The Question of Leave
16 The following discussion is predicated on the assumption that s 47A of the Limitation Act applies to the action that the applicants wish to bring: compare Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 ('Repacholi') at 123 [140]. Under s 47A(3), the Court may grant leave (with or without conditions) if it thinks it just where it considers that:
(1) the delay was occasioned by mistake; or
(2) the delay was occasioned by any other reasonable cause; or
(3) the prospective defendant is not materially prejudiced in its defence or otherwise by the delay.
If the Court is satisfied of any of (1), (2) or (3), then the Court may grant leave if it considers it just to do so: see Matheson at 274 [18].
17 Subsection 47A(3) provides that:
(a) Notwithstanding the foregoing provisions of this section application
may be made to the Court which would but for the provisions of this section have jurisdiction to hear the action, for leave to bring an action at any time before the expiration of 6 years from the date on which the cause of action accrued, whether or not notice as required by subsection (1) has been given to the prospective defendant.
(b) Where the Court considers that the failure to give the required notice or the delay in bringing the action as the case may be, was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in his defence or otherwise by the failure or delay, the Court may if it thinks it is just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose.
(c) Before an application is made under the provisions of paragraph (a), the party intending to make the application shall give notice in writing of the proposed application and the grounds on which it is to be made to the prospective defendant, at least 14 days before the application is made.
18 There is some difficulty in this case in identifying the date on which a relevant cause of action may have accrued. Referring to paragraphs [21] and [24] of the proposed statement of claim, the applicants submitted that the first alleged wrongful act capable of giving rise to a cause of action was "the excessive demands following the May 2004 audit" and that the second act capable of giving rise to a cause of action occurred on 7 December 2004. I proceed on the basis that the applicants are correct in this submission, although, at this point in the proceeding, it is impossible to determine whether or not, in truth, any of the alleged causes of action accrued on these dates. The respondents in fact submitted that no cause of action could have accrued against the individual respondents prior to January 2005, because that was when regulatory action was taken to cancel Polar's air operator'scertificate ('AOC').
19 As already noted, the applicants argued that the delay was due to their solicitor's mistake or other reasonable cause. In the alternative, they argued that the respondents would not be materially prejudiced by the grant of leave.
20 The word "mistake" is in common English usage, meaning "[a] misconception about the meaning of something; a thing incorrectly done or thought; an error of judgment" (OED) or "an error in action, opinion or judgment"; "a misconception or misapprehension" (Macquarie Dictionary). The meaning of "other reasonable cause" is well-established: see Perry v City of Armadale [2004] WASC 167 ('Perry v City of Armadale') at [20] per Le Miere J and Hughes v Minister for Health [1999] WASCA 131 ('Hughes v Minister for Health') at [42]- [44] per Malcolm CJ (with whom Pidgeon and Steytler JJ agreed), citing Quinlivan v Portland Harbour Trust [1963] VR 25 at 28 per Sholl J, who said that the expression "reasonable cause":
… means to refer to a cause which a reasonable man would regard as sufficient, a cause consistent with a reasonable standard of conduct, the kind of thing which might be expected to delay the giving of notice by a reasonable man.
21 In written submissions, the applicants said:
The failure to comply with the provisions of s 47A(1) was due to the inability to properly allege a cause of action until February 2005 and the fact that the legal advisers of the applicant were unaware of the content of s 47A. Taking the first cause of action as arising in May 2004, the delay until February 2005 was due to "other reasonable cause". The delay from that time was due both to mistake and "other reasonable cause".
22 Although the applicants' written submissions are put on the basis that a cause of action could have been alleged after February 2005, Mr Maitland's evidence suggests that it was not until November 2006, well after the year referred to in s 47A(1) had expired, that he formed the opinion that the applicants had a cause of action against CASA and its officers. In his affidavit of 31 August 2009, Mr Maitland explained that "it was only when the matters occurring in 2004 were seen in the context of later events in 2005 and 2006 that [he], as [the applicants'] legal adviser … formed the view that there was a clearly viable cause of action against CASA and the relevant officers". Mr Maitland added that "[i]t was the formation of this view that caused [him] to write to CASA on 9 November 2006". For reasons that will become clear below, nothing turns on this inconsistency.
