Supreme Court of WA|2006-12-15

Van Blitterswyk v Sons of Gwalia Ltd (Administrator Appointed) & Ors [2006] WASC 283 (15 December 2006)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : VAN BLITTERSWYK -v- SONS OF GWALIA LTD (ADMINISTRATOR APPOINTED) & ORS [2006] WASC 283

Practice and procedure - Proceedings for leave under s 440D of the Corporations Act 2001 (Cth) - Application to dismiss for want of prosecution - Relevant principles - Turns on own facts

Application to strike out for want of prosecution dismissed

Bishopsgate Insurance Australia Ltd (In Liq) v Deloitte Haskins & Sells [1999] 3 VR 863

Blitterswyk v Sons of Gwalia Ltd & Ors [2005] WAMW 26

First Trade Consulting Pty Ltd v GRD Kirfield Ltd [2005] WASCA 158

Hughes v Gales (1995) 14 WAR 434

Jakovljevic v L & B Doslov [2000] WASCA 131

Lewandowksi v Lovell (1994) 11 WAR 124

Masel v Transport Industries Insurance Co Ltd [1995] VicRp 59; [1995] 2 VR 328

Monaveen Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v ABB Service Pty Ltd [2004] WASC 5

Shields Contracting Pty Ltd (In Liq) v Glintan Pty Ltd [2005] WAMW 5

The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93

Van Blitterswyk v Sons of Gwalia Ltd & Ors [2005] WAMW 6

1 MASTER NEWNES: This is an application by the second defendant ("St Barbara") and third defendant ("Saracen") to dismiss, for want of prosecution, proceedings in this Court brought by the plaintiff under s 440D and s 444E of the Corporations Act 2001 (Cth) ("the Act"). The proceedings are for leave nunc pro tunc for the plaintiff to lodge and pursue in the Warden's Court both objections to exemption applications made by the first defendant ("Sons of Gwalia") under the Mining Act 1978 (WA) in respect of certain mining tenements it holds and plaints which the plaintiff has filed for the forfeiture of those mining tenements. It was accepted by the defendants that if leave were granted under s 440D, then leave under s 444E would inevitably be granted. I will, for convenience, refer simply to the application for leave under s 440D.

2 In the period 14 September 2004 to 30 January 2005, the plaintiff lodged objections to expenditure exemption applications made by Sons of Gwalia in respect of a number of mining tenements it held. The plaintiff also lodged plaints for forfeiture of the tenements in question. At the time, the plaintiff acted without solicitors.

3 Administrators had been appointed to Sons of Gwalia and its subsidiaries on 29 August 2004. The plaintiff was aware of that fact but considered that s 440D of the Act did not apply to the objections and plaints.

4 On 25 November 2004, some of the plaints and objections came on for hearing on the first return date in the Warden's Court. The solicitors for Sons of Gwalia informed the Warden that Sons of Gwalia was in administration and raised the issue of the application of s 440D. The hearing was adjourned to 16 December 2004. On the latter date, the matter was adjourned to 25 January 2005 when there was argument as to the effect of s 440D of the Act on the plaintiff's objections and plaints.

5 On 28 February 2005, Warden Auty SM delivered her decision on that question, finding that the objections to the exemption applications and the plaints for forfeiture lodged by the plaintiff were each "a proceeding in a court against" Sons of Gwalia "or in relation to its property" for the purposes of s 440D of the Act and, accordingly, they were stayed: Van Blitterswyk v Sons of Gwalia Ltd & Ors [2005] WAMW 6.

6 In the meantime, on 2 February 2005, certain other plaints and objections lodged by the plaintiff came on for hearing on their first return date in the Warden's Court. The hearing of those plaints and objections was adjourned to 2 March 2005. Again the question of the effect of s 440D was raised by the solicitors for Sons of Gwalia, who referred the Warden to the decision of Warden Auty SM in Van Blitterswyk v Sons of Gwalia Ltd & Ors (supra).

