- Unreported Judgment
SUPREME COURT OF QUEENSLAND
No 7012 of 2002
QUEENSLAND CARPET MILLS PTY LTD (ACN 011 013 522)
ROBYN MARY EDMONSON
MICHAEL DAVID SING
HER HONOUR: There are two applications before the Court. The first was an application by Mr Edmonson to represent the plaintiff company. That application is no longer pursued because the company is represented by solicitors, Primrose Cooper Cronin and Rudkin, by Mr Hitchcock of that firm so that it is no longer necessary for him to seek leave under the Supreme Court Act.
There are however some outstanding issues of the costs of the earlier application which was heard before me in June. However, there are some strongly disputed facts which it is impossible to resolve without, one would have thought, fairly extensive cross-examination of some of the deponents and so that matter has been adjourned. The other application is an application by the existing defendant, Mr Michael Sing, for security for costs.
The plaintiff is a company which made carpets. It has not traded since about 1996. It was a trustee company. It has no assets and it may be inferred that there are no trust assets from which it could be indemnified. There is reason to believe that it would not be able to meet an order for costs in favour of the defendant should one be made. Accordingly, the Court's jurisdiction is enlivened to consider the application. Mr Edmonson, the principal and guiding mind of the plaintiff, offers his personal worth which is modest.
The plaintiff has sued the defendant, a solicitor, for negligence over the conduct of litigation against Du Pont (Australia) Limited as the supplier of yarn for the manufacture of carpets and also the receivers appointed by Du Pont to the plaintiff.
The defendant was retained in about August 1996 and that retainer terminated in mid-April 1997. Another firm of solicitors, the proposed second defendant, was retained in April 1997 to take over the action from the defendant. In about July 2002 the plaintiff retained the proposed third defendant, another firm of solicitors, to assist with redrawing of the statement of claim and to comply with certain orders made by Justice Wilson.
The Chief Justice struck out the entire claim on the 18th of September 2002 for non-compliance with Wilson J's orders. There had by then been a number of versions of the statement of claim although not perhaps as many - that is, seven - as mentioned by his Honour. In his reasons the Chief Justice said:
“As I have said the pleading is probably not beyond redemption but the point to be addressed now is a different one and it is whether there was compliance with the ‘strict conditions’ set down by Justice Wilson. I have reached the conclusion that the plaintiffs regrettably did not comply with that condition by delivering, albeit within time, a further amended statement of claim in this deficient form.
While I have mentioned five sets of deficiencies in particular I wish to be plain that I do as I mentioned earlier consider that most of the points taken by Mr Kelly in his outline critical of the pleading are justified. Her Honour was plainly putting the plaintiffs on very clear notice as to the need for a compliant pleading were the proceeding to survive.”
This action is then about the loss of the chance to have brought the litigation to a successful conclusion.
The matter came before me on the 20th of June this year principally for leave for Mr Edmonson to represent the company, and for leave to join the second and third firms of solicitors as second and third defendants and to amend the statement of claim accordingly. That leave was given but, while a draft pleading has been delivered to each of the defendant and the proposed second and third defendants, they have not been served with a formal pleading.
The defendant has responded to the draft amended statement of claim in a defence. Mr Hitchcock concedes that a fresh statement of claim must be drawn. Mr Edmonson, who has no legal training, prepared the draft pleading.
Mr Holyoake, for the defendant, submitted that an order for security of costs ought to be made because the present pleading does not articulate clearly or, in some cases, at all, the nature of the claim against the defendant and/or what consequences flow from any negligence apart from some wasted costs orders not amounting to substantial sums. One of the difficulties is disentangling the liability of one solicitor from the others.
The claim against the defendant is found in paragraphs 2 to 9 of the draft amended statement of claim which is Exhibit 1. Paragraph 2 sets out the facts alleged to have been conveyed about Du Pont and the receivers by the plaintiff to the defendant. The complaints of negligence are set out in paragraph 7 and are to this effect: that the defendant issued a writ which is the proceeding which has been struck out by the Chief Justice naming Mr Edmonson an undischarged bankrupt as one of the plaintiffs. The defendant is also said to have been negligent in failing to advise the plaintiff company that, being in receivership, it then had its trusteeship of the family trust determined and it could not sue in its own name. It is also alleged that the defendant should have advised that injunctive relief might have been available against the receivers who were proceeding, in effect, to sell off the business of the plaintiff relating to the carpet manufacturing.
