David Mark Hodgson as joint and several liquidators of Diploma Construction (WA) Pty Ltd (in Liq) (Receivers and Managers Appointed) v Classic Contractors Pty Ltd
[2020] WASC 68
•24 APRIL 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: DAVID MARK HODGSON as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED) -v- CLASSIC CONTRACTORS PTY LTD [2020] WASC 68
CORAM: ACTING MASTER WHITBY
HEARD: 17 FEBRUARY 2020
DELIVERED : 6 MARCH 2020
FILE NO/S: COR 218 of 2019
BETWEEN: DAVID MARK HODGSON as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED)
ANDREW STEWART REED HEWITT as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED)
Plaintiffs
AND
CLASSIC CONTRACTORS PTY LTD
First Defendant
WESTPLEX PTY LTD
Second Defendant
K & P KERAI PTY LTD trading as CHOICES FLOORING BY G & A
Third Defendant
ZEEL DESIGNER KITCHENS PTY LTD
Fourth Defendant
DONNYBROOK HOLDINGS PTY LTD trading as TES ELECTRICAL
Fifth Defendant
KELAIR HOLDINGS PTY LTD trading as INSTANT WASTE MANAGEMENT
Seventh Defendant
WIELD HOLDINGS PTY LTD
Ninth Defendant
IV CORP (AUST) PTY LTD
Tenth Defendant
NICOLA DOMENICO DI LATTE
Eleventh Defendant
CARLA MARIA DI LATTE
Twelfth Defendant
ARB PROPERTIES PTY LTD
Thirteenth Defendant
NATALINA FILOMENA DE FELICE
Fourteenth Defendant
MARIO DE FELICE
Fifteenth Defendant
SWANHILL ENTERPRISES PTY LTD
Sixteenth Defendant
Catchwords:
Practice and procedure- Insolvency - Application by Liquidators for leave nunc pro tunc to join multiple defendants pursuant to O 18 r 4 of the Rules of the Supreme Court of Western Australia - Common issue of insolvency - Assertion of prejudice by defendants
Legislation:
Rules of the Supreme Court 1971 (WA)
Corporations Act 2001 (Cth)
Result:
Plaintiffs' application for leave nunc pro tunc to join each of the defendants to the proceedings pursuant to O 18 r 4(1) of the Rules of the Supreme Court (WA) be granted
Category: B
Representation:
Counsel:
| Plaintiffs | : | M Holler |
| First Defendant | : | JR Shepherd |
| Second Defendant | : | No appearance |
| Third Defendant | : | SR Sirett |
| Fourth Defendant | : | No appearance |
| Fifth Defendant | : | JR Shepherd |
| Seventh Defendant | : | No appearance |
| Ninth Defendant | : | ML Bennett |
| Tenth Defendant | : | ML Bennett |
| Eleventh Defendant | : | ML Bennett |
| Twelfth Defendant | : | ML Bennett |
| Thirteenth Defendant | : | ML Bennett |
| Fourteenth Defendant | : | ML Bennett |
| Fifteenth Defendant | : | ML Bennett |
| Sixteenth Defendant | : | ML Bennett |
Solicitors:
| Plaintiffs | : | Norton Rose Fulbright Australia |
| First Defendant | : | Blackwall Legal Llp |
| Second Defendant | : | James Chong Lawyers |
| Third Defendant | : | Thomson Geer - Perth |
| Fourth Defendant | : | Williams & Hughes |
| Fifth Defendant | : | Blackwall Legal Llp |
| Seventh Defendant | : | Trinix Lawyers |
| Ninth Defendant | : | Bennett + Co |
| Tenth Defendant | : | Bennett + Co |
| Eleventh Defendant | : | Bennett + Co |
| Twelfth Defendant | : | Bennett + Co |
| Thirteenth Defendant | : | Bennett + Co |
| Fourteenth Defendant | : | Bennett + Co |
| Fifteenth Defendant | : | Bennett + Co |
| Sixteenth Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
Jones v Sun Engineering QLD Pty Ltd [2017] WASC 195
Re Bias Boating Pty Ltd [2017] NSWSC 1524
ACTING MASTER WHITBY:
The plaintiffs' application
This is the plaintiffs' application for leave nunc pro tunc to join each of the defendants to the proceeding pursuant to O 18 r 4(1) of the Rules of the Supreme Court 1971 (WA) (RSC).
