Lafferty v McNamara and Associates (a firm)
[2017] QDC 121
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- Lafferty v McNamara and Associates (a firm)[2017] QDC 121
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Lafferty v McNamara and Associates (a firm)[2017] QDC 121
Lafferty v McNamara and Associates (a firm)[2017] QDC 121
[2017] QDC 121
DISTRICT COURT OF QUEENSLAND
CIVIL JURISDICTION
JUDGE RYRIE
No 2372 of 2014
PAULA LOUISE LAFFERTY and WAYNE ROBERT LAFFERTY
AS TRUSTEE FOR THE
LAFFERTY SUPERANNUATION FUNDPlaintiffs
and
MCNAMARA AND ASSOCIATES (A FIRM)Defendant
BRISBANE
12.14 PM, WEDNESDAY, 5 APRIL 2017
JUDGMENT
DELIVERED EX TEMPORE
HER HONOUR: Before me are two applications. The first of those in time is an application that was filed as document number 2, 28th of March 2017, with the plaintiff seeking to apply for orders, pursuant to rule 389 sub-rule (2) of the Uniform Civil Procedure Rules that the plaintiff be granted leave to proceed. And the second application, filed on the 3rd of April 2017, document number 6, by the defendant for an order that the proceedings be dismissed for want of prosecution.
As discussed with counsel, it is appropriate that both applications be heard together, with a determination, as it were, of the first application in time as to whether or not leave should be granted or otherwise, which will then dictate in respect of the result in respect of the latter application that has been filed, namely, to dismiss the proceedings for want of prosecution.
When considering whether or not to dismiss an action for want of prosecution or, indeed, whether to give leave to proceed under the Civil - Uniform Procedure Rules, there are a number of factors that the Court must take into account. Those have been helpfully set out by Justice Atkinson in the authority of Tyler v Custom Credit Corp Limited and Others [2000] QCA 178. Her Honour at paragraph 2 helpfully set out the various factors that the Court should turn its mind to when considering these types of applications.
I have received helpful submissions from both counsel, as well as oral submissions received this morning from them, in respect of the applications before me. I have marked them respectively 1 and 2, relating to the outline of submissions on behalf of the applicant/plaintiff and the outline of submissions on behalf of the respondent/defendant. As I have said, I have also received further submissions orally, of which I don’t have a transcript but made notes of, to which I will now refer throughout the course of my decision.
A brief background in respect of this matter is that the claim is for damages for breach of contract, alternatively, for damages for negligence in excess of $450,000 – was filed on the 23rd of June 2014. No step has been taken in the proceedings since the service of further and better particulars, at which time the solicitors for the respondent served that request and asked for certain documents that were referred to in the statement of claim that had been filed. It is evident, from the affidavit material that I have had regard to, that neither the particulars nor the documents were provided as requested. It is also evident from the affidavit of Mr Orr, document number 7, annexure, AO-4, that in respect of those requests for further and better particulars, which weren’t being answered, that there had been an agreement between he and the plaintiff’s solicitor reached to allow the defendant 14 days from the receipt of the same to file and serve a notice of intention to defend and defence.
No notice of intention or – to defend or defence has been filed, as a consequence of the fact that no further and better particulars were ever received. Put another way, very little has happened in respect of this matter since the statement of claim was filed over two and a-half years ago. The first real movement in respect of the file since then is an application that was filed by the plaintiffs applicants, which is currently for consideration before me. That was filed as late as 28th of March 2017.
The claim itself deals with events that arose from around early 2008 to late 2010, a contractual matter arising in respect of certain advices that the plaintiff says that he received from the respondent defendant solicitor firm in respect of a retainer. It is clear from Mr Orr’s affidavit at paragraph 18, document 7, that there will be denials on certain aspects of the retainer, what advice was given, and the like, which will ultimately be provided in any Defence that is filed.
As I understand Mr Orr’s affidavit, he says that no Defence has been filed for a variety of reasons. One, he was waiting for the further and better particulars to be received in accordance with the agreement, at which time he would then, within fourteen days, provide such a Defence, and having not received those particulars as requested, he has been unable to take certain statements from the various persons who have been involved in the facts of the subject of the proceedings, namely, the relevant solicitors within the firm. Mr Orr also indicates within his affidavit, at paragraph 21 onwards, that there may well be involvement of other parties in the factual matters that underline the claim. Paragraph 22 of his affidavit sets out those persons. He is unable at the moment, as he indicated at paragraph 23, to conclude any relevance relating to some of those parties, and may well be not in a position to undertake such inquiries until maybe late 2017, or as early as mid-July 2017, if the application made by the applicant plaintiff was successful.
