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McIntosh v Maitland[2016] QSC 203

 

 

SUPREME COURT OF QUEENSLAND 

 

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

5 September 2016

DELIVERED AT:

Brisbane

HEARING DATE:

7 July 2016

JUDGE:

Jackson J

ORDER:

The order of the court is that:

  1. The order of the registrar made on 1 April 2015 to renew the claim is set aside.
  2. The claim is dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COMMENCING PROCEEDINGS – TIME FOR SERVICE OF ORIGINATING PROCESS AND RENEWAL – where the plaintiffs did not serve the claim on the defendants within the period of one year starting on the day it was filed – where the plaintiffs started to take steps to serve the claim only seven days before that one year period expired – where the plaintiffs’ claims against the defendant lawyers related to events at least six years ago – where the plaintiffs had been waiting for the outcome of other proceedings to determine whether to progress the claim – where the registrar ordered that the claim be renewed for 12 months pursuant to r 24 of the Uniform Civil Procedure Rules 1999 (Qld) – where the defendants applied to set aside the renewal – whether courts still have a tendency to relax rigid time limits – whether reasonable efforts had been made to serve the defendants – whether waiting on the outcome of another case was a “good reason” to allow renewal – whether the fact the defendants had some earlier notice of the claim was a “good reason” to allow renewal

Judicature Act 1875 (Eng), O 8 r 1

Limitation of Actions Act 1974 (Qld), s 10

Rules of the Supreme Court 1900 (Qld), O 9 r 1

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 24

Agricultural and Rural Finance Pty Ltd v Kirk (2011) 82 ACSR 390; [2011] NSWCA 67, cited

Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229, cited

Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104, applied

Aussie Ideas Pty Ltd v Tunwind Pty Ltd [2006] NSWCA 286, cited

Batistatos v Roads and Traffic Authority of NSW (2006) 226 CLR 256; [2006] HCA 27, cited

Battersby v Anglo-American Oil Co Ltd [1945] KB 23, cited

Birkett v James [1978] AC 297, doubted

Camm v Linke Nominees Pty Ltd (No 5) [2015] FCA 431, cited

Cooper v Hopgood & Ganim [1999] 2 Qd R 113; [1998] QCA 114, cited

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2013) 305 ALR 648; [2013] NSWCA 454, cited

Doyle v Kaufman (1877) 3 QBD 7, cited

Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46, applied

Heaven v Road and Rail Wagons Ltd [1965] 2 QB 355, distinguished

Hewett v Barr [1891] 1 QB 98, cited

Hightop Pty Ltd v Kay Sheila Lawrence [2010] QCA 270, considered

Hunter v Hanson [2014] NSWCA 263, cited

Jones v Jebras & Hill [1968] Qd R 13, cited

Kleinwort Benson Ltd v Barbrak Ltd [1987] AC 597, cited

MacDonnell v Rolley [2000] QSC 58, cited

McIntosh & Anor as T’ees of the Estate of Camm (A Bankrupt) v Linke Nominees P/L [2008] QSC 79, cited

McIntosh & Anor as T’ees of the Estate of Camm (A Bankrupt) v Linke Nominees P/L & Anor [2008] QCA 275, cited

Muirhead v Uniting Church in Australia Property Trust (Q) [1999] QCA 513, cited

The Duke Group Ltd (in liq) v Alamain Investments Ltd (2003) 232 LSJS 58; [2003] SASC 415, cited

The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2007] 1 Qd R 148; [2006] QCA 407, followed

Tricon Industries Pty Ltd v Abel Lemon & Company Pty Ltd (No 2) [1998] 2 Qd R 551; [1997] QCA 376, approved

Van Leer Australia Pty Limited v Palace Shipping KK (1981) 180 CLR 337; [1981] HCA 11, considered

Victa Ltd v Johnson (1975) 10 SASR 496, distinguished

Wakim v Coleman [2010] NSWCA 221, considered

Weldon v Neal (1887) 19 QBD 394, cited

COUNSEL:

R Perry QC and D Keane for the plaintiff

GA Thompson QC and SJ Webster for the first, fourth and fifth defendants

SOLICITORS:

Piper Alderman for the plaintiff

Bartley Cohen for the first defendant

DLA Piper Australia for the fourth defendant

Thynne + Macartney for the fifth defendant

[1] Jackson J:  This is an application to set aside the renewal of a claim.  The claim was filed on 7 April 2014.  It was not served within the period of one year starting on the day when the claim was filed.[1] 

[2] On 31 March 2015, the plaintiffs filed an amended statement of claim but no amendment was made to the claim. The amendments deleted the causes of action in the original statement of claim against the fourth and fifth defendants.  They added new causes of action against all of the remaining defendants, based on subject matter not previously alleged.

[3] On 1 April 2015, the plaintiffs applied ex parte to the registrar to renew the claim. It was ordered that the claim be renewed from 7 April 2015 for 12 months. 

[4] It is common ground that although the defendants apply to set aside the order for renewal, the plaintiffs bear the onus of showing that it should have been made.[2]

[5] The challenge of the first, fourth and fifth defendants (“the defendants”) to the order for renewal is based on the application of r 24 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”).

UCPR rule 24

[6] Rule 24 provides in part:

24 Duration and renewal of claim

(1) A claim remains in force for 1 year starting on the day it is filed.

