Ormarc Engineering v Downer EDI Mining-Blasting Services - [2020] WASC 7

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   ORMARC ENGINEERING -v- DOWNER EDI MINING-BLASTING SERVICES [2020] WASC 7
CORAM:   FIANNACA J
HEARD:   7 JANUARY 2020
DELIVERED          :   7 JANUARY 2020
PUBLISHED           :   13 JANUARY 2020
FILE NO/S:   CIV 2524 of 2017
BETWEEN:   ORMARC ENGINEERING
Plaintiff
AND
DOWNER EDI MINING-BLASTING SERVICES
Defendant

Catchwords:

Practice and procedure - Application to remove matter from Inactive Cases List - Lengthy delay and non‑compliance with orders - Whether case will be conducted in timely way - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 4A r 24, O 4A r 25, O 4A r 26, O 4A r 27, O 4A r 28

Result:

Application for removal from Inactive Cases List dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr S C Jacob
Defendant	:	Mr A Willinge

Solicitors:

Plaintiff	:	Young & Young
Defendant	:	Jones Day

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

AON v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Belendaine Pty Ltd v Primary Consulting Services Pty Ltd [2014] WADC 74
Brocx v Hughes [2010] WASCA 57; (2010) 41 WAR 84
Hall v Hall [2011] WASC 110
Lashansky v The Legal Practice Board [No 2] [2010] WASC 159
Leighton v Garnham [2016] WASC 134
Mammoth Nominees Pty Ltd v Greg Rowe Pty Ltd [2016] WADC 33
Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 753
Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841, (1993) 116 ALR 625
The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

FIANNACA J:

Introduction

This is an application pursuant to O 4A r 27(1) of the Rules of the Supreme Court 1971 (WA) (RSC) to remove an action from the Inactive Cases List. The application was heard on 6 January 2020 on an urgent basis, for reasons that are explained below. On 7 January 2020, I gave my decision dismissing the application. I gave brief reasons, sufficient to identify the key factors in my decision, with written reasons to follow. These are my reasons for refusing to remove the action from the Inactive Cases List.

Background and legislative framework

The action was placed on the Inactive Cases List by the Principal Registrar on 10 July 2019 because no procedural step had been taken in the case for 12 months by any party, and was therefore taken to be inactive pursuant to RSC O 4A r 24. On that date, the Principal Registrar sent a letter to the parties' solicitors pursuant to O 4A r 25(1)(b) giving notice of that fact and of the consequence that a case that remains on the Inactive Cases List for six continuous months after the date on which the notice is given, it will be taken to have been dismissed for want of prosecution, referring to O 4A r 28. The letter also referred to the obligation on each of the legal practitioners, under O 4A r 25(2), to inform the party they were representing, as soon as practicable, of:
(a)the fact the case had been placed on the Inactive Cases List and why, and;
(b)the effect of O 4A r 28.
When a matter is on the Inactive Cases List, no document can be filed in relation to the case except as specified by O 4A r 26(1). The only document relevant for present purposes is a request to the Court, pursuant to O 4A r 27(1), for an order that the case be removed from the Inactive Cases List.
On 23 December 2019, the applicant filed a chamber summons by email, seeking an order that the case be removed from the Inactive Cases List.
It follows from the operation of O 4A r 28 that, if the case is not removed from the Inactive Cases List by 10 January 2020, it will be taken to have been dismissed for want of prosecution on the basis that it will have been on the list for six continuous months after the date on which written notice was given to the parties that the case had been put on the list.[1] Accordingly, the application was heard on an urgent basis on 6 January 2020 after affidavits had been filed. It must be noted that the urgency is of the applicant's own making, having left the making of the application to a date so close to the expiration of the six month period.
[1] RSC O 4A r 25(1)(b) and r 28(1).
The defendant opposes the application.
The making of an order to take a case off the Inactive Cases List is in the discretion of the Court. Order 4A r 27 provides:
(2)The Court may order a case be taken off the Inactive Cases List if satisfied the case will be conducted in a timely way or for any other good reason.
(3)An order that a case be taken off the Inactive Cases List may include any conditions necessary to ensure the case is conducted in a timely way.
Sub‑rule (2) specifies preconditions for the exercise of the discretion, but it does not oblige the court to make the order if either of the conditions is met. The discretion must be exercised in accordance with principles I will refer to later. However, it follows from the use of the disjunctive that the discretion to make the order can be exercised if either of the specified circumstances is met. That does not preclude the court from relying on both circumstances, if they are met. Further, it follows from the reference to 'any other good reason' that the discretion is broad.

Issues to be determined

The issues to be determined, therefore, are:
(1)whether I am satisfied that the case will be conducted in a timely way, if it is taken off the Inactive Cases List;
(2)alternatively, or in combination with (1), whether there is any other good reason why the case should be taken off the Inactive Cases List.
It is relevant to both issues to consider the history of the action.

