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Drake v PKF (Gold Coast) Pty Ltd[2023] QSC 45

Drake v PKF (Gold Coast) Pty Ltd[2023] QSC 45

SUPREME COURT OF QUEENSLAND

CITATION:

Drake v PKF (Gold Coast) Pty Ltd & Anor [2023] QSC 45

PARTIES:

PETER CHARLES DRAKE

(plaintiff/respondent)

v

PKF (GOLD COAST) PTY LTD

ACN 137 531 250

(first defendant/applicant)

SCOTT JAMES McMURTRIE

(second defendant/applicant)

FILE NO:

2822 of 2019

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 March 2023

DELIVERED AT:

Brisbane

HEARING DATE:

8 March 2023

JUDGE:

Cooper J

ORDER:

  1. Paragraphs numbered 48 to 51 and 65 of the statement of claim filed on 9 December 2022 are struck out, without leave to replead.
  2. The proceeding is dismissed for want of prosecution.
  3. The defendants file and serve written submissions on costs limited to four pages by 4 pm on 23 March 2023.
  4. The plaintiff file and serve written submissions on costs limited to four pages by 4 pm on 31 March 2023.
  5. The question of costs will be decided on the papers.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – GENERALLY – where the plaintiff has amended his statement of claim ten times – where the tenth statement of claim contains no significant amendments to cure the previously identified deficiencies in the pleading – whether the statement of claim should be struck out – whether leave to replead should be granted

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COURT SUPERVISION – WANT OF PROSECUTION OR LACK OF PROGRESS – where the plaintiff commenced proceedings in 2019 arising from alleged negligence of the first and second defendants in 2013 – where the tenth amended statement of claim as relating to causation and loss have been struck out without leave to replead – where the defendants seek the proceeding be dismissed pursuant to r 280 of the Uniform Civil Procedure Rules 1999 (Qld) or the inherent jurisdiction of the court – whether the proceeding should be dismissed

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 171, r 280

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, cited

Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863, cited

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25, cited

Drake v PKF (Gold Coast) Pty Ltd & Anor [2020] QSC 401, related

Drake v PKF (Gold Coast) Pty Ltd & Anor [2021] QCA 83, related

Drake v PKF (Gold Coast) Pty Ltd & Anor [2022] QSC 197, related

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

Graham & Linda Huddy Nominees Pty Ltd v Byrne & Ors [2016] QSC 221, cited

Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27, cited

PKF (Gold Coast) Pty Ltd & Anor v Drake [2021] QSC 326, related

Quinlan v Rothwell [2002] 1 Qd R 647; [2001] QCA 176, cited

Tyler v Custom Credit Corp Ltd [2000] QCA 178, cited

COUNSEL:

The plaintiff/respondent appeared on his own behalf

G Gibson KC with M Jones for the defendants/applicants

SOLICITORS:

The plaintiff/respondent appeared on his own behalf

Hall & Wilcox for the defendants/applicants

Introduction

  1. [1]
    The plaintiff commenced these proceedings on 14 March 2019 claiming damages in negligence against the first defendant, his former accountants, and the second defendant, a director or partner of the first defendant.  The quantum of damages claimed exceeds $120 million.
  2. [2]
    Broadly stated, the plaintiff’s case is that in March 2013 the defendants failed to advise him of the consequences of appointing administrators to two companies which he controlled.  This is said to have resulted in the relevant companies being placed into administration and, subsequently, into liquidation.  The plaintiff asserts that:
    1. (a)
      had he been advised of the relevant consequences: administrators would not have been appointed to the relevant companies, the companies would have continued to make significant income, and he would have directed that this income be paid to himself or to his benefit;
    2. (b)
      by reason of the defendants’ failure to advise him, and the consequences which followed the appointment of administrators, he has lost the opportunity to direct the payment of such income to himself or to his benefit. 
  1. [3]
    The defendants have not yet been required to file any defence to the claim in circumstances where, despite numerous attempts, the plaintiff has not pleaded his cause of action conformably with the requirements of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). 
  2. [4]
    On 9 December 2022, the plaintiff filed what amounts to his tenth attempt at pleading his cause of action.[1]  The defendants have applied pursuant to r 171 of the UCPR to strike out this tenth statement of claim, without leave to replead, and that the proceeding be dismissed pursuant to r 280 of the UCPR or the inherent jurisdiction of the court.  In the alternative, if the proceeding is to continue, the defendants seek specific directions as to steps which the plaintiff must take if he wishes to progress his claim.
  3. [5]
    The following issues arise for determination:
    1. (a)
      whether the tenth statement of claim should be struck out;
    2. (b)
      if so, whether leave to replead should be granted or whether the proceeding should be dismissed;
    3. (c)
      if the proceeding is to continue, whether the directions sought by the defendants should be made.

