Hansell v Collison Finance and Investments Pty Ltd
[2006] QDC 54
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- Hansell v Collison Finance and Investments Pty Ltd[2006] QDC 54
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Hansell v Collison Finance and Investments Pty Ltd[2006] QDC 54
Hansell v Collison Finance and Investments Pty Ltd[2006] QDC 54
DISTRICT COURT OF QUEENSLAND
CITATION: | Hansell and Anor v Collison Finance and Investments Pty Ltd and Ors [2006] QDC 054 |
PARTIES: | MARK HANSELL AND LOUISE HANSELL Plaintiffs v MARINER BAY INVESTMENTS PTY LTD First Defendant AND COLLISON FINANCE AND INVESTMENTS PTY LTD Second Defendant AND GARY COLLISON Third Defendant AND SCIACCA and SCIACCA Fourth Defendant AND IDA GREEN Fifth Defendant AND JOE SCIACCA Sixth Defendant AND CRYSTAL INVESTMENTS (AUST) PTY LTD Seventh Defendant |
FILE NO/S: | BD610/03 |
DIVISION: |
|
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 10 March 2006 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 February 2006 |
JUDGE: | McGill DCJ |
ORDER: | Decision to renew claim against the fourth defendant on 28 January 2005 set aside; service of the claim and statement of claim on the fourth defendant set aside; action against the fourth defendant dismissed; order plaintiffs to pay fourth defendant’s costs of the action including this application to be assessed. |
CATCHWORDS: | PRACTICE – Renewal of claim – whether another good reason to renew claim – desire to await outcome of other litigation – whether prejudice – renewal set aside. UCPR r 5(3), r 24(2), r 667(2)(a) and (b). Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 – cited. Clarke v Spotless Catering Services Ltd (W1346/92, Dowsett J, 14.1.94, unreported; BC9401424) – followed. Gillies v Dibbetts [2001] 1 Qd R 596 – applied. Littler v Price [2005] 1 Qd R 275 – considered. MacDonnell v Rolley [2000] QSC 58 – followed. Muirhead v Uniting Church of Australia Property Trust (Q) [1999] QCA 513 – applied. The IMB Group Pty Ltd v Australian Competition and Consumer Commission [2005] QSC 139 – followed. The IMB Group Pty Ltd v Australian Competition and Consumer Commission [2006] QSC 12 – followed. Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337 – considered. |
COUNSEL: | R. G. Bain QC for the plaintiffs A. J. H. Morris QC for the fourth defendant |
SOLICITORS: | Carter Capner lawyers for the plaintiffs CBD Lawyers for the fourth defendant |
- [1]This is an application by the fourth defendant that the plaintiffs’ claim against it be struck out, or the alternative dismissed for want of prosecution. The claim was filed on 27 February 2003 but was not served on the fourth defendant, by service on a person who was a member of the fourth defendant firm at the relevant time, until 25 November 2005.[1] In the meantime, on two occasions the registrar renewed the claim for 12 months, on ex parte applications on behalf of the plaintiffs. In support of its application, the fourth defendant sought the review of the decisions to renew the claim under rule 667(2)(a) and (b).
- [2]If either of the decisions to renew are to be set aside, it follows that the claim becomes stale when served. That is an irregularity, and it would be open to the court under rule 371 to waive the irregularity, but only if satisfied that it was proper to renew the claim: Gillies v Dibbetts [2001] 1 Qd R 596.
- [3]This application was heard in conjunction with similar applications by one of the defendants in two other matters, Woollard v Looker Estates Pty Ltd and Ors, D4519/02, and Black v Greenwich Financial Services Pty Ltd and Ors, D717/02. The defendant who was applying in each of those actions was represented by the same counsel, and there were similarities between the claims made in those actions against that defendant and the claim made against the applicant fourth defendant[2] in this action. In the course of the hearing, senior counsel for the plaintiffs in all actions read affidavits in each action by the solicitor who had the carriage of each of the actions, and many other similar actions, and who had sworn affidavits in support of the applications to renew the claims (“the solicitor”). In each of those matters there had also been applications to renew the claims. She was cross‑examined by senior counsel for the defendant, and by counsel for the applicant defendant in the other actions.
Background
- [4]Broadly speaking, the claims arise out of purchases by the plaintiffs of real estate on the Gold Coast, Queensland, which are alleged to have been at an overvalue, as a result of the activities of certain people who have become notorious for that sort of thing. All of the factual events occurred a long time ago. The amended statement of claim[3] alleged that on 1 March 1997 the plaintiffs signed a contract to purchase a unit in a development at Southport known as “Sun Village” from the seventh defendant company. It also alleged that prior to signing the contract, the plaintiffs were told various things by representatives of the first defendant, a marketing company, and were provided with a financial analysis by the third defendant, a director and employee of the second defendant, which provided financial advice. The plaintiffs executed a brokerage agreement with the second defendant before they were taken to the office of the fourth defendant, a firm of solicitors. One member of that firm was also sued separately as the sixth defendant, but the action is not proceeding against him, he having become bankrupt.
