DISTRICT COURT OF QUEENSLAND

1. [1]
   Andrews SC DCJ: This is an application by a plaintiff pursuant to the Uniform Civil Procedure Rules 1999 (“UCPR”) rule 389(2) for an order permitting the plaintiff to take a new step in the proceeding notwithstanding that more than two years have elapsed since the last step was taken.

2. [2]
   The rule provides:

“389 Continuation of proceeding after delay

…

3. (2)
   If no step has been taken in a proceeding for 2 years from the time the last step was taken, a new step may not be taken without the order of the court, which may be made either with or without notice.”

3. [3]
   When a court is to consider whether or not to dismiss an action for want of prosecution or whether to give leave to proceed under rule 389, it has been authoritatively^[1]held that the court’s discretion is not fettered by rigid rules though the factors which a court will take into account include:

3. (1)
   How long ago the events alleged in the statement of claim occurred and what delay there was before the litigation commenced;

3. (2)
   How long ago the litigation was commenced or causes of action were added;

3. (3)
   What prospects the plaintiff has of success in the action;

3. (4)
   Whether or not there has been disobedience of court orders or directions;

3. (5)
   Whether or not the litigation has been characterised by periods of delay;

3. (6)
   Whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant;

3. (7)
   Whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff’s impecuniosity;

3. (8)
   Whether the litigation between the parties would be concluded by the striking out of the plaintiff’s claim;

3. (9)
   How far the litigation has progressed;

3. (10)
   Whether or not the delay has been caused by the plaintiff’s lawyers being dilatory. Such dilatoriness will not necessarily be sheeted home to the client but it may be. Delay for which an applicant for leave to proceed is responsible is regarded as more difficult to explain than delay by his or her legal advisors;

3. (11)
   Whether there is a satisfactory explanation for the delay; and

3. (12)
   Whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial.

How long ago did the events alleged in the statement of claim occur?

4. [4]
   The plaintiff alleges that:

1. (a)
   she retained the defendant solicitors on or about 20 November 1998 to act as her solicitors in respect of property interests of the plaintiff and of her estranged husband;

2. (b)
   the solicitors were then told that the plaintiff and her estranged husband had reached agreement regarding the division of their property;

3. (c)
   she then received advice from the solicitors that she should resolve property issues with her estranged husband by preparing an application to the Family Court for a consent order and that she provided draft details to the solicitors for preparation of such orders;

4. (d)
   consent orders were not ever made by the Family Court;

5. (e)
   in about March 1999 the plaintiff’s father sought advice from the defendants about how to reorganise his assets including two rural properties so as to benefit the plaintiff and her brothers;

6. (f)
   the plaintiff attended two meetings between March and July 1999 with her father at the defendants’ premises regarding proposals for changes to the ownership of her father’s assets and the benefits to be provided to the plaintiff and her family under the arrangements;

7. (g)
   during 1999 a partner of the defendants advised the plaintiff’s father, inter alia, to make provision by way of mortgages over the two rural properties whereby the plaintiff was ultimately to be paid $1 million by four equal annual instalments commencing on 1 December 2006;

8. (h)
   in early April 1999 at a meeting between the plaintiff, her father and a partner of the defendants, the plaintiff sought advice as to how the settling of the assets upon her would affect her pension entitlements, in particular the disability allowance she received from the Commonwealth for her son;

1. (i)
   the defendants negligently and in breach of the implied terms of their retainer failed to advise the plaintiff that the proposed benefits she would receive pursuant to the mortgages would disentitle her to a pension and failed to advise her that, without an earlier resolution of matrimonial matters with her estranged husband, her estranged husband might seek an order in respect of the proposed mortgages for his benefit and to the plaintiff’s detriment;

10. (j)
    on 12 October 2001 she was served with a claim by her former husband seeking property settlement under the Family Law Act 1975;

10. (k)
    acting upon advice from senior counsel she compromised in June 2002 the claim with her former husband by paying him $25,000 and foregoing claims against him for maintenance for their two children who were cared for by the plaintiff;

10. (l)
    payment of the $25,000 was made by her on 23 July 2002;

10. (m)
    she suffered losses being the $25,000 she paid to her husband, plus $100,000 “which represents estimated loss of child support as agreed between the plaintiff and her husband” and $4,344.60 legal costs incurred by the plaintiff in relation to orders sought by her former husband under the Family Law Act. She does not claim the lost pension entitlements.

What delay was there before the litigation commenced? 