When considering, as I have said, applications of this type, and whether or not the Court should grant leave for the claim to proceed in accordance with rule 389, there are a number of factors that the Court should look at, as I have indicated, helpfully set out by Justice Atkinson in Tyler. I shall deal with those in detail as I see them of relevance. In respect of Tyler 1, how long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced, it is clear that the events alleged in the statement of claim occurred some time ago, namely, commencing early 2008 to late 2010. The commencement of the litigation was in 2014 and the question therefore is what was the delay, if any, before the litigation was in fact commenced.
In this regard, delay is of relevance in this case as a primary factor that both parties, within their submissions, helpfully focused on for me. The plaintiff’s material shows that the delay in commencing or moving this matter forward has been as a direct result of the solicitor who was acting for the plaintiff. The affidavit of Mr Cockburn deposes to the fact that he had personal and mental health issues, which included him himself ending his regime of medication for depression without appropriate medical supervision, various other personal stressors that were arising from threats being made by outlaw motorcycle gangs, and other issues that impacted upon his ability, both personally and mentally – on his capacity to be able to carry out the work of a solicitor as required. Mr Cockburn – that is document number 4 – Mr Cockburn at no stage was required for cross-examination, and it is accepted that his medical conditions as deposed to him were, in fact, subsisting at the relevant time.
Dealing with Tyler, Mr Cockburn has said in document number 4, that the proceedings were originally contemplated in January 2013, which is not a significant delay in light of when the matters the subject of the claim were still accruing, whether it be late 2010 or as late as early 2011. However, the proceedings were not filed until the 26th of June 2014. The explanation that Mr Cockburn has given is that the filing of the proceedings and the delay was as a result of a public examination of one of the related companies proposed by the liquidators and he considered it himself prudent to wait to see if further evidence came to light that it could assist the case. He also said that on occasion, counsel who had been briefed in the proceedings had lost the brief, which led to further delay in preparing further material for brief and having delivered it to chambers.
In my mind, those factors that have been raised by Mr Cockburn give a satisfactory explanation as to the delay before the litigation was commenced. It is not a long delay in any event between, as I have said, the subject matters that were accruing in respect of the claim, as it stands and to when the claim was actually filed. As regards to point 2 of Tyler, insofar as how long ago the litigation was commenced, it is evident no causes of action have been added. If I can turn to point 3, therefore, of Tyler? That deals with the prospects of success the plaintiff has in the action. It is not suggested by either party that it can be definitely determined, the merits or otherwise, of the success of this action. Nevertheless, on its face, the prospects appear, in my mind, to be good, insofar as the claim relates to the claim brought against a firm of solicitors who had been engaged under the retainer, to provide certain legal services, the fact of which will ultimately be denied to the degree as asserted at trial.
The dispute, as I understand the claim, relates to the term of the retainer itself, given by the solicitor and whether or not the legal service that was given by the defendant to the plaintiff was, in fact, appropriate in all the circumstances. As conceded by both counsel, it is difficult to make a definitive determination in respect of this matter, particularly where no defence has been filed. Though, it has to be said that Mr Orr, in his affidavit, says that there will at least be denial on some aspects of the retainer and any advice that is said to have been given in relation to it. It, in my mind, at least on what I have, there appears that the documents of which the solicitor was retained to draft and any of the aspects in respect of it, as pleaded in the claim, at least give rise to an arguable claim, even notwithstanding Mr Orr’s instructions that there will be a challenge relating to any giving of advice, in respect of certain matters under the securitisation retainer and or reorganisation retainer, or the like, without the further and better particulars being answered or any defence being filed. I am reluctant to determine that there is no prospects of success, but rather find, on the face of the document, that there certainly is, at least, an arguable case.
Turning to Tyler 4, the question of whether or not there has been disobedience of court orders or directions. In this case, there has not been any. It was argued on behalf of the applicant plaintiff, that even though a request for further and better particulars had been delivered by them, it did not prevent the defendant from their obligation being fulfilled under the rules, namely, putting in a defence as a pleading.
