Ross Flint Pty Ltd v PILATUS Pty Ltd
[2007] WADC 86
•25 MAY 2007
ROSS FLINT PTY LTD -v- PILATUS PTY LTD & ORS [2007] WADC 86
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 86 | |
| Case No: | CIV:2083/1999 | 16 MAY 2007 | |
| Coram: | COMMISSIONER O'NEAL | 25/05/07 | |
| PERTH | |||
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | ROSS FLINT PTY LTD (ACN 009 264 126) PILATUS PTY LTD (ACN 078 361 485) PILATUS PTY LTD (ACN 078 361 485) ROSS FLINT PTY LTD (ANC 009 264 126) ROSS FREDERICK FLINT |
Catchwords: | Dismissal for want of prosecution Principles |
Legislation: | District Court Act of Western Australia 1969 |
Case References: | Australian Growth Managers Ltd v Egerton-Warburton [2007] WASC 10 Birkett v James [1978] AC 297 Cox v Journeaux (No.2)(1935) 52 CLR 713 Herbert Morris Ltd v Saxelby [1916] 1 AC 688, [1916-17] All ER Rep 305 Monaveen Pty Ltd v ABB Service Pty Ltd (2006) WASCA 263 Monaveen Pty Ltd v ABB Service Pty Ltd [2004] ACL Rep (Iss 3) 325 WA 16 Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 248 Owen v Pugh [1995] 3 All ER Rep 345 Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 Spitfire Nominees Pty Ltd v Ducco [1998] 1VR 242 The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93 Ulowski v Miller [1968] SASR 277 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PILATUS PTY LTD (ACN 078 361 485)
Defendant
PILATUS PTY LTD (ACN 078 361 485)
Plaintiff by Counterclaim
ROSS FLINT PTY LTD (ANC 009 264 126)
First Defendant by Counterclaim
ROSS FREDERICK FLINT
Second Defendant by Counterclaim
Catchwords:
Dismissal for want of prosecution - Principles
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Legislation:
District Court Act of Western Australia 1969
Result:
Application dismissed
Representation:
Counsel:
Plaintiff : Mr D Lenhoff
Defendant : Mr J K Panegyres
Plaintiff by Counterclaim : No appearance
First Defendant by Counterclaim : No appearance
Second Defendant by Counterclaim : No appearance
Solicitors:
Plaintiff : Lawton Gillon
Defendant : Holborn Lenhoff
Plaintiff by Counterclaim : Not applicable
First Defendant by Counterclaim : Not applicable
Second Defendant by Counterclaim : Not applicable
Case(s) referred to in judgment(s):
Australian Growth Managers Ltd v Egerton-Warburton [2007] WASC 10
Birkett v James [1978] AC 297
Cox v Journeaux (No 2) (1935) 52 CLR 713
Herbert Morris Ltd v Saxelby [1916] 1 AC 688, [1916-17] All ER Rep 305
Monaveen Pty Ltd (recs and mgrs apptd) (admin apptd) v ABB Service Pty Ltd [2007] WASCA 263 (S)
Monaveen Pty Ltd v ABB Service Pty Ltd [2004] WASC 5
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 248
Owen v Pugh [1995] 3 All ER Rep 345
Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435
Spitfire Nominees Pty Ltd and Another v Ducco [1998] 1 VR 242
The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93
Ulowski v Miller [1968] SASR 277
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1 COMMISSIONER O'NEAL: By a chambers summons filed 14 August 2006 the appellant/defendant sought to strike out the respondent/plaintiff's action for want of prosecution. That application was heard by the Registrar on 13 November 2006 and dismissed on 25 January 2007. The defendant now appeals from that decision. The second defendant by counterclaim was not a party to the original application and is not a party to the appeal. In these reasons I will refer to the parties to the appeal by their status in the original action.