5. [5]
   Relevant allegations follow. When the compromise between the plaintiff and her former husband was agreed in June 2002 the plaintiff considered that she may have a claim against the defendants but was not in a financial position to pursue it having regard to her obligation to pay $25,000 to her former husband. On 4 October 2002 the plaintiff had discussions with her solicitors regarding a potential claim against the defendants. She was aware that her father was contemplating litigation against the defendants relating to advice he received from the defendants with respect to the re-organisation of property interests relating to the two rural properties. That day, the plaintiff authorised her solicitors to request all files held by the defendants in relation to matters conducted on her behalf.

6. [6]
   The solicitors made that request on 7 October 2002 on behalf of the plaintiff, her father and brothers specifically requesting “the John Zerk Restructure file … together with the file relating to further dealings with the mortgage received by Judie Zerk … We look forward to your urgent advices.”

7. [7]
   17 months later, on 19 March 2004 the defendants replied to the plaintiff’s solicitors:

“We refer to your letter of 9 March 2004 and enclose:

1. (a)
   Matrimonial file relating to Trevor and Judy Allan;

2. (b)
   Wills file also relating to Trevor and Judy Allan.

We confirm we have undertaken our comprehensive search of our records and to the best of our knowledge and belief hold no further document file relating to any of the clients outlined in your authority of October 2002.”

8. [8]
   On 26 May 2004 the plaintiff’s solicitors wrote to the solicitors for the defendants outlining her prospective claim against them. I infer that between 19 March and 26 May of 2004 the plaintiff instructed her solicitors to commence proceedings against the defendants. The proceedings were filed on 22 November 2004.

How long ago was the litigation commenced?

9. [9]
   The proceeding was filed on 22 November 2004, about three and a half years before this application.

What are the plaintiff’s prospects of success in the proceeding?

10. [10]
    The plaintiff deposes that the circumstances of her consultation with a partner of the defendants on 20 November 1998 are set out in her statement of claim. At paragraph 4 of her statement of claim the plaintiff alleges “the plaintiff retained the defendants to act as her solicitors in respect of property interests of the plaintiff and Trevor Stanley Allan”. The defendants submit that the plaintiff has poor prospects of success because there are two deficiencies in her case. The first submission is that the “plaintiff’s claim is in relation to a retainer by which the plaintiff and her then husband jointly sought to have the defendant document a concluded agreement between them as to dealing with assets by consent. The plaintiff’s claim that notwithstanding the joint nature of the retainer, the defendants should nonetheless have given her advice potentially contrary to the interests of the husband is somewhat adventurous.” The defendants’ submission is consistent with their defence. However, the plaintiff has pleaded and sworn to retaining the defendants to act as her solicitors. On this issue the plaintiff has established adequate prospects of success.

11. [11]
    The defendants submit that the plaintiff’s case is deficient also for failure to plead causation. I was referred to paragraph 10 of the statement of claim in support of the submission. In my view causation is not pleaded at paragraph 10 but is adequately pleaded at paragraphs 21, 22 and 23 of the plaintiff’s statement of claim. If the plaintiff establishes those matters at trial she has adequate prospects of success. She deposes to them sufficiently^[2]with respect to her claims for about $125,000. She does not establish prospects of success in relation to alleged advice in respect of Commonwealth pensions.

Has there been disobedience of court orders or directions?

12. [12]
    There has not been.

Has the litigation been characterised by periods of delay?

13. [13]
    The plaintiff was aware when her proceedings were filed on 22 November 2004 that her father would be commencing proceedings against the defendants based upon a number of the same factual issues and it was her intention and her instruction to her solicitors that her claim instituted in the District Court should be conducted in conjunction with the claim to be brought by her father in the Supreme Court. The plaintiff did not instruct her solicitors to serve her proceedings filed on 22 November 2004 until the proceedings filed by her father in the Supreme Court were commenced on 6 July 2005. This was alleged to be also due to her financial position. The proceedings were not served until 19 August 2005.

14. [14]
    On 23 December 2005 the defendants’ solicitors delivered unsealed copies of their notice of intention to defend and defence and foreshadowed that they would serve a request for further and better particulars of the statement of claim. On 6 January 2006 the plaintiff’s solicitors wrote advising that the plaintiff intended to file a reply to the defence and sought a reasonable period of time in which to do so. On 10 January 2006 the defendants’ notice of intention to defend and defence was served. The plaintiff provided instructions to her solicitors in relation to the matters contained in the defendants’ defence. She gave those instructions on 13 February 2006.

15. [15]
    The plaintiff deposed to instructing her solicitors to and expecting her solicitors to take all necessary steps to protect her interests including attending to all matters relating to time limits and to conduct the matter in the most cost effective manner possible.

