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Practice and procedure - Application to extend time to comply with springing order when effect to have matter entered in Inactive Cases List - Applicable principles

1 MASTER SANDERSON: On 29 May 2007, Acting Principal Registrar Dixon made the following order:

Unless the plaintiffs file and serve an application to amend the statement of claim by 10 July 2007, the action be entered into the Inactive Cases List.

2 No application was filed and the action was duly entered on to the List. No further steps were taken and, on 11 January 2008, pursuant to O 29A r 21(1), the action was taken to have been dismissed for want of prosecution. An order to that effect has been extracted.

3 On 17 March 2008, the plaintiffs filed a chamber summons which effectively sought to reinstate the action. At the hearing, leave to amend in terms of a minute of proposed amended chamber summons dated 25 March 2008 (the minute) was given. The orders sought by the minute are:

1. The time for filing by the plaintiffs of a notice of appeal under O 62A r 5 in respect of the order made by the acting principal registrar on or around 7 March 2008 in terms of the attachment hereto, be extended to 21 March 2008 or such other date as may be fixed by the court.
2. In the alternative to paragraph 1:

2.1 the order for dismissal dated 11 January 2008 be set aside;

2.2 upon the plaintiffs filing and serving an application for leave to amend the statement of claim within one clear day, the action is to be removed from the Inactive Cases List;

2.3 if the plaintiffs do not file and serve an application for leave to amend the statement of claim within one clear day, the plaintiffs' claim is to be dismissed and judgment entered for the defendants.

4 Having obtained leave to amend the summons, counsel for the plaintiffs then abandoned the relief sought in par 1 of the minute. He was right to do so. There was no order made by a registrar dismissing the action. The action was dismissed pursuant to the rules without any intervention by the registrar. Thus, no appeal was available - there was no decision against which to appeal. There remains, then, the question of the relief sought in par 2.

5 Before dealing with the merits of the application, I should make a comment about its form. What the plaintiffs seek to do by par 2 is extend the time for complying with the springing order. If their application is successful, then an order in terms of par 2.1 would be required. There would also need to be an order extending the time for complying with the springing order to a date after the delivery of these reasons. But there does not need to be an order that the matter be removed from the Inactive Cases List (the List). In fact, the action is no longer in the List - it is, at present, a concluded matter. So an order in terms of par 2.2 is not required. What would be required is an order in terms of par 2.3, the terms of which express the date by which the application for leave to amend the statement of claim had to be filed.

6 It is worthy of note that the plaintiffs do not seek leave to appeal out of time from the springing order made 29 May 2007. It is not suggested that the learned acting principal registrar was not justified in making the order that he did. It also follows that the plaintiffs accept that the period of six weeks given to them in which to bring the application to amend was a proper and reasonable timeframe. That is a factor to be borne in mind when considering whether the time for compliance with the springing order ought be extended.

7 Before going further, it is worth looking in some detail at how the List operates. The relevant rules are found in pt 4 of O 29A. There are two ways that a matter can wind up on the List. First, a case management registrar of his or her own motion may issue a summons requiring a party to show cause why a matter should not be entered on to the List. This is covered by r 17. The power to issue such a summons and enter the case on the List is available only to a case management registrar and only when a summons is issued for that purpose.

8 Pursuant to r 18, a judge, master or registrar, when making an interlocutory order, can include an order that unless a party takes certain steps in the proceedings by a specified date, the matter be entered on to the List. Presumably it is not open to a party to take out a chamber summons specifically for the purpose of having a matter entered on to the List. An order, once made, is doubtless open to appeal by using the normal procedures that apply to interlocutory appeals. But r 18(2) reserves to a judge, master or registrar - whether it is the judge, master or registrar making the order is unclear - the power to countermand such an order. This then would be a way of avoiding the effect of the springing order without the need to appeal and provided that the time for compliance with the springing order has not expired.

9 Rule 19 provides that once events have occurred which result in a case being on the List, the principal registrar must put the case on the List and give all parties written notice to that effect. Rule 19(2) requires a solicitor, once notified that a case is on the List, to alert his client to the fact that the case is on the List and why, and explain the effect of r 21 - that is to say, explain that if no action is taken within six months, the case will be taken to have been dismissed.

10 Rule 20 deals with the consequences of a case being on the List. No steps can be taken in the action while the case remains on the List unless the step is one to have the matter removed from the List. The rule also provides that if the case is removed from the List by order of the court, it can be made conditional on the case being conducted thereafter in a certain way. In other words, case management orders are anticipated when and if a matter is removed from the List.

11 Rule 21 contains the sting in this part of O 29A. If a case has been on the List for six continuous months, it is taken to have been dismissed for want of prosecution. When the case is so dismissed, the principal registrar must give to all parties written notice of that fact. That is what occurred in this case.

