DISTRICT COURT OF QUEENSLAND

1. [1]
   This proceeding began as an application by the first and second defendants to strike out the plaintiff’s action for want of prosecution. On its face, the application was brought under UCPR r 280^[1].  The third defendant was served, but did not appear.  Initially, the plaintiff resisted the application on the basis that there had been no inordinate delay and, in particular, no delay of more than two years (an argument founded on UCPR r 389(2), which prevents a party from taking a new step without leave, when more than two years have elapsed since the last step).

2. [2]
   In the course of the hearing it became apparent, however, that the plaintiff had not taken a step in the action since 28 August 2001 and his counsel, Mr Hackett, applied instanter for leave under r 389(2).  That course was not opposed by the first and second defendants (who had previously urged it^[2]) who contended, nevertheless, that leave should be refused.

3. [3]
   The claim arises out of the plaintiff’s sale of his interest in a partnership to the first defendant in September 1994. He alleges the sale was induced by oral misrepresentations made by the first defendant on his own behalf, and on behalf of the second defendant. The defence of the first and second defendants denies the representations were made, although a statement they provided to their solicitors which was disclosed in the proceedings appears to admit them. (The third defendant was the partnership accountant. Negligence is alleged against him in connection with the advice he is said to have given concerning the sale, and the value of the goodwill of the partnership). As Mr Hackett submitted, it appears the first and second defendants do not, in truth, deny there were discussions in terms of the alleged representations but attribute those representations to others including the third defendant, or the plaintiff’s accountant at the time, Mr Wan.

4. [4]
   The action has proceeded at a stately pace. It was not commenced until 5 August 1997, almost three years after the alleged representations were made. A Statement of Claim was delivered on 6 October 1997, and an Amended Statement of Claim on 21 February 1999. Some skirmishing about disclosure took place in 1998, and 1999. In early 2000 the first and second defendants applied to strike out the plaintiff’s Amended Statement of Claim, to which he responded by delivering yet another, Further Amended Statement of Claim on 23 February 2000. On 25 February 2000, however, Justice Atkinson directed the plaintiff to provide a further pleading no later than 31 March 2000. That was not done, in fact, until 26 April 2000 and the defendants sought further particulars.

5. [5]
   After further disputes about the plaintiff’s pleading, the first and second defendants eventually delivered a defence in July 2000. On 6 July 2000 the plaintiff delivered yet another Statement of Claim and then applied for judgment against the first and second defendants. That application was dismissed on 2 August 2000 and the plaintiff was ordered to pay the defendants’ costs.

6. [6]
   The first and second defendants delivered an Amended Defence on 26 October 2000 and then issued a Third Party Notice against the third defendant on 15 February 2001. He did not file a defence to that pleading until 28 August 2001.

7. [7]
   On 21 August 2002 the plaintiff served a Notice of Intention to Proceed upon the first and second defendants. On 27 August the plaintiff’s solicitors wrote to the solicitors for those defendants serving a Notice of Change of Address for Service and requesting proposals for case appraisal. On 10 January 2003 the first and second defendants’ solicitors wrote to the plaintiff’s solicitors complaining about the plaintiff’s dilatory conduct. Nothing further occurred until those defendants filed and served this application on 23 April 2004.

8. [8]
   At the outset of the hearing the plaintiff contended UCPR r 280 could not be relied     upon by the first and second defendants because the plaintiff was not in default of any rule.  The realisation that submission was wrong, and the immediate cross-application under r 389(2) meant the matter became, in effect, what the defendants considered it should always have been: an application by the plaintiff under r 389, opposed by the defendants and countered by their own application to strike out for want of prosecution. Once the matter achieved that form it became one to be determined by reference to principles of long standing which have been considered, since the introduction of the UCPR, in cases including Cooper v Hopgood & Ganim (1999) 2 Qd R 113, and Tyler v Custom Credit Corporation Limited & Ors [2000] QCA 178.

9. [9]
   The applicant’s affidavit material identifies the principal grounds for denying the plaintiff leave to proceed (and to strike out his action) as these:

1. (a)
   The first defendant says that he now has little recollection of the relevant meeting in 1994, when the representations were allegedly made; and

2. (b)
   the first and second defendants, through their solicitors, say they are now unable to locate Mr Wan, one of the persons said to have been present at the meeting.

10. [10]
    The first contention was undermined, however, by notes which appear to have been made by the first defendant in the course of giving instructions to his solicitors for a defence to the original Statement of Claim which, it appears, were disclosed by his former solicitors in these proceedings^[3].  The second was belied from an affidavit from Mr Wan himself^[4] which shows that he has worked as an accountant from the same premises for the last 15 years and his business address throughout that time is identified in correspondence which has been disclosed in the proceedings.