16. [16]
    On 18 September 2007 the plaintiff instructed her solicitors to brief counsel to review the pleadings and to settle a reply.

17. [17]
    On 18 October 2007 the plaintiff’s solicitors wrote giving notice of the plaintiff’s intention to proceed with a claim pursuant to r 389(1) of the UCPR. On 27 February 2008 the plaintiff’s solicitors filed her reply. On 7 March 2008 the plaintiff’s solicitors served the reply. On 17 March 2008 solicitors for the defendants wrote advising that the last step taken in the action was the service of the notice of intention to defend and defence on 23 December 2005 and that the plaintiff was not entitled to take any further step including serving her reply without first obtaining leave pursuant to r 389(2) of the UCPR.

18. [18]
    The solicitor handling the matter for the plaintiff deposed that the filing of the reply “within the two year period set out in that rule was overlooked by me”. The progress of the plaintiff’s father’s Supreme Court proceeding against the defendants was delayed by the obtaining of two reports from expert witnesses which have now been provided. The reports relate to the advice which is the subject of the proceedings brought by the plaintiff’s father.

19. [19]
    The plaintiff submitted that some blame for the delay is attributable to the defendants. The defence delivered in unsealed form was three months outside the period prescribed by r 142 of the UCPR for service of a sealed copy. The sealed copy was served three weeks later.

20. [20]
    The plaintiff submitted that the defendants failed to make disclosure after the close of pleadings and were in default from a time on or before 21 February 2006. I reject that submission. The plaintiff’s solicitors having written on 6 January 2006 that the plaintiff intended to file a reply to the defence and having then sought a reasonable period of time in which to do so, it was obvious that the pleadings had not closed. I do not regard the defendants as being worthy of any blame for failing to make disclosure in that circumstance.

21. [21]
    Since the proceeding commenced in November 2004 the delay attributable to the defendants has been about three and a half months. The plaintiff has been responsible for delay in service of the claim and statement of claim for about eleven and a half months and delay in service of a reply for about 25 months.

Has impecuniosity of the plaintiff been responsible for the pace of the litigation and are the defendants responsible for the plaintiff’s impecuniosity? 

22. [22]
    The defendants submitted that the plaintiff did not satisfactorily prove her impecuniosity. The evidence was scant. I infer from the fact that in April 2008 the plaintiff was a single person residing with a 13 year old child and an 11 year old child and that one of the children has Down Syndrome and is a child with special needs and that the plaintiff was then doing part-time work as a manager and cosmetics distributor for 20 hours per month and was in receipt of a Centrelink carer allowance and a family tax benefit allowance and that the first payment she was to receive as a result of her father’s rearrangement of property interests was not to be made until December 2006 that the plaintiff accurately describes matters where she deposes:

“I was then not in a financial position to pursue a claim against the Defendants, particularly having regard to the requirement for me to pay my ex-husband $25,000 on the property settlement and that I was not going to receive any further child support payments from him.”

The plaintiff provided that description of her circumstances for a time in early 2002 but I infer that her circumstances had probably not materially improved by July 2005. Support for this inference comes from the plaintiff’s referral to her financial position “at the time when the property settlement claim with Trevor Allan was resolved and up to when the proceedings herein were commenced” as if it was a generally constant financial position.

23. [23]
    I find that impecuniosity has been partly responsible for the plaintiff’s failure to have proceedings served for more than six months. She has established a prima facie case that her financial circumstances were, in part, worsened as a result of the alleged conduct of the defendants to an extent of something in excess of $25,000 and some child support payments in 2005. It is reasonable to infer that the impecuniosity was one part of the reason for delay until December 2006. Another part of the reason was the plaintiff’s decision to run her proceeding in tandem with her Father’s Supreme Court proceeding until mediation.^[3] However, on the material, there is a prima facie case that the plaintiff should have received about $250,000 in December 2006 as a result of the restructuring of property matters by the plaintiff’s father. Impecuniosity is not a satisfactory explanation for delay after December 2006.

Will the litigation between the parties be concluded by the striking out of the plaintiff’s claim? 

24. [24]
    The defendants submit that any relevant limitation period expired in about July 2005. The plaintiff’s submits that her cause of action may not have crystallised until the time of a compromise in June 2002 with her former husband of Family Court litigation. On either basis, declining the relief sought would bring the litigation between the plaintiff and the defendants to an end, though not the related litigation between the plaintiff’s father and the defendants.

How far has the litigation progressed?

