Settlers House Pty Ltd v Rocca Enterprises Pty Ltd - [2011] WADC 157

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: SETTLERS HOUSE PTY LTD -v- ROCCA ENTERPRISES PTY LTD [2011] WADC 157

CORAM: EATON DCJ

HEARD: 16 SEPTEMBER 2011

DELIVERED : 29 SEPTEMBER 2011

FILE NO/S: CIV 2534 of 2009

BETWEEN: SETTLERS HOUSE PTY LTD
Plaintiff (Respondent)
AND
ROCCA ENTERPRISES PTY LTD
First Defendant (Appellant)
GIOVANNI ROCCA
Second Defendant (Appellant)

Catchwords:

Practice and procedure - Appeal from a registrar - Effect of a springing order - Security for costs - Delay by the plaintiff - Impact of a legal practitioner's illness

Legislation:

District Court Rules 2005

Result:

Appeal allowed

Representation:

Counsel:

Plaintiff (Respondent)          :    Mr T R Kean
First Defendant (Appellant)     :    Mr R Corboy
Second Defendant (Appellant)   :    Mr R Corboy

Solicitors:

Plaintiff (Respondent)          :    Corser & Corser
First Defendant (Appellant)     :    Corboy Legal
Second Defendant (Appellant)   :    Corboy Legal

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

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268
MTQ Holdings Pty Ltd v Lynch [2007] WASC 49
Osgood v Wham [2007] WASCA 178
Phillips v Commonwealth [1964] HCA 22; (1964) 110 CLR 347

EATON DCJ: On 22 June 2011 Deputy Registrar Hewitt determined two applications before him. The first was that of the plaintiff filed 3 February 2011 seeking, in effect, an extension of the entry for trial date and the second was that of the defendants filed 9 May 2011 seeking dismissal of the plaintiff's application for extension of the entry for trial date, that the plaintiff's statement of claim be struck out and that judgment be entered in favour of the first and second defendants. Having heard the parties the deputy registrar made the following orders:
1.The time for compliance specified in orders 6 and 7 of the orders made on 18 January 2011 be extended to 1 June 2011 and the exhibits to the affidavit of Martin Desmond Mullins filed 2 May 2011 and Travis Rolla Kean filed 27 May 2011 be taken as compliance with those orders.
2.The Plaintiff do pay into Court by way of security for the First and Second Defendants' costs the sum of $50,000.
3.Payment be made within 28 days and until paid the Plaintiff's action be stayed.
4.There be liberty to apply to permit security to be given in some alternative form.
5.The First and Second defendants' application of 9 May 2011 be dismissed.
6.The Plaintiff's pay the defendants' costs of both applications including any costs reserved to be taxed and paid forthwith.
7.Messrs Corser & Corser do show cause why they should not indemnify the Plaintiff from costs ordered to be paid.
8.In the event that security is provided the action be removed from the inactive list and the entry for trial milestone be extended to 31 August 2011.
9.The matter be adjourned to 28 June 2011 for the solicitors for the Plaintiff to show cause why they should not pay the plaintiff's costs pursuant to Order 7.
10.There be liberty to apply generally.
On 1 July 2011, the defendants filed a notice of appeal. That notice was amended on 26 July 2011. They propose that the following final orders be made on appeal:
1.The Plaintiff's application for extension of entry for trial date filed 2 February 2011 be dismissed.
2.The Plaintiff's statement of claim be struck out, the Plaintiff's action be dismissed and judgment be entered in favour of the First and second Defendants.
3.The First Defendant have liberty to apply to list the action for a further directions hearing in respect of the First Defendant's counterclaim against the Plaintiff.
4.The Plaintiff do pay the First and Second Defendants' costs of the security for costs application filed 15 September 2009 to be taxed if not agreed.
5.The plaintiff do pay the First and Second Defendants' costs of defending the plaintiff's claim and costs reserved including the costs of the application and hearing of the chamber summons heard 24 February 2011 to be taxed if not agreed.
Rule 15 of the District Court Rules 2005 provides that an appeal lies from a registrar to a judge of this court. It provides that an appeal is to be by way of a new hearing of the matter that was before the registrar.
It is the essence of a new hearing or hearing de novo that the appeal court 'pronounce anew upon the rights of the parties as disclosed by the evidence before it': Phillips v Commonwealth [1964] HCA 22; (1964) 110 CLR 347 (Kitto, Taylor & Owen JJ). The court must form its own view of the facts as far as it is able to do so.