(2) If the claim has not been served on a defendant and the registrar is satisfied that reasonable efforts have been made to serve the defendant or that there is another good reason to renew the claim, the registrar may renew the claim for further periods, of not more than 1 year at a time, starting on the day after the claim would otherwise end.

(3) The claim may be renewed whether or not it is in force...”

[7] A rule of court substantially in the form of r 24 has been part of the rules of this court at least since the time of the Judicature Act 1876 (Qld) and the general orders made under that Act.  They were based on the rules of court introduced in England by the Judicature Act 1873 (Eng) and Judicature Act 1875 (Eng).  The requirements that the court must be satisfied that “reasonable efforts have been made to serve” the defendant or that there be “other good reason” for renewal were introduced by O 8 r 1 of the rules of court scheduled to the Judicature Act 1875 (Eng).[3]

[8] The rules made under the Judicature Act 1876 (Qld) provided that most proceedings were to be started by the process described as a writ of summons.  Although it was introduced before that Act, the writ of summons replaced many of the prior processes or forms of writ associated with the forms of action. In this court, the Rules of the Supreme Court 1900 (Qld) contained O 9 r 1, closely modelled on the English predecessors, in these terms:

“Original writs of summons shall be in force for twelve months from the day of the date thereof, including the day of such date, and no longer; but if the defendant therein named has not been served within that time, the plaintiff may, before the expiration of the twelve months or within such further time (if any) as the court or a judge may allow, apply to the court or a judge for leave to renew the writ; and the court or judge, if satisfied that reasonable efforts have been made to serve such defendant, or for other good reason, may order that the original or concurrent writ of summons be renewed for twelve months from the date of such renewal…”

[9] One difference between the Queensland rule of 1900 and the English rule of 1875 was that under the English rule an application to renew had to be made before the 12 months expired.  However, that time was able to be extended under the general rule for extension of time.

[10] In this and other jurisdictions where a comparable rule was adopted, a considerable body of case law has developed as to the principles to be applied on the hearing of an application for renewal.  It is unnecessary to trace the cases in detail for present purposes.

[11] In this case, the relevant context is that at the time of the renewal of the claim, the time under the statute of limitations had expired for some of the causes of actions alleged in the statement of claim.  If the plaintiff had started a new proceeding as at 1 April 2015, and the defendants had pleaded the relevant defences, the plaintiffs’ claims for damages for breach of contract in this State would have been statute barred for any breach that occurred on or before 31 March 2009,[4] as would any claim for the tort of negligence where damage was first suffered on or before the same date.[5]  As to any claim for breach of fiduciary obligation based on the same facts, for breach of a corresponding obligation, the equitable defence of delay by analogy with the statutory periods of limitation for claims at law would operate.[6]

[12] A convenient starting point to consider renewal of a claim in such a case is Daniels Chancery Practice[7] where in 1901 it was said:

“The court has power to enlarge or abridge the time … But after the time [for service of the writ] has expired the Court will not, except under exceptional circumstances, enlarge the time for renewal where, by so doing, the Statute of Limitations would be defeated.”

[13] Daniels Chancery Practice relied on Doyle v Kaufman[8] and Hewett v Barr.[9]  The so-called requirement of “exceptional circumstances” came from the latter case.  Kay LJ had said of the power to renew a writ where the limitation period had expired: “I am disposed to think that [the rules should] be construed to give the court power to do so under exceptional circumstances.”[10]

[14] As I understand it, the point of that passage, and of other cases which have used the language of “exceptional circumstances” since then, is that the expiry of a limitation period under a statute of limitations is a significant event.  Once a proceeding is started, there is a limited period during which the plaintiff is required to serve the proceeding, otherwise it becomes “stale”, in the sense that service after that time is not authorised.  If the period is to be exceeded, the plaintiff is subject to the requirement that the court exercise the power to renew the claim before service, unless the defendant elects to waive that requirement or the court makes an order regularising an unauthorised service.

[15] There has been some controversy about the appropriateness of the language of “exceptional circumstances” in the case law, when it is used as a test before the power to renew may be exercised.  There was a penetrating analysis of the history and meaning of the English rules of court as at 1987 by Lord Brandon of Oakbrook in Kleinwort Benson Ltd v Barbrak Ltd,[11] where that question was discussed. Again, it is not necessary to essay all of the relevant cases. 

[16] For present purposes, reference to two of them will illustrate the differences.  First, in Heaven v Road and Rail Wagons Ltd[12] Megaw J reaffirmed the relevance of prior case law requiring exceptional circumstances where the limitation period had expired.  This was notwithstanding amendments that were made to O 8 r 1(2) of the English Rules of the Supreme Court in 1964 that deleted the express requirements of satisfaction that reasonable efforts had been made to serve the defendant or that there is other good reason for renewal.

