Tipperary Developments Pty Ltd v The State of Western Australia

[2002] WASC 283

TIPPERARY DEVELOPMENTS PTY LTD -v- THE STATE OF WESTERN AUSTRALIA [2002] WASC 283

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASC 283
Case No:	CIV:2490/1992	Heard:	18 OCTOBER 2002
Coram:	MASTER SANDERSON	Delivered:	29/11/02
No of pages:	28	Judgment Part:	1 of 1
Result:	Action struck out
Category:	B
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Parties:	TIPPERARY DEVELOPMENTS PTY LTD THE STATE OF WESTERN AUSTRALIA WARREN PERRY ANDERSON
Catchwords:	Practice and procedure Application to strike out for want of prosecution Turns on own facts
Legislation:	Nil
Case References:	Birkett v James [1978] AC 297 Brisbane's South Regional Health Authority v Taylor (1996) 186 CLR 541 Duke v Royalstar Pty Ltd [2001] WASCA 273 Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998 Hughes v Gales (1995) 14 WAR 434 Levi v Stirling Brass Founders Pty Ltd, unreported; FCt SCt of WA; Library No 970209; 9 May 1997 Lewandowski v Lovell (1994) 11 WAR 124 Tipperary Developments Pty Ltd v State of Western Australia [1997] 22 ACSR 241 Tipperary Developments Pty Ltd v State of Western Australia, unreported; SCt of WA; Library No 970560; 28 October 1997 Ulowski v Miller [1968] SASR 277 Wan v Sweetman & Anor, unreported; FCt SCt of WA; Library No 960456; 14 August 1996 Allen v Sir Alfred McAlpine & Sons Ltd (1968) 1 All ER 543 Arcadia Holdings Pty Ltd v Brown [2002] WASC 44 Brixton Nominees Pty Ltd & Ors v Hardiman & Anor [2002] WASC 3 Carter v Standen, unreported; FCt SCt of WA; Library No 970271; 28 May 1997 Cummings & Anor v Davis & Anor [2000] QSC 158 Cummings & Anor v Davis & Anor [2001] QCA 293 Jakovljevic v L & B Doslov [2000] WASCA 131 Sangora Holdings Pty Ltd v Hodder [2002] WASC 206 Spitfire Nominees Pty Ltd v Ducco [1998] 1 VR 242 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : TIPPERARY DEVELOPMENTS PTY LTD -v- THE STATE OF WESTERN AUSTRALIA [2002] WASC 283 CORAM : MASTER SANDERSON HEARD : 18 OCTOBER 2002 DELIVERED : 29 NOVEMBER 2002 FILE NO/S : CIV 2490 of 1992

CIV 1473 of 1994
CIV 1878 of 1994
(Consolidated by Orders dated 8 June 1994 and 21 September 1994)

MATTER : Application to strike out for want of prosecution BETWEEN : TIPPERARY DEVELOPMENTS PTY LTD

Plaintiff

AND

THE STATE OF WESTERN AUSTRALIA
Defendant

(BY ORIGINAL ACTION)

THE STATE OF WESTERN AUSTRALIA
Plaintiff

AND

TIPPERARY DEVELOPMENTS PTY LTD
First Defendant

WARREN PERRY ANDERSON
Second Defendant

(BY COUNTERCLAIM)

(Page 2)

Catchwords:

Practice and procedure - Application to strike out for want of prosecution - Turns on own facts

Legislation:

Nil

Result:

Action struck out

Category: B

Representation:

Original Action

Counsel:

Plaintiff : Mr A J Meyers QC & Mr D Robinson
Defendant : Mr A M Pettit SC & Ms D H Carey

Solicitors:

Plaintiff : Slater & Gordon
Defendant : State Crown Solicitor

(Page 3)


Counterclaim

Counsel:

Plaintiff : Mr A M Pettit SC & Ms D H Carey
First Defendant : Mr A J Meyers QC & Mr D Robinson
Second Defendant : Mr A J Meyers QC & Mr D Robinson

Solicitors:

Plaintiff : State Crown Solicitor
First Defendant : Slater & Gordon
Second Defendant : Slater & Gordon

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

Birkett v James [1978] AC 297
Brisbane's South Regional Health Authority v Taylor (1996) 186 CLR 541
Duke v Royalstar Pty Ltd [2001] WASCA 273
Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998
Hughes v Gales (1995) 14 WAR 434
Levi v Stirling Brass Founders Pty Ltd, unreported; FCt SCt of WA; Library No 970209; 9 May 1997
Lewandowski v Lovell (1994) 11 WAR 124
Tipperary Developments Pty Ltd v State of Western Australia [1997] 22 ACSR 241
Tipperary Developments Pty Ltd v State of Western Australia, unreported; SCt of WA; Library No 970560; 28 October 1997
Ulowski v Miller [1968] SASR 277
Wan v Sweetman & Anor, unreported; FCt SCt of WA; Library No 960456; 14 August 1996

Case(s) also cited:

Allen v Sir Alfred McAlpine & Sons Ltd (1968) 1 All ER 543
Arcadia Holdings Pty Ltd v Brown [2002] WASC 44
Brixton Nominees Pty Ltd & Ors v Hardiman & Anor [2002] WASC 3


