Supreme Court of WA|2000-08-30|Before: Templeman J

Buyquick.Com Ltd v Foxgold Pty Ltd [2000] WASC 216 (30 August 2000)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BUYQUICK.COM LTD -v- FOXGOLD PTY LTD [2000] WASC 216

Practice and procedure Western Australia - Requirement to confer under O 59 r 9 - Circumstances in which compliance with O 59 r 9 can be waived - Appropriate order as to costs when there is a failure to comply with conferral rule

The requirement to confer not being waived, there was a failure to comply with O 59 r 9

Cash Converters v Hila (1993) 9 WAR 471

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148

Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670

HB Homes Pty Ltd v Beer [1986] 2 Qd R 379

Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657

Queensland v Australia Telecommunications Commission [1985] HCA 25; (1985) 59 ALR 243

Russell-Davison v Prosin, unreported; SCt of WA (Master Sanderson); Library No 980277; 22 May 1998

Shepherd Homes v Sandham [1971] 1 Ch 340

Westminster Brymbo Coal & Coke v Clayton (1867) 36 LJ Ch 476

1 TEMPLEMAN J: The plaintiff carried on the business of an on-line retail store from a web site hosted by the defendant.

2 The plaintiff became dissatisfied with the service provided by the defendant and sought to have the web site transferred to another host.

3 The plaintiff contended that it had reached an agreement with the defendant to that effect. However, on 2 August 2000 there was discussion between a director of the plaintiff and the defendant's General Manager at which the latter said that various matters needed further attention. He requested a meeting between the parties' representatives. In response the plaintiff's Director said he would speak to his co-director "and get back to you".

4 In fact there was no further dialogue. Instead, the plaintiff consulted its solicitors. They wrote a letter to the defendant's solicitors on 2 August which was delivered on 3 August. The letter set out the plaintiff's assertion that an agreement had been reached between the parties for the transfer of the web site. It concluded:

"I advise that unless you do all things which are required and necessary for the effective transfer of our client's web site, making it operational and fully tested (for which purpose our client is on 24 hour standby) by noon 3 August 2000 then we are instructed to commence legal proceedings immediately seeking orders for the transfer."

5 On the following day, 4 August, the defendant's solicitor replied. In his letter, he referred to the history of the matter and to discussions between representatives of the parties. He then set out the defendant's understanding of the position. The letter went on to say that in order to finalise the matter the defendant was prepared to transfer the web site and the object code on a number of terms which were then set out. They included a term that the plaintiff would accept the proposal in full and final settlement of all claims it might have against the defendant which would thereby be released from any action, claim or demand. The letter ended with the words "I await your response".

6 The plaintiff's solicitors did not respond to that letter: nor was there any other relevant dialogue between the parties.

7 On Friday 11 August, the plaintiff issued a writ and a chamber summons which was returnable on Monday 14 August, in Judge's chambers.

8 By its chamber summons, the plaintiff sought a mandatory interlocutory injunction requiring the defendant to do all things necessary to effect the transfer and testing of the plaintiff's web site to another nominated host by 5pm on the day following the day on which those orders were made.

9 The chamber summons also sought a dispensation from the requirements of O 59 r 9.

10 The matter came before me in Judge's chambers at 10.30am on 14 August. The defendant's counsel opposed the application on the basis, among others, that it would not be possible to transfer the web site within the 24 hour or similar period sought by the plaintiff.

11 Having heard from both counsel, I came to a provisional view as I expressed it, that if the plaintiff wanted to have the web site transferred and was prepared to accept the risk arising out of that transfer (as it was) then, it seemed to me that a transfer should probably be ordered. I went on to say:

"What troubles me is that there may be implications arising from the transfer which could give rise to problems for the plaintiffs which the plaintiffs, although they said they would accept the risk, may not be fully alive to. It troubles me that there has been no conferring as required by Order 59 rule 9, which I think in this case there certainly should be, because the persons involved in this dispute have a degree of technical knowledge and expertise which the Court does not have and are therefore the best people to resolve their difficulties if that can be done."

12 I then adjourned the matter until 10.30am on Wednesday 16 August and directed the parties to confer in the hope that the dispute might be resolved. I said I would then make an order, depending on what I was told by counsel and on my further consideration of the matter.

13 In fact, for the convenience of counsel, the matter was entered in the chambers list for Thursday 17 August. I was then told that the parties had substantially resolved their differences after conferring for about one hour. There were two small matters which remained outstanding. Counsel were optimistic that those matters could be resolved quite shortly. I therefore adjourned the matter until 21 August so that the matter could be finalised.

14 On 21 August, I was informed that all matters in dispute relating to the transfer of the web site had been resolved and that an agreement had been reduced to writing. After hearing from counsel, I concluded that the appropriate disposition of the chamber summons was to dismiss it. There remained the question of costs.

