Rosebridge Nominees Pty Ltd (in liq) v Commonwealth Bank of Australia
[2018] WASCA 112
•19 JULY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: ROSEBRIDGE NOMINEES PTY LTD (IN LIQ) -v- COMMONWEALTH BANK OF AUSTRALIA [2018] WASCA 112
CORAM: BUSS P
MURPHY JA
ALLANSON J
HEARD: 13 APRIL 2018
DELIVERED : 19 JULY 2018
FILE NO/S: CACV 101 of 2016
BETWEEN: ROSEBRIDGE NOMINEES PTY LTD (IN LIQ)
Appellant
AND
COMMONWEALTH BANK OF AUSTRALIA
First Respondent
CORRS CHAMBERS WESTGARTH (A FIRM)
Second Respondent
WFB PTY LTD
Third Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: LE MIERE J
Citation: ROSEBRIDGE NOMINEES PTY LTD -v- COMMONWEALTH BANK OF AUSTRALIA [No 7] [2016] WASC 329
File Number : CIV 1235 of 1999
Catchwords:
Practice and procedure - Alleged irregularity where registrar failed to give notice of the fact that an action had been dismissed pursuant to the operation of the Inactive Cases List rules - Whether dismissal may be set aside under O 2 r 1(2) of the Rules of the Supreme Court 1971 (WA) - Whether O 3 r 5 of the Rules of the Supreme Court 1971 (WA) may be invoked to extend time - Whether errors of principle by primary judge - Whether, assuming the existence of power, primary judge erred in not exercising any discretion in favour of appellant
Practice and procedure - Costs - Costs against liquidator - Whether error in exercise of primary judge's discretion
Legislation:
Rules of the Supreme Court 1971 (WA), O 2, O 3 r 5, O 4A
Result:
Appeal dismissed
Leave to extend the time to appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | Mr F M Douglas QC |
| First Respondent | : | Ms J Taylor |
| Second Respondent | : | Ms J Taylor |
| Third Respondent | : | Ms J Taylor |
Solicitors:
| Appellant | : | LVA Legal |
| First Respondent | : | Clayton Utz |
| Second Respondent | : | MDS Legal |
| Third Respondent | : | Jackson McDonald |
Case(s) referred to in decision(s):
BPM Pty Ltd v HPM Pty Ltd (1996) 131 FLR 339
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541
FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268
House v The King [1936] HCA 40; (1936) 55 CLR 499
Jakovljevic v L & B Doslov [2000] WASCA 131
Macks v Hedley [1999] FCA 1208; (1999) 94 FCR 188
Metroinvest Ansalt v Commercial Union Assurance Co Ltd [1985] 1 WLR 513
Minister for Aboriginal Affairs v Peko‑Wallsend [1986] HCA 40; (1986) 162 CLR 24
Monteleone v The Owners of the Old Soap Factory [2007] WASCA 79
Re Calder; Ex parte Capel Sands (WA) Pty Ltd (1998) 20 WAR 343
Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91
Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 7) [2016] WASC 329
Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia [2008] WASCA 107; (2008) 36 WAR 561
Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116
The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412
Traegar v Pires de Albuquerque (1997) 18 WAR 432
Tyler v Custom Creditor Corporation Ltd [2000] QCA 178
JUDGMENT OF THE COURT:
This is an appeal against Le Miere J's decision in Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 7)[1] (primary decision). The appellant is in liquidation. The primary proceedings involved claims by the appellant against the respondents. The proceedings were terminated when the action was taken to be dismissed for want of prosecution after the case had been on the Inactive Cases List for six continuous months.
[1] Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 7) [2016] WASC 329.
The appellant, by its liquidator, applied to have the action reinstated to the Commercial and Managed Cases list, and to recover money previously paid into court by way of security. The respondents applied for costs orders, with costs to be satisfied out of moneys previously paid into court by way of security. Le Miere J dismissed the appellant's application. His Honour also made orders requiring the appellant to pay the respondents' costs of the action, with such costs to be satisfied out of moneys paid into court. After delivering judgment, his Honour also ordered that the liquidator of the appellant pay the costs of the applications before him.
The appellant challenges the primary judge's decision. The appeal is commenced out of time, and the appellant also applies for an extension of time to appeal.
In these reasons it is convenient to refer to the appellant as the plaintiff and the respondents as, collectively, the defendants and, respectively, as CBA, Corrs and WFB.
Background[2]
[2] The following is taken from the uncontested findings of fact made by the primary judge, unless otherwise indicated.
The plaintiff commenced the action in 1999. It concerned claims by the plaintiff against the defendants in relation to events occurring between 1995 and 1999.[3]
[3] Primary decision [1].
Master Sanderson, on 23 February 2004, and Le Miere J, on 24 September 2009 and on 18 June 2014, made orders that the plaintiff pay into court security for the defendants' costs.[4] The plaintiff made payments on or about 6 November 2009, 1 June 2010 and 12 September 2014.[5] In 2014, the defendants applied for further security. The application was heard on 20 November 2014.
[4] Primary decision [26].
[5] Primary decision [26], [40].
The plaintiff's solicitors did not attend at the hearing on 20 November 2014. However, Le Miere J granted leave for Mr Grego, a director of the plaintiff, to appear for the plaintiff.[6] Le Miere J made an order for security for costs, and ordered that unless the security was provided within 28 days, the proceedings should be put on the Inactive Cases List.[7] The security to be given was in excess of $100,000 for each defendant.[8]
[6] Primary decision [1].
[7] Primary decision [1].
[8] Le Miere J's orders 20 November 2014.
The plaintiff did not furnish the security ordered.[9]
[9] Primary decision [1] - [2].
