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  • Unreported Judgment

O'Brien v Evans

 

[2014] QSC 110

SUPREME COURT OF QUEENSLAND

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Applications

DELIVERED ON:

29 May 2014

DELIVERED AT:

Brisbane

HEARING DATE:

22 May 2014

JUDGE:

Mullins J

ORDER:

  1. The proceeding is re-activated.
  2. The plaintiff Samantha O’Brien must pay the defendant’s costs of the application to re-activate this proceeding in any event.
  3. Leave to the plaintiff Samantha O’Brien to amend the claim by removing Craig O’Brien from the heading of the claim, making consequential amendments to the claim, and by amending the relief set out in the claim to accord with the relief claimed in the draft of the second further amended statement of claim which was exhibit 2 on the hearing on 22 May 2014.
  4. Direct the plaintiff Samantha O’Brien to file the amended claim and the second further amended statement of claim on or before 4pm on 10 June 2014.
  5. The application filed on 27 February 2014 is dismissed.
  6. The proceeding is remitted to the District Court at Brisbane.
  7. Costs otherwise reserved.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – JUDGMENTS AND ORDERS – OTHER MATTERS – where proceeding was deemed resolved when plaintiff failed to comply with or seek a variation of case flow management orders – where plaintiff filed application to re-activate proceeding – whether proceeding should be re-activated

Uniform Civil Procedure Rules 1999 (Qld), r 280, r 371, r 374

Multi-Service Group Pty Ltd (in liq) v Osborne [2010] QCA 72, followed

COUNSEL:

R S Ashton for the plaintiff Samantha O’Brien

C A Johnstone for the defendant  

SOLICITORS:

Collas Moro Ross for the plaintiff Samantha O’Brien

Coyne & Associates for the defendant

[1] Mr and Mrs O’Brien as the plaintiffs commenced this proceeding on 6 July 2010 claiming damages for negligence and breach of contract against the defendant who was their former solicitor.  The defendant is defending the proceeding. 

[2] After an unsuccessful mediation in March 2012, Mr O’Brien found out he had been made bankrupt on 29 February 2012.

[3] The parties received a case flow intervention notice from the court in May 2012.

[4] Directions were made at the case flow review hearing on 27 July 2012 which requiried Mrs O’Brien to undertake specified steps in the proceeding and included an order that the parties sign and file a request for trial date by 30 November 2012 “or the matter will be deemed resolved”. 

[5] Although some of the directions were complied with and it was apparent that further directions were required, neither party sought them, so that the order made on 27 July 2012 took effect when no request for trial date was signed and filed by 30 November 2012 and the proceeding was deemed resolved. 

[6] The trustees in bankruptcy on behalf of Mr O’Brien discontinued the whole of his claim against the defendant (with the consent of the defendant) by notice of discontinuance filed on 10 September 2012. 

[7] Mrs O’Brien’s solicitors served a notice of intention to proceed on the defendant on 18 December 2013. 

[8] By application filed on 27 February 2014, the defendant applied pursuant to r 371 (or r 374 or r 280) of the Uniform Civil Procedure Rules 1999 (Qld) for the proceeding to be dismissed or to strike out the statement of claim.  The solicitors for Mrs O’Brien had prepared previously the application seeking to re-activate the proceeding, but had asked Mrs O’Brien on 21 February 2014 to consider the draft documents.  In response to the defendant’s application, the solicitors for Mrs O’Brien filed the application to re-activate the proceeding on 28 February 2014 and for an order the proceeding be remitted to the District Court. 

[9] Counsel for both parties suggested that the first issue was whether the proceeding should be re-activated, as the outcome of that application would have consequences for the defendant’s application.

