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

Application dismissed - Application allowed to proceed

First Defendant : Mr M J McCusker QC & Mr P R Macliver

Second Defendant : Mr M J McCusker QC & Mr P R Macliver

Third Defendants : Mr M J McCusker QC & Mr P R Macliver

Fourth Defendant : Mr M J McCusker QC & Mr P R Macliver

1 MASTER SANDERSON: This is the defendants' application to strike out the plaintiffs' action for want of prosecution. (Although the second defendant is still named in these proceedings the action against him has come to an end. This application is brought by the first, third and fourth defendants.) To put the application in perspective I will provide a brief chronology of significant events since the issue of the writ in late 1994. In fact, the defendants' application focuses in particular on the plaintiffs' failure to take any significant steps in the action in the later 12 months or so. However, that period of delay has to be seen against the background of the conduct of the proceedings as a whole.

2 The following chronology is taken from an amended chronology filed by the defendants. (I have omitted what the defendants say is the period of delay between each step. It is acknowledged that some periods of delay were occasioned by the defendants and to include all periods can give a misleading impression.)

26.07.95 Statement of Claim (substituted pursuant to

29.03.01 First Defendants Affidavit of Discovery and

25.06.96 Plaintiff's Affidavit in support of Chamber

20.01.97 Order of Master Sanderson allowing further

09.09.97 Judgment on appeal (to set aside strike-out

14.04.00 Appeals against orders of Master Sanderson

3 A cursory examination of the chronology shows the action has had a tortuous history. There have been three interlocutory appeals and one application for leave to appeal to the High Court. Two of the interlocutory appeals have related to pleading issues. The other related to issues of discovery. This, in particular, was a matter of some importance in the context of the application. It involved questions of public interest immunity. Against this background it is not surprising that there have, from time to time, been delays in the conduct of the action. However, there have been long periods when the plaintiffs have simply taken no action. For instance, between the High Court refusing the application for special leave on 22 October 1998 and the plaintiff issuing a chamber summons seeking leave to amend the statement of claim on 15 October 1999, nothing occurred. The position can be summarised by saying that while there has been no contumelious disregard of orders of the court by the plaintiff, they have not pursued this action with the dispatch that should characterise the conduct of litigation in these days of case flow management.

4 In relation to this application the defendants' complaint relates to the period between 12 July 2000 and the present. On 17 March 2000 I published reasons refusing the plaintiffs' leave to amend in terms of a minute of further amended statement of claim which was filed on 5 January 2000. From this order the plaintiffs appealed. That appeal and a cross-appeal by the third and fourth defendants were heard on 12 July 2000 and both the appeal and the cross-appeal were dismissed. There then followed a chain of correspondence between the parties' solicitors which is to be found as annexure "TJC2" to the affidavit of Timothy John Carey sworn 6 December 2001 and filed in support of this application. The correspondence took the following course.

5 On 14 July 2000 the defendants' solicitors wrote to the plaintiffs' solicitors referring to the Full Court decision and inviting the plaintiffs' solicitors to file a fresh minute of the statement of claim which complied with the orders of the Full Court. Reference was made to the need for the plaintiffs to provide particulars of par 29 of the statement of claim and the solicitors indicated they would require 30 days for the filing of their amended defence. The plaintiffs' solicitors replied on 28 July 2000. They enclosed a minute of further reamended statement of claim which, it was said, complied with the orders of the Full Court. Reference was made to the third defendant's failure to give discovery of certain documents and also raised questions about discovery provided by the fourth defendant. In relation to the fourth defendant access to two documents described as "DITAC" files was made with a request for inspection. The defendants' solicitors replied on 2 August 2000. Reference was made to a telephone conversation between the solicitors for the parties on 26 July 2000 and the letter from the plaintiffs' solicitors of 28 July 2000. Some comments were made in relation to minor matters in the statement of claim. There then followed a request for particulars of par 22 and par 24 of the then extant minute. Reference was made to the DITAC files and whether in fact, given amendments to the statement of claim, these documents were any longer of relevance. The plaintiffs' solicitors were asked for their comments on this issue. The letter also dealt with matters relating to costs. That letter provoked no response and on 24 August 2000 the defendants' solicitors again wrote to the plaintiffs' solicitors seeking a reply to their earlier letter.

6 The plaintiffs' solicitors did reply by letter dated 11 September 2001 - almost a month later. A further minute of reamended statement of claim accompanied the letter, together with the further and better particulars as requested by the defendants' solicitors. Reference was made to specific documents in the discovery of the fourth defendant and a further request was made to inspect specific documents. The defendant's solicitors were asked to advise when these documents could be inspected. The defendants' solicitors responded by fax of 13 September 2001. They pointed out that 12 months had expired since any step had been taken in the proceedings and that notice was required under O 3 r 7. They declined to provide any further information until that notice was served. A Notice of Intention to Proceed dated 14 September 2001 was duly served. Without further reference to the plaintiffs' solicitors, the defendants issued this application.

