”. DIMIA also appointed independent expert investigators (DIMIA investigators) to examine some incidents. Mr Laws collaborated with such investigators, including facilitating their access to ACM personnel and records. Draft reports by DIMIA investigators went to Mr Forbes, who briefed the Managing Director of ACM. Mr Forbes annexed a copy of a detailed report he had compiled in relation to an incident at Woomera on 29 March 2002.

Mr Laws described the activities of ACM and DIMIA investigators in relation to incidents of the kind raised in the Commonwealth’s claim, as follows:

ACM internal investigations chiefly examined the circumstances surrounding or leading to the incident and the operational management response. Although the motivation for detainee’s protesting and causing damage was always relevant to the incident review, formal interviews with detainees were conducted by DIMIA personnel or by police (if involved). ACM received informal and often second hand feedback over the motivation for riots and disturbances through meeting with detainee delegates. Interviews with detainees were facilitated by DIMIA for the DIMIA Investigators who also had the benefit of conducting interviews and obtaining evidence from DIMIA officials.

Submissions were made that the conduct of detainee interviews by DIMIA or police, and apparently not by ACS representatives, had somehow disadvantaged ACS in its case.

It may be that if ACS representatives had interviewed detainees in the context of the Commonwealth’s statement of claim and ACS’s defence, they would have asked questions not necessarily asked by the DIMIA or police investigators. However, to the extent that ACS is prejudiced by this fact, it has nothing to do with any delay in these proceedings, since the interviews conducted for the purposes of reviews of the incidents took place years before these proceedings were begun.

To the extent that ACS may be prejudiced by the fact that interviews were not conducted by its representatives shortly after these proceedings were begun, it is hard to see that the Commonwealth’s conduct of the proceedings has contributed to that prejudice. It appears from other evidence that ACS held records of detainees while they were detained in centres managed by ACS (at [124] below), and that ACS no longer has the detainees’ personal files, including medical records. It is not so clear that ACS does not even retain lists of the detainees’ names, but even if that is the case, it also seems (at [153] below) that ACS has not made a proper request for those names.

At the risk of labouring the discovery point, I note that Mr Laws’ statement that formal interviews with detainees were conducted by DIMIA personnel or police seems to cry out for an attempt by ACS to have the records of those interviews discovered, rather than to provide a basis for arguing that delay in the Commonwealth’s conduct of its action will prejudice ACS’s defence.

Mr Laws noted that due to the lapse of more than 10 years since these events, his “independent recollection that would place [his] views in context with particular incidents or facts” is “increasingly limited”.

Mr Laws identified a particular DIMIA investigator, Kevin Corcoran, and quoted the following conversation with him that took place on 21 September 2011 (more than four years after the Commonwealth’s statement of claim was served). Mr Laws said that he did this “in the context of determining what records are available relating to the investigations” he had described earlier in the affidavit:

Me: Hello Kevin, I’m trying to pull together documents for the claim by the Commonwealth about the damage to the Immigration Detention Centres around Christmas 2002. Would you still have any documents relating or supporting investigation reports you compiled?
Kevin: I have moved offices four times since then. If I have any I would have got rid of them last time I moved a few months ago.

Mr Laws’ affidavit annexed a copy of one of the reports prepared by Mr Corcoran, suggesting that his organisation already had access to significant contemporaneous material concerning the detention centre incidents.

Mr Laws also exhibited a report prepared for ACM by Ian Stewart entitled Investigation Into Damage to Facilities by Detainees: Woomera Immigration Processing and Detention Centre, 17-20 December 2001. The report runs to 19 pages, six of which summarise the incident, apparently by reference to seven detailed incident reports that are attached and that total 22 pages.

The Terms of Reference commissioned Mr Stewart as follows:

1. You are appointed to investigate and report upon the incidents involving detainees burning buildings at the Woomera IRPC the week commencing 17 December 2001.
2. Without limiting the scope of your enquiry you are to seek evidence and report upon the following matters:
·How, when, where and why the alleged incidents occurred and circumstances surrounding the incidents;
·Any other circumstances related to the alleged incidents which may have impacted on the security of the Centre;
·Whether all relevant orders and procedures were complied with and in the event of non compliance, who failed to comply, to what extent, and why;
·Whether it is considered necessary to:
oIssue or amend operating instructions,
oModify training procedures, or
oModify equipment.

