Morris v Protec Pty Ltd[2010] QDC 504

[2010] QDC 504

DISTRICT COURT

CIVIL JURISDICTION

JUDGE JONES

No 4284 of 2005

BRISBANE

DATE 25/11/2010

ORDER

HIS HONOUR:  I will give my reasons now but I reserve my right to tidy my reasons up.

This is an application brought by the plaintiff applicant to seek leave to proceed pursuant to rule 389 and in particular subrule 2 of the Uniform Civil Procedure Rules.

Proceedings commenced in November 2005.  Originally there were two defendants involved - Protec Pty Ltd, the respondent to this application, and Walters Investments Pty Ltd.  For reasons it is not necessary to go into other than perhaps to note that the action against the second defendant, Walters, was compromised and therefore there are no longer any proceedings on foot against the second defendant.

The last formal step in the action was April 2006 when the first defendant filed its defence.  To that extent then four and a half-odd years have passed since the last step in the action.  That is in the context of a matter that was commenced only some five years ago.

The arguments have substantially centred around three matters.  Namely, the delay, the prospects of success and the question of prejudice.  Other issues were raised when counsel for the respective parties were dealing with those matters, but I think it is reasonable to say that they were the three main issues agitated.

The reasons for the delay are in the main addressed in an affidavit by Mr John Davies, the solicitor acting for the plaintiff, and an affidavit sworn by the plaintiffs filed 1 November 2010.

In respect of the affidavit of the plaintiffs in paragraph 5 they say, "We have always wanted to advance the proceeding to a conclusion, but understood that there were communication delays and difficulties with the solicitors for the first defendant and a refusal by them to agree to a date for mediation."

In paragraph 6 they say, "As small business operators we are certainly unable to focus on this litigation on a daily basis and have been concerned about the cost of litigation."  And in paragraph 10 say that if they were granted leave to proceed they would undertake to pursue litigation diligently.

I should note that in respect of paragraph 6 while it is asserted that they are concerned about cost it has not been asserted and it certainly could not be reasonably inferred that for any significant part of delay the plaintiffs were unable to fund the prosecution of the action.

Of particular significance here is the affidavit of Mr Davies.  In paragraph 7 he asserts, "I have always been concerned at the cost of the litigation for the plaintiffs having regard to the quantum of the claim.  For this reason I have deliberately adopted a course of attempting to resolve the litigation by alternate dispute resolution means, including negotiation and mediation."

In paragraph 8 he asserts, "To this extent I accept some responsibility for the delay that has occurred as a consequence of my focus on not causing costs to escalate for the plaintiffs.  Regrettably, and perhaps with the benefit of hindsight, it may have been a better course for me to adopt a more proactive approach in progressing this matter on behalf of my clients.  Further, and regrettably, as a consequence of me not expediting the matter and trying to achieve a resolution by focusing on alternate dispute resolution means time has passed by more quickly than I'd realised and beyond the relevant two year limit prescribed by the rules, following which leave of the Court is required for a step to be taken.  Any responsibility for this delay which is attributable to me should not be held against the plaintiffs who have at all times been prepared to provided instructions when requested."

It is, of course, a reasonable assertion to make that it is not always appropriate to hold against litigants the actions or inactions of their lawyers.  However, in considering applications such as this it is necessary to bear in mind that there are always two parties to litigation and to make a judgment about whether or not there has been any course of conduct which has unnecessarily and unfairly delayed the prosecution of the action.  As the affidavit of Mr Davies asserts, the delay is largely to a consequence of his deliberate strategy or course of conduct.

In the now well-known decision of the Court of Appeal in Tyler v Customer Credit Corporation [2000] QCA 178 her Honour Justice Atkinson at paragraph 2 set out a number of matters which are necessary to have regard to, depending on the circumstances of each case of course, when dealing with applications such as this.  I do not intend to repeat them here, but they have been brought to my attention by counsel for both parties and I have certainly had regard to them.

