Monaveen Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v ABB Service Pty Ltd (formerly known as ABB Engineering Construction Pty Ltd) - [2006] WASC 263

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: MONAVEEN PTY LTD (Receivers and Managers Appointed) (Administrator Appointed) -v- ABB SERVICE PTY LTD (formerly known as ABB Engineering Construction Pty Ltd) [2006] WASC 263

CORAM: TEMPLEMAN J

HEARD: 3 NOVEMBER 2006

DELIVERED : 23 NOVEMBER 2006

FILE NO/S: CIV 2302 of 1998

BETWEEN: MONAVEEN PTY LTD (Receivers and Managers Appointed) (Administrator Appointed) (ACN 009 309 175)
Plaintiff (Respondent)
AND
ABB SERVICE PTY LTD (formerly known as ABB Engineering Construction Pty Ltd) (ACN 000 095 250)
Defendant (Applicant)

Catchwords:

Practice and procedure - Striking out for want of prosecution - Very unusual claim - Long standing issues and negotiations over content of pleadings - Plaintiff's obligations to make timely applications to amend - Whether additional time lost by inordinate and partly excusable delay makes any difference - Turns on own facts

Legislation:

Nil

Result:

Adjourned pending resolution of pleading issues

Category: B

Representation:

Counsel:

Plaintiff (Respondent) : Mr B H Taylor
Defendant (Applicant) : Mr P B O'Neal & Ms R J Lee

Solicitors:

Plaintiff (Respondent) : Talbot & Olivier
Defendant (Applicant) : Minter Ellison

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

Birkett v James [1978] AC 297
Hancock Family Memorial Foundation Ltd v Fieldhouse (2005) 30 WAR 398
Latrobe Country Credit Co‑operative Ltd v Smith [1999] 1 VR 440
Monaveen Pty Ltd v ABB Service Pty Ltd [2004] WASC 5
Spitfire Nominees Pty Ltd v Ducco [1998] 1 VR 242

Case(s) also cited:

Duke v RoyalStar Pty Ltd [2001] WASCA 273
Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998
Hughes v Gales (1995) 14 WAR 434
Jakovljevic v L & B Doslov [2000] WASCA 131
Levi v Stirling Brass Founders Pty Ltd (1997) 36 ATR 290
Ulowski v Miller [1968] SASR 277

