Jet World Holdings Pty Ltd v Proplas Industries Pty Ltd - [2011] WADC 163

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: JET WORLD HOLDINGS PTY LTD -v- PROPLAS INDUSTRIES PTY LTD [2011] WADC 163

CORAM: BOWDEN DCJ

HEARD: 3 OCTOBER 2011

DELIVERED : 6 OCTOBER 2011

FILE NO/S: CIV 2801 of 2010

BETWEEN: JET WORLD HOLDINGS PTY LTD
Plaintiff
AND
PROPLAS INDUSTRIES PTY LTD
First Defendant
BRENDAN RAYMOND LEPPARD
Second Defendant

Catchwords:

Appeal from deputy registrar - Non-compliance with springing order

Legislation:

Nil

Result:

Judgment for plaintiff against first defendant

Representation:

Counsel:

Plaintiff:     Mr T Clavey
First Defendant             :     Mr S Smith
Second Defendant         :     Mr S Smith

Solicitors:

Plaintiff:     Clavey Legal
First Defendant             :     Simon Smith
Second Defendant         :     Simon Smith

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

Aon Risk Services Australia Ltd v Australia National University [2009] HCA 27
Hancock Family Memorial Foundation Ltd v Fieldhouse [No 3] [2010] WASC 223
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Magenta Nominees Pty Ltd v Bonini [1999] WASC 88
Mariotti v Wanneroo North Pty Ltd [2008] WASCA 243
Monteleone v Owners of the Old Soap Factory [2007] WASCA 79

BOWDEN DCJ: On 1 July 2011 the plaintiff issued a chamber summons seeking orders that the first and second defendants' defence be struck out and judgment entered for the plaintiff because of the failure of the defendants to comply with a springing order made on 22 June 2011.
That chamber summons was heard by a deputy registrar on 15 July 2011, who made the following orders:
1.The first defendant's answers to requests 3.3, 3.4 and 3.5 of the plaintiff's request for further and better particulars dated 29 June 2011 be struck out.
2.By 4.00 pm on 22 July 2011, the first defendant do file and serve on the plaintiff its response to requests 3.3, 3.4 and 3.5 of the plaintiff's request for further and better particulars of its defence.
3.The application be otherwise dismissed.
The plaintiff appeals from that decision.

Nature of the appeal

An appeal from a decision of a deputy registrar is a hearing de novo.
It is not necessary for the plaintiff to establish an appealable error on the part of the deputy registrar.
I am hearing the chamber summons the subject of the appeal afresh: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28.

The nature of the plaintiff's claim

The plaintiff's claim against the first and second defendants alleges misleading and deceptive conduct in contravention of s 82 of the then Trade Practices Act 1974 (Cth).
In summary, the plaintiff alleges the defendants made various representations to the plaintiff which were relied upon by the plaintiff when it entered into an exclusive contractor agreement in relation to the recycling of materials.
In general terms, the first defendant says it made some of the representations alleged and denies making others.
The second defendant denies the representations were made and says that if they were made, they were made by the first defendant.

The interlocutory history of the matter

It is not necessary to recite the complete interlocutory history in this matter.
However it is relevant to note that the springing order of 22 June 2011 is the second such order made against the defendants.
The first springing order was made on 16 December 2010 in circumstances where the court had on 12 November 2010 ordered, inter alia, that by 22 November 2010 the defendants' file and serve their defence and that by 17 December 2010, all parties provide discovery.
Neither the plaintiff nor defendants complied with those orders.
The plaintiff subsequently issued a chamber summons on 29 November 2010 seeking default judgment based upon the defendants' failure to file their defence and it was at the hearing of that chamber summons on 16 December 2010 that a springing order in default of the defendants' filing their defence by the close of business on 24 December 2010 was made.
That order was complied with by the defendants' filing their defence on the due date.

