TSW Analytical Pty Ltd v The University of Western Australia [No 2]
[2015] WASC 302
•14 AUGUST 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: TSW ANALYTICAL PTY LTD -v- THE UNIVERSITY OF WESTERN AUSTRALIA [No 2] [2015] WASC 302
CORAM: ALLANSON J
HEARD: 11 AUGUST 2015
DELIVERED : 11 AUGUST 2015
PUBLISHED : 14 AUGUST 2015
FILE NO/S: CIV 2760 of 2014
BETWEEN: TSW ANALYTICAL PTY LTD
Plaintiff
AND
THE UNIVERSITY OF WESTERN AUSTRALIA
Defendant
Catchwords:
Practice and procedure - Application to stay proceedings - No defence filed - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff: Mr S Penglis
Defendant: Ms P A Martino
Solicitors:
Plaintiff: Thompson Downey Cooper
Defendant: P A Martino
Case(s) referred to in judgment(s):
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Malleson Stephen Jacques [No 2] [2014] WASC 60
The University of Western Australia v TSW Analytical Pty Ltd [No 2] [2014] WADC 145
TSW Analytical Pty Ltd v The University of Western Australia [2015] WASC 232
ALLANSON J: There are three proceedings between TSW Analytical Pty Ltd (TSW) and The University of Western Australia (the University), all of which have pending appeals. TSW commenced an action against the University in this court in 2014. An interlocutory decision refusing summary judgment in that action is on appeal. The University has a judgment against TSW in the District Court; TSW has appealed. There are also proceedings in this court under the Corporations Act 2001 (Cth), which are also on appeal.
On 11 August 2015, I heard an application by the University to stay the proceedings in the action by TSW until the appeals are determined. I dismissed the application and said I would publish my reasons.
The proceedings in the District Court
The University commenced an action against TSW by writ filed in the District Court on 26 November 2013. The writ bore an indorsement of claim, and no statement of claim was filed. The writ and its indorsement were not put before me in this application.
TSW failed to file an appearance, and default judgment was entered against TSW on 11 December 2013.
On 20 March 2014, a registrar dismissed TSW's application to set aside default judgment.
TSW appealed. The appeal was dismissed on 24 October 2014: The University of Western Australia v TSW Analytical Pty Ltd [No 2] [2014] WADC 145. In dismissing the appeal, Staude DCJ proceeded on the basis that, in order to enliven the court's discretion to set aside a regularly entered default judgment, TSW must show a reason for its failure to enter an appearance and that it has a defence. His Honour found that TSW had satisfactorily explained the circumstances of its default, and there was no undue delay in the bringing of the application to set aside. Staude DCJ further found, however, that TSW's proposed defence was not arguable. In particular, his Honour referred to a proposed defence of equitable set-off. After briefly referring to principles relating to unjust enrichment, Staude DCJ said:
It is common cause that the agreement by which TSW was able to operate its business within the Centre involved the mutual benefits described in Mr Scadding's letter to Professor McEachern.
Accordingly, the proposed defence is simply not tenable. It is not reasonably open to TSW, having benefited from the relationship with UWA in the way that Mr Scadding described, to argue at the conclusion of that relationship that UWA accepted a benefit which it would be unconscionable for it to retain. It involves no finding of fact, nor any adjudication of an issue of law, to find that no defence of set-off is available on this basis.
By admitting an agreement that the mutual benefits provided by the parties would be cost neutral, TSW is precluded from maintaining a claim for restitution. No triable issue is disclosed [121] ‑ [123].
TSW has appealed from the decision of Staude DCJ. That appeal has not been heard.
The Corporations Act proceedings
At some time in 2014, the University served a statutory demand on TSW for the judgment debt. TSW applied to set it aside.
The proceedings in the Supreme Court
On 23 December 2014, TSW commenced proceedings in this court. A statement of claim was filed on 17 February 2015. TSW claims that:
1.From on or about 1 January 2008 to on or about 31 December 2013, it provided services, material and benefits to or on behalf of the University [3].
2.TSW and the University intended to enter into a legal agreement but did not do so [4].
3.TSW provided services at the request of the University which accepted the services or the benefit of the services, knowing they were not being provided gratuitously [5].
TSW claims it is entitled to be paid a reasonable sum for the services. The bulk of the statement of claim is a schedule particularising the date, type of service and claimed value. I have not counted the number of services claimed ‑ on a rough estimate it is more than 500. TSW claims approximately $4.7 million.
On 9 March 2015, the University applied for summary judgment.
Because of the relationship between the two applications, the master ordered that the University's application for summary judgment and TSW's application to set aside the statutory demand be heard together.