23 In order to appreciate Mr Maitland's statement that he did not form a view about the viability of any action until events occurring in 2005 and 2006, it is necessary to refer to the contents of the 9 November 2006 letter written by him to the Office of General Counsel, Civil Aviation Safety Authority, Canberra.
24 The letter of 9 November 2006 referred to Polar's application, in May 2004, for an AOC; the conduct by CASA flight operations inspectors of an operational 'audit' of Polar during that month; and to heated arguments between one of the inspectors and Mr Butson in the course of the audit. The letter asserted that, thereafter, CASA flight operations inspectors issued 14 requests for corrective action ('RCA') in relation to various minor matters. From this point, according to the letter, there were numerous contentious dealings between the applicants and CASA officers, including another audit in November 2004. The letter recorded that the "stated purpose … was said by CASA to be [to] determine the progress of the implementation of operational procedures and changes to the Polar Operations Manual"; but that the "real purpose of the so-called 'audit' was to find further fault". More disputes followed, including the cancellation, in January 2005, of Polar's AOC and other approvals related to the conduct of the flight operations business.
25 In January 2005, Polar and Mr Butson made an application to the Administrative Appeals Tribunal ('AAT'). The November 2006 letter stated that:
On 21 January 2005, [the applicants] sought an agreement from CASA to allow the Polar operation to continue pending the Review by the AAT, and an assurance that CASA would re-issue the Polar AOC upon its expiry on 31 January 2005. Mr Terence Farquharson of CASA ... advised that CASA would not consent to Butson continuing as Chief Pilot and Chief Flying Instructor pending the Review, and that [the applicants] would have to seek the approval by CASA of an alternative Chief Pilot before operations could continue at Polar.
On 31 January 2005, the day of the expiry of the AOC, Farquharson advised that he did not have the power to issue an AOC but that he would be prepared to recommend to the Delegate that CASA issue an AOC for 3 years from 31 January 2005 if Polar was prepared to enter into an enforceable undertaking on terms dictated by CASA and if Butson and Polar would waive their rights to appeal to the AAT for a Review of the CASA Decision made on 14 January 2005. Polar declined to enter into the enforceable undertaking.
26 The letter recorded that CASA refused Polar's AOC and that, on 4 February 2005, Polar applied to the AAT for a stay. On 11 February 2005, the AAT made the stay order that Polar sought in respect of the cancellation of Polar's AOC. In April 2005, CASA unsuccessfully challenged the AAT's decision in this Court and, on 8 August 2005, the AAT determined that Polar's AOC and Mr Butson's chief flying instructor approval should not be cancelled. According to the letter, relations between CASA and the applicants continued to be difficult and, ultimately, the applicants made a further application to the AAT in November 2005. Before the further AAT hearing, CASA conducted another audit, this time for the renewal of Polar's AOC, although, so the letter said, "the substantive intent of the so-called 'audit' by CASA was for the purpose of 'trawling' through the operational records of Polar seeking to find as many faults as possible, no matter how small, which could be used adversely as evidence against Polar for the imminent hearing in the AAT".
27 According to the November 2006 letter, the final AAT determination was favourable to the applicants. Notwithstanding this, there were, so the letter said, further show cause notices issued by CASA to Polar, as well as a notice of proposed action, and a special audit. Finally, the letter noted that, in September 2006, CASA issued an AOC to Polar for a further three years and that, in October 2006, Mr Butson was advised that he had successfully completed the chief pilot assessment process.
28 The letter of 9 November 2006 concluded as follows:
The above conduct by CASA in relation to our clients since January 2005 constitutes strong evidence of abuse of process by CASA (and in particular the West Area office) to wrongfully force the closure of the safe and successful general aviation operations conducted by Polar and Butson.
On our instructions, CASA has wrongfully singled out and targeted our clients.
There never was any proper basis for CASA to attempt to shut down Polar.
It should be kept paramount in CASA's consideration of the operations of Polar that shortly after the AOC was cancelled on 14 January 2005, Farquharson was prepared to approve an AOC for the normal 3 year period, on the conditions that an enforceable voluntary undertaking ['EVU'] be provided and other AAT proceedings be withdrawn.
…
We have instructions to seek compensation from CASA for the loss and damage suffered by our clients resulting from the unwarranted actions by CASA and certain of its officers.
On the evidence, it would appear that our clients have a strong case against CASA and against some of its officers.