25. [25]
    The litigation has progressed no further than the exchange of pleadings, subject to leave being given to validate the service of the reply. The disclosure of files by the defendants prior to the initiation of the proceeding is relevant.

Has the delay been caused by the plaintiff’s lawyers being dilatory?

26. [26]
    The plaintiff instructed her solicitors to conduct her proceeding in conjunction with the claim brought by her father with a view to both matters being subject to mediation when the Supreme Court matter was at a stage where it was ready to proceed to mediation. The slow progress of her father’s litigation is not explained. Steps and actions taken in the plaintiff’s father’s litigation include the following: 6 July 2005 the proceedings commenced; 14 December 2005 the defence was filed and served; 15 November 2006 an expert report of Paul Gleeson of Gleeson Lawyers dated 15 November 2006 was obtained by the lawyers for the plaintiff’s father; 17 July 2007 an expert report of Peter Sheehy solicitor was obtained by the lawyers for the plaintiff's father; 19 November 2007 an amended statement of claim was served; 19 November 2007 the plaintiff’s list of documents was served; 11 February 2008 an amended defence was filed. By 14 April 2008 the parties to that proceeding brought by the plaintiff’s father were “currently completing disclosure” according to the solicitor for the defendants.

27. [27]
    In scrutinising the conduct of the plaintiff and her solicitors in this proceeding and in considering how satisfactory are the explanations for delay it is relevant that the defendants have not complained about the delay. Had the defendants complained it would have made the plaintiff’s delay more inappropriate. The solicitors for the defendants in the litigation instituted by the plaintiff’s father are the solicitors for the defendants in the litigation instituted by the plaintiff. The solicitors for the plaintiff are the same as the solicitors for the plaintiff’s father. It is of some slight relevance that in the litigation between the plaintiff’s father and the defendants that the defendants appear to have been tardy in the delivery of an amended defence and in attending to disclosure. The tardiness of the defendants in that proceeding is significantly less than the tardiness of the plaintiff in that proceeding.

28. [28]
    The failure to settle and serve the plaintiff’s reply between 18 September 2007 when the plaintiff gave instructions to do so and service of it on 7 March 2008 has been caused by the plaintiff’s lawyers being dilatory and overlooking the requirements of rule 389(2).

Has there been a satisfactory explanation for the delay?

29. [29]
    The plaintiff satisfactorily explains why she did not commence proceedings before June 2002. It was not until then that she compromised the claims of her former husband relating to Family Court proceedings. Her financial circumstances from that time and the expectation that her father would commence related proceedings in the Supreme Court are a satisfactory explanation for continuing to delay proceedings until after October 2002 when her solicitors requested files held by the defendants in relation to matters conducted on the plaintiff’s behalf and on behalf of her father. The delay in commencing her proceedings until after March 2004 is satisfactorily explained by the defendant’s delay in responding to the request for files.

30. [30]
    The plaintiff also explained:

“It was my intention and instructions to my Solicitors that my claim be conducted in conjunction with the claim to be brought by my father. I also thought that if matters could not be resolved before a trial then it would be more appropriate for the matter in the Supreme Court to be heard before my matter in the District Court. I also wished to have my matter proceed to a mediation at the same time as any mediation that may have been agreed or ordered in relation to my father’s matter in the Supreme Court.”

31. [31]
    The plaintiff’s father’s proceedings against the defendants commenced in July 2006 and contain allegations in the amended statement of claim to the effect that:

1. (a)
   the plaintiff’s father told the defendants in the course of 15 discussions by phone or at the defendants’ office between 2 September 1998 and 28 June 1999 about his concerns that any ownership restructure would ensure that the properties would not be subject to claims for property settlement by the spouses of his children;

2. (b)
   he wanted the outcome to be that the plaintiff’s share was to be provided through a cash settlement secured by a mortgage over both rural properties to the extent of $1 million;

3. (c)
   he took the defendants’ advice;

4. (d)
   in breach of retainer or negligently the defendants failed to advise him of a more efficient means to restructure his assets, one element of which was to enter into a contract with his two sons and the plaintiff that he would devise the two rural properties to his sons subject to a payment of a sum of money secured on the properties to his daughter, the plaintiff.

32. [32]
    The defence of the defendants to the plaintiff’s statement of claim admits that the relevant partner of the defendants did not provide advice to the plaintiff of the risk that if she became entitled to interests under the mortgages her father envisaged over the two rural properties that her husband might seek an order under Part VIII of the Family Law Act in respect of the mortgages to the prejudice of the plaintiff’s interests in the mortgages. By their pleading the defendants explained that the retainer did not require the defendants to provide that advice.