On 19 January 2015, the principal registrar gave notice to the plaintiff's solicitors on the record, and to Mr Grego, that the case was put on the Inactive Cases List.[10]
[10] Primary decision [2], [9].
On 17 April 2015, an application was made for orders winding up the plaintiff in insolvency.[11] On 2 June 2015, the Master ordered the plaintiff to be wound up in insolvency and that Mr Jacobs be appointed liquidator.[12]
[11] Primary decision [3].
[12] Primary decision [3].
Before 16 June 2015, the plaintiff's liquidator knew that the plaintiff was involved in litigation, and that Angove Law Pty Ltd (Angove Law) acted or had acted for the plaintiff. Before 16 June 2015, the liquidator also had dealings with Mr Grego.[13]
[13] Primary decision [16].
On 6 July 2015, the principal registrar's delegate informed the plaintiff, in a letter to Angove Law and to Mr Grego, that, in accordance with O 4A r 28(1) of the Rules of the Supreme Court 1971 (WA) (RSC), the matter had been dismissed for want of prosecution, because it had remained on the Inactive Cases List for six consecutive months.[14]
[14] Primary decision [4].
On 7 July 2015, the plaintiff's liquidator met with Mr Grego, and was provided with unspecified legal documents. On the same date, the liquidator received a letter from CBA's solicitors, informing him that the action had been dismissed for want of prosecution.[15]
[15] Primary decision [16].
On 10 July 2015, the plaintiff's liquidator 'contacted' a barrister for assistance, but did not engage any lawyers at that time.[16]
[16] Primary decision [17].
On 13 July 2015, the plaintiff's liquidator wrote to the court requesting a list of documents and orders made in the proceedings from the court.[17]
[17] Primary decision [17].
On 19 July 2015 (six months after the notice referred to in [9] above), the case was taken to be dismissed for want of prosecution by virtue of the operation of O 4A r 28(1).[18]
[18] Primary decision [13].
The plaintiff's liquidator did not attend the offices of Angove Law and collect the files for the matter until 11 September 2015. Nor did he engage a solicitor until September 2015.[19]
[19] Primary decision [17].
Even if the plaintiff's liquidator had not been informed (by CBA) on 7 July 2015 that the case had been dismissed, he would not have done anything in any event to remove the case from the Inactive Cases List before 19 July 2015.[20]
[20] Primary decision [17].
In July 2016, each defendant filed a chamber summons seeking orders that the plaintiff pay their costs of the action, and that those costs be paid out of the security paid into court by the plaintiff.[21]
[21] Primary decision [5].
On 1 September 2016, the liquidator filed a chamber summons seeking an order that the action be reinstated to the CMC list and other ancillary or consequential orders.[22]
[22] Primary decision [5].
More particularly, the plaintiff's chamber summons was in the following terms:[23]
1.The action be reinstated to the CMC List.
2.Should Order 1 be dismissed, the money currently held by the Court (or such sum as the court deems appropriate), be otherwise released to the liquidator.
3.The Chamber Summonses filed by the defendants [in July] 2016, be dismissed.
4.Should Order 3 be dismissed, the additional sum of $180,000 paid into Court pursuant to the order of Le Miere J dated 24 September 2009 be returned to the plaintiff.
[23] Chamber summons filed by the plaintiff on 1 September 2016 in the primary proceedings.
The primary judge's findings and conclusions
In relation to the plaintiff's application to reinstate the case, Le Miere J, in effect:
(a)Found there was no irregularity or failure to comply with the rules in the plaintiff's liquidator not receiving notice that the case was on the Inactive Cases List and was dismissed under O 4A r 28(1). His Honour said the liquidator had not been appointed liquidator when the court notified the plaintiff that the case had been put on the Inactive Cases List,[24] and that the court did not need to check if a liquidator had been appointed before the principal registrar gave notice to the parties that the case was dismissed.[25]
(b)Said that the case was not dismissed by the letter of the principal registrar's delegate dated 6 July 2015. Rather, it was taken to be dismissed for want of prosecution on 19 July 2015, as by then, the case had been on the Inactive Cases List for six continuous months since the parties were notified that the case was on the list.[26]
(c)Said that the registrar's letter of 6 July 2015, although sent before the case was dismissed, rather than upon or after dismissal as required by O 4A r 28(3), did not render the dismissal liable to be set aside, as notification under O 4A r 28(3) is not required for the case to be taken as dismissed.[27]
(d)Said that the failure to give notice under O 4A r 28(3) does not render the dismissal of the case irregular or liable to be set aside. Accordingly, the court does not have power to set aside the deemed dismissal under O 2 r 1(2) of the RSC.[28]
(e)Said that if the court had power to set aside the dismissal, his Honour would not exercise the power, as the liquidator's lack of action to remove the case from the Inactive Cases List was not the result of irregularities or non‑compliance with rules, but was because he did not know the case had been put on the Inactive Cases List. His failure to know that the case had been put on the Inactive Cases List was not the result of any non‑compliance with the rules or any irregularity.[29]
(f)Held that the court had no inherent jurisdiction to reinstate the case. His Honour said to do so would be inconsistent with the RSC, and that the court cannot exercise inherent power inconsistently with the court rules.[30] In that regard, his Honour referred to and applied a decision of this court in Rowe v Stoltze[31] in an analogous context.
[24] Primary decision [9] - [10].
[25] Primary decision [10].
[26] Primary decision [13].
[27] Primary decision [14] - [15].
[28] Primary decision [15].
[29] Primary decision [17] - [18].
[30] Primary decision [20] - [25].
[31] Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116.
