Spargos Mining Nl v Fuller

[2001] WASC 226

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   SPARGOS MINING NL -v- FULLER & ORS [2001] WASC 226

CORAM:   MASTER BREDMEYER

HEARD:   31 JULY 2001

DELIVERED          :   24 AUGUST 2001

FILE NO/S:   CIV 1417 of 1992

CIV 2857 of 1991
CIV 2863 of 1991
CIV 2876 of 1991

BETWEEN:   SPARGOS MINING NL

Plaintiff

AND

MICHAEL JOHN FULLER
First Defendant

CECIL DENNISTON BURNEY
Second Defendant

PETER GEOFFREY JERMYN
Third Defendant

Catchwords:

Application to dismiss action for lack of prosecution and abuse of process - Plaintiff financed by litigation funder - Whether an abuse of process as champertous

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Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr W S Martin QC & Mrs C Mizen

First Defendant             :     No appearance

Second Defendant         :     No appearance

Third Defendant           :     Mr K J Martin QC & Mr P Van Der Zanden

Solicitors:

Plaintiff:     Alan Mizen

First Defendant             :     No appearance

Second Defendant         :     No appearance

Third Defendant           :     Minter Ellison

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

Bandwill Pty Ltd & Anor v Spencer‑Laitt & Ors [2000] WASC 210

Beach Petroleum NL v Abbott, Tout, Russell, Kennedy (1997) 26 ACSR 114

Beach Petroleum NL v Johnson & Ors (1993) 115 ALR 411

Birkett v James [1978] AC 297

Carob Industries Pty Ltd (In Liq) v Simpto Pty Ltd, unreported; SCt of WA (Anderson J); Library No 970692; 11 December 1997

Magic Menu Systems Pty Ltd & Anor v AFA Facilitations Pty Ltd & Ors (1996) 72 FCR 261

Re Trepca Mines Ltd (No 2) [1963] 1 Ch 199

Spargos Mining NL v Fuller & Ors, unreported; SCt of WA (Master Bredmeyer); Library No 980382; 14 July 1998

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Case(s) also cited:

Abraham v Thompson [1997] 4 All ER 362

Allan v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229

Athans & Taylor v Costa Carrera Nominees Pty Ltd, unreported; FCt SCt of WA; Library No 960419; 7 August 1996

Austin Securities v Northgate Stores [1969] 2 All ER 753

Carob Industries Pty Ltd (In Liq) v Simto Pty Ltd, unreported; FCt SCt of WA; Library No 970256; 22 May 1997

Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150

Giles v Thompson (1994) 1 AC 164

Grovewood Holdings PLC v James Capel & Co Ltd [1995] Ch 80

Haseldine v Hosken [1933] 1 KB 822

Hughes v Gale (1995) 14 WAR 434

Jago v The District Court of New South Wales & Ors (1989) 168 CLR 23

Jermyn v Spargos Mining Nl [2000] WASCA 149

Laurent v Sale & Co [1963] 1 WLR 829

Lewandowski v Lovell (1994) 11 WAR 124

Magic Menu Systems Pty Ltd & Anor v AFA Facilitation Pty Ltd & Ors (1996) 72 FCR 261

Queensland Trustees Ltd v Drysdale Hendy & Co (1992) 2 Qd R 625

Re Jokai Tea Holdings Ltd [1992] 1 WLR 1196

Re Movitor Pty Ltd (1996) 64 FCR 380

Roux v Australian Broadvasting Commission [1992] 2 VR 577

St Martin's Centre Pty Ltd v Civil & Civic Pty Ltd [1994] BCL 113

Stocznia Gdanska SA v Latreefers Inc, unreported; Court of Appeal UK; 9 February 2000

Tolley v Morris [1979] 2 All ER 561

Trendex Trading Corporation v Credit Cuisse [1982] AC 679

Ulowski v Miller [1968] SASR 227

Wan v Sweetman & Ors, unreported; FCt SCt of WA; Library No 960456; 14 August 1996

West Coast Clothing Co Pty Ltd v Sail America Foundation, unreported; SCt of WA (Master Adams); Library No 9604; 19 September 1994

Williams v Spautz (1992) 174 CLR 509

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1. MASTER BREDMEYER:  These four actions are against Mr Peter Geoffrey Jermyn only.  I will refer to him as Mr Jermyn or the defendant.  Mr Jermyn has brought identical applications in the four actions to have them dismissed for want of prosecution etc.  They were filed on 7 June 2000 and have been twice amended.  In their amended form they are:

   "1.That the Plaintiff's action against [Mr Jermyn] be dismissed for want of prosecution and judgment be entered for [Mr Jermyn].

