Savcor Pty Ltd v Cathodic Protection International ASP [2002] VSC 201

8. The application concerned an order made by Master Wheeler some 18 months ago upon the application of Savcor for an order extending the time for service of the writ in this proceeding. I had before me the affidavit of Stephen Francis Grant sworn 5 December 2000 which contained the material upon which the Master was asked to and did act in making the order sought. It was put that this material contained material non disclosures or perhaps misstatements of fact. The circumstances giving rise to the application are the following.

11. In July 1995 Savcor was awarded a contract with the fourthnamed defendant, now called Roads Corporation, to perform certain work with respect to Phillip Island bridge at San Remo in Victoria (the "San Remo bridge"), including the design, supply, installation, commissioning and monitoring of a cathodic protection system to the piers of the bridge ("the Roads Corporation Contract"). The system which Savcor provided was designed and supplied to it by a Danish company, CPI, pursuant to a series of agreements entered into between 23 August 1995 and 4 October 1996. The system included the delivery of a protective electric current to the steel reinforcement in the bridge by uninsulated titanium wire.

14. I should add at this stage that CPI and Savcor had had a commercial relationship which antedated this project. There was in evidence an agreement between them dated 23 September 1991. Under this agreement, CPI gave to Savcor and another company exclusive distribution rights in Australia and other Australasian countries for its cathodic protection technology and agreed to provide technical backup and consultancy services as requested. By cl. 24 the agreement provides for the resolution of disputes before "the Danish Maritime and Commercial Court in Copenhagen, Denmark, and judged by Danish law". This agreement was terminated by notice on 21 July 1997.

17. Difficulties arose in Savcor's performance of the work on the San Remo bridge. Savcor concedes in this proceeding that the titanium wire failed by reason of which the production system itself failed. Furthermore, the performance of its work took a greater time than expected for, on 22 October 1996, Savcor lodged a consolidated delay claim with the Roads Corporation. This claim was rejected and on 19 March 1997 the claim was referred to arbitration in accordance with the arbitration agreement contained in the Roads Corporation contract. At this time Savcor was represented by its solicitors, Messrs Alan Wainwright J Okno & Co ("Wainwright"). On 16 December 1997 Wainwright advised Savcor to notify its professional indemnity insurer, FAI Insurance Co Ltd, that a claim would or might be made by Roads Corporation in respect of its work on the bridge and Savcor did so on the following day.

20. Meantime, the arbitration continued, with Savcor's points of claim being delivered on 13 February 1998 and the Roads Corporation's counterclaim on 3 June 1998. On 20 November 1998 Savcor submitted to FAI a formal notification of the Roads Corporation claim. Wainwright on its behalf continued to conduct the arbitration.

23. For the purpose of its preparation for the arbitration, Savcor on 3 August 1998 sought the assistance of CPI in its defence of the Roads Corporation claim. The person at CPI involved in this was Paul Michael Chess, its Managing Director and sole employee. It appears from the affidavit of Dr Chess sworn on 23 April 2002 that his dealings were with Ian Godson the Managing Director of Savcor, at least until October 1999, and its legal advisers in conference in Melbourne in March 1999. The principal assistance of CPI in this period to October 1999 appears to have been in the preparation through some 11 drafts, of a witness statement for the evidence of Dr Chess as a witness for Savcor in the arbitration. On 22 October 1999 Wainwright, on behalf of Savcor, filed in the arbitration witness statements for its ten primary witnesses. It seems likely that the witness statement of Dr Chess was one of them.

26. On 5 July 1999 FAI had formally agreed to indemnify Savcor in respect of the Roads Corporation claims and to take over the conduct of the arbitration. Nevertheless, Wainwright continued to act for Savcor in the arbitration until "around the end of 1999" when Messrs Herbert Geer & Rundle ("HGR"), the solicitors for FAI, took over the full conduct of the arbitration for Savcor and they continued to do so until December 2000 when FAI transferred the file to its new solicitors, Messrs Sparke Helmore. Sparke Helmore thereafter acted in the arbitration on behalf of Savcor on the instructions of FAI until FAI went into provisional liquidation on 15 March 2001.

