Practice and procedure - Inactive cases list - Case dismissed pursuant to r 44G District Court Rules 2005 - Application to set aside the dismissal of the case - Rule 44G(5) - Exceptional circumstances

District Court Rules 2005 (WA)

Elwood v Goodman [2014] WADC 143

FAI General Insurance v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268

Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116

Sovereign Grange Pty Ltd v AV Truck Services Pty Ltd [2015] WADC 130

The Owners of SP13443, 129 - 133 Eighth Avenue, Maylands v The Owners of 135 Eighth Avenue, Maylands (Survey Strata Plan 44698) [2015] WADC 133

1 WAGER DCJ: On 1 July 2015 the appellant (plaintiff) applied to set aside the dismissal of this case from the inactive cases list.

2 The application was heard by Principal Registrar Melville on 16 September 2015. The principal registrar dismissed the application on 5 November 2015. This is an appeal from the principal registrar's decision.

3 The appeal is a hearing de novo. It is not necessary for the appellant to demonstrate an error of law or principle in the principal registrar's decision. I can consider all of the evidence before the court including the new evidence filed by the appellant, the affidavit of Brent Arthur Hedges sworn 16 January 2016.

4 Rule 55G(5) District Court Rules 2005 (the DCR) provides that the court may, in exceptional circumstances and on such terms as it thinks just, set aside the dismissal of a case from the inactive cases list. I need to determine whether exceptional circumstances exist and, if so, whether the court should exercise its discretion to set aside the dismissal.

5 The meaning of 'exceptional circumstances' in the context of r 44G(5) was considered by Principal Registrar Melville in his decision in this matter: Sovereign Grange Pty Ltd v AV Truck Services Pty Ltd [2015] WADC 130. Davis DCJ also gave detailed consideration to the meaning of exceptional circumstances in The Owners of SP13443, 129 - 133 Eighth Avenue, Maylands v The Owners of 135 Eighth Avenue, Maylands (Survey Strata Plan 44698) [2015] WADC 133, an appeal that was heard on 11 September 2015 (five days prior to the principal registrar's decision being delivered on 16 September 2015) and delivered on 11 November 2015.

6 Both counsel in this matter accept that Davis DCJ accurately defined 'exceptional circumstances' in the context of r 44G(5) and that the principal registrar's summation of the law in his decision is consistent with that of Davis DCJ.

7 In defining the meaning of 'exceptional circumstances' in The Owners of SP13443, Davis DCJ looked at the ordinary and grammatical meaning of the word 'exceptional', that word being relevantly defined in the Shorter Oxford English Dictionary as 'of the nature of or forming an exception; unusual or out of the ordinary; special'.

8 Her Honour also considered the decision of Elwood v Goodman [2014] WADC 143 [66] in which Deputy Registrar Kubacz considered the interpretation of r 44G(5) and followed the South Australian decision of Musolino v Osmond [1996] SADC 3526 determining that a circumstance is exceptional if it is unusual or atypical. Her Honour Judge Davis also considered a number of other authorities in relation to the meaning of 'exceptional circumstances' before concluding at [40]:

Having regard to the ordinary meaning of the word 'exceptional' all of the authorities and the principles of statutory construction, I consider that for circumstances to be 'exceptional' under r 44G(5) they must be out of the ordinary, unusual, special or uncommon. They do not need to be unique or unprecedented or very rare however they will not be exceptional if they are regularly, or routinely, or normally encountered.

9 I adopt her Honour's conclusion in relation to the meaning of 'exceptional circumstances'.

10 In considering the circumstances that would be deemed exceptional in the context of r 44G(5) the fact that the inactive cases list was introduced to further case management must be borne in mind. The rules relevant to the inactive cases list fall within pt 4 of the DCR that deals with case management in this court. In Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116 the Court of Appeal dealt with the question of whether dismissing a case from the inactive cases list pursuant to r 44G(1) was ultra vires because the dismissal denied a party the opportunity to have the case heard and determined on its merits and abrogated the rule of procedural fairness. The court did not consider the power to dismiss a case from the inactive cases list to be ultra vires and said [102]:

That latter submission greatly overstates the position. It is trite law that the rules of procedural fairness are not fixed or immutable. Procedural fairness is directed to avoid practical injustice and what is necessary to avoid practical injustice will depend upon the particular circumstances: Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 [37]. In a curial setting there is no absolute right to have an action heard and determined on its merits. What the rules of procedural fairness require is that each party be provided with a reasonable opportunity to be heard: International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319 [54], [88], [141]. And what is a reasonable opportunity is to be judged nowadays not solely by reference to the interests of the parties but also having regard to the wider interest of other litigants waiting to have cases heard and the public interest in the proper and efficient use of the scarce public resources of the court: see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; Brocx v Hughes [96]. What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources: Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841, 844 (Brennan, Deane, McHugh JJ) cited with evident approval in Aon (French CJ) at [26] - [27]. Moreover, as between parties to an action what constitutes a reasonable opportunity to be heard must be judged having regard to the effect of undue delay, including the stress and costs caused by having litigation hanging over a defendant's head for an undue period: see Aon [102].