7 On 2 March 2005, the Warden directed the exchange of written submissions by the parties on the question of whether the plaints and objections then before the Court were stayed by virtue of the operation of s 440D of the Act.

8 On 21 March 2005, St Barbara purchased the interest of Sons of Gwalia in the tenements. On 27 April 2005, an application was made by St Barbara to be joined as a party to the proceedings.

9 On 24 June 2005, in unrelated proceedings, Warden Calder SM held that none of s 440D, s 471B or s 500(2) applied to an objection to an application for exemption, but considered that those provisions did apply to a plaint for forfeiture: Shields Contracting Pty Ltd (In Liq) v Glintan Pty Ltd [2005] WAMW 5. Warden Calder SM (at [106] - [107]) expressly disagreed with the view of Warden Auty SM in Van Blitterswyk v Sons of Gwalia Ltd & Ors (supra) that s 440D applied to an objection to an application for exemption.

10 The application of s 440D of the Act to the further objections and plaints came again before the Warden's Court on 29 June 2005. On that occasion, reference was made to the decision in Shields Contracting Pty Ltd (In Liq) v Glintan Pty Ltd (supra) and a direction was given that the parties file any supplementary submissions on the issue of whether the plaints and objections were stayed by virtue of s 440D of the Act and on the joinder of St Barbara and the matter adjourned for argument on that question.

11 The question was argued before Warden Auty SM on 27 July 2005 and the Warden's decision was delivered on 24 August 2005: Blitterswyk v Sons of Gwalia Ltd & Ors [2005] WAMW 26. Warden Auty SM held that the plaints and objections were stayed pursuant to s 440D of the Act. The plaintiff was directed to apply to this Court for leave to proceed nunc pro tunc within 21 days in respect of both the objections and the plaints. While satisfied that the plaintiff should have acted more speedily in moving to obtain leave to proceed nunc pro tunc, the Warden declined to make a springing order in respect of the application for leave to proceed in light of the undertaking by the plaintiff's solicitor that the application would be made within 21 days. The further hearing of the plaints and objections has been adjourned pending the outcome of this application.

12 Shortly after that decision, on 30 August 2005, Sons of Gwalia entered into a Deed of Company Arrangement.

13 The plaintiff commenced the current proceedings for leave on 14 September 2005 and served them on 21 September 2005. In the proceedings as initially constituted, only Sons of Gwalia was named as a defendant.

14 On 22 September 2005, St Barbara's solicitors wrote to the plaintiff's solicitors asking whether the plaintiff opposed the joinder of St Barbara as a defendant. There was apparently no response to that letter and, on 6 October 2005, St Barbara's solicitors wrote again, reiterating the question and raising what it said were defects in the originating process which required rectification.

15 On 14 October 2005, St Barbara entered into an agreement with Saracen by which Saracen acquired an interest in the relevant tenements.

16 There was a directions hearing in these proceedings on 17 October 2005 at which directions were made by consent that any application to amend the originating process and any further affidavit on behalf of the plaintiff be filed by 28 October 2005, and that any application by St Barbara Mines to be joined as a party be filed by 28 October 2005. An application by St Barbara to be joined as a party was filed on 28 October 2005. Nothing, however, had been filed on behalf of the plaintiff by that date.

17 On 3 November 2005, the solicitors for St Barbara wrote to the plaintiff's solicitor complaining of the plaintiff's failure to comply with the order of 17 November 2005 and reiterating that their clients' principal ground of opposition to the grant of leave under s 440D was delay on the part of the plaintiff. The plaintiff's amended originating process was filed on 15 November 2005.

18 On 29 November 2005, the solicitors for St Barbara and Saracen wrote to the plaintiff's solicitors asking if the plaintiff consented to the joinder of Saracen as a defendant. There was apparently no response, or no satisfactory response, to that letter.

19 On 1 February 2006, Saracen filed and served an application for it to be joined as a defendant. When the matter came on for hearing on 8 February 2006, orders were made by consent for the joinder of St Barbara Mines and Saracen as second and third defendants respectively. The plaintiff was ordered to pay the costs of the application for joinder by St Barbara and Saracen.

