Stewart v ACN 056 068 127 Pty Ltd
[2012] QSC 57
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- Unreported Judgment
- Stewart v ACN 056 068 127 Pty Ltd[2012] QSC 57
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Stewart v ACN 056 068 127 Pty Ltd[2012] QSC 57
Stewart v ACN 056 068 127 Pty Ltd[2012] QSC 57
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED EX TEMPORE ON: | 28 February 2012 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 28 February 2012 |
JUDGE: | Atkinson J |
ORDERS: |
|
CATCHWORDS: | PRACTICE AND PROCEDURE – PROCEEDINGS – STALE PROCEEDINGS – RENEWAL OF STALE PROCEEDINGS – where respondent alleged that heater imported by applicant was the cause of a fire – where cause of action arose in 2005 and claim filed in 2008 but not served until 2011 – where stale claim had been renewed by the registrar – where the respondent did not oppose the application to set aside the renewal of the claim and contended that the application should be treated as one to renew the claim – whether there was a satisfactory explanation for the delay –whether the respondent’s claim was so strong that a serious injustice would result were it not allowed to proceed – whether the applicant had suffered prejudice – whether the claim should be renewed Uniform Civil Procedure Rules 1999 (Qld), r 5, r 24. High Top Pty Ltd v Lawrence [2010] QCA 270, considered IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission (ACCC) [2007] 1 Qd R 148, considered |
COUNSEL: | DJ Schneidewin for the applicant DJ Kelly for the respondent |
SOLICITORS: | DLA Piper for the applicant Rogers Barnes & Green Lawyers for the respondent |
HER HONOUR: There is an application before the Court by the defendant, ACN 056 068 127 Pty Ltd, seeking orders, firstly, that the orders of the Registrar to renew the claim filed on 18 July 2008 pursuant to rule 24(2) of the Uniform Civil Procedure Rules 1999 (UCPR) made on 1 September 2011, 28 September 2011 and 10 October 2011, respectively, be set aside and, secondly, that the claim be dismissed.
The first order is not opposed by the plaintiff who concedes that those orders renewing the claim should not have been made.
So far as the second application made by the defendant is concerned, the plaintiff submits that I should treat that as an application by the plaintiff to renew the claim pursuant to rule 24(2) of the UCPR on the basis that there is good reason to renew the claim. It concedes that it did not show good reason to the Registrar who made the orders.
I propose to follow that course. It follows, of course, that if I do not renew the claim pursuant to rule 24(2), then the claim will be dismissed.
The claim first came to the attention of the defendant in October 2011 when it was served on the registered office of the defendant in Melbourne. Not only was that the first notice that the defendant had of the claim in this Court but it was also the first knowledge that it had of the fire, which is the subject matter of the statement of claim, and the allegation that the fire was caused by a domestic heater imported by a company, Martec Pty Ltd, which was formerly the name of the defendant. Martec ceased to trade during 2007 when its brand name, goodwill and assets were sold to Celestial Pearl Pty Ltd.
Martec, while it was trading, imported electrical appliances, including ceiling fans and heaters, for sale within Australia. They were generally sold to large retailers, including Kmart. Unsurprisingly, perhaps, Mr Chen, the sole director of the defendant, has no knowledge or memory of any specific detail relating to the make and model of the heater in question, let alone the specific heater. He does, however, say that he has no recollection of the heater ever being recalled from sale, nor is he aware of any incidents involving those heaters.
The onus lies on the plaintiff to show that a writ should be renewed. So it is necessary, in the first instance, to look at what has occurred in this case.
The plaintiff is content to rely in support of its application on observations made by McMurdo P in High Top Pty Ltd v Lawrence [2010] QCA 270 where her Honour referred to an earlier decision, IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission (ACCC) [2007] 1 Qd R 148, in particular, to the observations of Keane JA where his Honour said, "It is to be emphasised that the ultimate objective of the UCPR is the facilitation of a judicial determination of a dispute fairly and justly on its merits. This objective cannot be achieved if, by reason of the lapse of time, it is no longer possible for each party to have a fair opportunity to present its case. If there is reason for concern that the lapse of time is a real impediment to the fair presentation of a party's case, that is a deficit in the case of an applicant for the grant of an indulgence in the form of an exemption from the operation of ‘the general rule that a Court will not exercise its discretion in favour of renewal’."
McMurdo P observed at [11], "The IMB Group case rightly states that an 'apparently worthwhile action' is a factor favouring the positive exercise of the Court's discretion in renewing an unserved claim under rule 24(2) where the action can proceed without prejudice to the defendant ... But the IMB Group case does not state, and is not authority for, the proposition that, where it is possible to make such a determination in an application under rule 24(2), it is an error to consider the strength of a plaintiff's claim. On the contrary, the IMB Group case suggests that if a plaintiff's claim is so strong that a serious injustice would result were it not allowed to proceed, that would be a persuasive reason, in the absence of some significant prejudice to the defendant, to allow the claim to proceed by renewing it. Together with a satisfactory explanation for delay and absent competing circumstances, these matters would, in terms of rule 24(2), constitute 'another good reason to renew the claim'."
