Supreme Court of WA|2005-03-09

Westpoint Corporation Pty Ltd & Ors v Marsh & Ors [2005] WASC 29 (9 March 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : WESTPOINT CORPORATION PTY LTD & ORS -v- MARSH & ORS [2005] WASC 29

BETWEEN : WESTPOINT CORPORATION PTY LTD (ACN 009 395 751)

Practice and procedure - Appeal from decision of Registrar - Turns on own facts

The Commonwealth of Australia v Verwayen (1990) 170 CLR 394

Fergusan & Anor v Mackaness Produce Pty Ltd [1970] 2 NSWR 66

Inform Formwork Pty Ltd v McInnes Concrete Service Pty Ltd, unreported; FCt SCt of WA; Library No 950611; 15 November 1995

Ketteman v Hansel Properties Ltd [1987] AC 189

Skahill v Kestral Holdings Pty Ltd (In Liq) & Ors [2000] WASCA 185

State of Queensland & Anor v J L Holdings Pty Ltd, unreported; FCt Fed Ct; BC 9605189; 29 October 1996

Walthamstow Pty Ltd v Gioinvinazzo [2003] WASC 249

1 MASTER SANDERSON: This was an appeal from a decision of Registrar Boyle, handed down on 5 November 2004. At the conclusion of the hearing I dismissed the appeal, lifted a partial stay of execution then in place in relation to the operation of the orders made by Registrar Boyle and indicated that I would publish my reasons at a later date. These are those reasons.

2 The orders made by Registrar Boyle on 5 November 2004 were as follows:

"1. The first and second plaintiffs having failed to comply with case management directions for discovery of documents made on 25 June 2004 and 3 September 2004, unless by 19 November 2004 the first and second plaintiffs give discovery on affidavit, the statement of claim so far as it pleads relief for the first and second plaintiffs, be struck out and judgment be entered for the first and second defendants against the first and second plaintiffs for costs, there being liberty to apply for a special costs order.

2. If the first and second plaintiffs give discovery in compliance with the preceding direction then the defendants be at liberty to apply within 90 days after the date of that discovery to strike out any portion of the statement of claim in relation to which the first and second plaintiffs have given no or inadequate discovery, and for the purposes of any such application it is for the plaintiffs to demonstrate that their discovery was adequate.

3. For the purposes of the preceding direction in order to be adequate the affidavit of discovery of each of the first and second plaintiffs must identify by reference to the pleadings the matters in issue in relation to which each document (or bundle, where documents are discovered as bundles) is relevant and further in relation to any documents identified as relevant to paragraph 31(d)(i) of the statement of claim, the project to which the document or bundle is relevant.

4. There be liberty to apply in relation to any question of security for costs of inspection or arising out of inspection."

3 In place of the orders made by the learned Registrar, the appellants sought the following orders:

"1. The first and second plaintiffs having failed to comply with case management directions for discovery of documents made on 25 June 2004 and 3 September 2004, unless by 31 January 2005 the first and second plaintiffs give discovery on affidavit, the statement of claim so far as it pleads relief for the first and second plaintiffs, be struck out and judgment be entered for the first and second defendants against the first and second plaintiffs for costs, there being liberty to apply for a special costs order.

2. The Status Conference be adjourned sine die.

3. The first and second plaintiffs pay the costs of today of the first defendant fixed at $1,500.00 and the second defendant fixed at $1,200.00 forthwith."

4 In their amended notice of appeal filed 26 November 2004 the first and second plaintiffs set out eight grounds upon which they appealed. Although it is not strictly necessary for me to do so, I will set out each of those grounds as it appears in the notice:

"1. The Registrar failed to undertake appropriate balancing of the prejudice to the respective parties flowing from his decision.

2. The Registrar failed to give sufficient weight to the fact that the plaintiffs had changed solicitors and that the previous solicitors had made no significant progress on the provision of discovery.

3. The Registrar took into account what he considered the merits of the plaintiffs' claims, an irrelevant consideration in the making of a case management direction.

4. Alternatively to ground 4 above, the Registrar placed too much weight on what he considered the merits of the plaintiffs' claims.

