Priolo v Nguyen

[2022] WASC 290

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   PRIOLO -v- NGUYEN [2022] WASC 290

CORAM:   MASTER SANDERSON

HEARD:   16 AUGUST 2022

DELIVERED          :   30 AUGUST 2022

PUBLISHED           :   30 AUGUST 2022

FILE NO/S:   CIV 1453 of 2021

BETWEEN:   ANTHONY PRIOLO

MARIA ROSALIE PRIOLO

First Plaintiffs

AND

KHANH HOANG NGUYEN

First Defendant

YEN THI TRAN

Second Defendant

NONNII CONSTRUCTION PTY LTD

Third Defendant

CIVCON CIVIL & PROJECT MANAGEMENT PTY LTD

Fourth Defendant

Catchwords:

Practice and procedure - Application to set aside orders made ex parte for an extension of stale writ - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Ex parte orders set side

Representation:

Counsel:

First Plaintiffs	:	M Pullen
First Defendant	:	No appearance
Second Defendant	:	NW Kalmund
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

First Plaintiffs	:	Bennett
First Defendant	:	Hotchkin Hanly
Second Defendant	:	Hotchkin Hanly
Third Defendant	:	Hotchkin Hanly
Fourth Defendant	:	Hotchkin Hanly

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

Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79

Chalmers and Partners v Kensit [2008] WASCA 122

MASTER SANDERSON:

1. Good neighbours are one of the consolations of living in suburbia.  An agreeable chat over the back fence or an exchange of pleasantries on the front lawn engenders a sense of community, a sense of belonging.  Regrettably, not all neighbours get on.  There may be a distinct cause of the disagreement - a dog barking incessantly or loud music played late at night.  Or, as with the Hatfields & McCoys, the origins of the antipathy may be lost in the mists of time.  Generally, the protagonists exist in a state of mutual loathing, the corrosive effect of which is localised.  Occasionally, disputes spill over into the courts.  This seems to happen more commonly in the western suburbs.  Perhaps that is because the individuals concerned are well‑resourced.  This case involves adjoining landowners in the leafy riverside suburb of Dalkeith.  These reasons deal with what is really a sideshow to the main case.  The action itself promises to be lengthy, bitter and costly.  The facts relevant to this application can be summarised as follows.

2. The plaintiffs are the owners of a property at 80 Viking Road, Dalkeith.  The first and second defendants are the owners of an adjoining property at 78 Viking Road, Dalkeith.  In or around 9 June 2015, the first and second defendant commenced construction of residential premises on their property.  The first defendant is a registered builder and through the third and fourth defendants, both of which are controlled by him, he undertook the construction works.  The parties' land is divided by a single leaf brick wall approximately 90 millimetres in width.  The plaintiffs have a raft of complaints about the way the building on the first and second defendants' land was constructed.  Claims are brought for nuisance, negligence and trespass.  The statement of claim seeks damages, but those damages are not quantified.  The plaintiffs also seek injunctions forcing the defendants to remove any sand or other material unlawfully on the plaintiffs' land or, alternatively, an injunction requiring the defendants to construct a retaining wall between the two properties.

3. The writ in this matter was issued on 28 May 2021.  As construction work commenced, according to the plaintiffs on 9 June 2015, the time limit for bringing the claims would have expired on 8 June 2021.  In other words, the writ was issued just under two weeks prior to the expiry of the limitation period.  The plaintiffs then had until 27 May 2022 to serve the writ.  After that date the writ was stale.  The plaintiffs managed to serve the first, third and fourth defendants but they did not do so until 26 and 27 May 2022.  In other words, the first, third and fourth defendants were served just prior to the writ going stale.  But the plaintiffs could not serve the second defendant.  She was in the eastern states, and she did not authorise anyone to accept service on her behalf.

4. By ex parte motion filed 2 June 2022, the plaintiffs sought an order under O 7 r 1(2) of the Rules of the Supreme Court 1971 (WA), extending the validity of the writ to 17 June 2022. That application was supported by an affidavit of Briony Marian Whyte sworn 2 June 2022. On 8 June 2022, I made the order sought by the plaintiffs. The writ was then served on the second defendant. She entered an appearance through her solicitors, and on 22 June 2022 she applied to set aside the ex parte orders.

5. There is no dispute between the parties that the process followed by the second defendant - that is to say entering an appearance and then applying to set aside the ex parte orders - is procedurally proper.  The parties also agreed that the application to set aside the ex parte orders should be treated as a hearing de novo.  At first, they approached the matter on the basis that to set aside the ex parte orders it was necessary for the second defendant to show that there had been material non‑disclosure when the order was made.  By agreement, the parties decided the matter should not be approached in that way and were content to have the hearing de novo.  That is the way I have approached the matter.