29. On 6 December 1999 HGR on behalf of Savcor commenced this proceeding against CPI alone. The writ bears a general endorsement in these terms:

"The plaintiff sues the defendant for damages in respect of loss and damage suffered by the plaintiff as a result of breaches of contract, negligence and misleading and deceptive conduct of the defendant in and about agreements for the sale and supply by the defendant to the plaintiff of goods and services relating to the cathodic protection system at the San Remo Bridge in Victoria in or about October 1995."

This writ was, it is said, issued to protect the position of Savcor, presumably having regard to the possibility that a time bar may operate. The issue of the writ protected Savcor, therefore, in respect of any misleading and deceptive conduct cause of action which came into existence after 6 December 1996 and from other causes of action arising after 6 December 1993. The writ was not immediately served on CPI nor were Dr Chess or CPI advised that this proceeding had been commenced.

34. Throughout the year 2000, preparation for the arbitration continued. Dr Chess says that on or about 17 April 2000 he received a request from HGR for further technical assistance for which they agreed to pay him a fee. Thereafter, he and HGR exchanged drafts and corrections for a second witness statement of Dr Chess which was completed on 5 May 2000. In the latter months of the year 2000, Dr Chess was asked by HGR and agreed to participate in a conclave of experts to be chaired by the arbitrator which was finally fixed to take place in Melbourne commencing 11 December 2000. Neither Savcor nor HGR informed Dr Chess at this time of the existence of the proceeding issued against CPI.

37. Meantime, the time for serving the writ was to expire at midnight on 5 December 2000[1]. On that very day application was made ex parte to Master Wheeler for an order pursuant to Rule 5.12(2) extending the period for service of the writ. No explanation was given to me nor, it seems, to the Master for the fact that the application was made on the last day for service. The consequence of this was that the Master was faced with an application which, if unsuccessful, would have the consequence that service in Denmark or elsewhere upon CPI within time, was not possible.

40. The application was supported by an affidavit of Stephen Francis Grant, a solicitor in the employ of HGR having care and conduct of the proceeding, sworn 5 December 2000. Savcor was represented by counsel upon the ex parte application[2]. The affidavit of Mr Grant is short and important. I shall set it out in full omitting the formal introductory paragraph.

"2. The plaintiff is a party to a confidential arbitration under the Commercial Arbitration Act 1984 which is currently proceeding. Damages are sought by way of cross claim in that arbitration from the plaintiff alleging that it has, inter alia, negligently designed a system for the provision of Cathodic Protection to a structure. 3. The defendant is a corporation incorporated in Denmark. The defendant to this action was the independent certifier pursuant to the contract of works under which the plaintiff undertook works for the other party to the arbitration. 4. It is alleged by the plaintiff that it may maintain an action against the defendant for: (a) breach of its retainer as certifier; (b) breach of duty of care owed in negligence to the plaintiff in undertaking that certification; and (c) claim pursuant to the Wrongs Act Vic (1958) on the basis that if the plaintiff is liable to the other party in the arbitration the defendant could also have been held liable pursuant to a duty owed to that party. 5. On 6 December 1999, in order to protect the plaintiff's position, I caused to be issued Writ No. 7818/1999 which is filed in this honourable court. While the arbitration is ongoing an employee of the defendant is a relevant witness to the matters in issue in the arbitration. Owing to the fact that the matter is an arbitration, the employee is not able to be compelled to attend by subpoena. It is anticipated that an expert's conclave will be held in the arbitration in the near future (January or February 2001) at which the attendance of the employee of the defendant is necessary. Accordingly, so as not to prejudice the plaintiff's ability to lead evidence at the conclave, my instructions have been not to serve the proceeding. The defendant has full knowledge of the circumstances of this matter and its retainer was in the period July 1995 to March 1996. Accordingly the extension of this period for service will not materially prejudice the defendant. 6. The twelve month period for serving the proceeding expires on 7 December 2000 and I accordingly seek a six month extension of time for service of that proceeding by this honourable court."

44. Before I continue with the narrative, it is worth noting a number of matters about these paragraphs. The assertion in paragraph 3 that CPI may be sued for its work as independent certifier appears to be an incomplete statement of the position. The endorsement does not allege that CPI was a certifier. In the statement of claim which was later delivered, CPI was sued for deficiencies in its conduct as certifier as well as other conduct. Paragraph 4, which speaks of maintaining an action against the defendant for various causes of action, does not include a cause of action for misleading and deceptive conduct. The claim pursuant to the Wrongs Act for contribution is not mentioned in the general endorsement, nor has it been pursued in any of the statements of claim. I pass over paragraph 5 for the moment. The assertion in paragraph 6, that the period for service expires on 7 December 2000, is not correct.

