BETWEEN : PROJECT PLANNING AND MANAGEMENT (WA) PTY LTD (ACN 009 147 399)

Practice and procedure - Appeal from decision of Registrar - Application for extension of time to file minute of proposed amended statement of claim - Leave refused - Action struck out on oral application of defendants' solicitor - Whether appeal from Registrar 'rehearing' or hearing de novo

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833

Capesail Nominees Pty Ltd (In liq) v Ride [2002] WASC 29

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194

Collins v Nielsen (1941) 41 SR (NSW) 42

Duke v Royalstar Pty Ltd [2002] WASCA 273

Fire & All Risks Insurance Co Ltd v Rousianos (1989) 19 NSWLR 57

Garrard (T/as Arthur Anderson & Co) v Email Furniture Pty Ltd (1993) 32 NSWLR 662

Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513

Hazart Pty Ltd v Rademaker (1993) 11 WAR 26

House v R [1936] HCA 40; (1936) 55 CLR 499

Londish v Gulf Pacific Pty Ltd [1993] FCA 470; (1993) 45 FCR 128

Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513

Magenta Nominees Pty Ltd v Bonini [1999] WASC 88

Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605

McKellar v Container Terminal Management Services Ltd [1999] FCA 1101; (1999) 165 ALR 409

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24

Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Re Gear (Dec'd) [1964] Qd R 528

Servcom Australia Pty Ltd v Shenton [2000] WASC 187

1 MASTER SANDERSON: This is an appeal from a decision of Registrar C Boyle made 13 December 2002. On that date the learned Registrar ordered as follows:

1. The plaintiff's application to the Case Management Registrar dated 25 November 2002 be dismissed.

2. The plaintiff pay the defendants' costs of the application referred to in par 1 hereof in any event.

3. Pursuant to O 22 r 1 of the Rules of the Supreme Court, the action be dismissed with costs including any reserved costs.

2 To put this decision in context it is necessary to say something about the way in which the case progressed from the date of the issue of the writ to the date of the learned Registrar's decision. The writ was issued on 23 November 2001. It contained an endorsement of claim. A memorandum of appearance was filed on 20 December 2001 by the first, third and fifth defendant. (The seventh defendant filed an appearance on 18 September 2001. This application concerns only the third, fifth and seventh defendants. I will refer to those three parties as "the defendants".) Under the provisions of O 20 r 1, taking into account that time does not run between 24 December and 15 January under O 3 r 3, the statement of claim should have been filed around 27 January 2002. The first status conference was held on 8 February 2002. By that stage it was apparent that there was a problem with the identity of the first defendant. The Case Management Registrar ordered that the plaintiff deliver a minute of proposed statement of claim by 22 March 2002. An opportunity was given to the defendants to object to any parts of the proposed statement of claim by 5 April 2002. The plaintiff was ordered to file and serve a statement of claim by 19 April 2002.

3 The plaintiff filed a minute of proposed statement of claim on 3 May 2002 along with an application to amend the writ of summons. At a case management conference on 31 May 2002 leave was given to amend to writ and the plaintiff was ordered to file and serve a statement of claim by 28 June 2002. The plaintiff failed to meet that deadline. At a case management conference on 9 August 2002 the plaintiff was ordered to file and serve a statement of claim by 23 August 2002. Orders were also made dealing with any application by the defendants to strike out the statement of claim. The plaintiff filed a statement of claim on 16 August 2002. By application dated 6 September 2002 the defendants applied to strike out the plaintiff's statement of claim.

4 Some time prior to 11 October 2002 the Registrar indicated to the parties that at the resumed status conference on 11 October 2002 he would deal with the strike-out application. That is what he did. After hearing argument the Registrar struck out the statement of claim. He indicated to the plaintiff that he would allow a time for repleading. A discussion then ensued as to how long the plaintiff should have to formulate an amended statement of claim. Counsel for the plaintiff asked for six weeks. He indicated that counsel from the Bar who was to be instructed to draft the amended statement of claim was heavily committed. The Registrar was reluctant to agree to such a lengthy period. He pointed out that if the counsel of choice was not able to draft the statement of claim, then other counsel would have to be found. After some further discussion and, as I have said, not without some reluctance, the Registrar agreed to allow the plaintiff six weeks to bring in a minute of proposed amended statement of claim. Pursuant to the Registrar's order the minute was to be filed by 22 November 2002. (The extracted case management directions make reference to "a substituted statement of claim". In fact what was to be filed was a minute of proposed substituted statement of claim - a reading of the transcript makes that clear. Nothing turns on this point and I mention it only to avoid any misunderstanding which may arise from a literal reading of the orders extracted on 11 October 2002.)