Principles to be applied on a re-activation

[10] The parties addressed the requirements for restoration of a proceeding deemed resolved that are set out at paragraph 8 of Supreme Court Practice Direction No 17 of 2012 Case Flow Management – Civil Jurisdiction.  Paragraph 8.1 of the Practice Direction provides:

“8.1A proceeding deemed resolved may be reactivated by an application by any party before the case flow judge supported by affidavit material, which must:

(a)explain and justify—

(i)the circumstances in which the proceeding was deemed resolved;

(ii)any delay; and

(iii)any failure to comply with court directions; and

(b)address—

(i)any potential prejudice caused by the delay;

(ii)the parties’ capacity to prepare the case for trial in a timely way; and

(iii)whether a trial is required for resolution of the proceeding; and

(c)propose a plan to facilitate its timely determination in accordance with paragraph 6.1.”

[11] The Court of Appeal in Multi-Service Group Pty Ltd (in liq) v Osborne [2010] QCA 72 considered the effect of an order that a proceeding was “deemed resolved” and the relevant factors to be considered on a re-activation application.  The Court of Appeal at [39] described a deemed resolution as “something akin to the placing of the proceeding on an abeyance list” and at [40] contrasted the deemed resolution of a proceeding with a process under the UCPR which brings the proceeding to an end, such as the dismissal of a proceeding for want of prosecution under r 280.  The Court also noted at [44] that the exercise of the discretion to re-activate had to be consistent with the objectives of the Practice Direction (the timely disposition of proceedings rather than keeping proceedings in abeyance), in addition to considering the factors expressed in the Practice Direction as relevant.  Although Multi-Service was concerned with the forerunner to the current Practice Direction, the approach mandated by that decision to a re-activation application remains applicable. 

Nature of the plaintiff’s claim

[12] The defendant was the solicitor who acted for Mr and Mrs O’Brien in the sale of certain property and in the provision of vendor finance to the purchaser.  Soon after the settlement of the transactions on 11 July 2007, the purchaser defaulted under both the first mortgage it had granted to its major financier and the second mortgage granted to Mr and Mrs O’Brien.   The first mortgagee exercised power of sale and Mr and Mrs O’Brien recovered nothing in respect of the debt owed to them, in effect, for the balance of the purchase price.  The claim made against the defendant is based on steps it is alleged he failed to take on behalf of Mr and Mrs O’Brien in relation to the transactions and advice it is alleged he failed to provide to them.  It appears from the defence filed on behalf of the defendant that the content of the advice given by the defendant may be in issue.

[13] In anticipation of re-activating the proceeding, Mrs O’Brien’s solicitors prepared a second further amended statement of claim that was provided to the defendant on 9 April 2014.  That pleading refines the claim of Mrs O’Brien, pleads a few additional matters, but reduces her claim to her half share of the losses alleged to have been suffered by both Mr and Mrs O’Brien.  The claim is simplified in the sense that it is alleged if specific steps had been taken and advice given by the defendant, Mr and Mrs O’Brien would not have entered into the transaction.  The amount now claimed for damages for breach of contract and duty is the sum of $334,440 which includes interest to 1 April 2014 with a claim for further interest thereafter.  The defendant’s solicitors forwarded a request for further and better particulars of the plaintiff’s proposed new pleading under cover of their letter of 11 April 2014 and the plaintiff’s solicitors responded to that request on 28 April 2014. 

Should the proceeding be re-activated?

[14] Both parties prepared extensive chronologies.  It is unnecessary to repeat the detail of all steps and activities undertaken in the proceeding. 

[15] Prior to the mediation in March 2012, pleadings had closed and disclosure had taken place.  Mrs O’Brien’s current solicitors were approached by her former solicitors to assist in the mediation, on the basis that Mr and Mrs O’Brien were impecunious and fees would have to be paid on a deferred basis.  The relevant delays that occurred after that time can be attributed, in part, to the complication of Mr O’Brien’s bankruptcy and the need to ascertain the attitude of the trustees in bankruptcy to the proceeding.  Mrs O’Brien also was in the process of changing solicitors to her current solicitors and that was formalised on 27 July 2012.  Some delays can be attributed to Mrs O’Brien’s inability to pay legal fees to her solicitors that would have enabled them to brief counsel at an earlier stage.