History of proceedings

The following outline of the history of the action is drawn from the evidentiary materials which have been filed and relied upon by the parties, as described in the next section of these reasons, and from the pleadings on the court record.
The action was commenced on 12 September 2017. It concerns events which occurred in 2016.
At the relevant time, the plaintiff carried on the business of providing engineering services, including the manufacture and refurbishment of equipment for use in the mining and construction industries. The defendant was in the business of providing mining and blasting services for use in the mining industry. It entered a contract with Newmont Boddington Gold Pty Ltd to customise and operate an emulsion manufacturing plant and install what is known as a 'Tread Module' at the Boddington Gold Mine. The defendant subcontracted part of that work to the plaintiff, which was to supply materials, carry out works and provide engineering services in relation to the emulsion manufacturing plant. The contract between the plaintiff and the defendant was executed on 2 June 2016.
The essence of the plaintiff's claim in the action is that, at the direction of the defendant, and in accordance with what the plaintiff alleges were variation notices issued by the defendant, the plaintiff carried out work and provided materials and services that were well beyond the original scope of the contract, and that the plaintiff is owed approximately $2.4 million for the materials and services supplied and the work carried out. It is part of the plaintiff's case that the scope of the materials, works and engineering services had changed significantly between the first version of the Statement of Work provided by the defendant to the plaintiff, on which the plaintiff tendered, and the final version of the Statement of Work that formed part of the contract executed on 2 June 2016. The final version is alleged to have been more detailed and comprehensive and included items that were excluded from the original scope of the plaintiff's work and supply of materials. Further, the plaintiff claims that, at the meeting of 2 June 2016, before the contract was signed, representations were made to the plaintiff's director, Mr Pover, by the defendant's representative to the effect that the plaintiff would be paid on a schedule of rates basis (rather than on the basis of a fixed price or lump sum pricing) because the final project design and site conditions were unknown at that stage, as neither party had access to the site.
The preceding summary is not intended to reflect the full ambit of the plaintiff's factual allegations or the claims based on those alleged facts, but it will suffice for present purposes to identify the nature of the dispute.
The plaintiff's claims, set out in the statement of claim, are for declarations in respect of the construction of the payment provisions of the contract, and for the sum of $2,417,820.85, inclusive of GST, or such other sum as the Court finds is owing to the plaintiff under the contract. The defendant paid the plaintiff $553,576.43, inclusive of GST, being the first two payments it was required to make to the plaintiff under the contract. It has not made the final payment under the contract. The sum claimed by the plaintiff is what it says the defendant owes it by way of final payment.
The declarations sought are that the contract did not provide for 'lump sum' pricing by the plaintiff, and that the schedule of rates set out in sch 3 of the contract applies to 'payment claims' by the plaintiff. In the alternative, the plaintiff seeks a declaration that the defendant is estopped from denying that directions allegedly issued by the defendant were variation notices. In the alternative to the claim for the sum alleged to be owing under the contract, the plaintiff claims by way of restitution 'such amount as the Court considers reasonable as a quantum meruit'. The pleadings include reliance on the existence of an implied term. The plaintiff also claims damages under s 236 of the Australian Consumer Law for alleged unconscionable conduct by the defendant in its dealings with the plaintiff, in breach of s 21(b) of that law.
The defendant filed its defence on 17 November 2017. In essence, it denies that the scope of the contract changed to any significant extent or that it issued variation notices. It also denies there was any implied term that affects the issue of what money would be payable by the defendant to the plaintiff, or that it engaged in unconscionable conduct. Finally, the defendant claims that the plaintiff was in default under the contract because it did not reach practical completion, and that the defendant is entitled to liquidated damages under the contract calculated on a daily rate. The defendant claims that it is entitled to exercise its 'Right of Set Off' under the subcontract to deduct the liquidated damages from any amount due to the plaintiff, and it intends to rely on such 'set off' if any part of the plaintiff's claim is established. It claims that as at 24 October 2017, the liquidated damages that had accrued were $1,996,500. The relevance of that date is that it was when the plaintiff went into voluntary administration.[2]
[2] Affidavit of Simon Christopher Jacob, sworn 23 December 2019 [8] attachment SCJ 1.
It is apparent from the pleadings and correspondence filed in this application concerning the contractual dispute that, if the matter proceeded to trial, there would be factual issues in relation to the content of the dealings between the parties before the contract was executed and during the term of the contract. It is also apparent that the determination of some of those issues will depend on an assessment of the credibility and/or reliability of witnesses to be called by the parties.
Further, it is not in dispute between the parties that the determination of a number of issues, in particular whether work and materials were outside the scope of the original Statement of Works or constituted variations, will require expert evidence.
As I noted earlier, the plaintiff went into voluntary administration on 24 October 2017, a little over a month after the writ was filed in these proceedings. The plaintiff acknowledges that it was not in a financial position to pursue the litigation from the time it went into administration.
On the same day administrators were appointed to the plaintiff company (24 October 2017), the defendant's solicitors wrote to the plaintiff's solicitors seeking further and better particulars in respect of each of the causes of action on which the plaintiff relied in its statement of claim.[3] The essence of the request was that the plaintiff identify with particularity all oral and written statements, and provide copies of all documents, alleged by the plaintiff to constitute directions from the defendant that amounted to variation notices. The defendant's solicitors asserted that the particulars and copies of documents were necessary to enable the defendant to know the case it had to meet and to properly plead its defence. The plaintiff did not provide the further and better particulars sought or copies of the documents requested by the defendant, even though the plaintiff's solicitor indicated by email on 20 December 2017 that the documents were being collated and would be sent once they had been checked to ensure they were properly collated.[4]
[3] Affidavit of Evan John Sylwestrzak, sworn 2 January 2020 [7] attachment EJS-1.
[4] Affidavit of Paul Francis Riethmuller, sworn 25 January 2018, attachment PFR-7, 170.
Given that the plaintiff was in administration, the defendant's solicitors wrote to the plaintiff's solicitors on 5 December 2017, seeking clarification as to how the plaintiff would be funding the proceedings, and enquired how the plaintiff would be in a position to pay an adverse costs order in the proceedings should it be unsuccessful.[5] The defendant's solicitors enquired whether the plaintiff would be prepared to provide security for costs pending the outcome of the proceedings. As there was no response from the plaintiff, other than its solicitor indicating the matter had not yet been discussed with counsel,[6] the defendant made an application for security for costs. The parties then agreed upon programming orders which were set out in a minute of proposed consent orders dated 11 January 2018.
[5] Affidavit of Evan John Sylwestrzak, sworn 2 January 2020 [19]; affidavit of Paul Francis Riethmuller, sworn 25 January 2018 [25] attachment PFR-6, 168.
[6] Affidavit of Paul Francis Riethmuller, sworn 25 January 2018, attachment PFR-7, 170.
On 15 January 2018, Archer J, the judge managing the case, made orders by consent in accordance with the minute (although amended in respect of filing dates), directing the parties to file and serve affidavits and submissions in relation to the defendant's application for security for costs. The defendant complied with the first order of 15 January 2018 by filing an affidavit in support of the application on 25 January 2018. The plaintiff failed to comply with the second order (of the same date), which required the plaintiff to file and serve any affidavit in opposition to the defendant's application by 9 February 2018.
On 21 February 2018, Archer J made orders:
(1)extending to 28 February 2018 the time for compliance by the plaintiff with the second order made on 15 January 2018;
(2)staying the proceedings (from 28 February 2018) in the event of the plaintiff's non-compliance with that order;
(3)directing that the plaintiff pay the defendant's costs of the hearing of 21 February 2018 on an indemnity basis to be taxed if not agreed;
(4)permitting service of the order via email to the plaintiff's solicitors; and
(5)directing the plaintiff to provide documents referred to in its Statement of Claim by 28 February 2018.
The plaintiff has not complied with any of the orders directed at the plaintiff.
As a result of the plaintiff's further non-compliance with the order that it file any affidavits in opposition to the application for security for costs, the action was stayed pursuant to the second order made by Archer J on 21 February 2018.
Pursuant to the third order of 21 February 2018, the plaintiff was required to pay the defendant's costs of that hearing forthwith on an indemnity basis to be taxed if not agreed. The defendant proceeded to have its costs taxed and a certificate of taxation was issued by a registrar on 28 June 2018 allowing the bill of costs in the sum of $19,524.61. The plaintiff did not object to the provisional assessment of the bill of costs. The plaintiff has not paid the costs, despite the defendant having made a request for payment.
Essentially, aside from filing the writ of summons more than two years ago, the plaintiff has not taken any steps to progress its claim.
As I noted earlier, the case was placed on the Inactive Cases List on 10 July 2019 on the basis that no procedural step had been taken for 12 months. The plaintiff has been aware of the status of the action since that time, as a result of the notice given by the Principal Registrar.

The evidence in the application

The plaintiff has filed and relies on the following evidence:
(1)an affidavit of Simon Christopher Jacob, the plaintiff's lawyer, sworn 23 December 2019, which ‑
a.deals with the previous orders made in the primary proceedings;
b.outlines what had occurred in respect of the administration of the plaintiff and the Creditor's Trust, which was established pursuant to a Deed of Company Arrangement executed by the plaintiff on 19 December 2017; and
c.attaches a circular to the plaintiff's creditors on 22 December 2017, the Deed of Company Arrangement and a circular to beneficiaries dated 21 November 2019;
(2)an affidavit of Scott Andrew Pover, the sole director of the plaintiff company, sworn 2 January 2020, which ‑
a.explains what occurred in respect of the administration of the company;
b.seeks to provide reasons why no steps had been taken in the action by the plaintiff since 21 February 2018;
c.seeks to explain the plaintiff's impecuniosity, in particular by reference to the defendant's non-payment of the sum claimed by the plaintiff;
d.outlines the prejudice which the plaintiff and its creditors would suffer if the action were dismissed;
e.expresses a commitment by Mr Pover to progressing the action on behalf of the plaintiff, and outlined the manner in which that would be done; and
f.addresses the plaintiff's incapacity to provide security for costs;
(3)a further affidavit of Mr Jacob, sworn 3 January 2020, attaching correspondence between the parties prior to the commencement of the action, which sets out the matters in dispute. This was intended to address an issue raised by the defendant in its written submissions as to whether the plaintiff had given a notice of dispute.
The defendant has filed and relies on the following evidence:
(1)an affidavit of Brian Gilbert Lutton (in-house counsel for the defendant), sworn 2 January 2020, which provides background in relation to the defendant and attests to the fact that two of its employees at the time of events relevant to the action, who were involved in dealings with the plaintiff that will be relevant to the determination of various factual issues in the action, are no longer employed by the defendant; and
(2)an affidavit of Evan John Sylwestrzak (an Associate in the firm of solicitors acting for the defendant), sworn 2 January 2020, which provides some background in respect of the subcontract the subject of the action, attaches correspondence between the parties' lawyers in respect of the issues arising from the action, and otherwise deals with the voluntary administration of the plaintiff company (as discerned from various documents, including the Administrators' report to the plaintiff's creditors) and the conduct of the plaintiff in the proceedings. The attachments include the transcript of proceedings before Archer J on 21 February 2018, the orders made by her Honour that day and the letter sent by the Principal Registrar on 10 July 2019 giving notice that the case had been put on the Inactive Cases List.

The defendant also relies on the affidavits that were filed in support of its application for security for costs, being the affidavit of Paul Francis Riethmuller (a partner of the firm of solicitors acting for the defendant) sworn 25 January 2018, and the affidavit of Laura Ellen Thomas (an associate with the same firm of solicitors) sworn 20 February 2018. It is sufficient to note that Mr Riethmuller's affidavit sets out the background to the relevant contract (from the defendant's perspective) and outlines the defendant's case in respect of the claims made by the plaintiff. It then deals with inquiries that had been made into the plaintiff's ability to pay the defendant's costs, in the event that the defendant were to succeed in the action, and the reasons why the defendant was seeking an order for security for costs.
Neither party sought to cross-examine any of the deponents of affidavits filed or relied upon by the other party.
While I have had regard to all of the material contained in the affidavits, including the attachments, it is not necessary for the purposes of these reasons to canvass all of that material in detail. It will be necessary, however, to set out the evidence in Mr Pover's affidavit, as it bears upon both issues to be determined in this application ‑ namely, whether the action will be conducted in a timely way, if it is removed from the Inactive Cases List, and whether there is any other good reason why it should be removed from the List.
Before turning to the evidence, I will discuss the legal principles that govern this application, as they provide the context in which the evidence will need to be considered.