In relation to the moneys paid into court and the order for costs in favour of the defendants, Le Miere J, in effect:
(a)Observed that the liquidator sought the return of $180,000 paid into court pursuant to an order of 24 September 2009 on the basis that that order conflicted with an earlier order of Master Sanderson.[32] His Honour said that a judge may vary an interlocutory order made by another judge, and that an order has effect unless and until it is set aside on appeal. Le Miere J said any conflict alleged between the orders made by his Honour and the master, for security for costs, provided no basis for ordering that security be released to the plaintiff.[33]
(b)Held that the defendants' applications for costs and payment out of court were not proceedings which required leave within the meaning of s 471B of the Corporations Act 2001 (Cth) (Corporations Act). Le Miere J said that, in any event, if leave were required, his Honour would grant leave.[34]
(c)Accepted there was no reason for departing from the usual rule entitling the successful party to costs from the losing party.[35]
(d)Ordered the plaintiff to pay the defendants' costs fixed in the sum sought by each defendant, as his Honour was satisfied that if the defendants' costs were taxed, the taxed costs would be higher than the amounts each defendant sought.[36]
(e)Held that, at least upon making the order that the plaintiff pay the defendants' costs as fixed, the money paid into court was charged in favour of the defendants. His Honour said that although the plaintiff had an interest that the money be paid in accordance with the court's orders, the plaintiff had no right to the money itself and could not require that it be paid to it or at its direction.[37]
(f)Said that it was appropriate that the money paid into court by the plaintiff as security for the defendants' costs be paid out of court to satisfy the costs orders in favour of each of the defendants.[38]
[32] Primary decision [26].
[33] Primary decision [28].
[34] Primary decision [31] - [33], citing BPM Pty Ltd v HPM Pty Ltd (1996) 131 FLR 339, 342.
[35] Primary decision [36].
[36] Primary decision [37] - [39].
[37] Primary decision [43].
[38] Primary decision [43].
The primary judge's orders
On 13 October 2016, Le Miere J made orders to the following effect:[39]
(a)The plaintiff pay CBA's costs of the action fixed in the sum of $141,092.50, and that such costs to be paid out of court to CBA from the security paid into court by the plaintiff.
(b)The plaintiff pay Corrs' costs fixed in the sum of $152,255.04, and that such costs be paid out of court to Corrs from the security paid into court by the plaintiff.
(c)The plaintiff pay WFB's costs fixed in the sum of $169,083.18, and that such costs be paid out of court to WFB from the security paid into court by the plaintiff.
(d)The plaintiff's application for reinstatement to the CMC list be dismissed.
(e)The liquidator of the plaintiff pay the costs of each of the defendants in respect of the applications, fixed in the sum of $3,000 for each defendant.
[39] BB 1 - 2.
Grounds of Appeal
As filed, the grounds of appeal alleged, in effect, that:
1The judge erred in law in finding that as a matter of law there had been notification to the plaintiff sufficient to comply with the provisions of O 4A r 25 of the RSC.
2The judge erred in law in finding that the failure of the plaintiff to take active steps to take the matter off the Inactive Cases List pursuant to O 4A r 27 was not non-compliance within the meaning of O 2 r 1 of the RSC.
3The judge erred in law in determining that the registrar's letter dated 6 July 2015 did not amount to an irregularity such as to enliven the operation of O 2 r 1(1) of the RSC.
4The judge erred in finding that, consistently with this court's decision in Rowe, the court could not extend the time for the plaintiff to comply with O 4A r 28(1) so as to permit an application under O 4A r 27(1) of the RSC to be made.
5To the extent that Ground 4 did not form the basis of the judge's decision, the court ought to have found that it had the power under O 3 r 5 of the RSC to extend time, and that to the extent that Rowe decided otherwise, it was inconsistent with the decision of FAI General Insurance Co Ltd v Southern Cross Exploration.[40]
[40] FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268.
6To the extent that ground 5 was not advanced in the primary court, the plaintiff ought to be permitted to rely on it in the appeal because it is a pure point of law, it involves a consideration of the same or similar questions in the primary court, and it is in the interests of justice.
7The judge erred in law in finding that if his Honour had power to set aside the dismissal of the case, his Honour would not do so, in that his Honour acted on a wrong principle, allowed extraneous or irrelevant matters to guide his Honour's discretion, mistook the facts or failed to take into account material considerations 'including':
(a)by taking into account only considerations of delay for a period of five weeks by the liquidator, and by failing to consider the prejudice to the plaintiff and the lack of prejudice to the defendants; and
(b)by failing to consider the justice of the case, in that the purpose of the RSC is to ensure that litigants are informed of matters relevant to the proceedings, and the delay of the liquidator in applying after he had notice of the facts did not warrant the dismissal of the application given the prejudice caused to the plaintiff,[41] and the absence of any prejudice, apart from costs, to the other parties.
8The judge erred in law when his Honour determined the funds paid into court by the plaintiff could be paid to the defendants in that:
(a)section 471B of the Corporations Act required the defendants to obtain the leave of the court as the proceeding related to the property of the company; and
(b)the merits of the defendants' respective applications did not warrant the money being paid out.
9The judge erred in law in ordering the liquidator to pay the costs of the applications personally.
[41] The plaintiff in its submissions contends that it had a valuable chose in action: appellant's written submissions, par 17.
Grounds 1, 2 and 8 were abandoned at the hearing of the appeal.[42]
[42] Appeal ts 25, 43.
The evidence of the plaintiff
In relation to ground 7, the plaintiff, on the hearing of this appeal, referred to the affidavit of Mr Jacobs in the primary proceedings sworn 20 June 2016.[43] In that affidavit, Mr Jacobs gave evidence to the following effect:
[43] Appeal ts 32, 35 - 36.