(Page 4)

Carter v Standen, unreported; FCt SCt of WA; Library No 970271; 28 May 1997
Cummings & Anor v Davis & Anor [2000] QSC 158
Cummings & Anor v Davis & Anor [2001] QCA 293
Jakovljevic v L & B Doslov [2000] WASCA 131
Sangora Holdings Pty Ltd v Hodder [2002] WASC 206
Spitfire Nominees Pty Ltd v Ducco [1998] 1 VR 242
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

(Page 5)

1 MASTER SANDERSON: This is the defendant's application to strike out the plaintiff's claim for want of prosecution. As is so often the case in applications of this nature, there was no real contest between the parties as to the applicable law, or indeed as to the facts at least insofar as a chronology of events is concerned. Indeed the plaintiff concedes that the lapse of time between crystallisation of the causes of action sued upon (1988-9) and the present time "is a lengthy period": see par 4 of the plaintiff's written submissions. However, the plaintiff says that the delay is not inexcusable and that the application ought be dismissed.

2 The parties agreed that the principles governing an application such as the present are to be found in cases which begin with Birkett v James [1978] AC 297 through Ulowski v Miller [1968] SASR 277, through to, in this jurisdiction, Lewandowski v Lovell (1994) 11 WAR 124, Wan v Sweetman & Anor, unreported; FCt SCt of WA; Library No 960456; 14 August 1996, Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 980078; 25 February 1998 and Hughes v Gales (1995) 14 WAR 434. In his written submissions counsel for the defendant relied upon the oft-quoted passage of Bray CJ in Ulowski v Miller (supra) where his Honour said (at 280):

"It must be remembered that we are dealing here with a discretion and in my view it ought not be fettered by any absolute or inflexible rules. It clearly appears from these cases that five paramount matters to be considered are the length of the delay, the explanation for the delay, the hardship to the plaintiff if the action is dismissed and the cause of action left statute-barred, the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay, and the conduct of the defendant in the litigation."

3 In support of its application the defendant filed four affidavits of Diane Helen Carey, sworn respectively on 11 December 2001, 19 March 2002, 14 October 2002 and 17 October 2002. In opposition to the application the plaintiff relied upon two affidavits, the first sworn by Cesar Piotti on 19 February 2002 and the second sworn by Warren Perry Anderson (second defendant to counterclaim) on 24 April 2002. Taken together, these six affidavits were the evidence for and against the application.

4 Appearing as annexure "DHC1" to Ms Carey's first affidavit is a document described as a chronology. Counsel for the plaintiff accepted the accuracy of this document which really is a list of dates upon which

(Page 6)

certain events occurred. It sets out comprehensively the way in which the action has progressed and I have accordingly incorporated it in these reasons. It is in the following terms:

Date of Document	Description
28 September 1990	Crown suits notice
24 November 1992	Writ of summons CIV 2490/92
3 December 1992	Memorandum of appearance in CIV 2490/92
25 March 1993	Amended statement of claim in CIV 2490/92
16 March 1994	Chamber summons for leave to file re-amended statement of claim in CIV 2490/92
18 May 1994	Writ of summons CIV 1473/94
19 May 1994	Memorandum of appearance CIV 1473/94
24 June 1994	Consent order (O.43 r.16) to consolidate CIV 2490/92 and CIV 1473/94
29 June 1994	Statement of claim (in consolidated action)
24 November 1994	Defence and counterclaim
24 November 1994	Defendant’s request for further and better particulars of statement of claim
22 December 1994	Plaintiff’s memorandum of appearance to counterclaim
20 February 1995	Defendant’s reply to defence and defence to counterclaim
3 March 1995	Plaintiff’s request for further and better particulars of defence and counterclaim

(Page 7)

8 November 1995	Request from Case Management Registrar, Supreme Court pursuant to Order 29 rule 4(3)(b) for explanation why entry for trial not occurred within the standard times. (No copy on CSO file)
22 November 1995	Response by Plaintiff’s solicitors to Case Management Registrar explaining why entry for trial has not occurred and seeking extension of standard times.
11 April 1996	Action admitted to Long Causes List and Murray J. assigned to manage the action
8 May 1996	First directions hearing before Murray J. in Long Causes List
15 May 1996	Defendant’s amended request for further and better particulars of statement of claim and request for further and better particulars of reply and of defence to counterclaim
3 July 1996	Defendant’s further amended request for further and better particulars of statement of claim
25 July 1996	Plaintiff’s amended request for further and better particulars of defence
25 August 1996	Defendant’s answers to amended request for further and better particulars of defence
26 August 1996	Defendant’s solicitors request information from Plaintiff’s solicitors re Plaintiff’s financial security (no response)
27 August 1997	Rejoinder to reply and reply to defence to counterclaim

(Page 8)

30 August 1996

Defendant’s amended defence and counterclaim pursuant to leave of Murray J.

