London Communique Pty Ltd & Anor v East End Holdings Inc
[2003] WASCA 226
•25 SEPTEMBER 2003
LONDON COMMUNIQUE PTY LTD & ANOR -v- EAST END HOLDINGS INC [2003] WASCA 226
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASCA 226 | |
| THE FULL COURT (WA) | 25/09/2003 | ||
| Case No: | FUL:100/2003 | 19 AUGUST 2003 | |
| Coram: | MALCOLM CJ MCKECHNIE J | 19/08/03 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | LONDON COMMUNIQUE PTY LTD (ACN 009 308 034) LONDON PARTNERS AUSTRALIA PTY LTD (ACN 057 549 925) EAST END HOLDINGS INC |
Catchwords: | Application for leave to appeal Failure to enter the appeal for hearing within time Application deemed to be discontinued No new principles |
Legislation: | Rules of the Supreme Court, O 63A |
Case References: | Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552 Melville v East End Holdings Pty Ltd [2003] WASCA 133 Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185 The State of Queensland v J L Holdings Pty Ltd (1996) 189 CLR 146 Western Australian Planning Commission v Ryan Nominees Pty Ltd & Ors [2003] WASCA 135 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : LONDON COMMUNIQUE PTY LTD & ANOR -v- EAST END HOLDINGS INC [2003] WASCA 226 CORAM : MALCOLM CJ
- MCKECHNIE J
- FUL 101 of 2003
- First Applicant (First Defendant)
LONDON PARTNERS AUSTRALIA PTY LTD (ACN 057 549 925)
Second Applicant (Third Defendant)
AND
EAST END HOLDINGS INC
Respondent (Plaintiff)
Catchwords:
Application for leave to appeal - Failure to enter the appeal for hearing within time - Application deemed to be discontinued - No new principles
(Page 2)
Legislation:
Rules of the Supreme Court, O 63A
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Applicant (First Defendant) : Dr P R MacMillan
Second Applicant (Third Defendant) : Dr P R MacMillan
Respondent (Plaintiff) : Mr S J Penrose
Solicitors:
First Applicant (First Defendant) : Gibson Lyons
Second Applicant (Third Defendant) : Gibson Lyons
Respondent (Plaintiff) : Tottle Partners
Case(s) referred to in judgment(s):
Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552
Melville v East End Holdings Pty Ltd [2003] WASCA 133
Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185
The State of Queensland v J L Holdings Pty Ltd (1996) 189 CLR 146
Western Australian Planning Commission v Ryan Nominees Pty Ltd & Ors [2003] WASCA 135
Case(s) also cited:
Nil
(Page 3)
1 MALCOLM CJ: This was an application by the applicants, namely, the first defendant, London Communique Pty Ltd and the third defendant, London Partners Australia Pty Ltd, for leave to appeal against an order made by Acting Master Dixon on 21 January 2003 dismissing an application for an extension of time within which to appeal against an order made by Master Sanderson in action CIV 2657 of 2001 ("the action") on 3 October 2002. The extension sought was to a date to be fixed by the Court. Orders were also sought that the draft notice of appeal filed stand as the notice of appeal; further service be dispensed with; and that the execution of the final judgment after assessment of damages entered against the first and third defendants be stayed until further order. The application is dated 9 July 2003, some 168 days out of time. Such a delay is extremely gross.
2 The application was accompanied by a draft notice of appeal dated 9 July 2003. In the proposed appeal, the applicant sought orders setting aside the orders made by Acting Master Dixon on 21 January 2003 and that there be substituted orders extending the time for compliance with the order of Registrar Rimmer made on 21 August 2002 be extended to a date to be fixed by the Court. That order was in the following terms:
"Unless within 7 days of service of this order the defendants file and serve a minute of proposed amended defence [of] the defence filed [on] 7 June 2002 be struck out and the [respondent] have leave to move for judgment as claimed in the statement of claim with any damages to be assessed, with the cost of the action to be paid by the defendants be extended until 30 August 2002."