2 In October 1998 the plaintiff and the defendant entered into an agreement for the sale and purchase of a business. The plaintiff's business at that time was the sale of abrasives used in industrial applications. The plaintiff had engaged a business broker, Asset Business and Property Consultants whose principal was a Mr Gunar Oksis to help find a purchaser. By written agreement made on 5 October 1998 (the "sale agreement") the plaintiff agreed to sell and the defendant agreed to purchase the plaintiff's business. The defendant agreed to pay a price of $230,000.00 with $200,000.00 to be paid on settlement and a further $30,000.00 on or before 1 May 1999.
3 The sale took place and the defendant paid the plaintiff the initial $200,000.00. Subsequently however the defendant refused to pay the balance of $30,000.00.
4 By an action commenced in June 1999 the plaintiff sued for the $30,000.00 balance owing under the sale agreement. The plaintiff made an application for summary judgment in the same month. The application was supported by the affidavit of Mr Ross Flint, the director of the plaintiff (and second defendant by counterclaim), sworn 30 June 1999. That application was opposed by the defendant for the reasons set out in an affidavit sworn by its managing director, Mr Elmer Ellison on 19 July 1999. These affidavits are referred to and incorporated by reference in the affidavit of Mr Ellison sworn 11 August 2006 on this application.
5 In his 19 July 1999 affidavit Mr Ellison admits entering into the sale agreement and admits that the defendant failed to pay the $30,000.00 balance. He says however that something was omitted from the written terms of the sale agreement.
6 According to Mr Ellison, prior to signing the sale agreement, there was a meeting between himself, Mr Flint and Mr Oksis. Mr Ellison claims that in the course of that meeting he told the other two men that "it was
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- important for Flint (the plaintiff's director) to be properly restrained from having any contact with the customers of the business after the sale". Mr Ellison says that he was told by Mr Oksis that the standard agreement for the sale and purchase of a business included a wide restraint clause that would have that effect. Mr Ellison says that he did not himself check the wording of the standard agreement or take legal advice. Mr Ellison also says that he was assured in the course of the meeting by Mr Flint that after the handover of the business, Mr Flint would have no contact at all with the customers of the business who were "end users", presumably of industrial abrasive products.
7 The sale agreement was made between the plaintiff and defendant companies. Mr Flint is not a party to the agreement. As one of its special conditions, the sale agreement provides, "Vendor warrants that he will not directly compete at client base (sic) of this business with purchaser, except with purchaser agreement".
8 After the sale, Mr Flint was employed as a technical sales representative by Norton Abrasives Pty Ltd ("Norton Abrasives"), a large corporation which imports, manufactures, distributes and retails abrasives. Prior to the sale of its business the plaintiff apparently sold some of Norton Abrasives' products. In his affidavit of 19 July 1999 Mr Ellison deposed that as an employee of Norton Abrasives, Mr Flint "comes into regular contact with the defendant's customers" and since that has occurred the defendant lost customers who previously purchased their Norton Abrasives products through the defendant. Since the sale agreement allocates $85,000.00 of the total purchase price of $230,000.00 to goodwill and the conduct of Mr Flint after the sale is said to have caused the defendant a loss that "...will certainly exceed $30,000", Mr Ellison refused on behalf of the defendant to pay the balance of $30,000.00 to the plaintiff when that sum came due.
9 In addition to opposing the summary judgment application, the defendant brought an application for security for costs. On 17 May 2001 the plaintiff's application for summary judgment was dismissed. On 31 May 2001 the defendant's application was allowed and the plaintiff was ordered to give security for costs in the amount of $10,000.00. The security was to be paid within 10 days of the order. When it was not paid, a springing order was made on 30 July 2001. Within the time provided by that order the security was paid into Court.
10 The order for security of costs was made, as is usually the case, on evidence that it appeared that the plaintiff would be unable to meet an
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- order for costs if judgment was given against it. It seems that the proceeds of the sale of the plaintiff's business was not retained by it and that the plaintiff company is effectively a shell.