Legal Principles

The principles relevant to an application to remove a matter from the Inactive Cases List were identified by Beech J in Lashansky v The Legal Practice Board [No 2].[7] His Honour, in dealing with an application under the provisions in place at that time for the removal of cases from the Inactive Cases List, namely RSC O 29A r 20, adopted the following statements of principle from decisions of Master Sanderson:[8]
(a)Courts have generally been sympathetic in the past to a tardy litigant and have been reluctant to grant a strikeout application, but the Inactive Cases List provisions bring a new rigour to this area of practice. The court is proactive in ensuring that a case progresses with reasonable despatch, with reasonable significant and self‑executing consequences for a tardy litigant: Lifelong Investments Pty Ltd v Karageorge [2008] WASC 86 [12];
(b)An application for removal from the Inactive Cases List should not be regarded as mechanical. Some evidence should be advanced to show that the party is committed to advancing proceedings. Ideally, a timetable should be set, perhaps backed up by a springing order: Swick Nominees Pty Ltd v Norncott Pty Ltd [2008] WASC 24 [11].
[7] Lashansky v The Legal Practice Board [No 2] [2010] WASC 159 (Lashansky [No 2]).
[8] Lashansky [No 2] [68].
The former RSC O 29A r 20 differed from O 4A r 27 in that it did not specify any matter of which the court must be satisfied before exercising the discretion to remove a case from the Inactive Cases List (in other words, it did not have an equivalent of r 27(2)).[9] However, in Hall v Hall,[10] Simmonds J, in dealing with a case under O 4A r 27, adopted the principles stated by Beech J in Lashansky [No 2].[11] His Honour noted the difference between the old and new provisions and said:
However, it was not suggested that O 4A r 27(2) made any change in the proper approach to the discretion to take a case off the List, at least for my purposes. In particular, it seemed to be common ground that O 4A r 27(2) stated in the rule what could be drawn from Lashansky [No 2] (WASC) read with former O 29A r 20(2) and (3). The reference to 'any other good reason', as I understood the parties' positions, was simply what might be taken from the discretionary character of the decision the court was called on to make, including its power to include any conditions 'necessary to ensure the case is conducted in a timely way' (O 4A r 27(3)). That power might be particularly, if not only, apposite where satisfaction as to future timely conduct of the case (O 4A r 27(2)) had not been attained. At the same time, in my view O 4A r 27(2) should be seen to reinforce the proposition that an application to take a case off the List 'should not be regarded as mechanical' (Lashansky [No 2] (WASC) [68] (b)).
[9] See the comparative analysis of O 4A r 27 and the former O 29 r 20 in Hall v Hall [2011] WASC 110 (Simmonds J).
[10] Hall v Hall [2011] WASC 110.
[11] Hall v Hall [60].
I also respectfully adopt the principles referred to by Beech J in Lashansky [No 2] discerned from the decisions of Master Sanderson, and I respectfully agree with the further analysis provided by Simmonds J in Hall v Hall.
In Lashansky [No 2], Beech J went on to consider the scheme of the provisions concerning the Inactive Cases List and the matters that would be relevant for the court to consider in deciding whether to exercise the power to remove a case from the List. As his Honour pointed out, once a matter is on the Inactive Cases List, it becomes subject to a special regime, and the evident scheme of that regime is that there will be curial supervision of whether the case should be permitted to resume progress and, if not, after 6 months the action is effectively dismissed.[12]
[12] Lashansky [No 2] [72] ‑ [73].
Further, in exercising power under O 4A r 27, it will be relevant to inquire whether there is evidence to explain how the case came to be on the Inactive Cases List and why it should not be expected that the matter would again become inactive, if it is removed from the List.[13] It will be relevant whether there is some evidence about the state of the action and how it is proposed that it will be progressed through to a trial. In Lashansky [No 2], a significant matter that weighed against removing the case from the list was the fact that the plaintiff had provided no evidence about the state of preparation of his case in the action at the time of the application or any proposal to progress the action by a programme of identified steps, with a timetable, to bring the matter to a hearing.[14]
[13] Lashansky [No 2] [74].
[14] Lashansky [No 2] [82] ‑ [83].
It is also relevant to consider when the application to remove the matter from the Inactive Cases List was made, and, if it was at a late stage, whether there is an adequate explanation for the delay. In Lashansky [No 2], Beech J was of the view that 'the plaintiff's unexplained failure to apply to have the case removed from the List until four months after [it was placed on the List] weigh[ed] in a significant way against the favourable exercise of the discretion to order removal of the case from the List'.[15] That view was referred to in Hall v Hall by Simmonds J, who agreed that it was appropriate to ascribe significance to an unexplained failure to apply to have the case removed from the List for a period of time, as it went to an essential step to be taken before the matter could be progressed.[16] I understand his Honour to be saying that the lack of timeliness in taking that essential step is a relevant consideration in assessing whether the case will be conducted in a timely way if taken off the Inactive Cases List.
[15] Lashansky [No 2] [80].
[16] Hall v Hall [62].
The plaintiff in these proceedings relied on the reasons of Dawson, Gaudron and McHugh JJ in The State of Queensland v JL Holdings Pty Ltd[17] for the following proposition:[18]
Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, 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 aim.
[17] The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 (JL Holdings).
[18] JL Holdings Pty Ltd, 154.
The issue in JL Holdings was whether the trial judge had erred in refusing to allow a particular amendment to the defence which, although arguable, was likely to result in the vacation of the date that had been set for trial six months ahead. As the headnote to the case aptly summarised the circumstances, the judge considered that maintaining that date was a more pressing consideration than a party's right to present a further defence. It was in that context that the plurality in JL Holdings considered the case management principles that had been expressed by Toohey and Gaudron JJ in Sali v SPC Ltd[19] as follows (footnote references omitted):
The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard.
[19] Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841; (1993) 116 ALR 625, 636.
The plurality in JL Holdings said about those principles, before the passage quoted at [43] above:[20]
Sali v SPCLtd was a case concerning the refusal of an adjournment in relation to which the proper principles of case management may have a particular relevance. However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable.
[20] JL Holdings Pty Ltd, 154.
It is evident that the context of that case was important to the manner in which the plurality considered that case management principles were to be applied. Their Honours recognised that the principles may have a particular relevance in other contexts.
In any event, as Beech J noted in Lashansky [No 2], reliance on JL Holdings for the proposition that 'case management is not an end in itself' may require reconsideration in light of the decision of the High Court in AON v Australian National University.[21] All of the judgments in that case expressed the view that, to the extent that the observations of the plurality in JL Holdings (quoted above) suggest a limited application for case management, they should not be applied in future, particularly given the statutory adoption of case management principles. That is so, even when the application is to amend pleadings, as had been the case in JL Holdings. French CJ said:[22]
It appears that a factor in the decision of the primary judge and of the Court of Appeal was the decision of this Court in JL Holdings. That case arose out of an entirely different factual setting. However, to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative.
[21] AON v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (AON).
[22] AON [6].
Gummow, Hayne, Crennan, Kiefel and Bell JJ acknowledged that 'a just resolution of proceedings' remained the 'paramount purpose' of the case management provision in that case (r 21 of the of the Court Procedures Rules 2006 (ACT)),[23] but went on to say:[24]
… what is a 'just resolution' is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
[23] Rule 21(2) of the Court Procedures Rules 2006 (ACT) provided that the rules were to be applied in civil proceedings 'with the objective of achieving (a) the just resolution of the real issues in the proceedings; and (b) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties'.
[24] AON [98].
Their Honours dealt with the statements in JL Holdings in the following passage:[25]
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.
[25] AON [111].
Heydon J said in AON:[26]
In relation to Queensland v JL Holdings Pty Ltd, it is sufficient to hold that, at least in jurisdictions having rules similar to rr 21 and 502, that case has ceased to be of authority. It is necessary to apply the Rules without any preconceptions derived from what was said in that case.
[26] AON [133]. Rule 21 is referred to above. Rule 502 was concerned with amendment to pleadings.
By reference to a passage from an unreported judgement of Bryson J in Maronis Holdings Ltd v Nippon Credit Australia Ltd,[27] Heydon J identified the undesirability of forbearance and liberality being extended to a party which has been delinquent in the conduct of proceedings, as 'the burden of inconvenience and lost opportunities for preparation tends to fall heavily and without adequate repair on parties who have not been delinquent'.[28]
[27] Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 753 [15].
[28] AON [133].
In Hall v Hall, Simmonds J considered the observation of Beech J in Lashansky [No 2] concerning the impact of the decision in Aon on the proposition in JL Holdings discussed above. Whereas Beech J did not regard it necessary to give the question further attention in the context of Lashansky [No 2], Simmonds J decided it was necessary to give an answer to the question in the circumstances of Hall v Hall.[29] His Honour said:[30]
It appears to me that Beech J in Lashansky [No 2] (WASC) particularly had in mind from [Aon] such paragraphs as [94] - [103] (Gummow, Hayne, Crennan, Kiefel & Bell JJ) and [6], [30] (French CJ). Those paragraphs indicate to me that a party seeking relief from the effects of a failure to comply with a time limit provided for in the rules will in most cases be expected to provide an explanation for that non‑compliance, to be weighed against the effects of the failure and case management considerations (see O 1 r 4A, r 4B): see [Aon] [103]. In weighing any such explanation regard will be had to its adequacy. In my view, to the extent that Lifelong Investments [13] and Love [3] might be taken to suggest that case management considerations will only in 'extreme circumstances' outweigh an explanation, that suggestion cannot be accepted. See [AON] [94], disapproving the view expressed in [JL Holdongs] 154.
It further seems to me that there is nothing in the language of O 4A r 27(2) to indicate that such weighing is not appropriate in most cases, including where it is sought to have the court exercise its discretion to take a case off the List 'for any other good reason' rather than because it is 'satisfied the case will be conducted in a timely way'. The case management considerations in O 1 r 4A, r 4B are of general application. The background to and nature of the List as I have explained them indicate to me that the language of O 4A r 27(2) was not meant to displace or replace those considerations, or diminish the significance of the effects of the matter that led to a case being put on the List, for the purposes of applications to take a case off the List. (footnotes omitted)
[29] Hall v Hall [68].
[30] Hall v Hall [69] ‑ [70].
I respectfully agree with his Honour's observations.
In Leighton v Garnham,[31] Le Miere J summed up the effect of AON as follows:[32]
In [AON] the High Court pointed out that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost effective resolution of the dispute has an effect upon the court and upon other litigants. Whilst parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of the dispute, where a party has had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party for the sake of doing justice to the opponent and to other litigants. (footnotes omitted)
[31] Leighton v Garnham [2016] WASC 134.
[32] Leighton v Garnham [64] ‑ [65].
His Honour went on to refer to the observations of Newnes JA In Brocx v Hughes[33] that, whilst the observations of the High Court in AON were made in respect of a late application to amend pleadings, they are of general application:[34]
They were made in the context of rules of court which find their counterparts in this court in O 1 r 4B. That rule provides, in effect, that the rules and processes and procedures of the court are to be applied so as best to attain just determination of litigation, efficient use of the resources of the court, and the timely disposal of the business of the court at a cost affordable by the parties.
[33] Brocx v Hughes [2010] WASCA 57; (2010) 41 WAR 84.
[34] Brocx v Hughes [2010] WASCA 57; (2010) 41 WAR 84 [94].
Of course, the rules in O 4A, which is headed 'Case Management', are intended to give effect to the objects set out in O 1 r 4B.
The plaintiff referred to two decisions of the District Court dealing with applications to remove matters from the inactive cases lists in the District Court and the Magistrates Court. Both cases were appeals from decisions at first instance to remove matters from the inactive cases list of the court in question. The first, Belendaine Pty Ltd v Primary Consulting Services Pty Ltd,[35] was an appeal from a decision of the Deputy Registrar of the District Court. The other, Mammoth Nominees Pty Ltd v Greg Rowe Pty Ltd,[36] was an appeal from the decision of a magistrate in the Magistrates Court. It is apparent, therefore, that the context of the decision of the District Court judge in each case differed from the context of the present application, although in each instance the judge approached the matter as if he were considering the exercise of discretion afresh.
[35] Belendaine Pty Ltd v Primary Consulting Services Pty Ltd [2014] WADC 74 (Stevenson DCJ) (Belendaine).
[36] Mammoth Nominees Pty Ltd v Greg Rowe Pty Ltd [2016] WADC 33 (O'Neal DCJ) (Mammoth Nominees).
The plaintiff relied on the observation of O'Neal DCJ in Mammoth Nominees that 'the decision in [Aon] does not stand for the narrow proposition that the introduction of case management rules means that the objective of a just outcome on the merits has become secondary to case management'.[37] With respect, that is undoubtedly correct as a general proposition, but it must be understood in the light of what the plurality had to say about what is a 'just resolution' (referred to at [48] above), which his Honour went on to quote, and what Le Miere J said in Leighton v Garnham (referred to at [54] above). Moreover, in the context of O 4A r 27(2), if the court is not satisfied that the case will be conducted in a timely way, then the objective of obtaining a just outcome on the merits could not, as a matter of course, alone constitute 'a good reason' for removing a matter from the Inactive Cases List, as that would render the other significant case management considerations ineffectual. As O'Neal DCJ noted in respect of the application of other observations in Aon and Hall v Hall concerning the need for an explanation for non-compliance with time limits, context is important.[38]
[37] Mammoth Nominees [69].
[38] Mammoth Nominees [66].