- [5]It was alleged that the fourth defendant “and/or” the sixth defendant were retained to act as solicitors for the plaintiff in relation to the contract, and relevantly that there were various breaches of the retainer by the fourth defendant, including allegations of non-disclosure. It was alleged that but for those breaches the plaintiffs would not have entered into the contract, and purchased the unit, involving them in finance arrangements with two banks which gave rise to additional costs and interest. It was alleged that the plaintiffs sold the property in August 2000 at a loss, and have suffered also consequential losses; the total amount claimed including interest for a period of eight years comes to over $80,000. This is claimed against the fourth defendant as damages “and/or” compensation pursuant to sections 82 and 87 of the Trade Practices Act, or in the alternative damages for negligence or breach of contract.
The first renewal
- [6]It was submitted on behalf of the defendant that the proceeding was filed immediately prior to the expiration of the six year limitation period, a proposition not disputed on behalf of the plaintiffs. On 3 February 2004 a deputy registrar renewed the claim for a period of 12 months from 27 February 2004 pursuant to rule 24. That was done after two affidavits by the solicitor were filed, one on 14 January and one on 2 February 2004. The later affidavit effectively superseded the earlier one, and corrected what must have been a mistake, to which I shall refer shortly. Relevantly, it deposed to no attempt having been made to serve the claim and statement of claim, because the action was said to be dependent upon the outcome of three other actions, described as “test cases” which had been filed in the court and were said to be “currently being litigated in the District Court.”
- [7]The first test case, D3966 of 2000, was said to have been filed on 4 October 2000, and was said to have “defendants common to this claim.” The claim in that matter “has been served on the first, second, third and fourth defendants.” Reference was made to an order for substituted service against the fifth defendant in October 2001. No other specific information about that matter was provided. It was said that in another test case, D4108 of 2001, 10 of the 12 defendants had been served and “the matter is at an advanced stage of readiness for trial.” In a third test case, D301 of 2002, it was said that disclosure was complete and a number of notices for non-party disclosure had been issued. It was said that it was expected that these “test cases will be finalised during 2004.”[4] The solicitor said that there were “now in excess of 800 claims awaiting the outcome of the test cases” and submitted that, “to pursue the claims, other than the test cases, will result in considerable costs being incurred and the use of valuable court resources in circumstances where this might otherwise be avoided.”
- [8]There were a number of criticisms made of the statements of fact in this affidavit. The first was that there were no defendants to this action who were also defendants to the first of the test cases referred to, D3966 of 2000. The solicitor accepted that, but explained that she was referring to defendants who held similar positions within the pattern of the transactions which were the subject of all of the actions.[5] For example, in most of the actions one of the defendants was the solicitor who had been seen by the plaintiffs and acted in relation to the execution and completion of the contract of sale. But there were a number of different solicitors involved. This is not what would ordinarily be understood by an expression in these terms, but I suppose if one is managing hundreds of actions which all follow the same pattern it might be more natural to think in such a way. The following paragraph referring to service on the first, second, third and fourth defendants would I think compound this, suggesting that this was a reference to the first four defendants in the present action; it was not, it was a reference to the first four defendants in the “test case”, but the failure to make that clear may have been simply a matter of sloppy drafting.
- [9]The next proposition that was challenged was that D3966 of 2000 was being actively pursued as a test case which was expected to be finalised during 2004. It does appear that very little occurred in this action, and it was conceded by the solicitor that it subsequently went no further.[6] The evidence did not clearly establish that the solicitor had no expectation that that action would be finalised during 2004 at the time that these affidavits were sworn, although she conceded that that may have been an error: p. 25.
- [10]The next test case referred to, D4108/01, could not in my opinion be accurately described in January 2004 as a matter at an advanced stage of readiness for trial. In July 2004, the plaintiffs amended the statement of claim, and there was an application for leave to proceed which was ultimately settled on the basis that the plaintiff discontinued the proceeding. The affidavit of the solicitor filed in response to the application reveals that the action was pursued in 2001 and 2002 to the point of completing disclosure and pursuing non-party disclosure, but after December 2002 the only steps taken to carry it forward were an application for leave to proceed against a company in liquidation in January 2004, a notice of intention to proceed in July 2004 and the filing of an amended statement of claim the same day (irregularly). That does not in my opinion provide a proper basis for saying in January 2004 that the matter was at an advanced stage of readiness for trial[7], although I suppose it might have been possible to get the matter ready for trial during 2004 if it had been seriously and expeditiously pursued. There is no evidence that as at January 2004 the evidence necessary for a trial of the action had been or was being assembled, but the relevant expectation might have existed.
