Tenement Administration Services Pty Ltd v Hodson

REASONS FOR JUDGMENT 1 On 25 February 2013 the applicant to the substantive proceedings filed the interlocutory application presently before the Court. The applicant seeks an order to vary self-executing orders of the Court dated 6 February 2013, as a result of which the originating application dated 14 December 2011 was dismissed. Effectively, success of the applicant in respect of this interlocutory application would reinstate the substantive proceedings. 2 Of particular note in relation to this matter is that the orders of 6 February 2013, which were in the nature of "guillotine" orders in the event of non-compliance, were made by the Court following circumstances where not only had the applicant's solicitor informed the Court that they were orders to which all parties consented, but the orders in draft were presented to the Court by the applicant's solicitor on that basis. 3 The question for consideration for the Court is whether the Court should exercise its discretion to vary the Orders of 6 February 2013, as sought by the applicant.

Background 4 It is useful to set out, in some detail, the background to the current application. 5 The applicant is a company engaged in the business of mineral land administration. It has offices throughout Australia although the largest proportion of its work occurs in Queensland and Western Australia. The applicant's managing director is Ms Jay Evans-Wheeler, who on 26 February 2013 swore an affidavit in support of the interlocutory application. 6 The first respondent, Ms Hodson, is a former employee of the applicant. The applicant claims that Ms Hodson used the applicant's confidential information, including client information, rates of charges and precedent documents, to establish the business now operated by the second respondent in competition with the applicant. The applicant further claims that the respondents used the applicant's equipment to promote the second respondent's business while Ms Hodson was still employed by the applicant. 7 The applicant filed an originating application in this proceeding on 14 December 2011. In summary, the applicant sought a permanent injunction restraining the respondents from divulging or making use in any way of confidential information of the applicant, in addition to interlocutory restraining orders. By consent on 16 February 2012 I subsequently made interlocutory orders restraining Ms Hodson and the other respondents from, inter alia, performing work in the nature of services supplied by the applicant, or making use of confidential information of the applicant. 8 Subsequently on 4 July 2012, by consent I made the following timetabling orders: 1. The parties make any request for further and better particulars by 4.00 pm on 19 July 2012. 2. The parties respond to any request for further and better particulars by 4.00 pm on 16 August 2012. 3. The applicant file any Amended Statement of Claim by 4.00 pm on 6 September 2012. 4. … 5. … 6. Each party file a notice of discovery identifying the categories of documents sought from an opposing party on or before 4.00 pm on 11 October 2012. 7. Each party file a list of documents to be discovered on or before 4.00 pm on 1 November 2012. 8. Each party provide inspection of its discovered documents by 4.00 pm on 29 November 2012. 9. … 9 The respondents filed a request for further and better particulars on 19 July 2012, and a notice for discovery on 12 October 2012. 10 In his affidavit sworn 22 February 2013, the applicant's solicitor Mr Conradie deposed that he only became aware on 7 August 2012 that the request for further and better particulars had been filed and emailed to him by the respondents' solicitor Mr Deighton. 11 In her affidavit sworn 26 February 2013 Ms Evans-Wheeler deposed that Mr Conradie repeatedly assured her that he was progressing the matter. However Mr Conradie conceded in his own affidavit sworn 22 February 2013 that he did not progress the matters the subject of the orders of 4 July 2012. 12 On 15 November 2012 Deputy District Register Belcher wrote to Mr Conradie noting that the applicant had not appeared to take any steps in the proceeding since the orders of 4 July 2012 were made (annexure EC-1 attached to the affidavit of Mr Erich Conradie sworn 22 February 2013). DDR Belcher also wrote: Please note that parties are expected to comply with orders of the Court and that failure to do so may result in sanctions, including adverse costs orders, or, in exceptional cases, recourse to other remedies such as the summary disposal of the application. It is unacceptable for a party to simply ignore the orders of the Court or to fail to take steps to remedy any breach of those orders. An applicant, in particular, is expected to prosecute their case with appropriate diligence. 13 Mr Conradie responded to DDR Belcher in a letter dated 26 November 2012, acknowledging that the letter was provided outside the period in which DDR Belcher had requested a response (annexure EC-2 to the affidavit of Mr Erich Conradie sworn 22 February 2013). Mr Conradie stated, in summary, that: The applicant had not responded to the defendant's request for further and better particulars, but proposed to do so by 30 November 2012. It was unlikely that the applicant would require its statement of claim to be further amended. The applicant did seek to have the defendants discover documents. The applicant proposed to remedy its breach of Order 7 of 4 July 2012 and file a list of discovered documents by no later than 4.00 pm on 7 December 2012. The applicant proposed that each party provide inspection of its discovered documents by 4.00 pm on 11 January 2013, "in light of the dates mentioned above, the upcoming Christmas holidays and the fact that this matter is listed for Directions again on Wednesday, 6 February 2011". 