The plaintiff also relied on the following statements of Stevenson DCJ in Belendaine:[39]
The rules ought not to be used in a way which would prevent resolution of sensible and reasonable disputes between parties. And, nor should the rules permit parties who seek to invoke the jurisdiction of the court for the determination of their disputes to be shut out unnecessarily or unreasonably.
[39] Belendaine [45].
I respectfully agree with those general propositions, but they do not detract from the principles that emerge from Aon, Lashansky [No 2], Hall v Hall and Leighton v Garnham, as discussed above. Stevenson DCJ accepted the comments of Beech J in Lashansky [No 2] that it will be relevant to inquire whether there is evidence to explain why the case is in the inactive cases list and 'critically why it should not be expected that if it is removed from the list it would return to the list'.[40] His Honour then expressed the following views, which are relied on by the plaintiff:[41]
In my view, the proper test is one which requires a consideration of the history of the matter in general objective terms with a view to being satisfied that if the matter is allowed to continue, it will be conducted in a timely way. The question which the court must be satisfied about is whether the action will be conducted in a timely manner going forward if the discretion is exercised.
The discretion, of course, is a beneficial discretion. Like any decision concerning future conduct there is an element of speculation. Counsel have submitted that the court might take comfort by the way in which the parties have conducted themselves to a certain point in time as an indicator as to how they might conduct themselves going forward. This is a valid consideration but is not itself determinative.
[40] Belendaine [46].
[41] Belendaine [50] ‑ [51].
Again, I respectfully agree with his Honour's observations as general propositions. However, I would note that, to the extent that the decision under O 4A r 27 depends on satisfaction that the case will be conducted in a timely way, then in the absence of adequate evidence of how the case will be conducted going forward, the history of the conduct of the case may be determinative.

Preliminary issue ‑ competency of the application

Before turning to the evidence relied on by the plaintiff in support of the application, it is convenient to deal with a preliminary issue raised by the defendant, namely that the application is incompetent because the action is stayed as a result of the second order made by Archer J on 21 February 2018 and the plaintiff's failure to comply, by the extended deadline, with the order made on 15 January 2018 that it was to file and serve any affidavit in opposition to the defendant's application for security for costs.
I note that the plaintiff sought to rely on Mr Pover's affidavit filed in this application as constituting, in part, an affidavit that complied with the order made on 15 January 2018, in that it dealt with the plaintiff's opposition to the defendant's application for security for costs. While it might be arguable that the affidavit has that character, in part, the affidavit cannot serve as an affidavit filed in compliance with the order, as the plaintiff is prohibited from filing any document in the action, other than the request to have the case taken off the Inactive Cases List, while the case remains on that List. Therefore, the action remains stayed.
However, the defendant's submission that the application is incompetent cannot be accepted.
Order 4A r 27(1) provides:
Any party to a case on the Inactive cases List may make a request to the Court for an order that the case be taken off the Inactive Cases List.
The balance of r 27, which provides for the circumstances in which the Court may make the order sought, is set out at [7] above.
In my opinion, there is nothing in the text or context of O 4A r 27, including the purpose of the case management provisions, that precludes a case from being removed from the Inactive Cases List because the action has been stayed as a result of a party's failure to comply with a previous order of the court. It may be that the continuing default was the reason the matter was placed on the Inactive Cases List (because it amounted to no procedural step being taken in the action for 12 months or more), but the procedure for the removal of a case from the List is not conditioned upon the means by which the case came to be on the List. If the defendant's proposition is correct, an action that is stayed until a particular document is filed by one of the parties (as in this case) could never be removed from the Inactive Cases List, once it has been placed on the List, and the party could never take the procedural step to overcome the stay, namely the filing of the document, because it would be precluded from doing so by O 4A r 26(1): see [3] above. In my opinion, that would be an absurd result which could not have been intended by Parliament. It is not consistent with the scheme of the case management rules, being a 'system of positive case flow management' intended to facilitate the attainment of the objects referred to in O 1 r 4B, which include promoting the just determination of litigation.[42]
[42] RSC O 4A r 2; O 1 r 4B.
In my opinion, notwithstanding the stay order made by Archer J on 21 February 2018, once the case was put on the Inactive cases List, the procedure under r 27 for the removal of the case from the List was available to the plaintiff. Accordingly, the application is competent.