6. The discretion to renew a writ after its expiry exists to prevent injustice and does not exist to indulge mere delay on the part of the plaintiff or the plaintiff's solicitors, particularly when that delay is inadequately explained.  The two leading authorities in this area are Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79 and Chalmers and Partners v Kensit [2008] WASCA 122. To an extent at least, Brealey has been overtaken by the decision in Chalmers, although both decisions sit happily together.  Ultimately, what is required is an assessment of the considerations in favour of granting an extension against the countervailing considerations and a proper attribution of weight to those considerations for the purpose of determining whether it is in the interests of justice to exercise the remedial discretion to grant an extension.[1]

   [1] Chalmers and Partners v Kensit [2008] WASCA 122 [30].

7. The relevant facts in Chalmers were as follows.  The plaintiffs issued proceedings just prior to the expiration of a 6‑year limitation period.  Their solicitors did little or nothing to advance the claim for a period of 12 months.  The writ was served one day late - on the anniversary of the date on which it was issued.  This occurred because the plaintiffs' solicitor mistakenly believed the writ was valid up to and including the anniversary of the date in which it was issued.  I made an order extending the validity of the writ.  That decision was overturned by the Court of Appeal. 

8. In the course of his reasons, Buss JA (as his Honour then was) summarised the relevant factors for and against the extension of the validity of the writ.  He said:

   [32]The factors which are in favour of an extension of the validity of the writ are these:

   (a) The statutory limitation period applicable to one or, perhaps, more of the alleged causes of action which the respondents wish to litigate against the appellants may have expired as at the date when the writ became stale.

   (b) By the letter dated 17 April 2003, the appellants were given some particulars of the respondents' claim.

   (c) The purported service of the writ was effected only one day after it became stale.

   (d) The respondents applied promptly for an extension of the validity of the writ.

   [33]The factors which are against an extension of the validity of the writ are as follows:

   (a) No statutory limitation period applies to the alleged causes of action for breach of fiduciary duty or breach of duty of trust and confidence, and equity would not apply a limitation period by analogy in respect of those alleged causes of action.

   (b) Neither the indorsement of claim (which is plainly defective), nor the affidavit material filed by the respondents, enables this court to assess reliably whether the statutory limitation period which is applicable to the alleged causes of action for negligence, breach of statutory duty and breach of contract had expired as at the date on which the writ became stale.  A minute of amended or substituted indorsement of claim was not produced to the learned master or this court.  The respondents are therefore responsible for the uncertainty which attends this important issue.

   (c) The respondents, in deciding not to serve the writ until the last moment, chose to live by technicalities, and therefore must be taken to have accepted the risk of dying by them if they failed to observe the time limits imposed by O 7 r 1(2).

   (d) The respondents, having decided not to serve the writ until the last moment for the purpose of enabling them to investigate whether they had reasonable causes of action against the appellants, did not make productive use of the 12 month period for that purpose.  Rather, as the learned master found, the respondents' solicitor 'took little or no steps in the 12 months after the issue of the writ to advance the [respondents'] claim'.

   (e) As the learned master concluded, there was no satisfactory explanation for the respondents' delay in serving the writ.  Mr Lindsay's apparent belief that 26 May 2006 (and not 25 May 2006) was the last day on which the writ was valid may be an explanation but it is not, in the circumstances, satisfactory.

   (f) Any prejudice suffered by the respondents if the validity of the writ were not to be extended would be self-inflicted.

   (g) Although the appellants are able to point only to general, as distinct from particular, prejudice, this may well be attributable, in part, to the respondents' failure properly to draw their claim.  The letter dated 17 April 2003 provides some particulars in relation to the respondents' alleged cause of action against the first appellant in negligence, but it does not mention the second appellant.  Nor does it mention any claim for breach of statutory duty, breach of contract, breach of fiduciary duty or breach of duty of trust and confidence against the first appellant.

9. The circumstances in this case bear a striking similarity to the facts in Chalmers.  Here, the factors which are in favour of the extension of the validity of the writ are as follows.  First, the statutory limitation period applicable to one or perhaps more of the alleged causes of action may have expired as at the date the writ became stale.  The parties were in agreement on this issue.  Second, there had been correspondence between the parties prior to the issue of the writ so that the second defendant had some particulars of the plaintiffs' claim.  Third, the purported service was effected less than two weeks after the writ became stale.  Fourth, the respondents applied promptly for an extension of the validity of the writ. 