TEMPLEMAN J: This is the second application by the defendant to dismiss the action for want of prosecution. I heard the first application in October and December 2003 and delivered a judgment on 22 January 2004: Monaveen Pty Ltd v ABB Service Pty Ltd [2004] WASC 5. The application did not succeed.
The background to the action, and its prosecution down to January 2004, are set out in my earlier reasons. However, for ease of reference, I repeat pars 3 ‑ 12 of those reasons:
"3 In 1996, the plaintiff entered into a subcontract with the defendant to supply labour, equipment and materials to carry out substantial civil engineering works in the construction of a hot briquetted iron plant for BHP Direct Reduced Iron Pty Ltd ('BHP') near Port Hedland. The defendant was BHP's head contractor.
4Essentially, the work comprised the construction of materials handling facilities and overland conveyors.
5The plaintiff commenced work in late July or early August 1996 and submitted progress claims to the defendant during the period July to November 1996. An issue then arose about the quality or grade of concrete which the plaintiff had used in constructing the foundations for an overland conveyor system.
6On 12 November 1996, the plaintiff was informed that some $592,740 would be available to it for collection as part payment of a progress claim. However, a few days later, after the concrete quality issue emerged, the plaintiff was informed that no moneys would be paid and that an amount of up to $1.2 million would be withheld pending resolution of this issue.
7The plaintiff contends that the defendant had no contractual right to withhold the funds as it did. The plaintiff contends further, that as a direct consequence of that allegedly improper withholding, it was obliged to accept an amendment to the subcontract which had a substantially deleterious effect on its position. The plaintiff claims that thereafter, it was controlled directly by the defendant and was subjected to onerous obligations in relation to remedial work. The overall effect, the plaintiff contends, was that it was unable to continue properly in its business.
8The plaintiff alleges it was then obliged to accept a second amendment to the subcontract which had an even more drastic effect. The plaintiff puts its case in the following way in par 76 of its re‑amended statement of claim:
'The defendant by its own actions in wrongfully withholding payments from the plaintiff to which the plaintiff was properly entitled and by forcing the plaintiff to accept the terms of the first amendment, which actions together had the effect of destroying the plaintiff's credit relationship with its suppliers and sub‑contractors and its own capacity to manage its cash flow and creditors, exerted an illegitimate pressure on the plaintiff to submit to the terms of the second amendment and to execute the document.'
9The plaintiff says it was induced to accept the second amendment by representations made by the defendant's project manager that certain payments would be made, but that at the material time the defendant had no intention of making such payments.
10The plaintiff contends that the defendant's conduct was unconscionable, being contrary to s 51AA of the Trade Practices Act 1974, and constituted repudiatory breaches of the subcontract. The plaintiff alleges that as a consequence of the defendant's conduct, it went into receivership, and later into administration.
11The plaintiff seeks orders that both amendments to the subcontract be set aside pursuant to s 87 of the Trade Practices Act: and that the defendant pay special damages in excess of $3 million, representing moneys due under the subcontract and unspecified damages for breach of the contract and pursuant to s 82 or s 87 of the Trade Practices Act.
12There is a substantial counterclaim. The defendant alleges that there were numerous breaches of the subcontract by the plaintiff resulting in a claim to some $2.23 million by way of damages."
The position in January 2004, as appears from my reasons, was that:
•there had been lengthy periods of delay in the prosecution of the action, amounting to some three years following service of the writ (which was not served until over a year after it was issued);
•there had been inordinate delay in the prosecution of the action;
•the defendant's principal witness was to be its former project manager, Mr Tregea, who remained in the employ of the defendant or a subsidiary company;
•part of the delay was the result of the plaintiff's impecuniosity, it being a company then in liquidation;
•three former directors, including Mr Kenneth Hetherington, had deposed to the fact that they had agreed to fund the action "through to and including the final trial";
•it appeared that the plaintiff was in a position to give discovery in the near future.
After some hesitation, I came to the conclusion that I should not dismiss the action for want of prosecution. I said:
"I have given considerable weight to the fact that the claim is now statute barred and to the plaintiff's contention that its impecuniosity has been caused by improper conduct on the part of the defendant. I appreciate that is not a consideration which can be permitted to be a blanket excuse for delay. I appreciate also, that the allegation is denied by the defendant. I make it plain that I do not intend in any way to suggest that I am prejudging the issue. But the fact that such a claim is made suggests that it would be a hardship to the plaintiff not to permit the action to proceed." (reasons, par 87)
The present application was brought by a chamber summons dated 19 July 2006. The application came before me on 28 July 2006 but was adjourned after some argument, in circumstances to which I shall refer below.
There has undoubtedly been considerable delay in the prosecution of the action since January 2004. Perhaps surprisingly, each side contends that the other is to blame. In order to resolve the dispute it will be necessary to review the conduct of both parties between January 2004 and July 2006. This emerges clearly enough from the correspondence, much of which was by email. I refer to such communication generally as letters.
As at January 2004, one of the principal difficulties facing the plaintiff was the formulation of its statement of claim. As I noted in my reasons (par 15), amendments had been made not only of the plaintiff's own volition, but as a result of the defendant's application to strike out parts of the statement of claim and to obtain clarification of it.
A number of issues remained outstanding. In particular, there were discrepancies between amounts claimed in the body of the pleading and particulars given in support of those claims. Further, the defendant contended that certain claims were inconsistent with contemporaneous documents.
When I dismissed the previous application, I said that directions should be given for discovery and for the resolution of outstanding pleading issues (reasons, par 88). When I delivered my judgment, I expressed the view that much of the argument on the numerous interlocutory applications which had been a feature of this action had been unnecessary: I considered that the parties should have resolved many of the matters themselves (TS 185). Although I did not give a formal direction for the resolution of any subsequent interlocutory disputes, I reminded the parties that they were obliged to confer pursuant to O 59 r 9 of the Rules of the Supreme Court 1971 (WA) before commencing any interlocutory application. I said that if conferral failed to resolve the matter, the party who initiated the conferral process should write a short letter to my associate for the purpose of explaining why it was necessary to bring an application: and I would then relist the matter for a directions hearing (TS 186).