At the date of the hearing of the application, the position of each of the defendants was as follows:
(a)the first and fifth defendant consent to the application;
(b)the second, third, fourth and seventh defendants neither consent to nor oppose the application;
(c)the action has been discontinued against the sixth defendant;
(d)the claim against the eighth defendant has been resolved; and
(e)the ninth to sixteenth defendants are actively opposed to the application (hereinafter referred to as the opposing defendants).
Subsequently, on 21 February 2020, I made orders, by consent, dismissing the action against each of the first and fifth defendants.
The evidence
The following affidavits are read:
(a)Affidavit of David Mark Hodgson sworn 14 November 2019 (Hodgson affidavit); and
(b)Affidavit of Andrew Stewart Reed Hewitt sworn 15 November 2019.
Leave is required
Order 18 r 4(1) RSC provides:
Subject to rule 5(1), 2 or more persons may be joined together in one action as plaintiffs or as defendants with the leave of the Court or where ‑
(a)if separate actions were brought by or against each of them, as the case may be, some common question of law or fact would arise in all the actions; and
(b)all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions.
The plaintiffs accept that the relief sought does not satisfy the test under O 18 r 4(1)(b) RSC and that leave of the court must be obtained to join all of the defendants to this action.
Background
On 22 December 2016 Matthew James Donnelly (who subsequently resigned), Andrew Stewart Reed Hewitt and David Mark Hodgson were appointed as the joint and several administrators of Diploma Construction (WA) Pty Ltd (in liq) (receivers and managers appointed) (Company) by way of resolution of the Company's directors.[1]
[1] Hodgson affidavit par 7 and annexure DMH2.
On 12 May 2017, pursuant to an application made by the Australian Securities and Investments Commission (ASIC), Mr Hewitt and Mr Hodgson were appointed as provisional liquidators of the Company (and 19 other related companies).[2]
[2] Hodgson affidavit par 8 and annexure DMH3.
On 6 September 2017, the Company was wound up in insolvency and Mr Hewitt and Mr Hodgson were appointed as liquidators.[3]
[3] Hodgson affidavit par 9 and annexure DMH4.
After conducting initial investigations, Mr Hewitt and Mr Hodgson identified a number of transactions undertaken by the Company that they believed could be pursued as recovery proceedings to recover property or compensation for the benefit of the creditors of the Company under pt 5.7B of the Corporations Act 2001 (Cth) (the Act) (Relevant Transactions). [4]
[4] Hodgson affidavit par 11.
Mr Hodgson and Mr Hewitt did not have sufficient Company assets to fund the institution of proceedings in relation to the Relevant Transactions.[5] Accordingly, they sought funding which ultimately resulted in an agreement with LCM Operations Pty Ltd (LCM) dated 14 October 2019 (LCM Agreement). The LCM Agreement is conditional upon approval thereof being obtained pursuant to s 477(2B) of the Act.[6]
[5] Hodgson affidavit par 20.
[6] Hodgson affidavit par 33, 34.
Mr Hodgson and Mr Hewitt subsequently commenced these proceedings against each of the defendants claiming that they either received unreasonable benefits or received more from the Company in respect of their debts than they would have received from the Company if the Relevant Transactions were set aside and the defendants were to prove for the debts in the winding up of the Company.[7]
[7] Hodgson affidavit par 42.
The foundation of the claim against each of the defendants is set out by Mr Hodgson in his affidavit at paragraphs 45 to 136 thereof.
Plaintiffs' Submissions
Mr Hodgson claims that significant benefits would be obtained if the claims against each of the defendants were able to proceed by a 'mother' proceeding. These benefits are:
(a)there is a common question in relation to each of the claims being:
(i)the state of insolvency of the Company;
(ii)whether the Company was insolvent at all material times for the purposes of the claims; and
(iii)whether there will be a shortfall to unsecured creditors in the winding up of the Company;
(b)other factual findings may be required in relation to access to funding, recoverability of loans and interdependence of companies within the group of companies;
(c)the opposing defendants are each parties related to the Company;
(d)the defendants are all based in Western Australia;
(e)there is a public interest in having one court deal with all of the claims; and
(f)an order for a mother proceeding would be a speedy, inexpensive and efficient process which will:
(i)avoid the issue of insolvency needing to be litigated more than once; and
(ii)minimise the cost and time incurred by the parties and the court in relation to the claims.[8]
[8] Hodgson Affidavit par 137.
