C & M Brick (Melbourne) Pty Ltd v Boral Besser Masonry Ltd [1998] VSC 186

Supreme Court of Victoria|1998-12-17|Before: BEACH, J.

This is an appeal by the first and second named defendants Boral Besser Masonry Ltd. and Boral Ltd. (to which I shall refer hereafter as "Boral") against an order made ex parte by Master Evans on 12 November 1998 whereby the Master ordered that the period of validity for service of the writ in the proceeding on Boral be extended to 1 December 1998. The background to the proceeding and to the appeal may be summarised as follows:

In 1994 the first named plaintiff C. & M. Brick (Melbourne) Pty. Ltd. commenced the manufacture of concrete blocks and other masonry products at Campbellfield in Victoria. The second named plaintiff C. & M. Brick (Bendigo) Pty. Ltd. had been manufacturing similar products in country Victoria for a number of years prior to that date. Hereafter I shall simply refer to the plaintiffs as "C. & M."

In 1995 C. & M. complained to the Trade Practices Commissioner, now the Australian Competition and Consumer Commission (A.C.C.C.) that Boral and the two other defendants to the proceeding Pioneer Building Products (Queensland) Pty. Ltd. and Pioneer International Ltd. (to which I shall refer as "Pioneer") were engaged in predatory pricing of masonry blocks and masonry products in the Melbourne area with the intent of damaging and destroying C. & M.'s business.

Following the making of the complaint the A.C.C.C. entered into negotiations with Boral and Pioneer in relation to the matter.

On 23 October 1997 C. & M. filed a writ in the Court naming Boral and Pioneer as defendants by which it seeks to recover damages from Boral and Pioneer for breach of s.46 of the Trade Practices Act 1974 (Cth.) (the Act).

C. & M. determined not to serve the writ on Boral at that time because the A.C.C.C. had entered into negotiations with Boral to resolve C. & M.'s dispute with a view to avoiding the necessity for the A.C.C.C. to institute proceedings against Boral. The A.C.C.C. had informed C. & M. that the negotiations between it and Boral at that time may result in an offer by Boral to pay compensation to C. & M. thereby obviating the need of C. & M. to proceed with its proceeding.

If, however, the A.C.C.C.'s negotiations proved unsuccessful and the A.C.C.C. instituted proceedings against Boral, any findings of fact made in those proceedings could be relied upon by C. & M. in its own proceeding. See s.83 of the Act.

Although it was a deliberate decision by C. & M. and its solicitor not to serve the writ immediately following its issue, it was always the intention of C. & M.'s solicitor to serve the writ on Boral before it became stale, in the event, that is, that he received instructions from C. & M. to adopt that course.

Ultimately the negotiations between the A.C.C.C. and Boral proved unsuccessful and on or about 5 March 1998 the A.C.C.C. filed an application in the Victorian District Registry of the Federal Court of Australia against Boral whereby it seeks, amongst other things, the recovery of pecuniary penalties pursuant to ss. 76 and 77 of the Act and injunctions pursuant to s.80 of the Act.

On 24 October 1998 C. & M.'s writ became stale. Hence the application to the Master on its behalf on 12 November.

Why was the writ not served on or before 24 October?

C. & M.'s solicitor's explanation for his failure in that regard is set out in his affidavit of 11 November 1998 the relevant paragraphs of which read:

"14. I had incorrectly recollected that the Writ was issued on 23 November 1997, not 23 October 1997. In consequence, I sent a letter by facsimile to Ullner on 19 October which read, in relevant part:

'It is only a few weeks until you must either serve the Supreme Court proceeding issued last year, or forego a substantial part of your damages claim. We recommend that you instruct us to serve that proceeding ...'

'If you have any further questions, please telephone the writer. It might be appropriate to have some of your Directors to have a conference at our office. If you are prepared to proceed, please provide us with $1,000.00 to cover out of pocket expenses on the issue of the various Applications and sign the endorsement at the foot of this letter and fax it back to us.'

