Goldsmith v Prime Health Pty Ltd

[2005] WADC 94

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   GOLDSMITH -v- PRIME HEALTH PTY LTD & ANOR [2005] WADC 94

CORAM:   MAZZA DCJ

HEARD:   8 APRIL 2005

DELIVERED          :   20 MAY 2005

FILE NO/S:   CIV 2317 of 2001

BETWEEN:   IAN JAMES GOLDSMITH

Plaintiff/First Respondent

AND

PRIME HEALTH PTY LTD
First Defendant/Second Respondent

ANDREW SMITH
Second Defendant/Appellant

Catchwords:

Practice and procedure - Application to withdraw unconditional appearance - Writ issued and served on second defendant outside jurisdiction without leave - Writ expired - Exercise of discretion - Turns on own facts

Legislation:

Rules of the Supreme Court of Western Australia 1971, O 2 r 1, O 5 r 9, O 12 r 6, O 23 r 1

Result:

Appeal allowed in part

Representation:

Counsel:

Plaintiff/First Respondent         :        Mr S Melville

First Defendant/Second Respondent        :        Mr D Bristol

Second Defendant/Appellant         :        Mr P D Quinlan

Solicitors:

Plaintiff/First Respondent                   :        Chapmans

First Defendant/Second Respondent        :        Murcia Pestell Hillard

Second Defendant/Appellant         :        Clayton Utz

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

Brealey v Board of Management Royal Perth Hospital (1999) 21 WAR 79

Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529

Firth v John Mowlem & Co Ltd [1978] 3 All ER 331

Hazart Pty Ltd v Rademaker (1993) 11 WAR 26

Kent v Lechmere Financial Corp [2002] WASC 75

Kleinwort Benson Ltd v Barbrak [1987] AC 597

Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] 1 QB 368

Case(s) also cited:

BP Australia Ltd v Kirki Shipping Corporation & Anor, unreported; SCt of WA; Library No 940612; 1 November 1994

Greenhill Associates (WA) Pty Ltd v Directories (Aust) Pty Ltd, unreported; SCt of WA; Library No 5493; 4 September 1984

Leal v Dunlop Bio­processes International Ltd [1984] 1 WLR 874

Somportex v Philadelphia Chewing Gum Corporation [1968] 3 All ER 26

Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337

1. MAZZA DCJ:  In this judgment I will refer to the appellant as the second defendant, the first respondent as the plaintiff, and the second respondent as the first defendant.

2. By notice of appeal filed 16 December 2004 the second defendant appeals against orders made by Deputy Registrar Harman on 10 December 2004 in respect of the second defendant's application to withdraw his unconditional appearance filed in this Court on 22 March 2004.  The learned deputy registrar's orders were:

   (1)the second defendant's application for leave to withdraw his unconditional appearance be dismissed;

   (2)the second defendant pay the plaintiff's and first defendant's costs of the application; and

   (3)the second defendant file its defence within 21 days.

3. The orders sought by the second defendant in his notice of appeal are:

   (1)the unconditional appearance entered in the action on behalf of the second defendant be withdrawn;

   (2)the writ naming the second defendant as a party to this action be set aside; and

   (3)there be no order as to costs.

4. This appeal is a rehearing de novo:  Hazart Pty Ltd v Rademaker (1993) 11 WAR 26. I am at liberty to consider the evidence before the learned deputy registrar and any other evidence which the parties place before me. In this regard, the only evidence before me comes from three affidavits sworn by Dominic John Bourke, solicitor with the conduct of this matter on behalf of the second defendant, sworn 1 October 2004, 5 November 2004 and 15 February 2005. Neither the plaintiff nor the first defendant has placed any evidence before the court.