   1A.Further and alternatively, the Plaintiff's action herein against [Mr Jermyn] be stayed as an abuse of process until the Court is satisfied that it has been purged of the taint of maintenance and champerty.

   2.The Plaintiff pay [Mr Jermyn's] costs of the action and of this application to be taxed."

2. The four applications were heard together and can conveniently be considered in the one judgment.

3. An earlier application by the same defendant to have the actions dismissed for want of prosecution was heard by me on 23 June 1998 and resulted in a published judgment:  Spargos Mining NL v Fuller & Ors, unreported; SCt of WA; Library No 980382; 14 July 1998.

4. I rely on the summary of the actions and their progress, as outlined in that judgment.  I also rely on the statements of law found in that judgment.  In that judgment, CIV 1417 of 1992 (the King King action) was taken as the leading action and the other three actions were very similar.  I propose to follow that analysis in this judgment and regard that action as the leading action.

5. What has happened in the progress of the actions since my decision of 14 July 1998 and the bringing of these applications on 7 June 2000?  On 14 July 1998 I dismissed the defendants' applications to have the actions dismissed for want of prosecution.  I also gave leave to the plaintiff to file a substituted statement of claim in CIV 1417 of 1992 in terms of a 74 page minute dated 17 April 1998.  I ordered the defendant to file an amended defence within 28 days.

(Page 5)

1. In September, Mr Jermyn and his solicitor inspected the plaintiff's documents.  On 24 September 1998 photocopies of discovered documents were provided to Mr Jermyn's solicitors, Minter Ellison.

2. On 27 October 1998 Minter Ellison wrote to the plaintiff's solicitors foreshadowing an application for security for costs.  On 2 November Mr Mizen, for the plaintiff, wrote to Minter Ellison requesting 14 days to consider the plaintiff's position in relation to security for costs.  That request was denied by Minter Ellison in a letter dated 10 November.  No application was brought for security for costs.

3. On 20 November 1998 the plaintiff applied to have the four actions heard together.  That application came on for hearing before me.  It was contested and on 27 November I delivered reasons and I ordered that the four actions be listed and tried together by the same Judge.  I ordered that CIV 1417 of 1992 be tried first.  Subject to any contrary order of the trial Judge, I ordered that the evidence in CIV 1417 of 1992 was to be evidence in the other three actions.

4. On 16 December 1998 a without prejudice offer was sent by the plaintiff's solicitor to Minter Ellison.  That offer was discussed by Mr Jermyn with his solicitor on 5 January 1999.  It was not accepted.

5. In March 1999 the plaintiff's Mr Holdsworth met with Mr Jermyn for discussions about settlement of the action.  These came to naught.  A further discussion was held between representatives of the plaintiff and the defendant on 8 December 1999.  Apart from these settlement discussions in 1999, the plaintiff took no further steps to advance the actions.  The defendant remained in breach of my order of 14 July 1998 to file an amended defence.

6. What was the plaintiff otherwise doing in 1999?  It was trying to find a litigation funder.  The background to this is that Beach Petroleum NL ("Beach"), which became Spargos' parent in June 1994, devoted significant resources to the prosecution of a claim in the New South Wales Supreme Court for breach of fiduciary duties against solicitors Abbott, Tout, Russell, Kennedy.  Those proceedings were heard in October and November 1997 and judgment was delivered by Rolfe J on 17 December 1997 (Beach Petroleum NL v Abbott, Tout, Russell, Kennedy (1997) 26 ACSR 114). Beach was unsuccessful in those proceedings and got a costs order against it of approximately $4 million. Beach lodged an appeal to the New South Wales Court of Appeal and that appeal was heard in February 1999. The decision was reserved and

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handed down in November 1999.  The appeal was dismissed with costs.  An application for leave to appeal to the High Court was heard and dismissed on 14 April 2000.  As a result of these forensic experiences the board of directors of Beach decided not to pursue further expensive litigation at the company's cost.  Nevertheless, Beach was prepared to provide limited funding sufficient to preserve the present four actions, which I will refer to as the "Jermyn actions".