On 8 June 2015, the master dismissed the application for summary judgment and set aside the statutory demand. He did not publish reasons immediately, but published short reasons on 26 June 2015: TSW Analytical Pty Ltd v The University of Western Australia [2015] WASC 232. Relevantly, the master said:
The District Court decision of his Honour is presently under appeal. While it is not for me to make any assessment of the merits of that appeal it must be said it could not be regarded as hopeless. Of course if it fails it will be very difficult for the plaintiff in this action to maintain its claim. Then a summary judgment application may or may not succeed. But at present it seems to me there is too much uncertainty over the contractual position of the parties to say without doubt summary judgment should run. For those reasons I determined the defendant's application ought be dismissed. Once that point is reached it seems to me the application to set aside the statutory demand ought succeed. In some circumstances a pending appeal can give rise to some other reason why the demand should be set aside under s 459J(1)(b) of the Corporations Act 2001 (Cth): see Eumina Investments Pty Ltd v Westpac Banking Corporation (1998) 84 FCR 454, 459 (Emmett J). Of course if the appeal is dismissed a further statutory demand can be issued [9].
The University has appealed from the decision of the master on both applications. I was told from the bar table that the appeals are to be heard at the same time as the appeal from Staude DCJ. There is no indication of when they will be heard.
The stay application
The University now applies for a stay of TSW's action in this court pending the resolution of the appeals.
The University gives two bases for the application to stay: first, to preserve the integrity of the litigation; second, on case management principles - in particular to minimise the cost of proceedings by not requiring the University to plead or carry out other interlocutory steps which may prove unnecessary, depending on the outcome of the appeals.
Counsel for the University submitted that, on the application to set aside default judgment in the District Court, TSW had been required to particularise the matters on which it relied for its defence. The matters relied on are essentially the same as those on which TSW has brought its claim. If the judgment dismissing the appeal is affirmed, the continuation of TSW's claim would possibly be an abuse of process. It would at least bring into question the integrity of the litigation, and would raise the potential for inconsistent judgments.
Alternatively, or additionally, the University submitted that case management considerations favour staying the present proceedings until the appeals have been resolved.
I am not satisfied, however, that either is a sufficient basis for staying proceedings. My reasons, in short, are these.
First, I have very little information regarding the matters in the District Court, and no information regarding the grounds of appeal from that decision (or the grounds of appeal in the appeals from the master). Where neither party had pleaded its case in the District Court, I am not satisfied that I can, with any certainty, determine what factual issues have necessarily been decided. I note that the judge stated that his decision required 'no finding of fact, nor any adjudication of an issue of law': The University of Western Australia v TSW Analytical Pty Ltd [No 2] [122].
Second, the availability of a claim by TSW for unjust enrichment was necessarily considered by the master in the applications he decided. The University sought summary judgment on the basis that there were two 'barriers' to the claim by TSW. The first was that there was a contract on foot that prevented any reliance on unjust enrichment. The second seems to have been a pleading point, the failure of the statement of claim to plead a qualifying or vitiating factor. As to the first barrier, the master found that, on the material before him, 'there is too much uncertainty over the contractual position of the parties to say without doubt summary judgment should run': TSW Analytical Pty Ltd v The University of Western Australia [9]. The master's decision is also on appeal. But currently there has been a determination that the claim by TSW is not one that should be disposed of summarily. It is not my role in an application of this kind to question the master's finding.
Third, there is no question that any of the three appeals would be rendered nugatory if a stay were not granted.
Fourth, it may be that at some later stage in the proceedings it would be inappropriate to progress until the appeals had been determined. The court is required to exercise its powers to achieve the objects set out in O 1 r 4A and O 1 r 4B of the Rules of the Supreme Court 1971 (WA). In Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Malleson Stephen Jacques [No 2] [2014] WASC 60, Le Miere J said:
The court should use its case management powers to ensure the quick, inexpensive and efficient resolution of proceedings before the court. The only effective means for reducing the costs of the parties are measures which result in less work being done by lawyers over the course of a proceeding. Where, as here, separate proceedings are related, the court should consider whether it should use its case management powers to achieve efficiency by ensuring that issues are resolved in one proceeding before costs are incurred in preparing for and conducting a trial of the same issues in another proceeding. However, at the same time the court must be mindful to ensure that each proceeding is resolved as quickly as is consistent with the efficient and just resolution of the proceeding [21].
The application of case management principles requires the balancing of competing considerations. But I am not satisfied that, at this stage of the action, the object of reducing costs to the parties and the court by staying the action outweighs the benefit of proceeding. The University has not yet pleaded its defence, and the point at which a stay would be required on case management principles has not been reached.
In reaching that conclusion I have had regard to the fact that, rather than seeking a stay immediately when this action was commenced, the University applied for summary judgment and the application was refused.
Fifth, the balance of convenience does not, in my opinion, favour a stay. Counsel for the University pointed to the nature of the task it would have to undertake to investigate all of the services which have been particularised in the schedule to the statement of claim in order to plead a defence. Having regard to the nature of the issues that the University has put forward, at least to date, I am not satisfied that would presently be required.
For these reasons, I exercised my discretion against the grant of a stay.
0
5
1