History of the proceeding to date

  1. [6]
    Before turning to consider those issues, I note the following summary of the history of the proceeding set out in the judgment of Hindman J in Drake v PKF (Gold Coast) Pty Ltd & Anor,[2] which concerned the defendants’ application to strike out the previous version of the statement of claim:[3]
  1. “[4]
    Some relevant background to the progress of the proceeding is conveniently set out in the judgment of the Court of Appeal in Drake v PKF (Gold Coast) Pty Ltd & Anor [2021] QCA 83, where at [4] the court recorded:
  1. '[4]
    The material shows that the relevant steps and other aspects of the proceedings below have been as follows:
  1. (a)
    Mr Drake first retained solicitors in June 2017;
  1. (b)
    he commenced the proceedings on 14 March 2019;
  1. (c)
    on 25 June 2019 it was conceded that the original statement of claim was deficient, and it was the intention to re-plead by 2 September 2019;
  1. (d)
    on 21 August 2019 an application was filed by the respondents, seeking to strike out the claim and statement of claim on the basis that the loss claimed was reflective of loss suffered by LMIM, or the same as that loss;
  1. (e)
    on 12 September 2019 a proposed amended statement of claim was delivered; an application was filed by Mr Drake’s lawyers, seeking leave to amend the statement of claim under r 376 of the Uniform Civil Procedure Rules 1999 (Qld);
  1. (f)
    the hearing date for each application became 16 September 2019;
  1. (g)
    on 16 September 2019 it was ordered that the original statement of claim be struck out; there was no appeal from that order; it was also agreed that a further statement of claim would be provided by 31 October 2019; no further statement of claim was delivered by that date;
  1. (h)
    on 11 November 2019 an application was filed by the respondents under r 374 of the UCPR seeking judgment; Mr Drake’s lawyers sought an adjournment based on a medical report as to Mr Drake’s mental state;
  1. (i)
    the hearing was adjourned to 18 December 2019, and when a further draft statement of claim was produced the hearing was further adjourned to 11 February 2020;
  1. (j)
    on 23 January 2020 yet another draft statement of claim (the fourth such draft) was produced; that became the pleading considered on 11 February 2020;
  1. (k)
    on 11 February 2020 the draft statement of claim was considered by Dalton J; leave to file that document was refused;
  1. (l)
    on 11 February 2020 Mr Drake’s counsel accepted the proposal that six months was to be given so that the necessary steps to re-plead could be addressed; Dalton J granted the six months period; her Honour also placed the matter on the commercial list so that directions could be sought quickly if there were problems;
  1. (m)
    no application for directions was made;
  1. (n)
    on 17 April 2020 Mr Drake advised his solicitors that he could no longer continue with them as his solicitors;
  1. (o)
    on 25 May 2020 Mr Drake requested his files from his former solicitors; and
  1. (p)
    as at 26 August 2020 Mr Drake had taken no steps to obtain the documents he said he needed to re-plead.’
  1. [5]
    At the hearing on 26 August 2020, Dalton J (as Her Honour then was) dismissed the proceeding because of the plaintiff’s persistent non-compliance with the UCPR. That order was the subject of an appeal by the plaintiff and the Court of Appeal set the order aside on 30 April 2021. That deals with events up to and including the fourth statement of claim. Since the decision of the Court of Appeal on 30 April 2021:
  1. (a)
    on 13 September 2021, there was a hearing before Daubney J relating to the plaintiff’s application for leave under rule 376 of the UCPR to file a further statement of claim (the fifth statement of claim). Leave was determined to be unnecessary;
  1. (b)
    on 5 October 2021, the plaintiff filed a further statement of claim (the sixth statement of claim);
  1. (c)
    on 2 December 2021, the defendants’ application to strike out the sixth statement of claim was heard before Martin J (as His Honour then was);
  1. (d)
    on 9 December 2021, Martin J published reasons for decision, and ordered that the sixth statement of claim be struck out, with the plaintiff having leave to file a further amended statement of claim by 21 February 2022. In his reasons for the decision Martin J commented that because the plaintiff was now represented by a firm of solicitors he was satisfied that it was appropriate to allow the plaintiff a ‘final’ opportunity to draw a pleading that satisfied the rules;
  1. (e)
    on 21 February 2022, the plaintiff filed a further statement of claim (the seventh statement of claim);
  1. (f)
    on 22 March 2022, the defendants filed an application to strike out the seventh statement of claim, and sought that the proceeding be dismissed;
  1. (g)
    that application came on for hearing before Flanagan J (as His Honour then was) on 6 May 2022, but was adjourned to 2 August 2022 to give the plaintiff a further opportunity to plead his statement of claim, particularly as to causation;
  1. (h)
    on 25 July 2022, the plaintiff filed another amended statement of claim (the eighth statement of claim);
  1. (i)
    on 2 August 2022, the plaintiff provided to the court (and filed) another further amended statement of claim (the ninth statement of claim) which he sought leave to rely upon for the purpose of the argument that day.”
  1. [7]
    Hindman J ordered that the ninth statement of claim be struck out but granted leave to replead.  The tenth statement of claim was filed pursuant to that grant of leave.
  2. [8]
    It will be necessary to return to aspects of this procedural history in more detail later in these reasons.