The Applications referred to certain applications to the Supreme Court concerning the transfer of this proceeding to the Federal Court, and to the Federal Court concerning directions as to the conduct of the proceeding. Subsequent to that letter I had a number of conferences with, and attendances upon Ullner concerning proposed non-party discovery sought by the Respondents to the Federal Court proceeding against the companies which are the Plaintiffs in this proceeding. (The Ullner referred to is John Ullner who is C. & M.'s Managing Director). 15. Subsequent to my facsimile letter to Ullner, on 22 October 1998 I had a conversation with him in which he advised me that the Directors had approved proceeding as proposed in my last letter. I am advised by Ullner and believe that he intended those instructions to be instructions to serve the Writ. I mistook those instructions to relate to the Applications referred to in my letter. I understood the instructions to be that the proposed Applications and supporting material should be prepared, to be ready for issue at the same time that the Writ was to be served. I continued to have the confident recollection that the Writ had to be served on or before 23 November 1997. 16. From numerous conversations I have had with Ullner over the last year, I have always understood that it was the intention of the Plaintiffs to serve the proceeding prior to the Writ becoming stale. 17. I was distracted from checking the date of issue of the Writ by a substantial volume of correspondence, attendances and conferences with Ullner and the Australian Government Solicitor concerning classification of documents provided by the Plaintiff companies to the ACCC as confidential, highly confidential or not confidential, and concerning proposed non-party discovery by the Plaintiff companies being sought by the Respondents to the Federal Court action. 18. My mistake as to the date on which the Writ had to be served is further evidenced by my facsimile letter to Ullner of 30 October 1998 which said in relevant part:

(i) Serve on Boral (and not Pioneer) the Writ issued last year ...'

19. By reason of my mistake as to the date for service of the Writ, I failed to make Application prior to 22 October 1998 for the validity of the Writ to be extended."

The prejudice C. & M. contends it will suffer if its writ is not extended is that it will be forced to issue a fresh writ during the course of the month. By reason of the limitation period specified in the Act in relation to s.46 proceedings any claim for damages for predatory pricing in respect of the period from 23 October 1994 to the corresponding date of issue of the writ in 1995 will now be statute barred. As the damage suffered by C. & M. was principally in 1994 and 1995 it would be precluded from claiming a sum estimated to be between $2.5 million and $4 million.

The prejudice Boral contends it will suffer if the period of the validity of the writ is extended is that it will face that very claim, which, if the validity of the writ is not extended, is now statute barred.

It is clear that the Court has a wide and unfettered discretion to extend the period of validity of a writ. See Finlay v. Littler [1992] VicRp 59; (1992) 2 V.R. 181 at p.184. In exercising that discretion the Court will generally have regard to the following matters insofar as they are relevant to the case in question.

(1) A writ should not be renewed where the plaintiff has been guilty of a long and unexplained delay causing prejudice to the defendant. See Soper v. Matsukawa [1982] VicRp 96; [1982] V.R. 948. On the other hand if the length of the delay in applying to the Court after the writ has expired is not inordinate and there is no prejudice to the defendant time should be extended. Traj v. The Cannery Board (1990) 1 Qd.R. 494.

(2) The Court is reluctant to see a plaintiff shut out from having his claim tried in the Court owing to the negligence of his solicitor in procedural matters. See Cull v. Stewart (1991) 15 M.V.R. 149 at p.152.

(3) The fact that a plaintiff may have a claim against his solicitor is a relevant consideration but is not generally entitled to very much weight. See Cull at p.152 and Soper at p.953 et seq.

(4) A plaintiff's burden of proof under R.5.12(2) is not greater if the limitation period has expired between the date of the issue of the writ and the date of the application for renewal; on the other hand the expiration of that period does not of itself constitute a good reason for renewal. See Finlay at p.187.