The springing order of 22 June 2011

The springing order of the 22 June 2011 was made in the following circumstances.
The plaintiff had on 2 February 2011 filed a request that the first and second defendants supply further and better particulars of their defence within 14 days of the service of that request. The defendants did not comply and on 24 March 2011 the plaintiff issued a chamber summons seeking orders that those answers be provided.
On 19 April 2011 the chamber summons was heard and, inter alia, the first defendant was ordered to provide answers to the plaintiff's request for further and better particulars filed and served on 2 February 2011.
However before that date the court, at a special appointment pre‑trial conference held on 12 April 2011, ordered, inter alia, that by 29 April 2011, each party provide to the other their list of discoverable documents.
The next significant event was that a further directions hearing was held on 22 June 2011.
By that date, neither defendants had provided discovery as required by the order of 12 April 2011 and the first defendant had not provided answers to the plaintiff's request for further and better particulars as required by the order of 19 April 2011.
At the directions hearing of 22 June 2011, the springing order was made in terms which provided that unless within seven days the first defendant provided its list of discoverable documents as ordered on 12 April 2011, and provide answers to the plaintiff's request for further and better particulars filed on 2 February 2011 as ordered on 19 April 2011, judgment be entered for the plaintiff against the first defendant and its defence be struck out.
Further, the order provided that unless within seven days, the second defendant provide its list of discoverable documents as ordered on 12 April 2011, judgment be entered for the plaintiff against the second defendant and its defence be struck out.
On the last day for compliance with that springing order, 29 June 2011, the first defendant purported to comply with the order by providing its answers to requests for further and better particulars and the first and second defendants purported to comply with the order by providing its list of discoverable documents.
On 1 July 2011 the plaintiff issued a chamber summons seeking orders that the first and second defendants' defence be struck out and judgment entered in their favour because of the defendants' failure to comply with the 22 June 2011 springing order.
I am now required to determine that chamber summons.