- [11]With regard to the third test case, D301/02, it does appear that that case was being pursued during 2002 and 2003, at least to some extent, and notices for non‑party disclosure were drafted in early 2004, but were not filed and served.[8] The omission to file and serve them was not discovered until February 2006, which strongly suggests that there was no active pursuit of those actions after February 2004. Again, however, it does not necessarily follow from that that there was no intention to pursue this matter actively at the end of January 2004, or that there was no expectation that it would be tried during 2004.[9]
- [12]In the light of the cross-examination, senior counsel for the applicant, Mr Morris QC, did not press the submission that the affidavit was fraudulent on the basis that it was deliberately false, but did press the submission that it was fraudulent in displaying a reckless disregard for the truth. It does appear that subsequent events did not live up to what was said in that affidavit, but that does not mean that it was reckless at the time when it was sworn. In all the circumstances, I am not persuaded that in executing the affidavit of 30 January 2004, or the earlier affidavit, the solicitor displayed a reckless disregard for the truth so that the affidavit could be said to have been fraudulent.[10]
The Second Renewal
- [13]On 28 January 2005 a deputy registrar renewed the claim for 12 months from 27 February 2005. That order was made following the filing on the previous day of a further affidavit from the solicitor. That affidavit was in many respects similar to the affidavit of 30 January 2004, but referred to only two “test cases”, D301/02 (again) and D4905/01, which was not mentioned in the earlier affidavit. As to the former, what was said was that disclosure was complete and a number of notices of non-party disclosure had been issued and the pleadings had been amended. Apart from the fact that the notices of non-party disclosure, although prepared in February 2004, had not in fact been issued, this was accurate as far as it went, and the solicitor said that she had believed the notices had been issued at that time.[11] However, I think it is obvious that nothing was done in this action after February 2004, and the further claim that there was an expectation that the test cases would be finalised some time towards the latter part of 2005 seems to me to be very tenuous indeed. Nevertheless, the solicitor maintained that at that time she still had that expectation.
- [14]The new “test case”, D4905/01, was not referred to in the affidavit of the solicitor. The defendant has searched that file in the registry and ascertained there are different solicitors for the plaintiff in that matter, default judgment has been entered against four of the 10 defences, and no step involving filing of court documents has occurred since 6 August 2004.[12]
- [15]Senior counsel for the defendant also criticised the use of the term “test case” in relation to these matters, on the basis that there had been neither an order of the court nor any agreement between the parties that these particular cases would be so treated. The position was simply that the plaintiffs’ solicitors had chosen to run these particular cases first, in the hope that they would generate precedents which would be helpful in the resolution one way or the other of the other matters. Although in my opinion the ordinary and preferable meaning of the term “test case” is a case the selection of which was the product of either an order of the court or agreement between the parties to all of the matters, I do not think that usage is so definite, or that the usage in the present case departs so greatly, that it could be said that that usage was fraudulent.
- [16]In other respects, the arguments in relation to the January 2004 affidavit apply also in relation to the January 2005 affidavit. Again, it was not pressed that this involved statements which were known to be false, and I am not persuaded that the statements made in that affidavit involved reckless disregard of the truth on the part of the solicitor. Insofar as the application relies on rule 667(2)(b), therefore, it is not made out.
- [17]Nevertheless, the order was clearly made in the absence of the applicant defendant, so rule 667(2)(a) applies, and the court has jurisdiction to review either of the decisions to renew the claim.[13] Rule 24(2) permits a claim to be renewed if “the registrar is satisfied that reasonable efforts have been made to serve the defendant or that there is another good reason to renew the claim…” Clearly the registrar could not have been satisfied about the former; no attempt was made to serve the claim, and once an attempt was made there was no difficulty in service. The plaintiffs’ case depends on the alternative ground, that there was another good reason to renew the claim. That depends really on whether the existence of a large number of claims, including this one, involving similar issues but a range of parties, justified most of the claims being held in abeyance without service on the defendants while selected cases were pursued.
Authorities
- [18]The approach to a rule to the same effect as rule 24(2) was considered by Stephen J in Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337. In that case the plaintiff imported consignments of steel from Japan which the plaintiff alleged were rusty on arrival. It took proceedings against the charter of the ship, a New South Wales company, and the owner of the ship, a Japanese company. A writ was issued in November 1978, about a year after the cause of action arose, and served on the New South Wales company 10 months later. In November 1979 it was renewed for a period of six months on an ex parte application to the registrar, but notice of the writ was not served on the Japanese company until October 1980, by which time the plaintiff’s writ was stale. The plaintiff applied for a further renewal of the writ, while the Japanese company applied to have the writ and service upon it of the notice of the writ set aside, and also sought to set aside the renewal of the writ in November 1979. The relevant limitation period, under the Sea Carriage of Goods Act 1924, was 12 months from delivery of the goods.