[17] It was held that the omission of those express requirements from the English rule did not affect the application of the relevant principles under the cases decided under the prior rule in a form like r 24(2).[13]  It was also held that other amendments to the rules of court that permitted amendment of a claim or a statement of claim to add a cause of action that was statute barred after the period under the statute of limitations had expired did not affect the application of the relevant principles.[14] 

[18] In passing, I note two other points that were made in Heaven.  First, “the fact that the plaintiff will be deprived of the possibility of successfully pursuing his claim against the defendants, since the latter can plead the statute to any fresh writ, cannot be a ground.  It is not an exceptional circumstance: it is the necessary consequence of applying the general rule…”[15] Second, “nor can the fact that the defendants knew of the existence of a claim or knew that a writ had been issued, be a ground.  These are in no way exceptional circumstances.  Nor can it be a ground that the defendants are unable to show that, if the validity of the writ were to be extended, there would be any specific prejudice or detriment to them in conducting their defence…”[16]

[19] The second relevant case is Van Leer Australia Pty Limited v Palace Shipping KK.[17]  Although Stephen J referred to both Doyle and other cases that referred to Heaven, the approach taken was a wider one.  Relying upon the decision of Gibbs J in Jones v Jebras & Hill,[18] Stephen J appears to have endorsed the proposition that a rule in the form of O 9 r 1 above “might be thought to permit of a more liberal exercise of discretion than [did] the [then] rules of [the High Court].”[19]

[20] In Hightop Pty Ltd v Kay Sheila Lawrence[20] the Court of Appeal considered a number of the cases and principles.  White JA, with whom Chesterman JA agreed, said:

“The primary source of power to renew a claim is plainly r 24.  It confers a discretion to renew if ‘good reason’ is shown.  While such a discretion is undoubtedly wide, it is not ‘at large’ and must ‘be exercised in the context of and by reference to’ the legislative framework in which it appears…

It is by reference to authoritative decisions expounding the discretion that meaning may be given to the expression ‘good reason’ where it appears in r 24(2) … As to the requirement that r 24 must be considered in its legislative context, in The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission, Keane JA (as his Honour then was) observed that r 24(2) must be read, and the discretion exercised, in a context which includes r 5.  Rule 5 states the philosophy of the UCPR, requiring parties to proceed expeditiously and, amongst other things, to avoid undue delay.  Thus any conduct of proceedings by a party which entails unexplained or inexcusable delay cannot expect to be vindicated by a court (or the registrar) exercising the discretion granted in r 24(2).”[21] (footnotes omitted)

[21] On the other hand, her Honour referred to the reasoning of Bray CJ in Victa Ltd v Johnson,[22] approved by Stephen J in Van Leer, as expressing “the appropriate understanding of a procedural rule which permits renewal of originating process after the expiration of the limitation period”.[23]  Her Honour also referred to other judicial comments that the words “for other good reason” should be given a broad and liberal interpretation and there is no better reason for granting relief than to see that justice is done.[24]  

[22] Having regard to that reasoning, some care must be taken in terms of the use of the language of “exceptional circumstances”.  Nevertheless, the difference may simply be one of expression rather than substance.  This is illustrated by Wakim v Coleman.[25] In that case, the Court of Appeal of New South Wales considered an appeal from a decision of McCallum J dismissing a proceeding in which the plaintiff sought the renewal of a summons for damages for professional negligence against the defendant solicitors and barristers.  McCallum J had referred to and relied on Heaven.  MacFarlan JA said about that reasoning:

“I would add that some discussion occurred at the hearing of the appeal as to whether the primary judge applied too strict a test to Mr Wakim’s application by requiring him to establish ‘exceptional circumstances’ in line with the test propounded in Heaven … It is clear however when her Honour’s judgment is considered as a whole that, consistently with the decision of this court in Tolcher v Gordon … her Honour did not require this but instead required Mr Wakim to demonstrate a ‘good reason’ for the grant of an extension of time.”[26] (citations omitted)

[23] Wakim was a case where renewal of the summons was sought after the limitation period had expired and the plaintiff had deliberately delayed serving the summons while considering the content of the proposed statement of claim.  It was submitted that the primary judge erred because of her Honour’s failure to give sufficient weight to a strong case and demonstration of loss.  MacFarlan JA said:

“A further answer to the attack that Mr Wakim makes on the reasons that the primary judge gave … is that they were alternative to the view her Honour expressed that a strong case and demonstration of loss on the part of Mr Wakim would not in any event, without more, justify the grant of an extension of time … I agree that more would be required to be shown before it would be appropriate to grant an extension such as Mr Wakim sought.”[27]

[24] Van Leer has been important among the Australian cases dealing with the exercise of a discretion like that under r 24.  Stephen J relied on a passage extracted from the judgment of Bray CJ in Victa Ltd v Johnson as follows:

“Action, even though misconceived or ineffective, is often regarded more indulgently than complete inaction. Lack of prejudice to the defendant though sometimes said to be immaterial (see Heaven at 366–7) has in fact sometimes been given considerable weight … and the balancing of hardship between plaintiff and defendant, though repudiated as a valid exercise by Megaw J in Heaven … has in fact been sometimes adopted as a criterion by the Court of Appeal in subsequent cases...