5 The plaintiff did not meet the deadline. On 25 November 2002 the plaintiff filed an application seeking an extension of time for filing of the minute until 20 December 2002. It was this application which was listed before the learned Registrar on 13 December 2002. The application was supported by an affidavit of Carmelo Giuseppe Primerano ("Mr Primerano"), sworn 25 November 2002. I will deal with this affidavit more fully below. After hearing argument on the plaintiff's application, the Registrar made the orders I have set out above.

6 The result of the learned Registrar's orders was that the action was brought to an end completely. There was no application made by the defendants for such an order prior to the hearing. Rather, after hearing from counsel for the plaintiff, the learned Registrar indicated that he would not extend the time for the filing of a minute of substituted statement of claim. He then pointed out to counsel for the defendants that the plaintiff was in default and invited counsel to make an application under O 22 r 1 seeking to have the action dismissed. Not surprisingly, counsel for the defendants took up the invitation, made the oral application and the action was dismissed. It is from these orders that the plaintiff appeals.

7 Before going further, three points can be made at this stage. First, the plaintiff's solicitors, up to 13 December 2002, had not conducted the litigation either within the spirit or to the letter of the case management rules. (I should point out that the plaintiff's present solicitors were not the solicitors who had conduct of the action up until 13 December 2002. The plaintiff's present solicitors took over conduct of the action on 28 January 2003.) Elsewhere, when dealing with appeals from decisions of Registrars, I have emphasised the importance of solicitors complying both with the letter and the spirit of case management directions. Since its inception in November 1996, case management by Registrars has become central to the conduct of litigation in this Court. The limited number of appeals from the numerous decisions of Registrars are testament to the fact that the majority of practitioners appear to acknowledge the importance the Court attaches to the work undertaken by Registrars. But from time to time the requirements of case management and the directions of Registrars appear to be ignored by practitioners. This is one such case. The plaintiff had not been subjected to draconian orders resulting in a compressed time frame. The writ was issued on 23 November 2001 and all that the Case Management Registrar had required over a period of 12 months was that a satisfactory statement of claim be filed. Yet the plaintiff's solicitors failed to comply with that perfectly reasonable requirement. Their actions were at odds with the principles of case-flow management.

8 Secondly, when the application for the extension of time was made it was supported, as I have indicated above, by the affidavit of Mr Primerano. That affidavit, which ran to five paragraphs, said virtually nothing. There was no attempt to explain the delay. Insofar as the affidavit said anything, it said only that counsel would have the substituted pleading ready for filing and serving by 20 December 2002. The affidavit should have addressed the reasons why it had not been possible in the six weeks provided to draft a fresh pleading. Properly considered, when the Registrar came to determine the question of the extension of time on 13 December 2002 he really had no explanation from the plaintiff's solicitors as to why his earlier order had not been complied with. This was a significant oversight on the part of the plaintiff's then solicitors.

9 Thirdly, the action, when struck out, could have been recommenced. All parties agree that the issue of fresh proceedings would give rise to no limitation issues. This circumstance cuts both ways. On the one hand the plaintiff suffers no irrevocable damage by having its action struck out. Subject to payment of the defendants' costs of the earlier proceedings, it can recommence its action, hopefully this time having put its house in order and being in a position to file a proper statement of claim. On the other hand, the fact that the plaintiff can recommence the action will result in further delay and expense which would be in no-one's best interests. Even a cursory reading of the statement of claim which was struck out reveals that the plaintiff's claim is not frivolous or vexatious. It is difficult to see how the interests of justice are served by requiring the plaintiff to start again for failure to comply with procedural requirements of the Court.

10 This appeal is brought under the provisions of O 60A r 5. Pursuant to O 60A r 6(1) appeals such as this are "by way of rehearing". An issue emerged between the parties both in their written submissions and during oral argument as to precisely what the term "rehearing" meant. It was the plaintiff's contention that the appeal was a hearing de novo. The defendants took the view that the appeal was truly a rehearing. Before determining which of these two approaches is correct it is necessary to clarify the distinction between a hearing de novo and a rehearing.

11 This matter was considered by the High Court in the decision of Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172. Gaudron, McHugh, Gummow & Hayne JJ put the position as follows (at 180 - 181):

"For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for the present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at the first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand."