With these observations to guide them, the parties produced a Minute of Agreed Undertakings dated 23 February 2004. This document recorded (inter alia) that:
"(a)The solicitors for the plaintiff will write to the solicitors for the defendant to provide substantive responses to each of the outstanding pleading issues raised by the defendant (except in relation to the progress claims) by Friday, 19 March 2004.
(b)The solicitors for the plaintiff will write to the solicitors for the defendant to provide a substantive response on the issue of the plaintiff's progress claims by Friday, 16 April 2004."
On 16 April, the plaintiff accepted that there was a discrepancy between figures pleaded in the then current version of the statement of claim and the relevant particulars. The plaintiff proposed to amend the statement of claim further to rectify this discrepancy.
By letter dated 7 May, the defendant's solicitors acknowledged this change in position. However, they pressed the plaintiff's solicitors to deal with issues arising from the statement of claim which had been raised with the plaintiff's previous solicitors on 23 July 2003. These issues related to the alleged duplication of various progress claims. The defendant's solicitors said also that they were considering a letter of 19 March attaching "a discussion draft" of the plaintiff's proposed amendment to par 37.2 of its Reply and Defence to Counterclaim dated 5 November 2002 "and will respond shortly".
The plaintiff's solicitors wrote to the defendant's solicitors on 26 July, with a "substantive response" to the 7 May letter referred to above, in relation to the progress claims issue. They contended that there had been no duplication. However, they sought copies of certain progress claims in the possession of the defendant's solicitors in order, it seems, to clarify the position.
In a further letter dated 26 July, the plaintiff's solicitors accepted that the plaintiff's claim to have paid its workers sums totalling $406,235 as part of its site allowance claims was inaccurate: the figure should have been $146,584. This was one of the outstanding issues to which I referred in my earlier reasons (par 16). The plaintiff proposed to amend par 22 of its statement of claim so as to rectify this matter.
However, the plaintiff declined to amend par 22A. It was there alleged that if the defendant had been relieved from its contractual obligation to reimburse the plaintiff for the cost of certain site allowances paid to its employees, the defendant was estopped from relying on the strict contractual terms because the plaintiff had relied on a representation made by Mr Tregea that the defendant would reimburse the plaintiff in any event.
The defendant's solicitors did not respond until 2 September. On that day, they wrote a detailed letter in which (inter alia) they maintained an objection to par 22A of the statement of claim. They said:
"We remain of the opinion, with respect, that without a plea as to a representation as to the timing of the reimbursement, the proposed paragraph is embarrassing and does not disclose a reasonable plea of estoppel, especially given your client now reiterates that the timing of the reimbursement is the critical issue."
The defendant's solicitors referred to the suggestion they had made on 7 May 2004 that there should be a meeting: they remained of the opinion that it was appropriate for the parties to meet.
In a telephone conversation on 1 October, Ms Byrne of the plaintiff's solicitors told the defendant's solicitor that the plaintiff was unable to respond substantively to the letter of 2 September relating to the progress claims issue because of difficulty in contacting Mr Hetherington who was out of the country. However, on 12 October, Ms Byrne said she now had some instructions and suggested that the plaintiff might provide a substantive response to the 2 September letter within a few days.
The defendant's solicitors referred to these conversations in a letter dated 15 October to the plaintiff's solicitors. They pointed out that the last substantive action taken by the plaintiff was discovery. They continued:
"Your client is otherwise still in the process of further amending its pleadings, a process commenced in August 2002, in response to His Honour granting your client leave after our client's successful strike out application.
Please advise by return whether your client is willing and able to prosecute its action in a timely manner or at all."
Pausing there, I think it clear enough that the process initiated by the agreed undertakings of February 2004 had run its course. That is to say, it had resulted in the elimination of some issues but had failed to resolve others. In those circumstances, and given the history of the matter, it was incumbent on the plaintiff to avoid further delay and to move for such amendments to its pleadings as it considered appropriate. However, the plaintiff did not do so: nor did the plaintiff's solicitors respond to the defendant's solicitors' letter of 15 October 2004.
On 26 October, the defendant's solicitors wrote again to the plaintiff's solicitors. They noted that there had been no reply to their letter of 15 October, and no substantive responses to two previous communications of 2 September. The defendant's solicitors said:
"You will understand that the present situation appears to our client to be similar to the situation last year, when your client's lack of reply to our correspondence prompted our client to make an application to dismiss the action for want of prosecution.
…
What is the reason for your client's current delay? Is your client willing and able to prosecute its action in a timely manner or at all? Your urgent advice is sought."
The plaintiff's solicitors replied on 19 November. They said they had been "in the process of obtaining instructions", but that due to Ms Byrne's other work commitments, they were not as advanced as they had hoped in finalising the plaintiff's substantive responses to the 2 September 2004 letters from the defendant's solicitors. They expected to be in a position to provide their client's responses shortly.
On 24 November, the defendant's solicitors wrote again to the plaintiff's solicitors. They complained generally about the lack of response from the plaintiff's solicitors and said:
"As [the plaintiff's] cash flow has always been a significant issue in this matter, it is surprising and disappointing at [sic] the amount of time it is taking [the plaintiff] to address issues relating to the amount of money due from and paid to it by [the defendant] in 1996 and 1997. In particular, [the plaintiff's] inability some 6 years after the writ was issued, to address questions based on the terms of the subcontract and the contents of its documents it has pleaded must raise doubts about the validity of its claims in this regard."