7 There is no real explanation provided by the plaintiffs as to why no action was taken between August 2000 and September 2001. In opposition to the application the plaintiffs filed an affidavit of Peter Arthur Kyle, sworn 22 February 2002. By par 2.4.2 of that affidavit Mr Kyle notes that a request for further and better particulars of the proposed reamended statement of claim was made by the defendants' solicitors in their letter of 2 August 2000. He goes on to say (by par 2.4.3) that this necessitated the taking of further proofs of evidence from witnesses. However, Mr Kyle does not say which witnesses were involved or how long it took to obtain further information to allow the request for further and better particulars to be answered. It is the fact that between 28 July 2000 and 11 September 2001 the plaintiffs' solicitors remained silent.

8 Both in his affidavit and during the course of his submissions Mr Kyle made the point that from 28 July 2000 onwards the defendants' solicitors were in default of their obligations in relation to the action. That proposition requires examination. As at 28 July 2000 the plaintiffs' solicitors had provided to the defendants' solicitors a minute of further reamended statement of claim. Strictly speaking, leave was required to amend the statement of claim in terms of the minute and no steps were taken to obtain that leave. That said, there appears to have been no disagreement between the parties as to the form of the further reamended statement of claim. The grant of leave would then have been nothing more than a formality. No criticism can be directed at the plaintiff's solicitors for not taking this procedural step and counsel for the defendants during the course of his submissions did not suggest otherwise. The position with respect to the inspection of documents is somewhat unclear. As a consequence of earlier strike-out applications the action against the named second defendant came to an end. That does raise the question of whether the DITAC files were indeed any longer discoverable, let alone relevant. In their letter of 2 August 2000 the defendants' solicitors asked the plaintiffs' solicitors to address this question and provide particulars of any documents they wished to inspect. Be that as it may, at the time the letter was written, orders in relation to discovery had been made and the plaintiffs were in a position where they could inspect.

9 In relation to the third defendant, the defendants' solicitors, in their letter of 2 August 2000, undertook to conduct searches for all documents relating to matters pleaded against them and to advise the plaintiffs' solicitors "as soon as this has been done". That implies an obligation on the defendants' solicitors to respond to the plaintiffs' solicitors in due course without necessarily any prompting from the plaintiffs' solicitors.

10 This then is a concise summary of the facts relevant to this application. There was no disagreement between the parties as to the proper approach to be adopted in applications such as this. The development of the law in this area can be traced from Birkett v James [1978] AC 297 through Ulowski v Miller [1968] SASR 277 to Hughes v Gales (1995) 14 WAR 434. Along the way there have been numerous other decisions. It is clear that in determining an application to strike out for want of prosecution there are "five paramount matters" (to adopt the terminology used by Bray CJ in Ulowski v Miller at 280) to be considered. They are:

(3) The hardship to the plaintiff if the action is dismissed and the cause of action left statute-barred.

(4) The prejudice to the defendant if the action is allowed to proceed notwithstanding the delay.

(5) The conduct of the defendant in the litigation.

11 There are two other decisions which were discussed by counsel in some detail and which should be noted. The first is the recent decision of this Court in Duke v Royalstar Pty Ltd [2001] WASCA 273. In their reasons the Court (Wheeler and McLure JJ) dealt with the relevance of case flow management principles in applications to dismiss for want of prosecution. Their Honours said (at par 12):

"As to the relevance of delay, however, it is important to note that in Hughes v Gale (1995) 14 WAR 434 at 499 - 500, Malcolm CJ, in reasons with which the other members of the Court agreed, made observations to the effect that it may well be that the case flow management principles contained in O 1 r 4A and r 4B of the Rules of the Supreme Court within an appropriate case, justify dismissal on the grounds of delay alone without the need for any other ingredient to be established. The relevance of case management principles was emphasised also in Levi v Stirling Brass Founders Pty Ltd, unreported; FCt SCt of WA; Library No 970209; 9 May 1997. Giving effect to those observations would mean that the earlier practice in this jurisdiction to which the learned Master referred is (since March 1993) not an appropriate guide to the way in which delay should be approached."

12 Having made those comments their Honours then went on to consider the application in light of the factors set out in Ulowski. It would appear then that although the principles of case flow management might, in a particular case, be determinative, they have not displaced the approach historically adopted to applications of this sort. That, I think, emerges from the way the Court approached the application in Duke .