The plaintiff's explanation for non-compliance and the delay

The plaintiff's submissions in respect of both issues in the application, namely whether the Court is satisfied that the case would be conducted in a timely way, and whether there is any other good reason why the matter should be taken off the Inactive Cases List relies substantially on the evidence in Mr Pover's affidavit. Both issues are affected by Mr Pover's explanations for the plaintiff's non-compliance with the Court's orders and its failure to take any steps to progress the proceedings since filing the writ.
Mr Pover states that, at the time of the orders made by Archer J on 21 February 2018, the plaintiff company had no income and was unable to continue to fund the prosecution of the proceedings. He states that he was focusing his efforts, as sole director, on 'investigating and fostering income earning opportunities for the plaintiff'.[43] He states that he was also 'under a substantial amount of stress and emotional upset, as a result of having to deal with the administration of the plaintiff',[44] which resulted in a Deed of Company Arrangement (DOCA) being executed on 19 November 2017.
[43] Affidavit of Scott Andrew Pover. sworn 2 January 200 [3].
[44] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [4].
The DOCA incorporated a Creditors' Trust, by which the trustees were to hold the trust fund on certain trusts for the 'admitted creditors'.[45] 'Trust Fund' was defined in the DOCA and was said to be comprised of the 'Available Property',[46] which was defined to include 'the benefit of the proceeds (if any) of the Downer Litigation in accordance with clause 8'.[47] Clause 8 provided that the 'net proceeds (if any) of the Downer Litigation will form part of the Trust Fund by reason of and in accordance with clause 4 of the Trust Deed'.[48] The 'Downer Litigation' was defined to mean the proceedings in the present action.[49]
[45] Affidavit of Simon Christopher Jacob, sworn 23 December 2019, attachment SCJ-2, DOCA page 22 .
[46] Affidavit of Simon Christopher Jacob, sworn 23 December 2019, attachment SCJ-2, DOCA page 22.
[47] Affidavit of Simon Christopher Jacob, sworn 23 December 2019, attachment SCJ-2, DOCA page 16.
[48] Affidavit of Simon Christopher Jacob, sworn 23 December 2019, attachment SCJ-2, DOCA page 28.
[49] Affidavit of Simon Christopher Jacob, sworn 23 December 2019, attachment SCJ-2, DOCA page 18.
As a result of the DOCA, control of the plaintiff company returned to Mr Pover, as sole director, on 19 November 2017.
Mr Pover states that 'negotiating and assisting the administrator with matters relating to the DOCA and the Creditors' Trust' occupied him full time until about 19 November 2017.[50] I note that Mr Pover has not provided any details of the things he was required to do by way of negotiation or assistance, nor what he means by 'full time'. Further, given that the potential net proceeds of the present litigation appear to have been a significant part of the available property under the Creditors' Trust incorporated in the DOCA, one might have expected that ensuring the litigation was able to progress would have been a matter towards which some of Mr Pover's energy would be directed as one of the 'matters relating to the DOCA'. That is particularly so given that, when the defendant sought an extension of time within which to file its defence, because of the need for further and better particulars, the plaintiff took the view that the circumstances in which the court would order such particulars were very limited and that there was sufficient particularity for the statement of claim for the defendant to provide more than a blanket denial. The plaintiff was prepared to agree to an extension until 17 November 2017, and, by email from its solicitor dated 6 November 2017, said it would not agree to any further extension.[51]
[50] Affidavit of Scott Andrew Pover, sworn 2 January 2010 [6(a)].
[51] Affidavit of Evan John Sylwestrzak, sworn 2 January 2020, attachments EJS-1 - EJS-4.
It is noteworthy that, at a time when Mr Pover says the plaintiff had no income and was unable to continue to fund the prosecution of the proceedings, the plaintiff was taking advice and providing instructions to its solicitor to press for the filing of a defence by the defendant.
Mr Pover goes on, in his affidavit, to list the matters to which he devoted his time after 19 November 2019 as follows:[52]
[52] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [6].
(b)arranging insurances for the plaintiff so that the plaintiff could seek work in its field of business providing engineering services;
(c)tendering for work for the plaintiff, including travelling to worksites to inspect and negotiate potential contracts;
(d)dealing with the plaintiff's accountant and the Australian Taxation Office and its agents in respect of the plaintiff s claim for an R&D tax offset (being an asset of the Creditors' Trust), and the Australian Taxation Office's claim for outstanding tax liabilities (which the plaintiff seeks to offset against the claimed R&D tax offset);
(e)dealing with the plaintiff's trading bank in respect of secured liabilities of the plaintiff, and attempting to re-establish trading accounts;
(f)securing and protecting patents and intellectual property rights of the plaintiff in machinery and designs;
(g)investigating litigation funding in respect of these proceedings
(h)taking advice in respect of these proceedings, including the defendant's application for security for costs; and
(i)generally attending to a multitude of administrative tasks relating to the plaintiff company and its business.
The generality of the last item renders it of no assistance in determining why the plaintiff was not able to take the steps necessary to provide further and better particulars and copies of documents to the defendant. However, it is apparent that the plaintiff, through Mr Pover, was continuing to take advice in respect of the litigation and intended at that stage to pursue the litigation if litigation funding could be obtained.
Mr Pover further states that he was 'dealing with considerable personal distress arising out of the administration of the plaintiff' and personal issues concerning his wife and the care of their two children.[53] To preserve the privacy of Mr Pover's wife and his children, as far as possible, I do not intend to refer to the specific details to which Mr Pover has attested in respect of those matters. It is sufficient to say that I accept that Mr Pover's personal circumstances caused him distress over a significant period of time, at least from late 2017 until October 2019, when his wife left the family permanently to reside in her home country in Europe, and that his functioning was affected from time to time by the emotional toll and his attempts to save his marriage and protect his children.[54] I do not underestimate the significance of those matters in Mr Pover's life, given the nature of his wife's condition, as he has described it. However, it is not possible to make any assessment of the extent of the impact of those circumstances, including his wife's condition, on Mr Pover's functioning, in particular as it affected his ability to take steps to pursue the litigation, as he has not provided specific details in that regard. The impact is described by Mr Pover in general terms, as follows:[55]
Unfortunately, I was not able to deal adequately with all of the demands placed upon me at that time, including to adequately take advice from my solicitors, to give instructions to my solicitors and to fund the progress of this action by the plaintiff.
[53] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [7].
[54] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [7].
[55] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [8].
Mr Pover goes on, in his affidavit, to describe his activities and events in his life after 21 February 2018, being the date on which the last orders were made by Archer J. In summary, he describes his efforts in seeking and obtaining work in his personal capacity, his efforts to obtain contracts for the plaintiff in order to re-establish it as a going concern, and the development of the problems in his personal life, to which I have referred.
In relation to his personal work, Mr Pover states:[56]
In order to pay bills (both personal bills and expenses of the plaintiff company) and support my family (as the sole breadwinner), I spent time away from home working for substantial periods on drilling rigs.
[56] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [9].
Although it is not clear whether Mr Pover is referring to work other than the work on rigs referred to in the preceding paragraph, he states that he 'also applied for employment positions, including causing [his] solicitor to negotiate contracts of employment with potential employers'.[57]
[57] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [10].
Mr Pover states that, after 21 February 2018, he continued to tender for new work for the plaintiff, and that he travelled to various overseas locations to negotiate work contracts for the plaintiff. He says there are a number of opportunities which he is continuing to explore, and he is 'hopeful that they will lead to work opportunities for the plaintiff in 2020'.[58]
[58] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [11].
Mr Pover describes one of the opportunities in some detail. He says he has been negotiating with a large overseas engineering company (which he refers to as the 'Potential Principal') over the past 12 months for the plaintiff to be its Australian agent. He says that, as part of those arrangements, the plaintiff would enter into a contract for the provision of engineering and related services for the Potential Principal in Australia, which would be 'a substantial opportunity for the plaintiff', and would result in Mr Pover working full-time for the plaintiff and building the plaintiff's business in Australia. Mr Pover says there is the opportunity for substantial profit.[59] It is not necessary to go into further detail for present purposes. I accept that genuine steps have been taken to achieve the contract described by Mr Pover. However, as Mr Pover's terminology indicates, at present it remains a potential source of income for the plaintiff, and there is no reliable indication of the timeframe within which the negotiations may bear fruit, if indeed they do. I will return to this issue below.
[59] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [18].
Mr Pover states that for the last half of 2019 he made the choice to give priority to spending time at home in an attempt to save his marriage, which included assisting his wife and caring for their children. He says that during that time, he could not work away to earn income.[60] After his wife left in October 2019, he remained home to look after his children until late November 2019. His parents then offered to accommodate and look after children for as long as they can afford it, and that allowed Mr Pover to return to work.
[60] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [12].
Mr Pover does not specify when it was, in the last half of 2019, that he ceased to work. Notably, he says he could not work away to earn money, but does not explain whether his circumstances prevented him from obtaining work locally.