- [19]His Honour noted that English authorities treated renewal after a limitation period had run as being justified only in quite exceptional circumstances (page 341) but concluded on the basis of authorities in Australia and other common law jurisdictions that the rule ought to be exercised more flexibly, with consideration of other matters, so that the question remained whether there was good reason for renewal of the writ: page 346. Nevertheless, the expiration of the limitation period remained a relevant factor, as did the circumstance that the action involved the carriage of goods by sea where there was an international expectation that any litigation would be conducted promptly. It appeared further that the plaintiff had initially not sought actively to pursue the action against the Japanese company, and only decided to do so in October 1979 after the New South Wales company had delivered its defence. The Japanese company had not even been given notice of the claim. The plaintiff then adopted a method of service of the notice which his Honour said proved to be extraordinarily slow: page 348.
- [20]His Honour noted that the delay in serving the Japanese company was of a considerable period, it was deliberate, and no notice was given to the defendant prior to formal service. These were all said to be substantial considerations, and although the plaintiff’s effective loss of its rights against the company if renewal of the writ was to be set aside was to be weighed against them, that seriously prejudicial consequence would always be present where renewal of the writ arose after a limitation period had expired, and the prejudice was self‑inflicted in the sense that the defendant did nothing to induce delay in service or to encourage a belief that the claim against it might be settled without recourse to litigation: page 351. Accordingly in his opinion the writ should not have been renewed in November 1979, the application for further renewal was dismissed and service of the notice of the writ was set aside.
- [21]This decision was considered by the Court of Appeal in Muirhead v Uniting Church of Australia Property Trust (Q) [1999] QCA 513. Pincus JA, with whom Davies JA agreed, summarised the views of Stephen J as follows:
“1. There is a tendency to relax rigid time limits where that is legally possible and where it can be done without prejudice or injustice to other parties.
- The discretion may be exercised although the statutory limitation period has expired.
- Matters to be considered include the length of delay, the reasons for it, the conduct of the parties and the hardship or prejudice caused to the plaintiff by refusing renewal or to the defendant by granting it.
- There is a wide and unfettered discretion and there is no better reason for granting relief than to see that justice is done.”
- [22]In that case, a District Court judge had renewed a claim under rule 24 on the basis that the expiration of the limitation period in itself provided a good reason to renew, which the court considered was erroneous: [6]. It appeared that in about August 1997 the plaintiff consulted solicitors in relation to a claim for damages and personal injuries supposedly sustained at a work related accident in September or October 1994. A claim was filed in August 1997, but not served because of further investigations into the matter, and because of a desire to clarify the plaintiff’s medical condition. That had not been clarified until April 1999 when the application to renew was filed, and in May 1999 it was ordered that it be served on the defendants. That was the first notice they had of the plaintiff’s claim.
- [23]Williams J, as his Honour then was, said that it was often prudent for a solicitor to await conclusive medical reports before serving originating proceedings, but the significance of that was reduced if not eliminated once the applicable limitation period was reached and there was really no justification for failing to give the defendant any notice at all before the limitation period expired: [30]. Delaying service until 22 months after the expiration of the limitation period while awaiting conclusive medical reports did not constitute good reason for the purposes of the rule. There were also indications of significant prejudice to the defendant as a result of the delay. Ultimately the court concluded that the material was not capable of supporting a finding that there was good reason for renewing the plaint after the expiration of the limitation period, and the order was overturned.
- [24]In Clarke v Spotless Catering Services Ltd (W1346/92, Dowsett J, 14.1.94, unreported; BC9401424) the plaintiff alleged that in May of 1988 she slipped on water on the floor in the course of her employment and suffered injuries. She appeared to recover speedily, but in May 1990 she was injured again and this led to a course of further medical investigation as a result of which she ultimately obtained the opinion that what had become quite severe lower back pain was actually caused by a lumbar disc protrusion caused by the incident in May 1988. A writ was issued, out of time, on 9 September 1992, but was not served. In January 1994 there was an application for an extension of the limitation period, and also an application to renew the writ. Ultimately his Honour declined to renew the writ, and accordingly concluded that it was unnecessary to consider an application to extend the limitation period.
