Polodna v Mattiaccio
[2019] WASCA 21
•30 JANUARY 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: POLODNA -v- MATTIACCIO [2019] WASCA 21
CORAM: BUSS P
MURPHY JA
BEECH JA
HEARD: 23 JANUARY 2019
DELIVERED : 23 JANUARY 2019
PUBLISHED : 30 JANUARY 2019
FILE NO/S: CACV 112 of 2017
BETWEEN: RICHARD ANTHONY POLODNA
First Appellant
FRANK BRATOVICH
Second Appellant
AND
ENRICO MATTIACCIO
Respondent
Catchwords:
Practice and procedure - Unconditional appearance - Application to withdraw unconditional appearance and enter conditional appearance - Whether master erred in granting defendant leave to withdraw unconditional appearance
Practice and procedure - Application to set aside ex parte orders to extend the validity of a writ - Whether master erred in finding entry of unconditional appearance did not waive right to apply to set aside ex parte orders extending the validity of a writ - Whether master erred in exercising discretion to set aside ex parte orders extending the validity of a writ
Legislation:
Supreme Court Rules 1971 (WA), O 2 r 1, O 7 r 1, O 12 r 6, O 23 r 1, O 58 r 23
Result:
Leave to appeal refused
Appeal dismissed
Category: A
Representation:
Counsel:
| First Appellant | : | T Galic |
| Second Appellant | : | T Galic |
| Respondent | : | T Langdon |
Solicitors:
| First Appellant | : | MGM O'Connor Lawyers |
| Second Appellant | : | MGM O'Connor Lawyers |
| Respondent | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561
Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79
Caltex Oil (Aust) Pty Ltd v Dredge Willemstad [1976] HCA 65; (1976) 136 CLR 529, 539
Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; (2017) 316 FLR 159
Dodds v Kennedy [2011] WASCA 32
Ezekiel‑Hart v Law Society of the Australian Capital Territory [2012] ACTSC 103
Garsec v Sultan of Brunei [2007] NSWSC 882; (2007) 213 FLR 331
House v The King [1936] HCA 40; (1936) 55 CLR 499
In re Chittenden [1970] 3 All ER 562
Jadwan Pty Ltd v Porter [2004] TASSC 107; (2004) 13 Tas R 162
Kaney v Rushton [2017] ACTSC 11
Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 507; (2000) 175 ALR 36
Polodna v Mattiaccio [2017] WASC 294
Popovic v Panagoulias [2014] WASCA 86
Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] QB 368
Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 All ER 382
Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 QB 393
Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337
Volkes v Eastern Health and Social Service Board (1990) N.I. 388
Weston v Publishing & Broadcasting Ltd [2011] NSWSC 433; (2011) 83 ACSR 206
REASONS OF THE COURT:
Introduction
On 23 January 2019, we heard the appeal in this matter. The appeal was against a decision of Master Sanderson in Polodna v Mattiaccio[1] (primary decision) to grant leave to the respondent (the defendant in the primary proceedings) to withdraw his unconditional appearance and to set aside the service of a writ of summons on him. It is convenient in these reasons to refer to the respondent as the defendant and the appellants as the plaintiffs.
[1] Polodna v Mattiaccio [2017] WASC 294 (primary decision).
The appeal was brought pursuant to s 58(1)(b) of the Supreme Court Act 1935 (WA), and leave to appeal is required under s 60(1)(f) of the Supreme Court Act. The application for leave to appeal had been referred to the hearing of the appeal.[2] After the hearing on 23 January 2019, we refused leave to appeal and dismissed the appeal, with reasons to be published. These are our reasons.
[2] Order of Mitchell JA dated 20 June 2018; WB 4.
Background
A writ of summons was filed by the plaintiffs on 14 February 2014 to commence the primary proceedings against the defendant.[3] The defendant was a senior investment advisor with a firm of stockbrokers, CK Locke & Partners Pty Ltd (in liq) (CK Locke (in liq)). The plaintiffs' claim was for breach of contract, in relation to certain oral representations allegedly made by the defendant on 14 or 15 February 2008, that he would assist the plaintiffs to make a profit if they invested $230,000 in a United Kingdom company.[4]
[3] cf primary decision [1] which erroneously refers to 13 February 2014.