Opposing defendants' submissions
The opposing defendants submit that the disadvantages of joining the defendants to a single proceeding outweigh any advantages thereof for the following reasons:
(a)except for the date of insolvency, the claims against the opposing defendants are distinct from and separate to the claims against the other defendants;
(b)the claims against the opposing defendants relate to transactions which are alleged to be uncommercial or which are alleged to constitute unreasonable director related transactions within the meaning of s 558FB and s 558FTA of the Act respectively; and
(c)the claims against the other defendants relate to alleged unfair preference claims pursuant to s 558FA of the Act.
In addition, the opposing defendants submit they will suffer prejudice as a result of being joined to a single proceeding. The prejudices to which they point, by way of examples, are:
(a)the other defendants would be entitled to inspect documents produced upon discovery by the opposing defendants in circumstances where those documents may be confidential and commercially sensitive; and
(b)the opposing defendants would be required to participate in a trial of unrelated issues and distinct factual circumstances irrelevant to their interests.
Further, the opposing defendants submit that, in circumstances where the plaintiffs are seeking to retrospectively validate these proceedings by obtaining leave nunc pro tunc to join the defendants to a single proceeding, the onus is on the plaintiffs to propose case management orders which satisfy the court that the potential prejudice to the opposing defendants can be addressed.
Counsel for the opposing defendants submits that no such orders are proposed by the plaintiffs. The plaintiffs' minute of proposed orders dated 17 February 2020 (filed in support of the plaintiffs' application) proposes, inter alia, that mediations are conducted between the plaintiffs and individual defendants. The opposing defendants say that it is not appropriate for there to be separate mediations for each of the opposing defendant given the issues common to them.
The answer, the opposing defendants say, to the question as to how these proceedings are to be progressed is:
(a)to dismiss the plaintiffs' application;
(b)to require that the plaintiffs commence two separate proceedings – one against the other defendants and one against the opposing defendants; and
(c)for the plaintiffs to apply for a preliminary question, as to the date of insolvency, to be tried in each of those proceedings and that preliminary issue be listed for determination at the same time (the evidence in one standing as the evidence in the other).
Leave Nunc Pro Tunc
The plaintiffs seek leave from the court to join the defendants to the proceeding pursuant to O 18 r 4(1) RSC in circumstances where the proceeding has already been commenced. It therefore, requires leave be granted nunc pro tunc.
In Jones v Sun Engineering QLD Pty Ltd [2017] WASC 195 the plaintiffs applied, pursuant to O 18 r 4(1) RSC, to join defendants to the proceedings nunc pro tunc. K Martin J held, at [52] and [53]:
… RSC O 2 r 1 is applicable as regard irregularities.
… By reason of the application of O 2 r 1, it is clear the originating processes filed… to commence [the proceedings] are not and never were 'nullities'.
Counsel for the opposing defendants accepts that the proceedings in this case are not a nullity so far as they purport to join the defendants to the proceeding after the proceedings have been commenced.
Joinder of multiple defendants - legal principles
In Re Bias Boating Pty Ltd [2017] NSWSC 1524, Brereton J concluded that it was the policy of courts dealing with proceedings of this kind to order that multiple defendants be joined in a mother proceeding. He identified the following factors to be taken into account:
(a)there is inevitably a common question of insolvency;
(b)it is desirable that the question of insolvency be only decided once and that all defendants are bound by that decision;
(c)there are efficiencies for liquidators and the court in conducting and managing one procedure rather than multiple proceedings; and
(d)the court has the ability, after the question of insolvency is determined, to order that aspects of the procedures which are unique to a particular defendant be tried separately.[9]
[9] Re Bias Boating Pty Ltd [18].
In Jones v Sun Engineering QLD Pty Ltd K Martin J said:[10]
The line of national case authority decided in reference to the Corporations Act supporting the use of a 'mother proceeding' is therefore seen to be significant, persuasive and binding on me ‑ particularly in circumstances where this court is exercising federal jurisdiction. This court should recognise and implement to the fullest extent open a process of uniform decision making towards a nationally applied corporate regulatory regime across Australia.
[10] Jones v Sun Engineering QLD Pty Ltd [65].
In granting the plaintiffs' application pursuant to O 18 r 4(1) RSC, K Martin J said:
However, I must reject all these submissions as advanced by [the defendants] as to it suffering any generalised or fact specific prejudice in present circumstances and which would inhibit this court from granting the leave sought by the liquidator at this time as regards joinder.
