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Life v Noosa Waters Pty Ltd

 

[2002] QCA 53

COURT OF APPEAL

McMURDO P

DAVIES JA

BYRNE J

Appeal No 10984 of 2001

PAUL GRAEME LIFEPlaintiff/Respondent

and

NOOSA WATERS PTY LTD

(ACN 010 979 414)First Defendant/Applicant

and

QM PROPERTIES PTY LTD

(ACN 010 716 935)Second Defendant/Applicant

and

CARDNO & DAVIES QUEENSLAND PTY LTD Third Defendant/Applicant

and

WHELAN ELECTRICAL SERVICES PTY LTD Fourth Defendant/Applicant

BRISBANE

DATE 27/02/2002

JUDGMENT

THE PRESIDENT:  Justice Davies will deliver his reasons first.

DAVIES JA:  This is an application for leave to appeal from an order made by a District Court Judge on 23 October 2001 for leave to proceed pursuant to Uniform Civil Procedure Rule 389.

The order involved an exercise of discretion by the learned primary Judge and this, as must be acknowledged, poses difficulties in the way of success in an application of this kind.  Nevertheless, the applicants submit that the learned primary Judge substantially erred in deciding the following questions:

(1) whether there was a satisfactory explanation for the delay by the plaintiff and whether the

plaintiff was responsible for the delay;

(2)the plaintiff's prospects of success;

(3)the extent of prejudice to the defendants; and

(4)the consequence for the plaintiff of refusal of leave to proceed.

Before turning to those questions, something should be said about the nature of the action and its progress, or lack of it, up to the time when the application was made for the order the subject of this appeal.

The action by the plaintiff is one for damages for negligence and in the alternative for breach of contract.  The damages consist of property damage, loss of income as the result of damage caused to the plaintiff's fishing boat by that negligence or breach of contract and damages for personal injury for a psychiatric condition which the plaintiff alleges he developed in consequence of the occurrence of that damage. The plaintiff at the relevant time was a commercial fisherman who lived on or near a canal in the Noosa Waters estate.  A lock which the plaintiff alleges was maintained and controlled either by the first defendant or the second defendant and which the first defendant admits was maintained and controlled by it, gave access to the Noosa River.  The plaintiff's fishing boat was damaged on two occasions whilst attempting to pass through that lock.  The plaintiff alleged that this was caused by the failure of one or other of those defendants to maintain the lock in good working condition.  In the alternative and as well the plaintiff alleged that the third and fourth defendants were responsible for the selection of components and the installation of the locking mechanism and that their performance of that task negligently caused the damage alleged.

In stating the allegations of the plaintiff in the summary way in which I have, I may have over-simplified them somewhat.  However, I think that summary is sufficient to convey a general understanding of the action as constituted.  It is unnecessary for that purpose to go further to the pleadings of the various defendants.

It is sufficient, I think, to say that there is no reason to think that the plaintiff does not have a reasonable course of action against either the first or the second defendant and either the third or the fourth defendant, at least in respect of property damage and lost income in consequence of damage to the boat.

The applicants' submissions to the contrary of this focus on that part of the plaintiff's claim which constitutes damages for psychiatric illness.  The applicants make the point that there is a strong argument that any such illness was not a reasonably foreseeable consequence of damage to the fishing boat.  That argument, in my opinion, has some substance both in fact and in law but it does not show that even that claim is fanciful and that, as I have already indicated, is only part of the claim.  The applicants submit that it is the vast bulk of the claim but there does not appear to be any clear evidence that that is so.  In any event, no application was made by any of the defendants at any time for summary judgment on that part of the plaintiff's claim, there being another part of the claim to which no such argument is advanced even here.  I think the learned primary Judge was correct in refusing to conclude that the action as a whole was one with poor prospects of success.

I turn then to the delay and the plaintiff's explanation for it.  The damage to the plaintiff's boat occurred on 6 December 1993 and 12 February 1994.  The action commenced on 23 March 1995 originally against the first and second defendants.  It had proceeded to the point of discovery by February 1997 when it was thought, in consequence of documents discovered, appropriate to join the third and fourth defendants and an order was made in that month joining them.

The action continued to proceed with fairly regular steps taken in it until an unsuccessful mediation in November 1998. It must be said that, prior to that date, the action proceeded at a fairly leisurely pace but no point is taken about that and it is by no means clear that any lack of expedition was the fault of the plaintiff.  Thereafter, however, no step in the action was taken until the application for leave to proceed was made. 

The significant delay was from the beginning of December 1998 until about September 2001.  Over the whole of that period the plaintiff's solicitor had been, or at least the plaintiff thought it was, Mr Robert Foster.  The plaintiff swore in his affidavit on the application, the subject of this appeal, that between February 1999 and June 2001 he telephoned Mr Foster on at least six occasions inquiring as to when the matter was going to hearing.  On each occasion Mr Foster advised him that the matter was on a list which was like a ladder and that the matter was coming down the ladder.