[4] Primary decision [16].
The writ of summons filed 14 February 2014 was required to be served on or before 13 February 2015.[5] The plaintiffs filed (ex parte) applications for orders extending the validity of the writ on 13 February 2015, 13 August 2015, 10 February 2016, and 29 June 2016.
[5] cf primary decision [1] which erroneously refers to 12 February 2015.
The court granted orders extending the validity of the writ on 13 February 2015 (to midnight, 14 August 2015), 13 August 2015 (to midnight, 13 February 2016), 11 February 2016 (to midnight, 30 June 2016), and 30 June 2016 (to midnight, 31 December 2016).
In each application for an extension of the validity of the writ, the plaintiffs filed an affidavit stating that:[6]
1.the primary proceedings were related to a proceeding against CK Locke (in liq);[7]
2.as CK Locke (in liq) was in liquidation, the plaintiffs could not proceed in the related proceedings without leave of the court; and
3.they expected CK Locke (in liq) was insured for their claim.
[6] Primary decision [2].
[7] See CIV 2170 of 2012.
The plaintiffs did not want to serve the writ on the defendant before the proceedings against CK Locke (in liq) had been determined.[8]
[8] Primary decision [3].
The plaintiffs did not take any steps towards obtaining leave to proceed against CK Locke (in liq) until 29 June 2016.[9]
[9] Primary decision [3].
On 14 November 2016, the plaintiffs' application to proceed against CK Locke (in liq) was dismissed.[10]
[10] Order of Master Sanderson dated 14 November 2016 in COR 139 of 2016.
After 14 November 2016, the writ was served on the defendant. Accordingly, the writ was served within the last period of extension (to 31 December 2016).
On 31 January 2017, the defendant's then solicitors filed an unconditional appearance.[11]
[11] Primary proceeding folio 24.
On 16 March 2017, the plaintiffs filed an amended writ and a statement of claim. On 31 March 2017, the defendant filed a notice of change of representation.
On 6 April 2017, the registrar ordered that by 14 April 2017, the defendant file and serve any application to set aside the order or orders extending the validity of the writ filed 14 February 2014.
On 18 April 2017, the defendant filed an application (Defendant's Application) for, in substance, the following orders:
1.the orders extending the validity of the writ made on 13 February 2015, 13 August 2015, 11 February 2016, and 29 June 2016 be set aside;
2.the defendant have leave to withdraw its unconditional appearance under O 23 r 1, enter a conditional appearance and have service of the writ set aside.[12]
3.the proceeding be dismissed and the plaintiffs pay the defendant's costs.
4.the plaintiffs pay the defendant's costs of the Defendant's Application.
[12] Primary decision [4]. The words 'enter a conditional appearance and have service of the writ set aside' does not appear on the application itself.
The Defendant's Application was heard before the master on 4 September 2017.[13]
[13] ts 11 ‑ 36, GB 1-25.
At the hearing of the Defendant's Application, the defendant contended, without challenge from the plaintiffs, that:[14]
1.the limitation period for the plaintiffs' claims against the defendant likely expired in early 2014;
2.as the orders for extensions of time were made ex parte, an application to set aside those orders is a hearing de novo, and there is no need to establish material non‑disclosure by the plaintiffs or error on the part of the original judicial officer who made the orders for extension of time.
[14] Primary decision [3] ‑ [4].
On 12 October 2017, the master published his reasons. On 16 November 2017, the master ordered that:
1.the master's orders extending the validity of the writ made on 29 June 2016 be set aside.
2.the defendant be granted leave to withdraw his appearance under O 23 r 1 and the defendant's appearance be withdrawn.
3.service of the writ on the defendant be set aside.
4.the proceeding be dismissed.
5.the plaintiffs pay the defendant's costs of the proceeding.
The Supreme Court Rules[15]
[15] The Rules quoted below are those current in the period January 2017 to April 2017, but there was no issue in this appeal as to the content of the relevant Rules.