[16] Under the order of 27 July 2012, the plaintiff was required to file and serve an amended statement of claim by 20 August 2012.  That step was effected one day late on 21 August 2012.  Mrs O’Brien’s solicitors then found out that the trustees in bankruptcy of Mr O’Brien were to discontinue the proceeding, insofar as it related to Mr O’Brien, and by letter dated 3 September 2012 informed the defendant’s solicitors that Mrs O’Brien claimed the whole of the financial interest in the losses the subject of the proceeding.  Mrs O’Brien had instructed her solicitors that she had provided most of the funding for the purchase of the subject property in the first place.  The defendant’s solicitors in their letter of 5 September 2012 requested Mrs O’Brien’s solicitors to provide the basis and authority upon which they asserted that Mrs O’Brien had that right and foreshadowed that, until a response was received about Mrs O’Brien’s standing, they would not take any further steps in the proceeding including the filing of an amended defence.  An impasse was reached between the parties in respect of the pleadings.  As the proceeding was under case flow management, such an impasse should have prompted the parties to return to court or, at least, endeavour to agree on a new timetable for the court’s approval.

[17] The solicitor handling the matter on behalf of Mrs O’Brien who filed affidavits in support of the re-activation application frankly acknowledged: 

“The regularisation of the proceedings in view of the problem thrown up by Mr O’Brien’s bankruptcy became my consuming concern and I did not realise that the deemed resolution was coming up or had occurred until I received a without prejudice letter from the Defendant’s solicitors dated 27 February 2013 pointing this out.” 

It is commendable that the solicitors who were acting for Mrs O’Brien when the proceeding was deemed resolved have not abandoned their client, but have continued to act for her in endeavouring to have the proceeding continue.

[18] Although Mrs O’Brien’s solicitors overlooked the need to return to the court to obtain a revised timetable for the steps in the proceeding and to avoid the proceeding being deemed resolved, correspondence continued to be exchanged between the parties.  The defendant’s solicitors had requested additional documents from the plaintiff’s list of documents about which there was some correspondence.  (That is a matter that still remains outstanding.)

[19] Mrs O’Brien’s solicitors were in contact with Mrs O’Brien over the period from end of February 2013 to mid-July 2013 about her instructions, but she wished to involve Mr O’Brien who was difficult to contact because of his employment at a remote place. 

[20] As a result of a letter sent by the defendant’s solicitors on 11 September 2013, between 11 September and 18 December 2013 Mrs O’Brien’s solicitors were corresponding with the defendant’s solicitors about the re-activation of the proceeding. 

[21] Mrs O’Brien has now been able to make arrangements with her solicitors which will enable her to prosecute the proceeding to its conclusion and she undertakes to do this diligently, if the proceeding is re-activated.

[22] It is unusual for a party to provide a justifiable explanation for all delays.  It is relevant, however, that the plaintiff and her solicitors have endeavoured to explain the subjective matters that contributed to the delays that resulted in failure to comply with or seek a variation of the order made on 27 July 2012 and thereafter in bringing this application. 

[23] There were difficulties with the terms of the statement of claim filed on 21 August 2012, but those difficulties appear to have been addressed by the revised statement of claim that is proposed to be filed and served, if the proceeding is re-activated.  There is no suggestion that the revised version does not disclose an arguable cause of action.

[24] Because the allegations arise out of the defendant’s professional practice, he is keen to have the matter finalised.  The defendant does not point to any specific prejudice caused by the delay in the finalisation of this proceeding, other than the usual prejudice that applies to witnesses who are asked to recall conversations or events that occurred seven or so years ago.  As the defendant is a solicitor, he will at least have the benefit of being able to refer to the file that related to the transactions which are the subject of the proceeding.

[25] In one respect, the energies of the parties directed to the applications filed on 27 and 28 February 2014 may have been better directed to the preparation for trial.  The other respect, however, is that the work which has been undertaken in connection with these applications has had some beneficial effect on clarifying the issues for trial and, if re-activated, the matter should proceed in a timely way. 