Plaintiff's intention to pursue the action

Mr Pover states that, with his experience in the offshore drilling industry, he can obtain work when he needs it.[61] He says that, given his change in circumstances, he has recently obtained work again on a drilling rig abroad. He says:[62]
I intend to continue working to earn income so that I can fund these proceedings for the plaintiff.
[61] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [15].
[62] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [16].
The implication is that his income will be such as to enable such funding to occur. There is no basis on which I can make any assessment of that expectation, as Mr Pover has not provided any details of his income or his expenses or other liabilities. Further, except for the fact that Mr Pover's parents will be looking after the children while he is working, there is no information to indicate how his circumstances will be any different to when he was earning an income working on drilling rigs previously. As for the fact that Mr Povey's parents will be caring for his children, there is no information to indicate the extent to which it will involve a financial contribution.
Mr Pover states:[63]
I am fully committed, as sole director of the plaintiff, to devoting my time and personal financial resources to the plaintiff in order to progress these proceedings against the defendant. My intent is to provide a return to the Creditors' Trust.
[63] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [33].
However, everything that follows in his affidavit after that statement concerns the manner in which he hopes to fund the litigation, rather than any plan to move the litigation forward. In particular, he refers to his work on the rig abroad and explains that it will be towed to the Bass Strait 'sometime between late January and early March 2020', after which he expects to be on a monthly roster (a month at work followed by a month at home).[64] He states:[65]
I intend to continue working on the drilling rig at which I am presently rostered for the foreseeable future until the plaintiff is able to secure a contract with the Potential Principal. From then, it is likely that I would be employed by the plaintiff. I expect to be able to fund legal expenses of $10,000 per month from my wages.
[64] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [34] - [35].
[65] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [38].
As I noted earlier, Mr Pover does not provide any details in respect of his expected income or expenses that would enable an assessment to be made of his expectation to be able to fund the litigation. He states that while he is home from his offshore work, he will be 'working for the plaintiff to earn income for the plaintiff'.[66] He says:[67]
This typically involves engineering maintenance projects. There is work available for the plaintiff when I am available to do the work.
[66] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [39].
[67] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [39].

It is not clear how long this situation of work availability has existed, but Mr Pover's statement begs the question whether such work was undertaken during 2018 and the first half of 2019 and, if not, why not.
In any event, it is evident from Mr Pover's affidavit that his expectations of successfully funding the present litigation, to enable it to progress, depend to a significant extent on the success of negotiations between the plaintiff and the Potential Principal. Mr Pover states (emphasis added):[68]
I am hopeful that the plaintiff will secure contracts with the Potential Principal to establish and develop its business in Australia, as its Australian agent. However, it is unlikely there will be progress in relation to that contract until March/April 2020 and I am hopeful that a contract would be entered into before mid-2020.
[68] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [37].
Later in his affidavit, Mr Pover states (emphasis added):[69]
From about mid 2020 when I hope the plaintiff company will commence a contract with the Potential Principal, I intend to continue my offshore work and to work for the plaintiff to develop business opportunities for the plaintiff, and to attend to the administration of the plaintiff's contract with the Potential Principal.
[69] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [40].
While it is understandable, for reasons of commercial confidentiality, that the plaintiff would not wish to adduce any further evidence of its negotiations with the Potential Principal, the court is not in a position, on the basis of the evidence in Mr Pover's affidavit, to make any assessment of the prospect of the plaintiff being able to fund the litigation from that potential source of income. Even if the negotiations are successful, Mr Pover's hope is for a stream of income from mid-2020. If the further conduct of the action is dependent upon funding from such income, it could hardly be said to be timely. The likelihood that it is so dependent can be discerned from the following paragraph of Mr Pover's affidavit:[70]
I could find other work for the plaintiff now, but that would take me away from earning wages. My best course of action at the moment is to earn wages and continue negotiations for a contract with the Potential Principal, as I consider that will give the plaintiff the best financial return and the greatest capacity to fund legal costs to progress this action.
[70] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [45].
Mr Pover states that he has instructed his solicitor and insurance broker to make a claim pursuant to a legal expenses insurance policy held by the plaintiff ('the legal expenses claim').[71] Mr Pover states that he proposes that the indemnity costs of $19,524.61, ordered by Archer J to be paid by the plaintiff to the defendant, be paid from proceeds of the legal expenses claim, 'if that policy responds to pick up payment of the costs order'.[72] The claim was lodged on 12 December 2019. The plaintiff had not received a response from the insurance company at the time Mr Pover swore his affidavit.[73]
[71] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [21].
[72] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [42].
[73] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [21].
Mr Pover states that, if the insurance claim does not provide a source for funds to meet the outstanding costs order, he proposes that he pay 25% of outstanding sum upon the Court making the orders sought by the plaintiff in this application, with the balance to be payable within 45 days from the date of those orders.[74] There is no explanation as to why the plaintiff (through Mr Pover) has not sought to make such a payment earlier.
[74] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [42].
Further evidence in respect of the plaintiff's financial circumstances and its capacity to fund the litigation emerges from the section of Mr Pover's affidavit that deals with the defendant's application for security for costs. As I discussed at [63] above, the plaintiff sought to rely on Mr Pover's affidavit, in part, as amounting to compliance with the order that the plaintiff file an affidavit in response to the defendant's claim for security for costs. I explained there why that approach is misconceived. However, while Mr Pover's affidavit lacks detail as to the plaintiff's financial status, it does not instil confidence in the plaintiff's capacity to conduct the case in a timely way. Mr Pover states:[75]
I do not expect that the plaintiff will have capacity to make any payment as security for costs. The plaintiff presently has no funds, other than the funds which I loan or give to the plaintiff, or funds which the plaintiff earns from services which I provide. The plaintiff presently has no employees other than me.
I am hopeful that, in time, the plaintiff will become a viable trading entity, which may possible (sic) be within 6 months when the plaintiff has a contract with the Potential Principal.
[75] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [43] ‑ [44].
Mr Pover further states that neither he nor the plaintiff has any borrowing capacity. He says that all assets owned by the plaintiff and him (personally), which could be used as security are secured to Bendigo Bank in respect of loan commitments or held by the Creditors' Trust. He says that he intends to put his residence on the market in the next 1 to 2 months, and the proceeds of sale will go to Bendigo Bank.[76]
[76] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [46] - [49].
Finally, Mr Pover states that he is prepared to give an 'unlimited personal guarantee' to the defendant in respect of costs which the plaintiff is ordered to pay to the defendant. However, other than the general evidence about his work and expected work, he does not provide any details of the means by which he would be able to meet such a guarantee if called on.

Reasons for the plaintiff's impecuniosity

As is obvious from the contents of Mr Pover's affidavit, as discussed above, the starting point for the plaintiff's explanation for failing to prosecute the action for nearly two years is its inability to fund the litigation because of its impecuniosity. In paragraphs that are essentially argumentative, but which set out Mr Pover's belief, he states:[77]
The financial impecuniosity of the plaintiff is substantially due to the failure of the defendant to make payment of the sums claimed by the plaintiff. The appointment of an administrator to the plaintiff was a direct result of the plaintiff being unable to meet its financial commitments as a result of non-payment of invoices issued by the plaintiff to the defendant in respect of the contract and works the subject of the Statement of Claim.
If the defendant had paid the invoices which the plaintiff issued to it (which are the substance of the plaintiff s claim against the defendant), I verily believe that the plaintiff would have remained solvent and able to continue to trade and an administrator would not have been appointed to the plaintiff.
[77] Affidavit of Scott Andrew Pover, sworn 2 January 2020 [25] ‑ [26].
That view is also reflected in the administrators' report of 21 November 2017, in which the administrators stated:[78]
Based on our investigations we estimate the date of insolvency to be 31 March 2017, being the date when Downer informed the company that invoice 30616-C dated 16 February 2017, totalling $2,303, 970.85 would not be paid.
[78] Affidavit of Paul Francis Riethmuller, sworn 25 January 2018, attachment PFR-5, pages 102 - 165 of affidavit at page 115.
Although the estimated date of insolvency was 31 March 2017, the administrators noted, in the same section, that the Company ceased trading in January 2017.[79] It is also apparent from that report that the plaintiff had a substantial tax debt, which was the proximate cause of the appointment of administrators:[80]
The Director's decision to place the Company into Voluntary Administration was in light of the pending court action by the ATO to wind-up the Company in pursuit of taxation arrears of $1.19 million. We understand the Company's inability to pay those arrears was primarily due to non-payment of amounts claimed from Downer.
[79] Affidavit of Paul Francis Riethmuller, sworn 25 January 2018, attachment PFR-5, pages 102 - 165 of affidavit at page 115.
[80] Affidavit of Paul Francis Riethmulle, sworn 25 January 2018, attachment PFR-5, pages 102 - 165 of affidavit at page 111 - '[2.4] Events Leading up to Administration' of the administrators' report.
It is noteworthy that the administrators estimated the date of insolvency to be well before the action in these proceedings was commenced by the plaintiff.