The history of the matter

The plaintiff commenced the action by writ of summons filed on 26 August 2009. The defendants entered an appearance on 7 September of that year. On 15 September they applied by chamber summons for security for costs. On 25 November 2009 Deputy Registrar Hewitt dismissed their application. In doing so he observed that the materials before him evidenced that the plaintiff was engaged in a substantial development and that it was likely to have, in future, substantial cash flow. He concluded that the plaintiff, on the evidence before him, would be well able to satisfy an adverse costs order in the event of one being made. There would be, he said, ample assets against which a successful defendant would be entitled to execute.
The defendants appealed from that decision by notice of appeal filed on 9 December 2009. Then, by a minute of consent orders of 25 February 2010, they withdrew the appeal and the hearing listed for it was vacated.
In the interim, on 9 October 2009 the plaintiff filed a statement of claim. On 26 October of that year, the first defendant filed a defence and counterclaim and the second defendant filed a defence. The case timetable required entry for trial by 23 February 2010. That was not complied with. On 24 February 2010 the court issued a notice of default in respect of entry for trial informing the plaintiff that unless the action was entered for trial on or before 11 March 2010, it would become inactive. On 6 April 2010 the defendants filed a minute of proposed orders documenting a schedule for amendment of pleadings and the filing of further documents. On that day, Deputy Registrar Hewitt made orders substantially in terms of that minute including an extension of the entry for trial date to 15 July 2010. Those orders obliged the plaintiff to file and serve any amended statement of claim by 20 April 2010, to file particulars of damages by 11 May 2010, to serve a sworn list of documents by 11 May 2010, to serve copies of expert reports to be relied upon at trial by 25 May 2010 and to enter the matter for trial by 15 July 2010.
Nothing happened. On 16 July 2010 the court issued notice of default informing the plaintiff that, it not having entered the matter for trial, the action would become inactive in the event of a failure to do so by 31 July 2010.
On 8 September 2010 the defendants filed an application by chamber summons for judgment against the plaintiff in respect of its claim against both defendants and costs. In support of that application the defendants filed an affidavit sworn by their solicitor, Robert Alexander Corboy, on 8 September 2010. In it he detailed his efforts to prompt the plaintiff's solicitors to comply with the timetable established by the orders made on 6 April 2010. Those efforts involved discussions from time to time with various members of the plaintiff's solicitors. On 25 May 2010 Mr Bower of that firm informed Mr Corboy that the plaintiff's solicitors had briefed a barrister to settle an amended statement of claim and that there was an expectation that the plaintiff would file and serve that document by 31 May 2010. That did not occur.
By letter of 15 July 2010 the plaintiff's solicitors wrote to Mr Corboy advising that a Mr Savas had the conduct of the matter within the firm and that he was currently interstate and 'unable to contact you'.
Somewhat belatedly, on 21 September 2010 the plaintiff applied by chamber summons to remove the action from the inactive list and for procedural orders. That application was supported by an affidavit by Mr Savas sworn 21 September 2010. He deposed to having been passed conduct of the matter by Mr Bower in mid-June of 2010, the latter being apparently thereafter unavailable to retain conduct. He says that he briefed counsel to provide advice as to an amendment to the statement of claim. He concluded his affidavit with the following:
The net effect of factors including seeking advice from counsel with respect to amendment to pleadings, seven consecutive weeks of absence from the firm by the principal solicitor and the fact that the sole director of the plaintiff was and is primarily completely occupied with the imminent completion of the project the subject of these proceedings resulted in the plaintiff not meeting the entry for trial milestone. Notwithstanding I verily believe that the plaintiff's inability to meet the entry for trial milestone, while regrettable, could not be avoided in these circumstances.