I think too that there is discernible in this, as in cognate branches of the procedural law, a tendency to relax rigid time limits where that is legally possible and where it can be done without prejudice or injustice to other parties.”[28] (footnotes omitted)

[25] The thinking in 1975, and the “tendency to relax rigid time limits”, was informed by developments in statute and case law as well as the nature of courts’ civil jurisdiction and civil lists at about that time. For example, and confining attention to the rules of this court, from 1965 amendments to the rules abolished the concept that non-compliance with the rules requiring steps to be taken would render the step or the proceeding a nullity,[29] and abolished the rule in Weldon v Neal[30] that prohibited amendments to introduce a cause of action where the limitation period had expired.[31]  Where a defendant was added after a limitation period had expired the court was also given power to order that the proceeding should be begun as against that defendant from a date earlier than the joinder.[32]

[26] As to the case law, by 1977 a leading case was Birkett v James,[33]  reinforcing the statements of principle made in 1968 in the three cases dealt with in Allen v Sir Alfred McAlpine & Sons Ltd.[34]  All were cases concerned with striking out or dismissing a proceeding for want of prosecution.  Allen was concerned with cases where the limitation period had expired.  Birkett was a case where it had not.  Birkett endorsed the view that the power to strike out for want of prosecution should only be exercised where the court was satisfied that there was “intentional and contumelious” disobedience to an order or abuse of process, or there had been “inordinate and inexcusable” delay and that such delay gave rise to a substantial risk that it was not possible to have a fair trial.

[27] As to the cases and case lists, in 1975 the majority of civil actions in the lists of this court were personal injury claims, mostly motor car and employment injury cases.  The delay in obtaining a trial of a proceeding was long, with the interlocutory steps often taking years and there would be a waiting period of years from the time when the case was ready for trial to the first available trial date.

[28] Subsequent developments in statute and case law and the nature of courts’ civil jurisdiction and civil lists have undercut some of the conditions that informed the thinking in 1975 that there was a tendency to relax rigid time limits where legally possible. 

[29] The rules of court and practice directions of this court now mandate the progress of a proceeding when it is started by claim.  The “philosophy” is contained in r 5 of the UCPR, that the purpose of the rules is to facilitate the just and expeditious resolution of the real issues at a minimum of expense, that the rules are to be applied with cognate objectives and that a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way. 

[30] Consistently with that philosophy, some cases in this court are now case managed in the commercial list[35] or in the supervised case list,[36] including cases involving self-represented litigants.[37]  Case flow management exists for other cases that are not progressing in accordance with the time frames allowed.[38]  

[31] Personal injury proceedings in motor car, employment injury or other cases are no longer a majority of cases in the court’s civil lists.  A plaintiff in a motor car claim,[39] employment injury claim[40] or other personal injury claim[41] is required by statute to notify the claim within a short period, to engage in a compulsory process of disclosure of the claim, to make or receive offers designed to produce an early settlement, and to ready the claim for trial in pre-proceeding processes, all before the plaintiff is permitted to start a claim in this court.  All of that is intended to happen before expiry of the limitation period of three years from when the injury is suffered, being the date on which the cause of action arose.[42]

[32] These differences are reflected in the state of the court’s civil lists.  Civil case clearance rates are compiled on a monthly basis and are usually 100 per cent or more.[43]  The number of cases unheard or unresolved after 12 months and after two years respectively have decreased over the years.  The delay in obtaining a hearing date for most cases that are ready for trial is generally not more than six months in Brisbane.

[33] And the time is now past where Birkett is taken as a reliable statement of the law as to the approach of the court to want of prosecution. As the majority of the High Court said in Batistatos v Roads and Traffic Authority of NSW,[44] in its home jurisdiction it has been suggested that Birkett has been overtaken “by the strictures of the new procedural code”.  It was never fully accepted within all the Australian jurisdictions and in any event its authority in this court has been attenuated as “not altogether relevant to proceedings in Queensland.”[45]  Even more aptly, it was said of Birkett in this court as long ago as 1998:

“In a time when complaints of delay in the disposition of legal proceedings are legion, one may question whether principles which can encourage delay and which have been said to have failed in their country of origin should continue to be applied in this State. The argument advanced on behalf of the appellants here gave the impression that there may be an idea abroad that, as long as an action is kept ‘ticking over’ by ensuring that something is done in every three year period, even very long delays will ordinarily be treated as excusable.”[46]

[34] In my view, it can no longer be said in this court that, in cognate branches of the procedural law, there is a tendency to relax rigid time limits where that is legally possible and where it can be done without prejudice or injustice to other parties. That would be inconsistent with a number of the statutory rules, concepts, principles and practices that are now recognised and incorporated into our modern laws of civil procedure. 

[35] Courts nowadays adopt many measures to make civil proceedings faster, less expensive and more efficient, even though they are not always attended with success.  The community pays for the due administration of justice through the provision of the courts to decide cases according to law.  Delay itself presents several challenges to that due administration.

[36] In expressing these reasons I have not referred to all the cases relied upon by the plaintiffs (or for that matter by the defendants).  However, in my view, the expiry of the limitation period is an important circumstance when considering an application to renew a claim under r 24(2).  That is because a plaintiff who starts a claim in the last days before the expiration of a limitation period, but does not serve it so as to avoid having to proceed in an expeditious way, and then seeks to renew the claim after one year without making reasonable efforts to serve seeks, in effect, to extend the maximum limited time to proceed as of right.  

[37] For most claims at common law, s 10 of the Limitation of Actions Act 1974 (Qld) and r 5 seek to prevent delay of that kind.  On an application under r 24(2), a plaintiff who proceeds in that way must show that there is a good reason for doing so.  The plaintiff is, after all, seeking the court’s blessing so as to be able to proceed contrary to the requirements otherwise imposed by statute.

