Costello v Costello[2005] QSC 160

SUPREME COURT OF QUEENSLAND

1. There are two applications before the Court. One is by the plaintiff seeking leave to proceed pursuant to rule 389 of the Uniform Civil Procedure Rules 1999 (Qld).  The other is by the defendant seeking that the action be struck out for want of prosecution.

2. The plaintiff instituted proceedings on 23 June 1999 against the defendant, who is his brother, seeking damages for breach of contract and on other grounds. The claim arises out of a contract for the sale of a grazing property which was entered into in early April 1998. The defendant was the vendor and the plaintiff was the purchaser. Essentially the claim relates to a failure by the defendant to disclose the right of a mining company to pass through the property.

3. A detailed chronology of the matter up until the time the last step in the action was taken is to be found in an attachment to the affidavit of Graham Vincent Skelly, solicitor for the defendant.

4. The plaintiff deposes to the fact that the last step in the action was taken on 27 February 2001 when the solicitors for the plaintiff provided the defendant with copies of documents which had been requested.

5. Between the time of the institution of proceedings and the taking of the last step in the action, the defendant obtained orders of the Court requiring the plaintiff to take certain steps. One was that he deliver a statement of claim within 14 days. This order was made on 1 October 1999 and on 22 October 1999 an application was made for dismissal of the claim on the grounds that the order had not been complied with. An amended writ and a statement of claim was served on 27 October 1999.

6. On 29 February 2000 the Court ordered the plaintiff to provide further and better particulars of his statement of claim within seven days. On 7 March 2000 an application was made for disclosure of documents by the plaintiff. An order was made on 27 March 2000. It appears this order was complied with on 10 April 2000.

7. This activity all took place within a fairly short period.

8. Hereafter, progress slowed and then stopped.  No step has been taken since the end of February 2001.  Notices of intention to proceed were given on 2 April 2002, 22 February 2004 and 23 February 2005.

9. In April 2001 the solicitors for the plaintiff engaged engineers and valuers to carry out an inspection of the grazing property which is situated in the Charters Towers area. The reports relate to matters, evidence of which is essential I am told to the plaintiff’s claim for damages.

10. Inspections were carried out and a report from the engineers was obtained in November 2001.

11. There was correspondence between the solicitors for both parties in early 2002 relating to the steps being taken by the plaintiff to quantify his claim and to the subject of mediation.

12. The plaintiff deposes to the fact that his financial position worsened in 2001 and 2002 as a result of an extended drought. The cost associated with the obtaining of the reports and the conduct of the matter generally were causing him stress and strained his financial position. He deposes to the extra expenditures that he was having to incur to enable the grazing operation to continue. These expenses relate to the financial years ending June 2002 and June 2003. He also deposes to having to fight fires in late 2001. He says that he was, as a result of his financial difficulties, unable to fund the proceedings.

13. The plaintiff deposes that because of his adverse financial position and stress he contacted his solicitors in about March 2002 and instructed them to cease acting on his behalf. It does not appear anything was conveyed to the solicitors for the defendant about this or that they became aware that the plaintiff may not be proceeding with the action. Indeed not long after that the solicitors for the defendant contacted the solicitors for the plaintiff seeking certain particulars. It appears that these went unanswered and it does not appear that there was any contact on the other side for almost two years.

14. The plaintiff deposes to having some health problems during 2003. These are set out at paragraph 21 of his affidavit but I would not regard them as having any great significance in relation to his capacity to attend to matters relating to the action or to instruct his solicitors. However, I accept they form part of the difficult position he says that he was in during part, at least, of the period concerned.

15. He says that for some period leading up to the beginning of 2004 his financial position improved with there being some relief from the drought conditions which had been affecting the area. He also says that with the improvement in his financial position, he was feeling less stressed and better able to cope with the rigours of litigation and on 24 February 2004 instructed his solicitors that he wished to proceed with the action.

16. Correspondence was forwarded to the solicitors for the defendant who expressed the view that it would be necessary for him to obtain leave from the Court before the matter could proceed any further and deflected a suggestion that the matter might be mediated. The solicitors in early 2004 instructed the valuers to complete the valuation that they had been engaged to prepare in 2001. As I have said the valuer carried out an inspection in April and May 2001 but it appears that they did not proceed any further presumably having been informed by the solicitors for the plaintiff not to do so.