The defendant is also said to have been negligent in serving a notice of non-party disclosure against the receivers prematurely and in too broad terms. He is also said to have been negligent in failing to include all causes of action which were open to the plaintiff at that time and, in particular as set out in 7(e)(i) through to (v), i.e., failing to include a claim for breach of Part 4 of the Trade Practices Act include claims against the directors or employees of Du Pont which became statute barred either in 1997 or 1999, depending upon the time when the cause of action arose; failure to include a claim for trespass or conversion of the company's assets against the receivers or, indeed, any claims against the receivers; failure to include a claim against Du Pont based on estoppel; failure to include a claim against Du Pont based on undue influence in the signing of the Deed of Charge over its assets by the company; and failure to properly draft, as I read subparagraph 5, the draft Statement of Claim.
The real complaint by Mr Holyoak, on behalf of the defendant, is the lack of sufficient facts to support these allegations. Some are delphic by any definition. Another complaint is the failure to attach loss to some of the allegations of negligence. What was, for example, the consequence, apart from some costs orders, in having Mr Edmonson joined as a plaintiff when, of course, he could not be joined without the leave of the Official Trustee?
There is no doubt that the action will be effectively brought to an end if security is ordered. I hesitate to do so. Consider this observation by the Chief Justice when he was striking out the action last year, “As I say - I fear the plaintiffs have been done a grave disservice by those responsible for this pleading. But that is not a matter which I can pursue further here.” Mr Hitchcock has said that the pleading, which was struck out was, to a large extent the pleading that was settled by the defendant. There had been minor adjustments to it as it had passed through the hands of the proposed second and third defendant.
Mr Edmonson deposes that he had a viable company and significant assets prior to the conduct complained of by Du Pont Australia Ltd. As a consequence of Du Pont's action and those of the receivers appointed by it, he alleges that he became bankrupt as the company's guarantor and that the carpet business was broken up and sold. Had the defendant and the proposed defendants attended to the action appropriately, he maintains, the company would have been successful in the proceedings.
Now, that the company has the services of solicitors, it seems to me appropriate that the company, with the assistance of this application, which has identified many of the weaknesses in the claim, should have an opportunity to plead a proper case against the defendant and to serve the second and third defendants so that the responses of those defendants will be before the Court. However there should be no further waste of costs by dismissing the application for security for costs and it should, simply, be adjourned to see if, indeed, it is possible for the plaintiff to articulate a coherent Statement of Claim against each of the defendant and the two proposed other defendant solicitors.
HER HONOUR: Adjourn the application for security for cost to a date to be fixed. The plaintiff-file and serve an amended Statement of Claim by 4 p.m., the 30th of January 2004, on each of the defendants. Order as per amended draft.
HER HONOUR: The earlier orders that I have made about paragraphs 3 and 4 of the application, of course, stand and those costs were reserved.
The costs of the application for security for costs, the only costs really which are outstanding or that should be determined today are the costs of today. The application for security for costs has simply been adjourned.
If the pleading which is to be forthcoming is thought to fail in ways that seem good to the first defendant, then there is an opportunity to re-ventilate the application for security for costs again. So I think it is understood that I am really only talking about the costs of today and I am of the view that they ought to be paid by the plaintiff.
This was an application in which appropriate notice was given. A properly drawn pleading may well have obviated the hearing today, but I am also mindful that it would render somewhat nugatory the order which I have already made allowing the plaintiff an opportunity to produce a better statement of claim.
And so I will order that the costs of today be paid by the plaintiff to the defendant, Mr Sing, in any event. I will otherwise reserve the costs associated with the other paragraphs in the application.
The application for Mr Edmonson for leave I make no order for costs with respect to it.
- Published Case Name:
Queensland Carpet Mills Pty Ltd & Anor v Sing
- Shortened Case Name:
Queensland Carpet Mills Pty Ltd v Sing
 QSC 446
01 Dec 2003
No Litigation History