- [25]As to the renewal of the writ, his Honour said:
“Although the writ was issued in September of 1992, absolutely no notice of its existence was given to either the defendant or the defendant’s insurer until November of 1993. Initially the plaintiff’s solicitor decided not to serve the writ until more information was to hand in support of the application under the Limitation Act, which was recognised as being necessary. Thereafter it seems that the solicitor simply forgot that he had not served the writ. I have previously observed that I consider it to be an inappropriate practice to issue a writ with the intention of not serving it. It seems to me that a solicitor who issues a writ is obliged to affect service as soon as reasonably practicable. It cannot be in the interests of litigation that the court permit the issue of writs with the expectation that on some occasions, no attempt will be made to serve them for quite considerable periods of time thereafter. On the other hand, mere inadvertence may well be an explanation which, in the absence of prejudice, would be sufficient to justify an extension of time for service of the writ pursuant to O.9.”
His Honour held that because of the prejudice the time for service of the writ should not be extended.
- [26]In MacDonnell v Rolley [2000] QSC 58 Byrne J refused to renew a writ which had been issued in November 1996 but not served. His Honour said at [12]:
“The plaintiff has always had the means to pay for service of the writ. She has chosen not to expend the $50 or less to do so, preferring to leave the litigation in suspension while she pondered whether to prosecute it. Speaking generally, such calculated inactivity is not to be encouraged. It is not for a party to decide whether there should be effectively a stay of proceedings. And ‘it is not right that people should be left in ignorance of proceedings that have been taken against them if they are here to be served.’”
An appeal from this decision was dismissed: [2001] QCA 32.
- [27]In Gillies v Dibbetts [2001] 1 Qd R 596, which concerned the question of whether an amended plaint should be renewed in order to enable it to be served, as required, on a statutory insurer (WorkCover), Wilson J, with whom the other members of the court agreed, said at page 604:
“Rules of court are intended merely to assist in the just resolution of disputes, and not to confine the process unduly. On the other hand procedural certainty is an aspect of that process, and this court should not gives its imprimatur to the blithe conduct of litigation without regard to what are quite basic and well known requirements. The very broad powers given to the court by the UCPR should be used judiciously to achieve the result which is fair and just in all the circumstances.”
- [28]In The IMB Group Pty Ltd v Australian Competition and Consumer Commission [2005] QSC 139 a claim and statement of claim were filed in September 1999, but were not served on the second, third, fourth and fifth defendants until September 2004. The plaintiffs had obtained renewals of the claim every six months until September 2004 when the registrar refused any further renewal. The defendants applied to the court to set aside the renewals by the registrar, and to refuse any further renewal, and instead to dismiss the action. Holmes J referred to rule 24(2), Van Leer and Muirhead, and said that it was relevant to consider whether the delay was deliberate or the product of mishap or oversight, whether notice had been given to the defendant, the merits of the proposed action, actual prejudice and the possibility of prejudice which was more than mere speculation: [18].
- [29]In that case the reason for the delay was that there were other proceedings in the Federal Court, which ultimately led to an appeal to the Full Federal Court which was concluded in favour of the plaintiffs by a judgment on 20 February 2003. It was then said, however, that the question of costs needed to be resolved so that funds would be available for the purpose of pursuing the Supreme Court action. Her Honour, however, was of the opinion that there was no demonstrated connection between that action and the causes of action against the relevant defendants, and, in any event, that was a matter which could have been made the subject of an appropriate application: [30]. Her Honour said that what the plaintiffs were in effect seeking was a unilateral stay, and approved a statement in Battersby v Anglo-American Oil Co Ltd [1945] KB 23 at 32[14]:
“Ordinarily, it is not a good reason that the plaintiff desires to hold up the proceedings while some other case is tried or to await some future development. It is for the court and not for one of the litigants to decide whether there should be a stay, and it is not right that people should be left in ignorance that proceedings have been taken against them if they are here to be served.”
- [30]There was some dispute as to whether notice of the claim had been given to the defendants at an earlier time, and her Honour appears to have concluded that there was no effective notice of the claim now being pursued until relatively recently. She found there was no specific prejudice, but there was the prospect of some general prejudice through lapse of time, particularly in a case turning on recollection of the content of conversations: [48]. She concluded that she was not satisfied that there was, or had been in the more recent past, good reason to renew the claim. She set aside the decision of the registrar in respect of the last renewal, before the service of the claims, and declined to grant any renewal of the claim. Accordingly, the plaintiff’s action against those defendants was dismissed.
- [31]The remaining defendant, the Australian Competition and Consumer Commission, applied in November 2005 to set aside the decision to renew the claim, so far as it was concerned. That came before Helman J, and was successful: [2006] QSC 12. His Honour referred to Van Leer and Muirhead, and UCPR r 5 and noted that the effect of the plaintiffs’ actions was [21]:
“They granted themselves a stay of their claim they may or may not have been granted had they applied to the court for it on notice to the defendant.”