On 23 September 2010 the defendant's application came before Deputy Registrar Hewitt who, after hearing Mr Savas for the plaintiff and Mr Corboy for the defendants, ordered as follows:
1.The defendants file and serve any amended defence and counterclaim within 14 days.
2.The plaintiff file and serve any amended reply and defence to the counterclaim within 14 days thereafter.
3.Leave be reserved to the plaintiff to apply to strike out the whole or any part of the amended defence and counterclaim.
4.The action be removed from the inactive list and the entry for trial milestone be extended to 18 January 2011.
5.Each party file and serve particulars of damages claimed by that party by 8 November 2010.
6.By 22 November 2010 the plaintiff and defendant serve on each other party a sworn list of documents that are or have been in their possession or custody or power relating to the matters in this action.
7.By 22 November 2010 the plaintiff:
(a)serve on the defendants a copy of the report of any expert witness upon which the plaintiff attends to rely upon at trial; or
(b)disclose in writing to the defendants the substance of any expert evidence that the plaintiff intends to rely upon at trial.
8.By 20 December 2010 the defendants:
(a)serve on the plaintiff a copy of any report of any expert witness upon which the defendants intend to rely upon at trial; or
(b)disclose in writing to the plaintiff the substance of any expert evidence that the defendants intend to rely upon at trial.
9.The directions hearing be adjourned to 18 January 2011 at 9.30 am.
10.The plaintiff pay the defendants' costs of this application and the application of the plaintiff's dated 16 September 2010 in any event.
11.The plaintiff's application filed 21 September 2010 be dismissed.
12.There be liberty to apply generally.
In compliance with those orders the first defendant filed an amended defence and counterclaim on 7 October 2010 and particulars of damages claimed by it on 8 November 2010. In compliance with those orders the second defendant filed an amended defence on 7 October 2010. The plaintiff did nothing.
On 19 January 2011, the court issued the plaintiff with a notice of default, there having been no entry for trial. It informed the plaintiff that in the event of the matter not being entered for trial on or before 3 February 2011, the action would become inactive.
At the directions hearing on 18 January 2011 Deputy Registrar Hewitt ordered as follows:
1.Unless by 25 January 2011 the plaintiff complies with paragraph 6 of the order of Deputy Register Hewitt made in chambers on 23 September 2010 the plaintiff's action be struck out and judgment be entered in favour of the first and second defendants.
2.The first defendant has liberty to request the court to list the action for a further directions hearing in respect of the first defendant's counterclaim against the plaintiff.
3.Upon compliance with paragraph 1 above, unless the plaintiff enters the action for trial on or before 20 February 2011, the action will become inactive.
3A.The time within which the plaintiff is to serve the substance of its expert evidence to be extended to 14 February 2011.
4.The defendants may enter the matter for trial and may do so even if the action has become inactive.
5.The costs of the directions hearing be in the cause.
The first order made by the deputy registrar was undoubtedly a springing order. On 23 September 2010 the deputy registrar had adjourned the directions hearing to 18 January 2011. On that day the defendants' solicitors presented a minute of proposed orders. Mr Bower was present for the plaintiff. The orders made were not completely in accordance with the defendants' minute of proposed orders but the springing order in par 1 was. It required the plaintiff to comply with par 6 of the order made by Deputy Registrar Hewitt in chambers on 23 September 2010 by 25 January 2011. By par 6 of the orders made on 23 September 2010 both the plaintiff and the defendant were to serve on each other a sworn list of documents. The plaintiff was not, by reason of that order, obliged to file an affidavit of discovery by 25 January 2011 but rather to serve on the defendants a sworn list of documents by that date.