47. The Master acceded to the application and extended the validity of the writ to 29 June 2001.

50. On 15 March 2001, FAI went into provisional liquidation and on 30 March 2001 the provisional liquidators informed Messrs Norton Gledhill, Savcor's own solicitors at this time, that they would not continue to instruct Sparke Helmore to act in the arbitration. On 7 May 2001 Norton Gledhill took over the conduct of the arbitration on Savcor's behalf but they had difficulty obtaining the file from Sparke Helmore. This, and other matters with which I am not concerned, have led to delays in the arbitration hearing which has yet to commence. The court file shows that on 25 May 2001 Norton Gledhill became solicitors for Savcor on the record.

53. On 29 June 2001, the day preceding its expiry, the writ and a copy of the Master's order was served in Denmark on CPI. The writ was referred to CPI's own indemnity insurers and on 10 August 2001 Messrs Peter Black & Associates, the solicitors appointed by CPI's insurers, filed a conditional appearance pursuant to Rule 8.08. After taking legal advice, CPI took no step to set aside the service and, on 24 August 2001, the appearance became unconditional.

56. Dr Chess says in his affidavit of 23 April 2002:

"37. At no time prior to 29 June 2000 [sic] had it ever been suggested to me by any representative of [Savcor], any of its legal advisers or any other person that there was any possibility that [Savcor] would make a claim against CPI in relation to this project or that it had contemplated doing so. On the contrary, I believe that it was understood and accepted that CPI had an extremely limited role in the project and that [Savcor] were the party responsible for the performance or otherwise of the cathodic protection system installed on the San Remo Bridge. At no stage during my dealings with [Savcor] and its advisers did anyone suggest to me, or cause me to think that [Savcor] had sued or intended to sue CPI."

This assertion was not disputed on behalf of Savcor.

61. Indeed, on 11 September 2001 Peter Black & Associates wrote to Norton Gledhill a letter which included a protest at its client's duplicity.

"Our client, CPI, has provided to us a copy of your facsimile to (Mr) Dr Paul Chess of CPI dated 10 September 2001. As you are aware that we act for CPI in relation to the matter between Remedial Engineering and CPI, we do not consider it appropriate for you to communicate directly with our client. Would you please direct all further communications with Dr Chess and other CPI officers and employees, through this office. We also observe that Remedial Engineering issued the Writ against CPI in December 1999 and yet continues to seek expert advice of CPI in the arbitration between Remedial Engineering and VicRoads. In our opinion, it is extraordinary that Remedial Engineering should have called upon the services of CPI to assist it in the arbitration for this period without having put CPI on notice that Remedial Engineering had issued a Writ to protect its interests against CPI in relation to the San Remo Bridge project. As this is an issue of some substance with regard to CPI's position, would you please advise whether, and if so when, CPI was advised by Remedial Engineering that Remedial Engineering proposed to, or in fact had issued a Writ against CPI."

Norton Gledhill's letter of 12 September 2001 in response to these matters displays not even a hint of embarrassment, unless this is to be discerned from the aggressive tenor of the last paragraph.

"We are aware you act for CPI in the above matter and will direct all our correspondence to you in relation to it. However it is entirely appropriate for us to communicate with Mr Chess in relation to the arbitration between our client and VicRoads. This would not amount to communication with your client nor would it be communication with regard to the proceeding between our clients and CPI. Further, far from being `extraordinary' to request the services of CPI or Paul Chess, it would clearly be in your client's best interests to assist in defeating VicRoads in the arbitration. With regard to our client advising CPI that the writ had been issued against it, this is a matter for you to seek instructions from your insured client in relation to."

67. And so this proceeding has continued. Savcor delivered a lengthy statement of claim on 26 September 2001 and the present solicitors for CPI became the solicitors on the record on 26 October 2001.

