Mullholland v Bengston[2012] QDC 70

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The defendant in this matter has applied for an order dismissing the plaintiff’s claim for want of prosecution (r. 280 UCPR). The plaintiff has cross applied for leave to proceed (r. 389 UCPR) and for directions regarding the future conduct of the proceedings.

2. [2]
   As observed by Justice Atkinson in Tyler and Custom Credit Corporation Limited and Ors [2000] QCA 178, when the court is considering whether or not to dismiss an action for want of prosecution or whether to give leave to proceed under the UCPR r. 389, there are a number of non exhaustive factors that the Court will take into account in determining whether the interests of justice require a case to be dismissed. Those considerations are helpfully set out in that decision at pages 2 and 3.

3. [3]
   As is the usual practice adopted by this court, the plaintiff’s application for leave to proceed shall be dealt with first.

4. [4]
   In Lilyville Pty Ltd v Colonial Mutual Life Assurance Society Ltd [1999] QSC 372, Justice Chesterman has outlined the proper approach which is to be adopted in respect of such an application. Amongst other things, His Honour observed that whether there has been a satisfactory explanation for the delay in the prosecution of the action and whether the defendant will suffer prejudice if the action proceeds, those considerations are always relevant factors. Additionally, His Honour noted that even though there is an evidentiary onus on a defendant to raise any considerations telling against the exercise of the discretion, the ultimate onus of satisfying the court that the action should be allowed to proceed always remains on the applicant: Brisbane South Regional Health Authority v Taylor {1996) 186 CLR at 547.

The genesis of the litigation

5. [5]
   By written contracts dated 31^st January 2005, the plaintiffs agreed to purchase a motel from the defendant situated in Toowoomba. Both contracts were due for completion on the 15^th March 2005. However apparently on the day prior settlement, it was discovered that approval had not been obtained from the local council by the defendant in respect of the motel’s bar or its use. The parties subsequently agreed to vary the terms of their bargain to the effect that the contracts would complete on the 15^th March 2005 on the basis, inter alia, that:

‘the amount of $50,000 is to be retained in the defendant solicitors trust account in the names [sic] both parties pending council approval of the development application in respect of the bar and storeroom. All costs associated with the application/approval are to be paid from the $50,000. After approval has been obtained, the balance of the funds held in your trust account is to be paid to your client”

6. [6]
   That agreement (‘retainer agreement’) is evidenced not only in the respective solicitors’ affidavits, but also in the file note referred to by Mr Nunan in his affidavit sworn 11^th April 2012 at paragraph 11. The defendant’s affidavit sworn 5^th April 2012 at paragraph 12 also confirms that agreement.

7. [7]
   The contracts proceeded to settlement on the 15^th March 2005 with an amount of $50,000 being retained by the defendant’s solicitors in their trust account in accordance with that agreement (hereinafter referred to as the ‘retainer’ agreement) which had been reached between the parties the day before.

8. [8]
   On or about 19^th October 2005, the plaintiff’s solicitors wrote to the defendant’s solicitors enclosing invoices which they said were monies which had been paid by the plaintiffs in order to obtain the requisite approval from the local council to make the use of the bar area (and storeroom) of the motel ‘lawful’.

9. [9]
   The issue identified by the pleadings between the parties is that the defendant contends that the monies which the plaintiff claimed, by the invoices provided, went well beyond what was contemplated by the ‘retainer’ agreement which had been reached between the parties on the 14^th March 2005. In other words, the expenditure outlaid by the plaintiffs could not be said to have been directly related to making the existing use of the bar area and storeroom lawful (see 6(d) and (e) and 9(e) of the defence). The plaintiff on the other hand, says that consistent with the ‘retainer’ agreement reached between the parties on the 14^th March 2005, the costs expended were a necessary component in order to obtain the approval required in respect of the said bar area and storeroom. The plaintiff maintains that the invoices which she had provided to the defendant were in fact costs directly related to that approval and as such, were costs contemplated by the parties in the ‘retainer’ agreement reached on the 14^th March 2005.

10. [10]
    The $50,000 still remains in the defendant solicitor’s trust account.

A consideration of the relevant ‘Tyler’ factors

The progress of the action so far

11. [11]
    The claim was filed on the 9^th December 2008. A defence was subsequently filed on the 19^th January 2009. No other steps have been taken by either party in respect of the action nor have any orders or directions ever been made by the court. The claim was commenced within time however the relevant limitation period has now expired.