11 On 13 August 2001 the defendant filed its defence together with a set-off and counterclaim. The counterclaim reflected the allegations made by Mr Ellison in his affidavit of 19 July 1999. The plaintiff is the first defendant by counterclaim. Mr Flint is joined as the second defendant by counterclaim. By the counterclaim, the defendant alleges, among other things, that as a result of the parties' common mistake, the sale agreement failed to provide for a term restraining Mr Flint from competing with the business. It is also alleged that it was represented to the defendant that Mr Flint would be so restrained by the terms of the sale agreement and that in any event Mr Flint represented that he would not compete with the business. The defendant claims damages for breach of the sale agreement, as rectified to provide for the restraint against Mr Flint, and for misleading and deceptive conduct.
12 At par 10 of the defence, set-off and counterclaim the defendant alleges that the representation that Mr Flint would be restrained by the terms of the sale agreement from having any contact with the customers of the business, was made by Mr Flint or "alternatively by (the plaintiff's) duly authorised agent, Gunar Oksis…".
13 Mr Flint and the plaintiff entered appearances in respect of the counterclaim and on 3 October 2001 filed a reply and defence to counterclaim. Their defence essentially admits that Mr Flint was employed by Norton Abrasives but otherwise denies the allegations made in the counterclaim. The defence also pleads that a contractual covenant in the terms sought by the defendant "… in the form proposed would in any event be void and unenforceable against the defendants by counterclaim by the defendant".
14 By mid December 2001 the parties certified that discovery had been given.
15 A further series of interlocutory disputes then occurred. An application for security in respect of the counterclaim was made by the plaintiff and Mr Flint. Applications for further and better discovery and further and better particulars were made.
16 In September 2002 an entry for trial was filed by the defendants by counterclaim. A book of pleadings was filed at the same time. On 30 October 2002 a pre-trial conference was held and the matter was
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- adjourned to a listing conference. Orders were also made with respect to expert evidence for the trial.
17 When the matter came on at the listing conference on 22 November 2002 the Registrar was advised that the defendant proposed to amend its defence, counterclaim and set-off. As will be seen, this was not in fact completed until nearly four months later. The listing conference was adjourned to 13 January 2003. When it came back on before the Registrar on 13 January 2003, various orders were made with respect to expert evidence and further and better particulars. The parties were granted liberty to apply on 24 hours' notice to re-list the action on completion of outstanding or intended interlocutory steps. The matter came again before the Registrar on 6 March 2003. On the application of the defendant orders were made allowing it to amend its pleading. This was done on 13 March 2003. The substance of the amendment was to allege that after the defendant's purchase of the business, Mr Flint as an employee of Norton Abrasives dealt with customers who were former customers of the plaintiff's business "causing there to be competition with the business…" in breach of the restraint condition for which the defendant seeks rectification.
18 The action then fell dormant until 6 May 2004. On that date the plaintiff's solicitor wrote to the defendant's solicitor advising that instructions had been received to arrange for the listing conference to be re-listed. The letter also sought agreement with respect to the directions for trial. The defendant's solicitors responded a few days later. Their letter, which is an annexure to the affidavit of Elmer Ellison sworn 11 August 2006, required the plaintiff to comply with O 3 r 7 of the Rules of the Supreme Court by serving notice of intention to proceed. By a letter of 22 July 2004 the plaintiff's solicitors gave the notice required by O 3 r 7 while disagreeing that notice was necessary. Following that effort, both parties fell silent until June 2006 when they were roused by an enquiry from the court.
19 In response to the court's enquiry on 19 June 2006 the plaintiff's solicitors asked that the matter be re-listed for a listing conference so that hearing dates could be allocated. When the matter came on before the Registrar at the listing conference on 24 July 2006, the defendant sought and was granted leave to bring an application to strike out the plaintiff's action for want of prosecution.
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20 Three affidavits were filed with respect to the application. There is an affidavit of Elmer Ellison sworn 11 August 2006. The plaintiff then filed a responsive affidavit sworn by Mr Flint on 20 September 2006. The defendant filed a further affidavit of Mr Ellison sworn 29 September 2006.