·Whether any immediate measures are considered necessary to prevent a recurrence of the incidents;
·Whether any weakness in the system or method of control caused or contributed to the incidents;
·Whether there was a breach by any staff member of the Company Code of Conduct; and
·Whether any disciplinary action is warranted.

3. You are to:
·Obtain signed statements from any person or persons who are able to give material information as to the date, time, place and circumstances relating to the incidents; and
·Recommend if any remedial or other action should be taken.

4. The following documents are to be attached to your report:
·Statements of all relevant witnesses;
·Copies of all relevant orders and instructions;
·Copies of any relevant log or report;
·These Terms of Reference;
·A summary of your findings and recommendations.

ACS did not claim that it did not have similar detailed reports about other relevant detention centre incidents.

Further evidence of the availability of contemporaneous records, or records made shortly after the relevant events, to support the memories of witnesses, was provided by Mr Forbes, who said in his affidavit:

37.As I am informed by Rod Casimir, Legal Manager for ACS, that as a matter of course ACS took steps to preserve and identify documents that it considered might be relevant to the matter. Those documents have been isolated and can be reviewed for the purposes of discovery or evidence and include, in general terms:
a. Contracts between ACS and the Commonwealth
b. Agendas and minutes of meetings of the:
i.Contract Operations Group;
ii.Contract Management Group;

c. Incident reports and other documents in relation to the incidents the subject of the claim;
d. Correspondence between ACS and the Commonwealth in relation to incidents the subject of the claim.
38.Certain files which are relevant to the proceedings were not able to be retained by ACS. Those files are those that were required to be, and were, retuned [sic] to the Commonwealth after ACS ceased providing the detention services to the Commonwealth. They include files relating to each of the detainees, including their medical notes.

To the extent that Mr Forbes’ comments indicate that relevant material is not in the possession of ACS, they also indicate that the material did exist at some stage and was returned to the Commonwealth, apparently during the early stages of development of the current dispute.

Mr Forbes referred to affidavit evidence from Mr Laws to the effect that some people employed by ACS at the time of the relevant incidents were by 2011 working for the Commonwealth or for a competitor of ACS. He went on:

In my experience, in civil litigation it is common for former employees to be reluctant to voluntarily assist in litigation being conducted by or on behalf of a former employer. This is particularly the case where those individuals now work for a competitor or the other party to the litigation. In those cases ACS’s only option would be to compel that person’s attendance to give evidence. This is usually undesirable in circumstances where it is not known what the witness could remember or what their likely evidence would be.

Mr Laws’ evidence was that several ACM employees who were in key positions at the time of a 2001 incident at Woomera had moved on to positions with Serco (a business competitor of ACM), or the AFP. Apparently by way of example, he reviewed the incident report for a 2001 Woomera incident and prepared a table setting out his knowledge of the whereabouts of each person referred to in that report. His investigations seem to have consisted of calling on his own knowledge and the GEO Group Australia’s personnel records, and arranging for a paralegal to call all phone numbers available from those sources. Mr Laws had a general idea of the location in 2011 of the five people in that list who were known to him; apart from that, he was not able to make contact with anyone else whose phone number had been obtained (most of them presumably from personnel records up to 10 years old), although messages of some sort were apparently left for some of them. No efforts were made to locate any of the other people named or identified by category (eg “SA Police Officers”) in the report. Mr Laws seemed to have made a fairly cursory effort at tracking people.

I note also that contacting Mr Corcoran as described at [120] above would seem to have been a particularly pointless exercise. Even if Mr Corcoran had retained any relevant documents from his engagement as a DIMIA investigator, it seems highly unlikely that he could properly have given copies of those documents to a representative of ACS at that point. On the other hand, any such documents that had been provided or returned to the Commonwealth would presumably have been a proper subject of a request for discovery.

There was no evidence to suggest that, to the extent that relevant material may have been lost, it had been lost since proceedings were begun in 2006.

I placed little weight on ACS’s attempt to establish that relevant information would not be available to it because of the Commonwealth’s delays in prosecuting this case, for the following reasons.

It was apparent that a lot of documentary material was collected or produced in the aftermath of the detention centre disturbances, and that much of it was likely to be in the possession of one or both of the parties.

It appeared from the affidavits that no or minimal effort had in fact been made to track down the potential witnesses who had been identified, and that such efforts as had been made were very recent.