1. Beach found a litigation funder and on 3 May 2000 sold all the issued shares in Spargos to Marignano Pty Ltd ("Marignano").  On 4 May 2000 Beach announced this move to the Australian Stock Exchange and I quote from its letter to the Exchange:

   "Beach Petroleum NL ('Beach') advises as follows:

   1.Beach has reached agreements with Marignano Pty Ltd ('Marignano') and Sunblock Pty Ltd ('Sunblock'), subsidiaries of Australian Litigation Fund Pty Ltd ('ALF') in relation to litigation against an overseas party (formerly banker to companies controlled by IRL) and the sale of Beach's shares in controlled entity Spargos Mining NL ('Spargos').

   2.In 1993, Beach successfully sued Spargos and others in connection with the Burbank fraud and was awarded $44.45M in damages.  Beach acquired Spargos in 1994 and the judgment debt owed by Spargos is now in the order of $69M.  Under the agreement the debt is acquired by a trust which holds it equally for Beach and Marignano with Spargos itself sold to Marignano.

   3.Under the Marignano agreement, Beach stands to recover under the trust half the debt from the proceeds of any successful litigation in Spargos or its subsidiaries.

   4.Under the Sunblock agreement, Beach will share equally with Sunblock any proceeds arising out of the overseas claim.

   5.Beach is not required to fund any ongoing litigation liabilities, that responsibility will now lie with Marignano and Sunblock.  Beach is insulated from any liabilities in respect of cost orders that might be made arising from outstanding litigation but stands to benefit from any

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recovery.  This outcome meets Beach's stated policy that it does not intend to pursue any further expensive litigation at the company's expense to recover its damage award arising out of the Burbank fraud and other losses related to IRL depredations.

6.Beach has also taken an assignment of the gold and other mineral royalties previously held by Spargos and subsidiaries."

1. It is necessary to describe and analyse the litigation funding arrangements in some detail because counsels' views on them differ markedly.  The defendant's counsel says that the totality of the transactions reveal champertous arrangements which are so bad that the court should, in the exercise of its discretion, stay these actions until the plaintiff can purge itself of the champerty.  The plaintiff's counsel, on the other hand, says the arrangements are not champertous and the agreements do not really provide for any litigation funding.

2. Maintenance and/or champerty are abuses of process exciting the stay jurisdiction of the court.  Maintenance is the assistance or encouragement of a party to an action in which the maintainor has no interest.  Champerty is a species of maintenance where the maintainor and the plaintiff will share in the outcome of the action.  See Magic Menu Systems Pty Ltd & Anor v AFA Facilitations Pty Ltd & Ors (1996) 72 FCR 261 at 267. It was feared that the champertor's financial stake in the litigation provided a strong temptation to suborn witnesses and to pursue worthless claims. Maintenance and champerty could be used as a tool of oppression by powerful nobles and others. Times have now changed. The fear in the early 20th Century that maintenance would give rise to an increase in litigation is of lesser importance where an ordinary litigant finds difficulty in funding litigation. Without funding he may be denied access to the courts. Many defendants are, of course, insured. Changing times and perceptions of public interest have led to the abolition of the offences and torts of maintenance and champerty in United Kingdom and South Australia. Cases where an agreement has been ruled illegal for maintenance and/or champerty are not common. Cases where maintenance or champerty has justified a stay are very few. Templeman J was referred to two cases since 1955: see Bandwill Pty Ltd & Anor v Spencer‑Laitt & Ors [2000] WASC 210 at [72].

3. The two agreements are attached to an affidavit of Mr Coope of 19 September 2000.  The first is a share and asset sale agreement between

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Beach, Mawson Petroleum NL and Marignano (both personally and as trustee of the Judgment Debts Trust).  That agreement is dated 3 May 2000.  The second is the Judgment Debts Trust and the parties to that are David Hudson Proudman (the settlor of the Trust) and Marignano.  The copy of that deed attached to the affidavit is undated but I believe it is also dated 3 May 2000.