11. [11]
    Other matters of which the first and second defendants complained included, firstly, lengthy periods of unjustified delay on the part of the plaintiff, and his failure to comply with orders of the court. It is true the proceedings were commenced shortly before the expiry of a limitation period under the Trade Practices Act, but the plaintiff also claims in fraud (for which there is no relevant period of limitation), and in negligence against the third defendant (for which the relevant limitation period is six years).  The action has moved very slowly but the pleadings between the parties have closed, and although there have been complaints about disclosure I am not persuaded it is actually incomplete.

12. [12]
    The plaintiff has not been diligent in pursuing his solicitors to advance the matter, but as his present solicitor Mr Earl swears, the plaintiff’s file was formerly under the supervision of a law clerk in the employ of the plaintiff’s solicitor’s firm (Mr Dean Bax) who was the subject of extensive inquiry by the Queensland Law Society, and has since left the firm. Mr Earl swears, and I accept, that through a combination of unfortunate circumstances the plaintiff’s file “appears to have fallen between the cracks” in his office. Although the plaintiff should I think have been more diligent in pursuing his solicitors, his explanation that he did not do so because he was aware of the difficulties Mr Bax was having is at least understandable, if less than satisfactory.

13. [13]
    This is a case in which the issues which fall to be considered in the plaintiff’s late application for leave to proceed under r 389 are essentially the same as those upon which the first and second defendants rely as grounds for dismissal for want of prosecution. The UCPR emphasise, in r 5, the obligations upon all parties to proceed expeditiously^[5] although, as Chesterman J noted in Lilyville Pty Ltd v Colonial Mutual Life Assurance Ltd (1999) QSC 372, the underlying principles have not changed from the former rules about which Connolly J said in Dempsey v Dorber (1991) Qd R 418 at 420:

“… the proper approach … is to identify the relevant factors, assess the weight to be given in the circumstances of the case to each of them, and then to determine whether, on balance, there is good reason for making the order”.

The relevant circumstances are also to be considered, as Chesterman J went on to say, against the background of an onus upon an applicant who seeks leave under r 389 to satisfy the court that grounds exist for exercising the discretion in his favour.

14. [14]
    Here the delays are quite lengthy but in recent years have been, principally, a consequence of a lack of attention to the file by the plaintiff’s solicitors - save in the initial period of almost three years before the proceedings were commenced, and between late 2000, and December 2002 when, as the plaintiff admits in his affidavit, he failed to give his solicitors some instructions they sought^[6].  The action could have been brought to a hearing earlier but the proceedings are relatively simple, involve straight forward issues of credit, and should not involve a long trial.  The fact the commencement of the action was postponed for a considerable period is a relevant factor but the statement of the first defendant which has been (probably inadvertently) disclosed suggests he did not suffer any disadvantage or prejudice because of it.  The critical period of delay for the purposes of r 389(2), that is since the last step on 28 August 2001, is lengthy but the plaintiff’s solicitors have been largely responsible for it.

15. [15]
    The only other ground of specific prejudice relied upon by the defendants – the alleged inability to locate Mr Wan – is surprising, and suggests a want of any real effort to locate him.

16. [16]
    The plaintiff appears to have some prospects of success although that is, of course, only a matter of conjecture at this stage. The limited evidence available indicates the possibility he might establish the representations were made, and not by Mr Wan. The litigation would not be extinguished by dismissal, at least the action in fraud. Despite the delays, the action has progressed. The delay, while unsatisfactory, has been explained and, since 2002, is the fault of the plaintiff’s solicitors rather than him.

17. [17]
    This analysis shows the majority of the factors relevant to the discretion, as it arises in this case, fall in the plaintiff’s favour or do not tell strongly against him. Of course, the exercise is not a mathematical one but what might be called the ‘general’ elements are at worst neutral, or not badly adverse to him and the major issue – whether any specific prejudice arises – has, for the reasons set out earlier, been largely extinguished. Where that is so, and delay in the proceedings is in large measure attributable to his lawyers, the discretion should be exercised in his favour.

18. [18]
    It was contended for the plaintiff that, although the late discovery of the need to apply under r 389 meant the application was an essential one for the plaintiff, costs should nevertheless be in the cause, or no order should be made. The defendants have, however, been pressing the plaintiff to bring an application of this kind since early January 2003. The plaintiff was mistaken in resisting that pressure, wrongly asserting he was not obliged to apply. Although the defendants’ application was served on 23 April 2004, it was not until the morning of the hearing, over a month later, that the plaintiff produced affidavit material in response to it. The plaintiff himself seeks a boon from the court, which would not be necessary had he pursued his action diligently. In all the circumstances it is right that the plaintiff pay the first and second defendants’ costs of and incidental to their application, and the plaintiff’s cross-application (brought orally on the morning of the hearing) assessed on the standard basis.