1.He was appointed official liquidator to the plaintiff on 2 June 2015. At that time, he was unaware of the fact that the plaintiff was involved in litigation. The funds of the company comprised around $21,000 held in the bank.
2.He became aware that the plaintiff was involved in litigation some time prior to 16 June 2015.
3.He met with Mr Grego in early July 2015, and Mr Grego provided him with some documents, including legal documents relating to the proceedings.
4.On 7 July 2015, he received a letter from CBA's solicitors advising that the action had been dismissed for want of prosecution. The letter attached a copy of the registrar's letter dated 6 July 2015.
5.On 10 July 2015, he contacted a barrister of Francis Burt Chambers for assistance. The barrister suggested that Mr Jacobs request documents from the Supreme Court.
6.On 13 July 2015, he wrote to the Supreme Court requesting a list of all documents and orders in the proceedings.
7.On 13 July 2015, he also received a telephone call from a solicitor, Ms McNally, regarding the action. She offered to help. Mr Jacobs told her that he had briefed a barrister at Francis Burt Chambers to advise.
8.On 17 July, 14 August, 21 September and 13 October 2015, he wrote further letters to the Supreme Court requesting documents.
9.On 11 September 2015, a person from his office attended the offices of Angove Law and collected the files that they held in relation to the action. There were some 203 lever arch files.
10.In September 2015, he engaged Mr Ratneser, barrister and solicitor, to act for the plaintiff. Mr Jacobs discussed with Mr Ratneser sending a letter to the parties advising that he intended to recommence the proceedings. Mr Jacobs considered that the 'best strategy' would be to attempt to recover the funds in court so as to allow the plaintiff company to pay for appropriate legal advice as to the plaintiff's claim, and to have counsel perform any steps necessary to continue with the action.
11.On 6 November 2015, he convened a meeting of the plaintiff's creditors and updated them on the progress of the liquidation. He informed creditors that he was attempting to recover the funds held in court and potentially recommence proceedings which had been dismissed for want of prosecution.
12.On 11 November 2015, Mr Ratneser wrote to the court requesting that the funds be paid into the liquidator's account.
13.On 23 November 2015, he convened a meeting of the plaintiff's creditors and they discussed the liquidation as well as the money held in court, the fact that the case had been placed on the Inactive Cases List, and that the action had been dismissed.
14.Between December 2015 and February 2016, he contacted the plaintiff's creditors, most of whom were legal practitioners who had previously acted for the plaintiff in the proceedings. He discussed with them the funds held in court and the prospect of recommencing proceedings, hoping to identify a way for the company to 'move forward with these issues despite its limited funds'.
15.He then met Mr Khosa, solicitor, and Mr Ian Viner QC, for the same purpose. He also met Ivona Ravlich, the company's accountant, to obtain more information about the funds that had been paid into court.
16.On 23 March 2016, Mr Ratneser informed Mr Jacobs that he could no longer act due to lack of funds.
17.Later that day, he contacted Ms Maria‑Louisa Coulson to see if she would be able to review the costs orders and advise him as to the costs applications by the defendants. She could not act, and she recommended Mr David Garnsworthy. On 24 March 2016, Mr Garnsworthy said he would be able to act, but there would need to be a solicitor on the record. Mr Jacobs then contacted another firm, Papamihail, to act for the plaintiff in relation to the costs applications and to consider recommencing proceedings.
18.On 16 August 2016, Mr Jacobs was put into contact with solicitors, Brian V O'Haire Lawyers.
19.Claims by unsecured creditors totalled around $3.36 million, and the plaintiff's only remaining assets are cash at bank of around $14,150.
20.The plaintiff had previously obtained expert evidence to the effect that the plaintiff's loss was between $6.5 million and $14.6 million.
21.If the dismissal of the action were set aside, the plaintiff proposes to proceed with its statement of claim dated 1 July 2009. The parties have previously performed a substantial volume of work to prepare for trial, including the exchange of witness statements.
Relevant legislation and rules
Rules of the Supreme Court 1971 (WA)
The following rules were current during the events leading up to the primary proceeding, though they have since been amended.
Order 1 - Application, elimination of delay and forms
…
3A. Inherent powers not affected
The inherent power of the Court to control the conduct of a proceeding is not affected by these rules.
…
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. (emphasis added)
Order 3 - Time
…
5. Extending and abridging time
(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorised by these rules, or by any judgment, order, or direction, to do any act in any proceedings.
(2) The Court may extend any such period as is referred to in subrule (1) although the application for extension is not made until after the expiration of that period.
(3) The period within which a person is required by these rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the Court being made for that purpose. (emphasis added)
…
Order 4A - Case management
…
Division 5 - Inactive Cases List
21.Term used: Inactive Cases List
In this Division -
Inactive Cases List means a list of inactive cases kept by the Principal Registrar under rule 25.
…
23.Springing order that case be put on Inactive Cases List
(1)A judge, master or registrar making an interlocutory order or case management direction in a case may include an order that unless the interlocutory order or direction is complied with by a date stated in the order, the case is to be put on the Inactive Cases List.
(2)Unless countermanded by a judge, master or registrar, before it has effect, the order has effect according to its terms.
24.Cases inactive for 12 months deemed inactive
If no procedural step is taken in a case for 12 months by any party to the case, the case is taken to be inactive unless the case manager for the case orders otherwise.
25. Parties to be notified of case being on Inactive Cases List and to advise clients
(1) When an order is made under rule 22(4), or an order made under rule 23(1) takes effect, or a case is taken to be inactive under rule 24, the Principal Registrar must -
(a) put the case on the Inactive Cases List; and
(b) give all parties to the case written notice that the case is on the Inactive Cases List and of the effect of rule 26
(2) As soon as practicable after being notified under subrule (1), the practitioner for a party to the case must notify the party of -
(a) the fact that the case is on the Inactive Cases List and why; and
(b) the effect of rule 26.