12. [12]
    The events the subject of the claim arose in 2005. However, what is immediately obvious is that while the ‘retainer’ agreement agreed between the parties occurred on the 14^th March 2005, a dispute subsequently arose in respect of any release of the monies being retained in the defendant’s solicitor’s trust account, which continued well after that date. That is evidenced as much by the solicitors’ correspondence annexed to the affidavits for consideration (see Robson affidavit filed 13^th March 2012 GLR‑4 to GLR‑20).

Delay

13. [13]
    The defendant submits that the plaintiff’s conduct of the proceedings has been characterised by lengthy periods of delay and inactivity both before and even after the claim was filed. In respect to the latter, the defendant says that the plaintiff has done nothing to advance her claim forward. In respect of the former, the defendant submits that the delay is not adequately explained, particularly between in or about November 2005 and May 2006, and again between July 2006 and 19^th November 2008 (see Outline of Submissions – Defendant: Exhibit 2 paragraph 55). That submission however overlooks that delay was also being contributed to by the defendant’s own solicitors’ failure to respond, on occasion, in a timely way to correspondence being sent (see Robson affidavit GLR‑4, GLR‑6, GLR‑7). That submission also overlooks annexure GLR‑12 which clearly shows that any offer referred to by the defendants in their correspondence 23^rd November 2005 had not been ignored and had in fact been attended to by telephone communication well prior to July 2006. Indeed, the subsequent correspondence from the defendant’s solicitors, repeating the offer made on the 23^rd November 2005 (GLR‑14), was unnecessary in light of the already clear rejection of it by the plaintiff’s solicitors correspondence to them in July 2006 (GLR‑12).

14. [14]
    The defendant submits that because there has been no satisfactory explanation from the plaintiff, particularly regarding the period after the claim was filed, then this is fatal to the plaintiff’s application. (Hall v RH & CE McColl Pty Ltd [2007] QCA 182)  I am unable to accept that submission. While I accept that there has been delay between the events giving rise to the action and the commencement of proceedings on the 9^th December 2008, I am not of the view that there is not a satisfactory explanation for it. Nor am I satisfied that there is not a satisfactory explanation provided by the plaintiff regarding the period subsequent.

15. [15]
    While I accept the defendant’s submission that impecuniosity raised by the plaintiff as a basis for delay is less convincing in light of the significant amount of money she received after the sale of the said motel in 2006, that submission however overlooks the other matters which the plaintiff has raised for court’s consideration on this issue. In this regard, I note that the plaintiff has deposed in her affidavit filed 2^nd April 2012, that upon applying for approval to the local council in 2005, she was required to expend more money than had been anticipated and the subsequent refusal by the defendant to release the monies when requested had caused her both constant worry and concern which ultimately affected her health. That in turn had affected her ability to provide timely instructions to her solicitors throughout the whole of the relevant period. (see also medical certificate attached to the plaintiff’s affidavit sworn 11^th April 2012).

16. [16]
    The whole of that evidence in my mind goes to adequately explain any failure on her part in providing in a timely way, instructions to her solicitors to commence proceedings until she did so and thereafter. In this regard, I note that the plaintiff has also deposed (unchallenged) that she was in fact the only one providing instructions to her solicitors on behalf of herself and her husband in respect of the initial contracts for sale, any ‘variation’ of it and with respect to the subsequent dispute which arose in respect of the said ‘retainer’ agreement.

17. [17]
    I also note that the plaintiff’s own solicitors’ accepts that although no further correspondence had been entered into by them with the defendant’s solicitors since 20^th January 2009 in respect of the matter on the plaintiff’s behalf, none had ever been received from the defendant’s solicitors defendants’ solicitors either in respect of the future progress of the proceedings. (See Nunan affidavit sworn 11^th April 2012 paragraph 20). While there is a positive obligation on a party under r. 5 UPCR to ensure that litigation is conducted expeditiously, r. 389 nevertheless still allows the court in its’ discretion to grant leave to a party to proceed.

18. [18]
    With respect to any question of delay, I am satisfied having regard to the factors outlined above that the plaintiff has provided a satisfactory explanation in respect of it.

Plaintiff’s prospects of success

19. [19]
    The defendant submits that the plaintiffs have no or no real prospects of success if this matter was to proceed to trial in any event. The defendant submits that the plaintiff’s claim is misconceived insofar as the available evidence shows that any expenditure outlaid by her went well beyond what was agreed between the parties under the ‘retainer’ agreement of the 14^th March 2005. I cannot accept that submission. Whether the expenditure outlaid by the plaintiffs related to what was agreed and reduced to writing between the parties on the 14^th March 2005 is a question of fact yet to be determined at trial. That question will ultimately be assisted at trial by the certifier who is able and available to give evidence of the costs expended or required in respect of the approval sought from the local council regarding the bar and storeroom area of the motel in order to make it lawful. The plaintiff deposes that that witness will be available to give evidence at trial. The submission made on this issue also overlooks in my mind, the original plan of the bar and storeroom (WGN‑1 affidavit Nunan sworn 11^th April 2012) as it was depicted in 2005, which shows where the ‘bar’ was originally situated which is described as ‘restaurant + bar’ in any event.

