Appeal - Procedure - Appeal instituted but not listed for hearing within required time - Respondents seeking to strike out appeal for want of prosecution - Appellants seeking to extend time - Whether sufficient reason for extending time

Respondents' application to strike out for want of prosecution granted in part

First Respondent (First Defendant) : Mr R E Sandover & Mr M K Benter

Second Respondents (Second Defendants): Mr R E Sandover & Mr M K Benter

Third Respondent (Third Defendant) : Mr R E Sandover & Mr M K Benter

First Respondent (First Defendant) : Jackson McDonald & Co

Second Respondents (Second Defendants) : Jackson McDonald & Co

Third Respondent (Third Defendant) : Jackson McDonald & Co

Boomalli Ltd v Hake [1985] WAR 7

Edwards v The Queen, unreported; SCt of WA (Heenan J); Library No 970030; 6 February 1997

Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196

Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458

Ireland v Commonwealth Development Bank of Australia, unreported; FCt SCt of WA; Library No 930244; 21 April 1993

Irvine v Western Australia [2000] WASCA 56

Magenta Nominees Pty Ltd v Bonini [1999] WASC 88

Muto v Faul [1980] VicRp 3; [1980] VR 26

Samuels v Linzi Dresses Ltd [1981] 1 QB 115

1 JUDGMENT OF THE COURT: The judgment in these proceedings at first instance was delivered on 2 December 1999. The various claims by the appellants against the respondents were all dismissed by the learned trial Judge. The appellants instituted an appeal against the respondents on 23 December 1999, which was the last day under the rules for instituting the appeal. The respondents filed and served a notice of cross-appeal and a notice of contention on 1 and 3 February 2000 respectively.

2 By a letter dated 8 February 2000, the respondents' solicitors wrote to the appellants' solicitors inviting the appellants to seek an expedited hearing of the appeal, drawing attention to the fact that the trial itself had been expedited on the application of the appellants due, it seems, to the illness of one of the appellants, Suk Chul Hwang. This letter was acknowledged by the appellants' solicitors in their letter of 10 February 2000, in which they indicated that they were taking instructions from their clients.

3 On 28 February 2000, the respondents' solicitors wrote again to the appellants' solicitors, expressing their concern at the delay in the appellants filing an application to expedite the hearing of the appeal. They stated that, in the absence of a positive response by Friday, 3 March 2000, they intended to take instructions with a view to their clients placing the matter before the court. That step was never taken.

4 Nothing further was heard from the appellants or their solicitors prior to the respondents filing their notice of motion for the dismissal of the appeal for want of prosecution on 11 April 2000. The last day under the rules for entering the appeal for hearing had been 6 April 2000. By that time, the appellants had failed to take even the first step in progressing the appeal, the filing of an appeal book index.

5 The sealed copy of the motion, which had been listed for hearing on 24 May 2000, was received by the respondents' solicitors from the Registry on 9 May 2000. A facsimile of the motion was transmitted to the appellants' solicitors office on the evening of the same day, together with a cover sheet indicating that the affidavits in support of the motion would be served on the following day. They were so served, and additional affidavits in support of the notice of motion were subsequently filed.

6 The first communication which the respondents' solicitors had from the appellants' solicitors after 10 February 2000 came late in the afternoon of 22 May, the second day before the hearing, when a letter was sent to them. In that letter, Kyle & Co advised that Mr Hwang had died the day before. They stated that Murcia Holdings Pty Ltd and Mr Howe, two of the appellants, had been waiting to enter the appeal for hearing, but that they had been unable to do so, they claimed, without prejudicing Mr and Mrs Hwang's position. How their position would have been prejudiced was not explained. It was then said that an application for an extension of time to enter the appeal for hearing would be served, with the necessary documents, on the following day. On 23 May 2000, the notice of motion for an extension of time to enter the appeal, together with a supporting affidavit, was served upon Jackson McDonald. A second affidavit was subsequently filed.