12 Part 4 of O 29A represents a significant departure from the traditional approach to litigation taken by this court. Prior to the introduction of these rules, cases could, and often did, languish for years with no steps in the action being taken by any party. Eventually, a defendant, tired of having an action hanging over his head for years, might bring an application to dismiss an action for want of prosecution. A significant body of law has grown up providing a guide as to the disposition of such applications. But it is fair to say, I think, that courts have generally been sympathetic to a tardy litigant and have been reluctant to grant a strike out application, particularly if it is a first application. But pt 4 brings a new rigour to this area of practice. The court is proactive in ensuring that a case progresses with reasonable dispatch, with significant and self-executing consequences for a tardy litigant.

13 Two further points should be borne in mind. First, these rules are a case management tool. They are designed to ensure the expeditious handling of cases. As such, the overall principles of justice are paramount - case management not being an end in itself. This was made clear by the High Court in The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146, 154. That does not mean that effect should not be given to the terms of the rule. After all, the terms of the rule are clear. But rigid adherence to the rule in circumstances which have an adverse effect on a party and lead to injustice should, if possible, be avoided.

14 Second, it would appear that there is no power to extend the time for the bringing of an application to have the matter removed from the List. That is to say, once the case has been on the List for six months, it is deemed dismissed. There is no scope for an extension of time under O 3 r 5. Indeed, if an application to have a case removed from the List is brought within the six-month period but not heard within that period, it must be open to doubt whether any order can be made. That question is not directly raised by this application and can be left for another day. But there appears to be no doubt that it is not possible to extend the time to bring an application to be removed from the List.

15 This is borne out by the decision of Owen J in Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552. That case concerns the now repealed O 63A r 5(2). The rule was in the following terms:

An appeal shall be entered for hearing within 7 days after the directions hearing and if not so entered shall be taken to have been discontinued.

16 After reviewing a number of authorities and considering a policy implicit in the rule, his Honour concluded:

In my opinion, O 63A r 5(2) should be construed strictly according to its tenor. It is self-executing and it excludes, by necessary implication, the general discretion to extend time that is to be found in O 3 r 5. In my view there is no jurisdiction to extend the time for compliance with the obligation (12).

17 The question, then, is whether time for compliance with the springing order ought be extended. It was accepted by counsel for the defendants that the power to extend time is available. This conclusion is based upon the High Court decision of FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268. There having been no argument as to the applicability of that decision to this case, I have proceeded on the basis that the power exists.

18 It is appropriate, then, to turn to the circumstances which led to the making of the order and the reasons why no action was taken by the plaintiffs once the case was entered on to the List. The evidence in relation to these matters is found in the affidavit of Timothy Oscar Coyle (Mr Coyle) sworn 14 March 2008. That affidavit annexes a copy of an affidavit of Natalie Jane Wigg (Ms Wigg) sworn 29 May 2007 (annexure TOC5). The affidavit of Ms Wigg is said to have been made in opposition to the proceedings being placed on the List. Ms Wigg was, at the relevant time, a solicitor in the employ of the plaintiffs' solicitors and, subject to the supervision of her principals, she had conduct of the action. Ms Wigg says that in June 2006 the plaintiffs' solicitors briefed an expert whose evidence was necessary to the conduct of the proceedings. Between July 2006 and September 2006, the expert sought further information to enable him to complete his report. In early October 2006, the solicitors were advised that the expert's report would not be ready until the end of November 2006 at the earliest. On 17 October 2006, the plaintiffs' solicitors wrote to the case management registrar advising him of the delay in the preparation of the expert's report. That letter was copied to the defendants' solicitors.

19 The report was not provided by the end of November. On 8 December 2006, Ms Wigg had a conversation with the expert who indicated that his report, or at least a draft thereof, would be available by 20 December. In fact, the report was not provided by that date. It still had not been provided by late January 2007. Doubtless concerned by the delay, Mr Coyle and Ms Wigg met the expert at the end of January to discuss the matter. At a case evaluation conference held at the end of January, the court was advised of the delay in obtaining the expert's report.

20 A further meeting between Mr Coyle, Ms Wigg and the expert was held in February 2007. At that stage, the report was partially completed. Following the meeting, the plaintiffs were asked to clarify a number of issues. By late March the report still had not been provided and further documents were sent to the expert. On 27 March, the plaintiffs' solicitors wrote to the court providing a status report. Again, a copy of that letter was provided to the defendants' solicitors. Between 27 March and 24 May, contact was made with the expert on a number of occasions, but as at the date of swearing the affidavit, no expert report had been received.

21 Mr Coyle's affidavit then takes up the story. It would appear, although it is not expressly stated in the affidavit, that some time prior to 20 May 2007 the plaintiffs' solicitors had determined that the statement of claim required amendment. Senior counsel was instructed and Mr Coyle conferred with him and the client. A minute of proposed substituted statement of claim was drawn, although it is not clear from the affidavit or the document itself when this minute was produced. Counsel for the defendants criticised this deficiency in the affidavit. His point was that there was no explanation at all as to why nothing was done between 29 May 2007 and the filing of this application on 17 March 2008. Mr Coyle does explain that he was overseas 'during the first part of 2008' and that he returned to work on 29 January 2008. It can be accepted that some time was occupied in settling the form of the minute of proposed substituted statement of claim. But how much time was occupied is not outlined. Nor is there any mention of the progress in obtaining the expert's report. That being so, it is impossible to conclude other than that the plaintiffs' solicitors simply left this matter to drift for long periods of time in the last part of 2007.