It is the case that Martin Desmond Mullins swore an affidavit of discovery on 2 May 2011. A copy of that document, marked MDM‑1, was attached to his affidavit sworn 2 May 2011 in support of an application to vary the programming orders made on 23 September 2010. I infer that there was no compliance with the springing order made on 18 January 2011. A springing order is a self‑executing order in the event of failure by a defaulting party to comply with its terms. The first order made by the deputy registrar on 18 January 2011 was expressed with clarity and precision. The party against whom the order was made was not present in court so far as I am aware but was represented by Mr Bower, the principal of Corser & Corser and the solicitor who initially had the sole conduct of the action on behalf of the plaintiff. I assume, in those circumstances, that the plaintiff could be taken to have had actual knowledge of the making of the order and of its terms.
On the face of the record no attempt was made to extend the time for compliance with the springing order before 25 January 2011. In fact, the parties appear to have proceeded as though it had not been made at all.
On 3 February 2011, the plaintiff applied by chamber summons for orders that it file and serve particulars of damages by 1 March 2011, that it file and serve a list of documents by 8 March 2011, that it serve copies of any expert reports to be relied upon or disclose the substance of any expert report to be relied upon by 8 March 2011 and that it enter the matter for trial by 15 March 2011. That application was supported by an affidavit sworn by Mr Savas on 2 February 2011. In it he deposed as follows:
4.The plaintiff is seeking a variation of the programming orders made on 23 September 2010 to extend the time for compliance of the orders by the plaintiff and the defendants have substantially complied with the programming orders.
5.During the months of October to December 2010 the sole director of the plaintiff was occupied with the imminent completion of the construction project, the substance of these proceedings.
6.From 11 November to 20 December 2010 I was absent from work on sick leave due to a serious medical condition.
7.On 10 January 2011 I returned to work on a full time basis but as I was still unwell, had significant time off. I have only returned to work full time since 24 January 2011.
8.As a result of the matters described in paragraphs 5 – 7 herein the plaintiff failed to comply with its obligations under the programming orders made on 23 February 2010. Consequently the plaintiff is unable to enter the matter for trial by the entry for trial deadline. I verily believe that the plaintiff's inability to meet the entry for trial milestone, while regrettable, could not have been avoided in these circumstances.
9.The plaintiff is now in a position to comply with all programming requirements in accordance with the timetable proposed by its chamber summons dated 2 February 2011 in support of which this affidavit has been sworn.
The defendants responded by filing, on 9 May this year, an application seeking dismissal of the plaintiff's application of 3 February and for judgment on the plaintiff's claim against them. Those two applications are the applications referred to in the opening paragraph of this judgment.
The defendants' application of 9 May 2011 seeks, inter alia, that the plaintiff's statement of claim be struck‑out and that judgment be entered in favour of the first and second defendants. In his decision delivered extempore on 22 June 2011 the deputy registrar referred to the defendants' application as seeking a judgment by reason of failure to comply with the springing order. There was no application by the plaintiff to set aside such a judgment. In written submissions filed in advance of the hearing by the defendants they contended that the plaintiff was fully aware of the circumstances giving rise to the springing order, that it consented to the making of the springing order and were in a position to comply with it. The defendants submitted that the onus was on the plaintiff to satisfy the court that its failure to strictly comply with the springing order was clearly occasioned by Mr Savas's illness.
The defendants' submissions in that regard are predicated on the proposition that, notwithstanding the terms of the springing order, the plaintiff's statement of claim had not been struck out and that judgment had not been entered in favour of the defendants.