[38] If it was ever right to say that delay, in itself, is not inimical to the administration of justice, it is not considered right to say so now.  As was said recently by the High Court in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd:

“In Aon Risk Services Australia Ltd v Australian National University, it was pointed out that case management is an accepted aspect of the system of civil justice administered by the courts in Australia. It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants. The decision in Aon Risk Services Australia Ltd v Australian National University was concerned with the Court Procedures Rules 2006 (ACT) as they applied to amendments to pleadings. However, the decision confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice.”[47] (footnotes omitted)

[39] Whether or not the plaintiffs have a strong case, the extent of the delay in the present case illustrates the point.  Some of the facts which are important to the outcome of the present proceeding relate to conduct that the plaintiffs allege was negligent in 2007, and advice as to how to proceed given by the defendants in 2008, yet ultimately the plaintiffs did not serve the claim until April 2016. 

[40] The modern approach under the rule in question is reflected in an important passage from The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission,[48] where Keane JA said:

“Rule 24(2) facilitates the preservation of proceedings which might otherwise become stale through no fault of the plaintiffs.  A party who deliberately chooses to refrain from serving a claim will rarely be able to show good reason to warrant the renewal of the claim.

No case was cited to this court in which r 24(2) or its analogues has been held to authorise a renewal of a claim in favour of a party who deliberately chooses not to serve a claim where the facts of the case [are] sufficient to enable the case to be pleaded are known to the plaintiff.  Whatever the position may have been in that regard in the absence of a provision such as r 5(3) of the UCPR, the presence of r 5(3) means that the approach pursued by the plaintiffs in the present case should not be vindicated by the court.”[49]

[41] In two subsequent cases in New South Wales there have been attempts to dilute the concentration of that acidic reasoning.[50]  For my part, I am bound to follow the reasoning of a decision of the Court of Appeal upon the operation of r 24.  Even if I were not, in my view, Keane JA was correct to observe that a party who deliberately chooses to refrain from serving a claim will rarely be able to show good reason for renewal, and I would follow that view.

Summary of the plaintiff’s claim as amended

[42] At all material times the plaintiffs were the trustees of the estate of a bankrupt. 

[43] On 16 May 2007, in that capacity, they entered into a deed of settlement with a company and its director, Mr L.

[44] The first defendant was involved in drafting the deed.

[45] On 31 August 2007, the plaintiffs started a proceeding in this court against Mr L and the company based on the deed (“guarantee and breach of warranty of authority proceeding”).

[46] The fourth and fifth defendants acted for the plaintiffs in the guarantee and breach of warranty of authority proceeding.

[47] On 7 April 2008, judgment was given on the claim in the guarantee and breach of warranty of authority proceeding in favour of the plaintiffs.[51]

[48] On 12 September 2008, an appeal from the judgment was allowed and the judgment was set aside (“Court of Appeal’s decision”).[52]

[49] The defendants acted for the plaintiffs in the appeal.

[50] On 19 September 2008, the fourth and fifth defendants advised the plaintiffs in writing as to their options in the light of the Court of Appeal’s decision.

[51] On 12 March 2009, the High Court of Australia refused an application for special leave to appeal from the Court of Appeal’s decision.

[52] The defendants acted for the plaintiffs in the unsuccessful application for special leave.

[53] On a subsequent date in 2009, the plaintiffs started a proceeding seeking to set aside a transfer of property made by the bankrupt to the company under s 121 of the Bankruptcy Act 1966 (Cth) (“voidable transaction proceedings”).

[54] The defendants acted for the plaintiffs in connection with or in giving advice about the voidable transaction proceedings.

[55] On a date in November 2013, the Federal Court of Australia reserved judgment in the voidable transaction proceedings.

[56] On 7 April 2014, the plaintiffs filed the claim in the present proceeding supported by the original statement of claim.

[57] On 11 May 2015, the Federal Court of Australia gave judgment dismissing the voidable transaction proceedings.[53]

[58] The plaintiffs allege that the first defendant was negligent in drafting the deed and that the same conduct was a breach of fiduciary obligation.

[59] By the second amended statement of claim filed on 1 April 2016, the plaintiffs allege that the defendants were negligent in giving advice in writing as to the options open to the plaintiffs as a consequence of the Court of Appeal’s decision, because they:

(a) failed to advise that the plaintiffs may have a cause of action for negligence or breach of duty against the first defendant and other lawyers who acted for the plaintiff in or about drafting the deed;

(b) failed to advise that the claim for breach of warranty of authority against Mr L had been finally determined by the Court of Appeal’s decision, subject to any appeal to the High Court; and

(c) failed to advise the plaintiffs to seek independent advice.

[60] The plaintiffs allege that the defendants all breached their fiduciary duties to the plaintiffs in failing to advise the plaintiffs that they had rights against any of the other defendants or the other lawyers.

Reasonable efforts to serve

[61] On Tuesday 31 March 2015, seven days before the expiry of the period of one year starting on the day when the claim was filed, the plaintiffs commenced taking steps to serve the claim on the defendants.  In that year, Good Friday fell on 3 April 2015.

[62] 31 March 2015 was also the day on which the plaintiffs amended the statement of claim for the first time.

[63] As to the first defendant:

(a) on 31 March 2015, the plaintiffs’ solicitors engaged process servers to effect personal service;

(b) on 31 March 2015, the process servers tried to call Mr Maitland but did not get through;

(c) on 31 March 2015, at 8:08 pm, the plaintiffs’ solicitors sent an email to the first defendant requesting to make an arrangement for service by 7 April 2015; and

(d) on 1 April 2015, a process server attended at the first defendant’s office to effect service but he was not there.