…
Please TAKE NOTICE that if we do not receive a satisfactory response from you at the expiry of 7 days, we are on firm instructions to commence civil proceedings against CASA and certain of its officers without further notice.
By letter dated 15 November 2006, the Manager, Legal Branch, CASA, denied that CASA had any liability to the applicants.
29 With the applicants' November 2006 letter in mind, it is possible to understand (without necessary accepting) the applicants' written submission that:
The events of January and February 2005, where CASA and Mr Farquharson made a complete volte face in relation to the grant of Polar Aviation's AOC, put the previous actions of CASA in context and at that stage a reasonable solicitor would consider that there was a viable cause of action not only in relation to the events of January and February but also in relation to the earlier actions of CASA.
30 Both the applicants' written submissions and Mr Maitland's November 2006 letter treat the events of January and February 2005 as pivotal in illuminating the existence of a cause of action. Though Mr Maitland's affidavit evidence refers to "the context of later events in 2005 and 2006" as playing a role in his realization that the applicants had a viable cause of action, these events are not identified, and, from my reading of the evidence, there are no later events that stand out as particularly significant in this regard. I am prepared to accept, for present purposes, that, as the applicants submitted, "the real potential for a claim did not emerge until February 2005". Considering that the potential for a claim might not be grasped immediately after it "emerged", however, I accept that a reasonable person, having Mr Maitland's legal experience and qualifications and being relevantly acquainted with the applicants' legal affairs, would not necessarily have formed the opinion that the applicants had a tenable cause of action against CASA and its officers before May or December 2005 (that is, before one year after the cause of action had accrued on the applicants' view). If this is accepted, then, so far as the applicants and their solicitor were concerned, the occasion to give notice under s 47A(1) and bring an action did not arise until after the expiration of the one-year notice period provided by the statute.
31 Of itself, this does not, however, explain the failure to advert to the proposed action until November 2006. As the letter of 9 November 2006 indicates, the applicants and CASA were engaged in proceedings before the AAT between January 2005 and March 2006. Notwithstanding that the "volte face" on CASA's part allegedly took place early in 2005, I would accept that it was reasonable for the applicants to delay instituting their proposed action until the resolution of the AAT proceedings. Accordingly, until November 2006, I would accept that there was reasonable cause for the delay in bringing the action. For present purposes, I would not regard the delay between the end of the AAT proceedings and the letter of 9 November 2006 as material.
32 A significant difficulty with the applicants' case at this point is that there was a further delay of almost three years before the applicants made their current application for leave to bring their action. For the reasons stated below, the applicants have not shown that this further delay was occasioned by mistake or other reasonable cause.
33 As the respondents noted, there were significant periods of time in which no steps were apparently taken and no explanation offered for the apparent inaction. These periods are: (1) from November 2006 to June 2007; and (2) from June 2007 to 28 April 2008. There are other periods when steps were apparently being taken, although not at a fast pace. Thus, in his affidavit of 31 August 2009, Mr Maitland deposed that the applicants had difficulty in filing an application for substantive relief, which was prepared in June 2007, because the applicants were unable to identify the individual officers of CASA "who were concerned with the contemplated litigation". An application in April 2008 under the Freedom of Information Act 1982 (Cth) proved unhelpful. The result was that, on counsels' advice, in September 2008, the applicants applied to the Supreme Court of Western Australia for pre-action discovery of documents held by CASA "to identify the decision maker or makers and those upon whose advice the decision maker or makers relied in relation to the decisions of [CASA]", which, generally speaking, are the decisions referred to in the proposed statement of claim. The summons for pre-action discovery named only CASA (and not Mr Farquharson, as the applicants suggested in their written submissions). Mr Maitland stated that, on 10 March 2009, an "informal agreement was reached … whereby the [r]espondents agreed to provide documents which contained information which would identify the relevant decision-makers of CASA relevant to the proposed litigation". On 1 April 2009, the applicants received some documents as a result of this agreement, although there was subsequently further correspondence with the respondents' solicitors from Mr Maitland seeking additional information, including as to whether or not the respondents' solicitors would accept service on behalf of CASA and individual respondents to a proposed action.