(5) Extension of a writ may not be granted if delay in service has been the result of waiting the outcome of pending litigation for it is not for a party to proceedings but for the Court to say whether there should be effectively a stay of proceedings. See Ramsay v. Madgwicks [1989] VicRp 1; [1989] V.R. 1 at p.4. However, if the collateral litigation is closely connected to the action the subject of the writ and if the defendant is in substance in the same position it would have been if service had been effected within time, an extension will be granted. See the decision of Smith, J. in Rowland v. Commonwealth of Australia, unreported, 2 July 1993.

With those principles in mind I return to the facts in the present case.

In my opinion it cannot be said in the present case that there has been inordinate delay on the part of C. & M. in making the application for the extension of time once its solicitor realised the mistake he had made concerning the date of issue of the writ; nor was it seriously suggested by counsel for Boral that there had been.

Rather what was relied upon by counsel for Boral in support of the contention that the order of Master Evans should be set aside is the fact that the decision of C. & M. not to serve the writ within a reasonable time after its issue was a deliberate decision; that to now extend the validity of the writ would deprive Boral of the benefit of the statute of limitations in respect of the period from 23 October 1994 to the date in 1995 corresponding to the date of the filing of any new writ and subject it to prejudice in that it would face a damages claim in respect of that period of between $2.5 million and $4 million.

I think that the first point to be made concerning those submissions is that it was not as a result of any deliberate decision that C. & M.'s writ was not served in time, the fact that it was not, was due to the negligence of its solicitor as he freely conceded. Whilst there is English authority for the view that an error on the part of a plaintiff's solicitor in not serving a writ within time is insufficient to discharge the burden which rests upon a plaintiff seeking an extension - see for example Singh v. Duport Harper Foundries Ltd. (1994) 2 All E.R. 889 at p.896 - I prefer the views of the Full Court of this Court in Soper. That was a case in which it was clear that the failure to serve the writ within time was due to the negligence of the plaintiff's solicitor and counsel. At p.951 Young, C.J., with whom the other members of the Court agreed, said:

"The learned Judge placed much weight on the consideration that the appellant has, as his Honour found, a good cause of action against his solicitor and against counsel. He said that the authorities indicate that it is relevant to consider whether such a cause of action exists and certainly there are statements to that effect in the authorities. It is a consideration that has also been invoked in cases where a defendant seeks a dismissal of an action for want of prosecution. In Birkett v. James [1978] AC 297, however, which was a want of prosecution case, a majority of the House of Lords held the fact that the plaintiff may or may not have an alternative remedy against his solicitor is not a relevant consideration: see per Lord Diplock, at p.324, where his Lordship acknowledged that he was wrong when as a member of the Court of Appeal in Allen v. McAlpine, [1968] 2 QB 229 he expressed a contrary opinion; see also per Lord Edmund-Davies, at pp.335-6, and per Lord Russell of Killowen, at p.336. If the question whether the plaintiff has an alternative remedy against his solicitor is not a relevant consideration in the ordinary want of prosecution case where the plaintiff carries the onus of satisfying the court that his action should not be dismissed for want of prosecution, it is a fortiori irrelevant in a case such as the present where the appellant plaintiff has to persuade the court of the conditions specified in the precise language of O.8, r.1. If it were to come in at all, it could only come in, so it seems to me, as a consideration bearing upon the appropriate order to make when the scales as between the plaintiff and defendant are otherwise evenly balanced. Such a case would be exceedingly rare, and in my opinion the question should ordinarily be regarded as irrelevant in cases where the plaintiff has to show he has made reasonable efforts to serve the defendant or that for other good reason the writ should be renewed. Southwell, J. was apparently not referred to Birkett v. James, supra. If he had been, it seems to me that he would not have placed so much weight on the appellant having a good cause of action against his solicitor. Indeed, in my view he should have treated it as irrelevant."