[64] The first defendant did not respond to the emails.  By affidavit, he says that he was interstate and did not look at his emails over that time. 

[65] As to the fourth defendant, on 31 March 2015, the plaintiffs’ solicitors were informed that he was overseas for about six months.  By affidavit, the fourth defendant says that he was overseas from Easter until late October 2015.

[66] As to the fifth defendant, on 31 March 2015, at 8:12 pm, the plaintiffs’ solicitors sent an email to him requesting to make an arrangement for service by 7 April 2015.  On 1 April 2015, he responded by email that he was recovering from surgery and not returning until 14 April 2015.  He said further that the plaintiffs “should apply to extend time”, meaning apply to renew the proceeding. 

[67] On 1 April 2015, the day after they commenced any attempt to serve the claim, the plaintiffs applied to renew the claim and obtained the order for renewal.

[68] The plaintiffs submit that the efforts they made were reasonable efforts to serve the claim.

[69] The plaintiffs never came to grips with the fact that for their own reasons, whether or not they thought it was justified, they decided to attempt to serve the proceedings only a week before the one year period expired when (including that day) there were only three days until the commencement of the Easter holiday period from Friday 3 April 2015 until Monday 6 April 2015.  Not only that, the plaintiffs applied for and obtained the order for renewal, only one day after starting their efforts to serve the claim.

[70] In my view, the plaintiffs did not make reasonable efforts to serve any of the first, fourth or fifth defendants. The case could scarcely be clearer on that question.

Other good reason

[71] The plaintiffs rely on a number of factors as showing that there was other good reason to make the order for renewal.

Waiting on the reserved judgment

[72] The first factor is that the reason for not serving the claim during the one year period was that the plaintiff was waiting upon the reserved judgment of the Federal Court of Australia in the voidable transaction proceedings.  The plaintiffs did not wish to progress the claim until they knew the outcome of the voidable transaction proceedings, on the footing that depending on the outcome the plaintiffs might not need to proceed upon the present claim at all or not in its entirety.  In the meantime, the plaintiffs did not wish to incur the costs of progressing the present claim or expose themselves to the possibility of an order to pay the defendants’ costs on the present claim.

[73] In my view, this is not a “good reason” within the meaning of r 24(2).  Although the cases do not all point in one direction, there is a long line of cases that supports the proposition that the desire of a plaintiff to await the outcome of another proceeding is usually or ordinarily not a good reason to renew a claim.

[74] In Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq)[54] it was said:

“There are other difficulties with the reasonableness of Mr Wily lying by and waiting for the HIH proceedings to be resolved.

His Honour himself said (at [57]):

Ultimately, an extension of time in which to serve originating process will be granted for only good reason, which would not usually include awaiting the outcome of other proceedings: Pell v Hodges; Ramsay v Madgwicks.

To these authorities I would add Battersby v Anglo American Oil Co Ltd where Lord Goddard said (at 32–33):

Ordinarily it is not a good reason that the plaintiff desires to hold up the proceedings while some other case is tried or to await some future development.

This observation was quoted with approval in Kleinwort Benson at 617. According to Lord Browne-Wilkinson in Dagnell v Freedman & Co (at 396), Lord Goddard’s remarks remain applicable.”[55] (citations omitted)

[75] The plaintiffs do not submit that they were unable to formulate their claims against the first, fourth or fifth defendants until the outcome of the voidable transaction proceedings was known.  The amount of the plaintiffs’ loss may have been affected by the outcome of the voidable transaction proceedings.  However, that alone was not a sufficient reason, in my view, to justify the plaintiffs arrogating to themselves, in effect, the benefit of a stay of the present proceeding.[56]  The correct procedure would have been to serve the claim and to make an application for directions.  The court has power to grant a stay or other relief if the ascertainment of loss in one case depends on the outcome of a case in another court.  The defendants would have been entitled to be heard on any such application.

Defendants’ knowledge

[76] The second factor is that the defendants had notice or knowledge of the proceeding. 

[77] On 12 September 2014, the first defendant sent an email to the plaintiffs advising that a search of the court’s eFile database had revealed that the plaintiffs had started a claim against the first to seventh defendants.  The first defendant requested a copy of the statement of claim.  He then forwarded a copy of the email to the other defendants, including the fourth and fifth defendants.

[78] On 18 September 2014, the plaintiffs emailed a copy of the claim and original statement of claim to the first defendant.  The first defendant forwarded a copy to the other defendants by email, including the fourth and fifth defendants.

[79] First, it is necessary to observe that the plaintiffs did not give the fourth and fifth defendants any notice of their own accord.  Second, while the first and fourth defendants received the relevant emails, the fifth defendant by affidavit says that he was not aware of them at the time.

[80] Third, in any event, the notice of the content of the claim and statement of claim that was received by the first, fourth and (possibly) fifth defendants was confined to the original statement of claim. In that form, the claim against the fourth and fifth defendants was limited to allegations about the quality of their conduct of the voidable preference proceedings.  The entirety of the causes of action then alleged against the fourth and fifth defendants about that conduct was deleted by the amendments made by the amended statement of claim on 31 March 2015.