26.Consequences of case being on Inactive Cases List
(1) If a case is on the Inactive Cases List, only these documents may be filed in the Court in relation to the case -
(a) a summons for an order under rule 27(1);
(b)a notice of discontinuance by the plaintiff under Order 23 rule 2;
(c) an application for leave made by the plaintiff or the defendant under Order 23 rule 2;
(d) a written consent under Order 43 rule 16 to the making of an order that would finally dispose of the case.
(2) If the plaintiff or defendant in a case on the Inactive Cases List files an application for leave under Order 23 rule 2, the Court may grant leave under that rule even though the case has not been removed from that list.
(3) If a written consent is filed under Order 43 rule 16 to the making of an order in a case on the Inactive Cases List that would finally dispose of the case, the Court may make the order even though the case has not been removed from that list.
27. Removing cases from Inactive Cases List
(1) Any party to a case on the Inactive Cases List may apply to the Court for an order that the case be taken off the Inactive Cases List.
(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.
28. Certain cases taken to have been dismissed
(1) A case that is on the Inactive Cases List for 6 continuous months is taken to have been dismissed for want of prosecution.
(2) If no procedural step (except an application to dismiss the case for want of prosecution) is taken in the 6 months after the date on which a case is ordered to be taken off the Inactive Cases List, the case is taken to have been dismissed for want of prosecution.
(3) If under subrule (1) or (2) a case is dismissed, the Principal Registrar must give all parties to the case written notice of the fact.
(4) Notwithstanding a case is dismissed under subrule (1) or (2) -
(a) any party to the case may apply for an order for costs; and
(b) the Court may make an order as to costs. (emphasis added)
…
Order 25 - Security for costs
…
7.Payment out
Where money has been paid into court as security for costs and the action has been finally disposed of, the amount of the security shall be paid out to the party for whose security it was furnished to the extent pro tanto that costs are due from the securer to such party, and the Principal Registrar shall pay out the security accordingly unless the Court has otherwise ordered, and the balance (if any) shall be refunded to the securer without the necessity for any special order.
…
Order 66 - Costs
1. General rules as to costs
(1) Subject to the express provisions of any statute and of these rules the costs of and incidental to all proceedings including the administration of estates and trusts shall be in the discretion of the Court but, without limiting the general discretion conferred on the Court by the Act, and subject to this Order, the Court will generally order that the successful party to any action or matter recover his costs.
Ground 3 - analysis and disposition
The plaintiff's arguments in this appeal
By ground 3, the plaintiff challenges the following findings:[44]
The failure to give notice in accordance with O 4A r 28(3) does not render the dismissal of the case irregular or liable to be set aside. The dismissal of the case is not irregular. The dismissal occurred by operation of the rules. The giving of notice under O 4A r 28(3) is not, and cannot, be a condition of the case being dismissed. It follows that the court does not have power pursuant to O 2 r 1(2) [to] set aside the deemed dismissal of the case.
[44] Primary decision [15].
In relation to ground 3, the plaintiff advances submissions not contained in its filed appellant's case. Additionally, it is not clear whether the submissions of the plaintiff advanced in the appeal hearing on ground 3 were put (or at least squarely put) to the primary judge. The plaintiff's submissions were:[45]
1.The registrar's letter of 6 July 2015 was not a written notice within the meaning of O 4A r 28, in that the rule required notice to be given if a case is dismissed under, relevantly, O 4A r 28(1), and the plaintiff's action was not, in fact, dismissed until 19 July 2015, some 13 days later. The registrar's letter of 6 July 2015 was a 'nullity'.
2.The registrar failed to give notice of the dismissal in accordance with O 4A r 28(3). The absence of notice is an 'irregularity' for the purposes of O 2 r 1(1).
3.Under O 2 r 1(2), the court may set aside a 'judgment' or exercise the other powers referred to.
4.The dismissal of the action under O 4A r 28(1) is, relevantly, a 'judgment' for this purpose.
5.Accordingly, the court may set aside the dismissal of the action and make orders extending time to 'comply with the requirements of the Inactive Cases list'.[46]
[45] Appeal ts 23 - 29. See also the appellant's supplementary written submissions dated 4 May 2018.
[46] Appeal ts 28.
The primary judge's error, according to the plaintiff, is that the judge, in the passage referred to in [29] above, wrongly introduced into the scope of the power under O 2 r 1(2) 'something in the nature of an element of causation' between the irregularity and 'what one might describe as the incident which has caused injustice'.[47] The plaintiff contends that any causal connection between the two is merely a factor to be taken into account, but does not limit the scope of the power.[48]
[47] Appeal ts 28.
[48] Appeal ts 28 - 29.
The plaintiff thereby contends that the primary judge made an error of principle, and that this court should re‑exercise the discretion in the plaintiff's favour. The plaintiff refers in particular to Mr Jacobs' evidence, and submits that:[49]
[49] Appeal ts 31 - 37.
1.The litigation is a major asset of the plaintiff company with an estimated value of $14 million.
2.A plank in the plaintiff's case, on a preliminary point of law, was found in its favour in an earlier decision of this court.[50]
3.The liquidator is lacking in funds.
4.The liquidator, not unreasonably, took time to consider the position after having been informed that the action had been dismissed.
5.There is a large volume of material, the liquidator is a court‑appointed liquidator, and the policy reflected in s 471B of the Corporations Act is that a liquidator cannot be expected, in effect, to absorb quickly and act upon such an extensive amount of material.