Chronology

1. The following chronology is based on the three affidavits of Mr Bourke and a perusal of the court's file.

   i.The plaintiff claims that the first and second defendants were negligent in their medical treatment of him between 6 September and 23 October 1995.

   ii.The second defendant has been a resident of the United Kingdom since January 1997.

   iii.The writ of summons was issued on 6 September 2001.

   iv.In or about mid‑September 2002 Dr Garside of the first defendant was sent a copy of the writ of summons.

   v.On or about 13 March 2003 an attempt was made to serve the second defendant with the writ by providing Dr Garside with a copy of it.  Plainly that was not effective service on the second defendant, and Mr Bourke sent a facsimile message to the plaintiff's solicitors on 13 March 2003 informing them of the second defendant's address in London, and advising the solicitors to serve the writ upon the second defendant personally.

   vi.On 17 June 2003 the first defendant filed an appearance.

   vii.On 3 September 2003 the first defendant filed its defence.

   viii.On 16 March 2004 the second defendant was served with a writ and statement of claim.

   ix.On 22 March 2004 an unconditional appearance was filed on behalf of the second defendant.

   x.On 29 March 2004 Mr Bourke wrote to the plaintiff's solicitors asking the solicitors to urgently advise if the writ of summons had been renewed prior to service upon the second defendant.  The plaintiff's solicitors did not reply to this letter, and so on 16 April 2004 a letter requesting an urgent response to the letter of 29 March 2004 was sent.  No response was forthcoming.  On 5 May 2004 a further letter was sent to the plaintiff's solicitors.  On 6 May 2004 the plaintiff's solicitors replied querying the relevance of the second defendant's solicitors request given the filing of the unconditional appearance.

   xi.On 9 June 2004 the plaintiff filed a chamber summons seeking consolidation of two actions, one of which was the present action.  This application was ultimately dismissed, but a solicitor for the second defendant appeared on 13 July 2004 and 20 July 2004.

   xii.On 20 July 2004 Mr Bourke, when he was at court for the plaintiff's consolidation application, informed the plaintiff's and first defendant's solicitors that the second defendant intended to apply to have his unconditional appearance set aside.

   xiiiOn 26 July 2004 the first defendant's solicitors wrote to the second defendant's solicitors informing them that the first defendant would oppose the second defendant's application to have his appearance set aside.

   xiv.On 17 August 2004 a solicitor employed by the second defendant's solicitors appeared before a deputy registrar in relation to the plaintiff's consolidation application.  The application was dismissed at the plaintiff's request.

   xv.On 18 August 2004 the plaintiff's solicitors wrote to the second defendant's solicitors requiring the second defendant to file a defence and provide discovery.

   xvi.On 27 August 2004 Mr Bourke wrote to the plaintiff's solicitors informing them of the second defendant's intention to bring an application to set aside the unconditional appearance.

   xvii.On 28 September 2004 the plaintiff filed a chamber summons seeking, amongst other things, an order that the second defendant file and serve a defence within seven days.

   xviii.On 5 October 2004 the second defendant filed his application for leave to withdraw his unconditional appearance.

   xix.On 3 November 2004 the first defendant filed a notice addressed to the second defendant claiming contribution and indemnity in the event that the plaintiff's action against the first defendant succeeded.

   xx.On 5 November 2004 the second defendant's application for leave to withdraw his unconditional appearance was heard by the learned deputy registrar.

   xxi.On 16 November 2004 the first defendant filed a chamber summons for directions with respect to the contribution indemnity proceedings.

   xxii.On 29 November 2004 the chamber summons for directions came before a deputy registrar.  The second defendant's solicitors appeared on that day.

   xxiii.On 10 December 2004 the second defendant's application to withdraw his unconditional appearance was dismissed.

Irregularities relating to the writ

1. It is not in dispute that as at the date the writ and the statement of claim were served on the second defendant in the United Kingdom:

   (a)the plaintiff had not obtained the leave of the court to issue a writ for service outside of the jurisdiction as required by O 5 r 9 of the Rules of the Supreme Court 1971 (RSC);

   (b)the plaintiff had not obtained leave to serve the writ (or more properly notice of the writ) outside of the jurisdiction contrary to O 10 r 1 and r 3 RSC; and

   (c)the plaintiff failed to renew the validity of the writ after 12 months had elapsed from its date of issue contrary to O 7 r 1 RSC.

2. As to (a), the evidence before me is that it is likely the plaintiff was unaware that the second defendant had left the jurisdiction at the time that the writ was issued, and may well have not contravened O 5 r 9 RSC. I will proceed to determine this appeal on the basis that the plaintiff did not have to obtain leave of the court to issue the writ outside of the jurisdiction.