The assertions about witnesses possibly being affected by what might conveniently be called conflicts of interest were very general; from a group of 14 named people, Mr Laws referred to one person said to be currently employed by the Commonwealth (with the Australian Federal Police), two employed by a commercial competitor of ACS, a fourth described as “working at Junee” but whose email address suggests he is still with Mr Laws’ own organisation, and another person described as “previously worked at Arthur Gorrie but finished prior to 2008 & contact details not available”. Without any explanation of who or what is “Arthur Gorrie”, I am left with the information that a maximum of four people named in Mr Laws’ list might be affected by a “conflict of interest”, and no claim that any of those four are key witnesses in the matter. No claims were made about any of the numerous other people mentioned in the list provided by Mr Laws, being unspecified numbers of AFP officers, South Australian police officers, Australian Protective Services officers and Woomera Community Fires Services Officers, 40 to 50 unnamed residents of Mike Compound, and 14 or 15 named detainees who had attended a meeting about unrest in the centre.

More significantly, even if the claims about conflicts of interest had been backed up with more detailed information, those claims seem to me to be of minor significance. The fact that witnesses, whether because of developments since relevant events or for other reasons, may be disinclined to testify at the instigation of a particular party is hardly an unusual aspect of a trial, and as such would not generally provide a basis for striking out a claim. Indeed, it is apparent that an approach that permitted the proper determination of a claim to be blocked by the presumed unwillingness of witnesses to give evidence (for whatever reason) would open the door for entirely inappropriate, perhaps contemptuous, frustration of the proper processes of the courts. The law has developed a range of tools for dealing with what may well be a fact of human nature (generally, a disinclination to do things that seem to be against one’s interests) without permitting the work of the courts to be obstructed; these include:

(a)the power to subpoena witnesses;
(b)the capacity to order a witness to answer a question and in appropriate circumstances to permit cross-examination of a witness by the party who called him or her;
(c)the capacity to determine the weight to be given to a witness’s evidence;
(d)the criminalisation of perjury; and
(e)the court’s entitlement to draw inferences from an unexplained failure to call witnesses who might properly have been called.

None of those tools is necessarily effective in dealing with a witness with a failing memory (whether genuine or otherwise), but a witness’s failing memory is a different issue from an inability to produce a witness or a witness’s reluctance to give evidence. As well, a witness with a failing memory may be able to use contemporaneous records to refresh his or her memory.

In summary, I was not convinced that the delay in the progress of these proceedings since they were initiated in 2006 has, as such, prejudiced ACS, nor that those delays will prevent a fair trial of the Commonwealth’s claims. It seemed more likely than not that most of the documentary evidence of matters that might arise in this trial would still be in existence, although locating it might be a particularly tedious exercise. While no doubt the relevant memories of witnesses have deteriorated since 2006, there is no reason to believe that they have deteriorated more significantly in that time than they already had between the time of the relevant incidents and the initiation of the proceedings in 2006. No doubt some of the many participants in the detention centre incidents have died, and others will not be able to be found, but ACS did not assert that there were key issues arising for which there was only a single witness or a very small number of witnesses. More importantly, I was not convinced that the unaided recollections of individuals would be particularly significant in resolving the matters in issue in this action, given the nature of the issues and the volume of documentary evidence that has been, and may still be, in existence.

Principles for exercise of discretion

Finally, particular relevant principles identified by Ward J as applicable in determining whether “justice demands that the action be dismissed” are:

(a)that “the discretion to strike out should be exercised only in a clear case where it is manifestly warranted”; and
(b)that “the exercise of the discretion to strike out should not incorporate any element of punishing a tardy plaintiff, or of excluding one who may appear to have some unworthy characteristics”.

Consideration

The progress of this litigation has so far been painfully slow (see [62] above).

There is no doubt that, as its counsel conceded, the Commonwealth has not applied an appropriate degree of energy to progressing this claim. However, it could not be said that the Commonwealth has done nothing, and indeed there have been particular points during the last six years when the Commonwealth has made efforts consistent with trying to move the claim on. For instance:

(a)it was the Commonwealth who sought an order for case management of the matter in late 2008 (but then failed to organise a directions hearing at which case management should begin);
(b)it was the Commonwealth who, in early 2009, and apparently without any particular prodding from ACS, purported to provide particulars as sought by ACS (albeit 15 months after those particulars were sought);
(c)it was the Commonwealth’s solicitors who proposed and organised an informal settlement conference at their premises on 25 March 2010; and
(d)it was the Commonwealth who proposed non-binding neutral evaluation in July 2011.