34 By itself, the pre-action discovery application does not explain the delay in bringing the action. This is because, first, the status of CASA as a potential litigant was unaffected by the application. As the respondents' counsel said, the proposed action against CASA for breach of statutory duty (and, indeed, for negligence) might have been brought at any time after November 2006. Secondly, the application for pre-action discovery apparently proceeded slowly. Thirdly, perusal of the documents exhibited to Mr Maitland's 31 August 2009 affidavit showed that, as at November 2006, the applicants knew the names of each of the individual respondents and their roles as relevant decision makers. The pre-action discovery application added little or nothing to this sum of knowledge, and the proposed action for damages was not dependent on the outcome of this application. In other words, the applicants could have brought the proposed action against all the present respondents at any time after the letter of 9 November 2006.
35 This conclusion is confirmed by reference to some other matters. The applicants' counsel stated in argument that Mr Farquharson and Mr Presneill gave evidence before the AAT at the hearings prior to November 2006. Their roles as decision makers or otherwise had been the subject of evidence. The correspondence with Mr Butson and his lawyers (which was exhibited to Mr Maitland's affidavit of 31 August 2009) showed that the applicants knew in mid 2004 of the involvement Mr Farquharson (as Area Manager, West Area, CASA). In 2004, they also knew of the involvement of Mr Peter John (as Manager, Business Development, Regulatory Services Branch and delegate) and Mr Presneill (as Flying Operations Inspector, West Area); and, at least in January 2005, of the involvement of Mr Marcolin (at that time General Manager, General Aviation Operations). By April and June 2006 respectively, the correspondence showed that Mr Butson must also have been aware of the involvement of Mr Robert Collins (then Group General Manager, General Aviation Operations Group) and Alan Cook (then Operations Manager, General Aviation Operations Group and delegate). That is, the correspondence in the hands of the applicants clearly identified the individuals within CASA who took responsibility for the acts about which the applicants complained.
36 Leaving aside the applicants' argument about mistake, I would reject their submission that the delay in bringing the action was occasioned by reasonable cause after November 2006. The existence of the pre-action discovery proceeding does not constitute reasonable cause, and nor does Mr Maitland's failure to advert to s 47A after November 2006 or, particularly, after his receipt of the October 2008 letter from Mr Manuchehri discussed below.
37 The applicants argued that the delay was due to mistake or other reasonable cause because, first, the applicants' solicitor knew nothing of s 47A and, secondly, when he became aware of it, he did not consider that the provision applied to an action of the kind proposed. In written submissions, the applicants said that "the applicants' legal advisers became aware of the possible application of section 47A" in March 2009 and "by that time, it was far too late to comply with the requirements of s 47A(1)". This submission found support in the second affidavit of Mr Maitland sworn on 16 April 2010, in which it was said:
At the time I received instructions from the Applicants to seek compensation from CASA for damages resulting from the actions of the Respondents … I was unaware of section 47A of the [Limitation Act].
I first learned of the existence of section 47A … on 9 March 2009 during the hearing of an Application in an unrelated matter, Repacholi Aviation Pty Ltd & Or v Civil Aviation Safety Authority & Or … which was before a Master of the Supreme Court of Western Australia ….
Mr Maitland deposed that he then made inquiry of counsel involved in the matter, who also said that they had not previously heard of the provision. He also inquired of his firm's Perth agents, who expressed the view that the provision did not apply to Commonwealth agencies or their officers.
38 The precise date on which Mr Maitland became aware of s 47A of the Limitation Act was also the subject of some evidence from the respondents. Exhibited to Mr Manuchehri's affidavit of 21 April 2010 was a letter from him to Mr Maitland and the Perth agent dated 3 October 2008. Although written in the Repacholi matter, the letter specifically mentioned s 47A, saying that it provided "protection" against any cause of action accruing before 15 November 2005. If Mr Maitland read the letter properly, then the existence of s 47A and the first respondent's likely reliance on it would have come to his attention in October 2008. I accept that Mr Maitland received a letter from Mr Manuchehri in October 2008, which ought to have alerted him to s 47A and the first respondent's approach to the provision at that time.
39 Mr Manuchehri's reference to this letter led Mr Maitland to swear a third affidavit on 23 April 2010, in which he said:
When I read the reference to the Limitation Act [in Mr Manuchehri's letter] I presumed that this particular statute was the same as the Statutes of Limitations in force in all other States of Australia, which impose a limitation period of 6 years within which to bring a proceeding. I gave no further consideration to the section at that time because I thought it irrelevant.