The applicant plaintiff also says that the defendant was well-aware of the claim for a very long time, it being filed in 2014. There has not been any disobedience of court orders or direction that I can see. The point that I just made has to be viewed in the context of Mr Orr’s affidavit, document 7, A04, where there was, in fact, an agreement that had been struck between the solicitors, relating to the delivery of a defence and intention to defend an defence, which was dependent upon the receipt of the further and better particulars being received.
But for the purpose of Tyler 4, I find there has been no disobedience as such of court orders or direction. Tyler 5 requires me to consider whether or not the litigation has been characterised by periods of delay. Whether that delay is attributable, this is Tyler 6, to the plaintiff, the defendant or both of – the plaintiff and the defendant. Submissions were focused on this point by both parties, not surprisingly. The delay in this case ultimately arisen as a consequence of the personal and mental issues of the plaintiff’s solicitor. And that was, as submitted by the applicant plaintiff, despite the best efforts of the plaintiff.
In this regard, the applicant plaintiff has also said there was no obligation upon the plaintiff himself to have contemplated changing solicitors if he, in fact, did not think anything was wrong. As such, any delay in progressing this matter forward, was solely based on the solicitor’s mental health, a fact that should not be sheeted home at all to the plaintiff himself. The respondent, on the other hand, on these points, raised that while it is accepted that Mr Cockburn’s mental health had played a significant part in the reasons for the delay in the progress of the matter, nevertheless, I should consider that the delay was nevertheless still attributable, not only to the solicitor, but to the plaintiff himself, as well. In this regard, the respondent referred me to Mr Lafferty, the applicant plaintiff’s explanation for the delay, as set out in document number 3.
Mr Beacham submitted on behalf of the respondent that a fair reading of his affidavit did not say what he had been told during the various times and many times that he had made contact with his solicitor, see document number 3. Mr Beacham said that all that Mr Lafferty shows in the affidavit document number 3 are the various times that he had made contact about the progress of the matter, which was extensive, but that he has not set out, as it were, what in fact he was being told or what was being said between he and his solicitor on the occasions the contact was made. As such, Mr Beacham says “The court is left to ponder whether he inquired, at all during the course of contact he made with his solicitors, how the court proceedings were doing and how far they were progressing or did not he inquire at all, if in fact he knew it was were not being progressed or why – what was the reason behind it?” As such, Mr Beacham’s– submission to me was that I may well find, based on that fact alone, that the delay could be sheeted home to the plaintiff himself.
That submission has, on its face, some initial attraction. Mr Lafferty was not a naïve person and was well qualified, one might think, education-wise, to consider why, after a long period of time, his matter had not really gone forward. However, on the other hand, the plaintiff, as evident by the affidavit document number 3 filed, had been in contact with his solicitor many, many times. He deposed, he was not aware that the plaintiff’s solicitor was, in fact, in contravention of court rules and that he was wanting and willing to progress the matter and not have it meander along. As he deposed in his affidavit, document 3, paragraph 4, he was not aware of any reason for the delay, which is suggestive that he was not told by Mr Cockburn, the real reason behind why his proceedings were not advancing forward. That is readily understood where his solicitor was suffering from the mental illness he was and the fact that he may well have been simply too embarrassed to admit that to Mr Lafferty.
Mr Lafferty has also said in his affidavit that he had made payments of all invoices when due and he had always wanted to progress the matter quickly. It is true that there are occasions where it has been recognised that even where delay is attributable to the solicitor, that it might also be equally sheeted home, not only to the solicitor, but also to the plaintiff himself. In this case, I am not so satisfied that it should be sheeted home to the plaintiff. While it is true that he made numerous contact – on various many occasions, as he has deposed, he was not aware his solicitor was failing in his responsibilities and was, in fact, failing in properly adhering to the requirements that were placed upon him professionally, to advance the matter.
Nor can he be criticised for accepting that when one engages a solicitor and one keeps in ready contact, that he should be entitled to simply rely upon that solicitor being engaged to do exactly what is professionally required of him to do for a client. As such, I do not see that any of the delay should be sheeted home to the plaintiff as such. It is readily explicable – the explanation as to why there has been a dilatory approach to the work by the solicitor. There is no suggestion in my mind that that is, in any way, lacking in explanation. There is a sufficient and reasonable explanation for the delay, in my mind.
The next matters that are to be considered under Tyler relate to impecuniosity. That is of no consequence for this matter. Tyler 8 is a factor that is relevant – namely, whether the litigation between the parties would be concluded by the striking out of the plaintiff’s claim. It is true by reference to the authority of Cummings & Cummings v Davis & Eagan [2001] QCA 293 at paragraph 20 that it was acknowledged, in respect of that case, that weight should be given when considering applications such as this that if there was a dismissal of a proceeding that that may well permanently deny to them the opportunity to pursue their claim, which is now statue barred. The respondent submitted that that should be a basis for not allowing the application to proceed and be dismissed.