In Cull the Full Court followed the decision in Soper. At p.152 the Court said:

"The self-executing order of 8 February 1990 was allowed to take effect largely through the negligence or inactivity of the plaintiff's then solicitor. But the court is always reluctant to see a plaintiff shut out from the opportunity of having his claim tried in the court owing to the negligence of his solicitor in procedural matters. The fact that he may have a claim against his solicitor is a relevant consideration to take into account in considering how the discretion should be exercised but it is not generally entitled to very much weight: see Soper v. Matsukawa at 953-4."

In my opinion the fact that a writ was not served within time because of the negligence of the plaintiff's solicitor is a factor to be taken into account in the plaintiff's favour when determining the fate of an application for an extension. As to what weight is to be attached to it will depend upon all the circumstances in the case.

I turn then to the argument advanced in relation to the Statute of Limitations.

Until 1986 as a general rule the Court would not allow a person to be added or substituted as a party to a proceeding at a time when any limitation period applying to the claim by or against that person had expired; nor would the Court permit an amendment to a pleading which would raise a cause of action then statute barred. That practice was first established in Weldon v. Neal (1887) 19 Q.B.D. 394. The rule was not a mere rule of pleading but was one directed to the substance of a claim and sought to prevent fresh claims being litigated in respect of causes of action as to which since the issue of the writ, the defendant had acquired a valid defence of a statute of limitations. See Williams - Civil Procedure p.4154.

However, by s.136 of the Supreme Court Act 1986 a new s.34 was inserted into the Limitation of Actions Act 1958 which abrogated the rule in Weldon v. Neal. The section reads:

"Abrogation of rule in Weldon v. Neal (1887) 19 QBD 394 34. (1) If a court would, but for the expiry of any relevant period of limitation after the day a proceeding in the court has commenced, allow a party to amend a document in the proceeding, the court must allow the amendment to be made if it is satisfied that no other party to the proceeding would by reason of the amendment be prejudiced in the conduct of that party's claim or defence in a way that could not be met by an adjournment, an award of costs or otherwise. (2) This section does not apply to an amendment in a proceeding commenced before 1 January 1987."

It must follow from that section that the fact that an amendment to a document in a proceeding will enable a party to litigate a fresh claim in respect of a cause of action as to which, since the issue of the writ, the defendant has acquired a valid defence of a statute of limitations, is not per se prejudice of the nature referred to in the section. As the section makes clear, the prejudice must be in the conduct of the parties' claim or defence not in the fact that by the amendment the party in whose favour the amendment is granted is able to litigate a cause of action which would otherwise be statute barred.

If that is the correct view to take of the matter is it relevant to have regard to the action of the Legislature in relation to amendments when considering an application for an extension of the validity of a writ?

If one is entitled to take the view that an extension of the validity of a writ which enables a plaintiff to pursue an action which would otherwise be statute barred is not a factor which can be relied upon by a defendant as demonstrating prejudice then in the present case, it is difficult to see how Boral can be prejudiced in any way by the extension granted by the Master. I say that for the reason that it is facing the proceeding instituted against it in the Federal Court by the A.C.C.C.

If that view of the matter is erroneous then clearly the extension will cause prejudice to Boral. It would now face a claim of the order of $2.5 million to $4 million which would otherwise be statute barred. But if the extension is not granted C. & M. will lose its right to pursue such a claim, not through any fault on its part but through the fault of its solicitor.

One might be tempted to say that in such a situation the scales are evenly balanced. But I do not think they are.

C. & M.'s case, as is the A.C.C.C.'s, is that Boral has been guilty of unlawful conduct. In my opinion one should be reluctant to allow it to escape the consequences of that conduct because of a mistake made by C. & M.'s solicitor concerning the date of issue of the writ.

Having given consideration to all those factors I am of the opinion that I should exercise my discretion in favour of C. & M.

The appeal will be dismissed with costs to be taxed and paid by the first and second named defendant.

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