10. The factors against the grant of the extension are, first, not all of the causes of action alleged against the second defendant will necessarily be statue‑barred if fresh proceedings are issued.  Building work on the first and second defendants' property commenced on 9 June 2015.  The work progressed for some time.  The nature of the complaints made by the plaintiffs mean that from time to time, the defendants allegedly committed torts.  Some of these may have been committed on a date which would be less than six years after any new proceedings were commenced.  No specific dates can be ascertained from the evidence.  That is why the parties proceeded on the basis that some, but not necessarily all, of the plaintiffs' claims against the second defendant might be statute‑barred.

11. Secondly, the plaintiffs did decide not to serve the writ until the last moment and therefore had to accept the risk of failing to observe the time limits.  Furthermore, there is nothing in the evidence to show the plaintiffs took any steps during the 12‑month period to further investigate the plaintiffs' claim.

12. Thirdly, although there is some explanation as to how it was the second defendant was not served, it is largely unsatisfactory.  To leave service of the writ to the last‑minute invites disaster.

13. Fourthly, although the second defendant is not able to point to any specific prejudice occasioned by the delay, she does point to general prejudice.  In an affidavit she filed in support of the application to set aside the ex parte orders sworn 22 June 2022, the second defendant says she does not now recall specific events during the construction on her and her husband's property.  Given the time that has passed, that is understandable.  It reinforces the point she will suffer general prejudice as a result of the delay. 

14. It is instructive to quote his Honour Buss JA's conclusion after weighing in the balance the factors set out above.  His Honour said:

    [34]After assessing the factors which are in favour of an extension of the validity of the writ and those factors which are against the extension, I have concluded that the respondents' application should be dismissed.  The factors militating against an extension decisively outweigh the factors militating in favour of it.  The interests of justice, including the 'balance of hardship' between the parties, do not require the exercise of the court's remedial discretion.  The respondents cannot reasonably complain of any unfairness resulting from the refusal of an extension.

15. There are two factors in this case which were not present in Chalmers and which must be weighed in the balance.  The first is a claim by the plaintiffs that the second defendant, effectively, evaded service.  They claim the second defendant is an 'experienced litigant'.  This seems to be based on the fact there is litigation on foot in the Magistrates Court between the plaintiffs and the first and second defendants relating to leaves from the first and second defendants' property dropping into the plaintiffs' pool.  It is the plaintiffs' position once the second defendant's husband (the first defendant) was served she should have been aware proceedings were on foot and should have instructed her solicitors, who had been acting for her in the Magistrates Court proceedings, to accept service on her behalf. 

16. With respect, there is no merit in this submission.  The evidence of the second defendant makes plain she was in Victoria dealing with her business interests in that state.  It is true she was contacted by her husband after he had been served with the writ, and it is also reasonable to assume she must have been aware she was named in the writ and she was cognisant of the cause of action against her.  But it was the plaintiffs' solicitors who left it until the last minute to attempt to serve the writ on the second defendant.  The rules require personal service.  They do not require a defendant, on becoming aware of the existence of a writ, to take steps to facilitate service.  If the evidence establishes that a defendant actively avoided service, that may be a factor to be taken into account in determining whether any ex parte order ought be set aside.  But that is not this case. 

17. The second relevant factor here is the question of whether the plaintiffs actually have a cause of action against the second defendant.  Given the nature of the relief sought, perhaps they do.  But the second defendant had no active role in directing the construction of the residence on the property she owned with her husband.  She appears to be what might be described as a necessary but ancillary party to the action.  Although I have approached the matter on the basis that causes of action exist against her, the fact that she is such a marginal figure in the dispute is a factor, albeit a very limited factor, in favour of setting aside the ex parte order.  For the sake of completeness, I should note that while in Chalmers the endorsement of claim was manifestly defective, that is not the case here.  The endorsement of claim alerted the defendants to the case they had to meet.  This should be countered as a factor against setting aside the ex parte orders.

18. As the Court of Appeal concluded in Chalmers the factors militating against an extension of time decisively outweigh the factors militating in favour of it.  Really, this is a case where the plaintiffs, having chosen to live by the sword, will die by the sword.  The interests of justice simply do not warrant the extension being granted and the ex parte orders will be set aside.  There would appear to be no reason why costs should not follow the event, but if any party takes a different view short submissions on costs ought be filed within seven days of the date of publication of these reasons.

19. It is a fundamental aspect of the rule of law that citizens should have recourse to the courts to allow their rights to be protected.  Reasonable persons may differ as to whether this case represents a productive use of the necessarily finite resources of this court.  I know where I stand on this issue.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AH

Associate to Master Sanderson

30 AUGUST 2022