The applicant plaintiff, relying on the authority of Cummings, on the other hand, pointed out that it is a significant factor. In my mind, if the proceedings were now struck out by me, it would conclude and shut out the possibility for the plaintiff to reinstate those proceedings because of the limitation period having expired and he would be barred to do so. Particularly in circumstances where the finding is made as I have found that there is, at least, on what I have, an arguable case against the relevant defendant respondent. The next point under Tyler is how far the litigation has progressed. Well, as I have already indicated, it has not progressed terribly far at all. Pleadings have not closed. Very little has been done, as I have said. However, directions, if given, can progress the litigation forward much more quickly, and should assist in that regard.
Tyler 10 I have already dealt with this insofar as the question of whether or not any delay, which I have found has been attributed solely to the plaintiff’s lawyers [indistinct] and whether that should be sheeted home to the client as recognised by case authorities. Delay in that respect is, as I have already determined, is readily explicable against the background of the plaintiff’s lawyers being very seriously ill during the relevant time. It should not, for reasons already given, be sheeted home to Mr Lafferty himself. Tyler 11 has also been addressed by me. Whether there has been a satisfactory explanation for the delay, I consider there has been.
And finally, Tyler 12, prejudice. Both parties helpfully provided written submissions on this point, as well as oral submissions. The prejudice, in effect, that is raised by the respondents is that it will be difficult for them due to the passage of time that has passed – to now do an investigation and obtain information relating to the claim itself. As Mr Beacham submitted, while there is no direct evidence of prejudice as such, nevertheless it is relevant what was said by Justice Bond in Cassimatus v Commonwealth Bank of Australia where events that have happened a long time ago the subject of the underlying dispute may well cause the ability of one to respond to a claim of the nature of that which the plaintiffs bring by the mere passage of that amount of time. As Mr Beacham submitted, memories can fade. Indeed, the submission is made that, as deposed to by Mr Orr, there will be denials in respect of the giving of advices under the retainer against what is said to have been provided in respect of that retainer in the claim.
If I could simply make this point. I agree that is difficult for a respondent defendant to, unless they receive what they requested further and better particulars in respect of the claim, to have delivered their defence. I accept the submission that was made on that point. However, against that, the defendants have been aware of the claim and the nature of it since 2014 since it was filed. As such, the evidence that could have been gathered, and should have been at least explored in respect of it could be, and should have been, nevertheless gathered. In this respect, I have due regard to the fact that the persons the subject of the retainer are solicitors and a solicitors’ firm. One might think that in the normal course of a commercial solicitor’s practise providing or being involved in a retainer of the nature as prescribed, as alleged – in the claim, that it would be the subject of notes, documentations, and the like.
There was also some suggestion that several other persons in the firm may not be available because they no longer work for the firm. That submission, in my mind, overlooks the fact that those solicitors are not, I am told by Mr Beacham, deceased, out of the state, out of the country, or cannot be found – that, on his instructions, they are still practicing as solicitors. Whether they are at the firm of the defendant or otherwise means they will be, and are able to be, readily found. In any event, Mr Lafferty, in the affidavit filed by leave today, deposed that he had very little to do with them in any event.
The other aspect of prejudice that the respondent raised in oral submissions was that even though the financial aspect of any claim may well be picked up by an insurer on behalf of the respondent defendant if the claim was successful, nevertheless the allegation of professional negligence against the firm as a defendant remains the same. It is hanging over and has been hanging over the head of the defendant since the matters the subject of the claim have arisen and the claim was filed. And that fact has been hanging in the balance, as it were – my words, not Mr Beacham’s – for a period of two and a-half years since the filing of the claim as a consequence of the matter not being able to be moved forward in any way as a result of the dilatoriness in the progression of the claim by the plaintiff applicant’s solicitor.
While I accept there is some prejudice relating to an allegation of this type against any professional, whether that be a solicitor firm, an individual, and/or anyone of a professional capacity, that, in my mind, is not sufficient to justify finding that the fact alone raises sufficient prejudice. Even having regard to the fact that it is the applicant who bears the onus of proof always, on an application such as this, to justify or persuade the court that the exercise of the discretion should be given in its favour, I do not, nevertheless, consider the fact raised by the respondent amounts to sufficient prejudice in my mind. As I have said, the onus is always upon an applicant to persuade this court in an application such as this that the exercise of the discretion under rule 389(2) should be granted.