So the first question to look at is the question of delay. The statement of claim was filed on 18 July 2008. This being 2012, it is getting on for four years ago that the statement of claim was filed.
The statement of claim refers to a fire which occurred on the evening of 17 July 2005. It alleges that the fire was caused by a defect in the electrical operation of a heater produced by Martec, or in the alternative, by a defect of design of the heater, and in breach of the defendant's statutory duties under the Trade Practices Act.
Rule 24(1) provides that a claim remains in force for one year, starting on the day it is filed. So, of course, it will be expected to be served within a year of the claim being filed, otherwise the claim will be stale and incapable of being served unless the indulgence now sought is granted. So that claim became stale one year after 18 July 2008.
The plaintiff has put forward an explanation for the delay. This is it as provided by the solicitor for the plaintiff. It says that the plaintiff's insurer, Suncorp, commissioned a report by Forensic Services Australia as to the cause and origin of the fire. That report was received on 19 July 2005. That, of course, is almost seven years ago. No explanation is given for any delay between that date and the following date, which was some two and a half years later.
In December 2007, he deposes that Suncorp forwarded instructions to Mason Black Lawyers to consider the circumstances of the loss and damage and provide advice and recommendations with respect to any recovery proceedings. That advice was provided on 21 January 2008, according to the affidavit. He deposes that, as a result of instructions received from Suncorp, in February Suncorp's lawyers forwarded freedom of information requests to the Queensland Fire & Rescue Service, Queensland Police Service and the Queensland Police Service Forensic Services Branch.
...
HER HONOUR: On 14 May 2008, Mason Black Lawyers forwarded a brief to counsel and she provided advice on 15 July 2008, together with the draft claim and statement of claim. They were then filed on 18 July 2008. They were filed without certain documentation having been received by the plaintiff's solicitors. Three months later, those solicitors forwarded notices of non-party disclosure to the government organisations and other parties.
In October 2008, Suncorp was informed by a representative of its loss adjustor's firm that the loss adjustor had left their employ more than 12 months previously. Later that month, Suncorp's lawyers wrote to Mr Nash at Forensic Services Australia requesting he respond to a number of queries raised by counsel in her memorandum of advice. Certain documents were received later that year by Suncorp's solicitors and others were refused. In December, documents were sent to Mr Nash for his consideration for preparation of an updated report. That was provided shortly afterwards.
In January 2009, Suncorp provided instructions to its lawyers to appoint an investigator. However, that investigator was not appointed. On 25 May 2009, before the writ was stale, Suncorp forwarded an email to its lawyers requesting an update but no response was received. In late January 2009, in fact, Suncorp had withdrawn its instructions from its lawyers due to a failure to comply with its performance standards and requested redelivery of its file for a redistribution.
The solicitor deposes on information and belief that it took almost 12 months to collect the files due to the closure of the lawyers who had previously acted for Suncorp. One would presume that that takes the file till late 2009. The internal review, which it is then said took place, must have disclosed that the claim was stale. However, there is no explanation as to what happened between then and January 2011 when the solicitors presently acting for Suncorp said that they received the file and took steps, including an advice on 5 April 2011 regarding steps that should be undertaken for the future conduct of the claim.
It was not until 27 May 2011 that Suncorp's present solicitors received instructions to renew the claim and serve it on the defendant. As I previously said, it was not served until October 2011, which was the first notice that the defendant ever had of the fire, of any suggestion there was a faulty heater or that there was any claim against it.
The solicitor then deposes as to the strength of the cause of action. Unfortunately, the paragraphs of the affidavit contain some regrettable inaccuracies and are certainly not complete as to the full circumstances as to the cause of action.
It can be seen that the explanation for the delay is extremely poor. There is not an adequate explanation for the whole of the delay. At no time does this litigation appear to have been attended to, apart from fitfully, on the basis that the defendant was entitled to know a claim against it in relation to events that happened in July 2005.
So there is no satisfactory explanation for the delay. In case I am wrong about that, and others will take a different view, I shall examine the next question, which is whether the plaintiff's claim so strong that a serious injustice would result if it were not allowed to proceed.
In spite of the valiant attempt by the solicitors for the plaintiff to characterise the case in that way, that is by no means a proper description of this claim. Certainly, the investigator retained by Suncorp expressed the view that the fire was caused by this heater, but this fire was investigated at the time by the Queensland Fire & Rescue Service and the Office of Electrical Safety of the Queensland Government and the Queensland Police Service, all of which are agencies independent of the plaintiff and the defendant in this case.