Order 2 of the Supreme Court Rules 1971 (WA) (RSC) relevantly provides:
Order 2 ‑ Effect of non‑compliance
1. Non‑compliance with rules
(1)Where in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
(2)Subject to subrule (3) the Court may, on the ground that there has been such a failure as is mentioned in subrule (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings, or any document, judgment or order therein or exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit.
(3)The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these rules to be begun by an originating process other than the one employed.
2. Application to set aside for irregularity
(1)An application to set aside for irregularity any proceedings, any step taken in any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity.
(2)An application under this rule shall be made by summons or motion, as the case may require, and the grounds of objection must be stated in the summons or notice of motion.
Order 7 of the RSC relevantly provides:
Order 7 ‑ Duration and renewal of writ: concurrent writs
1. Duration and renewal of writ
(1)For the purpose of service, a writ (other than a concurrent writ) is valid in the first instance for 12 months beginning with the date of its issue and a concurrent writ is valid in the first instance for the period of validity of the original writ which is unexpired at the date of issue of the concurrent writ.
(2)Where a writ has not been served on a defendant, the Court may by order extend the validity of the writ from time to time for such period, not exceeding 12 months at any one time, beginning with the day next following that on which it would otherwise expire, as may be specified in the order, if an application is made to the Court before that day or such later day (if any) as the Court may allow.
(3)Before a writ, the validity of which has been extended under this rule, is served it must be marked with an official stamp showing the period for which the validity of the writ has been so extended.
(4)Where the validity of a writ is extended by order made under this rule, the order shall operate in relation to any other writ (whether original or concurrent) issued in the same action which has not been served so as to extend the validity of that other writ until the expiration of the period specified in the order.
2. Proof of extension of validity of writ
The production of a writ purporting to be marked with the official stamp showing the period for which the validity of the writ has been extended shall be sufficient evidence of the validity of the writ having been so extended, and of the commencement of the action as of the date of the original writ, for all purposes.
…
4. Unserved writs may be struck out
(1)If at any time after 6 months after a writ is issued it appears to the Court that ‑
(a)no affidavit of service of the writ has been filed by the plaintiff; and
(b)no appearance has been entered to the writ,
the Court may issue a summons (to a hearing at least 7 days after it is issued) to the plaintiff to show cause why the writ should not be struck out.
(2)If at the hearing the Court is not satisfied that the writ has not been served for good reason the Court may ‑
(a)strike out the writ; or
(b)make directions as to the service of or the time for serving the writ.
(3)On being struck out, a writ and any writ that is concurrent with it cease to be valid.
Order 12 of the RSC relevantly provides:
1. Who may enter appearance
(1)Subject to subrule (2) …, a defendant to an action may … enter an appearance in the action and defend it by a practitioner or in person.
…
2. How to enter an appearance
(1)To enter an appearance, a defendant must file 2 copies of a Form No. 6 signed by -
(a)the practitioner who acts for the defendant; …
3. Procedure on receipt of requisite documents
On receiving the requisite documents the proper officer must in all cases affix to the copy of the memorandum of appearance an official stamp showing the date on which he received those documents, enter the appearance in the Cause Book, and then return the copy of the memorandum to the person entering the appearance and the copy memorandum so stamped shall be a certificate that the appearance was entered on the day indicated on the official stamp.
4. Appearance to be served on plaintiff
On the day on which a defendant enters an appearance to a writ, the defendant must comply with Order 72 rule 5 for the purposes of serving the stamped copy memorandum returned under rule 3 on the plaintiff in accordance with that Order.
5. Late appearance
(1)A defendant may not enter an appearance in an action after judgment has been entered therein except with the leave of the Court.
(2)Except as provided by subrule (1), nothing in these rules or any writ or order thereunder shall be construed as preventing a defendant from entering an appearance in an action after the time limited for appearing, but if a defendant enters an appearance after that time, he shall not, unless the Court otherwise orders, be entitled to serve a defence or do any other thing later than if he had appeared within that time.
6. Conditional appearance
(1)A defendant in any cause may enter a conditional appearance denying the jurisdiction of the Court or reserving the right to apply to the Court to set aside the originating process, or the notice thereof, or the service of the originating process, or notice thereof, on the ground of any informality or irregularity which renders the originating process or the service thereof invalid, and shall not thereby be deemed to have submitted to such jurisdiction, except as to the costs occasioned by the appearance or by any application under this rule.