20 The solicitors for St Barbara and Saracen wrote to the plaintiff's solicitors on 8 February 2006 setting out the orders that had been made at the hearing that day and requesting that the plaintiff ensure that all necessary steps were taken to enable the proceedings to be listed for hearing without further delay. They said that, in opposing the grant of leave, St Barbara and Saracen would not only rely upon delay in issuing these proceedings, but also any delay in prosecuting them.

21 On 15 March 2006, the solicitors for St Barbara and Saracen wrote to the plaintiff's solicitors complaining that the plaintiff had failed to proceed with these proceedings expeditiously and saying that unless a proposal for the resolution of the matter was received by the end of that week they were instructed to seek a dismissal of the proceedings. They would then seek dismissal of the plaints and objections in the Warden's Court on the basis that the latter proceedings were invalid and did not comply with s 440D of the Act.

22 On 4 April 2006, the solicitors for St Barbara and Saracen wrote to the plaintiff's solicitors complaining of a lack of response to their previous correspondence and enquiring whether the plaintiff intended to pursue the application for leave under s 440D, and the plaints and objections. They also enquired whether the plaintiff was interested in discussing settlement of the matter.

23 The plaintiff's solicitors replied by letter of 19 April 2006 (but not received by the defendants' solicitors until 12 May 2006) confirming an earlier telephone conversation in which they had advised the solicitors for St Barbara and Saracen that the plaintiff was prepared to consider negotiating a settlement and that the plaintiff would provide a proposal for settlement shortly. The solicitors sought, in the circumstances, the defendants' "forbearance".

24 An offer of settlement was put by the plaintiff to St Barbara and Saracen on 20 June 2006, through their respective solicitors. On 21 June 2006, the solicitors for St Barbara and Saracen advised that the offer was rejected by their clients and that an application had been made for the proceedings to be dismissed for want of prosecution. The present application was in fact filed on 23 June 2006.

25 Sons of Gwalia has taken no active part in these proceedings, although it has indicated that it opposes leave being granted to the plaintiff under s 440D. The carriage of the opposition to these proceedings has been taken by St Barbara and Saracen.

26 It was submitted that the Court has inherent jurisdiction to dismiss any proceedings for want of prosecution, including proceedings for leave under s 440D of the Act.

27 Counsel argued that the plaintiff should have sought leave before the Warden's Court proceedings were issued and that this application for leave nunc pro tunc is therefore seeking an indulgence to cure a defect in those proceedings. Accordingly, the Court should take into account the initial delay in applying for leave and the delay since the proceedings for leave were commenced.

28 It was submitted on behalf of St Barbara and Saracen that there had been inordinate and inexcusable delay in the prosecution of the proceedings for leave. The plaintiff did not apply for leave under s 440D for a period of 12 months after the initial Warden's Court proceedings were commenced and then only did so because St Barbara and Saracen obtained a direction from the Warden requiring the plaintiff to seek leave. While the current proceedings have been on foot for some 12 months, they are still far from ready for hearing and the plaintiff has repeatedly failed to comply with the rules of Court and the directions of the Court.

29 It was submitted that there is no requirement in circumstances such as the present for the defendants to show prejudice, but in fact there was prejudice to the defendants while these proceedings, and the plaints and objections the subject of it, remain unresolved. While they remained unresolved the defendants had to bear the holding costs associated with the tenements but were unable to enjoy the exclusive rights conferred by the tenements. The term of each of the tenements (which is finite) is effectively reduced because the defendants are unable to enjoy their exclusive rights and the value of the tenements is reduced by the risk of forfeiture.

30 It was submitted that if leave were ultimately granted, the delay in these proceedings will delay the ultimate hearing of the plaints and objections, which in turn will adversely affect the defendants' ability to locate documentary evidence and witnesses and also impair the recollection of witnesses. The defendants are not in a position to go about those tasks at the present time as the plaints and objections are not fully particularised and the matters in dispute are therefore not properly identified. As the proceedings in the Warden's Court have been stayed, the Warden has not made orders for particulars and other procedural directions.

