Jakovljevic v L & B Doslov - [2000] WASCA 131

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: JAKOVLJEVIC -v- L & B DOSLOV [2000] WASCA 131

CORAM: KENNEDY J
ANDERSON J
STEYTLER J

HEARD: 4 FEBRUARY 2000

DELIVERED : 11 MAY 2000

FILE NO/S: FUL 109 of 1999

BETWEEN: BOZO JAKOVLJEVIC
Appellant (Plaintiff)
AND
L & B DOSLOV
Respondent (Defendant)
NATIONAL EMPLOYERS' MUTUAL GENERAL INSURANCE ASSOCIATION LTD (IN LIQ)
Third Party

Catchwords:

Practice and procedure - Dismissal of action for want of prosecution - Principles to be applied - Inordinate delay without adequate explanation - Prejudice to the defendant - Dismissal of action for want of prosecution not interfered with on appeal

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Appellant (Plaintiff)        :     Mr R E Birmingham QC
Respondent (Defendant) :     Mr A A Jenshel
Third Party  :     No appearance

Solicitors:

Appellant (Plaintiff)        :     Anthony Torre & Monaco
Respondent (Defendant) :     McDonald & Sutherland
Third Party  :     No appearance

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

Birkett v James [1978] AC 297
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998
Hughes v Gales (1995) 14 WAR 434
Lewandowski v Lovell (1994) 11 WAR 124
Roebuck v Mungovin [1994] 2 AC 224
Stollznow v Calvert [1980] 2 NSWLR 749
Ulowski v Miller [1968] SASR 277

Case(s) also cited:

Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229
Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621
Bourke v Kecskes [1967] VR 894
Commonwealth of Australia v Dale, unreported; SCt of WA (A/Master Johnston); Library No 960508; 12 September 1996
Concrete Constructions Group Pty Ltd v McNamara (1990) 70 LGRA 241
Duncan v Lowenthal [1969] VR 180
Gronow v Gronow (1979) 144 CLR 513
House v The King (1936) 55 CLR 499
Instrumatic Ltd v Supabrase Ltd [1969] 1 WLR 519
Levi v Stirling Brass Founders Pty Ltd (1997) 36 ATR 290
Louth v Diprose (1992) 175 CLR 621
Lovell v Lovell (1950) 81 CLR 513
Mace v Murray (1955) 92 CLR 370
McKenna v McKenna [1984] VR 665
Norbis v Norbis (1986) 161 CLR 513
Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1980) 44 FLR 88
R v Lawrence [1982] AC 510
Slade & Kempton (Jewellery) Ltd v N Kayman Ltd [1969] 1 WLR 1285
Strange v Square Gold Minerals Ltd, unreported; SCt of WA (Master Staples); Library No 7354; 7 November 1988
Vidler v Merit Engineering Pty Ltd (1987) 86 FLR 213
Wan v Sweetman, unreported; SCt of WA (A/Master Chapman); Library No 950517; 29 August 1995
Zimmer Orthopaedic Ltd v Zimmer Manufacturing Co [1968] 2 All ER 309

KENNEDY J: For the reasons to be given by Steytler J, I would dismiss this appeal.
ANDERSON J: I have had the advantage of reading in draft the reasons for judgment of Steytler J and I agree with them. There is nothing I can usefully add. I, too, would dismiss the appeal.
STEYTLER J: This is an appeal against the decision of a Judge of the District Court of Western Australia whereby his Honour, on a successful appeal from the decision of a Deputy Registrar of that court, dismissed the appellant's claim against the respondent firm for want of prosecution.
The action is one for damages for personal injuries arising out of alleged negligence and breach of contract on the part of the respondent firm. The appellant was a labourer and painter. On 7 May 1985 the respondent firm engaged him to repair the roof of a shed in Kununurra. He slipped on a rotten sheet of metal and seriously injured his left hand and left hip. He returned to work about a year after the accident. However in August or September 1990 he suffered a seizure which was related to the damage to his hip. He has been unable to work since.
The writ was issued on 30 April 1991, almost six years after the accident and some seven or eight months after the seizure which was suffered by the appellant. The writ was served on the State Government Insurance Commission ("the Commission") which was thought to be the respondent firm's insurer. However nothing was done while it conducted enquiries. On 19 September 1991 the Commission informed the appellant that it declined to indemnify the respondent firm (a partnership operated by Mr Lazo Doslov and Mrs Bozana Doslov) and returned the writ. By letter dated 14 November 1991 the Commission suggested to the appellant's solicitors that the writ be forwarded on to the respondent firm's public liability insurers.
Nothing happened until August 1992 when the appellant applied, successfully, for an extension of the period within which to serve the writ. It was served on the respondent firm in about October 1992, some 18 months after it was issued and some seven and a half years after the accident.
On 10 November 1992 the respondent firm entered an appearance but nothing much appears to have happened until the following January. Then, by letter dated 25 January 1993, the appellant's solicitors told the respondent firm's solicitors that the appellant hoped to settle the matter out