(2)The defendant shall forthwith apply to the Court to have the question raised by his conditional appearance decided, and if such an application is not made within 14 days from the entry of the conditional appearance, or if the application be dismissed, the conditional appearance shall, unless the Court otherwise orders, become and operate as an unconditional appearance.
7. Setting aside writ etc. before appearance
A defendant to an action, at any time before entering an appearance in it, may serve notice of motion to -
(a)set aside the writ or service of the writ on the defendant; or
(b)discharge any order that granted leave to serve the writ on the defendant outside Australia. (emphasis added)
Order 23 of the RSC provides relevantly:
1. Withdrawing appearance
A party who has entered an appearance in an action may withdraw the appearance at any time with the leave of the Court.
Order 58 rule 23 of the RSC provides:
23. Order made ex parte may be set aside
The Court may set aside any order which has been made ex parte.
The master's reasons
Findings of fact
The master made relevantly the following findings of fact which are unchallenged in this appeal:
1.The affidavits which had been lodged in support of the extensions of time were not served with the writ when it was served on the defendant (and nor did the RSC require those affidavits to be served).[16]
2.The defendant did not know, at the time of entering the unconditional appearance, the basis on which the writ had been extended.[17]
3.The limitation period in respect of the plaintiffs' claims against the defendant expired in or about February 2014.[18]
4.The expiration of the limitation period was a matter which would have been obvious to the plaintiffs (via their solicitors) when they made the last application to extend the time for the validity of the writ.[19]
5.The original judicial officer (who was the master himself) was not misled by the plaintiffs at the times of their earlier applications.[20]
Whether entry of unconditional appearance waived defendant's right to apply to set aside service of writ
[16] Primary decision [12].
[17] Primary decision [12].
[18] Primary decision [17].
[19] Primary decision [17].
[20] Primary decision [20].
The master said that the first question was whether or not by entering an unconditional appearance, the defendant had waived his right to apply to set aside service of the writ by challenging the ex parte orders which had been made extending its validity.[21]
[21] Primary decision [5].
The master said the starting point was that, as a general rule, the entry of an unconditional appearance amounts to a submission to the jurisdiction of the court and is a waiver of irregularity. The master referred to the decision of Gibbs J in Caltex Oil (Aust) Pty Ltd v Dredge Willemstad[22] as authority for this proposition.[23]
[22] Caltex Oil (Aust) Pty Ltd v Dredge Willemstad [1976] HCA 65; (1976) 136 CLR 529, 539.
[23] Primary decision [9].
The master then referred to the case of Maronis Holdings Ltd v Nippon Credit Australia Ltd,[24] in which it was held (albeit under significantly different rules of court) that the entry of an unconditional appearance does not preclude the court from exercising a discretion to set aside service of its process.[25]
[24] Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 507; (2000) 175 ALR 36.
[25] Primary decision [10] - [11].
The Master said:[26]
The court's reasoning [in Maronis] has much to recommend it. In this case when the writ was served it was stamped with the requisite notice showing that it had been extended. The affidavits which had been lodged in support of the extension applications were not served with the writ. It is not a requirement of the rules that they should be. The defendant then had no way of knowing the basis upon which the writ was extended. Of course it would have been open to him to lodge a conditional appearance, call for copies of the affidavits and then to determine whether or not to issue a summons seeking to have service of the writ set aside. But in taking that course he would have been speculating; there is no way without the affidavits he could have made an informed decision. To say in those circumstances the filing of an unconditional appearance is a waiver which is final is not in my view consistent with the underlying philosophy of the rules.
Furthermore, in one sense a party has to consent to jurisdiction of the court if he is to apply to set aside the orders made ex parte. Unless and until the ex parte orders are set aside the writ is validly served and the defendant is forced to submit to the jurisdiction of the court. I would regard it as an open question whether, when a defendant seeks to set aside ex parte orders, he is obliged to file a conditional appearance. That was certainly done in Bell Group NV (in liq) v Aspinall (Unreported, WASC, Library No 970660, 1 December 1997) but the question of whether that was an appropriate procedure was not the subject of argument.