3 The grounds of appeal may be summarised as contending that the refusal of the extension of time was in error because:
(a) the learned Acting Master misdirected himself as to the failure by the solicitors for the applicants to file a Memorandum of Conferral under O 59 r 9 and gave undue weight to a failure by the solicitors for the appellants to file such memorandum; and
(b) the exercise of discretion by the learned Acting Master miscarried in that he failed to consider or give adequate weight to:
(Page 4)
- (i) that the respondent would not suffer substantial prejudice were the order to be granted whilst such prejudice would be suffered by the applicants;
(ii) the second defendant had been granted an extension of time in very similar circumstances;
(iii) the decision by Master Sanderson on 3 October 2002 worked a substantial injustice on the applicants in that it deprived them of the opportunity of pursuing an arguable defence in the action; and
(iv) in all the circumstances the interests of justice required that the applicants be granted the extension of time sought.
4 There was also a second draft notice of appeal by the appellants against the order of Master Sanderson dated 3 October 2002 by which the learned Master ordered that there be no extension of time for the applicants to comply with certain case management directions. In this case, an order is sought that the Master's order be set aside and that in lieu thereof there be orders that:
"1. The time to comply with the Case Management Directions made on 21 August 2002 be extended to 30 August 2002.
2. The judgment against the Appellants (First and Third Defendants) for non-compliance with Case Management Directions made on 3 October 2002 be set aside.
3. In lieu thereof there be directions given for the further conduct of the action between the Respondent (Plaintiff) and the Appellants (First and Third Defendants).
4. The costs of the appeal abide the outcome of the action with such further provision as to costs as the Court considers just."
5 The grounds of appeal for this second appeal contend that the learned Master erred as a matter of fact and law in entering the default judgment against the applicants in the following way:
"(a) The learned Master gave too much weight to the failure of the solicitors for the Appellants to attend the Case Management Conferences in the action.
(Page 5)
- PARTICULARS
(i) The failure to attend Case Management Conferences gave rise to the Registrar making a springing order; and
(ii) The failure to comply with the springing order was unrelated to the failure to appeal [sic appear] at Case Management Conferences and it was unreasonable to infer that the failure of the solicitors for the [applicants] represented a further example of mismanagement by their solicitors.
(b) The learned Master failed to give any or any sufficient weight to the fact that the failure to comply was neither intentional or contumelious;
PARTICULARS
(i) The un-controverted sworn evidence of the solicitor for the [applicants] was that he was under the mistaken belief that service of the orders had not been effected until 23 August 2002;
(ii) Acting on that belief he caused to be drafted and filed the Amended Defence and Counterclaim on 30 August 2002; and
(iii) It was at the time of filing the Amended Defence and Counterclaim that he was advised by the solicitor for the [respondent] that service had been effected on 22 August 2002.
(c) The learned Master's exercise of discretion was manifestly unreasonable in respect of the prejudice suffered by the respondent (plaintiff) as opposed to the prejudice suffered by the [applicants];
PARTICULARS
(i) The respondent (plaintiff) was served with the Amended Defence and Counterclaim one (1) day out of time;
(Page 6)
- (ii) The delay of one (1) day caused none or no significant harm to the respondent …; and
(iii) The refusal to grant the extension sought by the [applicants] deprived them of their right to resist the [applicants'] claim and pursue a fully pleaded counterclaim.
- (d) The learned Master misdirected himself in the exercise of his discretion in that [he] failed to give sufficient weight to the consequences of refusing to grant an extension in circumstances where the [applicants] were in delay by a period of one (1) day only and where the proposed minute of Amended Defence clearly contemplated that the accord and satisfaction plea would be maintained, thereby depriving the [applicants] of an opportunity to present an arguable line of defence, thereby occasioning a substantial injustice to the [applicants]."