of court. By letter dated 4 February 1993 the respondent firm's solicitors told the appellant's solicitors that the respondent firm's insurer was, in its opinion, liable to indemnify it in relation to the appellant's injury as the appellant had, at all material times, been its employee. However, they said, the insurer had denied liability. They asked the appellant's solicitors to supply them with information to assist them in making out their claim against the insurer. Correspondence was thereafter exchanged in that respect.

However on 8 June 1993 the insurer's solicitors wrote to the respondent firm's solicitors saying that the insurer denied liability. On the following day the respondent firm's solicitors informed the appellant's solicitors accordingly and said that they intended to commence third party proceedings against the insurer.
On 18 August 1993 the respondent firm filed its defence (dated 12 August 1993) and on the same day it issued third party proceedings. However these proceedings were served on the Commission and not on the respondent firm's insurer which had, by then, gone into liquidation.
The appellant filed its reply to the defence on 12 October 1993.
Thereafter nothing much happened for a considerable period of time. At some time during 1994 the action was transferred from the District Court in Geraldton to that in Perth. The appellant also changed solicitors. On 4 August 1995 there was an informal conference between the parties and, on the same day, the appellant applied for leave to amend his statement of claim. Nothing else happened until 15 December 1995 upon which date the appellant obtained leave accordingly. His solicitors then wrote to the respondent firm's solicitors on a number of occasions asking whether they intended to file an amended defence. They eventually responded on 6 February 1996, asking the appellant's solicitors not to take any further action without contacting them and explaining that they were waiting for the solicitors for the third party to respond to them.
The solicitors for the third party also wrote to the appellant's solicitors in early February 1996. They said that they were investigating whether or not to indemnify the respondent firm and asked for more time. They were given 14 days.
However nothing much seems to have happened until 25 March 1996 when the appellant's solicitors wrote to the respondent firm's solicitors asking if there was any reason why the matter should not be entered for trial. Then, on 10 April 1996, the appellant's solicitors filed a chamber summons for directions. The respondent firm's solicitors having failed to attend the ensuing hearing it was adjourned until 26 April 1996. Once again the respondent firm's solicitors failed to attend. The summons was adjourned for a further 21 days.
On 26 April 1996 the Commission informed the respondent firm's solicitors that it had been wrongly joined as a third party and that the respondent firm's insurer should have been joined. Between 26 April 1996 and 26 July 1996 the appellant's solicitors attempted to get the respondent firm to progress the third party proceedings. The summons for directions came on again on 17 May 1996. This time the respondent firm's solicitors attended but the summons was adjourned sine die upon the basis that the respondent firm would forthwith commence third party proceedings against its insurer.
In late July 1996 (and not September 1996 as found by the learned Judge below) leave to commence fresh third party proceedings was given. The appellant's solicitors attempted to push things along and, in October 1996, the respondent firm issued a summons for directions. This was heard on 23 October 1996. The Registrar directed the respondent firm to file and serve its statement of claim in the third party proceedings against its insurer within 14 days and that the third party should file its defence thereto within 14 days thereafter.
In fact the third party did not file its defence until 21 January 1997.
Apart from the fact that the appellant changed solicitors for a second time in March 1997 nothing much happened thereafter until 16 June 1997 when the appellant's solicitors asked the respondent firm's solicitors to provide copies of discovered documents (an informal list having been provided in May 1997) and to provide them with a list of the discoverable documents in the third party proceedings. They said that they wanted to enter the matter for trial. These requests were not responded to and they were repeated by letters dated 25 September 1997 and 17 October 1997.
On 26 September 1997 Mr Doslov was diagnosed with terminal cancer. He died on 12 December 1997.