Leave to withdraw unconditional appearance and substitute a conditional appearance
[26] Primary decision [12] - [13].
The master then looked at the position in the event he were wrong in concluding that the filing of an unconditional appearance was not a waiver disentitling the defendant from applying to set aside the ex parte orders for extension of the writ. The master said that if that conclusion were wrong then, in the alternative, he would have granted the defendant leave to withdraw his appearance and substitute a conditional appearance in exercise of the court's unfettered discretion to grant leave to withdraw an appearance.[27]
[27] Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] QB 368, 377.
The master said that, at the time the unconditional appearance was entered, the defendant was not in a position to make an informed judgment, but when the defendant became properly advised, the defendant took steps to set aside the ex parte orders.[28]
Setting aside the ex parte orders
[28] Primary decision [14].
The master then turned to the question of whether to set aside the orders for an extension of the validity of the writ (either on the basis that there had been no waiver or on the basis that he would grant leave to withdraw the unconditional appearance and substitute it with a conditional appearance).
The master approached the question of whether to set aside the earlier orders on the basis that the hearing before him was a review de novo. The master referred to the observations of this court in Popovic v Panagoulias[29] and adopted those observations. The master said that the law had moved on since the decision of Bell Group NV (in liq) v Aspinall,[30] made almost 20 years ago.[31] We note there is no challenge to this aspect of the master's reasoning.
[29] Popovic v Panagoulias [2014] WASCA 86 [54].
[30] Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561. The court in that case said that an applicant to set aside an ex parte order made by another judicial officer must establish material non‑disclosure, or show that on the basis of new material, the full facts and circumstances had not been appreciated by the original judicial officer, or that the order was made without jurisdiction (569).
[31] Primary decision [23].
The master quoted the observations of Ipp J in Brealey v Board of Management Royal Perth Hospital in relation to the relevant exercise of discretion:[32]
It is undesirable to allow a plaintiff to issue a writ before the expiry of a limitation period and then to delay service for an indefinite period. Lengthy delays cause difficulties in the ascertainment of the truth. It is unfair to require potential defendants to contemplate potential litigation indefinitely. The unfairness stems from the uncertainty and concomitant financial and other burdens that would be the consequence. As Young CJ (with whom Kaye and Southwell JJ agreed) said in Ramsay v Madgwicks [1989] VR 1 at 5, 'it is not right that people should be left in ignorance of proceedings that have been taken against them if they are here to be served.' Finally, the proper administration of the court would be hampered if writs could be issued and then left to lie dormant for indefinite periods.
[32] Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79 [45].
The master said that he accepted that:[33]
In exercising the discretion as to whether to extend the validity of a writ of summons, the Court should have regard to the entirety of the circumstances, and the relevant factors may include:
(a)the length of the delay;
(b)whether the delay was caused by mistake and whether such mistake is excusable;
(c)the nature of any attempts made at service;
(d)the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it;
(e)whether the applicable limitation period has expired.
[33] Primary decision [19].
The master also accepted that:[34]
It is not ordinarily a legitimate reason for failing to serve a writ that the plaintiff desires to hold up the proceedings while some other case is tried or to await some future development. It is also necessary for the plaintiff to demonstrate that it has taken steps to investigate the matter since the writ was filed and to get the proceeding moving. That is particularly so where the writ was filed shortly before the limitation period was due to expire.
[34] Primary decision [19].
The master noted that the defendant relied on the following factors as militating against the making of the orders for extending the validity of the writ:[35]
[35] Primary decision [19].