13 The second case of particular relevance is Latrobe Country Credit Co-operative Ltd v Smith & Ors [1998] VSCA 74; (1999) 1 VR 440. Counsel for the defendants refer to this decision in the context of the delay occasioned by the plaintiffs' difficulty in settling the statement of claim. This aspect of the decision can be summarised by quoting from the headnote:

"In an application to dismiss for want of prosecution, inordinate and inexcusable delay was not confined to periods of total inactivity. A defendant was entitled to rely on the fact that a real cause for post-writ delay was a plaintiff's complete inability, despite repeated efforts, to produce a statement of claim in precise and acceptable form."

14 There is no doubt that in this case the plaintiffs have had difficulty pleading their cause of action. The various strike-out applications and the fact that the file contains a number of different minutes of proposed statement of claim are testament to that fact. However, it must also be acknowledged that the claim which the plaintiffs raise is unusual and some difficulties with the pleading are to be expected. Whether or not the delays in this case have been unwarranted is a matter of judgment. On balance, I am of the view that the plaintiffs could have put their pleading to rights more expeditiously. But it must be remembered that the prime thrust of this application relates to the delay between July 2000 and September 2001. The plaintiffs' failure to deal promptly with the statement of claim, while relevant, is a matter which hovers in the background.

15 Turning then to the "full paramount matters", there is first the length of the delay. The latest period of delay has been just over 12 months. While that period in and of itself might not be seen as excessive, it has to be viewed against a background of a writ issued in 1994 and an action which has progressed slowly. In my view, taken in that context, the delay is unjustifiable. Furthermore, as I have indicated above, there is no adequate explanation for the delay. It is not enough for the plaintiffs to say that they were waiting for a response from the defendants' solicitors. The plaintiffs have conduct of this action and they could have written at any time to the defendants' solicitors seeking to move the matter forward. They simply did not do so and they have not explained why.

16 There is no doubt that if this action is struck out, hardship will be occasioned to the plaintiffs. It is clear that to date the plaintiffs have invested a great deal of time and money in bringing the action to this point. Were it to be dismissed they would be left with a substantial costs order against them. Moreover, there is no chance of any fresh action being commenced. The time-bar would provide the defendants with a complete answer to any fresh proceedings.

17 The defendants were not able to point to any particular prejudice they would suffer if this action were to proceed. Of course, with the passing of time, memories fade and these defendants will suffer the general prejudice occasioned to any party by delay. But this is not a case where particular documents have been lost or witnesses have passed away. To that extent, while the defendants will suffer a general prejudice, they will not suffer any particular prejudice. Presumably witnesses, particularly the third defendants, have been proofed and while the memories of these individuals may not be perfect, they will at least have a record of what was said at relevant meetings. While prejudice to the defendants is a factor to be weighed in the balance, it is not something which, in my view, is decisive in this case.

18 Finally, there is the question of the conduct of the defendants in the litigation. There have been periods during the conduct of the litigation where delays have been occasioned by inaction on the part of the defendants but it cannot be said that these delays have been inordinate. As I have detailed above, after July 2000, there were certain matters which the defendants' solicitors were to attend to and revert to the plaintiffs' solicitors. They did not do so. Nonetheless, while something more could have been expected of the defendants' solicitors, it can hardly be said that their inaction has been responsible for the delays which have plagued this action.

19 This matter is very finely balanced. In the end I have determined that this application ought be dismissed and the action allowed to proceed. I have reached that conclusion for three main reasons. First, if the application is dismissed the consequences for the plaintiffs will be significant. As I have said, they have undoubtedly invested much time and money in this action and were it brought to an end, they would be left not only with their own costs but with the costs payable to the defendants. Secondly, although the delay of 12 months from July 2000 to September 2001 is lengthy, unexplained, and ultimately unjustifiable it is not inordinate in the context of this action as a whole. There is no question but that the delay should not have occurred. But I do not see the length of the delay as decisive. Thirdly, although the defendants will undoubtedly suffer a general prejudice they have not suffered any particular prejudice. I dealt with this issue in passing when dealing with the plaintiffs' application for leave to amend in terms of a minute filed 15 October 1999: see Arcadia Holdings Pty Ltd & Anor v Brown & Ors [1999] WASC 267 at par 20. Although a further 12 months has passed, the comments I made in the earlier decision still, to my mind, hold good. In addition to these three decisive factors, there is the question of the conduct of the defendants over the past 12 months. While I would not venture any criticism of the defendants' solicitors, they did undertake to deal with the question of discovery and they could have been expected to have followed up this issue and written to the plaintiffs' solicitors. When no correspondence was forthcoming, the plaintiffs' solicitors should have pressed the matter - the primary responsibility was undoubtedly theirs. But to some extent at least, the defendants were responsible for the delay in the action progressing.

20 The fact that this application is so finely balanced must send a warning in the clearest possible terms to the plaintiffs and their solicitors. This action must now progress apace. Any further delay would be intolerable. The plaintiffs are on notice. It is difficult to imagine further indulgence being granted.