Strike out

  1. [9]
    The defendants submit that the tenth statement of claim should be struck out because it fails to plead the material facts necessary to demonstrate an arguable case in relation to causation and loss.
  2. [10]
    As is apparent from [2] above, in the tenth statement of claim the plaintiff has attempted to plead a claim for loss of opportunity damages. 
  3. [11]
    That claim concerns two companies which the plaintiff controlled.  The first, LM Investment Management Limited (LMIM) was the responsible entity or trustee of at least seven managed investment funds.  The second, LM Administration Pty Ltd (LMA), in its capacity as trustee of the LM Administration Trust, provided administration services to LMIM.  Pursuant to a service agreement between these two companies LMIM paid 100 per cent of the fees it was entitled to receive from each managed fund (whether as responsible entity or trustee) to LMA with the result that all of the profits from the funds management business were held by LMA as trustee and available to be paid to or at the direction of the plaintiff.
  4. [12]
    For the purposes of the strike out application two aspects of the plaintiff’s claim are important.
  5. [13]
    First, the allegation that the appointment of administrators to LMIM and LMA could have been avoided must depend on those companies not being insolvent as at 19 March 2013, the date the administrators were appointed, or thereafter.  Although that is addressed in particulars,[4] it is not pleaded as a material fact in the tenth statement of claim.  Nor are material facts pleaded from which solvency might be inferred.
  6. [14]
    Secondly, the claim relies heavily on a document which is referred to in the tenth statement of claim as the “Cash Flow Projection”.[5]  The pleading describes that document as a written forecast of gross income and profit for LMA, prepared by the defendants from source documents of LMIM and LMA and after factoring in all known contingencies of each of the managed funds, which the defendants provided to the plaintiff at a meeting with the board and senior executives of LMIM on 29 January 2013.
  7. [15]
    The relevance of the Cash Flow Projection can be seen from the particulars of the pleading that, on the counterfactual scenario described in [2](a) above, LMA as trustee would have continued to make significant income.[6]  Those particulars, and the method used to calculate the income alleged to have been lost by reason of the defendants’ negligent failure to advise, treat the probability of the projected level of income being earned under the alternative scenario as being 100 per cent: that is, a certainty.
  8. [16]
    I accept the defendants’ submission that, to make good his case with respect to causation and loss, the plaintiff must plead the following matters as material facts: the likelihood of one or more of the managed funds generating income; the quantum of that income; the quantum of expenses incurred by LMA; the net distributions to the plaintiff; and the form of those distributions.  Where, as in this case, the plaintiff alleges a loss of a 100 per cent possibility or the certainty that he would have obtained the hoped for or expected benefit under the alternative scenario, it is to be expected that the plaintiff will allege with some particularity the facts by which that certain outcome would have been achieved.[7]
  9. [17]
    The pleading of causation and loss by reference to figures in the Cash Flow Projection does not accomplish that.  The tenth statement of claim does not plead any facts by which the outcomes forecast in the Cash Flow Projection would have been achieved, let alone making the achievement of those forecasts a 100 per cent certainty.
  10. [18]
    That his pleading of causation and loss is deficient, and liable to be struck out, should not come as a surprise to the plaintiff.  The same criticisms formed part of the basis upon which Hindman J struck out the ninth statement of claim.  The relevant part of her Honour’s judgment stated:[8]