[81] It seems that it was the claim as supported by the amended statement of claim that was renewed, not the claim as supported by the original statement of claim.  The causes of action alleged against the fourth and fifth defendants in the amended statement of claim were not notified to them before the claim was renewed.

[82] In any event, the cases do not speak with one voice as to whether notice of a claim to a defendant is a factor which may show good reason to renew the claim.  For example, it was treated as irrelevant in Heaven, but was treated as relevant in other cases.

[83] In my view, because the plaintiffs did not notify the fourth and fifth defendants of the causes of action alleged against them at the time of the renewal of the claim, the notice of the claim that was given in September 2014 is not a significant factor in exercising the discretion as to whether to renew the claim.  It is a little more significant in relation to the first defendant.

Prejudice

[84] There is no dispute that prejudice to a defendant is a relevant factor.  The third factor relied upon by the plaintiffs is that there is no prejudice by reason of the delay in proceeding against the defendants, except to the extent of the fifth defendant’s complaint that he destroyed his notebooks of relevant matters in September or October of 2015.  I interpolate that the claim had not been served and there is no evidence that the plaintiffs had made any further efforts to serve the claim on the fifth defendant by November 2015.

[85]  Nevertheless, the fifth defendant knew of the outstanding claim by the plaintiffs as at 1 April 2015 and had suggested then that they apply to extend time for service, so the plaintiffs submit, and I accept, that it was at least an error to have destroyed the notebooks without checking that the plaintiffs’ claim was no longer pursued against him.

[86] The first defendant relies on prejudice in conducting his defence by reason of the delay because he has recently been diagnosed with prostate cancer and is undergoing treatment.  I accept that this is a relevant factor as against him.  Although this factor did not arise until after the renewal on 1 April 2015, in my view it is nonetheless relevant in the circumstances of this case where the plaintiffs failed to serve the defendants until approximately a year after that date.

[87] It might be expected that many of the relevant facts upon a claim like those made by the amended statement of claim and now the second amended statement of claim against the first, fourth and fifth defendants are evidenced by documents that still exist.   But to say so does not exhaust the universe of possibilities as to the relevant or decisive evidence. 

[88] For example, an advisor may consider but dismiss a possible point or consideration in a way that does not find its way into the written advice or is not fully reflected in the writing.  An analogous problem that courts deal with everyday arises in cases where parties contend that the written record of their accord is incomplete.

[89] On 1 April 2016, the plaintiffs filed the second amended statement of claim.  Paragraph 27B.2 was added as a separate allegation of negligence against the fourth and fifth defendants.[57] It alleges that the written advice as to the plaintiffs’ options given in September 2008 was negligent because the fourth and fifth defendants did not advise that the claim for breach of warranty of authority against Mr L had been finally determined by the Court of Appeal, subject to an appeal to the High Court. 

[90] The written advice was given in the context where the plaintiffs were professional insolvency practitioners, the Court of Appeal had allowed an appeal from the judgment of this court and the same advice (as par 27A of the pleading alleges) recommended that the plaintiffs apply to the High Court for special leave to appeal. 

[91] The possibility or likelihood of prejudice is to be assessed having regard to the fact that the eventual period of the plaintiffs’ delay until actual service was egregious.  From 31 March 2015, having amended the substance of the causes of action relied upon against the first, fourth and fifth defendants as previously summarised, the plaintiffs again sat on their hands and did not serve the claim, even after it had been renewed, for almost 11 months.   This was in further direct violation of their implied undertaking to the court as a party to the proceeding to proceed in an expeditious way under r 5(3) of the UCPR.

[92] In my view, when more than six years have elapsed since the relevant events,[58] it should not be assumed that the defendants are not prejudiced by the delay in their ability to respond to a claim about the quality of their advice on the ground that the plaintiffs’ evidence in support of the claim will be largely documentary.

Denial of worthwhile claim

[93] Fourth, the plaintiffs submit that the strength of their individual claims against the defendants is a factor that shows good reason why the claim should have been renewed.  In my view, the causes of action alleged in the second further amended statement of claim, as supported by the affidavits filed by the plaintiffs, do not show some overwhelming case as against any of the first, fourth or fifth defendants.

[94] However, there is no reason to investigate this question by detailed analysis, either in the present case, or in most other cases of this kind.  That point was made in both Heaven and Wakim.  Over and again, courts have said that the denial of the ability to pursue an apparently worthwhile claim:

“… is a feature which will be present in every case where recourse is had to r 24, at least where the relevant limitation period has expired.  For that reason that circumstance alone can never in law constitute sufficient ‘good reason’.”[59]

[95] This case is no different.

Conclusion

[96] Considered afresh, having regard to the reasons set out above, the order to renew the claim made on 1 April 2015 should not have been made.  The order should be set aside. 

[97] The consequential order should be made also that in the exercise of the inherent power of the court, the proceeding is dismissed.

Footnotes

[1] Uniform Civil Procedure Rules 1999 (Qld), r 24.

[2] Muirhead v Uniting Church in Australia Property Trust (Q) [1999] QCA 513, [31].

[3] The prior English provision for renewal of a writ of summons was s 11 of the Common Law Procedure Act 1852 (UK) but that did not contain the requirements of satisfaction that there had been reasonable efforts made to serve the defendant or that there be other good reason for renewal.

[4] Limitation of Actions Act 1974 (Qld), s 10(1)(a).