His Honour noted that whether there was good reason for the renewal of the claim must be considered in the light of the alternative course open to the plaintiffs, of serving the claim: [25]. As to the assertion the delay was caused by the plaintiffs’ lack of funds, his Honour said at [26] that it was caused rather by “the plaintiffs’ determination to proceed at their own, slow, pace contrary to the undertaking imposed upon them by rule 5(3).” His Honour accepted that this defendant (by then the only defendant) had notice of the claim soon after it was filed, and indeed a copy was obtained on behalf of the defendant in November 2002 from the court, but said that this was not decisive: [27]. His Honour also said that any prejudice to the plaintiffs through their loss of their claim was self-inflicted: [29]. There was in that case some public interest in the pursuit of the claim, but his Honour said that it was to be weighed against “an equally weighty public interest in the timely disposal of legal proceedings.” There was some discussion of the merits of the plaintiffs’ claim, but at [36] his Honour concluded that, taking the plaintiffs’ case at its highest, a review of the relevant circumstances revealed that there was no good reason at the time of the last renewal to renew the claim. The plaintiff had failed to establish why the case should be excepted from the general rule, that the court not exercise its jurisdiction in favour of renewal.
Prejudice to the Defendant
- [32]For practical purposes, any liability of the fourth defendant will fall on the remaining solvent member of the firm at the relevant time. He was not the person who dealt with the plaintiffs, and knows nothing about the matter himself. He assumes that his then partner, the bankrupt sixth defendant, handled the matter, but after service he telephoned the sixth defendant, who said that he could not recall the plaintiffs and had no recollection whatever of the matters the subject of the proceedings. He also said that he did not have access to the file, but the plaintiffs’ solicitors have had access to it, and put in evidence what they say is a copy of the file. Obviously the defendant is scarcely in a position, independently, to verify whether or not what the plaintiffs say is the file is intact.
- [33]He said he had no notice of the claim prior to service, although he has been, at all relevant times, within the jurisdiction and readily contactable. Indeed, he has held a practising certificate, and practised essentially under his own name from 1997 to 2003. This was not disputed.
- [34]The plaintiff submitted that the trial of the action would turn essentially on the documents, which were available because the fourth defendant’s file had been preserved. It was submitted that reliance could be placed on decisions such as Littler v Price [2005] 1 Qd R 275 as showing that the fourth defendant was liable. That was a case where a solicitor was held negligent in failing to point out to his clients certain aspects of a transaction, in respect of which he admitted he had agreed to provide them with legal advice, which ought to have revealed that the transaction was hazardous. In particular, there was a long-term lease executed by the plaintiffs in favour of a company which imposed significant obligations on the lessee which were unsecured. This was not drawn to the plaintiffs’ attention, nor the fact, which the solicitor had ascertained by a search, that the lessee had a paid up capital of $3. Liability in that case was on the basis that the transaction was unusual, and in particular that it presented unusual risk of loss to the clients, about which the solicitor had failed to advise the clients.
- [35]The present case is quite different. There was nothing unusual about the transaction as a sale and purchase of real estate, and the real basis of the plaintiffs’ case is that the solicitor had knowledge of various factors which suggested that the sale was at an overvalue, but failed to reveal this to the plaintiffs. The crucial allegation, it seems to me, is that the defendant failed to reveal the fact, known to him, that the vendor had just purchased the property at a much lower price[15], but there are many other factual issues raised in lengthy particulars. The plaintiffs evidently propose to prove the knowledge of the solicitor by reference to documents on the solicitor’s file, to prove the advice that ought to have been given by expert evidence (unless the need to give it was obvious) and to prove that it was not given by the evidence of the plaintiffs, supported by the absence of any documentation on the file to suggest that it was given.
- [36]I have not been through the file to assess whether there is, in the file, a real foundation for such arguments, but assuming in the plaintiffs’ favour that there is, there remains the risk that the file does not show the full story.[16] It may be that documents which appear to excite suspicion now in fact excited the suspicion of whoever was handling the matter, as a result to which inquiries were made which allayed that suspicion, but were not documented. Alternatively, it may be that advice was given that was not documented. In circumstances where so much time has passed since the relevant events, even being able to investigate, let alone establish, either of these matters must have been made more difficult.
- [37]I accept that the defendant would never have been in a position to give personal evidence in relation to this matter, and therefore he has not been prejudiced by any change in his own position, but if there was a good defence which depended upon oral evidence, the ability of the person who was actually involved in the transaction to give proper evidence of it as a witness, and therefore the ability of the defendant properly to defend himself in the action, has necessarily been reduced by the delay. The defendant’s difficulty in investigating and gathering evidence relevant to the issue of causation will also have been increased by the delay. The plaintiffs’ proposition that the defendant has not been prejudiced in his defence really assumes that there never was a good defence based on oral evidence, but I do not think that it is appropriate to analyse the matter in that way.