So far as the action is concerned, nothing appears to have happened between 17 October 1997 and 28 January 1998 when the appellant's solicitors attempted, unsuccessfully, to telephone the solicitors for the respondent firm. By letter dated 29 January 1998 the appellant's solicitors informed the respondent firm's solicitors that they intended to enter the matter for trial on 5 February 1998. However they did not do so. Instead they wrote, again, to the respondent firm's solicitors on 14 April 1998 saying that they proposed to enter the matter for trial.
The respondent firm's solicitors were, at that time, endeavouring to obtain instructions from the executors of Mr Doslov's estate. On 30 April 1998 they informed the appellant's solicitors that Mr Doslov had died and that their retainer had consequently terminated. In the same letter they reminded the appellant's solicitors that although the appellant had obtained leave to amend his statement of claim on 15 December 1995 he had never done so. He ultimately did so on 2 July 1998.
On 26 August 1998, the appellant issued a further summons for directions. This was heard on 7 October 1998 and adjourned at the respondent firm's solicitors' request (presumably because it was then still awaiting confirmation of its instructions).
On 28 October 1998 the respondent firm's solicitors obtained instructions to act on behalf of the executor of Mr Doslov's estate. I should mention, in this respect, that the executor has not been joined as a party to the proceedings. However no point has been taken in this respect.
On 4 November 1998 the respondent firm applied to have the action dismissed for want of prosecution. Its application was supported by affidavit evidence to the effect that Mr Doslov was the only person who knew the circumstances of the accident and who knew of the conditions on which the appellant had been employed by the respondent firm. The application was dismissed by a Deputy Registrar of the District Court on 4 February 1999 and the respondent firm appealed to a Judge of the District Court.
The learned Judge below, in the course of his reasons for decision on the appeal, referred, inter alia, to the case of Lewandowski v Lovell (1994) 11 WAR 124 at 133 where Murray J relied (with the concurrence, in this respect, of Kennedy and White JJ) upon the case of Birkett v James [1978] AC 297 at 318 in which Lord Diplock had said, of the power to dismiss an action for want of prosecution, that:
"The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, eg, disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party."
His Honour found that there had been inordinate delay in the prosecution of the proceedings. He referred, in particular, to four separate periods of delay. The first was the period of almost six years between the time of the appellant's injury and the issue of the writ. The second was the delay of 18 months between the issue of the writ and its service on the respondent firm. The third was the period of delay between 12 October 1993, when the appellant filed his reply, and 15 December 1995, when he obtained leave to amend his statement of claim. The fourth was the delay between 15 December 1995 and 2 July 1998, upon which date the amended statement of claim was filed. In addition his Honour said that, while there was correspondence in 1996 and 1997 which showed some inactivity on the part of the respondent firm, there was no reason why a chamber summons for directions should not have been filed in 1993 and appropriate orders made. Instead, he said, it was filed as late as 10 April 1996 and yet no orders had been made.
The learned Judge below found that the appellant had not given any satisfactory explanation for these delays and that Mrs Doslov has been seriously disadvantaged as a consequence of them. He consequently allowed the appeal and dismissed the appellant's action.
The appellant raises three grounds of appeal.
The first is that his Honour was in error in finding that there had been inordinate delay and that it had not been satisfactorily explained when his finding "was against the evidence and the weight of evidence". The gravamen of this ground, as developed in argument, was that the learned Judge below should have found that the delay had adequately been explained and that it consequently could not be said to be inexcusable. The second ground is to the effect that the learned Judge below erred in finding that the respondent was seriously prejudiced by the delay when this was not made out on the evidence. The third ground is essentially to the effect that the learned Judge should have found that much of the delay was ascribable to the conduct of the third party proceedings and that the appellant was reliant upon the respondent firm's conduct of those proceedings before he could list the matter for trial.
I will deal, first, with the first and third of those grounds, it being convenient to deal with those grounds together.