Prejudice

20. [20]
    When dealing with the question of prejudice, the correct test to apply is whether the plaintiff has satisfied the onus of showing that any prejudice the defendant may suffer is not such as to cause injustice to the defendant should be action be permitted to continue. (Tyler v Custom Credit page 13).

21. [21]
    In this regard, the defendant says that it cannot now receive a fair trial. The matters raised for consideration include the effect which the delay has had upon the defendant’s health. Not surprisingly, like the plaintiff, the defendant says her health has also suffered, a factor not uncommon when litigation is involved.

22. [22]
    The defendant also submits that the solicitor for the plaintiff has, in his affidavit material, put into issue the question regarding what was in fact the ‘true’ agreement that was reached between the parties on the 14^th March 2005. The defendant submits that because of that fact, that would now require that solicitor and the other solicitor to that conversation (Mr Hardman), who is unable to specifically remember that conversation, to give oral evidence, which places the defendant in an intolerably invidious position and is prejudiced accordingly. I cannot accept that submission. Firstly, the solicitor for the plaintiff has a contemporaneous file note of that conversation which is not in my mind inconsistent in any event with what was actually agreed and reduced to writing between the parties on the 14^th March 2005 (see affidavit of Nunan sworn 11^th April 2012). Further, that correspondence (of the 14^th March 2005) evidencing the agreement reached between the parties is not disputed by either the plaintiff or the defendant. The correspondence must also be viewed in light of the earlier correspondence sent on the same day on this issue (see Robson affidavit filed 13^th March 2012 GLR‑1).

23. [23]
    Counsel for the defendant also submits that the defendant is unable now to be in a position to determine what costs and expenses are directly attributable to obtaining the local council approval in order to ‘make the existing use of the bar area and storeroom lawful’ (as pleaded in the defence). I cannot accept that submission. That submission in my mind overlooks the fact that all the documents that will be relevant in respect of the action are available for trial. (See Nunan affidavit sworn 11^th April 2012 paragraphs 2, 3 and 21). It also overlooks the fact that the invoices which the plaintiff is relying on to prove its clam have been in the possession of the defendant since October 2005 and has not changed. Any question with respect to ‘differentiating’ between what invoices, if any, are solely related to the local council approval that was required to make the existing use of the bar area and storeroom lawful, will be assisted at trial in any event by the relevant certifier or expert which the plaintiff will need to produce in her case in order to prove her claim.

24. [24]
    The defendant also submits that because the defendant is unable now to recall a certain conversation which the plaintiffs say they had with her (see plaintiff’s affidavit sworn 11^th April 2012 at paragraph 4), she will be prejudiced at trial. I am unable to accept that submission. The defence filed in my mind adequately addresses the defendant’s position on this issue; see paragraph 8. The defendant will be able to give that evidence at trial.

25. [25]
    As such, and after taking into account all the matters to which I have referred, I am therefore satisfied that the plaintiff has discharged the burden of showing that any prejudice which the defendant may suffer is not such as to cause injustice to the defendant should the action be permitted to continue.

Other relevant factors

26. [26]
    It is however relevant to consider whether the proceeding can progress in a timely way if reactivated. With appropriate directions by the court, I am satisfied that this can facilitate a just and expeditious resolution of this matter. The documents currently not in the defendant’s possession relevant to this matter can be provided by the solicitor for the plaintiff immediately. There is no reason why that cannot be done expeditiously. A certifier is available at trial to give evidence. The issue in dispute between the parties are clearly defined on the pleadings.

27. [27]
    All witnesses are available and I see no impediment in this matter which would prevent it from being able to proceed to trial in a timely way.

28. [28]
    Accordingly, the orders of the court are:

1. The plaintiff’s application is allowed. Leave is granted to allow the plaintiff to take a further step in the proceedings.

2. The defendant’s application is dismissed.

3. I shall hear from the parties on the question of costs (in writing) if they cannot otherwise agree. I shall also make directions in respect of this matter’s future conduct if the parties cannot otherwise on a suitable timetable.

4. The matter shall be returned to the Toowoomba District Court (sitting in its civil jurisdiction).