11 In determining 'exceptional circumstances' the wider interest of other litigants wanting to have cases heard and the public interest in the proper and efficient use of scarce public resources of the court must be taken into account. The exceptional circumstances must be causally related to the dismissal of the action and it must be established that the circumstances would have led to the dismissal of the action are exceptional.

12 There is no particular circumstance that can be defined as exceptional. 'Exceptional circumstances' may relate to a single exceptional matter or to a combination of exceptional facts or a combination of ordinary facts that when taken together in combination may reasonably be regarded as amounting to exceptional circumstances. Each case must be determined on its own facts.

13 Rule 44G(5) is not remedial. It should be interpreted as giving the court a broader power to relieve against injustice: FAI General Insurance v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268, 283 - 284.

14 Inattention or inadvertence by a solicitor may in some cases be considered an exceptional circumstance, however r 44G(5) must be considered in the context of case management. Consistent with the principles of case management in r 38 and r 44A of the DCR the onus is on the party (not the party's solicitors) to enter the action for trial and to file documents. For this reason case management directions and interlocutory orders are made against the party not against the party's lawyer.

15 Mere inadvertence or inattention by a solicitor would ordinarily not constitute an exceptional circumstance that would absolve a plaintiff from any personal responsibility to pursue the action.

16 In The Owners of SP13443, Davis DCJ [53] referred to factors to be considered prior to any consideration of exceptional circumstances noting that if the case has no merit there is little point in considering whether the dismissal should be set aside. The factors are:

(a) whether there has been any delay in bringing the r 44G(5) application to set aside the dismissal and the reason for that delay: see Elwood v Goodman [59] - [64];

(b) the merits of the plaintiff's case (there being no point in reinstating a case that has no merit);

(c) the prejudice to the plaintiff if the dismissal of the action is not set aside (including the expiry of any relevant limitation period); and

(d) the prejudice to the defendant if the dismissal of the action is set aside.

17 These are factors that require some consideration in this case. In this case it is not suggested that these factors alone would constitute 'exceptional circumstances'.

18 The appellant has filed three affidavits of the appellant's solicitor Brent Arthur Hedges dated 8 July 2015, 14 September 2015 and 22 January 2016. The respondent relies on the affidavit of the respondent's solicitor Byron Andrew Winburn-Clarke dated 6 August 2015. The remainder of the material that comprises the evidence is contained on the court file.

19 The history of the matter is that on 22 December 2010 the appellant filed a writ of summons with an indorsement of claim seeking damages arising from the damage to the prime mover truck that had been purchased from the respondent in 2008 and that caught fire on 3 August 2008. The claim against the respondent relied on the merchantable quality provisions of the Trade Practices Act. The appellant concedes that expert evidence would need to be called to determine the relevant issues in the event that the matter proceeded to trial.

20 On 29 November 2011 the third party entered an appearance in the matter. On 30 November 2011 the court issued directions in relation to discovery between the appellant and respondent and directions as to the pleadings and discovery between the respondent and the third party.

21 The entry for trial milestone was adjourned by consent on a number of occasions including on 12 March 2012 to 15 June 2012, and then further to 5 July 2012. The matter was placed on the inactive cases list for the first time on 26 August 2012.

22 Five and a half months later on 19 February 2013 the appellant entered the matter for trial thereby removing the case from the inactive cases list about two weeks prior to the date when the matter would have been dismissed pursuant to r 44. The entry for trial did not certify compliance with O 36A r 3 Rules of the Supreme Court 1971 (WA) (the SCR) that requires a party intending to adduce expert evidence at trial to apply to the court for leave before entering the matter for trial. Nevertheless a pre-trial conference proceeded on 21 June 2013.

23 Orders were made on that date, including orders requiring discovery by way of affidavit and orders requiring the appellant to file and serve a report of expert witness evidence or the substance thereof by 30 July 2013. Similar orders in respect of the respondent and the third party were also made. These orders required documents relevant to expert witnesses to be filed by 21 August 2013.