I also took account of the Commonwealth’s expressed willingness to put on its evidence within a relatively short time frame.

As to explanations for delay, the Commonwealth’s “lethargy” speaks for itself (at [69] above), and as noted there was no explanation for it (at [89]).

I was also satisfied that ACS had taken few if any steps in preparation for the trial (at [67] above). It was also clear that ACS had not made any particular effort to progress the matter. Of course, the Commonwealth as the plaintiff has a greater obligation to move matters along, but I have already (at [76] and [79] above) rejected the argument that ACS’s conduct is only relevant if it is misleading or in breach of an undertaking, among other things by reference to r 21 and the obligation it imposes on “the parties” to “help the court to achieve the objectives” of, among other things, “the timely disposal of the proceedings”.

In this case, ACS’s contribution to delay at least through its approach to providing particulars of its defence seemed to be relevant. Some elements of ACS’s requests for particulars from the Commonwealth were no doubt legitimate; some of the others, however, seemed to me to have been on the edge of oppressive, which may explain why ACS failed to seek the court’s help in obtaining particulars, even after the order for case-management had been made. The extent of ACS’s requests for particulars seemed to be at least relevant to assessing the Commonwealth’s responsibility for its admittedly drawn-out conduct of the action.

For the purpose of assessing the impact of delay, I was satisfied that the Commonwealth has a genuinely arguable case (at [91] above), and that striking out the claim would dispose of that case (at [92] above).

As noted at [137] above, I was not convinced that ACS would suffer prejudice in the conduct of its defence as a result of the slow progress of this matter in the last six years, or that the trial of the matter would be unfair. Nor was I convinced that (separately from the delay constituted by the passage of time while the Commonwealth considered requests for particulars) the alleged failure by the Commonwealth to provide adequate particulars has caused, or will cause, prejudice or unfairness to ACS. ACS’s apparent failure to make any genuine preparations for trial (at [67] above) further weakened its claim to be prejudiced by delay.

As to the principles to be taken into account in exercising the strike-out discretion, I note that there has been no suggestion that the Commonwealth was a plaintiff who appeared “to have some unworthy characteristics” (apart from a tendency to move slowly which is, almost by definition, a characteristic of a plaintiff faced with an application for strike-out for want of prosecution). Nor did ACS’s submissions imply that it would be appropriate to “punish” the Commonwealth (again, apart from the “punishment” inherent in striking out the proceeding).

Having regard to all those factors, I was not satisfied that this was “a clear case where [a strike-out] is manifestly warranted” or that justice demanded that the Commonwealth’s action be dismissed.

Conclusions

Accordingly, I refused ACS’s application for the originating claim and the statement of claim to be struck out.

Application for Commonwealth to put on its evidence

Early in the hearing of these applications, counsel for the Commonwealth conceded that it would be appropriate to order the Commonwealth to put on all its evidence. The making of such an order was foreshadowed at the time I refused the strike-out application, and the order was made on 4 December 2012. Counsel had initially proposed a period of four months in which this was to be done, but in the end the period allowed was about five and a half months, including most of December and all of January.

Application for Commonwealth to provide particulars

As recorded above, each party had made repeated demands for the other party to provide particulars, or further and better particulars, of aspects of its pleadings. Each party had argued that it was not required to provide some particulars as requested, for instance because the requests were for evidence not particulars, because the relevant particulars had already been provided, or because the relevant particulars could not be provided until the other party had provided particulars of its claims. However, my interpretation of the correspondence was that the requests for particulars, especially but not exclusively those made by ACS, have related as much to overburdening the other party as to extracting information really needed by the requesting party. As also already noted, neither party sought the help of the court to resolve this ongoing stand-off.

At the hearing of the application, counsel for ACS was especially exercised by the fact that requests for particulars of loss have been “met” by provision of a quantity surveyor’s reports about damage to the various detention centres. ACS made two complaints about this material, one being that the figures in the quantity surveyor’s reports could not easily be matched or reconciled with the figures shown in the statement of claim, and the other being that the quantity surveyor’s reports seemed to have been prepared in 2003 for the purposes of the Commonwealth’s internal insurance claim processes and did not establish that the work being costed had in fact been done (a fact which in any case seems to be irrelevant: Bellgrove v Eldridge (1954) 90 CLR 613 at 620). As noted at [84], the role of the quantity surveyor’s reports in this matter remains a mystery to me, and having regard to the Commonwealth’s advice that the quantity surveyor’s reports were provided because they were available and in accordance with a court order, but not provided instead of particulars, I do not see that there is any point in trying to make any more sense of this issue.