The evidence before the deputy registrar

The material filed by the plaintiff in support of its application included the affidavit of Kyriakos Savas sworn 2 February 2011 and referred to above. Subsequently the plaintiff filed two further affidavits sworn by Mr Savas on 1 April 2011 and 26 May 2011, two affidavits by Martin Desmond Mullins, the plaintiff's sole director and shareholder, sworn 20 April 2011 and 2 May 2011, an affidavit by Ronald William Bower, sworn 27 May 2011 and an affidavit by Travis Rolla Kean sworn 27 May 2011.
From the defendants there were affidavits sworn by Robert Alexander Corboy, the defendant's solicitor, sworn 17 March 2011 and 9 May 2011, an affidavit by Giovanni Rocca, the second defendant, sworn 17 March 2011 and an affidavit by John Ross Ferraro sworn 16 June 2011.
In his affidavit of 1 April 2011, Mr Savas deposed to having had the sole conduct of the matter on behalf of the plaintiff at all material times including the period 23 September 2010 to 23 February 2011. He said that he was suffering from bipolar disorder and that his illness had 'precluded me from keeping up with my work duties in an efficient manner for more than 12 months'. He deposed:
During my periods of absence from work due to ill health between 23 September 2010 and 17 January 2011, I overlooked the need to alert others at Corser & Corser of the need to attend to compliance with the directions timetable.
He noted that further directions were made by Deputy Registrar Hewitt on 18 January 2011, which included a springing order. He deposed:
I believed that I would be able to attend to the orders of Registrar Hewitt dated 18 January 2011 within the times required, but found I was unable to do so, and I overlooked the need to alert others at Corser & Corser of the need to attend to compliance with the directions timetable.

Mr Bower, in his affidavit, deposed to being the principal of Corser & Corser and having taken the original instructions from the plaintiff to initiate proceedings against the defendants. He retained conduct of the file until mid-June 2010 when it was passed to Mr Savas. Mr Bower says that he was overseas from the period 14 June to 14 July 2010 and then interstate until 27 July 2010.
Mr Bower appeared before Deputy Registrar Hewitt on 18 January 2011, Mr Savas being unable to attend. The first order made by Deputy Registrar Hewitt on that occasion was a springing order in favour of the defendants. Given that Mr Bower was present on that occasion, I do not understand the statement in Mr Savas's affidavit of 1 April 2011 that he overlooked 'the need to alert others at Corser & Corser of the need to attend to compliance with the directions timetable'.
According to the affidavit of Mr Bower he, after directing Mr Savas to take sick leave, took over the conduct of the file from him on about 1 April 2011. Under his supervision Mr Kean, a restricted practitioner, took on the day to day running of the file. In effect, Mr Bower said that it was Mr Savas' illness which prevented both he and Mr Kean from ascertaining 'what was required immediately for the process of this action to comply with directions, orders and the rules of the court'.