6.Mr Jacobs had no actual knowledge of any dismissal until he received the letter from CBA's solicitors on 7 July 2015.
7.In the circumstances deposed to by Mr Jacobs, he could not have been expected to do any more than he did at the time that he did it. Much of the time was taken up in familiarising himself with the proceedings and obtaining legal advice.
8.The defendants have suffered no prejudice, save as to costs.
9.It is appropriate to reinstate the action now, allow the liquidator to see whether he can ascertain funding and, if he cannot, the matter could be dismissed again.
[50] Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia [2008] WASCA 107; (2008) 36 WAR 561.
In this context, the plaintiff referred to the considerations outlined in Tyler v Custom Creditor Corporation Ltd.[51]
[51] Appeal ts 37; Tyler v Custom Creditor Corporation Ltd [2000] QCA 178 [2].
It should be added that the plaintiff does not challenge the primary judge's findings that the action was dismissed by the operation of the RSC, and not by the operation of the registrar's letter of 6 July 2015.[52]
Order 2 r 1
[52] Appeal ts 26 - 27.
The terms of O 2 r 1 have been set out in [28] above.
In The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd,[53] the court said:[54]
This order was in the rules when they came into existence in 1971. The order is in the same terms as the English O 2 r 1, which was introduced into the English rules in 1964. According to Lord Denning in Harkness v Bell's Asbestos and Engineering Ltd [1967] 2 QB 729 at 735 - 736:
'This new rule does away with the old distinction between nullities and irregularities. Every omission or mistake in practice or procedure is henceforward to be regarded as an irregularity which the court can and should rectify so long as it can do so without injustice.'
… In Metroinvest Ansalt v Commercial Union Cumming-Bruce LJ said at 518:
'It is quite clear from Harkness v Bell's Asbestos and Engineering Ltd … that the mischief at which the revision of the rules was aimed was to remove the distinction between irregular purported proceedings which were ab initio a nullity from irregular proceedings which were not void ab initio. The content of Order 2 is designed to enable the court, whenever faced with anything done or left undone in proceedings which constitutes a failure to comply with the requirements of the rules, to exercise the powers conferred by the rules without having first to decide whether the jurisdiction conferred by the rules applies at all.'
…
The court may exercise the discretionary powers conferred by O 2 r 1(2) of its own motion. See Slade LJ in Metroinvest at 522. Like all judicial discretions unconfined by any express conditions, the discretion should be exercised judicially and, adopting the language of Lord Denning in Harkness, any irregularity should be rectified so long as it can be done without injustice.
[53] The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412.
[54] The Pilbara Infrastructure [48] - [52].
In The Pilbara Infrastructure, the court left open the question of whether an irregularity by one party, which has not been waived by the other, remains irregular, as between the parties, unless and until the matter is brought before the court and the court decides in which way to exercise its discretion under O 2 r 1(2).[55] Nor is it necessary, for the purposes of the present case, to reach a concluded view on that matter.
[55] The Pilbara Infrastructure [50] ‑ [51]; and see Monteleone v The Owners of the Old Soap Factory [2007] WASCA 79 [27].
However, even if the irregularity does not remain irregular, as between the parties, pending the exercise of the court's powers under O 2 r 1(2), the powers under O 2 r 1(2), that might be described generally as 'curative' powers, are expressed in the alternative to the power to 'set aside'. The court may 'set aside' the 'step taken in the proceeding', or 'judgment' etc, 'or' it may 'exercise its powers under [the Rules] to allow such amendments [if any] to be made …'.
There may be a question as to whether the concluding words in O 2 r 1(2) 'and to make such order (if any) dealing with the proceedings generally as it thinks fit' are intended to apply only conjunctively with the power to allow amendments to be made under the RSC, or whether those words are intended to confer broad consequential powers also exercisable upon the power to 'set aside'. In Metroinvest Ansalt v Commercial Union Assurance Co Ltd,[56] Slade LJ appeared to consider that the concluding words in the equivalent English section were an aspect of the alternative power. His Lordship said:[57]
[The court] is given by Ord 2, r 1(2) a choice of courses to pursue at its own discretion, whether or not an application under Ord 2, r 2 is before it. In such a situation, in the exercise of its discretion under rule 1(2), it may either adopt the more draconian course of setting aside wholly or in part the proceedings in which the failure occurred, or the relevant step taken in those proceedings or the relevant document or order; alternatively, it may 'make such order … dealing with the proceedings generally as it thinks fit.' The last mentioned words are, in my opinion, manifestly wide enough to empower it to make a dispensing order waiving the relevant irregularity[.] (emphasis added)
[56] Metroinvest Ansalt v Commercial Union Assurance Co Ltd [1985] 1 WLR 513.
[57] Metroinvest (522 - 523).
There is much to commend the construction of Slade LJ in Metroinvest, although it is unnecessary to express a final view on the question referred to in [39] above. More importantly, for present purposes, the concluding words of O 2 r 1(2) are, as Slade LJ observed, 'manifestly wide enough to empower it to make a dispensing order waiving the relevant irregularity'.[58] That conclusion is confirmed by the decision in The Pilbara Infrastructure referred to in [36] above.
[58] Metroinvest (522).
In Metroinvest, the relevant irregularity was committed by the plaintiff in not giving notice in accordance with the rules in accepting a payment into court from the defendants.[59] The defendants had paid money into court before it had been served with a belated supplementary list of documents by the plaintiff.[60] It was found that it was open to infer that had the documents been properly discovered by the plaintiff in time, the defendants would not have paid the money into court.[61] Each party made an application for the money in court to be paid out to it.[62] In support of its application for the money, the plaintiff contended:[63] (1) that its non‑compliant notice of acceptance of the payment in was not irregular as between the parties by virtue of the operation of the equivalent of O 2 r 1(1); and (2) if the non‑compliant notice was irregular, the plaintiff should be entitled to remedial relief under O 2 r 1(2).