7 The explanation in the affidavits for the delay relates solely to Mr Hwang's condition of health. As we have noted, the appeal was entered in the expedited list by reason of the poor health of Mr Hwang, whose health, it was said, had gradually deteriorated since the beginning of the year. Mr J A Telfer, the managing director of one of the appellants, Murcia Holdings Pty Ltd, deposed that he had been endeavouring to speak to Mr and Mrs Hwang for "some three months" but had been unable to speak to Mr Hwang as a result of his deteriorating health. He claimed that Mrs Hwang had been distraught by her husband's illness, and he had not been able to speak to her at all. On the few occasions he had seen Mr Hwang, he had been unable to talk to him because he was heavily sedated by painkillers. He deposed that the solicitors had been unable to obtain instructions from Mr and Mrs Hwang since January 2000 as a result of the illness. He also deposed that he had been unwilling to proceed to enter the appeal of Murcia Holdings Pty Ltd for hearing without Mr and Mrs Hwang doing the same because that would inevitably have prejudiced their position. Why this was so was not said. Mr Telfer finally deposed that, at all times since the institution of the appeal, his company had been ready, willing and able to proceed with the appeal. Mr P M Howe, the managing director of the second appellant, also deposed to his unwillingness to prejudice the position of the Hwangs and averred that he wished to, and was presently ready and able to, proceed with the appeal.

8 Mr Howe did not explain how proceeding with the appeal on behalf of the second appellant would have prejudiced the position of the Hwangs. Before us, counsel was unable to explain how this prejudice might have occurred. It should be noted that Murcia Holdings and the second appellant and Mr Howe all appeared to take the view that they were able to proceed with their application for extension of time without causing any prejudice to Mrs Hwang, notwithstanding that we were advised that there was no personal representative of the late Mr Hwang appointed and so he was not represented before us and notwithstanding that counsel advised us that he had been unable to seek instructions from any member of the Hwang family as a result of Mr Hwang's recent death. The notice of motion for an extension of time to enter the appeal for hearing is expressed as a notice of motion on behalf of Murcia Holdings, Mr Howe and the second appellant only, so that there has plainly been a decision made on behalf of those appellants to proceed without consulting with the Hwang family, the stage now having been reached where their right to appeal will otherwise be lost. This lends some further weight to the inference, which one would in any event derive from the lack of explanation of what possible prejudice could occur to the Hwangs, that no such prejudice was foreseen.

9 In their affidavits, the respondents have demonstrated clearly the stress under which they have been placed by this litigation and by the risks which they face should the appeal ultimately prove to be successful. The action is in respect of a decision of Anderson J dismissing claims of negligence against the City of Nedlands, and of acting with malice and misfeasance in office as Mayor and councillors against the other respondents, arising out of failure by the City to amend its town planning scheme so as to permit subdivision and redevelopment of three single residential lots owned by Mr Howe, the Hwangs, and Murcia Holdings respectively. The allegations are serious, and substantial damages are claimed.

10 The third respondent deposes that he is over 75 years of age and in the event of a judgment against him would be, in his view, unable to recover financially. He has deposed to his feelings that until the litigation is finalised, his life is in limbo and that he and his wife feel concern that they will be unable to carry out travel plans which they had made as a result of the litigation.

11 Mr Hart deposes that he suffered a nervous breakdown while employed with the Public Works Departments and that his worker's compensation claim in respect of that took a very long time to resolve. He says that he has a pre-existing heart condition and is concerned about the stress which this litigation has caused him, as well as being unable to enjoy his retirement.

12 Mr Taylor is a computer consultant and deposes that because of the scope of the damages claimed, he has been unable to advance his business by taking on additional investments because he has to make allowance for a potential adverse finding. He refers to the enormous burden in terms of his time and income foregone in attending the trial as well as preparing for the litigation generally.

13 Mr Wilson deposes that the litigation diverted him from obtaining permanent employment. He completed an MBA at the end of 1998 and wished to travel interstate or overseas to seek work but felt unable to do so until the litigation was resolved. He refers to the substantial tension which the litigation caused in his marriage and to his belief that the litigation was a contributing factor in which wife leaving him shortly before trial. He expresses concern that irrespective of the outcome of an appeal, his reputation may be damaged by the claims made against him (he being a chartered accountant). He deposes that following receipt of the notice of appeal, he felt he was "half-way back to where I was at the commencement of the actions". He refers to the litigation as a "black cloud hanging over me".

14 It is not necessary to canvas the remainder of the affidavits filed on behalf of the second respondents and referring to impact of litigation and concerns arising from the litigation and from the appeal, which include damage to reputation, potential loss of jobs (in work where personal reputation is important), loss of weight, distress and tension within the family, financial uncertainty affecting investment and financial planning, deterioration in health and general stress and anxiety.