30 August 1996	Directions hearing before Murray J.: (a) Plaintiff ordered to file and serve answers to requests for further and better particulars by 20 September 1996; (b) Each party ordered to give discovery on oath by 27 September 1996
12 September 1996	Defendant’s solicitors again request financial information from Plaintiff’s solicitors re Plaintiff’s financial security (no response)
26 September 1996	Defendant files chamber summons for security for costs
26 September 1996	Defendant’s affidavit of discovery
27 September 1996	Plaintiff’s informal list of discovery
3 October 1996	Directions hearing before Murray J.: (a) Plaintiff ordered to file and serve answers to requests for further and better particulars by 11 October 1996; (b) Plaintiff to file and serve discovery on oath by 11 October 1996. Defendant’s counsel outlined to Murray J. Plaintiff’s slow progress, continual lack of compliance with court directions and Plaintiff’s solicitors’ failure to correspond/communicate with Defendant’s solicitors.

(Page 9)

1 October 1996	Plaintiff’s answers to request for further and better particulars of statement of claim
11 October 1996	Plaintiff’s answers to request for further and better Particulars of reply and defence to counterclaim

11 October 1996	Plaintiff’s affidavit of discovery
16 October 1996	Defendant’s solicitors provides its affidavit of discovery on computer disks to Plaintiff’s solicitors
16 October 1996	Plaintiff’s solicitors informally raise possible matters to agree by way of admissions of fact
17 October 1996 (approx)	Defendant requests copies of some of Plaintiff’s informally discovered documents, following inspection of the same
31 October 1996	Defendant’s application for security for costs dismissed
10 December 1996	Defendant’s chamber summons for further and better particulars of statement of claim and reply

(Page 10)

16 December 1996

Directions hearing before Murray J.: (a) Plaintiff file and serve further and better particulars of statement of claim and reply by 24 January 1997; (b) Any party wishing to serve interrogatories to seek leave by 14 February 1997 (c) Any expert reports file and served by 25 April 1997 (d) Defendant produce for inspection the "RC" discovered documents (e) The trial is to commence on 3 June 1997 for such period as it may take.

3 January 1997	Plaintiff’s chamber summons for further and better discovery
24 January 1997	Plaintiff’s further and better particulars of statement of claim and reply
3 February 1997	Defendant’s chamber summons for springing orders re request for further and better particulars of paras 61 and 64 statement of claim and para 24 of reply; and Plaintiff seek leave to amend statement of claim and reply
6 February 1997	Defendant’s affidavit of further and better discovery
20 February 1997	Plaintiff’s interrogatories
24 February 1997	Defendant’s (supplementary) affidavit of discovery
25 February 1997	Plaintiff’s chamber summons to amend statement of claim and reply

(Page 11)

26 February 1997	Directions hearing before Murray J.: (a) Plaintiff have leave to file substituted (renumbered) statement of claim by 27 February 1997; (b) Parties have leave to file and serve interrogatories by 5 March 1997.
March 1997	Defendant’s solicitors query Plaintiff’s solicitors’ possible conflict of interest
7 March 1997	Defendant’s proposed interrogatories
10 March 1997	Plaintiff’s chamber summons to vacate trial date

13 March 1997	Hearing before Murray J. to vacate trial date; Plaintiff’s application to vacate trial date granted. Trial adjourned to a date to be fixed. Application to be made to Listing Co-ordinator for a new trial date by close of business 2 May 1997
18 April 1997	Bennett & Co advise Defendant’s solicitors that it has taken over the conduct action on Plaintiff’s behalf, due to potential conflict by Mallesons
6 May 1997	Notice of change of solicitor filed (Mallesons to Bennett & Co.)
6 May 1997	Plaintiff’s chamber summons to vary direction (that application made to Listing Co-ordinator by 31 July 1997)
14 May 1997	Hearing before Murray J.
1 July 1997	Defendant’s chamber summons for security for costs

(Page 12)

18 July 1997	Hearing for security for costs before Murray J. Decision reserved
1 August 1997	Plaintiff’s chamber summons to vary direction (that application made to Listing Co-ordinator by 31 October 1997)
11 August 1997	Orders (Wheeler J.) to vary direction re: listing
28 October 1997	Judgment by Murray J. re: security for costs application (dismissed)
18 November 1997	Notice of Plaintiff’s change of solicitor (Bennett & Co. to Slater & Gordon)

3 December 1997	Defendant’s solicitors inform Plaintiff’s new solicitors that Plaintiff is 5 weeks in default of the order to apply to the Listing Co-ordinator by 31 October 1997 for trial dates
5 February 1998	Letter from Defendant’s solicitors to Plaintiff’s solicitors re its letter dated 3 December 1997 and the telephone messages 28/1/98, 3/2/98 and 4/2/98 remain unanswered re Plaintiff in default of order to apply to the Listing Co-ordinator by 31/10/97.
10 February 1998	Letter from Plaintiff’s solicitors to Associate to Murray J. (copy to Defendant’s solicitors) re reason for delay (until 7/2/98 Bennett & Co held a solicitor’s lien over all relevant files) and proposing to make application to court for conference within one month

(Page 13)

12 February 1998	Letter from Associate to Murray J. to Plaintiff’s solicitors (copy to Defendant’s solicitors) confirming proposal in letter 10/2/98 acceptable.
6 March 1998	Letter from Plaintiff’s solicitors to Associate to Murray J. (copy to Defendant’s solicitors) advising reason for further delay (Mallesons now exercising solicitor’s lien over files) and seeking a 14 day ‘indulgence’.
2 April 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors requesting a further 3 week extension before they can proceed.