6 The application was supported by an affidavit of a Mr V I Melville, a director of the applicant companies, sworn on 9 July 2003. He said he became aware of the default judgment in mid to late October 2002, but was assured by his solicitor, Mr Morton, of the firm of Ely Palmer, that an appeal was on foot and the judgment would be set aside. He was "not told that there was a limited time within which to appeal against the decision of Master Sanderson on 3 October 2002." He was not made aware by Mr Morton or anyone else of the hearing before Acting Master Dixon on 21 January 2003. He did not attend at Court on any occasion until 12 March 2003, when he attended the hearing of an application to set aside a default judgment on 12 March 2003. At that time, the applicants were represented by Mr David Jones, a barrister who had been briefed by the applicants' then solicitors.
7 Mr Melville was subsequently informed by his present solicitor, Mr Timothy Lyons, that on 18 February 2003, an application for leave to appeal against the decision of Acting Master Dixon "was the subject of orders directed at having that appeal entered for hearing." Mr Melville knew nothing about those orders and had not been informed that the appeal was required to be entered within seven days of the date of the order. Mr Melville subsequently attended an examination before Registrar Dixon in the Supreme Court on 16 May 2003. As a result of what he then learned, he sought alternative legal advice.
(Page 7)
8 At the examination before Registrar Dixon, Mr Melville was asked questions about the ability of the applicants to satisfy any judgment obtained against them in the pending action. By a letter dated the same day, Mr Lyons requested Ely Palmer to let him have the relevant files. It was not, however, until late June 2003 that he obtained all the relevant files and documents that were needed. The file relating to the subject action, namely, CIV 2657 of 2001, was not complete, although some additional documents were obtained from the solicitors for the third defendant, London Partners Australia Pty Ltd. As of 3 July 2003, Mr Lyons had not been able to obtain a complete set of documents. He subsequently obtained copies of the necessary documents from the Supreme Court files on 8 July 2003. He did not receive any assistance from the applicants' former solicitors. Mr Melville had been unable to provide him with an accurate description of what had happened. This was apparently as a result of the failure of the applicants' former solicitors to keep Mr Melville informed.
9 It appears that the sequence of relevant events in this matter was that on 2 September 2002, the first and second defendants filed an application to extend time for compliance with a springing order made against them and for leave to strike out the respondent's statement of claim. The springing order had been made by Registrar Rimmer on 21 August 2002. The application sought an extension of time for compliance with the springing order and for the respondent's statement of claim to be struck out. The grounds for that application were:
1. The solicitor[s] for [the] first, second and third defendants were not aware that a copy of the order made by Registrar Rimmer was served on 22 August 2002 and relied upon the copy of the order received from the Court on 23 August 2002.
2. The first, second and third defendants had previously requested the plaintiff to address defects in the statement of claim, but after the matter was settled (as pleaded in the amended defence) no further action was taken by the first, second and third defendants in that regard.
3. As the plaintiff is now seeking to repudiate the settlement of the action, it is imperative that the pleadings in the statement of claim that are deficient are remedied.
10 It was this application which was dismissed by Master Sanderson, which resulted in judgment being entered for the respondent plaintiff by reason of the failure of the applicants to comply with the order by Register
(Page 8)
- Rimmer dated 21 August 2002 to file a defence within the time limited. In his judgment, the learned Master detailed a sorry chapter of defaults by the solicitors for the respondent, Mr Melville, who was the second defendant in the action, but who is not a party to the present appeal. The Master recited a series of failures on behalf of the solicitors for the respondent to comply with a series of deadlines and attend at various hearings, which led to a situation that 10 months after the first status conference there was no satisfactory pleading on foot. The fault clearly lay with the solicitors for the applicants as the learned Master found.
11 In Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185 at [18], Owen and Heenan JJ said that:
"In our view, the following principles should guide the practice relating to springing orders. All of what follows is, of course, subject to any orders that the case manager may make to suit the circumstances of a particular case.
1. If the party against whom the order is made is present in Court, personally or by solicitor or counsel, when the order is made, the party can be taken to have had actual knowledge of the making of the order and of its terms and no special steps need to be taken by a party seeking to enforce the order. In those circumstances there is no objection to the order being framed so that compliance is required by a specified date.
