FEDERAL COURT OF AUSTRALIA Capital Webworks Pty Ltd v Adultshop.com.Limited [2007] FCA 567 PROCEDURE – application to stay or dismiss action – seven years since action instituted – whether action an abuse of process due to maintenance and champerty no longer able to be maintained – whether failure to give proper discovery in circumstances where sworn evidence documents do not exist – whether want of prosecution – motion for stay or dismissal dismissed Federal Court Rules O 20 r 2(b), O 20 r 2(c), O 35A r 2(1)(f) Capital Webworks Pty Ltd v Adultshop.com.limited [2007] FCA 262 Capital Webworks Pty Ltd v Adultshop.com Limited [2005] FCA 438 CAPITAL WEBWORKS PTY LTD (ACN 003 384 932) v ADULTSHOP.COM.LIMITED (ACN 009 147 924), MALCOLM DAY AND MELBOURNE INFORMATION TECHNOLOGIES AUSTRALIA PTY LTD (ACN 073 716 793) WAD 49 OF 2000 NICHOLSON J 20 APRIL 2007 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 49 OF 2000 BETWEEN: CAPITAL WEBWORKS PTY LTD (ACN 003 384 932) Applicant AND: ADULTSHOP.COM.LIMITED (ACN 009 147 924) First Respondent MALCOLM DAY Second Respondent MELBOURNE INFORMATION TECHNOLOGIES AUSTRALIA PTY LTD (ACN 073 716 793) Third Respondent JUDGE: NICHOLSON J DATE OF ORDER: 20 APRIL 2007 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The motion of the first and second respondents dated 14 December 2004 be dismissed. 2. The proceeding be set down for further directions and to fix a trial date promptly. 3. The first and second respondents pay the applicant's costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 49 OF 2000 BETWEEN: CAPITAL WEBWORKS PTY LTD (ACN 003 384 932) Applicant AND: ADULTSHOP.COM.LIMITED (ACN 009 147 924) First Respondent MALCOLM DAY Second Respondent MELBOURNE INFORMATION TECHNOLOGIES AUSTRALIA PTY LTD (ACN 073 716 793) Third Respondent JUDGE: NICHOLSON J DATE: 20 APRIL 2007 PLACE: PERTH REASONS FOR JUDGMENT 1 On 14 December 2004 the first and second respondents moved for orders that pursuant to Federal Court Rules (FCR) O 20 r 2(b) and (c) the proceeding be stayed or, in the alternative, dismissed. The applicant opposes the motion. 2 The circumstances in which decision on the motion has been delayed have been set out in Capital Webworks Pty Ltd v Adultshop.com.limited [2007] FCA 262 and in reasons published on 15 April 2005 - Capital Webworks Pty Ltd v Adultshop.com Limited [2005] FCA 438. In addition I referred in Capital Webworks [2005] FCA 438 at [45]-[47] to reliance by the first and second respondents on FCR O 35A r 2(1)(f) and r 3 to support the stay or dismissal on the basis of failure to prosecute the proceeding with due diligence. 3 The first contention made by the first and second respondents in support of the motion for stay or dismissal was that the application was an abuse of process because it was unlawfully maintained and champertous, and so an abuse of process. Having reviewed those submissions I decided in Capital Webworks [2005] FCA 438 to order that the applicant file and serve an affidavit setting out in full the circumstances pertaining to the beneficial ownership of its cause of action. As set out in Capital Webworks [2007] FCA 262, it was found on appeal that there was no evidentiary support for the making of such an order. Consequently, no further weight than that already given in Capital Webworks [2005] FCA 438 can be given to that issue arising from the submissions of the first and second respondents. 4 The second head relied upon by those respondents was a failure to give proper discovery. Contentions are set out in Capital Webworks [2005] FCA 438 at [45]-[46]. The applicant says affidavits have been sworn on the applicant's behalf to the effect that the discovered documents do not exist, so that is the end of the matter. The respondents submit that the application cannot be dismissed summarily because the applicant did not prepare documents that it should have prepared. I agree. 5 The third limb of the contentions by the first and second respondents is that there has been a want of prosecution on the part of the applicant. The first and second respondents say that the applicant has failed to prosecute the action with due diligence and have taken no proactive steps, delaying at every stage of the proceeding. At the date of the hearing of the motion, the action had been on foot for five years and the respondents say that virtually nothing has occurred beyond the pleadings and risible discovery by the applicant. 6 The applicant says that no application to strike out for want of prosecution has been made and none could have been made. Rather, it submits that the progress of the application has been delayed by the large number of interlocutory applications. Certainly it is apparent that as between 15 April 2005 and the present date the delay has been occasioned by the appeals considered in Capital Webworks [2007] FCA 262. 7 Further the applicant says that although it wishes to make some amendments to the statement of claim and subject to orders being made in relation to consequential amendments, directions for trial may now be made. 8 In my view the proceeding cannot be dismissed for want of prosecution in the circumstances. 9 For these reasons I do not consider that the motion for stay or dismissal can properly be allowed and will be dismissed. 10 I will accordingly set the proceeding down for further directions to bring it to trial. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. Associate: Dated: 20 April 2007 Counsel for the Applicant: P Tottle Solicitor for the Applicant: Tottle Partners Counsel for the First and Second Respondents: GR Donaldson SC Solicitor for the First and Second Respondents: Fearis Salter Power Shervington Date of Hearing: 7 April 2005 Date of Judgment: 20 April 2007