24 Apart from a notice of change of address for service filed by the appellant's Perth agents on 6 May 2015 no documents were filed after 21 June 2013.

25 The case was again placed on the inactive cases list on 27 November 2014 and the parties were notified of this on 1 December 2014. No relevant application was made nor was any relevant document filed in the following six month period. Accordingly the case was dismissed from the inactive cases list on 26 May 2015.

26 Following dismissal the application brought under r 44G(5) was issued on 15 July 2015.

27 The affidavits of Brent Arthur Hedges set out that the parties met for informal and without prejudice discussions on 12 November 2014. Mr Hedges briefed special counsel to attend on that date because it was hoped that the discussions may have resolved the matter however the third party sought to obtain expert evidence before continuing to take part in the discussions. It is accepted that although an order had been made by the principal registrar on 1 June 2013 in relation to expert evidence, the third party had not complied with the order. Mr Hedges sought to reconvene the informal discussions on 11 December 2014. However, special counsel for the third party sent an email to Mr Hedges on 1 December 2014 (annexure BAH2) stating that 11 December 2013 would be too soon to recommence because he had encountered some delay in arranging expert evidence. Special counsel for the third party then said:

However, our preference is to resume negotiations and to exhaust that process before committing to a full scale trial.

I would like to suggest meeting in late January or early February however, if you are travelling here on business on any particular date, would you please let me know, otherwise a teleconference might be arranged.

28 Mr Hedges responded by email dated 1 December 2014 (annexure BAH4). His response included:

At this stage I have nothing in Perth in late January or early February requiring me to be in Perth, however, as I have a number of matters in which I am acting in Perth that may change.

Obviously I will let you know but one way or the other we should try to keep this moving.

Michael Sonter my local agent has sent me an email today advising that the matter has been placed in the inactive list so we will obviously need to take steps to have that rectified but in so doing we'll keep the focus on the discussions.

29 The next correspondence between the parties was by letter dated 11 December 2014 (annexure BAH5 and BAH6) from Mr Hedges. He said:

Whilst we remain hopeful that the matter may be capable of resolution via means of the discussions to which we refer, we nevertheless respectfully note that to protect our client's position we obviously cannot take no action insofar as restoring the matter to the active list.

We understand from our agent that this can be done by means of filing consent orders.

We are also informed, however, that if consent orders are not filed then there are other steps which we need to take to restore the matter to the list.

30 Mr Hedges then requested advice as to the parties' willingness to consent to the matter being restored to the active list.

31 There was no further correspondence between the parties after 11 December 2014. The case was dismissed over five months later on 26 May 2015.

32 Mr Hedges' evidence is that through inattention he failed to diarise the date of dismissal. His evidence is that he moved offices and his office closed between 23 December 2014 and 5 January 2015. On 18 and 19 January 2015 and 11 to 13 February 2015 he attended mine sites in relation to complex matters. He gives no explanation as to what occurred in the 13 days between 5 January 2015 and 18 January 2015 and in the three weeks between 20 January and 11 February 2015. Mr Hedges' father passed away on 19 May 2015. There is no explanation as to what occurred between 11 February 2015 and 19 May 2015, a period of over three months.

33 It is accepted that Mr Hedges was instructed in this matter by an insurance company on behalf of the appellant. There is no evidence from the appellant in relation to the delay. The appellant (as opposed to its solicitors) has not filed any evidence in support of this appeal.

34 Counsel for the appellant submits that although the case was placed on the inactive cases list, this is not a situation where the appellant manifested a lack of interest or will to prosecute the action. Counsel for the appellant asserts that the appellant was actively involved in the process of attempting to informally settle the matter over the 18 month period that the case was on the inactive cases list prior to dismissal.

35 I do not accept this. Once the informal meeting scheduled for 11 December 2014 was vacated special counsel for the third party suggested a January or February date. Special counsel for the third party indicated a degree of flexibility in relation to accommodating Mr Hedges' schedule, however, Mr Hedges did not take up any offer for an informal meeting in January or February, nor did he suggest a teleconference date. Mr Hedges did not make any arrangements with the other parties to further settlement after 11 December 2014 at all. Even after Mr Hedges was aware of the status of the case on the inactive cases list he failed to be proactive. He did not progress the matter either formally or informally.