2. If the party against whom the order is made is not present in Court, personally or by solicitor or counsel, when the order is made, the order ought normally to be framed so that the party is required to comply within a specified number of days after the order has been served on the party.
3. In a case to which the preceding paragraph applies, the onus is on the party seeking to rely on the order to serve the order on the party against whom it is made. It should not be left to the Court to bring the orders to the notice of the defaulting party. Where the defaulting party is represented by solicitors and has an address for service that complies with the Rules, service at the address for service in accordance with O 72 r 5 normally would be
(Page 9)
- sufficient. Where the litigant is unrepresented, actual personal service normally would be required."
12 In my view, that approach is entirely correct. Their Honours also noted in par [19] that:
"Under the system which the Registrars currently use, orders made at case management conferences are usually engrossed, signed and given to the parties at the conclusion of the conference. If a party is present and receives a copy of the orders, there can be no question that it has actual notice. Where a party is not present, it is the practice of the Registrars to write to the defaulting party seeking an explanation for the non-attendance and forwarding to it a copy of the orders. That was done in this case. However, that is no substitute for the party in whose favour the order was made itself taking all appropriate steps (including service, if necessary) so as to be in a position to enter judgment if there is non-compliance with the order."
13 In my opinion, it is extremely significant in this case that, despite the lengthy delays which led to the proceedings before Master Sanderson, the applicants failed to apply for leave to appeal against his decision within the time allowed. Master Sanderson's order was made on 3 October 2002. The notice of appeal and application for leave to appeal out of time was not filed until 20 December 2002. At that stage, the time for filing the application for leave had expired on 28 October 2002. There was then a delay of 57 days. The application for an extension of time was heard and dismissed by Acting Master Dixon on 21 January 2003. On 7 February 2003, the applicants lodged a notice of motion for leave to appeal against the order of the Acting Master pursuant to O 63A. On 18 February 2003, the application came before Master Sanderson for directions. The Master made orders granting leave to appeal from the orders of Acting Master Dixon and other consequential orders.
14 In accordance with O 63A r 5(2), the applicants were then required to enter the appeal for hearing within seven days. The failure to enter the appeal for hearing within that time had the effect that it was discontinued pursuant to O 63A r 5(2). There is no jurisdiction to extend time under O 63A r 5(2). As McKechnie J has noted, there may have been some confusion by the applicants' former solicitors regarding what orders had or had not been made by Master Sanderson on 18 February 2003. That issue was clarified by a letter from the applicants' counsel who pointed out that the failure to enter the appeal for hearing within seven days after the
(Page 10)
- direction hearing had the effect that the appeal was deemed to be discontinued.
15 The applicants could then have applied for an extension of time within which to appeal under O 63, but did not do so.
16 What then transpired has been detailed by McKechnie J. I agree with his Honour that when regard is had to the entire conduct of the litigation by the applicants and their solicitors prior to the order of Master Sanderson on 3 October 2002 and their conduct of the matter since that time, the application for leave to appeal should be refused. In my opinion, while the former solicitors for the applicants must bear significant responsibility, the delay has inevitably caused substantial prejudice to the respondent. In all the circumstances, I came to the conclusion that both applications should be refused. It is for these reasons that I joined in making the orders on 19 August 2003.
17 MCKECHNIE J: On 19 August 2003 the Court unanimously dismissed the applications. These are my reasons for joining in that decision.
18 The history of the sorry saga of this litigation is set out in Melville v East End Holdings Pty Ltd [2003] WASCA 133.
19 In that appeal the second defendant was successful in overturning an order by Master Sanderson entering judgment against him.
20 Master Sanderson ordered judgment be entered against the first and third defendants for the same reasons and at the same time as he ordered judgment against the second defendant.
21 Conformably with the decision in Melville v East End Holdings, there are prospects of success if the decision of Master Sanderson was at issue.