“Causation

  1. [34]
    The problems with the plaintiff’s pleaded causation case have been raised both before Dalton J and Flanagan J.
  1. [35]
    The nub of the defendants’ complaint about the plaintiff’s pleading of causation by the time of hearing appeared to be that the plaintiff’s allegation as to the solvency and ongoing solvency of LMIM, LMA and each of the managed funds was contained in a particular to the ninth statement of claim (particulars (v) and (vi) to [64]) and was not properly particularised. I agree. Those matters appear to me to be essential material facts to the counterfactual pleaded by the plaintiff and ought be contained in the pleading proper, and properly particularised.
  1. [36]
    The defendants also complain as to the plaintiff’s reliance in the pleading on a document described as a ‘Cash Flow Projection’ as being a pleading of evidence. I agree. The pleading might be useful if the document disclosed material facts to support an allegation of solvency, but the document itself is bereft of detail, including underlying assumptions.
  1. [37]
    The defendants also complain that in circumstances where the plaintiff pleads a loss of opportunity based on a 100% probability of the counterfactual occurring, the pleading should plead with particularity the facts by which that certain outcome would have been achieved – see Graham & Linda Huddy Nominees Pty Ltd v Byrne & Ors [2016] QSC 221 at [50]. Again, I agree. The pleading does not achieve that.
  1. [38]
    These are problems that cannot be fixed by striking out discrete parts of the ninth statement of claim. Some significant amendments to the ninth statement of claim are required to cure these deficiencies.”
  1. [19]
    The plaintiff did not appeal the decision of Hindman J to strike out the ninth statement of claim.
  2. [20]
    Contrary to the observation of Hindman J in paragraph [38] of the decision extracted above, the tenth statement of claim contains no significant amendments to cure the deficiencies in the pleading of the plaintiff’s case on causation and loss.  The paragraphs of the tenth statement of claim which plead causation and loss[9] substantially replicate the equivalent paragraphs of the ninth statement of claim[10] which Hindman J found to be deficient and a basis for the ninth statement of claim to be struck out.
  3. [21]
    On 4 January 2023,[11] the solicitors for the defendants wrote to the solicitors who then acted for the plaintiff about the persistent failure to properly plead causation and, particularly, the failure of the tenth statement of claim to address the criticisms made by Hindman J in the passage extracted above.  On 7 February 2023,[12] the solicitors then acting for the plaintiff replied to the defendants’ solicitors rejecting their complaints and baldly asserting that the tenth statement of claim accorded with the decision of Hindman J.  Given the failure to make any substantial amendment to the pleading of causation and loss, that assertion is not sustainable.
  4. [22]
    For these reasons, paragraphs numbered 48 to 51 and 65 of the tenth statement of claim which plead causation and loss are to be struck out.  I have not found it necessary to determine whether the deficiencies in that aspect of the pleading warrant striking out the whole of the tenth statement of claim.  That is because I have concluded that leave to replead the case on causation and loss should not be granted.  In those circumstances, the plaintiff must fail to establish an essential element of his cause of action.  The proceeding should be dismissed pursuant to the inherent jurisdiction of the court.  I turn now to my reasons for reaching that conclusion.

Leave to replead or dismissal

  1. [23]
    I prefer to consider the question of dismissal under the inherent power of the court.  That is because it is not clear to me that r 280 is engaged in this case.
  2. [24]
    By its terms, that rule operates in circumstances where a plaintiff must take a step required by the UCPR, or comply with an order of the court, within a stated time and fails to do what is required within the time stated.  The orders made by Hindman J on 16 September 2022 struck out the ninth statement of claim and granted leave to the plaintiff to replead but did not state any time by which the repleaded statement of claim was to be filed.
  3. [25]
    However, an application made under r 280 does not exclude the inherent power of the court to dismiss a proceeding for want of prosecution.[13]
  4. [26]
    The exercise of the court’s discretion to dismiss an action for want of prosecution is not to be fettered by rigid rules but requires a decision to be reached upon a balance of the relevant circumstances.