12 The fact that the Rules used the term "rehearing" as distinct from the expression "hearing de novo" tends to suggest that appeals such as this are by way of rehearing. However, it must be borne in mind that the Case Management Registrars are exercising delegated jurisdiction. The powers of the Registrars are set out in O 60A r 1 and r 2. There is no doubt that it is open to a court, be it a Federal or a State Court, to delegate powers to persons such as Registrars who are not members of the Court: see Commonwealth v Hospital Contribution Fund of Australia [1982] HCA 13; (1982) 150 CLR 49 and Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84. But if such power is delegated, it must be done on certain conditions. One of those conditions is that the Court retain the right to review the decisions made under the delegated power. The decisions of the High Court in both the Hospital Contribution Fund case and Harris v Caladine suggest that the review must be by way of hearing de novo. Both of these cases concerned Federal Court and the exercise of Federal judicial power under Chapter III of the Constitution. The question is whether the same rules apply to power delegated by the Supreme Court.

13 What authority there is on the question suggests that they do. In Briggs v Glentham Pty Ltd (1992) 8 WAR 339, the Full Court considered the District Court Rules which delegated power to a Deputy Registrar who was not a member of the District Court. In the course of his judgment, Malcolm CJ, with whom Pidgeon and Rowland JJ agreed said (at 350):

"The effect of the exception in O 2, r 9(1) of the District Court Rules would be to exclude review where an appeal lay direct to the Full Court. In my opinion, the use of the word 'direct' was intended to confine the exception to the case where an appeal lay as of right rather than an appeal by leave and so exclude from the condition of review any judgment or order of the Registrar in the nature of a final judgment or order. To the extent that this has effected an unconditional delegation of jurisdiction to make a final judgment or order free of review, I consider the rule to be beyond power. There must be a complete review de novo of the same kind as occurs under the equivalent English Rules relating to an appeal from the Master under O 14 ... To the extent that the decision in Powell v Belvin Enterprises Pty Ltd reaches a result which is inconsistent with the second condition of delegation referred to in Harris v Caladine, it may need to be reconsidered."

14 This passage from his Honour's judgment suggests that any review of, or appeal from, a decision of a Case Management Registrar must be by way of hearing de novo. It is the case, as was pointed out by counsel for the respondent, that his Honour's comments in the Briggs decision could properly be seen as obiter. Whilst strictly speaking that may be correct, his Honour did undertake an analysis of the two leading Australian authorities and the conclusion is expressed in forthright terms. Further, there is nothing to suggest that his Honour was referring to decisions of a court where the person delegated power was exercising Federal jurisdiction. Quite the reverse. His Honour was dealing with the District Court Rules in a situation where judgment had been given on an action brought on a guarantee. It was entirely a State matter. Everything points to the reference in O 60A r 6(1) to being a hearing de novo. In my view, that is the proper approach to adopt.

15 However, in this case whether the appeal is by way of hearing de novo or rehearing, in my view the result is the same. The decision of the learned Registrar ought be set aside. There is no doubt that the plaintiff's solicitors had handled this matter in a dilatory fashion. But they had at least, after the time for filing the statement of claim on 22 November had passed, made application for an extension of time. There was no cross-application by the defendants for a springing order or to strike out the action. Even taking into account what passed between the Registrar and counsel on the hearing in October, there was no basis upon which the plaintiff's solicitors could have anticipated that on 13 December when their application was heard, the action would be struck out. In my view they were entitled to such a warning. Had the Registrar on 13 December extended the time but done so on the basis of a springing order - that is to say an order that if the minute of substituted statement of claim was not filed by 20 December 2002, the action would be struck out - then the plaintiff could not have been heard to complain. Counsel for the appellant conceded as much during the course of his submissions. In the same vein, if the order of the learned Registrar made on 11 October had been a springing order, then the plaintiff would have had much less cause for complaint. It is a question of notice and a party being alerted to the possible consequences of not complying with a case management direction. In my view, in the circumstances of this case, the plaintiff did not receive sufficient warning and the action ought not to have been struck out. I would therefore allow the appeal.

16 During the course of his oral submissions, counsel for the appellant raised the question of whether a Case Management Registrar had power of his or her own motion to strike out an action for failure to comply with a case management direction. This was not a matter which had been raised by counsel in his written submissions and it was not a matter which counsel for the respondents was in a position to address. In the event, given the conclusion I have reached on the appeal, it is not a matter which I need consider further. However, in passing I would note that it does seem to me there is some doubt as to whether or not a Registrar has the power to dismiss an action in the circumstances of this case. The position is different where a springing order is made and there is a failure to comply with that order. In any event, as this question was not fully argued, I need say nothing further. It is an issue which can be reserved for another day.

17 The appeal will be allowed and the orders of the Case Management Registrar made 13 December 2002 will be set aside. I will hear the parties as to the appropriate form of orders and as to costs.