There is no doubt that it was open to the learned Judge below to conclude that the delay had been inordinate. Some thirteen and a half years had expired between the date of the accident and the date of the application to dismiss the action for want of prosecution. Some seven and a half years had by then expired since the issue of the writ. While it is true, as was pointed out by Lord Diplock in Birkett v James, above, at 322, that time elapsed before the issue of a writ within the limitation period cannot of itself constitute inordinate delay, a "late start makes it the more incumbent upon the plaintiff to proceed with all due speed". His Lordship also there said (ibid) that "a pace which might have been excusable if the action had been started sooner may be inexcusable in the light of the time that has already passed before the writ was issued". (See also Lewandowski v Lovell, above, at 134).
It seems to me that it was open to his Honour to find, as he did, that there was no adequate explanation for the delays leading to the period of seven and a half years which elapsed between the issue of the writ and the bringing of the application.
As to the delay between the issue of the writ and its service on the respondent firm it seems, from the affidavit evidence, that the appellant knew, as early as 24 July 1991, that the Commission might not be the proper defendant. In circumstances in which there had been a delay of almost six years before the issue of the writ the appellant was, as Lord Diplock has said, obliged "to proceed with all due speed". He plainly did not do so. The delay of about 18 months between the issue of the writ and its service on the respondent firm included a delay of more than a year between the time at which the Commission declined to indemnify the respondent firm and the date of service of the writ upon that firm. There is no adequate explanation for this delay.
While it is true that the remaining periods of delay were contributed to by the tardiness of the third party proceedings the authorities make it plain that inaction by a defendant does not of itself justify delay on the part of the plaintiff. (See, for example, Birkett v James (above) at 329.) It might be so that "in some cases inaction by a defendant in the face of impending prejudice to him if delay continues may render a later claim of actual prejudice less creditworthy, and the prejudice, if established, a less weighty factor" (Stollznow v Calvert [1980] 2 NSWLR 749 at 753, per Moffitt P) but this does not provide a plaintiff with an excuse for delay on its part. In this case the appellant could, and should, as the learned Judge below found, have taken steps to progress the matter. The Rules provided time limits for the conduct of the third party proceedings and, indeed, directions were given in respect of those proceedings. It was open to the appellant to apply to have them enforced under the threat of judgment if need be or, if relief of that kind was not to be afforded, to apply to have the principal proceedings entered for trial independently of the third party proceedings. The appellant did neither of these things. Moreover, while the appellant submitted that the respondent firm might not have been able to satisfy any judgment which it obtained unless it was successful in the third party proceedings, this provides no justification for the failure to ensure that the third party proceedings proceeded expeditiously or, at least, that the principal proceedings went to trial promptly.
In these circumstances I am not persuaded that the learned Judge below made any error in arriving at his conclusion that the inordinate delays by the appellant in the various stages of the proceedings have not satisfactorily been explained or that he erred in not giving sufficient weight to the delay brought about by the defendant's conduct in the course of the third party proceedings.
As to the second ground of appeal, the learned Judge below found that Mrs Doslov has been seriously prejudiced in her ability to maintain a defence to the action. He said in that respect that, whatever agreement was reached between the appellant and the deceased, she was no party to it and she knew nothing about such matters as pay, hours, conditions of work or equipment which might bear upon the distinction between employees and contractors. That, his Honour said, was a live issue between the respondent firm and the third party. The third party would, he said, defend the third party proceedings upon the basis that there was no insurance cover.
His Honour also said that Mr Doslov was the only person who could have presented evidence in defence of the appellant's claim and that his widow was consequently "most seriously disadvantaged by the absence of her late husband's evidence".