The terms of the deputy registrar's order

The orders made by the deputy registrar in chambers on 22 June 2011 were settled on about 12 July 2011 by him. The first of those orders was:
The time for compliance specified in orders 6 and 7 of the orders made 18 January 2011 be extended to 1 June 2011 and the exhibits to the affidavit of Martin Desmond Mullins filed 2 May 2011 and Travis Rolla Kean filed 27 May 2011 be taken as compliance with those orders.
The affidavit of Robert Alexander Corboy sworn 9 May 2011 annexed a true copy of the orders made by Deputy Registrar Hewitt in chambers in this matter on 18 January 2011. There were six, the last being 'the costs of the directions hearing be in the cause'. Order 1 of the settled orders made on 22 June 2011 by him would, therefore, appear to be incomprehensible. Order 6 of the orders made on 18 January 2007 dealt with costs and there was no order 7. It may be that he intended to refer to orders 6 and 7 made by him in chambers on 23 September 2010.
The second order made by Deputy Registrar Hewitt on 22 June 2011 was that the plaintiff do pay into court, by way of security for the first and second defendants' costs, the sum of $50,000. The third order required that payment be made within 28 days and until paid the plaintiff's action be stayed. He granted liberty to apply to permit the security to be given in some alternative form and dismissed the first and second defendants' application of 9 May 2011.
In the course of his extempore reasons the deputy registrar made reference to the defendants' earlier application for security of costs. That application had been dismissed by him on 25 November 2009. There was no further application for security before him. Notwithstanding that he said:
When the defendants first applied for security for costs, they sought a figure of some $100,000. It has to be borne in mind that they are counter‑claiming, to some extent, themselves, and that is a factor which I include in the orders of which I make.
In my view, the appropriate order is to extend the deadlines, but to impose upon a condition of that extension that the plaintiff bring into court a sufficient sum to secure the defendants' costs of this action as it proceeds from this point.
He determined, following some discussion, that the sum to be paid should be $50,000.
I observe, in passing, that the plaintiff applied, by way of chamber summons of 31 August 2011, for permission to give the security required in an alternative form or, in the alternative, to give no security at all. The former request is within the scope of liberty to apply to permit security to be given in some alternative form. The latter, in effect, seeks to appeal the deputy registrar's decision and, being outside the scope of liberty granted with respect to security and not being an appeal, is incompetent. Having regard to the affidavit of Mr Bower sworn on 31 August 2011 in support the application is little more than yet another for an extension of time. He deposes to the refinancing of the plaintiff's project as 'not yet reached the state at which Mr Mullins can provide to the plaintiff company from that source the required sum of $50,000 for the security for costs ordered on 22 June 2011'. He says further:
If this honourable court were to remove or substantially reduce the requirement for the plaintiff company to provide security for costs, or to postpone the stage of the action on which the security of $50,000 should be provided, then the plaintiff would be in a position to enter the matter for trial.
In the final paragraph of that affidavit Mr Bower speaks of the court entertaining the possibility that the plaintiff might provide security in another form. The application filed by the plaintiff is not, in truth, a proper exercise of the liberty to permit security to be given in some alternative form but rather, in effect, a confirmation for the need for security to be provided. The application and the supporting affidavit is little more than a further demonstration of the conduct displayed by the plaintiff throughout the halting progress of its action. As Deputy Registrar Hewitt correctly observed on 22 June 2011 the plaintiff's conduct of the action has been characterised by delay. He observed that the plaintiff's conduct of the action had, in his view, been unsatisfactory for some time. My own observation is that the deputy registrar was undoubtedly correct.

The defendants' submissions on appeal

The defendants' submissions clearly base their claim for judgment and the striking out of the plaintiff's statement of claim on its failure to comply with the springing order made by Registrar Hewitt on 18 January 2011. They contend that the plaintiff made no attempt to comply with that order notwithstanding that Mr Bower had appeared when the order was made and offered no opposition to it. The defendants contend that Mr Savas's illness and its impact upon his performance work does not serve to explain the failure of the plaintiff to comply with the order.
The defendants contend that the plaintiff's contumelious disregard for the orders made by the court has caused them substantial procedural disadvantage. They submit that they have, where possible, complied with the court's orders. In doing so they continue to be disadvantaged by the failure of the plaintiff to serve its documents as and when required. The defendants submit that the proceedings are currently inactive and have been the subject of three notices of default against the plaintiff issued on 24 February 2010, 16 July 2010 and 19 January 2011.
It is true that the court, as mentioned, issued a notice of default of entry for trial on 19 January 2011 advising that unless the plaintiff entered the matter for trial on or before 3 February 2011 the action would become inactive. On 3 February 2011 the plaintiff filed an application, by chamber summons, for orders that it file and serve particulars of damages by 1 March 2011, that it file and serve a sworn list of documents by 8 March 2011, that it serve copies of expert reports by 8 March 2011 and that it entered the matter for trial by 15 March 2011. On 24 February 2011 that application was adjourned by Deputy Registrar Harman to a special appointment.
By the end of October 2009 the plaintiff and the defendants had filed pleadings, a statement of claim by the plaintiff, a defence by each defendant and a counterclaim by one of them. Since then, a period of almost two years has elapsed without the plaintiff advancing its claim further.
In their submissions the defendants accept that even though judgment may have been entered upon proof of default following the springing order an extension of time to comply with the order may be granted. They cite FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268. The defendants submit further that, ultimately, the question is: what does justice, in all notions or senses of it that are relevant, require in the circumstances of the case. Reference is made to Osgood v Wham [2007] WASCA 178. The general factors to be taken into account when exercising the discretion to set aside judgment entered as a result of non‑compliance with a springing order are:
(a)The circumstances in which the springing order came to be made;
(b)The reason for the non‑compliance with the springing order;
(c)The prejudice to the defaulting party if time is not extended; and
(d)The prejudice to the other party if the time were extended.
The defendants cite MTQ Holdings Pty Ltd v Lynch [2007] WASC 49.