The letter concluded:
"In an effort to progress this matter, and narrow down the real issues in dispute, we therefore require a response to all of the above correspondence by 5:00pm on 29 November 2004."
The plaintiff's solicitors responded by letter of 30 November. They said that in relation to issues raised by the 2 September letters from the defendant's solicitors, they were still seeking instructions but were hopeful of finalising their responses "shortly". The plaintiff's solicitors went on to say:
"Please note that the process of seeking our instructions has involved our office liaising with Mr Ken Hetherington, who is assisting our client, to verify and provide necessary information about the progress claims submitted by [the plaintiff] and on the site allowance issue. Mr Hetherington has been away from Perth and is currently overseas on business. Mr Hetherington has advised that he will be available to provide assistance from Thursday, 2 December 2004."
The reason for the difficulty experienced by the plaintiff's solicitors in obtaining instructions has been explained by Mr Hetherington in an affidavit sworn on 11 August 2006. He said that since August 2004 he had been contracted by Leighton Contractors Pty Ltd "to provide senior management assistance to various projects": and that in the 11 months leading up to October 2005 "I commuted between Auckland and Perth for work". Mr Hetherington said also that after the plaintiff's current solicitors had taken over the conduct of the action early in 2004 he had, with the assistance of counsel:
"given instructions to [the solicitors] on all factual matters in this case based on my personal involvement with the sub‑contract works giving rise to the plaintiff's claim.
In my role as the person with the most hands‑on knowledge about the case, I took all my files relating to the action with me to New Zealand so that I would have access to relevant documents available to me if my instructions were required."
Having regard to the fact that Mr Hetherington was engaged to provide senior management assistance to Leighton Contractors Pty Ltd, I do not doubt that he was required to devote much time and energy in the discharge of his duties. The stresses of regular travel between Auckland and Perth must have added very considerably to his burdens. But although Mr Hetherington's apparent inability to provide the plaintiff's solicitors with the kind of detailed instructions they required is understandable, it did not relieve the plaintiff of the obligation to prosecute the action diligently, particularly having regard to the delays which had bedevilled it previously.
On 28 January 2005, the defendant's solicitors wrote to the plaintiff's solicitors to confirm that a number of issues had been raised by the defendant's solicitors in a telephone conversation of the previous day. The issues were:
"1.Why should [the defendant] not write to the associate to his Honour Justice Templeman to:
•advise of the plaintiff's failure to comply with paragraph 6 of the minute of agreed undertakings in that the plaintiff failed to provide by 16 April 2004, and continues to fail to provide, a substantive response on the issue of the plaintiff's Progress Claims; and
•request a directions hearing for appropriate orders to be made (see Issue No 5 below)?
2.Does the plaintiff agree that its pleadings should be struck out in line with the defendant's application dated 16 May 2002?
3.Is it necessary for the defendant to make an application for Progress Claims 4 & 5 on which the plaintiff relies in the minutes of the statement of claim for which it will ultimately be seeking leave (as asked in our email letter to you dated 2 September 2004)?
4.Is the plaintiff willing and able to prosecute this matter?
5.Will the plaintiff consent to springing orders to:
•provide a substantive response to the Progress Claims issues;
•provide Progress Claims 4 & 5; and
•file and serve an application to amend its pleadings with settled minutes attached?"
In relation to each of these issues, the defendant's solicitors set out the basis for the defendant's position.