(a)the fact that the limitation period in respect of the claims appears to have been due to expire shortly after the writ was filed;
(b)the length of the delay in serving the writ;
(c)the delay in serving the writ was deliberate, rather than accidental;
(d)the delay was not caused by failed attempts to serve the writ;
(e)the only reason the writ was not served within the usual time was that the plaintiffs wished to await the outcome of the proceeding against CK Locke (in liq);
(f)despite that, the plaintiffs took no steps to progress that outcome until June 2016, 28 months after the writ was filed;
(g)that was despite the fact that the plaintiffs had commenced the proceeding against CK Locke (in liq) in 2012, and CK Locke (in liq)'s winding up commenced on 2 October 2013;
(h)the plaintiffs made no effort to notify the defendant of the fact that the writ of summons had been filed;
(i)the plaintiffs therefore did not make any productive use of the 12 month period (or the subsequent periods of extension of time);
(j)the plaintiffs offered no explanation for their delay in progressing the proceeding against CK Locke (in liq);
(k)by applying for each extension of time ex parte, and without notifying the defendant, the plaintiffs accepted the risk that the orders might subsequently be set aside under Order 58 rule 23, particularly in circumstances where the plaintiffs appear to have failed to make full and frank disclosure to the Court as to the fact that they did not progress the proceeding against CK Locke (in liq);
(l)the facts alleged in the statement of claim occurred over 9 years ago, and any witness' recollection is likely to have become less reliable over time;
(m)it appears that there is limited documentary evidence that would assist the Court in determining the facts at issue; and
(n)the defendant will suffer prejudice if the orders are not set aside.
In essence, the master would set aside the ex parte order extending the validity of the writ, having regard to:[36]
(a)the matters raised by the defendant (summarised in [35(a) ‑ (j) and (l) ‑ (n)] above);[37]
(b)the efflux of time; and
(c)the fact that the plaintiffs' approach in the primary proceedings was unfair to the defendant in that the events the subject of the proceedings had occurred over 10 years earlier.
[36] Primary decision [22].
[37] The master, in effect, rejected the matter in [35(k)] ‑ see [23.5] above.
Grounds of appeal
The plaintiffs relies upon three grounds of appeal.
Ground 1 is that the master erred in granting the defendant leave to withdraw his unconditional appearance.
Ground 2 is that the master erred in holding that the defendant could file an unconditional appearance and then apply to set aside service of the writ. The master should have held that the defendant could only apply to set aside service of the writ if he filed a conditional appearance.
Ground 3 is that the master erred in exercising his discretion to set aside service of the writ.
Disposition
Ground 2
It is convenient to commence with a consideration of ground 2 - to the effect that the defendant had waived any entitlement to set aside the ex parte orders for an extension of the validity of the writ because he had filed an unconditional appearance.
In their submissions, the plaintiffs referred to Sheldon v Brown Bayley's Steel Works Ltd.[38] In that case, the plaintiff did not serve a writ in the time required by the rules of court on either the first or second defendants. The first defendants entered a conditional appearance and applied to set aside the service of the writ. The second defendants entered an unconditional appearance and subsequently applied to set aside the service of the writ. The master allowed both applications. The plaintiff appealed against the order made in favour of the second defendants, but not the order made in favour of the first defendants.[39] On the appeal, Barry J held that the expired writ was effectively a nullity and that, despite the unconditional appearance, the second defendants were accordingly entitled to have writ set aside.[40]
[38] Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 All ER 382 (Barry J); on appeal Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 QB 393.
[39] Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 QB 393.
[40] Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 All ER 382, 386.
The decision of Barry J in Sheldon was overturned on appeal. It was held that the service of a stale writ is an irregularity, not a nullity, and that the irregularity had been waived by the second defendants entering an unconditional appearance.
Denning LJ said:[41]
Suppose a defendant, who is served after the 12 months, deliberately enters an unconditional appearance and goes to trial. It may be that it is a case in which no statute of limitation avails him and he does not think it worth while to object to the service of the writ, because he knows that it would only mean the issue of a fresh one. Could he thereafter turn round and say that all the proceedings were void on the ground that the writ was a nullity? Clearly not. That shows that the service out of time was only an irregularity which could be waived.
…
If we accept the plaintiff’s evidence, the writ was served by post on October 1, 1952, and should have reached the second defendants on October 2, 1952, before the 12 months had expired. It was delayed in the post and did not in fact reach them until October 7, 1952, after the twelve months had expired. The delay was a matter known to them and not to the plaintiff. If they chose to waive any objection to it they should be held bound by their waiver. They should not be allowed to turn round and say that the writ itself was a nullity. If they could say so now, they could also say so at a much later stage, even after the trial. I cannot believe that to be the law.