Prejudice to creditors

Mr Pover states that there would be substantial prejudice to the plaintiff, and to creditors of the plaintiff who are entitled to benefit pursuant to the Creditors' Trust, if these proceedings were dismissed. That is because the potential proceeds of this litigation, if the plaintiff were to succeed, are an asset of the Creditors' Trust.
However, Mr Pover does not explain what the substantial prejudice will be to either the plaintiff or creditors. While the non-recovery of a debt will always result in some 'prejudice' to a creditor, the Court has no basis for assessing the extent of such prejudice in these proceedings. The plaintiff has produced no evidence identifying the current creditors, the debts owed to them or their financial circumstances.

Plaintiff's submissions

The plaintiff submitted that, through Mr Pover, it has given a reasonable explanation for its delay in prosecuting the action, and the Court can be satisfied that the reasons for the delay, in combination, constitute a good reason why the matter should be taken off the Inactive Cases List. In essence, those reasons were that:
(1)the plaintiff had been impecunious and unable to fund the litigation;
(2)while the plaintiff was under administration from 24 October 2017 until 19 November 2017, Mr Pover, as sole director of the plaintiff, had to devote his energies to assisting the administrators, negotiating the DOCA and securing the position of the plaintiff, so that it could continue to trade after the period of administration;
(3)Mr Pover was working away from home on drilling rigs, to earn an income to support his family and pay the plaintiff's ongoing expenses;
(4)Mr Pover had made significant efforts to negotiate contracts for the plaintiff, with a view to ensuring the plaintiff would have funds to pursue the litigation; and
(5)Mr Pover's personal circumstances had made it difficult for him to pursue the litigation for a significant part of the period since the orders were made by Archer J.
The plaintiff's case is that its insolvency in 2017, and its subsequent impecuniosity, were substantially and directly caused by the defendant's refusal to pay the money which the plaintiff has claimed in these proceedings for work it had carried out. The plaintiff submitted that its failure to pursue the action until recently was largely due to its impecuniosity, and to prevent the plaintiff from pursuing its claim because of that failure would amount to allowing the defendant to benefit from an alleged wrongdoing, namely the failure to pay money owed to the plaintiff. In the plaintiff's submission, that is a significant factor in determining whether the reasons that have been put forward to explain the non-compliance and delay, in combination with each other and with other matters (which I will come to shortly), constitute a good reason for removing the matter from the Inactive Cases List. That is particularly so, it submits, because of the significant disparity between the parties in terms of corporate size and financial capacity.
The plaintiff submitted that, notwithstanding any tardiness on the part of the plaintiff in progressing the action, the doing of justice between the parties, and the protection of the interests of creditors of the plaintiff pursuant to the Creditors' Trust, militate in favour of giving the plaintiff the opportunity to pursue its action against the defendant. If the action is not removed from the Inactive Cases List, it will be deemed to be dismissed within a few days, and the plaintiff will have lost forever the opportunity to bring a substantial claim against the defendant, in circumstances in which it has an arguable case. Consequently, the plaintiff submits that it will suffer substantially greater prejudice if the proceedings are dismissed then the defendant would suffer if the action is removed from the Inactive Cases List.
The plaintiff further submitted that its resolve to pursue the claim was evident at the start, in that the materials show that the plaintiff obtained detailed legal advice and incurred costs in documenting the claim. It submitted that I can be satisfied on the basis of Mr Pover's affidavit that the plaintiff is committed to progressing the action, and, through Mr Pover, will be able to devote its energy and resources to do so, now that Mr Pover's personal circumstances have changed.
As to the potential for some further delay before the plaintiff is in a financial position to progress the matter, the plaintiff submitted that the case is in its early stages and, given the nature of the action, it is reasonable to expect that the path to trial will take some time. It is also reasonable to expect that expert evidence will form part of the case, which will affect the timetable to a listing conference. However, a detailed statement of claim and a defence have been filed, and the plaintiff submits the issues are sufficiently identified in those pleadings.
Of course, to acknowledge that the case is still in its early stages after more than 2 years, highlights the extent of the plaintiff's delay in the prosecution of the action. Further, the fact that the path to trial will take some time does not assist the plaintiff's cause in the application. What is necessary is for the plaintiff to demonstrate that the case will be conducted in a timely manner. In that regard, given that expert evidence will be necessary, the absence of any evidence of steps being taken to obtain expert reports, or of a timetable that accounts for expert evidence, weighs against the plaintiff.
The plaintiff submitted that the defendant had not identified any particular prejudice it would suffer if the case were removed from the Inactive Cases List. The defendant had argued in its written submissions that the case should be dismissed for want of prosecution. The plaintiff submitted that while this application was not the occasion for determining that issue, it would be open to the defendant to bring an application to dismiss the action for want of prosecution, and that would be the appropriate forum for the court to resolve whether the action should be allowed to proceed in light of the history and any proposed programme for the matter to progress. The plaintiff further submitted that the Court can impose conditions on the further conduct of the proceedings. For instance, it could use springing orders as a tool to ensure that the plaintiff conducts the case in a timely manner.
The plaintiff also submitted that the defendant will have an opportunity to address issues concerning the plaintiff's impecuniosity in its application for security for costs. The question of whether the plaintiff should provide security for costs should be determined separately. If the Court makes an order that the plaintiff provide security for costs, and the plaintiff does not comply, the usual order would be to stay the proceedings, or provide for dismissal of the proceedings by springing order.
Finally, the plaintiff relied on Mr Pover's preparedness to give an unlimited personal guarantee to the defendant in respect of costs as an indication of his commitment to progressing the action.
It is necessary to refer to what is in effect a concession made on behalf of the plaintiff by counsel in submissions concerning its attitude to the proceedings. It was put to counsel for the plaintiff that the plaintiff had ignored the orders made by Archer J, despite consenting to them, and that may suggest the court could have little confidence in the plaintiff complying with orders in future. Counsel pointed out that the effect of the order made by Archer J was to stay the proceedings if the plaintiff did not file an affidavit responding to the defendant's application for security for costs. Counsel submitted that it suited the plaintiff at that time to have the action stayed, as it was not in a position to progress the matter because of its financial position. He submitted that circumstances had now changed, and the plaintiff was committed to proceeding with the action and complying with any orders made.
The concession to the effect that the plaintiff was not concerned with the consequence of non-compliance with the court order, because it suited the plaintiff to have the matter lie in abeyance, tends to detract from the submission that other factors prevented the plaintiff from progressing the case. Further, it tends to support the defendant's argument that the plaintiff has approached the court process as if it was to function at the plaintiff's convenience. It is a fraught approach, as it flouts the case management principles that must be applied, and leaves the plaintiff at risk of having his action dismissed for want of prosecution.

Defendant's submissions

The defendant submitted that the plaintiff is unable to satisfy the Court that the case will be conducted in a timely way if removed from the Inactive cases List, because it does not have the financial means to conduct the litigation. In that regard, the defendant submitted that nothing has changed.
The defendant submitted that the strongest indication of the plaintiff's likely conduct if the matter were taken off the Inactive Cases List is its past conduct, consisting of a failure to comply with the Court's orders and a failure to prosecute the action beyond the filing of a writ and statement of claim. It submitted that the plaintiff's broad explanations for its inaction do not shed light on why it could not comply with two relatively simple matters, the filing of an affidavit in answer to the defendant's application for security for costs, and the provision of documents to which the plaintiff refers in its statement of claim and which are in the plaintiff's (or its lawyer's) possession. The latter appeared to be the case in what was said by the plaintiff's lawyer in correspondence with the defendant and in the appearance before Archer J on 21 February 2018.
As to prejudice to the defendant, it submitted that it had continued to incur legal costs, and the continuing existence of the litigation is a factor that could reflect adversely on its standing with potential contractors. Further, some of the defendant's employees referred to by the plaintiff as having been involved in relevant interactions in which directions are said to have been given are no longer employed by the defendant. In my view, that argument carries less weight than the first. The defendant has submitted in essence that the plaintiff should not have commenced the proceedings when it did because it was not in a financial position to pursue the action. However, the action would still be within the limitation period if brought this year or next year. If the plaintiff had waited to commence the action until it was financially viable, say later this year, there would still be an issue with witnesses, from the defendant's perspective, but it is difficult to see that such an issue would result in a stay of the proceedings.
As to the plaintiff's argument about the disparity between the parties, the defendant noted that the plaintiff is not a litigant in person, but a corporation with duties under the Corporations Act 2001 (Cth). The defendant accepted that it is much larger and financially stronger than the plaintiff, but submitted that it would be wrong in principle to treat parties differently according to corporate size or financial strength when it comes to compliance with court orders and the timely conduct of litigation. While I respectfully agree with the general proposition, that is not to say that a court cannot have regard to the fact that a party, whether a person or a corporation, is labouring under a disadvantage that has affected its ability to prosecute its action. Each case must be decided on its own facts.