21 On the hearing of this appeal it was submitted on behalf of the defendant that it was "trite that the court had an inherent jurisdiction to strike out actions for want of prosecution". Given the constitution of the court provided by the District Court Act of Western Australia 1969 it cannot be said that the court possesses inherent powers akin to those of the Supreme Court: Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435. I accept however that, by necessary implication, the court possesses an implied or 'inherent' power to strike out actions in some circumstances whenever it may be required for the effective exercise of jurisdiction conferred upon the court by the Act. Such circumstances would arise in my view, where for example by reason of some inordinate delay by a plaintiff it was likely that it would no longer be possible to have a fair trial of an action. Or, if it became apparent that by reason of the manner in which an action was being conducted including delay that an action was effectively being continued as an abuse of process, the implied or inherent power to strike out would also be available.
22 Here, as I understand the submissions for the defendant it is not suggested that the latter of those circumstances applies, or at least not in the sense that the plaintiff's conduct is intentional or contumelious. Rather, it is the defendant's case that there has been inordinate delay by the plaintiff and by reason of delay the defendant has suffered both general and specific prejudice of a kind such that it is no longer possible for there to be a fair trial of this action.
23 The considerations governing applications to strike out for want of prosecution were considered by the Court of Appeal in TheHancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93. As Steytler P and Owen JA observed, the proper exercise of the court's discretion in considering applications of this kind is not served by a rigid application of the principles described by Lord Diplock in Birkett v James [1978] AC 297.
24 From other authorities, such as Ulowski v Miller [1968] SASR 277 it is possible to identify five matters to be considered which will usually be relevant to the court's decision to exercise the discretion to strike out an action:
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- (a) the length of the delay;
(b) the explanation for the delay;
(c) the hardship to the plaintiff if the action is dismissed and the cause of the action left statute barred;
(d) the prejudice to the defendant if the action was allowed to proceed notwithstanding the delay; and
(e) the conduct of the defendant in the litigation.
25 However, neither the principles identified in Birkett (supra) or the five considerations set out above should be used as a check list to be ticked off one after the other to determine whether the discretion should be exercised. While each of those things are matters to which a court should have regard and which will usually be persuasive, the absence of one more of them from the credit or debit side of the balance will not necessarily determine the result. As their Honours said in Hancock supra):
"it will always be necessary for the Court to stand back and ask: what does justice, in all the notions or senses of it that are relevant, require in the circumstances of this case?"
26 In Batistatos v Roads and Traffic Authority (NSW) [2001] ACL Rep 325 the High Court had occasion to consider aspects of the exercise of the inherent power to dismiss actions for want of prosecution.
27 On behalf of the respondent here it was submitted that the decision of the High Court in Batistatos (supra) meant that on an application of this kind the only factors which were now relevant were delay and whether the defendant had been prejudiced by that delay. With respect, I do not agree. In my view, Batistatos has not overtaken the conclusions reached by the Court of Appeal in Hancock as to the appropriate exercise of the discretion to dismiss an action for want of prosecution.
28 In Batistatos the Court was required to determine whether the inherent power to dismiss an action could be exercised in circumstances where, while the factors of delay and relevant prejudice resulting from that delay were present, there was no element of "oppressive" conduct on the part of the plaintiff. In opposing the application, the plaintiff in Batistatos relied particularly upon the application of the principles described in Birkett v James in precisely the manner criticised by their Honours in Hancock.
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29 In Batistatos a majority of the High Court rejected the proposition that unless there was proof of some oppressive or contumelious conduct on the part of the party bringing the action, an action could not be stayed as an abuse of process. And, while a majority of the court observed that "attention must be directed to the burdensome effect upon the defendants of the situation that has arisen by a lapse of time", nothing in the decision of the majority suggests that that is in all cases the only relevant consideration. To the contrary a majority of the court adopted the reasoning of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 248 where his Honour said that there was no "requirement that the continuance of the action would involve moral delinquency on the part of the plaintiff; what was decisive was the objective effect of the continuation of the action". In determining the "objective effect" of the continuation of an action the considerations identified by Dixon J in Cox v Journeaux (No 2) (1935) 52 CLR 713 were to be taken into account:
"A litigant is entitled to submit for determination according to the due course of procedure a claim which he believes he can establish, although its foundation may in fact be slender. It is only when to permit it to proceed would amount to an abuse of jurisdiction, or would clearly inflict unnecessary injustice upon the opposite party that a suit should be stopped."