5. The Registrar imposed further onerous conditions upon the plaintiffs in excess of those normally required in discovery but failed to provide additional time to allow the plaintiffs to comply with those obligations.

6. The Registrar in Order 2 reversed the normal onus of proof in requiring the plaintiffs to demonstrate that their discovery is adequate.

7. Order 4 was pre-emptive and without grounds.

8. The Registrar failed to state or alternatively failed to state sufficiently the reasons for exercising his discretion as he did."

5 Before proceeding, I can conveniently deal at this point with ground 8. It is said that the learned Registrar did not adequately state his reasons for exercising his discretion as he did. Having read a transcript of proceedings before the learned Registrar on 5 November 2004 and his reasons for decision, it is clear that there is no substance in this ground. With respect, the learned Registrar carefully considered all of the circumstances of the case before making the order he did. The case management conference on 5 November was the eighth case management conference before the learned Registrar. He was intimately familiar with the nature of the action. He had made a number of previous orders with respect to discovery. In fact, were this not a hearing de novo under the provisions of O 63A, I would have been content to refer to the learned Registrar's reasons, uphold his decision and add nothing more. In my view there is nothing in this ground of appeal.

6 Before dealing with each of the particular grounds of appeal, it is appropriate to set out a brief chronology of events as they transpired prior to 5 November 2004. This is a claim for slander. The slander was allegedly uttered by the first defendant in or about May or June 2001 and on other dates. The writ was issued on 20 May 2003. As was required by the Rules, it was generally endorsed. A statement of claim was filed on 1 July 2003. The first status conference was held on 4 July 2003. At that conference the first defendant drew to the attention of both the Registrar and the plaintiff's solicitors the magnitude of the discovery task involved, given the nature of the plaintiffs' claims. Without going into detail, it is said that the slander allegedly uttered by the first defendant impacted adversely on the business of the first plaintiff, resulting in losses of many millions of dollars. It must have been apparent to the plaintiffs at the outset that to prove this loss they would have to actually establish the adverse effect on the first plaintiff's business. Effectively, what that would require was an audit of the first plaintiff's business; in other words, discovery of just about every financial record the plaintiff had available to it. One might have expected the plaintiff's solicitors to embark upon the process of discovery as soon as the writ was issued, if not before it was issued. Be that as it may, as at 4 July 2003 the plaintiffs must have been aware that they faced a difficult discovery exercise.

7 On 13 February 2004, Acting Master Chapman struck out the plaintiffs' statement of claim. A substituted statement of claim was filed on 5 March 2004. At status conference number 6 on 25 June 2004, the Registrar directed the parties to give discovery on affidavit by 20 August 2004. It is to be noted that this date for discovery was suggested by counsel for the plaintiffs. It anticipated a period of eight weeks. However, by this stage the action itself had been on foot for over 12 months.

8 On 27 August 2004 a notice of change of solicitors of the first and second plaintiffs was filed and served. A notice of change of solicitors with respect to the third plaintiff was filed and served on 2 September 2004. Status conference number 7 was held on 3 September 2004. At that conference the Registrar directed that the time limit for the first and second plaintiffs to give discovery on affidavit be extended to 22 October 2004. On 4 November 2004 the first defendant gave notice of non-compliance with the case management directions for discovery by 22 October 2004. It was against this background that the orders were made by Registrar Boyle on 5 November 2004.

9 Before dealing with the specific grounds of appeal it is appropriate to make some general comments. By the time the orders for discovery were made, the action had been on foot for almost 18 months. So far as the plaintiffs were concerned, all that had been done during that time was to prepare an adequate statement of claim. It is hard to resist the impression that the plaintiffs were dithering. No adequate explanation as to why discovery had not been completed was provided. The plaintiffs' solicitors must have been aware that the defendants' solicitors were clamouring for action and were not prepared to allow the matter to drift. In the circumstances, there can be no real excuse for the failure of the plaintiffs to provide discovery.