…
In my opinion, the service of the writ after the 12 months was not a nullity but an irregularity which was waived by the unconditional appearance. (emphasis added)
[41] Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 QB 393, 402.
In Sheldon, Denning LJ evidently treated knowledge of the date of the writ and the date of the service, in the circumstances, as knowledge of the irregularity. Singleton J also held that the unconditional appearance of the second defendant was a 'step in the action'[42] and amounted 'to a waiver with regard to service'. [43]
[42] Compare RSC O 2 r 2(1).
[43] Sheldon v Brown Bayley's Steel Works Ltd [1953] 2 QB 393, 400.
The reasoning of the Court of Appeal in Sheldon has been accepted by this court in Brealey,[44] and in the High Court.[45] The plaintiffs in this case also observed that the reasoning of the Court of Appeal in Sheldon has been adopted or referred to in other jurisdictions.[46]
[44] Brealey [19], [73].
[45] Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337, 341.
[46] Appellants' submissions, par 7 ‑ 16; WB 7-8; Kaney v Rushton [2017] ACTSC 11 [46]; Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; (2017) 316 FLR 159 [124]; In re Chittenden [1970] 3 All ER 562, 567 ‑ 568; Ezekiel‑Hart v Law Society of the Australian Capital Territory [2012] ACTSC 103 [21]; Weston v Publishing & Broadcasting Ltd [2011] NSWSC 433; (2011) 83 ACSR 206 [133] ‑ [142]; Jadwan Pty Ltd v Porter [2004] TASSC 107; (2004) 13 Tas R 162 [14]; Volkes v Eastern Health and Social Service Board (1990) N.I. 388.
It is unnecessary to examine the metes and bounds of the doctrine of waiver for present purposes.[47] It is sufficient to observe that, in this appeal, the plaintiffs' argument was, in substance, that by entering an unconditional appearance, the defendant made an election between inconsistent rights or courses of action.[48] The argument was to the effect that there were two mutually inconsistent rights or courses of action, namely (1) the right to treat service as irregular and to apply, on that basis, to set aside the service of the expired writ, and (2) the right to treat the service of the writ as regular, notwithstanding its irregularity, and to enter an unconditional appearance on that basis. The exercise of this latter right (so the argument went) meant that the defendant had made a binding election to forego the exercise of the former right, with the result that he had waived any right to apply to set aside the ex parte orders for extensions of the validity of the writ.
[47] See, generally, Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 [50] ‑ [67].
[48] Appeal ts 5.
The plaintiffs' arguments must be rejected. The defendant had no right, under O 12 r 6(1), to file a conditional appearance challenging the jurisdiction of the court, or reserving the right to apply to set aside the originating process (writ), or reserving the right to set aside the service of the originating process (writ), 'on the ground of any … irregularity which renders the originating process or the service thereof invalid'. In the present case, there was no irregularity and the defendant did not claim there was an irregularity in the writ or in the service of the writ ‑ which occurred within the last period of extension. Still less did the defendant claim an irregularity which rendered service invalid. The defendant, who was within the jurisdiction, was not put to any election of the kind advanced by the plaintiffs.[49] The filing of the unconditional appearance by the defendant was not a waiver of his right, as a party, to invoke O 58 r 23 to set aside the ex parte orders extending the validity of the writ. Accordingly, ground 2 should be dismissed.
[49] That point was ultimately accepted by counsel for the plaintiffs: appeal ts 6.
Further, the quality of an unconditional appearance as a waiver or an election must be evaluated by reference to the law under which the procedure for entering an appearance is created. One of the characteristics of an unconditional appearance is that, in appropriate circumstances, the court will give the defendant leave under O 23 r 1 to withdraw it. That being so, the entry of an unconditional appearance cannot, of itself, be an outright waiver or election. It is at best a contingent waiver or election taking final effect only if the court is not asked to, or does not consent to, intervene.[50]
[50] Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation[1981] QB 368, 377.
In this case, the master was asked (in the alternative) to intervene, and did intervene, by granting the defendant leave to withdraw his unconditional appearance in any event. That aspect of the master's decision is challenged by ground 1, which is discussed below.