30 Nothing in Batistatos requires for example that I ignore here any relevant conduct of the defendant should it be necessary to determine whether there has been "an unnecessary injustice" inflicted upon it. Accordingly, while I direct myself to the usual factors identified above, ultimately I must be governed by what the interests of justice require in the circumstances of this case. I will refer to the evidence with respect to the five considerations.
Length of the delay
31 It was common ground that the delay was a period of about three years and four months. It ran from 6 March 2003 to the last listing conference on 24 July 2006 when the plaintiff sought to have the matter listed for hearing. It is in my view an inordinate delay.
Explanation for the delay
32 There is no evidence from the plaintiff explaining the reason for the delay. From the material filed by the defendant, it seems likely that the plaintiff company would not have the ability to pay a judgment if
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- judgment were given against it. Similarly, the delay in providing the security for costs required by the court suggests a lack of funds to pursue the action. Given the defendant's response to the plaintiff company's claim, it might be that the plaintiff's director began to believe that any potential benefit derived from the plaintiff company's claim might be balanced if not outweighed by the costs of defending the defendant's counterclaim. This is however mere supposition. There is no evidence that would enable that to be determined and it was not in any event urged on me by plaintiff's counsel as an explanation.
33 There is an explanation offered however for the fact that the defendant did nothing to encourage the plaintiff to list the trial for hearing and did not do so itself although the matter has been entered for trial. In Mr Ellison's affidavit of 11 August 2006 he says, at par 12:
"The defendant is in an unfortunate position in this action in that the plaintiff is merely a shell and, save for the amount of $10,000.00 (security for costs), will be unable to satisfy any judgment or adverse costs order made against it."
34 He goes on to say at paragraph 15:
"Because of the fact that there can be no favourable financial outcome to the defendant in these proceedings even if it is successful at the trial of the matter, the defendant was content to leave the matter in abeyance and consents to having its counterclaim dismissed if it is successful in this application thereby bringing the action to an end."
35 In his later affidavit of 29 September 2006 he says at paragraph 2.6:
"It has always been apparent to the defendant that the plaintiff company was merely a shell and would never be in a position to satisfy any judgment or costs orders made against it. Consequently, the defendant has been reluctant to incur any costs that would be wasted should the matter not proceed to a trial."
36 Upon this evidence, the defendant's counsel based his submission that "because of the fact that there can be no favourable financial outcome to the defendant in these proceedings, even if is (sic) successful at the trial of the matter, the defendant was content to leave the matter in abeyance and consents to having its counterclaim dismissed if it is successful in this application…".
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37 There is evidence before me that the second defendant by counterclaim, Mr Flint, was employed as a technical service adviser for Norton Abrasives. In the course of oral submissions I invited counsel for the defendant to explain why it was it apparently suggested that Mr Flint did not have some means of satisfying a judgment. I was told that I should infer it from all of the circumstances. In my view, there is no proper basis from which I could draw such an inference much less conclude that that was the most probable inference in all the circumstances.
The hardship to the plaintiff if its action is dismissed
38 If it were dismissed, the plaintiff's action would now be statute barred. It is relevant to consider what that means in practical terms in the sense of paying at least some heed to the merits of the plaintiff's case. If the case were a patently weak one "it might be a kindness to dismiss it…", limiting any further costs that might be incurred in its pursuit: Monaveen Pty Ltd v ABB Service Pty Ltd [2004] WASC 5.
39 As the defendant properly concedes at par 21 of its written submissions:
"the (plaintiff's) claim is effectively admitted and the real issue is the counterclaim. Thus, were I to accede to the appellant's application, I would be dismissing a statute barred cause of action where, for practical purposes, every element has been admitted by the defendant".
40 All that stands between the plaintiff and judgment is the question of whether or not the defendant can prove its counterclaim. The defendant carries the burden of proof with respect to the only remaining matters in issue between the parties.