1. As stated, the share and asset sale agreement is dated 3 May 2000 and the completion date for the sale of shares is also 3 May 2000.  I note that Spargos is not a party to the agreement.  In this agreement Beach sells all its 344,540,692 shares in Spargos to Marignano, described as the share purchaser, with effect from 3 May 2000 for $1.  This may seem amazing but not when it is realised that Spargos was, and is, an impecunious company.  It owes a judgment debt to Beach of $44,450,000 plus costs and interest thereon, amounting to a total of about $69 million as at 3 May 2000.  Its only asset is the four present actions against Mr Jermyn, which are, of course, potential assets as choses in action.

2. Beach also sells, in the agreement, its judgment debts to Marignano as trustee for the Judgment Debt Trust, for $1.  The judgment debts are defined as the judgment debts due to Beach and Mawson under the Federal Court action G 53 of 1991 which was the action heard by Von Doussa J of the Federal Court: Beach Petroleum NL v Johnson & Ors (1993) 115 ALR 411. The orders on it were given in various dates in 1993 and 1995. That was the judgment debt for $44,450,000 plus costs and interest totalling about $69 million, already referred to.

3. The Jermyn proceedings were not sold under the share and asset sale agreement.  Neither could they, because they were owned by Spargos who was not a party to the agreement.  But cl 5.2.3(xi) required the vendor (Beach) to deliver to the share purchaser ("Marignano") all consents and other authorities required by the share purchaser to engage the vendor's solicitors to act for the share purchaser, Spargos, in respect of the Jermyn proceedings.  Moreover, cl 7.4 headed "Purchaser's obligations" provided that the share purchaser (Marignano) was required to "procure" Spargos to apply any moneys received by it from the "Jermyn proceedings" by way of settlement, judgment or otherwise - to be paid to Marignano as trustee of the Judgments Debt Trust.

4. The Judgments Debt Trust Deed established a trust to be known as the Judgment Debts Trust.  Marignano is the trustee.  Under that deed, Marignano covenanted to hold any moneys it recovered under the judgment debts defined by reference to the Federal Court judgment for

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$44,450,000, already mentioned, plus costs and interest, on trust as follows.  The first $125,000 received by the trustee was to be paid to Beach.  The balance of any moneys recovered were to be divided equally between Beach and Marignano.  The trust deed makes no reference to the Jermyn proceedings.  Nevertheless, by reading cl 7.4 of the share and assets sale agreement with the trust deed, the effect of that is that any money recovered by Spargos from the Jermyn actions must be paid to Marignano, the trustee of the Judgment Debts Trust, to be held on the trusts as mentioned.

1. Do these two agreements impose an obligation on Marignano to fund and prosecute the Jermyn actions?  There is no clause to that effect.  As the 100 per cent shareholder of Spargos and the major creditor of Spargos, it may well choose to prosecute and fund the actions.  It may advance moneys to Spargos for that purpose but there is no legal obligation on it to do so.  Marignano's only obligation, to which I have already referred, is under cl 7.4 that if Spargos does recover any moneys under the Jermyn proceedings, then Marignano is required to ensure that Spargos pays that money to Marignano as trustee in accordance with the trust deed.  In other words, any money recovered by Spargos under these actions is to go half to Beach and half to Marignano, after an initial payment of $125,000 to Beach.  The agreements do not provide for litigation funding by Marignano.  Marignano, as the 100 per cent shareholder of the impecunious and dormant Spargos, may choose to go on with these actions or it may not.  Being a subsidiary of Australian Litigation Fund Pty Ltd, I imagine the whole commercial point of the arrangement was for Marignano to take over the funding of the actions, but it has no legal requirement to do so.

2. Are these arrangements champertous?  The defendant's counsel says yes, for two reasons.  One is that the control of the action has passed from Spargos or Beach to an outsider, Marignano, which had no pre‑existing interest in the litigation.  Secondly, Marignano, this outside company with no pre‑existing interest in the litigation, will share equally in the spoils of it.  I ask what is the evil which the rule against maintenance and champerty is designed to protect?  In Carob Industries Pty Ltd (In Liq) v Simpto Pty Ltd, unreported; SCt of WA; Library No 970692; 11 December 1997 at 18, Anderson J said that it is a rule of public policy and is directed also at the interests of the other party to the litigation - in this case, the defendant.  The public interest is that there should be no encouragement to persons who have no right to do so, to bring an action "improperly and for the purpose of stirring up litigation and strife.  The

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defendant, has the right to be free from litigation conducted by the assistance of persons working for their own interests ... ".