The submissions and my findings

The plaintiff says notwithstanding the first defendant has filed purported answers to the request for further and better particulars; there is non‑compliance with the court's order because they have not provided answers to all the requests.
They point to request 2 of their request for further and better particulars which provides:
As to paragraphs 5 and 6 of the first defendant's defence, give full particulars to identify …
2.4To the extent that the representations were oral indentify:
(e)when the representations were made;
(f)where the representations were made;
(g)who was present when the representations were made; and
(h)the substance of the conversation in which each and every representation was made.
Paragraphs 5 and 6 of the first defendant's defence provides:
5The first defendant denies paragraph 4.2 of the statement of claim and says further that the first defendant represented to the plaintiff that it would make approximately $100,000 gross profit if the plaintiff worked the plant and equipment eight hours per day for five days per week.
6The first defendant denies paragraph 4.3 of the statement of claim and says further that the first defendant represented to the plaintiff that no more than two employees would be needed to make approximately $100,000 gross profit if both employees worked the plant and equipment eight hours per day for five days of the week.
The first defendant's answer to the request is:
2.2The representations were made as pleaded in the particulars in paragraph 4 of the amended statement of claim.
2.4The first defendant repeats paragraph 2.2 above.
Paragraph 4 of the amended statement of claim pleads, in essence, the date and place of the representation, who was present and that the words were said to the effect of the representation pleaded. That answer can only be interpreted as referring to the representation that the first defendant by pars 5 and 6 of his defence says was made. I consider that the defendant has answered the request.
I reject the plaintiff's submission that the first defendant has failed to answer request 2.4(e), (f), (g) or (h).
Request 3 of the plaintiff's request for further and better particulars provides:
As to paragraph 7 of the first defendant's defence, give full particulars to identify the following.
3.3Identify each and every contract relied on by the first defendant and say whether each contract was written, oral or partly written.
3.4To the extent each contract was written, identify the document or documents recording the terms of the contract.
3.5To the extent that each contract was oral, identify:
(a)with whom the contract was made;
(b)when the contract was made;
(c)who was present during the conversation said to constitute the contract;
(d)the substance of the conversation held in which the contracts were said to be made.
Paragraph 7 of the first defendant's defence pleads the following:
The first defendant denies paragraph 4.4 of the statement of claim and says further that the first defendant represented to the plaintiff that at the point in time the representation was made, the first defendant had contracts to supply the product the plaintiff would produce and there was demand for more product than the plaintiff would be able to produce.
The plaintiff's requests 3.3, 3.4 and 3.5 are directly addressed to the details of the contracts pleaded in par 7 of the defence.
The first defendant's answer to requests 3.3 and 3.4 is 'The first defendant repeats paragraph 3.2 above'.
Paragraph 3.2 of their answers is:
The representations were made as pleaded in the particulars of paragraph 4 of the amended statement of claim.
Clearly these answers refer only to the representations pleaded in par 7 of the defence and not to the contracts pleaded in par 7.
There is therefore no answer provided to requests 3.3 and 3.4.
No answer is provided to request 3.5; it is simply ignored.
I agree with the plaintiff's submission that there is non‑compliance with the order because the first defendant has failed to answer requests 3.3, 3.4 and 3.5.
The first defendant says there has been compliance because they have provided answers to the requests. They says that any defects go only to questions of credibility that may arise at the trial and say as there has been compliance the springing order cannot be activated.
In my opinion, the court is able to look behind the answers provided.
A party simply cannot title a document 'Answers to further and better particulars' and say they have complied with the court's order when an examination of the document's contents show they have not answered the requests.
The court is entitled to look behind the answer provided and see whether or not there has been compliance. To do otherwise would enable court orders to be defeated by a party simply providing nonsense answers whilst heading the document 'Answers to further and better particulars'.
There has been non‑compliance with the springing order by the first defendant because of its failure to answer all the requests for further and better particulars.
Additionally, the plaintiff says there has been non‑compliance with the springing order as the defendants have provided an incomplete affidavit of discoverable documents.
The plaintiff says that the affidavit provided must be considered in light of the issues between the parties.
The plaintiff draws my attention to their amended statement of claim, where it is pleaded that the representation made by the second defendant was that between $100,000 ‑ $150,000 net profit would be made.
The defence says the representation made by the first defendant was that it would be approximately $100,000 gross profit that was made.
The plaintiff says that the pleadings put in issue the questions of gross and net profit and therefore the defendants must discover documents relevant to profit, such as their accounting records.
Further, the plaintiff pleads that the first and second defendants represented that certain equipment and vehicles were fit for the purpose of processing and transporting the plastic materials manufactured. The first defendant pleads that it made such a representation. The second defendant denies that representations were made but says if it was, the first defendant made them.
The plaintiff says that this puts in issue whether the vehicles were in fact licensed and/or roadworthy and there has been no discovery of any licensing papers and the like for vehicles.
The defendants have discovered tax invoices, delivery dockets and goods, receipts between the first defendant and a plastic group, and swear that the original and hard copy bank account statements which were in the possession of the first defendant were either locked at a named premises or had been disposed of by the owner of those premises and electronic copies of account statements of the first defendant were now in the possession of the first defendant's bank and they refused the first defendant access to those accounts.
The plaintiff's submissions assume that proper accounting records have been kept and assumes vehicles exists. The plaintiff has not pointed to any evidence by way of interrogatories, or affidavits which establish those facts.
I do not consider that there is sufficient evidence before me which establish the discovery is defective and therefore I am not satisfied that there has been a failure to comply with the springing order by the defendants insofar as it related to discovery.