15 So far as the first respondent, the City of Nedlands, is concerned, Mr Silcox, the Chief Executive Officer of the first respondent, deposes to the difficulties with ensuring that there is continuity in responsibility for litigation and to difficulties already encountered in conducting the first respondent's defence which stemmed from the period of time which elapsed since the relevant events took place in 1995 and 1996. This is as a result of staff turnover and turnover in councillors. He refers also to the public suspicion, distrust and dissatisfaction with the first respondent created from the mere fact of the allegations, the subject of this litigation, being a matter of public knowledge.

16 The principles applicable in a case of this nature, in which an appeal has been instituted within time but where there has been a delay in the listing of the appeal for hearing, were considered in Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516.

"[7] Cases such as Palata [Palata Investments Ltd v Burt & Sinfield Ltd (1985) 1 WLR 942 at 946 which related to an application for an extension of time for instituting an appeal] are therefore concerned with applications that seek to put at risk the substantive rights of the respondents. It is understandable that, where the applicant's right of appeal has gone, courts should insist, as they do, that the time for appealing will not be extended unless the proposed appeal has some prospects of success. But once an appeal has been lodged, different considerations apply. An appeal, honestly lodged by a suitor within time, 'must be investigated and decided in the manner appointed' [Cox v Journeaux [No 2] [1935] HCA 48; (1935) 52 CLR 713 at 720 per Dixon J]. If the appeal is frivolous, it can be disposed of summarily. If there is gross delay in prosecuting the appeal, it may be dismissed for want of prosecution. If it fails to comply with a particular rule, the rules of court may entitle the respondent to strike it out. But the merits of the appeal are not a relevant consideration where the application concerns an extension of time for taking a step in prosecuting the appeal unless, unusually, the court can be satisfied that the appeal is so devoid of merit that it would be futile to extend time. The merits are examined at the end of the process, not during its course. It would lead to strange consequences if consideration of the merits was a prerequisite for extending the time for each and every step in the conduct of the appeal, just as it would lead to strange consequences if consideration of the merits was a factor to be determined in considering extensions of time for every step in ordinary actions." (See also at [9]).

18 Gummow and Hayne JJ at 526 [29] indicated that delays in the courts are a major cause of disquiet not only amongst those who resort to them but also among Judges and all others associated with the courts. They also placed stress upon delays prolonging uncertainty and the worry felt by litigants. They continued:

"[30] It is with these considerations in mind that the rules of court prescribed times for the taking of certain steps in a proceeding. They are not prescribed for the purpose of implementing what Roscoe Pound referred to more than ninety years ago as the 'sporting theory of justice'. They are prescribed as aids to the attainment of justice. Just as a case management is not an end in itself, but an aid to the prompt and efficient disposal of litigation, so, too, the rules of court and the time limits which are prescribed there are not to be seen as ends in themselves. But they are aids to the attainment of justice and the times that they fix are prescribed as sufficient to take the step or steps identified while maintaining the general momentum of the litigation."

19 As Kirby J pointed out, at 539 [66], where as is usually the case, and is the case here, the discretion of the court is conferred in unlimited terms, the question for the decision maker is whether it would be just in all the circumstances to grant or refuse the application. Necessarily the indulgence is not granted as of course. It is for the parties seeking to persuade the decision-maker to show that it should be granted. Such persuasion will usually depend upon the provision of an acceptable explanation of how the time default occurred. Neither a party nor its legal advisers may simply assume that a request for an extension of time will always be acceded to. Inherent in the grant of a discretionary power is the assumption that it will sometimes be refused. His Honour then went on to point out that the present rule, that an appeal be entered for hearing within a specified time, is one of a procedural character and not one touching the substance of a party's appellate rights.