The letter went on to refer to the fact that the plaintiff's solicitors were to contact the defendant's solicitors on 31 January 2005 to let them know whether, as a result of a meeting with counsel and Mr Hetherington on 28 January, they would be able to provide a substantive response by 4 February. The defendant's solicitors continued:
"depending upon what you advise us at that time, our client may make the appropriate applications referred to above. Should [the defendant] instruct us to bring those applications then, for the purposes of order 59 rule 9 of the Supreme Court Rules we will again confer with you at the appropriate time to seek your client's position on the exact orders to be sought by our client."
The plaintiff's solicitors responded on 4 February. However, they did not address any of the issues raised by the defendant's solicitors in their letter of 28 January. The response was directed to the various pleading issues. They maintained their position in relation to some issues; and they proposed amendments to their pleadings in relation to others. They concluded their letter by saying:
"In the event that the proposed amendments are now acceptable, we propose to forward a substituted minute of the statement of claim and a minute of consent orders in the terms agreed on the question of leave to amend the above pleadings.
We await your client's response."
The defendant's solicitors responded on 22 March in relation to the issue of the site allowance. They noted that in a letter dated 28 February to the plaintiff's solicitors, they had requested a "with prejudice meeting" to discuss the issue of the apparent duplication in the progress claims. I take this to be a proposal for a without prejudice meeting. The defendant's solicitors said:
"You have so far declined to set a date for this meeting. It also appears to us beneficial to meet to discuss the issue of the site allowance, for the reasons set out below."
The defendant's solicitors then commented on the matters raised by the plaintiff's solicitors in their letter under reply. They sought clarification of some matters and further particulars in relation to others. The letter concluded:
"Given the plaintiff's delay in this matter to date, it seems appropriate that all particulars be provided now."
There appears to have been no response to this letter. There was no meeting nor were any further pleadings provided.
On 29 June, the matter came back before me in relation to additional security for costs.
On 1 July, the defendant's solicitors confirmed that they had been informed by the plaintiff's solicitors "that it was not within the plaintiff's contemplation that the additional security would not be provided" and that it therefore appeared appropriate for the plaintiff to act to progress the matter. The defendant's solicitors proposed that by 14 July, the plaintiff should provide drafts of a minute of further re‑amended statement of claim and a minute of amended further reply to the request for further and better particulars of the statement of claim. They proposed that the parties meet to confer on remaining issues by 21 July following which, and if necessary, the plaintiff would need to make the appropriate applications for leave to amend "say by 28 July 2005".
The plaintiff's solicitors replied on 13 July. They said their client had no difficulty with the defendant's proposal that minutes of draft pleadings be supplied but that the issue was as to the time the drafts would be finalised and be available to the defendant. The plaintiff's solicitors expected to be in a position to provide the relevant drafts by 29 July. They said:
"In relation to your client's proposal to meet to confer on any remaining issues, it is proposed that any meeting, if such meeting is to be convened, be scheduled after the draft minutes and responses have been considered by your client and your client has identified in writing any remaining issues it may have in relation to either the draft minutes or the responses."
On 29 July, the plaintiff's solicitors wrote three letters to the defendant's solicitors. They were:
(1)A letter enclosing drafts of further pleadings. In relation to those documents, the plaintiff's solicitors said:
"Please confirm that the minutes satisfactorily record the amendments (for which leave has yet to be made) agreed to date. Once this confirmation is received, we will forward appropriate consent orders to you to deal with, amongst other things, the question of leave to amend and the appropriate costs orders (on account of the amendments) which have been agreed to date."
(2)A letter responding to the letter dated 28 February 2005 from the defendant's solicitors relating to the plaintiff's progress claims. In relation to that matter, the plaintiff's solicitors maintained their position and said:
"It seems to us, with respect, that there will be little utility in meeting to discuss this issue further as your client has not accepted any of the explanations provided by [the plaintiff] to date. Therefore we do not consider any utility will be served by further conferral on this issue. Instead, the issue would appropriately be dealt with at trial."
(3)A letter responding to a letter dated 22 March 2005 from the defendant's solicitors, relating to the site allowance issue. Again, in respect of that matter, the plaintiff maintained its position that its position as currently pleaded was satisfactory.
In relation to par 22A, the plaintiff's solicitors said that although their counsel believed that the current pleading was adequate, he was willing to meet to discuss that matter. Counsel was said to be available in the week commencing 8 August (except on 12 August) and after the week commencing 22 August. They asked the defendant's solicitors to contact them to arrange a mutually convenient time for the meeting.
The meeting did not take place because the action was stayed from 28 July to October 2005 as a result of the plaintiff's failure to provide the additional security for costs ordered by consent on 29 June.
In a letter dated 5 August, the defendant's solicitors referred to the fact that the action had been stayed and asked whether the plaintiff had agreed the terms on which its bank would provide the requisite guarantee. They said:
"If it has not, we are concerned that your client's request now to meet will cause our client unnecessary cost when considerable doubt remains that your client will be able to provide the security and have the stay lifted or indeed be able to proceed with the action.
Please advise us of the status of negotiations. We would be grateful if you could keep us informed in relation to each step in the process."
On 4 October, the defendant's solicitors wrote again to the plaintiff's solicitors consenting to the plaintiff amending an application for an extension of time in which to provide additional security for costs. They said:
"We note that, despite our request in our letter of 5 August 2005, you did not advise us of the status of negotiations nor did you keep us informed in relation to each step in the process. It has not been explained to us why it took so long for the funding to be provided.
Our client does not consent to the extension of time nor to the lifting of the stay. Our client does, however, accept that your client's various applications for leave to amend its pleadings can be appropriately listed for the same time as the application for an extension of time."
The defendant's solicitors expressed their concern at the "repeated assertion" made by the plaintiff's solicitors that they had provided an appropriate response on all of the progress claims issues. The defendant's solicitors enclosed a table, prepared by counsel, in which the issues were identified and the plaintiff's responses set out. The defendant's solicitors invited the plaintiff's solicitors to rectify any omission from the table because "it seems apparent that there are some key matters which your client has simply not addressed."
The table referred to some 17 issues (albeit some were interrelated) raised by the defendant for consideration by the plaintiff. The defendant's solicitors continued:
"It seems to us with respect that leave should not be granted to your client to amend its further reply to our client's request for further particulars in terms of your amended minute dated 4 February 2005 (being the last version forwarded to us). Indeed, it seems that your client has not in fact complied with the order of his Honour Justice Templeman of 7 August 2000, in that the particulars provided are inadequate for the reasons set out in our previous correspondence on the progress claims issue. We will also feel obliged to bring to his Honour's attention paragraph 6 of the Minute of Agreed Undertakings, which you forwarded to his Honour's associate on 23 February 2004.
You stated in your letter of 29 July 2005 that 'there will be little utility in meeting to discuss this issue further'. We note that the parties must meet to discuss the site allowance issue in any event. Are you refusing to meet to discuss the progress claim issues? Our client's counsel is available to meet to discuss both sets of issues on Wednesday or Friday this week, or Monday to Wednesday or Friday next week."
In my view, if it was not apparent to the plaintiff in July 2005 that they should apply to amend their pleadings, it should have been abundantly clear by the beginning of October. Despite the fact that the defendant's solicitors were actively pursuing conferral, the plaintiff's position was that they had done all they were required to do by way of amendments to the pleadings: and they were being expressly invited to list their application for leave to amend with their application for an extension of time in which to provide security for costs. The defendant's solicitors had not acceded to the request in the first of the 29 July letters from the plaintiff's solicitors to confirm that the draft pleadings contained agreed amendments. However, it was plain that agreement would not be reached to all the proposed amendments.