70. Meantime, Savcor commenced a new proceeding, No. 8081 of 2001, by writ filed on 24 October 2001 and marked for entry in the Building Cases List. The defendants to this proceeding are Solomon Corrosion Control Services Pty Ltd and its principal, Isaac Solomon, and the Roads Corporation. On the same day, Savcor filed a summons in the 2001 proceeding seeking consolidation of the two proceedings and orders staying the arbitration. On 1 November 2001 I heard and refused the Savcor application to stay the arbitration[3] and on the cross-application of Roads Corporation, stayed those parts of Savcor's claims against the Roads Corporation in the 2001 proceeding as were covered by the arbitration agreement. On 30 November 2001 I ordered the 1999 proceeding be entered in the Building Cases List and consolidated it with the 2001 proceeding.

73. During the following three months or so, the consolidated proceeding has moved in a fairly conventional way through the process of filing and serving pleadings and particulars.

76. On 8 March 2002 the solicitors for CPI made a search of the file and discovered, for the first time, the content of the affidavit of Mr Grant upon which Savcor had relied in its application of 5 December 2000 for an extension of the writ in the 1999 proceeding. After referring this affidavit to their client, they wrote to Norton Gledhill on 18 April 2002 asserting that the Master's order was tainted by material non-disclosure. Their intention to seek an order setting aside the Master's order was stated to me in the course of the directions hearing in the Building Cases List on 19 April 2002. They have taken no further step in the proceeding. The present summons was filed on 26 April 2002.

79. Counsel for CPI submitted that this Court might set aside the Master's order and the consequent service of the writ in Denmark where the order was made as a consequence of a material misstatement or non-disclosure. Counsel for Savcor accepted that I had the power to do so.

(1) The degree of assistance sought by Savcor and obtained from Dr Chess in the period before the 1999 writ was filed and in the period which followed its filing.

(2) The existence and terms of the agreement of 23 September 1991 between Savcor and CPI which governed their dealings.

(3) The fact that CPI was unaware of the writ.

88. Before I turn to deal with each of these suggested non-disclosures I should recall the way the Master would have approached an application of the kind before him in December 2000. He would have been acutely conscious of the obligation of candour which attends an ex parte application of this kind. He would expect to be told that the period of limitation was or was about to expire if this were the case[4]. He would have known that it was the duty of a plaintiff to serve originating process promptly and that extensions will not be permitted unless good reason be shown[5]. A deliberate tactical reason to defer service pending the outcome of other litigation is not ordinarily considered a good reason[6]. He would have expected some proof that reasonable efforts had been made to effect service[7]. He would have been mindful that any prejudice to the defendant was an important consideration but that the impact of such prejudice may have been mitigated if notice of the writ had been given[8]. Such prejudice may arise where the defendants has not had the opportunity to gather or preserve evidence or to give effect to insurance arrangements. Finally, he would have been aware that in the ultimate, the decision to grant an extension turned upon his perception of where the justice of the case lay.

92. The application before me proceeded on the basis that the Master was told nothing other than what appeared in Mr Grant's affidavit. It is clear from this that the Master was told, rather coyly, that "an employee of [CPI] is a relevant witness to the matter in issue in the arbitration". The Master would have seen that the involvement of CPI was that of certifier. As a certifier he may have thought that the employee or its employer was in neither camp in the arbitration. He knew that Savcor was keen to have the employee attend an "expert's conclave" and that the employee might be reluctant to come voluntarily if the existence of the writ were brought to his attention by its service. It was not suggested on behalf of Savcor that the Master was told anything of the degree of assistance which had been given by this employee who must be Dr Chess. The Master would have known that the causes of action mentioned in paragraph 4 of the affidavit of Mr Grant expired six years after they arose. Since the retainer of CPI was "in the period July 1995 to March 1996" there was no urgent reason for concern on this matter. If he had looked again at the general endorsement, he would have seen the claims for misleading and deceptive conduct which are not mentioned in Mr Grant's affidavit. He would have perhaps thought that time might have expired with respect to those claims prior to the date of the application before him.

95. In the course of developing this argument, counsel for CPI sought to take me through the correspondence between Dr Chess and Mr Godson of Savcor or HGR, its solicitors. Savcor sought to prevent this by asserting legal professional privilege in these communications.