20 Kirby J referred to changes over time in judicial attitudes to the grant of an indulgence under procedural rules of court, from a rather rigid approach at the beginning of the last century, towards a greater flexibility which stemmed from a recognition that rules of court, particularly those relating to time, should not be permitted to become "an instrument of tyranny" and with a revival of insistence upon a stricter adherence to rules and practices occurring towards the close of the century. His Honour identified the source of that more recent strictness as a judicial concern to ensure the efficient dispatch of court business. His Honour mentions the interest which the court has in ensuring compliance with time limits. We would add that a number of law reform inquiries and reports, together with an increasing volume of complaint from litigants coming before the courts who are not prepared to accept without protest the hardship which litigation imposes on them, have perhaps in recent years also contributed to a judicial awareness of the hardship which is necessarily involved in most litigation, however well conducted. Where litigation is unnecessarily delayed and protracted, that hardship is increased to a degree which is unnecessary and which is to that extent unfair. That unfairness must be balanced against the unfairness which would be caused to the parties seeking an extension of time were the extension not granted.

21 We have referred in detail to the affidavits filed on behalf of the respondents in this case because they vividly illustrate the concern for justice which underlies the court's requirements that certain steps be taken within a specified timeframe. While the appellants have a right to an appeal if they institute it within time and pursue it according to the rules of court or according to such orders as may be made varying or dispensing with compliance with the rules, that right is necessarily attended by a hardship to the respondents which is increased as the process is prolonged. It is for that reason, and not merely to punish disobedience to the court's rules (although that may sometimes be a relevant consideration) that it is necessary for an appellant seeking an extension of time to provide an explanation for his or her delay which, if satisfactory, will be balanced against the length of the delay and any other relevant factors.

22 Kirby J also mentioned at 543 [66] of Jackamarra a number of other factors sometimes thought to be relevant to the question of whether an extension of time should be granted. These include whether the delay was intentional or contumelious rather than merely the result of a bona fide mistake and whether the delay was that of the litigant or of its lawyers. The extent to which prejudice may be remedied by an appropriate costs order is another consideration sometimes treated as relevant.

23 Turning to apply the considerations referred to in Jackamarra to this case, the delay up until the date of the notice of motion for extension of time is substantial - a matter of weeks, rather than days. However, were there some reasonable explanation proffered, we would not refuse to extend time based upon the delay alone. As we have noted, however, the only explanation proffered is that of not wishing to prejudice an appeal on the part of the Hwangs, which explanation was unable to be developed or explained to the court. It appears from the affidavits filed on behalf of the appellants that the appellants intentionally, and understanding that they were not complying with relevant time limits, determined not to take steps to enter the appeal for hearing or indeed to take any other steps to pursue the appeal for a reason which appears to me to lack any substance.

24 Further, although the respondents' solicitors twice invited the appellants to seek an expedited hearing of the appeal, by the letters dated 8 and 28 February to which we have referred, the appellants gave the respondents no indication of their intentions or of their views for the best part of three months between 28 February and 22 May 2000. It appears that it was only the respondents' notice of motion to dismiss the appeal for want of prosecution which prompted the appellants to take any step at all.

25 In this case, in our view, the appellants have simply failed to overcome the hurdle of explaining their delay. It is impossible not to sympathise with the Hwangs in their distress at Mr Hwang's prolonged illness and recent death. However, the Hwangs do not apply for an extension of time. The most that can be said in relation to those appellants who do apply is that one can see that it might have been convenient and it might have saved costs to some small degree had all appellants proceeded together. Mr Hwang's illness apparently made this course difficult, and in the eyes of the present appellants/applicants, impossible. In our view that does not sufficiently explain, if it begins to explain at all, delay of the kind that has occurred here.

26 We would dismiss the appellants' motion to extend time and in relation to the appellants Murcia Holdings, Mr Howe and Rangemen Pty Ltd, we would strike out the appeal for want of prosecution.

27 So far as the appellants Hwang, are concerned, the court was informed that because of Mr Hwang's death on the Sunday preceding the hearing of these motions, it had not been possible for solicitors to obtain instructions either from his personal representative or from Mrs Hwang who was, understandably, too distressed to be in a position to provide instructions. There has by now, one would have thought, been ample time for instructions to have been obtained.

28 In our view, it would not be just under those circumstances to strike out the appeal for want of prosecution so far as it relates to the Hwangs without giving an opportunity to Mrs Hwang and the personal representatives of the late Mr Hwang to put before the court any information which might be relevant. So far as the motion to dismiss the appeal for want of prosecution on the part of the Hwangs is concerned, then in our view the appropriate course would be simply to adjourn it with the hope that it can be relisted and determined in the near future.