The plaintiff's solicitors responded to the 4 October letter by letter of 10 October 2005. They said:
"We have sought our instructions in relation to the various matters raised in your letter and will revert to you as soon as … we have our instructions."
On 18 January 2006, Mr McKelvie of the defendant's solicitors telephoned Ms Byrne to enquire whether there would be a response to the letter dated 4 October 2005 from the defendant's solicitors. This was in the light of the letter of 10 October referred to above, in which the plaintiff's solicitors said that they were awaiting instructions. In response to that enquiry, Ms Byrne told Mr McKelvie that the position was unchanged in that the plaintiff's solicitors were still seeking instructions.
On 18 January, the defendant's solicitors sent a letter to my associate which was copied to the plaintiff's solicitors on the following day. The letter, which was obviously written in accordance with my informal direction of 22 January 2004, referred to the fact that the plaintiff had not dealt with various outstanding matters, and to the fact that its solicitors had said they were having difficulty in obtaining instructions. A chamber summons for springing orders was enclosed with the letter, together with a memorandum pursuant to O 59 r 9 of the Rules of the Supreme Court.
On 25 January, the defendant filed the chamber summons for springing orders against the plaintiff "to progress [the] matter". The orders sought were that the statement of claim be struck out, the action dismissed and judgment entered for the defendant with costs unless within 14 days of the date of the order the plaintiff:
"(a)Applies to lift the stay imposed by the order of his Honour Justice Templeman dated 29 June 2005; and
(b)Files and serves further and better particulars in answer to paragraph 6 of request 41 of the defendant's request for further and better particulars dated 18 May 2000;
(c)Confers with the defendant on the issue of the site allowance;
(d)Applies to amend the statement of claim and reply and defence to counterclaim."
On being notified of the chamber summons, the plaintiff's solicitors wrote at length to the defendant's solicitors on 25 January. The tone of the letter was to express surprise and disappointment that the defendant had taken this step. In particular, they said:
"We draw your attention to copies of the plaintiff's amended pleadings [which] were provided to your office under cover of our letter dated 29 July 2005 showing all agreed amendments to the respective pleadings marked up in colour. At that time and until receipt of your email of 19 January 2006, we had been proceeding, on a previously agreed basis, that once your client was satisfied with the amendments to the pleadings, the parties would execute consent orders to deal with, amongst other things, the question of leave to amend." (my emphasis)
Pausing again; I do not accept that there was any agreement between the parties that the plaintiff would not proceed unless and until the defendant was satisfied with the plaintiff's pleadings. That was a proposal made by the plaintiff's solicitors in their letter of 29 July, referred to above. However, at least by 4 October, the defendant's solicitors were pressing for the plaintiff's amendments to be moved.
The plaintiff's solicitors went on to say that it seemed to them there had been some misunderstanding arising from a reference in the letter dated 4 October 2005 from the defendant's solicitors, relating to an application by the plaintiff for leave to amend its pleadings at the same time as an application for the extension of time in which to provide additional security for costs. The plaintiff's solicitors said:
"We have construed this statement as being a proposal by your client because up until that time, as to the amendments to the pleadings, this process was to proceed, to the extent it could be agreed, by the execution of consent orders as referred to in our letter dated 29 July 2005.
We note that no substantive response to our letter dated 29 July 2005 has been received from your client as regards the amended minutes. The first reference to any minute of amended pleading was in your letter dated 4 October 2005 in which you advised that leave should not be granted to [the plaintiff] to amend its further reply in the terms of the minute dated 4 February 2005. You have said that the amended minute dated 4 February 2005 was the last minute received. We are concerned by this as a minute of amended further reply was provided to you on 29 July 2005. Have you considered this document?
Moreover, there was no reference in your letter dated 4 October 2005 that the minutes of amended statement of claim or the amended reply and defence to counterclaim provided on 29 July 2005 were not satisfactory and that an application for leave to amend these pleadings would need to be made by [the plaintiff]. On this issue, but for the suggestion that the various applications should be listed together, your letter was silent.
There was, therefore, nothing in the correspondence to suggest that an application for leave to amend the statement of claim and the reply and defence to counterclaim was required. We are therefore surprised to note that your client now seeks orders 1(b) and (d) in its chamber summons as there has been no conferral in respect of these matters as required by order 59 rule 9."
In my view, the attitude adopted by the plaintiff's solicitors was unreasonable. I think it emerges clearly from the correspondence to which I have referred thus far, that:
•the parties had resolved pleading issues as far as possible;
•the onus was on the plaintiff to amend its pleadings in order to progress the action;
•the plaintiff had not responded to reasonable enquiries from the defendant's solicitors relating to the pleadings and as to the plaintiff's ability to progress the action;
•the defendant's solicitors had invited the plaintiff's solicitors to move their amendments at a time when it should have been apparent to the plaintiff that this was required in any event;
•the defendant's solicitors had sought conferral on several previous occasions but this had not been taken up.
In these circumstances, I consider it reasonable for the defendant's solicitors to have applied for springing orders as they did.
The parties were offered a hearing date of 8 February 2006 for the defendant's chamber summons, but the plaintiff's counsel was then unavailable. Because of my commitment to a long trial commencing on 13 February, and other difficulties, it was not possible to list the matter until 26 July.
On 18 July, the defendant's solicitors wrote at length to the plaintiff's solicitors "to confirm the history of your client's statement of claim, and the latest amendments which allegedly will be sought to it".
Then, after setting out that history, the defendant's solicitors referred to the minute of proposed amendments to the statement of claim which had been sent to them on 29 July 2005. They said:
"We note that the July Minute does not appear to accurately reflect the amendments made up to and including the re‑amended statement of claim on 25 July 2000 ('the Filed Statement of Claim'). It is possible that the errors occurred in the drawing up of the Filed Statement of Claim, but when we compare the two documents we find differences in paragraphs 22, 31, 34, 38.1, 38.2, 49, 52.4.3, 59, the headings on either side of paragraph 87, 96, 101, 103, 103.3 and 120. It may be that these errors are not of great significance, but we suggest that the plaintiff should ensure that any document for which it seeks leave should be accurate.
The amendments proposed to be made since the Filed Statement of Claim, occur in paragraphs 7 (insignificant), 22, 22A, 23, 31.3, 65.1, 65.2, 69, 70.1, 70.2 and 70.3.
The amendments to paragraph 22 are in accordance with your letter of 4 February 2005 and to paragraph 23 in accordance with your letter of 26 July 2004. As previously stated, we have no objection to these amendments.
You have not amended the proposed paragraph 22A. Our client's objection to this paragraph therefore stands.
You have also declined to amend paragraphs 29, 32, 70, 91 and 126.1 and 126.2. We also take this opportunity to raise with you the fact that the allegations in paragraph 39 now appears to be in conflict with the Amended Minute of Proposed Amended Plaintiff's Further Reply to Defendant's Request for Further and Better Particulars dated 29 July 2005. Paragraphs 96‑100 and 115 may also need to be reviewed in light of the reduced figures in the Amended Minute.
The amendments to paragraphs 31.3, 65.1, 65.2, 69, 70.1, 70.2 and 70.3, with one exception, adopt the figures we suggested in our letter to Phillips Fox dated 12 August 2003. The exception we respectfully suggest is a typographical error in paragraph 70.2 of the July Minute, which you may wish to correct.
We therefore note that the parties are in exactly the same position which they were in, at the latest, as at February 2005."
On 19 July, the plaintiff's solicitors replied. They said they would provide a response shortly in which they would set out their views on the history of the statement of claim, but:
"In the meantime, we note that this letter also contains your client's substantive response to our letter dated 29 July 2005, which enclosed draft minutes of the plaintiffs:
1.amended minute of proposed further re‑amended statement of claim;
2.amended minute of proposed amended plaintiff's answers to the defendant's request for further and better particulars of the re‑amended statement of claim; and
3.amended minute of amended reply and defence to counterclaim.
Until receipt of your letter yesterday and excepting some reference in your letter dated 4 October 2005 to your client's view about the listing of the plaintiff's applications for leave to amend its pleadings and in relation to the plaintiff's minute of amended answers to particulars, no substantive response had been provided in relation to the draft minutes referred to above.
Please advise by 4.00pm on Friday, 21 July 2006 as to why it has taken your client nearly 12 months to provide this response."