Consequences of failure to comply with the springing order

I have found that there has been non‑compliance with the springing order by the first defendant because of its failure to answer the plaintiff's request for further and better particulars filed on 2 February 2011 as ordered by the court on 19 April 2011.
The power of the court to enter judgment for non‑compliance with court orders is to be exercised in such a manner as seems to the court best calculated to do justice in the particular case. It is a power that the court will exercise only with some reluctance because of its serious consequence. However the orders of the court must be obeyed. A point is reached at which a litigant who deliberately and without proper excuse disobeys an order will not be allowed to proceed: Magenta Nominees Pty Ltd v Bonini & Ors [1999] WASC 88 [89] (Wheeler J).
In the exercise of my discretion the appropriate question to ask is 'what does justice, in all its notions or sense of it that are relevant, require in the circumstances of this case?': Hancock Family Memorial Foundation Ltd v Fieldhouse [No 3] [2010] WASC 223 [103], [150] and [166].
The discretion has to be exercised in light of the desire of a court to permit a party to litigate an issue which is fairly arguable regardless of non‑compliance with court procedures and orders and the need for the court to ensure that it protects the integrity of its orders. The court must not encourage a culture of non‑compliance with court orders: Monteleone v Owners of the Old Soap Factory [2007] WASCA 79.
It is also relevant to consider whether there have been repeated failures to comply with court orders and whether those failures are deliberate and unexplained: Mariotti v Wanneroo North Pty Ltd [2008] WASCA 243.
In this regard, the defendant's solicitor, during the hearing of the appeal, attempted to hand to the court what was described as a medical report relevant to the second defendant's psychiatric condition, a copy of which had been provided that morning to the plaintiff's solicitor. This was opposed by the plaintiff.
I rejected the tender of that report.
It is simply not acceptable to hand documents to the court on the morning of a special appointment, unaccompanied by any affidavit and without giving the opposing party sufficient notice to consider its contents.
Ultimately the defendant sought an adjournment, approximately one hour and twenty minutes, into the special appointment to put evidence of the second defendant's mental instability before the court.
I refused the adjournment.
Adjournments are not to be granted merely because they are asked for.
To grant the adjournment would result in further delay and therefore injustice to the plaintiff.
Whilst I accept that case management is not an end in itself and no principle of case management can be allowed to supplement the aim of obtaining justice, it does not seem to me to be just to grant an adjournment in circumstances where the application was made late in the day and where the medical report had been in the possession of the defendants before the hearing commenced and no effort had been made to adduce it into evidence in acceptable form prior to the commencement of the hearing. In those circumstances, I was not prepared to grant the adjournment.
I am aware of the consequences of making the springing order sought by the plaintiff.
As I have indicated, there are a variety of factors to be taken into account including the need to ensure that a party is able to litigate the issues it raises in its pleadings and the need for the court to ensure that its orders are not disregarded.
There is also the need for proper case management to ensure that the court manages its cases efficiently. Those principles were most recently reviewed in Aon Risk Services Australia Ltd v Australia National University [2009] HCA 27 where the High Court commented on the need to maintain public confidence in the administration of justice and recognised that although a party has a right to bring proceedings, there are limits placed on that right.
I am also entitled to consider that although the plaintiff appeals the decision of the deputy registrar of 15 July 2011 dismissing its application, that very decision gave the first defendant a further seven days to file and serve on the plaintiff its response to requests 3.3, 3.4 and 3.5 of the request for further and better particulars, and 11 weeks later that order has still not been complied.
That means that approximately nine months after the request was made (2 February 2011), 5 1/2 months after the court first ordered they be answered (19 April 2011), 3 1/2 months after the springing order was made (22 June 2011), and 11 weeks after another order (15 July 2011) there has still not been full compliance with the orders. The first defendant, on the most favourable interpretation available to it, knew at the latest on 15 July 2011 that it had not fully complied with the request and it has still not done so.
The plaintiff's appeal did not stay the deputy registrar's order and yet the order was still not complied with.
In the circumstances of the case having found that there has been a failure by the first defendant to comply with the springing order and considering all the circumstances of the case and weighing the drastic effect of such an order and the need for cases to be efficiently progressed, judgement ought to be entered against the first defendant.
The orders I propose to make are as follows:
1.The first defendant's defence be struck out and judgment be entered for the plaintiff.
2.The first defendant do pay to the plaintiff forthwith the sum of $110,000.
3.The first defendant do pay interest calculated at the rate of 6% from 21 July 2010 until the date of the judgment pursuant to s 32 of the Supreme Court Act 1935 (WA).
4.The first defendant do pay the plaintiff's cost of the action at first instance to be taxed if not agreed.
5.The first defendant do pay the plaintiff's cost of the appeal to be taxed if not agreed.
6.The matter otherwise be listed for a callover on a date to be fixed.

The plaintiff also sought an order under s 87 of the Trade Practices Act 1974 (Cth) that the contract between the plaintiff and the first defendant has been rescinded.
In light of the Competition and Consumer Act 2010 (Cth), I am not at all satisfied that it is appropriate that I make that order under the Trade Practices Act.
Accordingly, I do give leave to both parties to file and serve on the court by 4.00 pm on 20 October 2011 any further written submissions in connection with the proposed orders and the court's powers to make the further order sought.
Failing the filing of such submissions by that date, I shall make orders 1 ‑ 6 referred to.