10 Turning then to the specific grounds of appeal, it is first said that the Registrar failed to undertake an appropriate balancing of the prejudice to the respective parties flowing from his decision. So far as the plaintiffs were concerned, the prejudice was obviously substantial. The time limited for bringing an action for slander had passed and the consequences of the action being struck out is that fresh proceedings could not be issued. So far as the defendants were concerned, they are individuals facing a very substantial claim which was not being pursued with reasonable diligence. It was these competing interests that the Registrar had to weigh in the balance.

11 In my view the Registrar did not fail to undertake an appropriate balancing of the parties' respective interests. He worked with the only material he had before him at the time and that material did not provide any explanation as to why discovery had not been given and why an extension of time was necessary. In my view, the balancing of the respective interests was fair and even handed and, having looked again at the interests of the parties, I have come to the same conclusion. In my view there is nothing in this ground of appeal.

12 Second, it is said that the Registrar failed to give sufficient weight to the fact that the plaintiffs had changed solicitors. The Registrar was at pains to point out that the plaintiffs' present solicitors had only recently assumed conduct of the file: see page 198 of the transcript. It may be that the plaintiffs' previous solicitors were at fault; there is no evidence to that effect and I offer no views one way or the other. But if that was the case, then it should have been explained on affidavit. In any event, it was for the plaintiffs to drive these proceedings and if progress was not being made by their solicitors, then they should have taken some steps to rectify the position. Moreover, if significant progress with respect to discovery had been made in the two months since the plaintiffs' present solicitors had assumed conduct of the file, then evidence to that effect should have been provided, together with a clear timetable for the finalisation of discovery. That was not done. I am satisfied that there is nothing in this ground of appeal.

13 Grounds 3 and 4 can be taken together. Essentially what is said is that the Registrar, in looking at the merits of the plaintiffs' claim, took into account an irrelevant consideration. With respect, in my view it is entirely proper to give consideration to the merits of the action when making a decision which might effectively terminate the proceedings. For my part, I view the claims made by the plaintiffs as fanciful. A reading of the Registrar's reasons does not suggest that his views on the merits of the action influenced his decision at all. Placed in the same position, consideration of the nature of the plaintiffs' claims leads me to the conclusion that limiting the time for discovery was entirely appropriate.

14 It is said by ground 5 that the Registrar imposed further onerous conditions on the first and second plaintiffs in excess of those normally required in discovery, but failed to provide additional time to allow the first and second plaintiffs to comply with those obligations. This no doubt is a reference to orders 2 and 3 of the orders made by the Registrar. In my view those orders were entirely appropriate. When discovery is given, it must be given in a proper form. It is not unusual for parties who are complaining of discovery to point to an inadequacy in the discovery and to argue that there has not been compliance with a discovery order. That can give rise to a battle which is all about semantics. Prudently, in my view, the Registrar made orders 2 and 3 so that there would not arise at a later date a dispute about whether or not order 1 had been complied with. Orders 2 and 3 were entirely appropriate. There is no substance in the plaintiffs' complaint.

15 Ground 6 really picks up again on ground 5. I need only refer to what I have said above about orders 2 and 3 being appropriate and say nothing further. There is no substance in this ground.

16 By order 4 of the orders made by the Registrar, liberty to apply was given in relation to any question of security for costs of inspection, or arising out of inspection. In my view, there can be no complaint about such an order. It did not effect the rights of any of the parties. It simply allowed them to bring an issue back before the Registrar if any of the parties chose to do so. There is no substance in this ground.

17 For these reasons I determined that the appeal should be dismissed and that the first and second plaintiffs should pay the defendants' costs of the appeal, including reserved costs.

18 At the concluding of the hearing, counsel referred to costs which had been reserved by the Registrar when he partially discharged an order staying the operation of the case management orders he had made. In my view, the plaintiffs were seeking an indulgence in obtaining a stay. Given the conclusion that I reached in relation to the appeal, it follows that the stay itself was without merit. In those circumstances the first and second plaintiffs ought pay the costs of the defendants in relation to the discharge of the stay of execution.

Westpoint Corporation Pty Ltd & Ors v Marsh & Ors [2005] WASC 29

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Westpoint Corporation Pty Ltd & Ors v Marsh & Ors [2005] WASC 29 (9 March 2005)

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