3. Failure by the plaintiff to obtain a grant of leave to serve a notice of the writ out of the jurisdiction and to extend the validity of the writ are serious irregularities.  The rules requiring a grant of leave to serve a writ out of a jurisdiction are not mere procedural provisions.  They confer jurisdiction on the court.  The rules are designed to ensure that the court properly supervises that jurisdiction:  Kent v Lechmere Financial Corp [2002] WASC 75 per Pullin J at [5].

4. Failure to extend the validity of the writ is particularly undesirable in circumstances, such as in this case, when the writ is issued just prior to the expiry of the limitation period, and then service is delayed.  Ipp J put it this way in Brealey v Board of Management Royal Perth Hospital (1999) 21 WAR 79 at 89 :

   "It is undesirable to allow a plaintiff to issue a writ before the expiry of a limitation period and then to delay service for an indefinite period.  Lengthy delays cause difficulties in the ascertainment of the truth.  It is unfair to require potential defendants to contemplate potential litigation indefinitely.  The unfairness stems from the uncertainty and concomitant financial and other burdens that would be the consequence."

5. Service out of the jurisdiction of a writ which is stale and has not attracted the leave of the court is invalid. Both defects could have been remedied by resorting to O 2 r 1 RSC. This proposition is beyond dispute with respect to the service of stale writ: Brealey v Board of Management Royal Perth Hospital and has been assumed to apply to non‑compliance with O 10 r 1: Kent v Lechmere Financial Corp at 23. At no stage has the plaintiff sought to remedy these irregularities.

6. The second defendant, once served with the writ on 16 March 2004 had the right to object to service of the writ.  The usual procedure would have been for the second defendant to file a conditional appearance:  O 12 r 6 SCR and then apply to set aside service.  Unfortunately for the second defendant, that did not happen.  Instead, an unconditional appearance was filed on behalf of the second defendant.

Circumstances surrounding the filing of the unconditional appearance

1. In his affidavit sworn 15 February 2005, Mr Bourke explained the circumstances surrounding the filing of the unconditional appearance in the following terms.  I hasten to add that this evidence was not before the learned deputy registrar:

   "11.I cannot recall the exact circumstances in which a unconditional appearance was entered.  However, even though I considered that it was likely that the Plaintiff had extending the validity of the Writ and obtained leave to serve the Writ out of the jurisdiction, I was also aware that there was a possibility that they had not.  I would not have intended to waive the Second Defendant's right to contest the validity of service the Writ by entering an unconditional appearance.  It is certainly the case that I did not advise my client to waive his right to contest the validity of service of the Writ nor was I given instructions to do so.

   12.I can only assume that an unconditional appearance was entered because:

   (a)I mistakenly assumed that the Plaintiff's solicitors had extended the validity of the Writ and sought leave to serve that Writ outside the jurisdiction and therefore service was no longer a live issue; or

   (b)An unconditional, as opposed to a conditional appearance, was entered either due to an administrative error, an error on my part or a combination of the two.

   I did not at any time deliberately intend to waive my irregularity by filing the appearance in this matter."

2. Generally, the filing of an unconditional appearance is a submission to the jurisdiction of the court, and is a waiver of irregularity such as the manner of service:  Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529 at 539. Unless the court grants leave to the second defendant to withdraw the unconditional appearance pursuant to O 23 r 1 RSC, the effect of the unconditional appearance would be to prevent the second defendant from objecting to service of the writ. Plainly, the filing of the unconditional appearance on behalf of the second defendant was a serious mistake by his solicitors. Mr Bourke's explanation displays, at the very least, a considerable degree of carelessness. However, what in my mind is particularly significant in this case, is that the second defendant himself did not give instructions to his solicitors to waive his right to contest the validity of service of the writ. In other words, his solicitors acted without his instructions.

The law with respect to an application to withdraw an appearance

1. Order 23 r 1 RSC is in the following terms:

   "A party who has entered an appearance in an action may withdraw the appearance at any time with the leave of the court".

2. The plain words of the rule provide the court with a complete discretion.  Having said this, the discretion must be exercised judicially and with caution:  Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] 1 QB 368 per Mustill J at 377. The discretion is not limited to circumstances where there has been a mistake of some kind, although the existence of a mistake is relevant to the exercise of the discretion. Each case has to be looked at on its own particular facts: Firth v John Mowlem & Co Ltd [1978] 3 All ER 331 per Megaw J 334 – 335.