31 Moreover, as Sons of Gwalia has been in administration and is now the subject of a Deed of Company Arrangement, the documents and witnesses necessary for the ultimate hearing of the plaints and objections will be increasingly difficult to locate. The former employees of Sons of Gwalia and its subsidiaries have gone on to other jobs.

32 It was further submitted that it was in the public interest for tenements to be actively explored, prospected and mined, and while these proceedings and the subject matter plaints and objections remain on foot, and there remains a risk of forfeiture, the defendants' exploration will not be conducted and the ground is "effectively sterilised".

33 Counsel argued that the plaintiff would not suffer any significant prejudice if the current proceedings were dismissed. The plaintiff has no existing interest in the tenements or personal entitlement to relief under the plaints which is greater than the entitlement of any other person, because any person may lodge an objection to an exemption application or a plaint.

34 It was submitted that the objections and plaints as they currently stand are defective because they were issued without leave, so the plaintiff's entitlement to relief is contingent upon that defect being cured. He has no right to have the defect cured and is seeking an indulgence, which will not be granted in the event of unjustified delay. Counsel acknowledged that the delay in this case may not be of the magnitude that would generally warrant dismissing an ordinary civil action, but argued that in circumstances where the plaintiff was seeking an indulgence of this nature, the delay justified the proceedings being dismissed.

35 It was also submitted that the dismissal of the current application for leave, and in turn the plaints and objections, will not affect the plaintiff's ability to lodge new plaints in respect of the tenements for subsequent reporting years.

36 Counsel argued that if the application for leave were dismissed for want of prosecution, it would be appropriate that orders also be made setting aside the plaints and objections concerned. It was submitted that this Court has the power to make such ancillary orders pursuant to its inherent jurisdiction, s 447A of the Act or s 1132 of the Act.

37 It was submitted on behalf of the plaintiff that leave was not, and is not, required under s 440D of the Act either in relation to the objections or to the plaints. That was also the view the plaintiff took at the time the objections and plaints were lodged, on the basis that such proceedings were not a "proceeding in a court" under s 440D of the Act. These proceedings were instituted following a determination by the Warden that leave under s 440D of the Act was required and directed that leave be obtained.

38 Counsel for the plaintiff did not take issue with the proposition that the Court may dismiss these proceedings for want of prosecution but argued that there had not been inordinate, or any intentional, delay in the prosecution of the proceedings. It was submitted that there had been a number of issues to be resolved in relation to the joinder of other parties following the disposal first, of the interests of Sons of Gwalia in the tenements to St Barbara, and subsequently by St Barbara of an interest in them to Saracen.

39 In addition, in about April 2006 the solicitors for St Barbara and Saracen had invited a settlement offer from the plaintiff to resolve all matters between them and such an offer was put on 20 June 2006. That offer was rejected on 21 June 2006. In circumstances where there had been an invitation to the plaintiff to make an offer of settlement it would have been inappropriate for the plaintiff to seek to pursue these proceedings until attempts to resolve the matter were exhausted. It was submitted that it was inappropriate for St Barbara and Saracen to make an application to dismiss these proceedings for want of prosecution while the question of settlement remained outstanding.

40 There had also been difficulty in service of a tenement holder from whom Sons of Gwalia had acquired one of the tenements. The tenement had not been transferred into Sons of Gwalia's name and Sons of Gwalia had insisted that the registered holder be served. Sons of Gwalia had maintained, however, that as it held an interest in the tenement, leave under s 440D was still required to proceed with the relevant objection and plaint.

41 It was submitted that there was no real prejudice to the defendants by reason of any delay in the prosecution of the leave application. There is no evidence that the existence of these proceedings has affected the exploration by the defendants. St Barbara and Saracen have not actively explored many of the tenements in the same location that are not subject to plaints by the plaintiff and, on the other hand, they have explored tenements that are the subject of plaints.