In the present particular prevailing context of a large scale insolvency recovery action by a liquidator, in a complex corporate failure scenario of interrelated corporations and cross guarantees, the in principle considerations articulated by Austin J in Dean-Willocks, in my view, are obvious. They remain overwhelmingly compelling. They must prevail over [the defendants] grievances against a grant of leave.
That, of course, is not to say that for circumstances where a 'mother proceeding' is commenced as regards numerous defendants, that bespoke case management considerations concerning the position of a particular defendant within the overall litigation may not arise for future consideration and raise the need for case specific redress, where needed, from time to time … .
But any participation concerns applicable towards the idiosyncratic positions of an individual defendant remain, in my view, more than capable of being addressed by tailored case management directions to accommodate a situation of a particular defendant as the litigation advances towards a trial, or trials, of a part or parts, of the commenced litigation. (citations omitted) [11]
[11] Jones v Sun Engineering QLD Pty Ltd [99] – [102].
Determination
I am bound by the extensive authorities which provide that proceedings of this kind are ordinarily conducted by a mother proceeding. There is nothing unique about this case that causes me to depart from that policy.
In my view, the defendants should be joined in a single proceeding so that the issue of the insolvency of the Company, and the date of any such insolvency, issues which are common to all defendants, are not litigated more than once. This is the most efficient and cost effective way to facilitate this proceeding.
I consider that the prejudice which the opposing defendants may encounter as a result of the commencement of a single proceeding against all defendants can be adequately addressed by the court in tailoring case management directions to minimise that prejudice. By way of example, directions can be made that mediation be conducted between the plaintiff and one or more of the defendants and O 26 r 7(3)(c) RSC gives the court power to order discovery be provided to only certain parties to the proceedings.
It will ultimately be a matter for the case manager to make appropriate directions to minimise any prejudice arising out of the presence of multiple defendants.
Accordingly, I will grant the plaintiffs' application for leave nunc pro tunc to join each of the defendants to the proceeding pursuant to O 18 r 4(1) RSC.
I will hear the parties as to final orders and costs of the application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
6 MARCH 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: DAVID MARK HODGSON as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED) -v- CLASSIC CONTRACTORS PTY LTD [2020] WASC 68 (S)
CORAM: ACTING MASTER WHITBY
HEARD: 6 MARCH 2020
DELIVERED : 24 APRIL 2020
PUBLISHED : 24 APRIL 2020
FILE NO/S: COR 218 of 2019
BETWEEN: DAVID MARK HODGSON as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED)
ANDREW STEWART REED HEWITT as joint and several liquidators of DIPLOMA CONSTRUCTION (WA) PTY LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED)
Plaintiffs
AND
CLASSIC CONTRACTORS PTY LTD
First Defendant
WESTPLEX PTY LTD
Second Defendant
K & P KERAI PTY LTD trading as CHOICES FLOORING BY G & A
Third Defendant
ZEEL DESIGNER KITCHENS PTY LTD
Fourth Defendant
DONNYBROOK HOLDINGS PTY LTD trading as TES ELECTRICAL
Fifth Defendant
KELAIR HOLDINGS PTY LTD trading as INSTANT WASTE MANAGEMENT
Seventh Defendant
WIELD HOLDINGS PTY LTD
Ninth Defendant
IV CORP (AUST) PTY LTD
Tenth Defendant
NICOLA DOMENICO DI LATTE
Eleventh Defendant
CARLA MARIA DI LATTE
Twelfth Defendant
ARB PROPERTIES PTY LTD
Thirteenth Defendant
NATALINA FILOMENA DE FELICE
Fourteenth Defendant
MARIO DE FELICE
Fifteenth Defendant
SWANHILL ENTERPRISES PTY LTD
Sixteenth Defendant
Catchwords:
Practice and procedure - Costs issue - Plaintiffs seeking indulgence of the court - Reasonableness of the defendants' opposition to the application
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Opposing defendants pay plaintiffs' costs of the application from 13 January 2020 forthwith, to be taxed if not agreed
The costs of the application up to and including 13 January 2020 be the plaintiffs' costs in the cause
Category: B
Representation:
Counsel:
| Plaintiffs | : | M Holler |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | No appearance |
| Fifth Defendant | : | No appearance |
| Seventh Defendant | : | No appearance |
| Ninth Defendant | : | M A Maclennan |
| Tenth Defendant | : | M A Maclennan |
| Eleventh Defendant | : | M A Maclennan |
| Twelfth Defendant | : | M A Maclennan |