The plaintiff’s conduct of the proceeding

  1. [27]
    The plaintiff has, for much of the time the proceeding has been on foot, been represented by solicitors and counsel.  However, at the hearing of the application he represented himself.  He filed a notice that he was acting in person on the morning of the hearing.[14]
  2. [28]
    Although the plaintiff deposed that he is currently in the process of engaging a litigation specialist and litigation funder to represent him in the proceeding,[15] his affidavit provides no detail about what steps have been taken in that regard, when those steps were taken, what further steps remain to be taken and when it might be expected that he will secure the legal representation and funding he considers he requires to progress the proceeding.
  3. [29]
    The plaintiff deposed that his “inability” to further particularise some paragraphs in the tenth statement of claim is explained by the fact that, once LMIM and LMA were placed into administration, he was cut off from his business and personal records.[16]  This is consistent with responses the plaintiff provided to a request for particulars of the tenth statement of claim,[17] which refer to documents being in the possession of the liquidators of LMIM[18] as well as documents being in the possession of the defendants.[19]
  4. [30]
    In particular, the plaintiff asserts that the solvency of LMIM, LMA and the managed funds is disclosed in the electronic source file of the Cash Flow Projection in the form it was in March 2013, which is in the possession of the defendants.[20]  Although no formal application was made, the plaintiff’s outline of submissions contends that an order is required for disclosure by the defendants of the original electronic source file of the Cash Flow Projection.[21]  When asked during the hearing why no application seeking disclosure of that document had been made at an earlier point in the proceeding, the plaintiff stated that he was told on several occasions that it was not possible to make that application.
  5. [31]
    These submissions by the plaintiff need to be considered in the context of a more detailed analysis of the procedural history of the matter.
  6. [32]
    In about June 2017, when the plaintiff first appointed solicitors to determine if he had a cause of action in respect of his personal losses arising from the appointment of administrators to LMIM, those solicitors asked the plaintiff to provide relevant documents.  The plaintiff informed his solicitors that he held few documents.[22] 
  7. [33]
    Thereafter, on 28 June 2017, the plaintiff’s solicitor sent an email to the second defendant requesting three categories of documents said to be relevant to an understanding of the day to day conduct of LMIM’s business leading up to the appointment of the administrators.[23]  The second defendant responded by email on 14 August 2017,[24] informing the plaintiff’s solicitor that the defendants had received legal advice to the effect that the documents which had been requested comprised confidential information which could only be provided with the consent of LMIM.  Nonetheless, the defendants accepted that in the event legal proceedings commenced they would provide any documents they were legally required to.
  8. [34]
    On 11 February 2020, an application by the plaintiff for leave to file an amended statement of claim came on for hearing before Dalton J (as her Honour then was) after previous versions of the pleading had been struck out.  I was taken to the transcript of that hearing[25] during which Dalton J expressed criticism of the way in which causation and loss had been pleaded.[26]  That was the fourth version of the plaintiff’s statement of claim.  Counsel who appeared for the plaintiff at that hearing submitted that the plaintiff did not have the documents he required to plead the matters which Dalton J raised and proposed that the plaintiff be afforded more time to obtain the necessary documents.[27]  The defendants did not oppose that course.[28]  Dalton J observed that granting the plaintiff more time to replead would have to be on the basis that it was the plaintiff’s “last chance”.[29]
  9. [35]
    The application was adjourned to enable the plaintiff to deliver a further amended statement of claim in August 2020.  In response to a concern expressed by counsel for the defendants about the prospect of the plaintiff seeking a further adjournment, Dalton J stated:[30]

“Well, I think the plaintiff can work on the basis that – as I’ve said, unless there’s something pretty extraordinary at the next hearing, I think this proceeding has to be dismissed without a hearing.”

  1. [36]
    The adjourned application came back on for hearing on 26 August 2020.  On that date the plaintiff appeared in person.  Dalton J ordered that the proceeding be dismissed.  In her Honour’s reasons for making that order,[31] she noted:

“I warned on the 11th of February that, unless there was something extraordinary presented today, there would not be another chance for the Plaintiff, so far as pleading its case.  In my view, there is nothing extraordinary shown today.  In fact, what Mr Drake says, really, is that the matter is no further progressed than it was in June 2017.  Mr Drake does not have the documents he says he needs to plead.  He has been aware that he needs those documents since 2017.  He has not obtained them.” 