In the light of the history of the matter since February 2004, I regret that I cannot accept the proposition advanced by the plaintiff's solicitors - inferentially in this letter, and expressly at the hearing of this application - that the plaintiff was not obliged to pursue the amendments to its statement of claim pending a substantive reply to its solicitor's letter of 29 July 2005. Counsel for the plaintiff submitted that the defendant's application for springing orders was "totally premature". I do not accept therefore, counsel's further submission that the defendant is responsible for delaying the formulation of the statement of claim.
When the defendant's application came before me on 28 July 2006, it was apparent that there had been periods of delay in the prosecution of the action. The plaintiff's solicitor told me from the bar table that there had been difficulty in obtaining instructions from Mr Hetherington. However, there was no evidence from Mr Hetherington bearing on this point. Over objection from counsel for the defendant, I adjourned the matter so as to give Mr Hetherington an opportunity to explain why the plaintiff's solicitors had been unable to obtain instructions from him. I have referred above to Mr Hetherington's affidavit in which he set out the nature of his employment in the relevant period.
The plaintiff's solicitor also filed an affidavit to which further correspondence between the solicitors was exhibited.
Although the defendant had initiated its application to dismiss the action for want of prosecution on 25 January 2006 (having foreshadowed it a week earlier), the plaintiff did not file its application to amend its pleadings until 24 July. At the hearing on 28 July, it was common cause that I should deal first with the defendant's application to dismiss the action for want of prosecution.
The principles applicable to that application are well settled. They were enunciated by Lord Diplock in Birkett v James [1978] AC 297 at 318. In Hancock Family Memorial Foundation Ltd v Fieldhouse (2005) 30 WAR 398, Steytler P and Owen JA held that it was for the defendant to show that the principles applied in the case under consideration.
Their Honours said:
"The general principles identified in those cases include consideration of these points:
(a)whether any default has been intentional and contumelious, for example, disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or
(b)whether there has been inordinate and inexcusable delay on the part of the plaintiff or his or her lawyers, and, if so
(c)whether such delay:
(i)will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action; or
(ii)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.
But as with so many areas in the law, it is one thing to identify general principles and another properly to apply them. It should always be borne in mind that the power to dismiss for want of prosecution calls for the exercise of discretion. It is a discretion that must be exercised judicially but is otherwise open. It exists to serve the ends of justice. Caution should therefore be employed so that these general principles are not elevated to the level of a 'test' or a 'rule'. They are more appropriately to be seen as guidelines indicating some of the matters to which the court should have regard in exercising the discretion. The court's discretion to dismiss an action for want of prosecution is not fettered by any absolute or inflexible rules. There are however five matters to be considered which will usually be relevant to the court's decision to exercise the discretion:
•the length of the delay;
•the explanation for the delay;
•the hardship to the plaintiff if the action is dismissed and the cause of the action left statute‑barred;
•the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay; and
•the conduct of the defendant in the litigation."
In the present case, I consider that the length of the delay in the prosecution of the action, since January 2004, must be regarded as approaching 18 months.
In forming that view, I have not attempted to identify each individual period of delay by either party in dealing with correspondence or, in the plaintiff's case, while attempting to obtain instructions; or even the period of some two months while the action was stayed pending the provision of further security for costs.
I base my view on the proposition that, having regard to the delays down to January 2004, the plaintiff should have prosecuted the action thereafter with all reasonable dispatch.
I am supported in that view by the following passage in the judgment of Steytler P and Owen JA that:
"A defendant is not confined to proof of inordinate and inexcusable delay by reference to long periods of total inactivity on the part of the plaintiff. It is also relevant that there may be a want of prosecution during a period in which the plaintiff is involved in continuing unsuccessful efforts to establish a proper pleading …"
The authority cited by their Honours for that proposition is Latrobe Country Credit Co‑operative Ltd v Smith [1999] 1 VR 440 at 448, 452. In that case, a plaintiff whose proceedings had been dismissed for want of prosecution, appealed to the Court of Appeal. There, Phillips JA (with whom Batt and Kenny JJA agreed) held that:
"it was difficult for the appellant to contend that, during that period of three years from December 1994, the delay was not inordinate and inexcusable or, for some reason, should not be laid at the door of the appellant and its advisers …" (at par 17).
A little earlier in his judgment, Phillips JA said:
"From December 1994, the appellant appears to have been almost wholly engaged in struggling to establish a sufficient pleading and maintain it. At first blush, it might be thought difficult to characterise as a 'want of prosecution' such continuing efforts to establish a proper pleading but that approach is now shown to be simplistic."
In the Hancock case (supra), Steytler P and Owen JA noted at par 90 that the power to dismiss proceedings for want of prosecution "is a function of the broader consideration that the Court must ensure that justice is done in any cause brought before it".
This observation reflects that made by Hedigan AJA (with whom Winneke P and Brooking JA agreed) in Spitfire Nominees Pty Ltd v Ducco [1998] 1 VR 242 at 248. His Honour was there dealing with an appeal from the decision of the primary Judge who had upheld a decision of a Master dismissing the plaintiff's claim for want of prosecution. Hedigan AJA said:
"The judge properly referred to the issues as involving a matter of justice to both sides, but did not address the real issue in the language commonly used to denote it, concerning which the delivery of a decision with justice to all parties is concerned, namely, is there in the circumstances a substantial risk that a fair trial cannot be had because of inordinate and inexcusable delay? [Emphasis added.] It is not, as the primary judge appears to have thought, whether you can have a fair trial after 10 years. Of necessity, once a trial of factual issues is delayed, even without fault by any one - a frequent enough occurrence - the problems of faded recollection and the strain of litigation, matters which rightly concerned the judge, are commonplace. The issue in this context is whether or not the additional time lost by inordinate and inexcusable delay makes any difference."
In the present case, this is a material consideration.
As I noted in my January 2004 reasons, one of the factors I took into account in deciding not to dismiss the action for want of prosecution, was that Mr Tregea, the defendant's former project manager, remained in its employ or that of a subsidiary company.