98. Counsel for CPI accepted that most of the communications were brought into existence for the predominant purpose of providing instructions to the solicitors for Savcor for the pending arbitration and were therefore privileged at the time they came into existence. There were some documents of a purely administrative nature, such as those dealing with Dr Chess' travel and accommodation arrangements upon his visit to Melbourne to attend conferences with Savcor's legal advisers. These, it was put, were never privileged and I think this is correct.

101. The argument as to the availability of the remainder turned upon imputed waiver. I was referred to the application of the fairness principle as explained in Mann v Carnell[9]. It was submitted on behalf of CPI that it was unfair for Savcor to maintain its privilege, at least upon this application. It was put that Savcor, by its silence, had led Dr Chess to think that his interest was that of an ally of Savcor and not a person at risk from it, to provide candid, confidential and technical information, perhaps including matters disadvantageous to himself or his company. It was put that it would be outrageous if Savcor could raise the privilege to prevent CPI from defending itself from its confidant by disclosing Savcor's reprehensible conduct. I agree that such inconsistent conduct amounts to unfairness. I ruled that the privilege had been waived so that the documents and their content are available for use upon this application. I express no view as to whether the waiver has a wider effect, for example, to permit the documents to be inspected or used by other parties or generally in the consolidated proceeding, or elsewhere.

104. Nevertheless, the documents have been tendered in evidence and, to protect the interests of Savcor and CPI, I ordered that they, exhibits PMC2 to PMC23 (inclusive) and Exhibit SJW23, be treated as confidential exhibits; they are not to be available for inspection otherwise than pursuant to an order of the Court.

107. To my mind, the detail of the content of these communications does not take this application far. It is sufficient that I conclude from a general inspection of them that they show that Dr Chess was asked for and that he provided candid, technical information regarding the cathodic protection process, including information in response to expert witness statements filed in the arbitration by the Roads Corporation. Furthermore, Dr Chess submitted to the process of the preparation of his own witness statements, including acquiescing in editorial decisions made by the legal advisers of Savcor. At the time he reposed in them the trust which ordinarily accompanies one's dealings with a respectable firm of solicitors who are believed to have one's interests at heart.

111. It was accepted that the existence and terms of this agreement were not disclosed to the Master. When pressed, counsel for CPI was unable to address argument that this was a material matter and I say nothing further about it.

(3) The fact that CPI was unaware of the existence of the Writ

115. Mr Grant in his affidavit states that the reason for not serving the writ was that, if service were effected, the employee of CPI might not voluntarily attend the expert's conclave. He did not disclose as a further and more important reason his concern that the assistance in terms of technical input and witness statement preparation might be terminated if the true intention of Savcor were exposed by service. The deponent, however, goes on to make the following extraordinary statement:

"[CPI] has full knowledge of the circumstances of this matter and its retainer was in the period July 1995 to March 1996. Accordingly the extension of this period for service will not materially prejudice [CPI]."

119. In response to my query that the first of these sentences might amount to a positive misstatement of fact, counsel for Savcor submitted that the expression "the matter" on a fair reading was a reference to the arbitration. This cannot be correct; the second sentence which is linked by the word "accordingly" would make no sense if this were so. Nor is it likely that a statement about the arbitration then on foot would be joined by the simple conjunction "and" to a statement about the retainer some five years previously. In the context in which it is found, "the matter" might refer to the Savcor decision not to serve the writ and its reason for this which is the subject of the preceding sentence. Or perhaps it refers to the facts giving rise to the dispute between Savcor and the Roads Corporation. If it has the first meaning, the sentence contains a false statement and one which, in the circumstances, the deponent must have known to be false.

122. I should record that, after the conclusion of the hearing, I was on 30 May 2002 asked to consider two further applications concerning Mr Grant's affidavit and the suggestion put on behalf of CPI that he intentionally misled the Court in making this statement in it. The first was made by counsel on his behalf for leave to appear and to lead evidence of his state of mind on this. I refused this application. Mr Grant is not a party, not even a mere witness, since his affidavit was not read in evidence. His affidavit was not before me as probative of the facts asserted in it, it was to show what material was before the Master.

125. The second application was made by counsel for Savcor seeking to reopen its case to call like evidence. This, too, I refused. I was not satisfied that the evidence or its supposed significance was not or could not reasonably have been appreciated by those acting for Savcor when its case was presented and when they decided not to lead the evidence which they now proposed to present. In any event, counsel for CPI stated before me on 30 May 2002 that their client did not seek a finding that Mr Grant intended to mislead the Court, if such a finding be relevant for my purposes. I make no finding that Mr Grant intended to mislead the Court when he swore his affidavit which included the sentence in question.