27 May 1998	Letter from Defendant’s solicitors to Plaintiff’s solicitors noting that Plaintiff has failed to progress the action any further and seeking agreement to list of interlocutory steps to be completed before trial.
12 June 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors re letter 27/5/98: Court file temporarily mislaid by Court - detail response to letter asap.
29 June 1998	Letter from Plaintiff’s solicitors to Associate to Murray J. (copy to Defendant’s solicitors) explaining reason for Plaintiff’s further delay (proposed expert unavailable) and suggesting consent orders.
29 June 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors re expert’s unavailability and proposed interlocutory steps

(Page 14)

30 June 1998	Letter from Defendant’s solicitors to Plaintiff’s solicitors stating, inter alia, Defendant not willing to delay the trial pending Plaintiff’s expert’s availability and seeking application to be heard in chambers, not by consent.
1 September 1998	Letter from Associate to Murray J. to Plaintiff’s solicitors (copy to Defendant’s solicitors) seeking resolution to proposed programming orders between the parties and proposed dates and length of trial.
2 October 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors re correspondence to Murray J.

7 October 1998	Defendant lists chamber summons for directions and springing order
9 October 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors noting “difficulties obtaining instructions” and commenting on Defendant’s proposed directions.
12 October 1998	Letter from Defendant’s solicitors to Plaintiff’s solicitors suggesting Plaintiff’s difficulties be raised before Murray J. at the directions hearing.
13 October 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors advising they still do not have instructions from client and requesting a 1 - 2 week adjournment of hearing on 15/10/98

(Page 15)

13 October 1998	Letter from Plaintiff’s solicitors to Defendant’s solicitors advising that unless Defendant agrees to “a short adjournment” of the hearing on 15/10/98 Plaintiff’s solicitors will have no alternative but to apply to the Court to cease acting for Plaintiff.
13 October 1998	Letter from Defendant’s solicitors to Plaintiff’s solicitors advising Defendant will oppose any application to adjourn the hearing on 15/10/98.
14 October 1998	Plaintiff’s affidavit of N. Styant-Brown opposing orders sought by Defendant in hearing on 15/10/98.

15 October 1998	Directions hearing before Murray J.: Plaintiff to file and serve affidavit as to, inter alia, whether Plaintiff intends to proceed to trial, whether Plaintiff intends to obtain expert evidence, and if so, the arrangements made re obtaining the same.
29 October 1998	Solicitors for Plaintiff advise Mr Anderson unavailable to attend Court on 30 November for directions hearing and request an adjournment
3 November 1998	Solicitors for Defendant advise unable to indicate if Defendant will consent to an adjournment until Plaintiff’s affidavit served.
16 November 1998	Affidavit of Warren Perry Anderson filed and served.

(Page 16)

30 November 1998	Directions hearing before Murray J.: (1) Answers to interrogatories by 15/2/99. (2) Action to be listed for trial on mutually convenient dates. (3) Plaintiff’s summons to amend statement of claim listed for 25/1/99. (4) notice to admit by 22/2/99. (5) Plaintiff’s expert report by 19/4/99. (6) Defendant’s expert report by 19/7/99. (7) Plaintiff provide draft mediation order.
18 December 1998	Mediation order - directing parties to submit dispute to mediation
22 December 1998	Plaintiff’s statement of issues for the purposes of mediation.

22 January 1999	Defendant consents to Plaintiff’s amended statement of claim
9 February 1999	Defendant’s statement of issues for mediation
17 February 1999	Plaintiff files and serves answers to interrogatories
11 March 1999	Defendant’s answers to interrogatories
16 March 1999	Plaintiff’s amended reply to defence and defence to counter claim
27 April 1999	Pre-mediation conference agreed that mediation be held after expert reports, tentatively scheduled for 5 and 6 August 1999.

(Page 17)

19 May 1999	Plaintiff’s application before Parker J. for non party discovery from the Joint Liquidators of Rothwells.
19 May 1999	Issue of writ of subpoena to produce re ASIC, upon Defendant’s application.
9 June 1999	Associate to Murray J. enquires from Defendant’s solicitors re progress of the action.

16 June 1999	Judgment of Parker J. re application for non-party discovery from Rothwells’ Joint Liquidators. Orders, inter alia: (1) Within 21 days the Joint Liquidators make available to Plaintiff the relevant documents. (2) Within 28 days liquidators file affidavit of discovery. (3) Within 7 days Plaintiff serve written undertaking re safety and confidentiality of documents. (4) Plaintiff give security for liquidators costs of $37,500 by payment into Court within 7 days.
23 June 1999	Plaintiff’s payment into Court of $37,500 re non-party discovery.
30 June 1999	Plaintiff serves pre-administered interrogatories on Defendant.
19 July 1999	Letter Plaintiff’s solicitors to Mediation Registrar requesting the mediation be postponed.