[59] Metroinvest (516).
[60] Metroinvest (516 - 517).
[61] Metroinvest (516).
[62] Metroinvest (519).
[63] Metroinvest (518 - 520).
As to the first contention, the Court of Appeal in Metroinvest held that the non‑compliant notice remained irregular until the court had exercised its powers under O 2 r 1(2) by 'taking the action of killing or curing the irregular proceeding'.[64] As we have indicated earlier, it is unnecessary to examine that aspect of the decision for present purposes. The second argument is, however, of some significance.
[64] Metroinvest (520).
As to the second contention, the plaintiff argued that the discretion should be exercised in its favour, and not in favour of the defendants because the non‑compliant notice had not, in itself, been causative of any prejudice to the defendants. Slade LJ said:[65]
[Counsel for the plaintiff] submitted that even if … [the judge] had a discretion to treat the purported notice of acceptance as if it had been set aside, he could only properly exercise such discretion in favour of the defendants if they had shown that the irregularity in the form of the notice had itself caused them prejudice; and [counsel for the defendants] has frankly accepted that they could show no such prejudice.
I do not think this submission is correct. Once a party to litigation has been guilty of a failure of the nature mentioned in Ord 2, r 1(1) which has not been waived by the other party, the court, in my opinion, has a general discretion under paragraph (2) to make such consequential orders dealing with the proceedings generally as it thinks fit …
Of course this is a discretion which must be exercised judicially. I would readily accept that the irregularity in the present case is of a nature which the court could and should have rectified, so long as it could have done so without injustice to the defendants … Furthermore, I accept that prejudice or lack of prejudice to the other party to the litigation is clearly a highly relevant matter in considering the interests of justice; it may be the all‑important one.
In the present case [counsel for the defendants] recognised that the objection taken to the form of the notice of acceptance by his clients is of a highly technical nature. He agreed that it did not in any way mislead the defendants as to [the plaintiff's] intentions in purporting to accept the payment in. However, where a litigant, having failed to comply with a specific requirement of the Rules of the Supreme Court, is seeking the indulgence of the court under Ord 2, r 1(2) he cannot, in my judgment, expect the court to assess the requirements of justice with its eyes in blinkers; it must look at all the circumstances. His opponent in the litigation is, in my opinion, entitled to rely on a technical failure to comply with the requirements of a particular rule if, in the event of the waiver of the breach, the other Rules of the Supreme Court would operate to confer a benefit on the party in default, which justice requires that he should not receive on the particular facts of the particular case. This approach accords with that of Robert Goff J in Carmel Exporters (Sales) Ltd v Sea‑Land Services Inc [1981] 1 WLR 1068, 1079, where he referred to the flexibility which is now generally characteristic of the Rules of the Supreme Court, and which enables the court to ensure that justice may be done.
[65] Metroinvest (523 ‑ 524).
It was held that in the circumstances of that case, where it was open to infer that the money would not have been paid into court had proper and timely discovery been given, that the primary judge did not err in exercising the discretion to permit the defendants to withdraw their payment in.[66]
Disposition
[66] Metroinvest (524).
It will be assumed for present purposes, without deciding, that the dismissal of the action under O 4A r 28(1) is a 'judgment' within the meaning of O 2 r 1(1).
The plaintiff's contention that the registrar's letter of 6 July 2015 had no legal effect is to be accepted. A further letter, in accordance with O 4A r 28(3) was not sent by the registrar. Accordingly, there was a failure by the registrar to comply with O 4A r 28(3) because notice of the dismissal was not given after the action had been dismissed on 19 July 2015. Order 4A r 28(3), on its proper construction, requires such a notice to be given as soon as practicable after dismissal has occurred.
The absence of notice does not in itself nullify the dismissal of the action: O 2 r 1(1). The plaintiff does not ask for an order extending the time for the registrar to send a compliant notice, nor for an order that the failure to send a notice be waived. Rather, the plaintiff asks for the dismissal to be set aside because of the registrar's failure to send the notice after dismissal under O 4A r 28(3).
In our view, the scope of the power under O 2 r 1(2) is not limited by a requirement that the irregularity complained of must itself cause injustice to the 'innocent' party. It is a remedial provision with, evidently, a broad sphere of intended operation. The provision is unconfined by any express terms. There is nothing in its scope, purpose or subject matter to suggest that it is qualified by a requirement that the irregularity complained of must itself cause injustice to the 'innocent' party.[67] The reasons of Slade LJ in Metroinvest, referred to in [43] above, are, with respect, apt.
[67] cf Minister for Aboriginal Affairs v Peko‑Wallsend [1986] HCA 40; (1986) 162 CLR 24, 39 - 40.
Insofar as the primary judge's reasons may be read as suggesting otherwise, that suggestion is not, with respect, correct. It should be added, however, that it is not clear that his Honour was dealing with the argument as now presented.
However, the power cannot be exercised, on its proper construction, for any purpose other than to do justice between the parties in the particular circumstances of the case. In this case, each of the plaintiff and the defendants is the 'innocent' party. Here none of the parties committed the irregularity in question. There could be no sound exercise of the discretion in favour of the plaintiff where it has suffered no injustice because the judgment was regularly entered against it under the RSC, and where it could not conceivably be in the interests of justice for the defendants, as innocent parties, to be deprived of a judgment regularly entered in their favour. Insofar as the judge made any error as alleged, it was immaterial.