14 On 31 December 2013, DDR Belcher wrote to Mr Conradie for a second time (annexure EC-3 to the affidavit of Mr Erich Conradie sworn 22 February 2013). In summary, DDR Belcher: Requested the applicant to confirm that it had responded to the respondent's request for further and better particulars dated 4 July 2012 by 30 November 2012. Stated that the leave granted to the applicant to file an amended statement of claim had expired, and that the applicant would be unable to amend its statement of claim without further order of the Court. Stated that despite the applicant's indication that it still wished to pursue discovery, no document had been filed in furtherance of that pursuit. DDR Belcher stated: "The applicant's long delay in taking advantage of the discovery order by the Court needs to be considered in combination with the discretionary nature of that order. Consequently it is difficult to see that the applicant would now be permitted to seek discovery without the sanction of a further order of the Court". Noted that the applicant had failed to remedy its breach of Order 7, despite Mr Conradie's earlier assurance that the applicant would do so by 7 December 2012. Reiterated his warning about compliance with orders being compulsory and the adverse consequences that could follow for parties who failed to comply. DDR Belcher also stated that: In this case there is a lengthy and ongoing failure by the applicant to satisfactorily progress its case. Its failure to comply with court orders has continued despite the Court's concern about this being raised in my earlier letter. No explanation for the delay has been provided. Stated that the applicant would need to be in a position to explain its failure to comply with the court's orders at the next directions hearing on 6 February 2013. 15 Mr Conradie deposed in his affidavit sworn 22 February 2013 that he did not respond to DDR Belcher's letter because he believed he would be able to agree on a new timetable with the respondents at the directions hearing scheduled for 6 February 2013. 16 I note that Ms Evans-Wheeler is herself a solicitor. It appears that she attended Mr Conradie's offices for 10 days in January 2013 to assist in the preparation of the notice of discovery and list of documents for the applicant. 17 On 5 February 2013, Mr Deighton on behalf of the respondents emailed a letter to Mr Conradie, proposing draft orders for the Court's consideration at the directions hearing on 6 February 2013. 18 Mr Conradie responded to the email on the morning of 6 February 2013, attaching an amended version of the order proposed by the respondents. In his email Mr Conradie stated: I got rid of all the steps associated with an amended claim as my instructions are that course will not be explored any further. I have also brought most of the dates forward as my client's documents are ready for inspection. 19 On 6 February 2013 the matter was listed for further directions before me. At that hearing the following exchange occurred (transcript 6 February 2013 p 2 ll 18-33): MR CONRADIE: Your Honour, orders were previously agreed upon and made. Those orders were not adhered to, and I'm - - - HER HONOUR: That's unfortunate. MR CONRADIE: That is unfortunate, and I offer my apologies. Inroads, substantial work has been done and my learned friend and I have agreed on orders that I intend to hand up to your Honour. It contains some checks and balances. Should the applicant not adhere to these orders, the applicant's proceedings will be dismissed, which is a serious - - - HER HONOUR: Consequence. MR CONRADIE: Well, it's a serious penalty. In addition, the applicant agrees to pay the respondents' costs of the proceedings today on the standard basis or as agreed. 20 On that date I made the following orders which were agreed between the parties: 1. The applicant respond to the respondents' request for particulars dated 19 July 2012 by no later than 12 February 2013. 2. The applicant file and serve a list of documents to be discovered by 12 February 2013. 3. The applicant file and serve a notice of discovery identifying the categories of documents sought from the respondents by 12 February 2013. 4. The applicant provide inspection of its discovered documents on or before 19 February 2013. 5. … 6. … 7. If the applicant fails to comply with any of order 1, 2, 3 and 4, the proceeding be dismissed and the applicant pay the respondents' costs of the proceedings on a standard basis. 8. Liberty to apply on three days' written notice. 9. … 10. … 11. … 12. … 13. The applicant pay the respondents' costs of and associated with this directions hearing on the standard basis or as agreed. 21 These orders included all of the orders agreed between the parties in the terms emailed that morning by Mr Conradie, including Order 7, in addition to additional orders relating to mediation which are not material in the current circumstances. 22 It is not in dispute that Order 7, the self-executing order, was made by consent of the parties so far as the Court and the respondents were aware. 23 Subsequently however, Mr Conradie has deposed that he agreed to the self-executing orders without informing Ms Evans-Wheeler of their nature, and that he only informed Ms Evans-Wheeler of the nature of the orders after they had been made.