ACS also complained that the Commonwealth had refused to give ACS the names of detainees who had been in relevant detention centres at relevant times, noting that this was a matter for discovery, and that this had made it hard for ACS to find them. It seems that this information has been sought by ACS as particulars, but it is hard to see what aspect of the Commonwealth’s claim would be particularised by this information. Even if the Commonwealth needed to prove that damage had been caused by detainees, the statement of claim did not seem to require the Commonwealth to prove that damage had been caused by any particular detainee. In any case, ACS in its defence has admitted paragraph 6 of the statement of claim, which is that between two specified dates damage was caused to the detention facilities by detainees. The identity of particular detainees might be relevant to ACS’s defence based on the Commonwealth’s negligence, but information that would have been, in effect, the names of possible witnesses in ACS’s defence does not seem to have been appropriately sought by a request for particulars of the Commonwealth’s claims.

ACS argued that the Commonwealth, as a model litigant, should not have met its request for information about detainees as it did. To the extent that it is legitimate anyway for ACS to raise this issue (see Judiciary Act 1903 (Cth), s 55ZG(3)), I note that the Model Litigant obligations set out at Appendix B to the Legal Services Directions 2005 do not appear to require the Commonwealth to provide discovery by way of a response to a request for particulars.

Having concluded that at this stage the Commonwealth’s evidence should be put on, there was no need to respond to ACS’s application for an order for the Commonwealth to finish providing particulars. If, after putting on its evidence, the Commonwealth wishes to renew its attempt to get further particulars from ACS, an application for appropriate orders can be made.

Proposal for split trial

During the hearing of the application, the Commonwealth proposed a split trial under which liability issues would be determined before any evidence was called. Given the significance of the contract interpretation issues, this would in other circumstances have seemed to be a good idea. However, the prejudice to the proceedings in general from delay, even if it is not sufficient to justify a strike-out, and the fact that it is now over 10 years since the most recent incidents relevant to this claim, had to be recognised. In those circumstances, I was not willing to delay the taking of evidence for the period that would inevitably be absorbed in finding a hearing date in the Supreme Court and preparing a no doubt reserved judgment, and the period that would possibly be absorbed by an appeal. In my view, it was time for this matter to run, and if that produced a degree of inefficiency in order to minimise prejudice, that was just unfortunate. Accordingly, in the absence of a formal application for a split trial, I simply indicated my view that the hearing should not be split.

Proposal to defer strike-out decision

Late in the hearing of the application, ACS submitted that if I was minded to order the Commonwealth to put on its evidence, I should adjourn the strike-out application until the deadline for the Commonwealth to put on that evidence. I declined to take such a course, on the basis that if I was not already satisfied that a strike-out was justified, then a genuine, even if not completely successful, effort by the Commonwealth to put on its evidence by a particular date would not change that position. On the other hand, an unexplained failure by the Commonwealth even to attempt to comply with such an order could provide its own grounds for a strike-out application.

Proposal for self-executing order

ACS then submitted that any order for the Commonwealth to put on evidence should be a self-executing order with strike-out as the consequence of failure to comply. While recognising the virtues of self-executing orders in dealing with uncooperative parties, I declined to make a self-executing order in this case. Given the complexity of the matter, and the complexities of the defences raised by ACS, exact compliance with an order to put on evidence might be difficult to identify, and an extended argument about whether the self-executing order had executed itself in the particular circumstances seemed far less useful than an argument, if such became necessary, about whether the Commonwealth deserved any further extension of time or how the matter should otherwise proceed.