Consideration

I have given careful consideration to the evidence presented in the application in light of the legal principles I discussed above.
Under O 4A r 27, it is open for the court to remove a matter from the Inactive Cases List, even if it is not satisfied that the case will be conducted in a timely way, if there is some other good reason why it should be removed. However, the magnitude of the delay in the present case, and the concession that the plaintiff chose inaction, or at least took advantage of the consequence of inaction because it suited its circumstances, are factors that, in my opinion, elevate the need for the court to be satisfied that the case will be conducted in a timely way. In my opinion, for any other consideration to constitute some 'other good reason' in those circumstances, it would have to be compelling.
In addition, on the evidence presented in this application, there is no reasonable explanation for the plaintiff's failure to apply to have the case removed from the Inactive Cases List until a matter of weeks before the expiry of the six month deadline that would have resulted in the deemed dismissal of the action for want of prosecution. The defendant aptly described the application as a 'last gasp attempt' to remove the matter from the List before automatic dismissal. As in Lashansky [No 2], the lateness of the application (worse here than in Lashansky [No 2]) weighs in a significant way against the favourable exercise of the discretion to order removal of the case from the List.
The onus is on the plaintiff to persuade me that it will conduct the case in a timely way if the matter is removed from the Inactive Cases List. The only evidence on which the plaintiff relies is that contained in the affidavit of Mr Pover. The information in that affidavit falls well short of persuading me that the action will be conducted in a timely way.
This is a case in which past conduct should be given significant weight in determining the plaintiff's likely approach in the future. In my opinion, Mr Pover's explanation as to why the action was not pursued after orders were made by Archer J on 21 February of 2018 is inadequate. In essence he relies on the circumstances of insolvency, administration, subsequent impecuniosity and the need to engage in endeavours to obtain funds, both for the plaintiff and personally, as factors that affected the plaintiff's capacity to proceed with the action. He also refers to his personal circumstances as a factor that affected his ability to prosecute the action for the plaintiff. Given the nature of the orders that were made by Archer J and what was required of the plaintiff for compliance, which was not particularly onerous, the circumstances in which the plaintiff found itself and in which Mr Pover subsequently found himself in respect of his personal life do not provide an adequate explanation for the plaintiff's failure to comply with the orders.
For obvious reasons, my finding in that regard affects the weight that can be given to Mr Pover's claim now that he would pursue the action in a timely way. The plaintiff's dilatory conduct in failing to pursue the action before December 2019 is cause for concern that the action would not be pursued in a timely way in the future.
Nothing contained in Mr Pover's affidavit indicates that the plaintiff would conduct the case in a timely manner. At best, he indicates that steps would be taken to obtain funding for litigation and that he may personally be in a position to contribute to the funding of the litigation as a result of work that he has obtained. However, it is also evident that the work that he refers to is work that he has done in the past, and there is no explanation as to why that has not resulted in funds being available previously to enable the action to be pursued, at least to the extent of compliance with the orders that were made by Archer J on 21 February of 2018.
To the extent that Mr Pover claims that he may have the ability in the very near future to fund the litigation from his personal income, there is no basis upon which I can determine what weight can be given to that prospect. Mr Pover has provided no evidence of his income, either in the past, at present or expected. He has provided no evidence of his expenses that might enable one to assess the reasonableness of his expectation. Similarly, he has provided no evidence as to the plaintiff's income or expenses.
Mr Pover was present during the proceedings. In exchanges with his counsel, I made it clear that I considered there to be deficiencies in the information that was contained in the affidavit in respect of those matters. The plaintiff has not sought to supplement the evidence in the affidavit with any further evidence in relation to the matters to which I have referred.
The essence of the requirement under the rule is that the matter be conducted in a timely way. The notion of timeliness is absent from the contents of Mr Pover's affidavit concerning his intention to pursue the matter. As I noted in discussing his affidavit, the timeframe in which he hopes to have a contract in place which will enable the litigation to be funded properly and for progress to commence extends to mid-2020. He has not described any plan to move the matter forward in the meantime, other than the proposal to make a payment towards the costs ordered by Archer J.
While it may be accepted that Mr Pover has a renewed resolve to pursue the action, the resolve at this stage is essentially to keep the action alive. That is not the same as progressing the action.
The plaintiff has provided no plan, let alone a timetable, of the manner in which the action would be pursued. This is precisely the sort of case referred to in the authorities in which a programme of further steps to be taken in the proceedings is essential to demonstrate that the matter will not return to the Inactive Cases List or otherwise be dismissed for want of prosecution. Further, this is a case in which both parties acknowledge there will be a need for expert evidence. There is nothing in the information produced on the application to indicate that experts have ever been approached on behalf of the plaintiff or what steps will be taken to obtain expert evidence if the matter were to proceed.
In all the circumstances, I am not satisfied that the plaintiff will conduct the case in a timely way if the matter is removed from the Inactive Cases List.
I turn then to the question of whether there is any other good reason why the case should be removed from the List.
I am not satisfied that the circumstances described by Mr Pover in his affidavit demonstrate that there is any other good reason for taking the matter off the List. As counsel for the defendant properly acknowledged, one must respect the difficult personal circumstances in which Mr Pover found himself. In discussing his evidence, I indicated my understanding of the impact those circumstances had on him, although there was no specific evidence of their effect on his ability to take advice and give instructions for the purposes of complying with the court orders.
While I accept that Mr Pover was subject to personal difficulties, and difficulties associated with the administration of the plaintiff, in my opinion those circumstances do not provide an adequate explanation for the dilatory conduct of the action until December of 2019.
I have given careful consideration to the plaintiff's argument that the need to achieve justice between the parties may itself be a good reason for the purposes of O 4A r 27. In that context the plaintiff placed emphasis upon the disparity between the position of the defendant (a large company that is part of a group of companies) and the position of the plaintiff, which is a relatively small company, described as a family company. However, as the defendant pointed out, the plaintiff has responsibilities as a corporation, and I cannot treat the matter as if the plaintiff were Mr Pover as a litigant appearing in person.
As I noted in discussing the principles, if the court is not satisfied that the case will be conducted in a timely way, then the objective of obtaining a just outcome on the merits could not, as a matter of course, alone constitute 'a good reason' for removing a matter from the Inactive Cases List, as that would render the other significant case management considerations ineffectual. It is relevant to consider not only the action between the parties, but the impact of noncompliance with court orders and with a failure to pursue actions in a timely way upon other litigants in the justice system. There will be times when a party may be left with a sense of injustice because of the operation of provisions such as O 4A r 27 and the case management principles.
Finally, I have had regard to the plaintiff's argument that, if the matter is not taken off the Inactive Cases List, the plaintiff and its creditors will suffer significant prejudice. As I said earlier, there is no evidence in the affidavits produced on behalf of the plaintiff to indicate what the prejudice to the creditors would be. There is no evidence to identify those creditors, apart from references in the administration report, which was attached to an affidavit filed by the defendant. There is no evidence of what is owed to the creditors. There is no evidence as to what other measures might be taken to protect their interests. I note from the administrators' report that other measures may be available to secure the interests of creditors. I am not satisfied that there is a sufficient basis to conclude that the plaintiff's inability to pursue this action will cause any particular prejudice to creditors. In any event, the argument relies on the assumption that the action would succeed.
Of course, if the plaintiff's case fails, the money that is said to be owed by the defendant to the plaintiff would no longer be a benefit available to the creditors.
It is not necessary for me to make any assessment about the merits of the case. It seems to me that the plaintiff has an arguable case. However, the same could be said of the defendant's case, having regard to the pleadings and the correspondence between the parties.

Conclusion

All that is required at this point in time is to consider whether the arguments that have been put forward by the plaintiff satisfy me that either the action will be conducted in a timely way or there is some other good reason why it should be taken off the Inactive Cases List. I am not persuaded of either of those matters.
Accordingly, the application must be dismissed.

Costs

It was agreed at the time I delivered my decision that the question of costs should be determined on the papers in accordance with the orders that follow.

Orders

The application is dismissed.
My decision on the question of costs is reserved and will be determined on the papers.
It is ordered that:
(a)within 14 days the defendants file submissions on the question of costs;
(b)within 21 days thereafter, the plaintiff file and serve his submissions on costs;
(c)within seven days thereafter, the defendants file any submissions in reply; and
(d)the question of costs be determined on the papers.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
HF
Associate to the Honourable Justice Fiannaca
13 JANUARY 2020