It seems to me that it was open to the learned Judge below to reach the conclusions at which he arrived.
There was, before him, uncontradicted affidavit evidence to the effect that the respondent firm was operated by Mr Doslov exclusively. The consequence of that, so far as the claim in negligence is concerned, was that Mr Doslov was the only person who could give first hand evidence in respect of the respondent firm's knowledge of relevant circumstances at the time of and immediately prior to the accident and, in particular, whether the respondent firm knew or should have known of the risk of injury to the appellant. It is noteworthy, in this respect, that the appellant, in par 15 of his amended statement of claim, alleges that the respondent firm was guilty of negligence in, inter alia, failing to instruct him adequately or at all as regards the dangers of carrying out the work, in instructing the appellant to perform the work without ensuring the stability of the roof, in failing adequately to supervise the appellant and in exposing him to a risk of injury of which the respondent firm knew or ought to have known. The respondent firm denies these allegations of negligence in its defence.
Also, so far as the third party proceedings are concerned, it is apparent, as the learned Judge below pointed out, that Mr Doslov would have been in the best position to give evidence as regards the terms upon which the appellant was engaged by the respondent firm. While it is true, in this respect, as counsel for the appellant pointed out, that the respondent's firm's solicitors contended, in correspondence with the appellant's solicitors, that the appellant was an employee of the respondent firm and that the appellant did not dispute this, the fact is that this remains a critical issue in the third party proceedings with the third party having denied liability, inter alia, upon the basis that the respondent firm was not entitled to be indemnified under the policy of insurance because the appellant was engaged by the respondent firm "as a contractor under a contract for service" (par 7 of its defence). Also, while counsel for the appellant said that the appellant could himself give evidence as to the nature of his employment contract, there is nothing to say that this would accord, in all respects, with that which might have been given by Mr Doslov. It is also noteworthy in this respect that the appellant has alleged, in par 3A of his amended statement of claim, that he was "employed by or alternatively retained by" the respondent firm "as a Contractor".
The appellant sought to contend that any prejudice was a product of the respondent's failure to obtain timeous written statements and to maintain or keep adequate records or other documents relating to its defence. I am unable to accept that this is so. Statements or records of that kind, even if they are available (and, it must be said, there was little evidence in this respect), are unlikely to be an adequate substitute for oral testimony in a case of this nature. It is impracticable, apart from anything else, to assume that the respondent firm should have been able to anticipate everything which might be said against it by the appellant and, for that matter, the third party. Moreover the loss of documents, if any have been lost, was itself made more likely by reason of the delay. It would be difficult, now, for Mrs Doslov to know what, if any, documents might have been lost or misplaced.
It is also apposite to quote the following remarks of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551:
"The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates' (R v Lawrence [1982] AC 510 at 517, per Lord Hailsham of St Marylebone LC). 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 anyone else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo (1972) 407 US 514 at 532, '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. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose."
I should also mention that, in Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998, Parker J has said that there may well be circumstances where delay of itself might lead to an inference of serious prejudice. (See also Hughes v Gales (1995) 14 WAR 434 and Ulowski v Miller [1968] SASR 277). This case seems to me to be one which falls into that category.
Counsel for the appellant also relied upon the fact (deposed to by the appellant) that, had the appellant been told of Mr Doslov's illness, he would have "co‑operated ... in having Mr Doslov's evidence heard on commission prior to his death" but that no such request was made of him. However there was only a relatively short interval between the date upon which Mr Doslov was diagnosed with terminal cancer (26 September 1997) and the date of his death (12 December 1997). I do not consider that either he or Mrs Doslov can fairly be criticised for failing to give any priority to the action during that brief period.
That Mrs Doslov has, in the circumstances to which I have referred, been seriously prejudiced by the appellant's delays cannot, I think, sensibly be doubted. While it is true, as I have said above, that this prejudice must be looked at in the light of the respondent firm's own inaction, I am unable to accept that this, when considered in the whole of the circumstances to which I have referred, was such as should have led the learned Judge below to conclude that it rendered the respondents' claim of prejudice so unmeritorious as to warrant the refusal of its application or that the prejudice suffered by the respondents should, for this reason, be found to be outweighed by that resulting to the appellant from the dismissal of the action. The respondent firm's delays were relatively minor when compared with those of the appellant.
I should add that, while there is authority for the proposition that, where there has been inordinate and inexcusable delay by a plaintiff which has prejudiced the defendant, subsequent conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action is a relevant factor to be taken into account in the exercise of the discretion whether or not to strike out the claim (see Roebuck v Mungovin [1994] 2 AC 224 at 236 ‑ 237), the weight to be attached to such conduct will depend upon all of the circumstances (Roebuck v Mungovin, above, ibid). Nothing has, in this case, been pointed to which, in my opinion, should have led the learned Judge below to conclude that there was anything in the respondent firm's conduct, after it had been prejudiced by the inordinate and inexcusable delay of the appellant, which should result in an unfavourable exercise of his discretion.
It follows, in my opinion, that no error in the exercise of his Honour's discretion has been shown.
I would consequently dismiss the appeal.