42 In respect of submissions on behalf of St Barbara and Saracen that the value of the tenements has been reduced by the risk of forfeiture, counsel submitted that the tenements in question were acquired by St Barbara and Saracen in circumstances where they were aware that the expenditure requirements had not been met, with the consequence that the tenements were at risk of forfeiture and that exemption applications had been made. They were also aware that the tenements were the subject of the plaintiff's objections and plaints. Sons of Gwalia was aware too that the expenditure requirements had not been met and it had made the exemption applications in issue. It had also been aware from the outset of the plaintiff's objections and plaints.

43 It was submitted that St Barbara and Saracen, which are not in administration and which now have acquired the beneficial interest in the tenements, were seeking to utilise s 440D in a way that it was never intended by the legislature. The effective owner of the tenements was not Sons of Gwalia, but rather St Barbara and Saracen in respect of which the protective provisions of s 440D had no application. St Barbara and Saracen were using the position of Sons of Gwalia to hide behind s 440D.

44 It was further submitted that the delay will not affect the defendants' ability to locate documentary evidence and witnesses as Sons of Gwalia has been on notice from the time that the plaints and objections were lodged, and St Barbara and Saracen from at least the time they acquired their respective interest, that the tenements were liable to forfeiture. The circumstances of the defendants have not materially changed since that time.

45 Counsel for the plaintiff accepted that prejudice to the public interest in the expeditious progress of litigation ought to be considered in relation to an application of this nature, but argued that it was equally in the interests of justice that settlement negotiations take place to avoid unnecessary litigation. Having invited an offer of settlement from the plaintiff it was inappropriate for St Barbara and Saracen to institute and proceed with this application before the negotiations had irretrievably broken down.

46 It was submitted that the plaintiff will suffer significant prejudice if the proceedings are dismissed as he will lose the opportunity to acquire the tenements if the objections are upheld. It is in the public interest that tenements are "policed" to ensure that tenement holders meet their obligations under the Mining Act. The dismissal of these proceedings will affect the plaintiff's ability to proceed with plaints in relation to the non-compliance of the defendants with those obligations.

47 There was no substantial disagreement between the parties on the principles to be applied on an application of this nature.

48 Proceedings should be dismissed for want of prosecution where the Court is satisfied either that the delay has been intentional or contumelious, or that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers and the delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the proceedings or is such as is likely to cause or to have caused serious prejudice to the defendant: Lewandowksi v Lovell (1994) 11 WAR 124 at 133.

49 The matters which will usually be relevant to the Court's discretion to dismiss a claim for want of prosecution were recently considered by the Court of Appeal in The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93 at [99] - [103]. They are as follows:

3. the hardship to the plaintiff if the proceedings are dismissed and the cause of the proceedings is left statute-barred;

4. the prejudice to the defendant if the proceedings are allowed to proceed notwithstanding the delay; and

5. the conduct of the defendant in the litigation.

50 In that case, the Court made it clear, however, that it is inappropriate to use these matters as a checklist and the ultimate test is what justice in all its relevant notions or senses requires in the circumstances of the case.

51 In the absence of express agreement or an order to the contrary, settlement negotiations do not have the effect of suspending the obligations of the parties to continue to take all necessary procedural steps to advance the litigation: First Trade Consulting Pty Ltd v GRD Kirfield Ltd [2005] WASCA 158 at [9].

52 While the relevant delay is that which occurs after the issue of the proceedings, a late start makes it more incumbent upon the plaintiff to proceed with all due speed, and a pace which might have been excusable if the proceedings had been started sooner may be inexcusable in light of the time that has already passed before the proceedings were issued: Lewandowski v Lovell (supra) at 134.