15 The plaintiff's position in relation to costs was that it had succeeded in obtaining the relief sought by the chamber summons: and that costs should follow the event. The plaintiff contended that it should be given a dispensation from the requirements of O 59 r 9 because it was apparent on 2 August when the plaintiff instructed its solicitors - or at least if not then, on receipt of the letter dated 4 August from the defendant's solicitor - that further dialogue was pointless. The plaintiff contended that it would have achieved nothing without litigation.

16 It was also submitted on behalf of the plaintiff that the matter had been urgent. This, it was said, was because the web site crashed repeatedly with the result that the plaintiff was unable to conduct its business.

17 The defendant's position was that O 59 r 9 should be dispensed with only in special circumstances: and that there were none in this case. It was submitted that a proposal had been put by the defendant in its solicitor's letter of 4 August and that a response had been invited which was, in effect, an invitation to further dialogue. It was submitted that in the absence of any dialogue between 4 and 11 August, the plaintiff acted precipitatingly by commencing proceedings.

"(1) No order shall be made on an application in chambers unless the application was filed with a memorandum stating -

(a) that the parties have conferred to try to resolve the matters giving rise to the application; and

(b) the matters that remain in issue between the parties

(2) The Court may waive the operation of paragraph (1) in a case of urgency or for other good reason."

"Introduced because the issue of Chambers applications without prior communication between the parties frequently gave rise to expense and delay and the clogging of the lists, this rule demands a conference as a necessary step in the generality of circumstances before making a Chambers application. No matter how unlikely it is that the parties will reach complete agreement or even narrow the issues, the Court will only waive compliance in unusual circumstances upon being satisfied that there is good reason to do so." (My emphasis)

20 In my view, there were no unusual circumstances in this case. As I said on 14 August, this matter clearly required the parties to confer in a way which they had not done previously. The dispute involved technical considerations. The defendant opposed the application because of its concern that the plaintiff might not understand the implications of what it was seeking and because it was not thought possible to give the plaintiff what it wanted within the time period specified.

21 In the event, the transfer of the web sit was not achieved within a day, but took several days to implement. That is the position the defendant adopted at the outset.

22 I think it inappropriate on an application of this kind, to go into the merits in any detail. The purpose of requiring the parties to confer pursuant to O 59 r 9 is that it avoids the necessity for the court to go into the merits. If the parties are able to resolve the matter between themselves, then they should do so. That will avoid any unnecessary application to the court and associated legal costs.

23 It is true that on 14 August, I gave an indication that the plaintiff should probably be entitled to an order for the transfer of the web site. However, as I said and emphasised at the time, that view was provisional only. I made it plain that I would not make any order without the parties conferring as they should have done.

24 In my view, had the parties conferred in the week between 4 and 11 August, as they did following the appearance on 14 August, there would have been every prospect of achieving the settlement which has now been achieved. The circumstances were not, I think, sufficiently urgent to require the requirements of O 59 r 9 to be waived. Had the matter been urgent, I do not think the plaintiff would have delayed between 4 and 11 August in commencing proceedings.

25 Again, it is not necessary to explore those matters in any detail because O 59 r 9 was not complied with. The defendant was not given what I would regard as a reasonable opportunity to initiate a dialogue when the proceedings were served on the afternoon of Friday 11 August with a return date on the following Monday at 10.30am. Clearly, it was necessary for the defendant to protect its position by requiring its solicitor to provide appropriate material for the court.

26 Any party who makes an application in chambers without initiating the dialogue required by O 59 r 9 does so at his peril. If he is unable to make good his contention that the requirements should be waived, he will be at risk as to costs, whatever the outcome of the application. In the present case, that risk has become a reality: I ordered the plaintiff to pay the defendant's costs of the application.

27 It was submitted on behalf of the defendant that I should not only make an order for costs but that I should make a special order relating to the work carried out between 11 and 14 August in preparation for the hearing on that day.

28 I did not think it appropriate to award indemnity costs, there having been no misconduct in the sense in which that expression is normally used: see Seaman par [66.1.16A].

29 However, because there was no compliance with O 59 r 9, the defendant's solicitor was required to carry out work over the weekend of 12-14 August which should not have been necessary. In all the circumstances, I concluded that it would be appropriate to make a special costs order and allow the taxing officer a discretion to permit the defendant's solicitor to charge a reasonable amount based on the time spent in carrying out the work over that weekend.

Buyquick.Com Ltd v Foxgold Pty Ltd [2000] WASC 216

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Judgment (48 paragraphs)

Buyquick.Com Ltd v Foxgold Pty Ltd [2000] WASC 216 (30 August 2000)

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Cases Cited (3)