The situation has now changed. I am told that Mr Tregea left the defendant's employment in December 2004. He now lives and works in Queensland. There is, however, no direct evidence to this effect from an officer of the defendant: the evidence is contained in an affidavit sworn by the defendant's solicitors, based on information provided by the defendant's Regional Legal Manager for South Asia.
It is impossible from this evidence to assess the extent of any prejudice to the defendant because I do not know the nature or likely duration of Mr Tregea's present employment. I accept that he would be a crucial witness at trial and that he would be required to assist in the preparation for trial. However, I do not know whether the defendant would be able to make any arrangement with Mr Tregea or his employer to facilitate the arrangements. He could, of course, be compelled by subpoena to attend trial. If that was wholly impracticable, it may be that his evidence could be adduced pursuant to s 79C of the Evidence Act 1906 (WA).
Mr Hetherington, in his affidavit sworn on 11 August 2006, said (inappropriately):
"34.I note that Mr Tregea has not been employed by the defendant since December 2004 and now is employed in and resides in Queensland. Although it is acknowledged that memories fade, this is a factor in all litigation. I would assume that a statement was taken from Mr Tregea shortly after the proceedings commenced in any event. Much of the evidence in this case is likely to be documentary. It is not unusual, though undesirable for witnesses in large actions to be asked to give evidence as to matters that occurred years before.
35.I do not believe that Mr Tregea's current employment and residence in Queensland is likely to cause the defendant any significant prejudice as:
35.1there does not appear to be any impediment in Mr Tregea travelling to Perth for the trial of this action; and
35.2with modern communications, there is relatively little difficulty in communicating with people in the eastern states.
36.I note that in or about May 2006, I happened to see Mr Tregea in Perth at the offices of Fortescue Metals Group on Adelaide Terrace in which I attended for business purposes."
I refer to these passages in Mr Hetherington's affidavit, because they were adopted as submissions by the plaintiff's counsel.
I do not doubt that a statement was taken from Mr Tregea for the purpose of preparing the defendant's case. But that would hardly be a sufficient preparation for a trial taking place many years later.
In my view, the plaintiff's submission that Mr Tregea's distant residence and employment should not cause inconvenience to the defendant is inconsistent with its own experience. When Mr Hetherington was living and working distantly - in New Zealand - he was unable to attend to the preparation of the plaintiff's case. However, I note that a considerable amount of detailed work on the case has been carried out by the defendant's solicitors since Mr Tregea's departure in December 2004.
Ultimately, the question must be whether the defendant has suffered additional prejudice as a result of the plaintiff's further delay since January 2004. I doubt that it has: even if the action had been entered for trial in (say) the first quarter of 2004, it would not have been allocated a trial date until after Mr Tregea had left the defendant's employ.
The extent of hardship to the plaintiff if the action is dismissed, while a matter to be considered, is not easy to gauge. The plaintiff's claim is now statute barred: but that is only one factor. Clearly, if it could be said that the action was bound to succeed, its dismissal would work a considerable hardship. Conversely, if the action was highly speculative, it might be a kindness to the plaintiff to dismiss it, thereby limiting the plaintiff's exposure to an order for costs.
It must be accepted that this is a very unusual claim: see pars 3 ‑ 12 of my earlier reasons, as set out above. And there is a substantial counterclaim. However, the fact that the plaintiff has not yet finalised its statement of claim makes it difficult to form a view as to the plaintiff's prospects of success.
Counsel for the plaintiff submitted that the statement of claim could be justified by the documents on which it is based and that any further issues would properly be resolved at trial. That is true up to a point. However, O 20 r 19(1)(d) of the Rules of the Supreme Court permits the Court to strike out a pleading which is an abuse of its process. And when such an application is made, it is open to the defendant to adduce evidence to support it: see generally, Seaman on Civil Procedure, par 20.19.12. These considerations apply equally to applications to amend pleadings.
It is said in Seaman (supra) that:
"The jurisdiction to strike proceedings out as an abuse must be exercised with great circumspection … but although it is a grave step to exercise the jurisdiction, if the factual and legal basis for so doing is made out the Court has a duty to intervene: McKechnie v Campbell (1996) 17 WAR 62 at 75."
Having regard to the history of the pleadings thus far, I would certainly permit the defendant to object to proposed amendments on the abuse of process ground. And given the extent of the defendant's objections to the proposed amendments to the statement of claim, I expect that a hearing of the plaintiff's application would require one to two days.
Counsel for the plaintiff contends that the defendant has acted with indecent haste, and opportunistically, in commencing its application to dismiss the action for want of prosecution only a few days before its application for springing orders was to be heard. The plaintiff contends that because (as is the fact) the defendant raised fresh objections to the plaintiff's proposed pleadings for the first time in the letter dated 18 July 2006, it has not exhausted the conferral process in relation to those new matters.
I do not think that is a legitimate cause for criticism of the defendant's solicitors. In all the circumstances, including the fact that the plaintiff was not prompted by the application for springing orders to apply to amend its pleadings, I consider that the defendant was justified in taking the action it did.
This is undoubtedly a borderline case. The plaintiff's delay since January 2004 has been inordinate, in my view. The action has not received the attention necessary to progress it in a proper manner. But I can see that the plaintiff's solicitors might have placed too much weight on the apparent willingness of the defendant's solicitors to negotiate on the various pleading issues. To that extent, the delay is excusable.
In all the circumstances, I have come to the conclusion that I should not dismiss the action for want of prosecution without giving the plaintiff a final opportunity to amend its pleadings as it wishes to do.
The amendments have been formulated. The plaintiff has completed its discovery: and the defendant has almost done so. Subject to these matters and the exchange of expert evidence, the action could be entered for trial in the near future.
As I have noted above, I am not persuaded that the defendant would necessarily suffer additional prejudice by reason of the delay since January 2004.
I propose, therefore, neither to accede to the defendant's application; nor to dismiss it. The application will be adjourned, pending the resolution of the pleading issues.
If it transpires that the plaintiff's pleadings are still defective, or that its case has very little merit, the balance would swing into the defendant's favour. That result would demonstrate that the delay since January 2004 had been inexcusable: and it would be unjust to the defendant to permit the action to proceed.