53 Delay can be constituted by a failure to prosecute proceedings in a way which would enable the interlocutory steps to be concluded within a reasonable time. Thus, for example, it has been held there may be a want of prosecution during a period in which the plaintiff is involved in continuing unsuccessful attempts to establish a proper pleading: Bishopsgate Insurance Australia Ltd (In Liq) v Deloitte Haskins & Sells [1999] 3 VR 863 at 876 - 877; Monaveen Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v ABB Service Pty Ltd [2004] WASC 5. Generally, therefore, delay is not to be measured simply by the amount of activity by the plaintiff, but rather by the amount of progress that has been made by the plaintiff.

54 Delay is a relative concept that must be considered in the context of the case in question and involves consideration of matters such as the size and complexity of the proceedings, the length of time that would normally be required to resolve such litigation and the conduct of the other parties: Masel v Transport Industries Insurance Co Ltd [1995] VicRp 59; [1995] 2 VR 328 at 345.

55 While it is open to the defendant to prove actual prejudice of a particular sort, where there has been substantial delay that delay, of itself, may lead to an inference of serious prejudice without specific evidence of prejudice: Hughes v Gales (1995) 14 WAR 434; Jakovljevic v L & B Doslov [2000] WASCA 131.

56 I should say that I do not accept the submission on behalf of St Barbara and Saracen that the question of whether or not there will be prejudice to them by reason of the delay is irrelevant. The case referred to for that proposition was Finlay v Littler [1992] VicRp 59; [1992] 2 VR 181, which concerned an application for the renewal of a writ which had not been served within time. The circumstances were therefore quite different to the present case, as counsel acknowledged, and, in any event, in that case the Court considered as a relevant factor in the determination of the application that prejudice to the defendant was to be inferred from the delay that had occurred. I do not, therefore, consider the case is authority for the proposition advanced by St Barbara and Saracen. In my view, on an application of this nature whether or not there will be prejudice to the defendants if the proceedings are allowed to continue is a factor to be considered in weighing what the interests of justice require in the circumstances of the case.

57 There is no doubt that there has been considerable delay in the prosecution of this application. It is also the case, as Warden Auty SM found, that the plaintiff did not move with appropriate speed to institute these proceedings in the first place, so that the plaints and objections could be finally heard and determined. The learned Warden did not, however, consider that the delay which had occurred to that point warranted a springing order being made in light of the undertaking on behalf of the plaintiff to institute the application for leave under s 440D of the Act within a period of 21 days.

58 But, in light of the delay that had occurred to that point, it was particularly incumbent upon the plaintiff to prosecute these proceedings with appropriate despatch. I do not consider he has done so. The application had been on foot for some nine months at the time this application was made. Relatively little substantive progress had been made in that time or has been made since. The lack of progress has been attributed by the plaintiff principally to three factors, the joinder of parties, settlement discussions and difficulties in the service of certain parties or potential parties.

59 The question of the joinder of St Barbara Mines, however, was raised by the defendants' solicitors immediately following service of the originating process on 21 September 2005. It appears the plaintiff did not respond to the proposal that St Barbara Mines be joined as a defendant and, on 28 October 2005, St Barbara Mines applied to be joined. That was not resolved until 8 February 2006 when the plaintiff consented to the joinder. It is not apparent why that consent was so long in coming.

60 The acquisition by Saracen of an interest in the tenements, on the other hand, did not occur until 14 October 2005 and the joinder of Saracen as a defendant was first raised by the defendants' solicitors on 29 November 2005. Once again, however, the plaintiff's solicitors do not appear to have responded to the proposal that Saracen be joined, resulting in an application for joinder being made by Saracen on 1 February 2006. The plaintiff consented to the joinder on 8 February 2006. It is not apparent why that consent was not forthcoming sooner.

61 While, then, it is the case that some delay is likely to have come about in any event because of the acquisition first by St Barbara and then by Saracen of their interests in the tenements, it is not apparent that the delay necessarily involved extended beyond about December 2005.

