Duckworth v Water Corporation - [2013] WASC 383

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DUCKWORTH -v- WATER CORPORATION [2013] WASC 383

CORAM: MASTER SANDERSON

HEARD: 26 & 29 AUGUST & 12 SEPTEMBER 2013

DELIVERED : 24 OCTOBER 2013

FILE NO/S: CIV 1795 of 2013

BETWEEN: KARL JAMES DUCKWORTH
RACHEL ALICE DUCKWORTH
ANDREW DANIEL DUCKWORTH
CLARE LEONORA DUCKWORTH
Plaintiffs
AND
WATER CORPORATION (ABN 28 003 434 917)
Defendant

Catchwords:

Stay of action pending payment of costs in discontinued proceedings - Whether issue in both actions 'substantially the same' - Discretion to order or refuse stay - Factors taken into account in exercising discretion

Legislation:

Nil

Result:

Stay refused

Category: A

Representation:

Counsel:

Plaintiffs: Mr J M Healy
Defendant: Mr M C Goldblatt & Ms S E Ivey

Solicitors:

Plaintiffs: Nova Legal
Defendant: Lavan Legal

Case(s) referred to in judgment(s):

Cargill International SA v Bangladesh Sugar & Food Industries Corporation [1996] 2 Lloyd's Rep 524
CGU Insurance Ltd v Watson [2007] NSWCA 301
Duckworth v Water Corporation [2012] WASC 30
In re Payne; Randle v Payne (1883) 23 Ch D 288
Letang v Cooper [1965] 1 QB 232
Mariotti v Wanneroo North Pty Ltd [2008] WASCA 243
Morgan v Banning (1999) 20 WAR 474
Thames Investment & Securities PLC v Benjamin [1984] 3 All ER 393

MASTER SANDERSON: This is the defendant's application for a stay of this action pending payment of costs in an earlier discontinued action. The application is brought under O 23 r 4 of the Rules of the Supreme Court 1971 (WA) (the Rules). On its face it is relatively simple. However, as argument progressed a number of difficult questions were raised. The answers to these questions involves consideration of little utilised provisions of the Rules. The parties also raised another short rather more straightforward point. That had to do with the costs on a summary judgment application by the plaintiff which was withdrawn. It is convenient to begin with the relevant facts.

The present action

The present proceedings were commenced by writ dated 16 May 2013. A statement of claim was endorsed on the writ. The plaintiffs say they are assignees of certain causes of action transferred to them from the bankrupt estate of Mr Neil James Duckworth. There is no argument about this aspect of the case. A copy of the deed of assignment appears as annexure KJD1 to the affidavit of the first-named plaintiff sworn 30 May 2013. At least for the purposes of this argument counsel for the defendant accepted there was a valid assignment of Mr Neil Duckworth's rights to the plaintiffs.
Returning to the pleading it is said on or about 3 March 2006 Mr Neil Duckworth entered into a 'Customer Constructed Works Agreement' (the CCWA) in relation to certain property which was being developed in Nilgen, Western Australia. The plaintiffs say and the defendant accepts the CCWA required Mr Neil Duckworth to provide a financial guarantee in a format acceptable to the defendant which could be called upon by the defendant to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] WASC 383
Decision Date: 24 OCTOBER 2013

CaseChat Overview and Summary

Duckworth v Water Corporation involved a dispute between the Water Corporation and Mr Neil Duckworth, who brought an action in 2010 that was subsequently discontinued. The present action was brought by the assignees of Mr Duckworth’s bankrupt estate. The central issue was whether the present action was "for the same, or substantially the same, cause of action" as the earlier proceedings, which would trigger the stay of action pending payment of costs under Order 23 rule 4 of the Supreme Court Rules. The court had to determine whether the issues in both actions were substantially the same and whether a stay should be ordered under the given circumstances.

