Brazier v Pohlmann[2005] QSC 10

SUPREME COURT OF QUEENSLAND

1. DOUGLAS J:  The first defendant is a solicitor who acted for the first and second plaintiffs from 29 October 1987 after they were injured in a motor vehicle accident on 5 October 1987.  The third plaintiff was the wife of the first plaintiff and the mother of the second plaintiff.  She owned the vehicle damaged in the accident and alleged that she received erroneous advice in April 1991 that she did not have a claim for loss of consortium.  She does not pursue any claims in respect of those issues against the first defendant now. 

2. The first and second plaintiffs commenced proceedings against the first defendant on 13 March 2002 seeking damages for pure economic loss on the basis that he failed to pursue their claims in a timely manner. In their most recent proposed pleading they allege that he should have brought their claims to a conclusion by 7 February 1993. Originally the pleading asserted that it should have concluded by 1992.

3. The first plaintiff calculates his damages alternatively as interest paid on borrowings from 1 July 1992 to 29 June 2001 or by the loss of 7 years’ interest claimed pursuant to s. 47(1) of the Supreme Court Act 1995 or its statutory predecessor, the Common Law Practice Act 1867.  The second plaintiff puts his claim simply on the basis that he has lost statutory interest.  The basis for that approach is that the first and second plaintiffs, using the proposed third defendant, eventually settled their claims arising out of the motor vehicle accident in October 1998 and only obtained four years’ interest in their negotiated settlement because of the delay in finalising their claims between 1987 and 1998. 

4. No doubt, in settling the claims, the parties were influenced by decisions such as Serisier Investments Pty Ltd v English [1989] 1 Qd R 678, 679 which referred to the public policy of having claims brought and determined promptly as a reason for the Court’s discretion to deny interest over the whole period where a plaintiff has been guilty of unreasonable delay in prosecuting a claim; cf, however, Interchase Corporation Ltd (in liq.) v Grosvenor Hill (Qld) Pty Ltd (No. 3) [2003] 1 Qd R 26, 53 at [61] and Westpac Banking Corporation v Commissioner of State Revenue [2004] QSC 19 at [15]-[16]. 

5. The first defendant seeks summary judgment against each of the plaintiffs pursuant to r. 293 of the Uniform Civil Procedure Rules 1999.  Alternatively he seeks to strike out the action pursuant to r. 171 on the basis that the claims made against him are statute barred and cannot possibly succeed. 

6. The first defendant’s argument is that, at least in respect of the first plaintiff’s claim for interest particularised as paid on borrowings from 1 July 1992, that damage was suffered from that time and therefore became statute barred 6 years later. Mr Wilson SC for the first defendant submitted that that claim for damages, particularised as it was, was for a sum not claimable in the personal injuries proceeding itself and was capable of accruing from then, or from February 1993 if that is the true date by which the proceeding should have been finalised. He submits that one of those dates was the time when actual loss and damage was sustained even if further damage continued to accrue until the termination of the first defendant’s retainer in February 1995; see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 531, Scarcella v Lettice (2000) 51 NSWLR 302, 306; Argyropolous v Layton (2002) 36 MVR 432, 433; Wilson v Rigg (2002) 36 MVR 451, 454. 

7. He sought to distinguish the decision of the High Court in Wardley Australia Ltd v Western Australia on the basis that the liability pleaded was not dependent upon a contingency being fulfilled before it could accrue.  In that context he referred me to Pittaway v WH Tutt & Quinlan [2004] 1 Qd R 285 as an illustration of circumstances where limitation defences can be relied on to dispose of actions in a summary way in spite of what was said by the High Court in Wardley Australia Ltd v Western Australia at 533 about the undesirability of “limitation questions of the kind under consideration” being decided in interlocutory proceedings “except in the clearest of cases”.  In my view the claim based on interest paid on borrowings from 1 July 1992 must fail for the reasons argued, namely that the loss was sustained either when the money was borrowed or when the action should have been resolved and both of those dates occurred more than six years before this claim was instituted.  Those particulars of the first plaintiff’s claim should be struck out. 

8. The first and second plaintiffs were on stronger ground in the alternative formulations of their claim for damages for pure economic loss in negligence by reference to the lost opportunity to obtain statutory interest. That opportunity arose because, when the action was eventually settled in October 1998, the allowance made for statutory interest in the settlement negotiations was limited to a period of 4 years. In those circumstances Mr Lilley for the plaintiffs submitted that their claim based on loss of statutory interest was contingent or prospective until the action was resolved and not measurable until then. He relied in particular on some comments of Gaudron J in Hawkins v Clayton (1988) 164 CLR 539, 600-601 approved in Wardley Australia Ltd v Western Australia at 527.  Her Honour spoke of the difference between physical loss and economic loss and the need to identify the precise interest which had been infringed.  She took the view at 602 that the executor in Hawkins v Clayton suffered a loss only when the assets that had been allowed to waste came under his actual control, that is when he was informed of the existence of the will by the negligent solicitor.  Mr Wilson SC sought to distinguish that approach by reference to the undeniable fact that, here, the plaintiffs did retain control over their own cause of action as evidenced by their change of solicitors on two occasions.  He also pointed to the allegation in paragraph 16 of the proposed new statement of claim that they had causes of action against the first defendant as at February 1995 at least in respect of breach of his retainer and submitted that those potential actions arose more than six years before this proceeding began. 

9. Mr Lilley relied, however, on the decision of the New South Wales Court of Appeal in Sugal v Fleming [2002] NSWCA 262 [24]-[26] where Hodgson JA drew a distinction between a loss of a chance and the chance of a loss saying with respect to the latter;

“On the other hand where a person incurs a chance, even a substantial chance, of suffering a loss, in due course it may become clear that no loss is ultimately suffered; and so long as there is some appreciable chance that no loss will be suffered it is unreasonable to require a plaintiff to commence proceedings and unreasonable to award damages against the defendant.”

10. It seems to me that that analysis is appropriate here as it may have been the case that the first and second plaintiffs’ damages claim could have been resolved in circumstances where full allowance for their statutory interest claim may have been made. That possibility is recognised in decisions such as Interchase Corporation Ltd (in liq.) v Grosvenor Hill (Qld) Pty Ltd (No. 3) and Westpac Banking Corporation v Commissioner of State Revenue referred to earlier and was the actual result in Serisier Investments Pty Ltd v English. 

11. To that extent this seems to mean that the first and second plaintiffs have arguable cases to persist in their claim for damages formulated on the basis of their claim for statutory interest but not on the basis asserted in the fifth paragraph of the particulars of paragraph 36 of the proposed further amended statement of claim.

12. Accordingly I will not grant the first defendant’s application for summary judgment but will strike out the particulars of the damage suffered by each plaintiff contained in paragraph 5 of the further and better particulars provided by the plaintiff dated 12 November 2004. I give leave to the plaintiffs to amend their claim and statement of claim substantially in accordance with the draft amended claim and statement of claim annexed to the affidavit of Kate Elizabeth Avery filed 3 December 2004 as exhibit KEA01 with the exception of the first paragraph of the particulars provided to paragraph 36 of that document.

13. That proposed pleading recognises that no damages are now sought by the third plaintiff against the first defendant. I have already ordered the relief also sought in the plaintiffs’ cross application filed 3 December 2004 for leave to join a third defendant to the action by 4 February 2005. As the result of that application may affect the form of the pleading that the plaintiff wishes to deliver I further order that the plaintiffs may deliver their proposed further amended claim and statement of claim within 14 days of the determination of their application to join a third defendant to the proceeding.

14. I shall hear the parties further as to costs.