… At the time I swore [my previous] affidavit and as at 9 March 2009 I was not conscious that s 47A had been mentioned in the letter … I certainly had no knowledge of the content or the ambit of s 47A prior to 9 March 2009.
If Mr Maitland is to be believed, Mr Maitland did not become aware of the provision and the respondents' reliance on it for another five months. I have some difficulty in accepting Mr Maitland's account, but, ultimately, I doubt that anything turns on whether he became aware of these matters in October 2008 or March 2009.
40 Whether Mr Maitland knew about s 47A in October 2008 or March 2009, his failure to act in conformity with s 47A(1) was not attributable to his failure to advert to this provision. As already indicated, I accept that this failure was attributable to reasonable cause. If the reference to "the delay in bringing the action" in s 47A(3) is to be construed as a reference to the failure to bring the proceedings within the year, then a condition for the grant of leave in s 47A(3) would be satisfied: compare Murray v Baxter (1914) 18 CLR 623 ('Murray v Baxter'). As appears below, even if this were a proper construction, I would nonetheless reject the application for leave on discretionary grounds.
41 No party argued for such a construction, however, and all parties treated the reference to "the delay in bringing the action" as a reference to the entire period of the delay until the application for leave in September 2009. This approach is consistent with Western Australian authorities: see Matheson at 280 [47]. If I approach the matter on this basis, I accept that there was a reasonable cause for the delay until around the end of November 2006. As already stated, I reject the applicants' submission that they established that the delay in bringing the action after November 2006 was occasioned by reasonable cause, independently of mistake. Having considered the totality of the evidence, I also reject the applicants' submission that they have established that, after November 2006, the delay in bringing the action was occasioned by mistake. I accept that, for the purposes of s 47A, a mistake may be a mistake of law, and that there is no requirement that the mistake be a reasonable one: see Murray v Baxter at 629 and Hughes v Minister for Health at [42]. Further, I accept that a mistake of an applicants' legal advisers can be a relevant and operative mistake for these purposes: see Hughes v Minister for Health at [44], citing Stevens v Motor Vehicle Insurance Trust [1978] WAR 232. I do not accept, however, that the delay in bringing the action in this case was 'occasioned' by mistake. Mr Maitland's evidence is that he did not know of s 47A of the Limitation Act until March 2009 and that, if it applied, the applicants were required to bring the action within the year referred to in s 47A(1), or, absent consent, seek leave under s 47A(3) within six years. I would not regard absolute ignorance of the provision as a 'mistake' in the relevant sense. The difference between ignorance and mistake is explored and explained in Murray v Baxter at 630-32. Had Mr Maitland known of the provision and wrongly believed it did not apply, then that would be a mistake. But, on Mr Maitland's account, this situation arose only after March 2009. Even if total ignorance of a provision could constitute a 'mistake' for present purposes, there is no evidence that Mr Maitland's ignorance of the provision 'occasioned' the delay in bringing the action. There is no evidence to support the proposition that the applicants would have conducted the matter any differently had their legal advisers been aware of the provision at some earlier date. There is, indeed, no evidence that explains the applicants' change of approach, as reflected in their decision to bring the present application. In these circumstances, I reject the applicants' submission that they have established that the whole of the delay in bringing the action was occasioned by mistake or other reasonable cause.
42 Perhaps the applicants might have proceeded with greater expedition in making their pre-action discovery application had they adverted to s 47A; and perhaps, they might have chosen to institute the proceeding without pursuing the pre-action discovery application at all. This is, in the present case, little more than speculation. There is no evidence to indicate what precisely the applicants were likely to have done had they known of s 47A and its asserted operation earlier.
43 The applicants also argued that the prospective respondents were not materially prejudiced in their defences or otherwise by the delay. I reject this submission for the reasons that follow.
44 In Perry v City of Armadale at [23], Le Miere J said:
The relevant time for considering the issue of prejudice is the period between the date of the cause of action arising and the date of the application for leave to bring the action …The defendant bears an evidentiary onus which it must discharge as to material prejudice, but if it does so, the ultimate onus to show the absence of material prejudice rests upon the plaintiff ….
See also Matheson at 281 [52].