128. I have, nevertheless, pondered long over this matter. It is indeed a serious thing for a deponent, even innocently, to make a false statement, the more so in an affidavit presented to the Court on an ex parte application. It is a serious thing for a solicitor to do so. It is a finding I would make only where I was clearly persuaded that the evidence demanded it. In the present case I am not so persuaded. I will construe "the matter" in the first sentence quoted in paragraph [33] above as being a reference to the underlying facts which give rise to the dispute which was before the arbitrator. The preceding sentence contains the implication that the writ had not been brought to the attention of CPI. It is unlikely in these circumstances that the deponent conveyed or that the reader would understand that CPI had full knowledge of the proceeding before the Court. There is no misstatement in the first sentence.

131. That leaves the rather puzzling second sentence regarding prejudice. The deponent here seems to offer two reasons for the conclusion that there will be no prejudice to CPI if it continues in ignorance of the writ for another six months. First, it knows the facts underlying the dispute with the Roads Corporation and, second, its retainer was about five years old. It is difficult to make anything of this unless it was intended to convey that CPI has lived with this matter for many years and, without knowledge of the writ for the past 12 months, so that a further few months will not harm it. The assertion that the extension of the writ will not materially prejudice CPI appears to be based on mere supposition.

134. It was put on behalf of CPI that this was a false statement because its indemnity insurer avoided its policy on 19 April 2002 on the grounds that the renewal proposal dated 10 January 2001 contained a statement that CPI was then not aware of any circumstances which may give rise to a claim. This cannot be correct for a number of reasons. There is no reason to infer that Mr Grant had any knowledge of CPI's insurance position when he swore his affidavit in December 2000. Second, while it may be correct that a different answer would have been given by CPI in the January 2001 proposal had the writ been served upon it before December 2000, the erroneous answer made in January 2001 was no less erroneous for that. If the facts underlying the Roads Corporation claims were known to CPI at all material times, it was their non-disclosure to CPI's insurer and the erroneous answer to the 2001 proposal, not the non-disclosure of the existence of the writ that, arguably, gave rise to the decision to cancel the policy. Whether the insurer was entitled to cancel the CPI policy for this erroneous answer is beside the point; if CPI knew of the circumstances which may give rise to a claim it should have answered the question differently. If CPI knew of the circumstances which may give rise to a claim there is no reason for it not to have answered the question differently or to have failed to disclose those circumstances upon the 2001 policy renewal. F The fact, however, remains that it is very probable that CPI would have notified its insurers as soon as it learnt of Savcor's writ or of Savcor's intention to sue it for its conduct in connection with the San Remo Bridge.

138. This part of the present application, therefore, comes down to this. Was the non-disclosure of the fact that Savcor was obtaining technical assistance from CPI of the kind I have described a non-disclosure of such materiality that this Court should act as CPI has asked it to? The answer to this question requires an examination of the role that this non-disclosed fact might have played in the application before the Master. I have set out above the general matters with which the Master would have been concerned. I put to one side the unfair pressure that Savcor sought to impose upon him by its decision to bring their application at the last minute. The Master would have been aware that the applicant bore the onus of persuading him that this was a case for extension. He would have been troubled by the fact that no good reason was shown for the failure to serve promptly. Indeed, the reason given, that it wanted to conceal the hostile intention from a person in the hope that he would voluntarily assist it by attending the conclave of experts, is one which the Master would have found very unattractive. It may well have been that his concerns about this might have been allayed by the fact that the extension was to be relatively short and that no prejudice would be caused by the deferring of service. Accepting all of this, I find it inconceivable that the Master would have granted the extension had he been given a full account of the double-dealing of Savcor and its representatives. He would have recoiled from lending the support of the Court to such conduct by extending for even one moment the time within which this conduct might continue. This non-disclosure was a very material non-disclosure.