22 Amazingly, however, despite the lengthy delays which led to the proceedings before Master Sanderson, the applicants failed to apply for leave to appeal against his decision within the time allowed under the Rules of the Supreme Court.
23 On 3 October 2002 Master Sanderson dismissed the application.
24 An appeal and application for leave to appeal out of time was not filed until 20 December 2002.
(Page 11)
25 That application for leave to appeal was heard by Acting Master Dixon on 21 January 2003. He dismissed the application.
26 On 7 February 2003 the applicants lodged a notice of motion for leave to appeal against the decision of the Acting Master pursuant to O 63A.
27 On 18 February 2003 the application came before Master Sanderson for directions and on that day he made orders granting leave to appeal from the orders of Acting Master Dixon and other consequential orders. Pursuant to O 63A r 5 the applicants were then required to enter the appeal for hearing within 7 days. It was not entered within that time and therefore the appeal was discontinued pursuant to O 63A r 5(2). There is no power to extend time under O 63A(5)(2): Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552 at 557; Western Australian Planning Commission v Ryan Nominees Pty Ltd & Ors [2003] WASCA 135 at [17].
28 Although there may have been some confusion by the applicants' then solicitors as to what orders had or had not been made by Master Sanderson on 18 February 2003, the matter was resolved on 13 March 2003 by a letter from the applicant's counsel who noted that the appeal had lapsed because of O 63A r 5.
29 No action was then taken to seek leave to appeal against the decision of Master Sanderson on 3 October 2002 pursuant to O 63. Significantly, in the course of his letter of advice, counsel noted as follows:
"Also, in discussions with you subsequently, I did make the comment that even if that affidavit had been properly before the Acting Master, it did not give a reason as to why the appeal was not commenced within the statutory 21 days. It records the history of the enquires made but makes no comment that no appeal was considered until those enquiries were complete."
30 In a belated attempt to get the proceedings on track, the applicant lodged a notice of motion for leave to appeal for an extension of time within which to appeal pursuant to O 63A on 11 July 2003. This motion sought orders seeking leave to appeal and to appeal the orders made by Master Sanderson on 3 October 2002. That application was supported by an affidavit of Victor Ian Melville dated 9 July 2003 and by an affidavit of Timothy Brendan Lyons of 9 July 2003. Mr Lyons is a partner in the firm of Gibson Lyons, the applicants' present solicitor.
(Page 12)
31 It was also supported by an affidavit of Benjamin Shawn Morton sworn 11 July 2003 and an affidavit of David Ernest Eley, sworn 11 July 2003. Mr Eley and Mr Morton were the applicant's former solicitors.
32 The notice of motion seeking an extension of time to seek leave to appeal and to appeal the orders made by Master Sanderson on 3 October 2002, came before Master Newnes on 14 July 2003. he adjourned the application to the Full Court with costs reserved.
33 The affidavit of David Ernest Eley sworn 11 July concludes by deposing that the affidavit was prepared for signing and filing on 10 February 2003 but was not required by counsel for that day and was subsequently sworn only on 11 July 2003.
34 Necessarily then, it provides no explanation for any delays from 10 February 2003. The delays in early 2003 are partly explained by the affidavit of Mr Morton, indicating that the appeal was not entered for hearing by 25 February 2003 because of reliance on counsel's report on 20 February 2003. It appears that counsel who appeared on 20 February 2003 thought that orders had not been made, but that the parties were to attempt to agree a new motion.
35 However, when counsel appeared on 13 March 2003 on an application for stay of execution, the Master advised that there was nothing to that effect on his files and it appeared he had made the orders. That was the view of counsel for the respondent.
36 Mr Melville deposes:
"12. … I knew nothing about those orders and had no idea that appeal was required to be entered for hearing within 7 days thereafter. I do not know why the appeal was not entered for hearing. I left the progress of the appeal in the hands of my solicitor and counsel briefed."
37 Adopting the most favourable view, from 13 March 2003 it was obvious to counsel and to the applicants' then solicitor that the application for leave to appeal against the decision of Acting Master Dixon had lapsed by discontinuance under the Rules. There is no satisfactory explanation as to why nothing occurred between 13 March and 9 July 2003.