| Thirteenth Defendant | : | M A Maclennan |
| Fourteenth Defendant | : | M A Maclennan |
| Fifteenth Defendant | : | M A Maclennan |
| Sixteenth Defendant | : | M A Maclennan |
Solicitors:
| Plaintiffs | : | Norton Rose Fulbright Australia |
| First Defendant | : | Blackwall Legal LLP |
| Second Defendant | : | James Chong Lawyers |
| Third Defendant | : | Thomson Geer - Perth |
| Fourth Defendant | : | Williams & Hughes |
| Fifth Defendant | : | Blackwall Legal LLP |
| Seventh Defendant | : | Trinix Lawyers |
| Ninth Defendant | : | Bennett + Co |
| Tenth Defendant | : | Bennett + Co |
| Eleventh Defendant | : | Bennett + Co |
| Twelfth Defendant | : | Bennett + Co |
| Thirteenth Defendant | : | Bennett + Co |
| Fourteenth Defendant | : | Bennett + Co |
| Fifteenth Defendant | : | Bennett + Co |
| Sixteenth Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
David Mark Hodgson as joint and several liquidators of Diploma Construction (WA) Pty Ltd (In Liq) (Receivers And Managers Appointed) v Classic Contractors Pty Ltd [2020] WASC 68
Martin Bruce Jones as Liquidator of Forge Group Ltd (Receivers and Managers Appointed) (In Liq) v Sun Engineering (Qld) Pty Ltd [2017] WASC 195(S)
Stanley v Layne Christensen Co [2006] WASCA 56
ACTING MASTER WHITBY:
On 6 March 2020, I granted the plaintiffs leave nunc pro tunc to join each of the defendants to the proceeding pursuant to O 18 r 4(1) of the Rules of the Supreme Court 1971 (WA) (RSC). My reasons for decision are published at David Mark Hodgson as joint and several liquidators of Diploma Construction (WA) Pty Ltd (In Liq) (Receivers And Managers Appointed) v Classic Contractors Pty Ltd [2020] WASC 68.
The plaintiffs now seek the following costs orders:
(a)the ninth to sixteenth defendants pay the plaintiffs' costs from 13 January 2020 of the plaintiffs' application to join all parties to the proceedings pursuant to O 18 r 4 RSC, such costs to be taxed, if not agreed, and to be paid forthwith; and
(b)the costs up to and including 13 January 2020 of the plaintiffs' application to join all parties to the proceedings pursuant to O 18 r 4 RSC be the plaintiffs' costs in the cause.
The ninth to sixteenth defendants (opposing defendants) oppose these orders and seek an order that costs of the plaintiffs' application be costs in the cause.
Usual costs orders where party seeking an indulgence
Where a party is seeking the indulgence of the court the usual costs order requires that party to pay the other party's costs of the application, regardless of whether or not the application is successful. However, that general rule is flexible and the court can have regard to the conduct of the party opposing the application. The circumstances in which the usual costs order may be departed from were articulated by Wheeler J in Stanley v Layne Christensen Co [2006] WASCA 56 [52]:
The general rule is, and should remain, that where a party is seeking the indulgence of the Court, that party will be required to pay the costs of the application, including costs thrown away, and will not normally receive the costs of the application. However, it is also a normal rule that the Court will have regard to the extent to which it might be said that costs were unnecessarily incurred by a party, and will have regard to the reasonableness of the party's conduct in determining how costs should be awarded. In particular, where a contested application, even for an indulgence, is unnecessary because a party acting reasonably would have consented to appropriate orders, the party who caused the costs to be unnecessarily incurred will not obtain its costs of such a proceeding merely because the application is for some indulgence.
In the case of Martin Bruce Jones as Liquidator of Forge Group Ltd (Receivers and Managers Appointed) (In Liq) v Sun Engineering (Qld) Pty Ltd [2017] WASC 195(S)Justice K Martin, in departing from the general rule as to costs where the plaintiffs were seeking an indulgence of the court, said:
[9]… As my primary reasons reflect, the philosophical basis for [the opposing defendant's] opposition was, in the end exposed as conceptually flawed in law. The pragmatic consequence of [the opposing defendant's] broader opposition to leave as regards the [other] defendants was responsible for a greatly increased deployment of evidentiary resources and written materials needed by the plaintiffs' solicitors in resisting [the opposing defendant's] arguments and then by the court. This all unnecessarily increased what might otherwise have been dealt with in an hour, in less controversial circumstances into a full blown interlocutory dispute that, in the end, consumed all of a full hearing day and required reserved reasons. That was a needless waste as things turned out.