I am of the view, even after having regard to the points that have been raised for consideration by the respondent, while it is accepted that the passage of time can always give rise to prejudice, even accepting that an allegation being made against a professional can be distressing, I nevertheless am satisfied having regard to the whole of this case, in relation to all the relevant circumstances of this particular case, that the exercise of the discretion should be made in favour of the applicant.
I am acutely aware of the rules of the UCPR that require the expeditious progression of matters and the philosophy behind that rule. In particular, the public policy consideration that ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continual threat of litigation and consequences hanging over them. This claim is, however, related to a retainer in respect of solicitors who have provided, allegedly, deficientprofessional work which has had dire financial consequences. I consider it is appropriate to allow the application – particularly where there has been a reasonable and satisfactory explanation for the delay in respect of the matter. I was helpfully given a series of cases by the applicant. I have referred to Cummings, and I shall deal with Gearing shortly [2001] QDC 061 on the question of costs. I have had regard to those various authorities that have been helpfully provided to me as noted within the written submissions. If I can turn to the question of costs, the applicant plaintiff is seeking that if it was successful in its application then costs should be awarded in the cause or as costs in the proceedings.
I note the original application document number 2, however, indicates no order as to costs. I will take it for the purpose of the consideration on this point that the applicant/plaintiff is of the view that because the failure to progress the matter when it was as a result of the solicitor’s dilatoriness that cannot be sheeted home to the plaintiff himself, that cost should therefore be in the cause or in the proceedings as an order on this application.
In that regard the applicant plaintiff referred to Gearing in support of the fact that it can be distinguished factually because, as noted by Judge Robinson in that decision, there was little doubt that the plaintiff in that case had been guilty of egregious delay, a fact the applicant plaintiff submitted is not present here. As such it was submitted that the order sought by the respondent, in the event that the applicant plaintiff was successful on its application, should not be made.
In that respect, the respondent/defendant submitted with reference again to Gearing that the – if the plaintiff is successful in its application before the Court which would have the consequence of the dismissal of the respondent’s application as a consequence, that the plaintiff should nevertheless be made to pay the cost of the applications that have been brought. I am of the view that that is correct in this particular case.
While it is true that there was different conduct in Gearing from that present here, namely, that there was conduct on behalf of the plaintiff who had been dilatory rather than an explanation relating to the solicitor per se. Nevertheless, there is no reason in my mind where proceedings have not been prosecuted by a plaintiff that a Court should not, nevertheless, make an order in favour of the respondent having to answer it, particularly in circumstances where the application requires leave of the Court to progress the matter where no step had been taken for two years or more from the last time this base step was taken.
Accordingly, in this case I do not consider it inappropriate to order, as the respondent submits, that the plaintiff be required to pay on a standard basis the costs of the application. Accordingly, the formal orders will be in accordance with the draft order unless the parties otherwise wish any amendment will be in accordance with the orders 1 to 9 respectively with nine being changed to read that the plaintiff pay the defendant’s costs of the application to be assessed on the standard basis.
I do not consider it appropriate that no order as to cost be made, nor do I consider in the circumstances of this case that even notwithstanding that there has been a reasonable explanation of a mental illness and health issues and personal issues that was subsisting with the relevant plaintiff’s solicitor at the time that cannot be sheeted home to the plaintiff himself, the applicant/plaintiff should not borne the costs. There is still an obligation upon any solicitor in a professional capacity even in these sad circumstances to recognise that the file itself ought to have perhaps been passed on to someone else with the professional capacity to undertake to continue to do the work and progress the claim as required under the relevant rules and requirements in respect of bringing such matters.
As such, the formal orders will be orders 1 to 9, nine being as amended by me, as initialled. I have given the parties liberty to apply on three days’ written notice if in fact they want a change to some of those directions if required. There was also the cross-application. I consider that because both applications were heard together that the cost of the applications for the purpose of being assessed be on one basis only and on a standard basis. That is because for the respondent to answer the initial application, it would have required in any event the preparation of the cross-application.
All right. Those are my reasons for decision. That will be transcribed and provided in due course. Okay. Those reasons for decision that will have been transcribed will be provided to me so that I can revise it before the parties receive a copy of it by email. Okay.