(Page 18)

17 August 1999	Principal Registrar of the Supreme Court asks parties for unavailable dates so that the mediation conference could be relisted.
18 August 1999	Plaintiff’s notice to admit filed and served.
25 August 1999	Plaintiff’s solicitors advise Supreme Court that due to delay in preparing Plaintiff’s expert report “unlikely that the Mediation could take place until early in the new year".

20 December 1999	Plaintiff’s solicitors advise Supreme Court that “we anticipate that Plaintiff will be in a position to file its expert report by February 2000”.
15 March 2000	Service of Plaintiff’s affidavit of R.S. Norgard verifying list of documents (non-party discovery).

5 During the course of his submissions counsel for the defendant tendered a document entitled "Outline of Litigation". This document was intended as an overview of the facts and the matters at issue of the case. Counsel for the plaintiff did not dispute this version of the facts. The only qualification was as to one paragraph. That being so, I have incorporated the plaintiff's outline in these reasons, adding a qualification (which is underlined) to take into account counsel for the plaintiff's objection.

"EVENTS

Immediately following the stock market crash on 20 October 1987, Rothwells Ltd suffered a run on its cash reserves by depositers. As part of his efforts to improve Rothwells' liquidity, Laurie Connell sold his half interest in Midtown Properties Pty Ltd to the State Government Insurance Commission on 23 October 1987. Midtown owned half of two large central Perth sites: The Perth Technical College site (later 'Westralia Square') and the David Jones site (later 'Central Park'). The other half of each site was owned by the Government Employees Superannuation Board.

(Page 19)

In December 1987 the SGIC also acquired the 25% interest in Westralia Square which had previously been held by Bond Corporation through its half share in Midtown. That is, by 24 December 1987 the SGIC and GESB together held 100% of Westralia Square.

The SGIC and GESB determined to sell the site quickly. Three offers were made. The offer from joint venturers Consolidated Press Holdings Ltd and Tipperary Developments Ltd ('Packer/Anderson') was determined most advantageous.

At this stage, early 1988, both the SGIC and the GESB had made substantial deposits with Rothwells in an effort to provide temporary liquidity to stabilise Rothwells and the wider financial market. GESB had deposited some $50 million.

It is alleged that, as a condition of the sale of Westralia Square, Packer/Anderson were required to make a loan of $50 million available to Rothwells, the intention being to permit the GESB to withdraw its $50 million deposit. Negotiations were completed at a meeting in Sydney on 16 March 1988, attended by Tony Lloyd (Rothwells), Ollie Rees (SGIC), Kevin Edwards (GESB, SGIC and Public Service), Warren Anderson (Tipperary) and Ray Stone and Don Bourke (Conspress).

The Westralia Square site was sold to Packer/Anderson for $270 million, but with various and complex conditions of sale, the transaction being finalised on 30 June 1988. Also on 30 June 1988, in a related and equally complex deal, Anderson (without Packer) purchased a 50% interest in the Central Park project.

In March and April, Conspress lent $50 million to Tipperary who in turn purchased Rothwells accepted bills to the value of $50 million pursuant to the agreement of 16 March.

The defendant alleges that in the ensuing months there were three important developments. First, the GESB and SGIC became concerned that Anderson, by his interests in both Central Park and Westralia Square, might be able to manipulate the rental market to their disadvantage. Secondly, severe difficulties arose as to the interpretation of the contract for the sale of Westralia Square, particularly in respect of a rental

(Page 20)

guarantee by SGIC and GESB to Packer/Anderson. Thirdly, later in the year, it emerged that Rothwells was in difficulty.

The consequences of those three developments were, respectively, that GESB and SGIC wanted to remove Tipperary from the Central Park development, they also wanted to completely renegotiate the Westralia Square development, and Anderson became concerned about the prospects of retrieving his $50 million. Anderson had various further meetings and telephone conversations with, among others, Premier Dowding and Deputy Premier Parker, in which he intimated that he might sue in respect of alleged misrepresentations made to him about Rothwells.

In about October or November 1988 Whitlam Turnbull was engaged by the State to assist with several matters, including the Westralia Square site. Warren Tucker was engaged by the SGIC and GESB.

Rothwells went into provisional liquidation on 3 November.

On 30 December 1988 a settlement of several issues occurred with the execution of various deeds between the parties. In particular:

(a) Anderson was bought out of Central Park;

(b) Anderson/Packer agreed to obtain separate title to one portion of Westralia Square, build an 18 storey office block on it and sell the land and building to the SGIC and GESB for $239 million;

(c) The rental guarantee and other issues were removed; and

(d) Anderson and Tipperary released Ministers, officers and instrumentalities of the State from liability in respect of the $50 million advanced to Rothwells.

In May and June of 1989, Anderson recovered $12.5 million from bills purchased from Rothwells and in 1990/91 recovered $10.2 million from the liquidator of Rothwells in satisfaction of his proof of debt.