41 With respect to the strength of the defendant's counterclaim, it is of course impossible to determine on an application such as this the issues of credibility that must necessarily arise with respect to the allegations of misrepresentation and the conversation that is said to have established the defendant's right to rectification of the sale agreement. It must be observed however that the effect of the restraint covenant, if applied literally, would prevent Mr Flint from ever competing with the defendant. It is difficult to see how it might be established that a restraint of that duration could meet the necessary test of reasonableness. See for example: Herbert Morris Ltd v Saxelby [1916] 1 AC 688 at 700, [1916-17] All ER Rep 305. However, I am not called upon to determine
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- that nor is it possible for me to reach any conclusion about the allegation of misleading and deceptive conduct.
The prejudice to the defendant if the action is allowed to proceed despite the delay
42 Counsel for the defendant submitted that the evidence on the application established both that the defendant had suffered actual prejudice and that I may infer general prejudice arising from the delay.
43 The evidence of specific or actual prejudice is contained in Mr Ellison's affidavits of 11 August 2006 and 29 September 2006.
44 It is obvious that the key factual issues in proving the defendant's claim and therefore its defence will turn on what was actually said by Mr Ellison, Mr Flint and Mr Oksis in a meeting prior to the entry into of the sale agreement. In the course of oral submissions I raised with counsel for the defendant the contents of the affidavit of Mr Ellison sworn 19 July 1999, and in particular his response to the plaintiff's application for summary judgment. As alleged in the counterclaim, the conversation was said to have taken place prior to the entering into of the sale agreement on 5 October 1998. As counsel for the defendant accepted, Mr Ellison addressed himself to the details of the conversation in that affidavit.
45 As might be expected, the content of Mr Ellison's affidavit supports the allegations made in the counterclaim. Mr Ellison has sworn that:
"The most important witness who would have to testify at the trial of the matter was Mr Gunar Oksis…the agent who brokered the sale of the business in question by the plaintiff to the defendant…the part played by Oksis prior to the sale of the business has been described in paragraph 5 of the affidavit sworn by me on 19 July 1999 in opposition to the application by the plaintiff for summary judgment. It was Oksis who completed the written agreement to purchase a business which is annexure RF1 to the affidavit of Ross Flint sworn by him on 30 June 1999 in support of the application by the plaintiff for summary judgment" (par 16 and 17)
46 Contrary to Mr Ellison's conclusion, I would have thought that in the first instance he was the most important witness with respect to the success or otherwise of the defendant's counterclaim. Whether Mr Oksis was an important witness with respect to the matters in issue on the
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- counterclaim is not knowable from the material before me. All I am able to glean from the affidavit material is that Mr Oksis moved to Queensland shortly after the sale of the plaintiff's business and that he now has little recollection of the transaction.
47 The defendant also sought to persuade me that it had lost the opportunity to obtain evidence from certain purchasing officers of former customers of the plaintiff's business who were allegedly solicited by Mr Flint after the sale of the business. It was said that that arose as a factual issue by reason of the alleged breach of the restraint covenant that it is said should have been included in the sale agreement. The evidence in this respect was somewhat vague and, with respect, it is unclear to me how whatever those witnesses might say would advance matters much beyond what should have been recorded in contemporaneous documents. It would be strange indeed if the records of Mr Flint's sales had not been recorded by his employer. No evidence was offered of any inquiry in this respect.
48 The kind of prejudice that would be relevant is one that creates a substantial risk that a fair trial cannot be had because of inordinate and inexcusable delay. As Hedigan AJA (with whom Winneke P and Brooking JA agreed) in Spitfire Nominees Pty Ltd and Another v Ducco [1998] 1 VR 242 at 248 said:
"The issue in this context is whether the additional time lost by inordinate and inexcusable delay makes any difference."