1. Templeman J, in Bandwill Pty Ltd & Anor v Spencer‑Laitt & Ors, above, at [28], quotes from Lord Denning in Re Trepca Mines Ltd (No 2) [1963] 1 Ch 199 at 219:

   "But there is one species of maintenance for which the common law rarely admits of any just cause or excuse, and that is champerty.  Champerty is derived from campi partitio (division of the field) it occurs when the person maintaining another stipulates for a share of the proceeds ... The reason why the common law condemns champerty is because of the abuses to which it may give rise.  The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses.  These fears may be exaggerated; but, be that so or not, the law for centuries has declared champerty to be unlawful and we cannot do otherwise than enforce the law ... "

2. The defendant's counsel argued that via these arrangements the outsider, Marignano, has gained control of the actions.  I do not think that is strictly accurate or is really a criticism.  It is not strictly accurate because these four actions, started in 1992 by Spargos, remain actions in the hands of Spargos.  Spargos remains the plaintiff and Spargos will conduct the actions.  The actions have not been assigned to Marignano.  Spargos is impecunious.  It owes $69 million.  It can only fund these actions with financial assistance.  Hitherto, that financial assistance has come from Beach, its shareholder.  Now, as a result of these new arrangements, that assistance may come from Marignano, its new shareholder.  There is no litigation funding agreement between Spargos and Marignano.  No doubt Marignano, which is a litigation funding company, will - if it decides to - fund the action.  But where is the mischief in that?  It is the 100 per cent shareholder.  The actions once funded previously by the 100 per cent shareholder, Beach, will now be funded by the new shareholder, Marignano.  Marignano, as 100 per cent shareholder controls the destiny of Spargos anyway, through its shareholdings.  It can appoint all the directors.  It can control the affairs of the company through general meetings.

1. I consider the case law cited to me by the plaintiff on this topic, is readily distinguished.  There is no assignment of the action, or of the control of the actions, to a litigation funder.  Control of the actions

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remains with Spargos.  There is no obligation on Marignano to fund the actions.  If it does, why should it not?  What is wrong in principle with a shareholder lending money to a company for the advancement of the company?  It is done every day.  Also, what is wrong with the shareholder if the action proceeds, sharing the proceeds with Beach?  That is a commercial decision.  Beach, the shareholder sold all the shares in Spargos to be rid of the actions for the small sum of $1 but with the hope of gaining in the fruits of a win.  That is a commercial decision, or gamble, by Beach which should not concern the court.

1. Secondly, it is said by the defendant in support of the champerty argument that Marignano, the new company, will share in the spoils of any victory.  I ask, so what?  Is that contrary to public policy?  Spargos began these actions in 1992 and the shareholders then were other than Beach.  Beach became the shareholder in mid 1994 and, because of its $69 million judgment debt against Spargos, was always likely to receive ultimately the fruits of any victory by Spargos in these actions.  I should add that the other debts of Spargos are minor.  They are set out in p 4 of the share and assets sale agreement.  (They are $30,807 in unclaimed dividends to shareholders of Spargos and $70,500 owed to Bank Austria AG.)  Prior to the "litigation funding" arrangements of May 2000, the spoils of any win were to go from Spargos to Beach because of its huge judgment debt.  Following the arrangements of May 2000 the fruits of victory are to be shared equally between Beach and Marignano.  Marignano is the 100 per cent shareholder.  It may fund the action.  Beach is not a funder and will not be liable for costs.  There is no public policy reason why Marignano should not pay half of any money recovered to Beach.