I should say there is no evidence before me that any of the persons involved in that investigation are still available or have any memory at all of what occurred but there are some documents which show that, despite the plaintiff's attempt to paint this as a strong case in their favour, that is by no means the case.
There are a number of bases for doing that. The main one is causation of the fire. The plaintiff's claim depends upon the heater being in the position that Suncorp's investigator's report, which is exhibited to an affidavit by the solicitor, says that he said it was. There is no sworn evidence from the plaintiff as to where he says the heater was. He asserted to the investigator that it was in the lounge room. However, other contemporaneous documents of persons who arrived at the scene and examined it do not support that.
The most contemporaneous report was done by a Mr Cruice whose report says that a Queensland Fire & Rescue Service investigator was on site who showed him the extent of the damage. Photographs were taken. With regard to the heater and the source of the fire, he says:
"The lounge room was the most damaged area and appeared the area of origin. The wooden floor was burnt through in several places and the carpet floor covering was nearly completely consumed. The room contained remains of a television, video and stereo, although this side (west) of the room was not as badly damaged. There were remains of a lounge chair on the other (east) of the room which burn patterns indicated to have been near the point of origin.
Adjacent to the chair was the bedroom which contained a bed and the strip heater, along with other belongings. Although there was significant damage in this room it did not appear to be the area of origin. This was due to portions of the wooden bed slats remaining and less severe charring on timber of the walls.
The heater was on top of some materials and in proximity were remnants of a shelf. It would be expected that these materials would be more consumed if it were the point of origin.
The heater was examined and no sign of electrical fault was found with the wiring to the heater. The wiring connections at the socket outlet on the wall between the two rooms were also examined with no sign of electrical fault such as arcing or melting."
He has taken that from observations made immediately upon attending the scene of the fire.
A report by Forensic Services Australia produced for Suncorp on 24 December 2008 refers to the position of the heater. At paragraph 2.9 of that report, he says:
"The QPS investigator showed me where the remains of the bar heater were collected from and that location was on the floor near the phone books at the southern side of the opening between the lounge room and the bedroom to the east, just inside the eastern room (bedroom)."
It is apparent that Suncorp's investigator did not himself see where the heater was and the contemporaneous evidence supports that it was in the bedroom which was, by all accounts, not where the fire commenced.
There is disagreement in the reports about the cause of the fire but the best evidence as to the location of the heater appears to have it in a room where the fire did not commence.
It might be possible for Suncorp to prove that the heater, in fact, was in the room where the fire commenced. If it were able to do so, it might be able to be successful in its claim but this could not, on any version, be said to be such a strong claim that a serious injustice would result if it were not allowed to proceed.
There is no evidence before me of the present availability of the persons who saw the heater in situ and no sworn evidence from anyone as to the position of the heater so as to suggest whether or not it was situated where the fire commenced.
There are differing opinions expressed by the Office of Electrical Safety, the Fire Service & Rescue Authority and the Queensland Police Service as to the cause of the fire but all of that suggests that the cause of the fire would be a matter of extreme dispute.
There are other matters of difficulty, such as the claim that the directions given with the heater were confusing but, again, no evidence that the plaintiff read the directions and decided that his leaving the heater on unattended in the middle of the night when he went to bed was consistent with the instructions in spite of the clear instruction contained in the manual that may have come with the heater that it was not to be left unattended.
The heater is no longer in existence and there is no evidence before me that there is any forensic evidence still in existence to assist in the determination of where the heater was and where the fire commenced and if, in fact, the heater was the cause of the fire; which brings me to the question of prejudice.
This is almost a classic case of how a defendant informed of a claim as to a fire that occurred in 2005 and a claim that was filed in 2008 which was not served until late 2011 could never overcome the known and unknown prejudice which would make the defence of such a claim extraordinarily difficult. It is completely inconsistent with rule 5 of the Uniform Civil Procedure Rules which require the just and expeditious resolution of the real issues in dispute between the parties.
Rule 5(3) specifically provides that in a proceeding in a Court, a party impliedly undertakes to the Court and to the other parties to proceed in an expeditious way.
This claim has not been conducted in that way. It was allowed to go stale. It has been stale for many years. The plaintiff may only have it renewed if it shows good reason to do so. It has failed to do so. It has not adequately explained the delay. It has not shown that it has a strong case. It has not shown that there will be a miscarriage of justice if it were not able to prosecute its claim and it has certainly not shown that there has not been irreparable prejudice done to the defendant.
Accordingly, I order that the claim be dismissed.
...
HER HONOUR: I order that the plaintiff pay the defendant's costs of the application and the action, to be assessed.