Of significance here in my view is that when regard is had to the chronology exhibited to the affidavit of Mr Davies there are a number of periods where there appears to be total inaction and there has been no attempt to explain those periods of inaction. The two most notable examples are those between 14 September 2006 and 15 October 2007 nothing apparently occurred.  And then between June 2009 and September 2010 again nothing seems to have occurred.

In my view this litigation is characterised by significant periods of delay and there are no good reasons given to explain much of that delay. 

If I can turn then to the question of prospects of success.  The allegations against the first defendant are couched in terms of a breach of duty of care and proceedings under the Trade Practices Act.  In paragraph 23 of the claim in reliance on the facts and matters pleaded in paragraphs 21 and 22 therein it is asserted that the first defendant owed a duty of care to act with due skill and diligence and there was a breach of that duty of care.

In respect of the trade practices action, in paragraphs 26 and 27 there are what appears to be two alternate assertions made against the first defendant, essentially being that the first defendant engaged in conduct that was misleading or deceptive by omission or likely to mislead and deceive.

In considering the prospects of success it is necessary to touch briefly on the circumstances of the action.  The plaintiffs, as I understand it, were experienced painting contractors who entered into a contract for the supply of certain paint or paint like products with the second defendant.  The first defendant was a manufacturer of a product which the plaintiffs had entered into a contract with the second defendant to purchase.

The contract between the plaintiff and the second defendant for the supply of the product was entered into some time on or about 14 July 2004.  The action against the first defendant stems largely from certain technical data sheets provided by the first defendant to the plaintiffs.  That occurred 6 August 2004, that is just short of a month after the contract with the second defendant had been entered into.

In the affidavit of the plaintiffs in paragraph 11 it is asserted, "The basis of our claim against Protec Pty Ltd stems from a fax we received from them on 6th of August 2004 containing data sheets for Wassa Paint.  This was the paint we were intending to use on a pool at Thargomindah" et cetera.

In paragraph 16 it is then asserted, "If we had been given specifications which stated that the above-said paint would not cure in low flow humidity then we would have cancelled the order for the paint and would have purchased other paint instead because historically Thargomindah is a town with low humidity, being on the edge of a desert."

When this matter was raised by me with Mr Nevison, counsel for the plaintiffs, it would appear that the case for the plaintiffs is that had they been properly advised or not otherwise misled by the first defendant they would have in some way brought to an end or terminated the contract between them and the second defendant. 

There is nothing in the affidavit material of either the plaintiffs or Mr Davies which says how that could have been achieved.  During argument it was suggested, if not argued, that the contract itself might have provided for some form of exit strategy for the plaintiffs.  However, as I have said, that has not been sworn to by anyone and of some significance is that the contract has not been annexed to any of the material.

On the face of it there are some real difficulties for the plaintiffs in my view in respect of the action against the first defendant.  They include the relationship between them and the first defendant which would give rise to a duty of care of the type pleaded and, secondly, no course of conduct has been disclosed either in the pleading or in the other material which shows some form of causal relationship or probable form of causation between the acts or inaction of the first defendant and the acts or inaction of the plaintiffs.  That is, it is difficult to understand the basis for the trade practices action by the plaintiffs against the first defendant.

In my view the prospects of the plaintiff successfully prosecuting this action are not particularly strong.  In circumstances where there has been a significant delay and no sufficient explanation for the delay, together with the fact that on the pleadings and the material which has been given to me during the course of argument the prospects of the plaintiff successfully prosecuting the action would only be described as relatively poor, leads me to conclude that I ought refuse the application.

For the sake of completeness I should say that in my view no material prejudice has been disclosed by the first defendant.  I only mention that to say that if I am wrong about my conclusions in respect of the first two matters of delay and prospects of success I would not have refused the application based on prejudice.

For those reasons the application is dismissed.

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HIS HONOUR:  I further order that the plaintiffs pay the first defendant's costs of and incidental to this application on a standard basis.

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HIS HONOUR:  The only costs orders I have made in your favour, Ms Chapple, are in respect of this application.

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