49 Ultimately, the question must be whether the defendant has suffered additional prejudice as a result of the plaintiff's delay since 2003: Monaveen Pty Ltd (recs and mgrs apptd) (admin apptd) v ABB Service Pty Ltd [2007] WASCA 263 (S) at [78]. Based on the material before me, I am unable to say when the matter should have come on for trial in any event and whether the fact that the trial did not come on at some available earlier date has made any appreciable difference in the defendant's position. Moreover, for reasons which I will set out in considering the conduct of the defendant, it does not appear to me that what might be described as an "unnecessary injustice" has been inflicted upon the defendant as a result of that delay.
50 Accordingly, I am unable to find that there has been any relevant prejudice in this respect as a result of the delay.
51 Nor do I find that, in the circumstances of this case, there has been delay of such a kind that I may infer that it is no longer possible to have a
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- fair trial of the matter. It is not the kind of case where "the whole quality of justice" necessarily should justify. It is relatively straight forward beyond the allegedly critical conversation that much of the case should be documentary on the evidence before me. I cannot conclude that there has been any loss of any relevant document from Mr Oksis. It is at best speculation to suggest that he ever had any document or copy of a document that would not have been in the hands of the plaintiff and discoverable by it.
The conduct of the defendant
52 The only activity of the defendant in the three years and four months of delay was to respond to the plaintiff's advice that it was seeking to have the matter to be re-listed for a hearing date. That response was a three sentence letter requiring that the plaintiff first provide a written notice of intention to proceed. It is not suggested on behalf of the defendant that it ever sought in that more than three years to urge the plaintiff or much less complain about delay or suggest what the consequences of further delay might be. Mr Lenhoff for the defendant submits that there was no obligation on the part of the defendant to do anything. The defendant was entitled, he submits, to simply sit and wait until sufficient time had passed that it might prudently make this application. It was not obliged to do anything to preserve its position, he says, in anticipation of a trial of the action some day coming on for hearing.
53 There is authority that supports that position, although it was not referred to in submissions. Whether those authorities remain valid in light of modern practice and the changes that have occurred with respect to the management of actions towards trial seems doubtful: Australian Growth Managers Ltd v Egerton-Warburton [2007] WASC 10 at [120]. Whether or not it remains open to a party who is merely a defendant to sit by and literally do nothing either to protect their own position or warn a dilatory plaintiff of the consequences of delay in my view the defendant here was not entitled to that indulgence.
54 In this action, the only live issues are those raised in the counterclaim and adopted in the defence. The defendant as plaintiff by counterclaim bears the burden of proof with respect to all of the live issues of fact.
55 Here, having invoked the process of the court by way of counterclaim, not merely against the plaintiff but against Mr Flint personally, the defendant has in my view the same obligations as the plaintiff to see that so far as it can the action proceeds to trial in a timely fashion. It was open to the plaintiff to apply to strike out the counterclaim
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- on precisely the same basis that the defendant now applies: Owen v Pugh [1995] 3 All ER Rep 345 at 351, 352; cited in Civil Procedure Western Australia at [18.2.1].
Conclusion
56 While I have had regard to the usual principles and considerations relevant to applications of this kind, there are several factors which are in my view particularly important to what a just outcome requires here. The first is the fact that barring the success of the matters raised in the counterclaim, the plaintiff's claim against the defendant is unanswerable. The plaintiff will have judgment against the defendant unless the defendant succeeds in its counterclaim. In my view, that is a factor which would ordinarily strongly militate against striking out what would become a statute barred claim.
57 Secondly, I am not persuaded that the plaintiff has suffered any substantial prejudice or any prejudice that might prevent a fair trial of this action.
58 The last consideration is one that makes this application somewhat unique. That is the fact that the defendant, not merely by way of defence and set-off but by a counterclaim, advances its own claim. It is a claim not merely against the plaintiff but against a person not a party in the original action. In the circumstances, it is not open to the defendant to sit by and do nothing to either preserve or advance its own cause of action and then complain about a perceived inability to do so as a consequence of delay. It would be unjust in the circumstances of this case to allow the defendant to strike out the plaintiff's action for want of prosecution. The appeal is dismissed.
59 I will hear the parties with respect to costs.
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9
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