Disqualification issue

After the first day of the hearing of ACS’s applications, counsel for ACS drew my attention to a matter from my pre-judicial career that he wished me to consider as a possible ground for me to disqualify myself, while explicitly declining to make a disqualification application. The matter raised, and my response, is set out in the following comments that I made ex tempore after briefly considering counsel’s submissions:

In November and December 2003 I led a team appointed by the Attorney-General that conducted a review described as the Migration Litigation Review. The announcement of that review made by the then Attorney-General referred to migration applications in the Federal Court and the Federal Magistrates Court, the small numbers of successful applications in those courts, and the effect of migration litigation on the workload of the two courts.
The Attorney-General said:
For some time the government has been concerned about delays in the resolution of migration cases and the very low success rate of applicants. In 2002/2003 more than one third of migration applications in the Federal Court and the Federal Magistrates Court were withdrawn by applicants before the court reached a decision. The government won 92.5% of the remaining cases.
These figures suggest that much court time is being wasted at taxpayer expense and litigants with meritorious claims are being inconvenienced.
The government is committed to applicants with genuine claims having their case properly considered, however, great strain is being placed on the courts and the migration system more generally by unmeritorious applications.
Migration cases form a substantial and increasing proportion of the workloads of both the Federal Court and the Federal Magistrates Court. Migration applications filed in or transferred to the Federal Magistrates Court went from 182 in 2001/2002 to 1,397 in 2002/2003.
In the Federal Court migration matters comprised 66.5% of appeals last year up from 56.5% the previous year.

He then went on to announce my appointment to head that review.
I delivered the final report of that review to the Attorney-General early in January 2004, and within less than 10 days left the Commonwealth Public Service to take up a role in the administration of Parliament. Having left the executive, I played no further role in, and have no further knowledge of, the outcomes of that review. I understand that the report was never published, but I have this morning identified that in 2005 the Attorney-General introduced a bill called the Migration Litigation Reform Bill, which appears to have contained provisions apparently arising from some of the recommendations of my report.
Having heard the first day of this application several weeks ago, it occurred to me that I should mention my involvement with migration and litigation matters to the parties, but considered that this was merely in effect a matter of tidiness. I was entirely satisfied that I had no basis at all for needing to disqualify myself from the hearing of the applicant’s current application.
While I am not in a position to provide any specific information about the Migration Litigation Review beyond what is on the public record, I can confirm that the topic of the review was, as indicated by the Attorney-General’s press release, migration litigation in the Federal Magistrates Court and the Federal Court. The review did not concern itself with arrangements in the detention centres or, to the best of my recollection, with the Department of Immigration’s processing of claims before the point at which they moved into a review stream.
The fact that some groups who made submissions to the review raised issues concerning those earlier stages, as is apparent from the documents that have been provided by counsel for the applicant, is hardly surprising, but does not establish that those were topics dealt with by the Migration Litigation Review. I have no memory of any discussions with or briefing from Immigration officials about any particular approach to the handling of immigration claims at those earlier stages, and can think of no reason why such matters would have been raised.
It was for these reasons that it did not occur to me at any stage after realising the connection between my work on the Migration Litigation Review and aspects of this matter that there was any basis in that work that raised any question about the appropriateness of me continuing to deal with this matter. None of the material that has been produced by counsel for the applicant has changed my mind in any respect.
In the absence of any application by counsel for me to disqualify myself, I do not propose to take up further time addressing the authorities about judicial disqualification, but note merely that in the circumstances of this application and the circumstances that I have already outlined about my involvement with migration litigation in 2003, nothing said by the High Court in British American Tobacco Australia Services Limited v Laurie (2011) 242 CLR 283 suggests a basis upon which I could properly disqualify myself.
Also, in the absence of an application, I need make no decision as such but now propose to continue with this hearing.

Subsequent to this, and in the context of the introduction of a docket system in the Supreme Court, I indicated to the parties that if an application for disqualification were to be made based on any further research by the parties into the activities of the Migration Litigation Review, it should be made sooner rather than later.

Costs

When I gave my decision on the strike-out application, I reserved the costs of the application. It was agreed that the parties would be free to make submissions about costs when these reasons were provided.

It may be useful to indicate that at this stage my inclination, subject to any submissions the parties choose to make within time limits that I shall set at the next mention, would be to order that each party pay its own costs of the application.
I certify that the preceding one hundred and sixty-two (162) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Penfold.
Associate: Sameena Ahmad
Date: 8 March 2013

Counsel for the Plaintiff:	Mr M Einfeld QC with Mr J Duncan
Solicitor for the Plaintiff:	Ashurst Australia (formerly Blake Dawson Waldron)
Counsel for the Defendant:	Mr F Kunc SC with Mr S Hausfeld
Solicitor for the Defendant:	Baker & McKenzie
Date of hearing:	27 June, 16 July, 10 August 2012
Date of orders:	19 October 2012
Date of reasons:	8 March 2013