38 The applicants lodged an application book which was before the Court. The application book is effectively unindexed. The first document
(Page 13)
- was the notice of motion seeking leave to appeal and to appeal against the orders of Acting Master Dixon made 21 January 2003. It also contains what purports to be a draft notice of appeal dated 9 July 2003 seeking to appeal against the decision of Master Sanderson delivered 3 October 2002.
39 The application book does not contain the decision of Acting Master Dixon, even though this is one of the judgments under challenge.
40 The day before the hearing in the Full Court the applicants filed a minute of proposed orders seeking orders that the applications for appeal proceed under O 63 and that they be heard together with the appeals not ex parte. Also on 18 August 2003 the applicants filed an amended notice of motion seeking orders as follows:
"1. The Application Book filed in FUL 100 of 2003 stand as being filed in respect of FUL 100 of 2003 and FUL 101 of 2003;
2. Appeals FUL 100 of 2003 and FUL 101 of 2003 proceed under Order 63A;
3. The applications for leave to appeal be heard together with the appeals;
4. The applications for leave to appeal not be heard ex parte;
5. Costs of today be in appeal FUL 100 of 2003."
41 So it was that the matter arrived at hearing before the Full Court on Motions Day on 19 August 2003.
42 Counsel who appeared on that day had not previously appeared for the applicants. Counsel advised the Court that the matter was not set down for argument but set down for directions. For this reason he did not file any outline of submissions. However, the fiat of Master Newnes on 12 July in relation to both applications, read:
"Application adjourned to Full Ct.
Costs reserved"
43 This seems relatively straightforward and appropriate in all the circumstances and it is difficult to see how the need for directions arose. The primary order was for an extension of time.
(Page 14)
44 In Eaton Developments Pty Ltd v NTC Pty Ltd, Owen J said at 557:
"Order 63A was introduced into the Rules of the Supreme Court in November 1996 to overcome what was seen as a mischief seriously impeding the administration of the civil justice system. The mischief was that appeals from interlocutory orders were treated in the same way (subject to the need to obtain leave in some cases) as appeals from final orders. This was adding to the delays then being experienced in getting matters to trial. The object of O 63A was to have appeals and applications that come within it disposed of in the shortest possible time so as to minimise delays in getting the substantive litigation to trial.
As I have already said, there is no lack of clarity in the wording of O 63A, r 5(2). The plain meaning of the words is consistent with a policy that there should be some real and effective sanction if the parties fail to pursue the appeal with vigour and expedition. Again as I have already said, the rule does not bring an appeal to an end irreversibly. Although it is self-executing, it does not shut the applicant out completely. In this way it serves the policy aims of the Order. A party who is (accidentally or deliberately) tardy must convince the court that there are good reasons why it should have a second chance."
45 The second chance in this case is the application to extend time within which to appeal against the decision of Master Sanderson dated 3 October 2002.
46 Clearly, one factor to be considered is the prospect of success and in this case that can be partially determined by the decision in Melville v East End Holdings Pty Ltd.
47 Against that must be weighed the very considerable delay in taking the appeal which, to a considerable extent, has not been satisfactorily explained.
48 The principles laid down in The State of Queensland v J L Holdings Pty Ltd (1996) 189 CLR 146 must be steadily borne in mind, particularly "… even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that claim."
(Page 15)
49 Having regard to the entire conduct of the litigation by the applicants prior to the order of Master Sanderson in October 2002, and having regard to the conduct since that time, in my view the interests of justice required the application for leave to appeal to be refused notwithstanding the decision in Melville v East End Holdings Pty Ltd. The conduct of the litigation on behalf of the applicants from inception until the motion in the Full Court has been inept to the point where the administration of justice has been adversely affected. The delay has inevitably caused prejudice to the respondent. Balancing all matters, I concluded that both applications should be refused. This is why I joined in the orders made on 19 August 2003.
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