3. The second defendant's counsel, Mr Quinlan, submitted that I should exercise my discretion to allow the unconditional appearance to be withdrawn.  Further, he submitted that I should set aside the writ itself, insofar as it relates to the second defendant.  Both the plaintiff and the first defendant submit that I should refuse the second defendant's applications.

4. Mr Quinlan submitted that had an application been made to set service aside, it would have inevitably succeeded.  He further submitted that the second defendant would have successfully resisted any application brought by the plaintiff to remedy the writ's irregularities.  Mr Quinlan makes the last mentioned submission on the basis that the second defendant had an accrued right of limitation:  Kleinwort Benson Ltd v Barbrak [1987] AC 597 at 616, and that the delay in issuing the writ in the first place, coupled with the time which has elapsed since the issue of the writ has seriously prejudiced the second defendant in the conduct of his case.

5. The plaintiff and the first defendant, through their counsel, Mr Melville and Mr Bristol submitted, in effect, that the second defendant was bound by the conduct of his solicitors, and that the proceedings have become protracted and especially in light of the contribution and indemnity notice have just gone too far.  Both Mr Melville and Mr Bristol placed considerable emphasis in the existence of the contribution and indemnity notice.  Both submitted that the plaintiff would have to appear at those proceedings which would cover the same factual issues raised by the plaintiff in his statement of claim.

Resolution of the competing arguments

1. This is a case where both parties have made serious procedural mistakes.  However, the resolution of this appeal is not to be determined by deciding which parties mistake was worse.  It is the second defendant who seeks to be relieved of his solicitor's mistake, and it is the second defendant who bears the onus of proving that the court should exercise a discretion to allow him to withdraw his unconditional appearance.

2. I have carefully considered the various competing arguments raised by counsel.  I am mindful of the existence of the indemnity and contribution proceedings.  However, those proceedings may be resolved without the need for a trial.  They do not involve the plaintiff.  I have also reflected on the question of the protracted nature of the proceedings.  Without doubt, the proceedings have become protracted.  The cause of action arose in September and October 1995 yet the writ did not issue until 2001.  Even then service on the first defendant did not occur until September 2002 and the second defendant was not purportedly served until March 2004.  This case has been conducted in such a way by the plaintiff that it would be wrong for me to punish the second defendant for any delay in the proceedings.

3. In my opinion the second defendant should be given leave to withdraw his unconditional appearance.  The factor which is decisive in my decision is that the unconditional appearance was filed as a result of a mistake and not as a result of the second defendant's instructions.  There is nothing in the evidence before me which suggests that a deliberate decision was made by the second defendant to waive his right to contest the validity of service of the writ.  Accordingly, I am prepared to allow the appeal to the extent that I will make an order giving the second defendant leave to withdraw its unconditional appearance.  It follows from this that I should set aside the deputy registrar's orders refusing the second defendant's application to withdraw his application and requiring him to file a defence.

4. However, I am not prepared to make an order setting aside the writ as against the second defendant.  The effect of such an order would be to, in effect, end the proceedings as against the second defendant.  This is because the plaintiff's claim as against the second defendant would now be statute barred, and any new writ he issued would be met with a limitation defence.

5. By not making an order setting aside the writ insofar as it relates to the second defendant, the plaintiff will now have the opportunity to apply to the court pursuant to O 2 r 1 SCR to set aside the irregularities relating to the writ. I do not accept Mr Quinlan's submission that a court would inevitably refuse any such application. The plaintiff or his solicitors will have to put before the court the reasons for the failure to comply with the Rules relating to extending the validity of the writ and obtaining leave to serve a notice of the writ out of the jurisdiction. The second defendant will be able to put before the court whatever matters he believes are appropriate to such an application and the court will then deal with the matter on the merits.

Orders

1. I propose, subject to hearing from counsel, to make the following orders:

   1.The second defendant's appeal is allowed in part.

   2.Orders 1 and 3 of Deputy Registrar Harman's order made on 10 December 2004 are set aside.

   3.The second defendant have leave to withdraw the appearance filed 22 March 2004.

2. I will hear from counsel as to costs of this appeal and the proceedings before the learned deputy registrar.