142. I have concluded that the order of Master Wheeler was obtained as a consequence of a material non-disclosure. I am satisfied that, had he been apprised of the true situation, the Master would have refused the application for extension. The Court has power in these circumstances to discharge the order and will do so where the justice of the case directs. In the present case, this may well be an idle gesture for the writ has been served and an unconditional appearance has been entered so that the irregularity involved in the service of the stale writ has been waived[10]. I shall assume, without expressing an opinion on this matter, which was not the subject or argument before me, that in circumstances such as the present an unconditional appearance by a party who is ignorant of the facts may amount to waiver so that, following service of the writ on 29 June 2001, CPI submitted to the jurisdiction.

145. The orders, therefore, which are now sought by CPI are that the ex parte order of the Master be discharged for non-disclosure and that the service of the writ be set aside[11]. I am not sitting on an appeal from the Master; I am asked to discharge his order on the basis of facts which were not before him and to do so in the light of events which have occurred since his order. I see my task as determining whether the non-disclosure was of sufficient gravity to warrant the setting aside of the order and of what has flowed from it and, generally, in the circumstances as they now stand, including the balance of hardship to the affected parties, where the interests of justice lie.

148. These interests, which include the preservation of the integrity of the Courts' own process, may, in circumstances where there has been a serious non-disclosure, point to the setting aside of this tainted order. The applicant, by making a deliberate decision for what, in my view, was no good reason, ran the risk that the writ would not be extended. It was a decision which appears to have been made entirely for its own convenience. Further, by not bringing its application until the very last minute when refusal would have had serious consequences for it, Savcor walked to the very edge of the precipice. I add to this that these decisions were made by Savcor in the furtherance of its conduct vis-à-vis Dr Chess, to which the Court would not wish to lend its aid.

151. From the point of view of CPI, the continuance of this proceeding carries prejudice. Dr Chess has made disclosure of matters which may be used against him and his company. He has acquiesced in a deletion from his witness statement which may cause later difficulty. The question of CPI's insurance position is more problematic. It may be supposed that, if it had prompt notice of the writ by service or otherwise, CPI would have advised its insurer forthwith. This would have been a claim under its 1999-2000 policy or possibly its 2000-2001 policy. Whether circumstances existed for a denial of liability under these policies is not known. Dr Chess does say that his lack of information about the writ has meant that "CPI has been unable to act so as to avoid prejudice to its insurance cover". I have no reason to doubt this.

154. What then would be the consequence of making an order such as CPI now seeks? It would be unlikely to retrieve CPI's insurance position. The causes of action of Savcor for which loss or damage, in terms of its liability to the Roads Corporation, is an ingredient, cannot be statute barred, for this liability has not been established[12]. It is possible that some other causes of action against CPI would now be barred and that some were barred in December 2000. Savcor would be put to the trouble and expense of commencing a fresh proceeding against CPI. The utility to CPI of the orders which it seeks is the prospect or the possibility that Savcor may not start again.

157. Weighing up these considerations as best I can, I am persuaded that the application should be granted. I cannot escape the fact that this writ should not, in the circumstances now known, have been extended[13]. The Court, which was led into error by the Savcor non-disclosure, should do all possible to set this matter aright.

160. The order of the Master will be discharged and the service of the writ on CPI will be set aside. I will hear counsel further as to the precise terms of the order which will be required to give effect to these conclusions and as to costs.

[3] [2001] VSC 428.

[4] Waddon v Whitecroft-Scovill Ltd [1988] 1 All ER 966 at 999, per Lord Brandon.

[5] Ramsey v Madgwicks [1989] VicRp 1; [1989] VR 1 at 5, per Young CJ.

[6] Ramsey v Madgwicks [1989] VicRp 1; [1989] VR 1 at 5, per Young CJ.

[7] Finlay v Littler [1992] VicRp 59; [1992] 2 VR 181 at 186.

[8] Van Leer Australia Pty Ltd v Palace Shipping KK [1981] HCA 11; (1981) 180 CLR 337 at 350, per Stephen J.

[9] [1999] HCA 66; (1991) 201 CLR 1.

[10] See Brealey v Board of Management Royal Perth Hospital [1999] WASCA 158; (1999) 21 WAR 79 at 84, per Malcolm CJ.

[11] As was sought and refused in Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561.

[12] See Fluor Australia Pty Ltd v Sherritt International Corporation [2002] VSC 203.

[13] See Bell Group NV (in liq) v Aspinall (1998) 19 WAR 561 at 578.