45 Although the applicants conceded (as indeed they must) that no notice under s 47A(1) had been given, they pointed to their applications to the AAT on 18 January 2005, subsequent negotiations, and the parties' return to the AAT on 4 February 2005 and 11 February 2005, to show that the respondents were on notice of the dispute. In oral argument, senior counsel contended that the existence of matters in the AAT, taken with the letter of 9 November 2006 and the subsequent application for pre-action discovery, meant that the respondents were not prejudiced by the delay in bringing the action.
46 I reject the applicants' submissions on the issue of material prejudice. There was no evidence that the contents of Mr Maitland's letter of 9 November 2006 was brought to the attention of any of the individual respondents around the time that CASA received it. Naturally enough, only CASA was a respondent party in the proceedings in the AAT, although Mr Farquharson and Mr Presneill apparently gave evidence before the Tribunal. No individual respondent was a party to the pre-action discovery application. There is therefore little, if anything, to support the proposition that the individual respondents were on notice that the applicants contemplated suing them prior to the service of the current application. Perhaps Mr Farquharson might have been aware in a general way but this is, in reality, no more than surmise on the applicants' part.
47 Further, the respondents' evidence was that the passage of time had diminished the individual respondent's ability to recollect the circumstances attending the challenged acts. The respondents' evidence was that none of the individual respondents held the same positions as in 2004-2005. Some had left CASA.
48 In his affidavit of 21 April 2010, Mr Manuchehri deposed that he had spoken with each of the individual respondents. According to Mr Manchehri, Mr Farquharson "only ha[d] a general recollection of CASA's dealings with the applicants during 2004 and 2006" and "d[id] not presently have day-to-day access to any of the files and records maintained by CASA in relation to its dealings with the applicants during 2004 and 2006". Mr Manuchehri stated that Mr Farquharson now notionally held the post of Regional Manager of the Western Region of CASA, although he had not performed operational functions as such since April 2009. From this date he "ha[d] been working out of CASA's offices in Canberra performing various roles", including, currently, the role of the Acting Deputy Director of Aviation Safety at CASA.
49 According to Mr Manuchehri, Mr Marcolin was also currently employed by CASA, as the Manager of Sydney Operations in CASA's Air Transport Office. Mr Manuchehri deposed that, without reviewing the files, Mr Marcolin had only a limited independent recollection of the details of the deficiencies that CASA had identified with the applicants' operations between 2004 and 2006 and that he did not have day-to-day access to these files. Similarly, Mr John was also currently employed by CASA, as the Manager of Eastern Region Operations, based in Brisbane. Mr Manuchehri deposed that Mr John was in the same position as Mr Marcolin in that, without reviewing the files, Mr John had only a limited independent recollection and could recall CASA's dealings with the applicants, and CASA's concerns about their operations, in only general terms.
50 In the same affidavit, Mr Manuchehri said that Mr Presneill had ceased to be employed by CASA at about the end of January 2009 and that, from about March 2009 until the present, he had been employed as a casual pilot by a private air operator based in Canberra. Mr Manuchehri deposed that Mr Presneill had a "general recollection" of CASA's dealings with the applicants at the relevant time and could recall some of these dealings "in some detail", although, without reviewing the files, Mr Presneill "[did] not have a comprehensive independent recollection of all of CASA's dealings with the applicants during 2004 and 2006".
51 Mr Manuchehri deposed that Mr Collins had ceased to be employed by CASA from about September 2006 and had since been working as an independent aviation consultant, currently based in Queensland. In the absence of a file review, Mr Manuchehri said that Mr Collins "ha[d] a limited independent recollection of the details of the deficiencies that CASA had identified with the applicants' operations between 2004 and 2006".
52 Finally, Mr Manuchehri deposed that Mr Cook ceased to be employed by CASA about mid-August 2007 and was now retired in Brisbane. In the absence of a file review, Mr Manuchehri said that Mr Cook "ha[d] a limited independent recollection of the details of the deficiencies that CASA had identified with the applicants' operations" and could recall only "'snippets' of information relating to CASA's dealings with the applicants" during the relevant years.
53 I accept that, since CASA can act only through its officers, the fact that the passage of time has led to diminished recollection on its officers and former officers' part about the acts in issue would almost inevitably diminish CASA's capacity to run its defence.