[26] The plaintiff has proposed a timetable for further steps in the proceeding, if it were remitted to the District Court, which covers filing and serving of amended pleadings and disclosure. 

[27] The plaintiff has shown a capacity and willingness now to prosecute the proceeding diligently by the preparation of the second further statement of claim and prompt response to the defendant’s request for further and better particulars of that statement of claim. 

[28] The failure to comply with the order of 27 July 2012 occurred at a time when there was confusion on the part of Mrs O’Brien and her newly retained solicitors as to how this matter should progress, compounded by Mrs O’Brien’s lack of access to funds.  The delays which Mrs O’Brien and her solicitors have endeavoured to explain do not, in the circumstances of a demonstrated willingness and capacity to pursue the claim and lack of specific prejudice caused to the defendant, warrant refusing her the opportunity to pursue her claim by leaving it in a state of abeyance.  The proceeding should be re-activated.

[29] The defendant did not seek to pursue his application to dismiss the proceeding, if the plaintiff’s application to re-activate the proceeding was successful.

Orders

[30] During the hearing of the application, I raised with the parties whether leave should be given to Mrs O’Brien to remove Mr O’Brien as a party.  In view of the discontinuance filed by his trustees in bankruptcy, he is no longer an active party.  It may not be strictly necessary, but I will give leave to Mrs O’Brien to make appropriate amendments to the claim to show that she is now the only plaintiff and to amend the relief in the claim to accord with the relief sought in the proposed second further amended statement of claim.

[31] I will fix the date for filing and serving the amended claim and the second further amended statement of claim.  The timetable proposed by Mrs O’Brien for the further steps in the proceeding largely reflects the timing required for those steps under the UCPR.  That can be a matter that the parties can agree upon.

[32] The defendant’s solicitors prepared a costs statement on a standard basis in relation to the defendant’s costs thrown away as a result of the plaintiff’s amendments to her statement of claim, non-compliance with the order made on 27 July 2012 and the deemed resolution, the costs incurred by the defendant after the matter was deemed to be resolved on 30 November 2012 and costs incurred by the defendant of the application filed 27 February 2014 (including anticipated costs up to and including the hearing of the application).  The defendant was seeking to have costs fixed.

[33] During the hearing of the application, I was not convinced that it was appropriate to deal with all the costs for which the costs statement (comprising 85 pages and 720 items) was prepared or to finally dispose of all the costs in respect of which the defendant was seeking orders.  I indicated my view that, apart from ordering Mrs O’Brien to pay the defendant’s costs of the application to re-activate the proceeding in any event, I would otherwise reserve the costs, and those costs could be dealt with at the conclusion of the proceeding.  That view has not been changed by further consideration of the matter or a closer look at the costs statement. 

[34] The orders that I will make therefore are:

1. The proceeding is re-activated.

2. The plaintiff Samantha O’Brien must pay the defendant’s costs of the application to re-activate this proceeding in any event.

3. Leave to the plaintiff Samantha O’Brien to amend the claim by removing Craig O’Brien from the heading of the claim, making consequential amendments to the claim, and by amending the relief set out in the claim to accord with the relief claimed in the draft of the second further amended statement of claim which was exhibit 2 on the hearing on 22 May 2014.

4. Direct the plaintiff Samantha O’Brien to file the amended claim and the second further amended statement of claim on or before 4pm on 10 June 2014.

5. The application filed on 27 February 2014 is dismissed.

6. The proceeding is remitted to the District Court at Brisbane.

7. Costs otherwise reserved.

Close

Editorial Notes

  • Published Case Name:

    O'Brien & Anor v Evans

  • Shortened Case Name:

    O'Brien v Evans

  • MNC:

    [2014] QSC 110

  • Court:

    QSC

  • Judge(s):

    Mullins J

  • Date:

    29 May 2014

Litigation History

No Litigation History

Appeal Status

No Status