  1. [37]
    In his reasons for striking out the sixth statement of claim, Martin J (as his Honour then was) concluded:[32]
  1. “[24]
    The plaintiff has had over eight years in which to formulate his case and gather the relevant material.  I acknowledge that, for part of that period, he was bankrupt and could not have proceeded during that time.  Nevertheless, he has had at least five full years in which he could have drawn the material together and created a suitable statement of claim.
  1. [25]
    A firm of solicitors now represents the plaintiff.  On that basis, I am satisfied that it is appropriate to allow the plaintiff a final opportunity to draw a pleading which satisfies the [UCPR].  It is, though, not appropriate for this matter to be allowed to meander on to the detriment of everybody.”
  1. [38]
    Martin J granted the plaintiff leave to file a further amended statement of claim within a period of approximately two months.
  2. [39]
    As noted in the history extracted at [6] above, a further strike out application came on before Flanagan J (as his Honour then was) on 6 May 2022 but was adjourned to give the plaintiff a further opportunity to plead his statement of claim, particularly as to causation.  Again, I was taken to the transcript of the hearing before Flanagan J.[33]  Counsel who appeared for the plaintiff at that hearing accepted Flanagan J’s invitation to replead in response to concerns his Honour expressed about the pleading of causation.[34]  Again, the defendants did not oppose the grant of a further period of time for the plaintiff to replead.[35]  It was on that basis that the application was adjourned to 2 August 2022 and was heard by Hindman J on that date.
  3. [40]
    I have already referred to the decision of Hindman J in some detail above, but I note for completeness that her Honour stated that she granted leave to replead “with some significant hesitation, given the number of opportunities the plaintiff has already been given to deliver a compliant statement of claim.”[36]

Balancing the relevant circumstances

  1. [41]
    The analysis above demonstrates a history of the plaintiff having been granted repeated opportunities to obtain the documents he requires to address the deficiencies in his pleading, particularly the case on causation and loss, and his consistently having failed to do whatever is necessary for him to comply with the requirements of the UCPR.  It is with that history in mind that I now turn to consider the factors relevant to the issue whether the proceeding should be dismissed for want of prosecution.[37]

How long ago the events alleged in the statement of claim occurred

  1. [42]
    The alleged acts of negligence, by failing to advise, occurred in March 2013, before the appointment of the administrators occurred on 19 March 2013.
  2. [43]
    The passage of 10 years since the alleged acts of negligence weighs against granting leave to replead and in favour of an order dismissing the proceeding.

How long ago the litigation was commenced and delay before the litigation was commenced

  1. [44]
    The plaintiff commenced the proceeding on 14 March 2019.  As acknowledged by Martin J,[38]  some of that period is explained by the plaintiff’s bankruptcy which lasted from January 2015 to January 2018. Nevertheless, the plaintiff had engaged solicitors from June 2017.
  2. [45]
    Having commenced the proceeding just days before the expiry of the limitation period, the plaintiff is obliged to move with greater speed than might otherwise be the case.[39]
  3. [46]
    Again, I consider these factors weigh against granting leave to replead and in favour of an order dismissing the proceeding.

The plaintiff’s prospects of success in the action

  1. [47]
    Like Hindman J,[40] I am not prepared to determine the questions of leave to replead or dismissal of the proceeding on the basis that the plaintiff’s prospects of success are, at best, conjectural.
  2. [48]
    I have treated the plaintiff’s prospects of success as a neutral factor in my consideration.

Disobedience of court orders and whether any delay is attributable to the plaintiff

  1. [49]
    I have already addressed the repeated opportunities afforded to the plaintiff to obtain the documents he requires to address the deficiencies in his pleading.  There is no evidence in the plaintiff’s affidavit that he has taken any steps to do so.  He has been warned on more than one occasion by judges of this Court that this proceeding cannot “meander on” indefinitely for want of a pleading which complies with the requirements of the UCPR.  Despite those warnings, that remains the current status of the proceeding some four years after it was commenced. 
  2. [50]
    Some of that delay (26 August 2020 to 30 April 2021) is explained by the appeal of Dalton J’s order dismissing the proceeding.  In my view, however, the period of approximately 18 months prior to 26 August 2020 and the period of nearly two years since 30 April 2021 have been characterised by delay attributable to the plaintiff’s unwillingness or inability to produce a compliant pleading.
  3. [51]
    It has now reached the stage where this delay amounts to a breach of the plaintiff’s undertaking, pursuant to r 5 of the UCPR, to proceed expeditiously.  In that regard, I consider the substantial repleading of the plaintiff’s case on causation and loss in defiance of Hindman J’s reasons to be particularly egregious.
  4. [52]
    These factors weigh heavily against granting leave to replead and in favour of an order dismissing the proceeding.