33. [33]
    It is a significant issue in the plaintiff’s case against the defendants whether the retainer imposed a duty upon the defendants with respect to advising the plaintiff how to protect the prospective million dollars she would receive from her father from a possible claim by her former husband. The disputed facts in the plaintiff’s father’s litigation relate to that important issue.

34. [34]
    The plaintiff’s delay in instituting proceedings between March and November 2004 is satisfactorily explained by her financial position at that time and her expectation that her father would be commencing related proceedings and the explanation is made more satisfactory by the fact that her solicitors had, in May 2004, outlined her prospective claim against the defendants in a letter to the defendants’ solicitors. The delay in service of the proceedings between the date of their filing on 22 November 2004 and their date of service in August 2005 is explained by the plaintiff’s financial position at the time and her expectation that her claim could be conducted in conjunction with the claim to be brought by her father and her desire to have her matter proceed to a mediation at the same time as any mediation that may have been agreed or ordered in relation to her father’s Supreme Court proceeding. Because she had explained her potential claim against the defendants while her claim remained unserved I regard this explanation as satisfactory. The next period of delay from 19 August 2005 until 10 January 2006 is satisfactorily explained. The plaintiff awaited service of a sealed copy of the notice of intention to defend and defence.

35. [35]
    Between 13 February 2006 when the plaintiff provided further instructions to her solicitors in relation to the defence and the filing of a reply two years later on 27 February 2008 the plaintiff took no step in the action. During that period, on 18 October 2007 the plaintiff’s solicitors gave ineffective notice to the defendants’ solicitors of intention to proceed purportedly pursuant to r 389(1) of the UCPR. The notice might have been effective if the reply had been filed and served one month later or at any time before 9 January 2008. The plaintiff would have avoided the need for her application if her solicitors had served the reply two months earlier than they did. This delay, in so far as it is partly explained by a desire to await the progress of the Supreme Court proceeding brought by the plaintiff’s father is satisfactory. I accept that it is reasonable for the plaintiff to have employed as a litigation tactic an approach of attempting to seek a mediation of her own litigation at such time as her father’s litigation was to be mediated. On 18 September 2007 the plaintiff instructed her solicitors to brief counsel to review the pleadings and settle a reply aware that a report had been commissioned for her father’s matter and had been provided. The delay from October 2007 is attributable to the plaintiff’s solicitors.

Has the delay resulted in prejudice to the defendants leading to an inability to ensure a fair trial? 

36. [36]
    The defendants’ counsel’s submission relies upon a presumption as to prejudice to the defendants caused by the long delay. The defendants do not depose nor do they submit that they are unable to fairly defend and nor do they raise any particular matter of prejudice.

37. [37]
    When considering the presumption of prejudice to the defendants it is relevant that the defendants were informed on about 26 May 2004 of the plaintiff’s prospective claim against them.^[4]Also relevant are the obligations imposed upon a defendant by r 166(4) when pleading a defence. Those obligations promote thorough and timely preparation which tends to reduce the prejudice a defendant will suffer through delay. Reference to the defence shows that thorough instructions appear to have been taken from the defendants during the three and a half months between service of the statement of claim and service of the defence, if instructions had not been taken after the plaintiff gave earlier notice of her intention to claim. The persons whose conduct is alleged to have been negligent or in breach of retainer are solicitors and the practice of solicitors at material times in Queensland was to make appropriate records of conversations with clients. That practice would reduce the prejudice to the defendants caused by the delay.

Conclusion

38. [38]
    Considering all of the above matters I find of particular significance that:

1. (a)
   delay in starting the litigation was reasonable in the circumstances;

2. (b)
   the plaintiff has a prima facie case;

3. (c)
   there has been no disobedience of court orders or directions;

4. (d)
   impecuniosity, allegedly caused in part by the defendants was partly responsible for early delay;

5. (e)
   the reasonable desire to run the proceeding in tandem with the Supreme Court proceeding until mediation and then, if necessary, to allow the Supreme Court proceeding to go to trial first is a partial excuse for the plaintiff’s allowing two years to elapse between steps in the proceeding;

6. (f)
   there is a relative lack of prejudice to the defendants arising from the circumstances of this case, and that there has been no complaint about delay by the defendants nor any urging of the plaintiff to proceed expeditiously;

7. (g)
   the plaintiff’s solicitors were dilatory from October 2007.

39. [39]
    I give leave to the plaintiff to file and serve the reply filed in this proceeding on the 27^th day of February 2008. I will hear the parties as to costs.