22 Counsel for the defendants, in support of his position, referred to the decision of Newnes J in MTQ Holdings Pty Ltd v Lynch [2007] WASC 49. His Honour said:

The authority of the Court will equally be undermined, and the quality of justice for the innocent party eroded, if the ultimate sanction effected by the operation of a springing order can be avoided by showing that non-compliance with the springing order came about by the same sort of inattention or laxity that caused the order to be made in the first place [51].

23 It is appropriate at this point to return to what was said by the High Court in the FAI decision. Referring to the general power to extend time found in the Supreme Court Rules 1970 (NSW) (a provision which roughly accords with O 3 r 5 in our rules) Wilson J said of the rule:

It is a remedial provision which confers on a court a broad power to relieve against injustice. The discretion so conferred is not readily to be limited by judicial fiat. The fact that it manifestly is a power to be exercised with caution and, in the case of conditional orders, with due regard to the public policy centred in the finality of litigation does not warrant an arbitrary limitation of the power itself, not expressed in the words of the rule, so as to deny its capacity to apply to circumstances such as those which are to be found in the present case. It would be wrong to so read the rule as to deny to a court power to prevent injustice in circumstances where the party subject to a conditional order ought to be excused from non-compliance (283).

24 In the MTQ Holdings decision to which I have referred earlier, Newnes J set out four matters to which the court will normally have regard. They are the circumstances in which the springing order came to be made, the reason for non-compliance with the springing order, the prejudice to the defaulting party if the time were not extended and the prejudice to the other party if the time were extended. His Honour went on to say that it would also be appropriate to consider the merits of the action, albeit briefly, there being no point in resuscitating a case that is devoid of merit. Two of these five criteria can be dealt with quite shortly. There is no suggestion that the defendants will be prejudiced if the time were extended. There was no evidence to that effect and no submission on the issue was made by counsel for the defendants, either in writing or orally. Further, the plaintiffs clearly have an arguable case. That emerges from a reading of the minute of proposed substituted statement of claim. Once again, there was no submission to the contrary made on behalf of the defendants.

25 I have outlined the circumstances in which the springing order came to be made. As I said above, there was no challenge made to the registrar's order. But the evidence does disclose that the plaintiffs' solicitors had been attempting to obtain an expert report to allow them to move the case forward. The delays that led to the making of the springing order can, in large measure, be laid at the door of the expert who delayed in preparing the report. In those circumstances, it cannot be said that the plaintiffs or their solicitors engaged in lax conduct of the matter.

26 The major weakness in the plaintiffs' application is the failure to offer an adequate explanation for non-compliance with the springing order. Here, it is difficult to conclude other than that the solicitors were lax. The effect of extending the time might be seen as sanctioning that laxity.

27 There is no doubt that if time is not extended, the plaintiffs will suffer prejudice. It was submitted on the part of the plaintiffs that any attempt to issue fresh proceedings would run into a limitation defence. This issue was not directly addressed by counsel for the defendants, but a consideration of the nature of the claim suggests that such a defence might be open. It may be the case that if the plaintiffs could not proceed against the present defendants, they could sue their solicitors. But that is a course not without its difficulties. In all fairness, it must be said that the plaintiffs would be significantly prejudiced if the time were not extended for compliance with the order.

28 It is relevant to note that the plaintiffs themselves appear not to have been advised that the matter was placed in the List. In those circumstances, to visit the consequences of the inactivity of the plaintiffs' solicitors upon the plaintiffs themselves may not serve the interests of justice. This was a matter taken up by the Full Court in the decision of Grigoriou v Nitsos [1999] WASCA 42. The fact that the plaintiffs themselves did nothing is explained by their ignorance and is a factor to be taken into account when determining whether or not time ought to be extended.

29 In the end, I am satisfied that the interests of justice require that I extend the time. In my view, what is decisive is the prejudice likely to be suffered by the plaintiffs if the time is not extended. I fully appreciate that there is no real explanation for the delay in seeking to have the matter removed from the List. That tips the balance strongly in the defendants' favour. But the prejudice suffered by the plaintiffs if time were not extended weighs more heavily in the balance even though it is a near run thing.

30 There is one further matter which I should mention. As I have mentioned above, the plaintiffs' solicitors appear not to have notified the plaintiffs that the matter was entered on the List as is required by O 29A r 19(2). If that order was not complied with, then, in my view, it would have cost consequences for the plaintiffs' solicitors. Before a costs order is made in this matter, some evidence from the plaintiffs or their solicitors should be put on addressing this issue. The costs question can then be dealt with at a later date.

31 I would propose then making an order extending the time for filing of an application to amend the statement of claim to a date seven days after the publication of these reasons. The plaintiffs' solicitors should bring in a minute of orders reflecting these reasons.