2. I can understand Beach wanting to enter into the arrangement it has with Marignano.  Beach is a mining company and, from its point of view, has been ill‑served by litigation.  It won a massive action against Spargos and other companies and other individuals in the Federal Court where it obtained a judgment of $44,450,000, plus interest and costs.  I understand that the costs exceeded over $8 million and, as previously stated, the total amount owed is now $69 million.  It has recovered nothing.  It brought a second action against Sydney solicitors, already mentioned, which it lost and has been dunned with costs of over $4 million.  I can understand the directors now being battle‑shy of further litigation.  They want someone else to take the risks.  I fail to see how the arrangements made between Beach and Marignano in May 2000 are champertous, or in any way offensive to public policy.

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1. Lord Diplock in Birkett v James [1978] AC 297 at 318 said:

   "The power [to dismiss an action for want of prosecution] should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, eg, disobedience to a pre‑emptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party."

2. In my earlier decision of 14 July 1998 I found that the plaintiff's delay in the King King action (and by implication, all the actions) to that point was intentional but not contumelious.  The defendant has now submitted that the further delay on the part of the plaintiff since November 1998 was intentional and also contumelious, since it was conduct in pursuance of an abusive process of the court, namely, in furtherance of champerty or of a champertous arrangement.  For the reasons given above, I do not consider that the arrangements made between Beach and Marignano are champertous at all, so they do not constitute an abuse of process.  I consider that the delay is not contumelious as amounting to an abuse of the process of the court.

3. Alternatively, it was submitted on behalf of Mr Jermyn that the additional 18 months delay in its own right, even without champerty, is more than enough to satisfy the first limb of the test for establishing want of prosecution.  At the conclusion of my earlier reasons I said:

   "Programming orders should now be made and closely monitored to get these actions to trial within a reasonable time.  Those directions could be given by a Master or it could be referred back to the Case Management Registrar with some appropriate directions."

4. As previously stated, not much has happened in that period to advance the plaintiff's case.  On 14 July 1998 the plaintiff was given leave to file a substituted statement of claim in the lead action CIV 1417 of 1992.  That statement of claim of 74 pages is signed by Mr Alan Mizen but has been settled by a Sydney senior counsel.  It covers common facts

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in all four actions and it is intended that, as my orders of 27 November 1998 state, that this action will be tried first and that the evidence in this action will be counted as evidence in the other three actions.  It is also proposed, and I think this a wise course, that this will be the most substantial pleading and that the statements of claim in the other three actions will be much shorter because much of the facts common to the three actions are set out in this lengthy statement of claim.  Also, as previously stated, there have been two or three attempts at settlement discussions during this period.  A without prejudice offer was made by the plaintiff on 16 December 1998 and considered by the defendant and his solicitors in January 1999.  In March 1999, and again in December 1999, face‑to‑face discussions were held between a representative of the plaintiff and Mr Jermyn to try and reach a settlement.  Also, as previously related, in September 1998 Mr Jermyn and his solicitor inspected the plaintiff's discovered documents and obtained copies of some of them.

1. The plaintiff has been dilatory in this 18 month period.  It could have, for example, filed amended statement of claims in the other three actions.  It could have obtained a springing order against the defendant, who failed to file its substituted defence within 28 days of my order made on 14 July 1998.  The commercial reason for this delay was, as stated, that Spargos' shareholder, Beach, was trying to find a litigation funder, which it did, in terms of the contractual arrangements reached in May 2000 with Marignano, already discussed.

2. The delay in the 18 month period is to be regretted.  I regret that the court did not make tough programming orders, as proposed in the concluding part of my earlier judgment.  The court left it to the parties to get on with the case.  Certainly, the plaintiff has been dilatory in this period but that fault is shared with the defendant.  The defendant was ordered to file a substituted defence in the lead action within 28 days of 14 July 1998.  That has not been done.  The defendant is in breach of a peremptory order of the court.  Why was this defence not filed?  Affidavit evidence has been filed by the defendant to try and pin some of the blame for its non‑filing on the plaintiff.  An affidavit has been sworn by Mr Michael Ferguson on 31 July 2001 another and by Peter Van Der Zanden, both solicitors with Minter Ellison.  Mr Mizen, for the plaintiff, had a telephone conversation with Mr Ferguson for the defendant on 30 September 1998 and both Mr Ferguson and Mr Mizen have deposed to that conversation.  On that day they spoke about the defence.  It is common ground that the defence was with counsel for drafting and Mr Ferguson stated that the counsel had taken some time over it.  I think it is also common ground that Mr Mizen said he was going

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to change some typing errors in the substituted statement of claim.  According to Mr Ferguson, he said:

"Are you going to do anything about errors in the statement of claim mentioned by PJB?