The plaintiff's submissions on appeal

The plaintiff submits that there was no error at first instance made by Deputy Registrar Hewitt. In exercising appellate power I must, submits the plaintiff, be satisfied that Deputy Registrar Hewitt did make an error. The plaintiff cites Coal andAllied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 [14] (Gleeson CJ, Gaudron and Hayne JJ) in support of that proposition.
In oral submissions Mr Kean, for the plaintiff, submitted that the conduct of the case had been affected by Mr Savas's illness until March 2011, he said:
The non‑compliance of this file was not brought to the attention of Mr Bower. Mr Bower trusted, from his affidavits, greatly in Mr Savas. Mr Savas - is one of the - or was one of the senior people in our firm and it was only until the end of March 2011 that Mr Bower discovered the gravity and nature of Mr Savas's illness.
As to delays and security for costs generally Mr Kean submitted:
We have instructions from our client that he is seeking finance at the moment, he's going through a major restructure and refinance and that that should be resolved shortly.
The plaintiff submitted that Deputy Registrar Hewitt was 'quite correct' in his decision because of the problems associated with Mr Savas's illness and its impact on his conduct of the file. He concluded by submitting that there was merit in the plaintiff's claim.

The deputy registrar's reasoning

Deputy Registrar Hewitt noted that the defendants put in issue the merit of the claim pursued by the plaintiff, he said:
I have examined the particulars of damage which have been supplied by the plaintiff under cover of an affidavit and I must say that I consider the sums which are claimed to be suspect. I am also concerned by the fact that a related action in the Supreme Court was settled upon terms which entitled the defendants to a caveat over a nominated piece of land forming part of the development which was being undertaken by the plaintiff and of which the first defendant was the builder. It appears that the plaintiff sold that land without regard to the defendants' entitlement in respect of it and did so, on my reading of the materials, very shortly after or at the same time as the deed of settlement of the earlier action was executed.
The date of the deed of settlement is not recorded on its face, but it appears to be in March 2010. The transfer of the relevant land was in April 2010. Allowing some time for the paperwork and transaction to proceed and the settlement to be arranged and take place it seems to me that it is hard to ignore the conclusion that the plaintiff deliberately destroyed the security which it had agreed to grant to the defendant. If I am wrong on that score, it certainly was a case of considerable indifference to the terms of the deed which had been agreed between the parties.
Deputy Registrar Hewitt concluded that it would not be fair to penalise the plaintiff for the effects of Mr Savas's illness. On that basis he was inclined to extend the time limits for further action by the plaintiff. He did, however, consider that the conduct of the plaintiff was generally such that the defendants' position needed to be protected or secured. They could not, on any version, he observed, be held accountable for the unhappy state of affairs in the action. In balancing the competing considerations he decided to impose a requirement that the plaintiff provide security for costs in the sum of $50,000 to be paid within 28 days and that the plaintiff's action be stayed pending that event.
In Osgood v Wham McLure JA said:
As I have noted elsewhere, there is a widely held view in this jurisdiction, based on the decision of the High Court in the State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, that the justice of the case will always, or practically always, permit a party to litigate an issue that is fairly arguable regardless of non‑compliance with court procedures and orders. It has produced culture in the legal profession in this state of non‑compliance with court rules, practice directions and court orders, in particular, interlocutory orders. The view is misconceived: see Monteleone v The Owners of the Old Soap Factory [2007] WASCA 79. The court has the duty and power to protect the integrity of its processes once they are set in motion. Case management is not an end in itself but it exists to further the interests of justice which are advanced by the timely and efficient disposition of proceedings.
She went on to say that in the case before her there was unexplained delay in the progress of the action exceeding 18 months and unexplained failures to comply with two court orders. There was, she said, no clear explanation for the entire delay of nearly five months between the initial contact with an expert and the provision of his report.
In the matter before me there is the pervasive problem of Mr Savas's illness but that does not, in my view, provide a complete answer to the way in which the action has been conducted by the plaintiff. For example, as to the springing order made on 18 January 2011, there can be no doubt that Mr Bower, a very senior practitioner in the firm and a practitioner with some familiarity with the plaintiff's case, appeared and would have been well aware of the seriousness of the plaintiff's position in the light of the orders made. It may be that, following that appearance, he again entrusted the matter to the care of Mr Savas but one might expect that the gravity of the client's situation at that point might have led to more intensive supervision by a principal of the firm.
In the case before Justice McLure there was, as she said, unexplained delay. There is, in the matter before me, an explanation, at least in part, for delay. I accept Deputy Registrar Hewitt's assessment of the merit of the plaintiff's claim and his doubts in that regard.