None of the matters referred to by the plaintiff in the appeal weighs in the balance in favour of the plaintiff against those two fundamental aspects of the justice of the case.
Further, and in any event, we would not re‑exercise the discretion in favour of the plaintiff. In addition to the facts that the plaintiff suffered no prejudice as a result of the irregularity and the defendants would suffer the injustice of being deprived of the judgment in their favour regularly entered, the relevant matters, in our view, arising from Mr Jacobs' evidence, are that:
1.The judgment was entered in accordance with the operation of the RSC after a period of lengthy inertia by the plaintiff.
2.The litigation commenced in 1999 and relates to events in the period 1995 ‑ 1999. Even though witness statements have been exchanged, it may be accepted that there is some inevitable deterioration in the quality of the evidence to be given at trial in respect of events going back 20 ‑ 25 years.[68]
3.The plaintiff remains in default of Le Miere J's orders of 20 November 2014 requiring the provision of security for costs.
4.The plaintiff is insolvent and has been since at least 2 June 2015. On Mr Jacobs' evidence, the plaintiff has no assets to fund the litigation and has no prospect, at least in the short to medium term, of complying with the orders of 20 November 2014.
5.The plaintiff's creditors, who might perhaps have an interest in funding or procuring the funding of the litigation, have evidently not done so since the commencement of the liquidation some two years ago. That is the case even though most of them are the lawyers who have acted in the litigation, and presumably have some familiarity with it.
6.Although the liquidator wishes to reinstate the proceedings and avoid payment into court in the meantime, that course would effectively overturn the operation of Le Miere J's orders of 20 November 2014, against which there has never been an appeal.
7.The liquidator's evidence is that in September 2015, at a time when he was being advised by a solicitor (Mr Ratneser), he felt the 'best strategy' was to recover the funds previously paid into court by the plaintiff (and presumably avoid paying the further funds required under the 20 November 2014 orders). Whatever the objective merits of that strategy were, he did not make an application until 1 September 2016, and it is difficult to see, having regard to the nature and scope of the arguments advanced to Le Miere J on that application, why those matters could not have been brought before the court a year earlier.[69]
8.The considerations referred to in Tyler do not, in the particular circumstances of this case, provide any real assistance to the plaintiff.
[68] See Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, 551; Jakovljevic v L & B Doslov [2000] WASCA 131 [41] ‑ [42].
[69] The arguments advanced before Le Miere J are apparent from the judge's findings set out in [22] - [23] above.
We would dismiss ground 3.
Grounds 4, 5 and 6 - analysis and disposition
By grounds 4, 5 and 6, the plaintiff contends, in substance, that the judge should have found that his Honour had the power to order that the case be taken off the Inactive Cases List under O 4A r 27(1), by using the power under O 3 r 5 to extend the time for the plaintiff to make an application under O 4A r 27(1). In that regard, the plaintiff contends that this court should not follow the decision in Rowe,[70] which is to contrary effect.
[70] Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116 [23] ‑ [26].
The point is academic here because, essentially for the reasons given in [50] ‑ [52] above, even if the power were exercisable, this would not be an appropriate occasion to exercise it.
Further, for the Court of Appeal to overturn its own previous decision, the court must be convinced that the earlier decision was wrong, or that there is some other compelling reason why the previous decision should no longer be followed.[71]
[71] Traegar v Pires de Albuquerque (1997) 18 WAR 432, 434, 447.
Also, the court should not lightly depart from its previous decisions, least of all in circumstances in which the later court comprises only three members.[72]
[72] Re Calder; Ex parte Capel Sands (WA) Pty Ltd (1998) 20 WAR 343, 354.
Neither of the criteria referred to in [56] above is, in our view, satisfied in this case. We would dismiss grounds 4, 5 and 6.
Ground 7 - analysis and disposition
It was open to the judge to reach the view that it was not in the interests of justice to exercise a power (assuming the power was available) to set aside the dismissal of the plaintiff's action. Further, even if there were an error which required a re‑exercise by this court of the discretion, we would not exercise it in favour of the plaintiff for the reasons given in [50] ‑ [52] above. We would dismiss ground 7.
Ground 9 - analysis and disposition
The plaintiff (or at least the liquidator) contends that, although the court had power to order costs against the liquidator, ordinarily such an order would not be made absent a serious element of delinquency.[73]
[73] Macks v Hedley [1999] FCA 1208; (1999) 94 FCR 188 [89].
Whilst that may be accepted, in order to succeed on this ground, the plaintiff (or liquidator) must establish an error of the kind identified in House v The King.[74]
[74] House v The King [1936] HCA 40; (1936) 55 CLR 499, 505.
Moreover, the defendants contend, without dispute by the plaintiff in this appeal, that:
1.The defendants gave notice of the costs order they intended to seek against the liquidator after an advance copy of the primary decision was delivered by Le Miere J.
2.The liquidator did not respond to the minute of proposed orders.
3.The liquidator did not attend, by his legal representatives, to take judgment or to be heard in relation to final orders and costs.
4.The liquidator did not make any attempt, after the costs orders were made in his absence, to have those orders vacated, or to relist the matter to make submissions in relation to costs.
Accordingly, ground 9 raises a point not raised by the plaintiff or the liquidator below. No exceptional circumstances have been shown which would justify the point being raised afresh on this appeal.[75] The plaintiff should not be permitted to raise it now.
[75] Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91 [48] ‑ [52].
Moreover, there has been no attempt to demonstrate an error of the requisite kind (see [61] above). We would dismiss ground 9.
Conclusion
For the foregoing reasons, leave to extend the time to appeal should be refused and the appeal should be dismissed.
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 MURPHY19 JULY 2018
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