[5] Limitation of Actions Act 1974 (Qld), s 10(1)(a)

[6] Cassegrain v Gerard Cassegrain & Co Pty Ltd (2013) 305 ALR 648, 671-674 [123]-[147]; Aussie Ideas Pty Ltd v Tunwind Pty Ltd [2006] NSWCA 286, [19]-[23]; The Duke Group Ltd (in liq) v Alamain Investments Ltd (2003) 232 LSJS 58, [118]-[133].

[7] Daniels Chancery Practice (7th ed, 1901) Vol 1, p 274.

[8] (1877) 3 QBD 7.

[9] [1891] 1 QB 98.

[10] [1891] 1 QB 98, 99.

[11] [1987] AC 597, 614-623.

[12] [1965] 2 QB 355.

[13] [1965] 2 QB 355, 361-364.

[14] [1965] 2 QB 355, 364.

[15] [1965] 2 QB 355, 365.

[16] [1965] 2 QB 355, 365.

[17] (1981) 180 CLR 337.

[18] [1968] Qd R 13.

[19] (1981) 180 CLR 337, 344-345.

[20] [2010] QCA 270.

[21] [2010] QCA 270, [35].

[22] (1975) 10 SASR 496, 500, 503-504.

[23] [2010] QCA 270, [36].

[24] [2010] QCA 270, [37].

[25] [2010] NSWCA 221.

[26] [2010] NSWCA 221, [38].

[27] [2010] NSWCA 221, [34].

[28] Van Leer Australia Pty Limited v Palace Shipping KK (1981) 180 CLR 337, 343-344 citing Victa Ltd v Johnson (1975) 10 SASR 496, 502.

[29] Rules of the Supreme Court 1900 (Qld), O 93 r 17.

[30] (1887) 19 QBD 394.

[31] Rules of the Supreme Court 1900 (Qld), O 32 r 1(5).

[32] Rules of the Supreme Court 1900 (Qld), O 3 r 12.

[33] [1978] AC 297.

[34] [1968] 2 QB 229.

[35] Practice Direction No 3 of 2002 and Practice Direction No 17 of 2015.

[36] Practice Direction No 11 of 2012.

[37] Practice Direction No 10 of 2014.

[38] Practice Direction No 17 of 2012; 180 days is allowed to make a request for trial date from the time for filing a notice of appearance and defence, and if not the registrar may ask that the plaintiff show cause why the proceeding should not be deemed resolved. A proceeding where cause is not shown results in a case-flow hearing. Non-compliance with the directions made at the case-flow hearing results in the case being deemed resolved.

[39] Motor Accident Insurance Act 1994 (Qld).

[40] Workers’ Compensation and Rehabilitations Act 2003 (Qld).

[41] Personal Injuries Proceedings Act 2002 (Qld).

[42] Limitation of Actions Act 1974 (Qld), s 11.

[43] The civil lodgements in 2015-2016 in Brisbane were 2,718. The matters finalised were 2800. The clearance rate was 103 per cent. At the end of the period there were 2150 active matters. Of those that are active 24 per cent were older than 12 months while only 7.7 per cent were older than 24 months, being approximately 166 matters.

[44] (2006) 226 CLR 256, 281 [68].

[45] Cooper v Hopgood & Ganim [1999] 2 Qd R 113, 123.

[46] Tricon Industries Pty Ltd v Abel Lemon & Company Pty Ltd (No 2) [1998] 2 Qd R 551, 555.

[47] (2013) 250 CLR 303, 321 [51].

[48] [2007] 1 Qd R 148.

[49] [2007] 1 Qd R 148, 160 [53]-[54].

[50] Hunter v Hanson [2014] NSWCA 263, [63]; Agricultural and Rural Finance Pty Ltd v Kirk (2011) 82 ACSR 390, 411-412 [104]-[105]. A comparative analysis of the current approach under the English Civil Procedure Rules 1998 (and not forgetting the differences under those rules) appears in Zuckerman on Civil Procedure: Principles of Practice, 3rd ed, (2013), Sweet & Maxwell, 229-237 [5.91]-[5.108].

[51] McIntosh & Anor as T’ees of the Estate of Camm (A Bankrupt) v Linke Nominees P/L [2008] QSC 79.

[52] McIntosh & Anor as T’ees of the Estate of Camm (A Bankrupt) v Linke Nominees P/L & Anor [2008] QCA 275.

[53] Camm v Linke Nominees Pty Ltd (No 5) [2015] FCA 431.

[54] [2009] NSWCA 104.

[55] [2009] NSWCA 104, [88]-[90].

[56] See The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2007] 1 Qd R 148, 161 [57]; MacDonnell v Rolley [2000] QSC 58, [12]; on appeal [2001] QCA 32; and Battersby v Anglo-American Oil Co Ltd [1945] KB 23, 32.

[57] Paragraph 27B.2 of the amended statement of claim was renumbered par 27B.3 in the second amended statement of claim.

[58] As at 1 April 2015, when the claim was renewed.

[59] Muirhead v Uniting Church in Australia Property Trust (Q) [1999] QCA 513, [13]; The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2007] 1 Qd R 148, 159 [47].

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Editorial Notes

  • Published Case Name:

    McIntosh & Anor v Maitland & Ors

  • Shortened Case Name:

    McIntosh v Maitland

  • MNC:

    [2016] QSC 203

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    05 Sep 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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