62 It seems the first complaint of delay in these proceedings was made in a letter of 15 March 2006 from the solicitors for St Barbara and Saracen to the plaintiff's solicitors. It was followed by another letter on 4 April 2006 enquiring, among other things, whether the plaintiff intended to pursue the application for leave and whether he was interested in discussing settlement. While the plaintiff's solicitors in their letter of 19 April 2006 indicated that the plaintiff was willing to put a settlement proposal, the plaintiff's substantive response on settlement did not come until 20 June 2006 and it was immediately rejected. The delay occasioned by the question of settlement was therefore quite short, a period of some eight weeks or so, and most of it is to be accounted for by the time it took for the plaintiff to put an offer to St Barbara and Saracen.

63 The plaintiff says there have also been difficulties with service of some other parties to the proceedings, including the registered holder from whom Sons of Gwalia acquired one of the tenements, and that has also resulted in delay. The extent of the delay and difficulties that has caused is not clear from the evidence, but it does appear that some difficulties have occurred.

64 While some of the delay in this matter is attributable to matters that do not reflect adversely on the plaintiff, in my view it is clear that the plaintiff has not pursued the proceedings with proper diligence and that there has been substantial unnecessary delay.

65 I accept that there will be prejudice to the plaintiff if these proceedings are dismissed. If Sons of Gwalia's exemption applications are unsuccessful, the plaintiff will lose the opportunity, to which he would otherwise be entitled, to acquire the tenements under the plaints by reason of Sons of Gwalia's non-compliance with its obligations under the Mining Act. In addition, if it is correct that s 440D of the Act applies, not only to the plaints, but also to the plaintiff's objections to the exemption applications (a matter which was not canvassed on this application), the plaintiff will also lose the ability to object to the exemption applications.

66 That prejudice is not negated by the prospect that in future years the plaintiff may have the opportunity to object to expenditure exemption applications and to lodge plaints in respect of the tenements.

67 On the other hand, I accept that the defendants have been prejudiced by the continuing uncertainty over the fate of the tenements and that that will be the case while the plaintiff's proceedings for leave remain unresolved. The evidence does not permit any firm conclusions to be drawn as to the actual extent, if any, to which work in respect of the tenements which would otherwise have been done by one or other of the defendants was curtailed, but, in my view, the state of continuing uncertainty brought about by the lack of finality in these proceedings is itself a form of prejudice. It is also the case that the quality of justice tends to deteriorate where there is excessive delay and that there may be indeterminate, but nevertheless significant, adverse effects arising simply from the passage of time, as documents become more difficult to locate or keep together, and witnesses become more difficult to locate and their memory, and their willingness to assist in the litigation, tends to fade.

68 St Barbara and Saracen contended that they would, in addition, suffer actual prejudice by reason of the delay. The extent and precise nature of that prejudice, however, was not clearly identified and is not easy to determine.

69 St Barbara and Saracen said that, if ultimately leave were granted to the plaintiff to pursue the matters in the Warden's Court, the defendants would need to lead evidence in the Warden's Court proceedings of the expenditure that they had incurred, or which had been incurred by previous holders of the tenements, being invoices and like material; they would need to lead evidence in support of their exemption applications to establish there are good grounds for the grant of an exemption; and, if the defendants are unsuccessful in obtaining an exemption, they would need to lead evidence on whether in the circumstances the defendants' non-compliance with the expenditure was of sufficient gravity to justify forfeiture of the tenements. That may involve substantial evidence on both sides. It was submitted that until there has been a proper exchange of particulars and the nature of the matters in dispute has been clarified, the defendants will not know precisely what evidence they will need to adduce. Those procedural steps cannot occur while the Warden's Court proceedings remained stayed and the difficulties for the defendants in preparing their case in those proceedings will continue to increase with time.

70 While it can be accepted that the fact Sons of Gwalia is in administration may make the task of locating relevant documents and witnesses more difficult than it was otherwise likely to have been, Sons of Gwalia was, of course, in administration before the proceedings in the Warden's Court were instituted by the plaintiff. And the defendants have at all relevant times been on notice, first, that it was necessary to make good the exemption applications, and secondly, that the objections and plaints had been lodged by the plaintiff and, subject to leave being obtained under s 440D of the Act, would have to be met.