17. Notwithstanding that the matter was raised by the solicitors for the defendant in March 2004 the plaintiff has let more than a year pass before making this application.

18. The plaintiff says that he obtained a report from the valuers in May 2004 together with an invoice of some $4400. This report was not disclosed at that time but has recently been disclosed.

19. The plaintiff says that he became aware at some time in 2004 of speculation that the mining company with the right of access through the property was to cease its mining operations. An article was published in the Northern Miner on 3 December 2004 to this effect.  According to the plaintiff this was of considerable importance to his claim overall although it would not have affected any rights that he may have had to claim damages in respect of events up until the time of any cessation of activities.  In late 2004 he referred the matter to his solicitor for them to advise as to what impact the closure would have on his cause of action.  It is not clear what the current position is.

20. The defendant has not placed any material before the Court suggesting any specific prejudice nor did he through counsel contend that there was any prejudice generally arising out of the delays which have occurred.

21. Nor ultimately was there any challenge to the plaintiff’s claim that he was suffering financial hardship during a part of the relevant period although some criticism was made of the lack of specific evidence showing what his income was during this time and of the fact that the material in relation to this subject is in quite general terms.

22. In this case the action was instituted promptly and there was a good deal of activity in the first year or so. The defendant obtained a number of orders at times when the plaintiff was in default although in default for relatively brief periods (there is a claim that in respect of one of these orders he was not in fact in default) followed by a long period of inactivity.

23. The plaintiff bears the responsibility for this as it is his action and it was for him to pursue it. I have already referred to the deliberate choice he made to take no further steps which accounts for at least two years. He advances an explanation that his financial position was such that he could not afford to pursue the action. He also refers to some health problems. These alone would not have affected his capacity to pursue the action but I accept are to be considered with the other difficulties which he said he was facing.

24. Although it may be accepted that, as the defendant contended, the evidence about the plaintiff’s financial position is far from satisfactory, it is unchallenged and I see no reason not to accept it.

25. Some of the delay in the last year occurred as a result of the plaintiff’s attempts, if I understand things correctly, to ascertain what the plans of the mining company were and what impact any cessation would have upon his cause of action. It can be accepted that this would be an important consideration.

26. The claim is based upon a failure to disclose a right of way through the property and the nature of it is such that no significant difficulty should arise in preparing the matter for trial and in litigating it and indeed none was suggested. The parties and the relevant experts will presumably constitute the witnesses or at least most of them.

27. Significant sums have been expended in the obtaining and preparation of reports from experts.

28. It is true that there remains significant work to be done if the action is to proceed and the defendant is to obtain appropriate reports from the relevant experts. The plaintiff’s expert reports have now been provided after substantial delays.

29. There is however no suggestion that any difficulties lie in the face of the defendant obtaining appropriate reports to defend the action.

30. If leave is not granted this may be the end of the matter. I say may because the plaintiff has instituted further proceedings. These would be statute barred if the relevant date for limitation purposes was the date of completion of the contract but not if the date of the contract was the relevant date.

31. Undoubtedly, the very lengthy delays and the various non-compliances on the part of the plaintiff constitute a substantial basis for the defendant to contend that leave should be refused.

32. Against these however, have to be placed the countervailing factors I have referred to. In particular there is nothing to suggest that a fair trial of the action cannot be held or that any prejudice of any kind has been suffered by the defendant. There is an explanation advanced for a significant part of the delay if not for all of it.

33. The considerations which will be relevant on an application of this kind were set out (not exhaustively) by the Court of Appeal in Tyler v Custom Credit Corp Ltd [2000] QCA 178. An application of this kind involves a balancing exercise.  In my view when the considerations are balanced here, the appropriate course to take is to grant the plaintiff the leave sought.

34. It was common ground that in the event that such leave was granted, the action instituted in 2004 should be dismissed. There is an application on foot seeking this.

35. I give the plaintiff leave to proceed with action number 502 of 1999 in the Townsville Supreme Court notwithstanding that no step in the action has been taken for more than two years. I dismiss the defendant’s application to dismiss the action for want of prosecution.

36. I order that action number 404 of 2004 be dismissed.

37. I order that the plaintiff pay the defendant’s costs of and incidental to the application for leave to proceed, the application by the defendant to dismiss for want of prosecution and the application to strike out action number 404 of 2004 with costs to be assessed.