THE LITIGATION

(Page 21)

Tipperary makes four principal allegations in its suit for recovery of some $27 million:

(a) Edwards and Lloyd misrepresented the position of Rothwells in the meeting of 16 March 1988, thereby inducing Anderson to commit to the $50 million facility;

(b) At the same meeting the State, through Edwards and Lloyd, gave a guarantee or indemnity to Anderson in respect of any loss arising from the $50 million facility;

(c) The guarantee was affirmed in amended form by Dowding in subsequent discussions; and

(d) The deed of release, which otherwise would preclude this litigation, does not extend beyond Ministers, officers and instrumentalities so as to release the State itself. Alternatively, the deed of release is void for failure of a condition of its delivery and for duress.

6 Turning then to the five "paramount matters" referred to by Bray CJ in Ulowski. The first and the last of these criteria can be dealt with quite shortly. There is no doubt that the length of the delay is inordinate. I have touched on that matter above. Ten years have passed since the writ of summons in CIV 2409 of 1992 was issued and more than 8 years since the writ was issued in CIV 1473 and CIV 1878. Still the matters are not ready for trial. Although there was no direct evidence on this point, both counsel agreed that subject to the provision of the plaintiff's expert report and the answering of interrogatories by the defendant, the matter should be ready for hearing. There was some dispute about whether or not inspection of documents has taken place - it would seem that inspection was carried out by the plaintiff's former solicitors, but no inspection has been carried out by its present solicitors. The matter itself is likely to occupy some four weeks of hearing time and it is therefore unlikely that it could be heard before the middle of 2003. In my view this is a factor very much in favour of the defendant.

7 There is nothing in the conduct of this litigation by the defendant which has contributed in any way to the delay in progressing the action. It is apparent that one of the reasons why the action has not moved more quickly is the delay in the plaintiff obtaining an expert report. It was submitted by counsel for the plaintiff that the defendant had been difficult by not admitting that Rothwells Ltd ("Rothwells) was insolvent between March 1988 and November 1988. It is to this issue that the plaintiff's

(Page 22)

expert report is directed. Counsel submitted that this refusal to admit Rothwells' insolvency was a tactical decision for the purposes of the litigation. As I understand counsel's submission, it was said then that some of the delay could be attributed to the defendant.

8 At this stage in the proceedings it is not open to me to make any finding as to the reasonableness or otherwise of the defendant's refusal to admit Rothwells' insolvency. As counsel for the defendant pointed out, at all times the defendant maintained this was an issue between the parties. The plaintiff could never have had doubts on this question. It cannot therefore be said that the defendant is in any way at fault in its approach to the litigation. I accept that argument. In my view there is nothing in the conduct of the litigation which suggests that the defendant is responsible for the delay. Again, this is a matter which I would see as favouring the defendant.

9 The plaintiff seeks to explain the delay in progressing the action in a number of different ways. First, it is said that there has been difficulty obtaining an expert's report as to Rothwells' solvency. This issue is covered in par 6 through to 9, par 25 to 41 and 58 through to 81 of Mr Piotti's affidavit. The issue is further addressed in Mr Anderson's affidavit. The position can, I think, be summarised in this way.

10 In late 1996 the plaintiff's then solicitors realised, perhaps belatedly, that an expert report would be required. At a directions hearing before Murray J on 16 December 1996 the parties were ordered to file and serve expert reports by 25 April 1997. Mallesons, who were then acting for the plaintiff, had in mind to use as experts accountants who had been retained by the prosecution in the conspiracy action brought against certain individuals in relation to Rothwells. The defendant's solicitors advised that they had no objection to the plaintiff engaging these experts and in February 1997 Mallesons approached Ferrier Hodgson. They were advised that production of the report would take four months full time work. Before any formal instructions could be issued Mallesons, concerned about a potential conflict of interest, withdrew as the plaintiff's solicitors. Another firm of solicitors was appointed but it would appear never reached the point of instructing experts. It was not until May 1998 that the plaintiff's present solicitors again approached Ferrier Hodgson.

11 Ferrier Hodgson advised that they would not be in a position to commence work on the report until the middle of 1999. Perhaps understandably, the plaintiff was reluctant to engage another firm of accountants and the matter appears not to have progressed until November

(Page 23)

1998. In fairness to the plaintiff, it should be said that during this time it had made some attempts to explore with the defendant the possibility of agreeing the insolvency of Rothwells so as to obviate the need for expert reports. As I have indicated, the defendant would have none of it. In November 1998 the plaintiff engaged Norgard Clohessy to prepare the expert's reports.

12 Soon after his engagement, Mr Ross Norgard of Norgard Clohessy wrote to Ferrier Hodgson, who were the liquidators of Rothwells, seeking access to all of their files, working papers and the like. Ferrier Hodgson refused access, saying that it would only permit it with the proper court order. On 29 March 1999 the plaintiff filed an application for non-party discovery. This application was resolved in the plaintiff's favour on 16 June 1999.

13 Both in his written and oral submissions counsel for the defendant questioned the need for the application for non-party discovery. He indicated that the defendant had provided discovery and, it was said, this discovery contained all the documents necessary for the plaintiff's experts to complete the report. There is no direct evidence on that issue and I am not in a position to question the need for the non-party discovery application. Clearly the plaintiff's solicitors thought the application was necessary and there is no evidence to the contrary. In any event, the delay between making the application and obtaining the order was less than three months - an insignificant period when placed in context.