71 To what extent any difficulties in locating witnesses and documents have been made significantly more difficult by the delay in these proceedings is by no means clear, the defendants not having sought to adduce any evidence in that respect. Equally, it is not apparent to what extent the proceedings will turn on the recollection of witnesses, so that the relevance of deterioration in the quality of the recollection of witnesses is also not clear.

72 St Barbara and Saracen complain that as the proceedings in the Warden's Court have been stayed, no orders for particulars have been made, with the result that the defendants have not been in a position to commence the substantive preparation of their case. Counsel for St Barbara and Saracen conceded, however, that an applicant for exemption would normally provide particulars of the application for exemption first. If the objector wished to lead evidence in support of the objection, that would then have to be particularised by the objector. It is the latter particulars the defendants do not have. I understand, however, that the defendants have not yet provided particulars of the application for exemption.

73 The particulars of the plaint, on the other hand, would normally be provided by the plaintiff and the defendants would then lodge particulars in response. I accept that the particulars of the plaint may be most significant in informing the defendants of the case they have to meet in respect of the plaint, particularly in respect of the alleged consequences of the defendants' non-compliance. There is no evidence, however, that at any stage the defendants have asked the plaintiff for particulars of his case, despite the difficulties in the preparation of their case that the defendants say will increase with the passage of time.

74 It is also not apparent why evidence in support of the exemption application should not have been gathered, and the relevant witnesses consulted, whatever the position with the plaintiff's objections and plaints. The onus lies on the defendants to establish that an exemption should be granted, whether or not an objection is lodged.

75 It was not in issue that the carriage of the opposition to the plaintiff's application for leave and the carriage of the proceedings in the Warden's Court on behalf of the defendants have been assumed by St Barbara and Saracen, who have acquired the whole of the interest of Sons of Gwalia in the tenements. It was submitted on behalf of St Barbara and Saracen that it was not, as claimed by the plaintiff, a case of St Barbara and Saracen hiding behind s 440D. Sons of Gwalia has declined to consent to the grant of leave and there is nothing St Barbara and Saracen can do about that.

76 I should say, however, that the basis upon which Sons of Gwalia had at the outset intended to oppose the plaintiff's application for leave under s 440D is unclear, apart from the question of delay by the plaintiff in making the application for leave. Nor is it clear whether, or to what extent, Sons of Gwalia now has an interest in the outcome of the application for leave.

77 In the course of argument, counsel for St Barbara and Saracen refused to concede that Sons of Gwalia - which it seems has not had any beneficial interest in the tenements since March 2005 - would be unaffected by the outcome of the proceedings, but the nature of any continuing interest of Sons of Gwalia was not disclosed. The effect on Sons of Gwalia was, counsel submitted, a matter for the substantive hearing on the plaintiff's application, if the matter got that far.

78 It is the case, however, as submitted by counsel for the plaintiff, that whether, or to what extent, the application for leave will affect Sons of Gwalia at all may well depend upon the terms of its agreement with St Barbara and Saracen. The defendants have not disclosed those terms.

79 As the Court of Appeal made clear in The Hancock Family Memorial Foundation Ltd v Fieldhouse (supra), the ultimate test on an application of this nature is what the interests of justice require in the circumstances of the particular case. While there has been substantial delay on the part of the plaintiff, in my view, having regard to all of the circumstances, including the length of the delay and the circumstances in which it occurred, and the likely prejudice to the plaintiff and the defendants respectively, I do not consider that the interests of justice require that the plaintiff's application be dismissed.

80 I consider that the proper course is to programme the remaining interlocutory steps, with such sanctions for non-compliance as may be appropriate, with the object of getting the application for leave on for hearing as soon as that can reasonably be achieved.

81 I will hear the parties on the appropriate directions and on the question of costs.

Van Blitterswyk v Sons of Gwalia Ltd

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (103 paragraphs)

Van Blitterswyk v Sons of Gwalia Ltd (Administrator Appointed) & Ors [2006] WASC 283 (15 December 2006)

Parties

Cases Cited (2)