That seems to mean, as no doubt the plaintiff thought it meant, that the action was progressing to trial in an appropriate way.  In fact it appears that was not the case and that over that period nothing was done at all to progress the action.

In July and August 2001 the plaintiff was on holidays in north Queensland.  On his return he read a letter, apparently sent on 10 July 2001 from a solicitor who is now his current solicitor to the effect that Mr Foster had passed his file on to that solicitor and that the letter sought his instructions. He telephoned the solicitor on 6 September and instructed him to proceed.  There is nothing to indicate that the plaintiff had any knowledge of the arrangement pursuant to which his file was passed on in this way. 

It is not unreasonable to infer from the conversations which the plaintiff swore he had with Mr Foster, as her Honour seems to have inferred, that the delay over almost the entirety of this period was caused by dilatoriness of Mr Foster and that the plaintiff was misled by Mr Foster into thinking that the action was proceeding in the normal way.

In my opinion her Honour was entitled to accept that, though the evidence on this question was somewhat unsatisfactory, the plaintiff's explanation for the delay during this period was reasonable.

I turn now to the question of prejudice to the applicants.  The prejudice said to have occurred to the first and second defendants is that they were, at the time the damage was caused, insured by CIC Insurance Limited which was part of the HIH group of companies.  Those companies went into liquidation in March 2001.  It was therefore said on behalf of the first and second defendants that, because of the delay, they lost an indemnity to which they would have otherwise have been entitled in respect of any liability which they had to the plaintiff.

It is not entirely clear to me from the evidence which was before the learned primary Judge that any such indemnity was assured at the time the damage occurred, or that any acknowledgment of an obligation to indemnify was given by CIC at any subsequent time.  Nor is it clear to me beyond any doubt that, as her Honour seems to have assumed in the first and second applicants' favour, had there been no delay, judgment would have been obtained prior to March 2001 and that those defendants would have recovered by way of indemnity in respect of any liability under that judgment from CIC.

The public statements which have been made in this matter, now notorious, seem to indicate that it may be many years before questions in this matter, that is the HIH liquidation questions, are resolved, including when the members of that group first became unable to pay their debts.

However, her Honour accepted the loss of indemnity as prejudice, an assumption which, as I have already indicated, appears to me to be somewhat questionable.  Her Honour then balanced that against other matters and in the exercise of her discretion nevertheless granted leave to proceed.

The prejudice upon which the third and fourth defendant relies is primarily that they were never in a position to conduct investigations or interview witnesses when memories of events relevant to the allegations contended against them would have been fresh in their minds.  This however appears to be caused not so much by the delay upon which this application focuses, but because they were joined late.  Moreover there was no evidence given by the third and fourth defendants of what kind of evidence might have been available to them had they been joined earlier, which would no longer or might no longer be available to them.

The other basis Mr Couper, who appears for the applicant, submits upon which the third and fourth defendants made this contention below is that, if the first and second defendants lost their right to indemnity, they would lose any effective right to claim contribution or indemnity from them.

As appears from numerous cases decided on this rule and its predecessor, the question whether leave should be granted is in the end determined by balancing those factors which I have already mentioned and other factors.

There is nothing, in my opinion, to indicate that the learned primary Judge, in determining that balance, gave insufficient weight to the possibility of prejudice to the defendants.

The final matter relied on by the applicants concerns what was said to be a failure to adequately consider the consequences for the plaintiff.  It is not entirely clear what her Honour meant by this statement which appears towards the end of her reasons for judgment, but I don't think, as Mr Couper contends, that this was a matter which appears to have weighed heavily with her Honour.  It was, as I said, the last matter referred to by her Honour and there is nothing to indicate that she gave it undue weight.

In summary, in my opinion, there is insufficient reason to doubt the correctness of the exercise of her Honour's discretion in this matter to justify the granting of leave to appeal and I would refuse the application.

THE PRESIDENT:  I agree.

BYRNE J:  I agree.

...

THE PRESIDENT:  The order is, the application is refused with costs to be assessed.

Close

Editorial Notes

  • Published Case Name:

    Life v Noosa Waters Pty Ltd & Ors

  • Shortened Case Name:

    Life v Noosa Waters Pty Ltd

  • MNC:

    [2002] QCA 53

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Davies JA, Byrne J

  • Date:

    27 Feb 2002

Litigation History

EventCitation or FileDateNotes
Primary Judgment-23 Oct 2001Order for leave to proceed pursuant to rule 389 UCPR.
Appeal Determined (QCA)[2002] QCA 5327 Feb 2002Application for leave to appeal against District Court judgment refused; costs to be assessed: McMurdo P, Davies JA and Byrne J.

Appeal Status

Appeal Determined (QCA)
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