- [38]The whole period of time since the relevant facts occurred is relevant at this point, in my opinion, by analogy with the reasoning in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Delay prior to the expiration of the limitation period may cause prejudice, but there is no right in the defendant to complain of that. But once the limitation period is exceeded (which from the point of the view of the defendant is the position here) it becomes relevant to consider prejudice, and in my opinion what is relevant to prejudice then is the whole period of time involved. The defendant in the present case cannot point to any specific prejudice, except for the fact that the sixth defendant claims to have completely forgotten about the matter, but there is the potential for prejudice, as occurs in any matter where oral evidence may be important and where there has been significant delay since the time when the cause of action arose.
- [39]It was also submitted by the plaintiffs that effective notice had been given of the action by a letter from the plaintiffs’ solicitors to “Australasian Lawyers and Consultant” on 27 June 2002.[17] However, that was a different practice conducted by the sixth defendant, not the defendant, and not a practise with which the defendant was involved. He has sworn that he never received any advice from the sixth defendant or any correspondence from the plaintiffs’ solicitors[18] and he was not cross-examined on this. I therefore find that there was no notice to the defendant of this action prior to the service of the claim. It is true that there has been a certain amount of publicity about claims being brought against various people in relation to transactions of this nature. But in my opinion, that is not the sort of notice which is relevant for present purposes.
Analysis
- [40]In my opinion the important consideration is that the renewal was prompted by a deliberate decision on the part of the plaintiffs not to serve the claim, because of their unilateral adoption of an inappropriate approach to large scale litigation. I respectfully agree with the approach of Dowsett J, Byrne J, Holmes J and Helman J. As a general proposition, a party who has commenced proceedings is obliged to pursue them, and is not entitled to any concession under the rules because of any delay brought about by a deliberate decision to refrain from pursuing them for some other reason, whether because it was thought sufficient just to carry on the action against another defendant,[19] or to await the outcome of other proceedings between the parties,[20] or in order to allow more time to assemble evidence in support of the claim. In my opinion the same applies to refraining from serving a proceeding because of a desire to litigate another matter first. The vice in this approach is that it involves a unilateral interference by the plaintiffs with the ordinary processes of the court. It involves the plaintiffs giving themselves a stay, without the defendant having the opportunity to be heard about it.
- [41]It may well be that case management of large scale litigation such as that of which this action is said by the solicitor to be a part is appropriate, but if that is to occur it should be undertaken by the court, not unilaterally by the plaintiffs’ solicitors. There is no automatic case management of civil actions in the District Court, but in appropriate cases the Chief Judge will manage an action or group of actions, or appoint a particular Judge to do so. Confronted with large scale litigation, the appropriate course was for the plaintiffs’ solicitors to make an application to the Chief Judge.[21] Given the circumstances outlined in the affidavit of the plaintiffs’ solicitor, I do not doubt that her Honour would have applied appropriate case management, but that would have been after either service on or at least appropriate notice to all of the defendants involved. If test cases are to be run, they can be selected by the court after hearing submissions from all the relevant parties.
- [42]In my opinion the approach of the plaintiffs’ solicitors in relation to this matter was fundamentally wrong. It was contrary to the well-established principle which antedates the UCPR that proceedings ought to be served promptly once they have been issued, if that is possible. That can only have been strengthened by the introduction, prior to the filing of the claim, of rule 5 of the UCPR. It seems to me that there was in this case a clear, indeed deliberate, breach of the plaintiffs’ implied undertaking to the court to proceed in an expeditious way. The rules expressly provide that the proceeding can be dismissed for a failure to comply with that undertaking: example to subrule (4).
- [43]In my opinion this is compounded by the fact that no notice of the proceeding was given to the defendant[22], notwithstanding that he was readily available at all times, so that it always would have been easy enough to do so. The fact the plaintiffs’ solicitors are also conducting a large quantity of similar litigation is not, in my opinion, a reason for not taking that step. The point is that this defendant was not given notice of this claim.
- [44]I accept that if renewal is refused the plaintiffs will suffer the loss of any claim against the defendant. That claim may well be a good one, and I am prepared to proceed on the basis that the plaintiffs have reasonable prospects of success in an action against the defendant, if it proceeds to trial, so far as I can tell at the moment. That does mean that they will suffer significant prejudice if the action cannot proceed, but that will always be the case with renewal after the end of the limitation period, and the significance of it is greatly reduced by the fact that the prejudice has been, as Stephen J pointed out, self-inflicted. It arises from the deliberate choice as to how to conduct (or not to conduct) the proceeding, rather than from anything done by the defendant. On the other hand, there is some prospect of prejudice to the defendant in the conduct of the proceeding as a result of the delay which has occurred.