14 Norgard Clohessy were then in a position to commence work on the expert's report on 6 July 1999. On 21 July 1999 the defendant's solicitors wrote to Norgard Clohessy, alleging a conflict of interest on the basis that Norgard Clohessy were the administrators and trustees of the estate of L R Connell. There was some correspondence backwards and forwards on this issue, but it appears not to have been pressed. There is no evidence that by raising this issue the defendant contributed in any way to the delay in preparation of the expert report.

15 By 16 February 2000 Norgard Clohessy had completed a first draft of the expert report. Before completing their report they claimed outstanding fees. A dispute then arose as to payment of Norgard Clohessy's fees. As a consequence of that dispute, work ceased in February 2000 and did not recommence until Norgard Clohessy's fees were paid in October 2001. It appears that the report itself, in final form, was available in the first part of this year and if this matter proceeds it could be filed and served within the next few weeks.

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16 In his affidavit Mr Anderson deals with the cost of obtaining the expert's report and explains why there was a delay between February 2000 and October 2001. The report itself has cost $381,000. To summarise Mr Anderson's evidence, between February 2000 and December 2002 the plaintiff experienced liquidity problems which meant it simply did not have the wherewithal to make payment of Norgard Clohessy's fees. It would appear that the plaintiff and other companies associated with Mr Anderson were fighting on a number of different fronts. This was expensive and cash resources were used to discharge legal fees. So this action did not progress. These cash flow difficulties have now been overcome and the plaintiff is in a position to progress the action.

17 It is worth pausing at this point to note that during the course of these proceedings the defendant has applied twice for an order for security for costs: see Tipperary Developments Pty Ltd v State of Western Australia [1997] 22 ACSR 241; Tipperary Developments Pty Ltd v State of Western Australia, unreported; SCt of WA; Library No 970560; 28 October 1997. Counsel for the defendant submitted that the fact the plaintiff had resisted both these applications indicated that it was not impecunious and it could not now rely on alleged impecuniosity as an explanation for the delay in obtaining the expert report. With respect, I am not satisfied that anything can be drawn from the fact that the plaintiff resisted an application for security for costs. I say this for at least two reasons. First, each application was made under s 1335 of the Corporations Law and the question to be considered is whether "when called upon to do so" a corporation will be able to meet a costs order which might be made against it. Any determination then of an application for security for costs speaks as to the future. While it may be relevant to consider the financial resources of the corporation as at the date of the application, no decision about the security for costs application can say anything about the then financial position of the plaintiff. Secondly, it is clear from a reading of both decisions that his Honour (in each case Murray J dealt with the application), decided that the defendant had not satisfied what is sometimes referred to as the threshold hurdle - that is, the defendant had not satisfied the Court that if called upon to do so, the plaintiff would not be able to meet a costs order. His Honour reached this conclusion, again in each case, largely on the absence of any financial information provided by the defendant which could satisfy him that the plaintiff did not have the resources to meet a costs order. In each case then, the decision was really based on a lack of evidence rather than any positive determination one way or the other on the evidence produced. While each of these decisions is worthy of note and while it must be

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assumed that in each application the plaintiff resisted on the basis that it was not impecunious, I am not satisfied that much can be drawn from the decisions.

18 On balance, I am not satisfied that the explanation for the delay is satisfactory. Reduced to its essentials, the plaintiff seeks to explain the delay in two ways. First, it did not anticipate that the solvency of Rothwells would be an issue between the parties. This led to a delay in actually commissioning the expert's report. With respect it seems to me that from the first, the plaintiff should have appreciated that the solvency or otherwise of Rothwells in the relevant period was central to its case. It should then have moved promptly to ensure that a report was available. As I have indicated, the defendant did nothing at any stage to lead the plaintiff to believe that the issue would be conceded. This aspect of the plaintiff's explanation for the delay is unsatisfactory.

19 The second reason given for the delay is the plaintiff's impecuniosity - it simply was not able to pay the fees of the accountants to prepare the report.

20 There is no doubt that having the accountants prepare the expert report was an expensive undertaking. I also accept that from time to time the plaintiff has had cash flow difficulties. But in my view none of that provides a satisfactory explanation for the delay. A party who undertakes significant litigation must expect to incur heavy costs - both legal costs and costs of experts involved in the litigation. From time to time it may be that the demands of costs are such that delay in the proceedings is inevitable. But here the delay has been lengthy and in my view, simply to plead poverty is not a sufficient answer.

21 It is true that from time to time delay was occasioned by the unavailability of accountants whom the plaintiff wished to instruct. The plaintiff wished to instruct those accountants because of their familiarity with Rothwells. However, when it became clear that instructing those accountants was likely to lead to significant delay, the plaintiff could have been expected to instruct an alternative expert. In my view the unavailability of certain accountants does not provide any explanation for the delay.

22 I am satisfied that there is no proper explanation for the delay in this case. That is a factor very much in the defendant's favour.