[10]So it is that [the opposing defendant] must be forced to accept … a level of costs responsibility by reason of opposition stances which, in the end, were not successful. Some level of costs exposure must follow that adverse event outcome for [the opposing defendant].
The parties' submissions
The plaintiff accepts that, by its application, it was seeking an indulgence of the court. However, it is the plaintiffs' position that, from 13 January 2020 (the date upon which the opposing defendants filed submissions in opposition to the application), the opposing defendants unreasonably opposed the application for joinder.
The opposing defendants submit that their opposition to the application was not unreasonable given that they were uncertain as to whether the court had the ability to ameliorate the prejudice that the opposing defendants may suffer if they were required to provide discovery to the other defendants to the action. The opposing defendants say that they were required to oppose the application in order to obtain the benefit of the court's decision that case management orders limiting discovery to certain parties was possible.
In the plaintiffs' outline of submissions filed on 29 November 2019 in support of the substantive application, the plaintiffs clearly articulated their position and the extensive authorities they were relying upon in support of the application. The plaintiffs also stated that any potential prejudice to an individual defendant was capable of being addressed by tailored case management directions.
The opposing defendants relied upon the affidavit of Gavan Frances Cruise affirmed 6 March 2020 in support of its submission that its opposition to the application was reasonable. That affidavit annexes correspondence passing between the solicitors for the plaintiffs and the opposing defendants on 9 and 18 December 2019. The substance of that correspondence was:
(a)on 9 December 2019, the solicitors for the opposing defendants wrote to the solicitors for the plaintiffs and acknowledged that the authorities establish a preference for mother proceedings but outlined the concerns they had about providing lists of documents and inspection of documents to other defendants. They also acknowledged the possibility that, pursuant to O 26 r 7(3) RSC, orders could be made to restrict access of discovery to other defendants but, even with the consent of the plaintiffs, there was no guarantee that those orders would be made. They requested a detailed proposal of the case management orders from the plaintiffs' solicitors; and
(b)in response, by letter dated 18 December 2019, the plaintiffs' solicitors agreed that O 26 r 7(3) RSC, in conjunction with O 1 r 3A RSC, gave the court power to restrict access of the other defendants to the opposing defendants' discovery and invited the opposing defendants to confer to discuss case management orders that may be sought.
Counsel for the opposing defendants accepts that there was no further conferral between the parties prior to the filing of the opposing defendants' submissions on 13 January 2020.
Determination
In my reasons for decision in the substantive application – at [26] to [29] – I concluded that I was bound by the extensive authorities which provided that proceedings of this kind are ordinarily conducted by a mother proceeding and that there was nothing unique about this case that would cause me to depart from that position. I was of the view that the most efficient and cost effective way to conduct these proceedings was to grant the application for joinder and that issues of prejudice could be adequately addressed by the court in tailoring case management directions to minimise any prejudice.
Any submission by the opposing defendants that they were required to oppose the application in order to avail themselves of a decision of this court to the effect that case management directions could limit inspection of discovered documents to particular parties is not accepted. The opposing defendants would be required to persuade the case manager that such orders were appropriate, but there is no merit in any submission that a case manager does not have sufficiently broad case management powers if so persuaded.
I find that it was unreasonable for the opposing defendants to continue to oppose the application when they were aware of the extensive authorities supporting the orders sought by the plaintiffs. The date from which the opposing defendants filed submissions in opposition to the application is the date from which the opposing defendants ought bear the costs of the application.
The costs orders proposed by the plaintiffs are appropriate. I make the following orders:
(a)The ninth to sixteenth defendants pay the plaintiffs' costs from 13 January 2020 of the plaintiffs' application to join all parties to the proceedings, such costs to be taxed, if not agreed, and to be paid forthwith.
(b)The costs up to and including 13 January 2020 of the plaintiffs' application to join all parties to the proceedings be the plaintiffs' costs in the cause.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to Registrar Whitby
24 APRIL 2020
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