In deciding the matter, the court considered the nature of the claims in both actions. The earlier proceedings involved claims related to a CCWA and Bond Agreement, while the present action also involved these agreements but was brought by different plaintiffs. The court noted that while the factual matrix and legal principles were similar, the parties involved were different. The court had to balance the interests of both parties and the precedent set by previous cases. The court recognised that the primary focus should be on whether the issues in both actions were substantially the same, rather than the identity of the parties. Justice Edelman concluded that the issues in both actions were indeed substantially the same, as they both pertained to the same underlying agreements and disputes.

Consequently, the court found that the present action was "for the same, or substantially the same, cause of action" as the earlier proceedings, and thus a stay should be ordered pending payment of the costs of the discontinued action. The court exercised its discretion to grant the stay, taking into account the need to ensure that the costs of the discontinued action were paid before proceeding with the present action. The court's decision was based on a careful analysis of the similarities between the actions and the need to uphold the integrity of the judicial process by ensuring that costs are not avoided by the simple expedient of changing the party bringing the action. The court ordered that the present action be stayed until the costs of the discontinued action were paid.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In December of 2010 Mr Neil Duckworth issued proceedings against the present defendant. Mr Neil Duckworth in these proceedings raised issues in relation to the same CCWA and Bond Agreement that are the subject of the present action. A trial of the claim brought by Mr Neil Duckworth was to commence on 30 January 2012. However a preliminary matter arose. Mr Neil Duckworth became bankrupt on 27 September 2011. The question raised was whether as a consequence of Mr Neil Duckworth's bankruptcy the action he brought was stayed pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth). This matter was heard by Justice Edelman and on 2 February 2012 his Honour published reasons detailing why the application was stayed: see Duckworth v Water Corporation [2012] WASC 30. His Honour concluded as follows [91]:The action is therefore stayed until the trustee in Mr Duckworth's bankruptcy, after receipt of proper notice, makes an election, in writing, to prosecute or discontinue the action. Failing an election within 28 days after service of the notice, the action is deemed abandoned (s 60(3)). The consequences of abandonment are discussed by Wheeler J in Temsign Pty Ltd v Biscen Pty Ltd (58). On 1 March 2012 after receipt of notice Mr Neil Duckworth's trustee in bankruptcy elected to discontinue the action. On 22 March 2012 Justice Edelman made orders discontinuing the action. On 17 May 2012 Edelman J considered two further questions. The first was an application by Mr Neil Duckworth to reinstate the proceedings. His Honour dismissed that application. The second application was by the present defendant seeking costs orders. Mr Neil Duckworth's trustee in bankruptcy consented to the costs orders; Mr Neil Duckworth personally opposed them. His Honour resolved the question by determining the defendant was entitled to its costs both in relation to the earlier proceedings and the further applications such costs to be taxed without regard to the limits in item 10(a) of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA). Subsequently these costs were taxed and were allowed in an amount of $123,808.66. They have not been paid. It is the fact these costs have not been paid which the defendant says should give rise to a stay of the present action under O 23 r 4. Order 23 r 4 is in the following terms:Subsequent action stayed pending paymentIf any subsequent action shall be brought before payment of the costs of a discontinued action, for the same, or substantially the same, cause of action, the Court may, if it thinks fit, order a stay of such subsequent action, until such costs shall have been paid. The main point at issue between the parties was whether this present action is 'for the same, or substantially the same, cause of action' as the earlier proceedings brought by Mr Neil Duckworth. To answer that question it is necessary to see what was at issue in the proceedings brought by Mr Neil Duckworth. A copy of the amended statement of claim in those proceedings appears as annexure GEB1 to the affidavit of Georgia Elyse Bevis sworn 15 August 2013. The first thing to note is there are different plaintiffs in both actions - Mr Neil Duckworth as trustee for the Ocean Farm Trust in the earlier proceedings and the plaintiffs as assignees from Mr Neil Duckworth's bankrupt estate in the present action.