Ground 1
Ground 1 concerns the master's alleged error in granting the defendant leave to withdraw his unconditional appearance.
As to this, the master said, in effect, without challenge in this appeal, that the discretion as to whether to give leave to withdraw an appearance was unfettered, save that it must be exercised judicially. That is correct.
In Garsec v Sultan of Brunei, McDougall J elaborated on the nature of discretion in the following terms, which we would respectfully adopt:[51]
In Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation[1981] QB 368, Mustill J at 377 referred to the equivalent English rule empowering the Court to give defendants leave to withdraw an unconditional appearance. His Lordship said that the discretion was not limited to cases of mistake, but was 'completely unfettered', although it was 'one which must be exercised with caution'. His Lordship contrasted the position of mistake with one of 'deliberate if misguided choice'. His Lordship's characterisation of the discretion as being 'completely unfettered' means that even in the latter case it would be open to the Court to give leave. It is, however, plain from the decision of the English Court of Appeal in Somportex Limited v Philadelphia Chewing Gum Corporation[1968] 3 All ER 26 that, in a case of deliberate choice, the applicant for leave might have a difficult task.
The exercise of the discretion is to be undertaken on the facts of the particular case, and is not to be constrained by statements of principle or dicta in decisions on similar facts (let alone, on different facts): see Firth v John Mowlem & Co Ltd(1978) 3 All ER 331 [sic]. I note that in that case Waller LJ, who concurred in the result and gave short reasons, stated at 336 that the discretion is one to be exercised 'sparingly', but was 'a matter for the judge, acting judicially'.
[51] Garsec v Sultan of Brunei [2007] NSWSC 882; (2007) 213 FLR 331 [49] ‑ [50].
Any successful challenge to the master's exercise of discretion must establish error in accordance with the principles in House v The King[52] and must recognise the significant limitations on appellant intervention in this context, particularly as it concerns a matter of procedure.[53]
[52] House v The King [1936] HCA 40; (1936) 55 CLR 499, 505.
[53] See, eg, Dodds v Kennedy [2011] WASCA 32 [4] ‑ [5].
No error of the requisite kind has been shown in the master's decision (summarised at [29] above). Ground 1 has no merit.
Ground 3
Ground 3 alleges, in effect, that the master erred in exercising his discretion to set aside the ex parte orders extending the validity of the writ. There is no challenge to the master's conclusion that the question of whether to set aside the earlier ex parte orders was to be determined on the basis that the hearing before him was a review de novo, and these reasons proceed on that basis.
The plaintiffs in their written submissions submit, in effect, that:[54]
1.It was reasonable for the plaintiffs to wait to see if the Australian Securities and Investments Commission investigated the insolvency of CK Locke (in liq).
2.Although the court will usually infer prejudice of some kind,[55] the degree of prejudice is always the question. In this case, the claim was based on an oral agreement relating to the purchase or placement of shares. It was not a personal injuries case, with difficulties in obtaining medical records and witnesses to the accident.
3.The defendant, as a stockbroker, would be expected to keep 'sufficient records' of the alleged oral agreement.
4.The defendant had applied to withdraw its unconditional appearance. There was no evidence in support of why the appearance was entered at all, let alone unconditionally. Nor was there evidence as to why the defendant would wish to withdraw it.
5.The defendant had not asked for the affidavits in support of the earlier applications for extensions of time.
6.There was no suggestion that the unconditional appearance was filed by mistake, without consideration, or without advice.
[54] Appellants' submissions, pars 25 ‑ 32; WB 9-10.
[55] Reference was made to Van Leer.
The observations in [54] above apply in relation to the exercise of the master's discretion to set aside the writ in this case. In effect, the plaintiffs' complaint is that the decision was against the weight of the evidence.[56] That is not a ground to overturn an exercise of discretion. It was open to the master to reach the conclusion that he did, for the reasons he gave, as summarised in [36] above. No error of the requisite kind has been established. Ground 3 has no merit.
[56] Appeal ts 7.
Conclusion
For these reasons, we refused leave to appeal and dismissed the appeal.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CL
Associate to the Honourable Justice Murphy30 JANUARY 2019
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