Mizen:  Yes, but under the hammer will do something.

I do not recollect saying to Mr Mizen during that telephone conversation that the fact that he was not in the position to correct the statement of claim would not holp up the filing of the defence.  I do not believe I said that.  I note that nowhere in either my note of the conversation nor in Mr Mizen's note does that statement appear."

1. Mr Mizen's recollection of the telephone conversation in relation to the typing errors is as follows:

   "Yes, I [AFM] am going to change the typing errors.  No big deal says MF but if I [AFM] am going to get it done it is something I [MF] don't have to worry about any more."

   Mr Mizen continues:

   "2.My recollection of that conversation concerning the typing errors in the statement of claim was that I indicated to Mr Ferguson that they would be changed.  But that I did not have time to do it in the short term.  Mr Ferguson indicated that so long as he knew that I would eventually make the changes, he does not have to worry about them further.  My recollection is that he said this would not hold up the filing of the defence.

   3At the hearing on 20 November 1998 before Master Bredmeyer, I recall counsel for Mr Jermyn, Mr John Ley, informing the court that Mr Jermyn's defence was almost ready, that he had to check a few things within in and that it would be filed shortly."

2. That latter statement is not accepted.  I quote from Mr Van Der Zanden's affidavit on that topic:

   "4.I am informed by Mr John Ley to whom I have now spoken and made enquiry, and believe to be true, that at the time of the hearing on 20 November 1998 before

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Master Bredmeyer that Mr Ley had prepared a first draft of an amended defence for the third defendant but which required further instructions from the third defendant.  Mr Ley informs me and I believe it to be true that it is unlikely, in such circumstances, that he would have said to Master Bredmeyer that the amended defence was 'almost ready' or that it would be 'filed shortly'."

1. There are different versions of what was said between Mr Mizen and Mr Ferguson in the telephone call of 30 September 1998 and what was said by Mr Ley at the hearing before me on 20 November 1998.  I am unable to contribute any recollection to the latter occasion and the proceedings on that day were not transcribed.  I do not think it is necessary or proper that I should rule on the accuracy of the different versions of these two events.  To take common ground, there was some promise by Mr Mizen to correct typing errors in the substituted statement of claim but no promise that it would be done speedily.  There was also some statement that a draft defence had been prepared.  I do not consider that the promise to correct typing errors in the substituted statement of claim is a justification for the non‑filing of the amended defence.  That pleading was ordered to be filed by an order made on 14 July 1998 within 28 days.  The statement of claim is an elaborate and detailed document and would merit a very detailed and considered defence and I do not consider that a few typing errors would be any obstacle to the preparation of that defence.

2. So, I consider that the plaintiff's delays post‑July 1998 in advancing these actions to trial has been shared significantly by the defendants' failure to produce its amended defence.  I am therefore unconvinced that the length of this delay, when, of course, added to the earlier delays and the explanation for the delay and the prejudice to the defendant in allowing the actions to continue and all the other relevant matters, justify a dismissal of these actions.

3. I do not consider that the defendant has made out a case for the dismissal of these actions and I propose to dismiss his application.

4. I should add a word on the other three actions - CIV 2876 of 1991, CIV 2863 of 1991 and CIV 2857 of 1991.  No amended, or substituted statement of claim, has been filed in relation to those actions, so no new defences are required.  The plaintiff considers that CIV 1417 of 1992 is the lead action and has persuaded the court of that view and that much time can be saved at trial by adopting that view.  The lead action will lead

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evidence on the history of the relationships between the various parties and all the steps in the process which led to the asset stripping of IRL and the defendant's involvement in that.  In those circumstances, now embraced in my orders of November 1998 directing that CIV 1417 of 1992 be the lead action, it is reasonable and appropriate that the parties' preparation for trial focus largely on CIV 1417.  The pleadings and discovery and other interlocutory processes on the other three actions can be much briefer because of the priority given to CIV 1417.  I do not consider it just and appropriate to dismiss the other three actions for want of prosecution.  The four should be considered together.