- [45]As in the IMB cases, it is convenient and sufficient to deal only with the more recent renewal. In my opinion, when reviewing the decision of the registrar under rule 667(2)(a), the approach is for me to decide the question afresh, that is to say for me to decide now whether, in the light of all the material I have, there is good reason to renew the claim. In my opinion, for the reasons indicated above, there is not. Accordingly, the decision of the deputy registrar of 28 January 2005 is set aside. It follows that the service of the claim was irregular. In my opinion the claim ought not to be renewed, and it follows that that irregularity ought not now to be cured. In those circumstances, the appropriate course is to dismiss the plaintiffs’ action against the fourth defendant. That follows from the relief granted in the IMB cases.
- [46]Since it is appropriate to dismiss the action anyway, it is unnecessary to consider whether the action should be dismissed for want of prosecution, although in the circumstances that provides an alternative basis for dismissing the action. Senior counsel for the plaintiff advanced the interesting submission that r 389 did not apply in circumstances where a claim had not been served, so that the time period specified in that rule only began to run from the date of service. Accordingly, it was submitted that no leave was required under r. 389(2). For that reason, there is no application for leave to proceed. In the absence of such an application, it is unnecessary for me to decide whether that is correct. There is however, no reason why the two year period specified in s. 85 of the Supreme Court of Queensland Act 1991 should not run prior to the service of the claim. More than two years had elapsed between the date when the claim was filed and the date when the claim was served[23] and following my decision to set aside the registrar’s decision to renew the writ, that service becomes irregular. There is, accordingly, jurisdiction to dismiss for want of prosecution. But even if the two year period had not run, there must be jurisdiction to dismiss an action where the claim is stale and will not be renewed, and there is always the jurisdiction in r. 5(4).
- [47]The plaintiffs should pay the fourth defendant’s costs of the action and the application to be assessed; I am not concerned with who, as between the plaintiffs and their solicitors, should bear those costs, but will reserve leave to the fourth defendant to apply for an order for costs against the plaintiffs’ solicitors.
Footnotes
[1] Affidavit of Rickards filed 18 January 2006 para 6; affidavit of Teitzel filed 7 February 2006 para 9.
[2] To whom I shall generally refer for simplicity as “the defendant”.
[3] Filed 5 October 2005 – the current pleading. The copy of the contract exhibited to the affidavit of Teitzel filed 25 January 2006 is dated 2 March 1997.
[4] This corrected an obvious mistake in the previous affidavit which had deposed to an expectation that they would be finalised towards the latter part of 2003 which, had it ever been held, was obviously already falsified by the time that affidavit was sworn in January 2004.
[5] Affidavit of Teitzel filed 7 February 2006, para 17; affidavit of Teitzel filed 8 February 2006 paras 2‑6; transcript pp. 17-18.
[6] Affidavit of Teitzel filed 7 February 2006 para 23. Under cross-examination she conceded that no step was taken after October 2001: p. 41. Indeed, not only have none of the “test cases” been tried, none of the 800-odd actions have been: p. 19.
[7] As the solicitor said she then expected: p. 20.
[8] Affidavit of Teitzel filed 7 February 2006 para 62.
[9] As claimed: p. 30.
[10] The nicest thing one can say about the affidavit is that it was not actually fraudulent. It, and indeed all of the affidavits seeking renewal of claims, were thoroughly unsatisfactory.
[11] Affidavit of Teitzel filed 7 February 2006 para 62.
[12] Affidavit of Rickards sworn 7 February 2006 para 6.
[13] The IMB Group Pty Ltd v ACCC [2006] QSC 12 at [17].
[14] Which was also cited as authoritative by Gibbs J in Jones v Jebras [1968] Qd R 13 at 20.
[15] Particular 12 of paragraph 21.
[16] See also Gillies v Dibbetts [2001] 1 Qd R 596 at [23].
[17] This letter however did not refer to a claim by these plaintiffs: Affidavit of Teitzel filed 7 February 2006 exhibit JT12.
[18] Affidavit of Rickards sworn 20 January 2006, para 3.
[19] As in Van Leet (supra).
[20] As in the IMB cases.
[21] It was not suggested that anything like this had been attempted, even informally.
[22] Perhaps also by the unsatisfactory nature of the affidavits in support of renewal of the claim, as discussed earlier.
[23] An application for renewal is not, itself, a step in the proceeding nor is renewal: Musumeci v Ferro Constructions Pty Ltd [1976] Qd R 135; MacDonnell v Rolley [2001] QCA 32 at [5].