54 I also accept that, as the respondents submit, in an action such as that proposed by the applicants, the respondents' defence would probably require a mixture of reconstruction of the first applicant's business records as at the audit dates and the key officers' independent recollection of the factors that were taken into account with respect to the administrative action. On the evidence, the independent recollection of CASA's officers is compromised by the passage of time. Even if assisted by recourse to CASA's files, the individual respondents' capacity to defend themselves could be seriously compromised by their lack of independent recollection; and, as CASA's defence would involve their deliberations, actions and decisions, so its defence could also be materially compromised. The applicants have failed to satisfy me that the respondents would suffer no material prejudice if leave were granted.
55 The respondents argued that, even if a relevant condition for the grant of leave were satisfied, the Court should nonetheless decline to exercise its discretion to grant leave. The respondents affirmed that the claims against them had no prospect of success and referred to the matter of prejudice. Having regard to these matters the respondents said that it would not be in the interests of justice for leave to be granted to commence an action against them.
56 For the reasons stated below, even if I considered that the delay was occasioned by mistake or other reasonable cause, I do not think it would be just to grant leave to bring the action.
57 The question of material prejudice to the respondents continues to be relevant at this stage of the inquiry: see Matheson at 282 [56] and Bingham v England (1996) 17 WAR 226 ('Bingham v England') at 231-32 per Kennedy ACJ.
58 For the reasons already stated, this consideration militates against the grant of leave.
59 As to the strength of the applicant's case, the Western Australian authorities have adopted the approach outlined in Victorian Railways Commissioners v Casaccio [1961] VR 157 at 160, where Lowe, Gavan Duffy and Sholl JJ said that it is not essential for an applicant to show a prima facie case of liability, and the fact that the applicant does not do so does not mean that it must be held to be unjust to give the leave sought. As their Honours said:
[I]t may be quite enough if it appears that the claim is not mala fide, nor merely speculative or absurd. All that the applicant seeks is leave to institute proceedings, with all the risks which attend the suit of any plaintiff.
See, for example, Bingham v England at 232.
60 Counsel for the respondents acknowledged at the hearing of the matter that, under Western Australian case law, an applicant is not required to establish a prima facie case to obtain leave. Counsel argued, however, that Matheson indicated that the Court should nonetheless undertake an evaluation of "the very nature of the … causes of action" pleaded in the proposed statement of claim. According to the respondents, the applicants must be able to establish "that the proposed causes of action are tenable, in the sense of being legally viable". The respondents argued that the applicants' alleged causes of action were either unknown to the law or the draft pleading failed to set out any, or any sufficient, material facts to support them.
61 Indeed, although there is no need to prove a prima facie case, I accept that the strength of the applicant's cause of action may be a relevant consideration in determining whether to grant leave. The statement in Matheson at 282 that "such matters as the strength of the cause of action . . . will continue to be relevant" after the discretion has been enlivened justifies this conclusion.
62 The respondents conceded that the level of scrutiny to be applied in assessing a cause of action on a leave application such as this was necessarily less rigorous than that applied on a strike out or summary judgment application. This concession was properly made, although it was at times difficult to discern any distinction between the respondents' approach to the proposed statement of claim and the approach that would be applied on an application for summary judgment. In considering a challenge to proposed causes of action on a leave application of this kind, it must be borne in mind that, in a case where the limitation period is about to expire without prospect of extension, denial of leave will effectively shut the door on the applicants' claims forever. If leave is denied, the applicants will lose any opportunity they might otherwise have had to formulate a more satisfactory pleading. Defective pleading, by itself, should not necessarily doom a potentially viable claim before it is even on foot.
63 I accept, however, that leave should be denied where a proposed cause of action is patently untenable. I also accept that, in light of Matheson, the strength of a cause of action is a relevant consideration. The weight to be given this consideration will vary, depending on the circumstances of the case. In some case - for example, where there is evident prejudice to the respondents if leave is granted - a particularly weak claim may, when considered with the other relevant factors, result in the refusal of leave, notwithstanding the rule that an applicant is generally not required to establish a prima facie case.
64 With these considerations in mind, I turn to the applicants' proposed statement of claim. In assessing these claims, it is useful to have regard to the judgment of McKerracher J in Repacholi. Though the proposed claims are not identical to the claims in Repacholi (so far as those claims can be discerned from the published reasons), the two sets of claims are sufficiently similar in broad outline that McKerracher J's conclusions, though reached under a higher standard than is applicable on a leave application, warrant attention here. To that end, I briefly summarize Repacholi and compare it with the present action below.