23 There is no doubt that if this action is dismissed it will occasion hardship to the plaintiff. The plaintiff's claim will be time-barred and

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there is no question of the action being recommenced. Accordingly the plaintiff will be precluded from recovering any amount to which it may have been entitled. Furthermore, legal expenses of millions of dollars have been incurred and will be wasted. The costs associated with the expert report will be wasted. In addition, the plaintiff will be liable for the defendant's costs of the action which will be substantial.

24 Dismissing this action will cause hardship to the plaintiff and this is a factor in the plaintiff's favour.

25 During the course of the hearing it was submitted on behalf of the defendant that it would suffer prejudice if the action was allowed to proceed notwithstanding the delay. Reference was made to what might be called the general prejudice suffered by any party when there is a delay in progressing litigation. This is the prejudice of the type referred to by McHugh J in Brisbane's South Regional Health Authority v Taylor (1996) 186 CLR 541 at 455. Counsel for the defendant conceded in his submissions that such general prejudice would be suffered by the defendant.

26 But the defendant went further. It submitted that it would suffer specific prejudice. Reference was made to a number of witnesses who were either dead or indisposed through physical illness. A number of other witnesses had declined to speak with the defendant. This, it was said, would cause the defendant significant prejudice. On behalf of the plaintiff it was pointed out that there had been a number of enquiries and commissions which had gathered evidence in relation to the events the subject of this dispute. In particular, there was the report of the Royal Commission into the activities of the Western Australian Government, the McCusker Report and a report by the NCSC. All of these, it was submitted, provided the defendant with details of what was likely to be said by witnesses. Furthermore, it was pointed out that those witnesses who would not speak to the defendant now would not have spoken to the defendant at any stage. There could, therefore, be no suggestion of particular prejudice.

27 On this latter point I accepted the defendant's submissions. I am not satisfied that there is, in this case, any particular prejudice occasioned to the defendant by the delay. That said, it must be acknowledged that there is the general prejudice that the defendant would suffer as a consequence of the time between these proceedings being initiated and any trial. On balance, this is a factor which favours the defendant's position, although it is not a matter of overwhelming significance.

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28 There are two further factors which I should mention. The first is really by way of an aside. In a number of cases it has been suggested by the Full Court that the application of case management principles might, in itself, be the basis for determining whether or not an action ought be struck out for want of prosecution. This issue was raised by Malcolm CJ in Levi v Stirling Brass Founders Pty Ltd, unreported; FCt SCt of WA; Library No 970209; 9 May 1997. Most recently it was referred to by Wheeler and McLure JJ in Duke v Royalstar Pty Ltd [2001] WASCA 273. In each of these cases, and in others, the Court has teetered on the brink of determining an application on the basis of case management principles, but drawn back. Both parties in this case agreed that the principles to which I have referred to above were applicable. However, in my view, were it the case that this matter was determined on case management principles, by applying O 1 r 4A and O 1 r 4B, the action would be struck out for want of prosecution. Lest there be any misunderstanding, I have not approached the matter on this basis but have dealt with the application on the law as it stands at present.

29 The second point is of somewhat more consequence. The defendant in this action has brought a counterclaim against both the plaintiff and Mr Anderson. If the plaintiff's action against the defendant is dismissed, there is no reason why the defendant could not proceed with its counterclaim. This was not a matter raised by either party during the course of submissions. Subsequent to the hearing I raised the issue with the solicitors for both parties and invited further submissions. The solicitors for the plaintiff indicated they had proceeded on the basis that if the plaintiff's claim was dismissed, the counterclaim would remain and while this was not specifically mentioned, it was to be seen as a factor against the application.

30 The response from the defendant's solicitors was in the following terms:

"Our instructions are that, should the defendant's application to strike out the plaintiff's claim be successful before the Master, then, subject to the following, the defendant will undertake to discontinue the counterclaim. The defendant will delay withdrawing the counterclaim until the expiry of appeal periods. If an appeal is lodged, the defendant reserves the right to re-assess its position on its counterclaim."

31 The issue of the counterclaim provides an unusual twist to this application. So far as I am aware, none of the authorities dealing with

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applications to strike out for want of prosecution, and they are legion, confront the issue. There would appear to be no reason why a conditional order should not be made - that is to say, an order striking out the action subject to the counterclaim being discontinued - but so far as I am aware, it has not been done. Further, if the counterclaim is discontinued by the defendant consequent upon the plaintiff's claim being struck out, the issue of costs becomes highly complicated. While such a complication may not be determinative of the application, it does serve to illustrate the consequences of an order being made where a counterclaim exists.

32 In the end it is a matter of weighing all these factors in the balance. Having done that and taking into account all of the evidence and the submissions made by the parties, I am satisfied that this action ought be struck out for want of prosecution subject to the defendant's undertaking to discontinue the counterclaim. In my view, what is decisive is the length of the delay and the inadequate explanation for the delay. The events that give rise to this action date back to another era. If the plaintiff had a legitimate grievance it should have pursued it promptly. It did not do so and in my view, it has not adequately explained the reasons for not doing so. This action should be consigned to history's dustbin.

33 I will hear the parties as to the precise form of orders and as to costs.