Re-visiting the nature of this appeal

As I said at the outset the relevant District Court Rules provide that an appeal lies from a registrar to a judge and is to be by way of a new hearing of the matter that was before the registrar. As mentioned, the plaintiff submits that, in order to allow this appeal, I must be satisfied that there was an error on the part of Deputy Registrar Hewitt. The plaintiff cited: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission in support of that proposition and in particular, the joint judgment of Gleeson CJ, Gaudron and Hayne JJ. Their Honours said:
It is common and often convenient to describe an appeal to a court or tribunal whose function is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given as an appeal in the strict sense. An appeal to this court under s 73 of the Constitution is an appeal of that kind. In the case of an appeal in the strict sense, an appellate court or tribunal cannot receive further evidence and its powers are limited to setting aside the decision under appeal and, if it be appropriate, to substituting the decision that should have been made at first instance. If an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is not to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing. Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision‑maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.
This being an appeal by way of a new hearing, I am not confined to acting only if I find that Deputy Registrar Hewitt was in error. I propose to allow the appeal in part and in doing so, tentatively, to re‑cast the orders made by him on 22 June 2011 as follows:
1.The appeal be allowed;
2.The time for compliance specified in orders 6 and 7 of the orders made on 23 September 2010 be extended to 30 September 2011 and the exhibits to the affidavit of Martin Desmond Mullins filed 2 May 2011, being the documents marked MDM‑1 and MDM‑2, be filed and served in compliance with those orders;
3.The plaintiff do pay into court by way of security for the first and second defendants' costs of the plaintiff's action the sum of $50,000 on or before 31 October 2011;
4.In the event of the failure of the plaintiff to provide security for costs in accordance with order 3 hereof on or before 31 December 2011 the plaintiff's action will be dismissed, with the plaintiff to pay defendants' costs of the action to be taxed;
5.The plaintiff's action is stayed pending payment in accordance with order 3 hereof;
6.The plaintiff pay the defendants' costs of the plaintiff's application filed 3 February 2011 and the defendants' application filed 9 May 2011 including costs reserved in each case to be taxed and paid forthwith;
7.The defendants' application of 9 May 2011 be otherwise dismissed;
8.Messrs Corser & Corser do show cause why they should not indemnify the plaintiff as to costs ordered to be paid pursuant to order 6 hereof;
9.In the event that security is provided in accordance with order 3 hereof the action be removed from the inactive list and the entry for trial milestone be extended to 30 November 2011; and
10.The costs of the appeal be in the cause.