36 Counsel for the appellant argues that the meeting on 12 November 2014 was arranged as an informal meeting in order to further the prospects of settlement. However had the conference been listed in the court as a pre-trial conference, then the case would not have been placed on the inactive cases list until 12 November 2015. Counsel submit it is likely that a settlement would have occurred in the interim.

37 There is no evidence that a settlement would have occurred in 2015 nor that the parties would have met for further discussions focussed on settlement, even if a formal pre-trial conference had been listed. The advantage of a formal pre-trial conference is that, consistent with case management principles, the court would have been in a position to drive the progress of the case. Because the appellant did not list the matter the court was not in a position to provide any judicial case management.

38 The third party's failure to obtain expert evidence should have indicated to the appellant that settlement discussions had stalled. The court was not in a position to make orders after 12 November 2014 because nothing relevant to the proceedings was listed or filed after 21 June 2013.

39 Counsel for the appellant also submits that the respondent and the third party are, as parties to the proceedings, also responsible for the delay. He submits that once a case has been entered for trial the case ceases to be the sole responsibility of the plaintiff because after entry for trial all parties are required to confer prior to any court listing consistent with O 59 r 9 of the SCR. Counsel for the appellant submits that by failing to comply with the order of the principal registrar made on 21 June 2013 in relation to expert evidence and by indicating that informal discussions could not take place in December 2014, the delay was caused by the third party not by the appellant. Counsel for the appellant also argues that even if the appellant had chosen to list the matter in the required time period, the case could not have proceeded towards trial or settlement because the third party had not obtained the expert evidence it needed in order to comply with O 59 r 9(1) SCR. Order 59 r 9(1) is relevantly in the following terms:

1. Parties to confer before making application

(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.

40 Counsel for the appellant argues that without expert evidence the third party could not confer to resolve the matters nor identify the remaining issues between the parties.

41 I do not accept this submission. Although all parties are required to comply with their obligations to the court, the appellant as plaintiff has the responsibility of ensuring that matters proceed in a timely way. The event giving rise to the case occurred 6 ½ years before the case was dismissed and the writ was filed 4 ½ years before the date of dismissal. Consistent with Rowe v Stoltze this delay, taking into account that the parties were put on notice for a period of 18 months, is consistent with the parties having more than a reasonable opportunity to have the matter judged. The appellant should have brought the matter back to the court at some time in the 18 month period given that the case relied on expert evidence.

42 It is also argued on behalf of the appellant that if a consent order had been filed, both once the case was placed on the inactive cases list and again after the dismissal, then the consent, when considered with the matrix of other facts in favour of the appellant, would have been sufficient to ground exceptional circumstances. I accept that the filing of the consent order may have assisted the appellant because it would have been a factor in the matrix that, the appellant argues, comprise exceptional circumstances in this case. There is no evidence however that the appellant ever sought a consent order in relation to an application to have the case removed from the inactive cases list. There is no evidence that the appellant intended to proceed by way of an application for a formal court order even if the other parties indicated their consent.

43 This is not a case where there was an agreement or consent in any form either before or after the dismissal. The respondent and the third party did not reply to the appellant's correspondence dated 11 February 2015 that sought their consent generally. The parties did not consent to offering their support to the appellant in the r 44G(5) application. The appellant knew by the lack of response that he did not have the consent of the other parties yet the appellant failed to list an application before the court.

44 It is also argued by counsel for the appellant that the appellant should not be prejudiced by Mr Hedges omitting to diarise the date of dismissal.

45 This appeal is determined on the evidence before the court. There is no evidence that the appellant was not advised that the matter was on the inactive cases list. Further, there is no evidence of any commitment by the appellant to ensure that the case either settled or went to trial in a timely fashion.

46 Even after the case was dismissed the appellant took over one month to bring the r 44G(5) application to set aside the dismissal. The only reason submitted for that delay is that the appellant sought the consent of the other parties in relation to the application. However, the parties had never indicated that they would consent to support the appellant to set aside the dismissal. In fact the parties had not communicated for 6 months. There was no reason why the application could not have been made sooner.

47 Although there is limited evidence in relation to the merits of the appellant's case it is not disputed that the case may well have had merit had it proceeded.

48 I accept the appellant is prejudiced by the dismissal. The relevant limitation period has expired.

49 I also accept the respondent and third party would have suffered a degree of prejudice from the dismissal of the action being set aside. That however is only one factor to be considered.

50 This appeal relates to r 44G(5). I find the circumstances of the dismissal indicate only that the appellant and its solicitors were inattentive. There are no circumstances that amount to exceptional circumstances in this case. I dismiss the appeal.