Whether the impecuniosity of the plaintiff has been responsible for the pace of the litigation

  1. [53]
    The plaintiff was legally represented from March 2019 to July 2020 and again from at least December 2021 until at least 7 February 2023.  In those circumstances, financial impecuniosity cannot explain the deficiencies in the tenth statement of claim which was settled by experienced counsel, or the three previous versions of the statement of claim which were each settled by the same counsel.

Whether the litigation would be concluded by the striking out of the plaintiff’s claim

  1. [54]
    The limitation period for the cause of action in negligence has long expired.  An order dismissing the proceeding would bring the litigation between the parties to an end.  It would operate to deprive the plaintiff of potentially valuable rights.
  2. [55]
    This is a factor in favour of granting leave to replead and against an order dismissing the proceeding and must be balanced against the other relevant factors I have referred to.

How far the litigation has progressed

  1. [56]
    As I have already observed, despite having been commenced over four years ago, the litigation remains at its earliest stage with the plaintiff having still not filed a compliant statement of claim.  It is difficult to see how the matter could be progressed to trial in a period of less than two years.
  2. [57]
    This factor weighs against granting leave to replead and in favour of an order dismissing the proceeding.

Whether or not the delay has been caused by the plaintiff’s lawyers being dilatory

  1. [58]
    In her reasons for dismissing the proceeding on 26 August 2020, Dalton J noted that the plaintiff blamed his lawyers for his failure to obtain the documents he required to plead his cause of action but did not further consider that issue.[41]
  2. [59]
    The plaintiff did not raise that issue in his written submissions before me.  As noted in [30] above, he stated from the bar table that he had been told that it was not possible to bring an application for disclosure at this stage of the proceeding.  He did not identify who told him that.  There is no mention in his affidavit of his lawyers having told him that.
  3. [60]
    I am not prepared to act on the basis that from December 2021, when the plaintiff replaced his solicitors, the delay in obtaining the documents required to properly plead the plaintiff’s case on causation and loss was the result of the plaintiff’s lawyers being dilatory.  I have treated this as a neutral factor in my consideration.

Whether there is a satisfactory explanation for the delay

  1. [61]
    I have referred above to the period between 26 August 2020 to 30 April 2021 when the earlier dismissal of the proceeding was appealed.  During that period and up to about November 2021, the plaintiff was self-represented, and I make allowance for that fact. 
  2. [62]
    Otherwise, the plaintiff’s position is the result of him failing to take any steps to obtain the documents he says he needs to properly plead his case on causation and loss. 
  3. [63]
    I note that the plaintiff’s affidavit rejects the defendants’ argument that, by seeking to be released from his implied undertaking, he could have obtained relevant documents related to a proceeding brought against him in the Federal Court of Australia by the Australian Securities and Investments Commission on the basis that the proceeding related to events years before the alleged negligence of the defendants and are not relevant to the present proceeding.[42] 
  4. [64]
    Even if that is accepted, the plaintiff’s affidavit provides no explanation for his failure to take steps to obtain documents from the liquidators of LMIM or to get disclosure of the source file for the Cash Flow Projection from the defendants.  I do not accept that the unsworn statements the plaintiff made from the bar table – that the liquidators would have resisted attempts by him to obtain relevant documents and he was told several times he could not seek disclosure of the source file for the Cash Flow Projection at this stage of the proceeding – provide a satisfactory explanation for the delay.
  5. [65]
    This factor weighs against granting leave to replead and in favour of an order dismissing the proceeding.

Whether the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial

  1. [66]
    As the High Court observed in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd,[43] speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings.  Delay will almost always impede the proper disposition of any case that does not come to trial promptly in circumstances where, due to the passage of time, memories fade and records may be lost.[44]  Similarly, the passage of time will often diminish the significance of known facts or circumstances because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose.[45]
  2. [67]
    In this case, proof of breach of any duty owed by the defendants will turn on what was said, and what was not said, during two meetings which occurred in the period between 15 March 2013 and 17 March 2013.  The second, and more critical meeting, is alleged to have taken place on either a Saturday or Sunday in the front yard of the plaintiff’s home.  There is no suggestion that what occurred at those meetings was recorded in any document.
  3. [68]
    By the time this proceeding comes to trial it is likely that a period of more than 12 years will have passed since the relevant meetings.  I am satisfied that any witness’ ability to honestly recall what was said that long ago will have diminished. 
  4. [69]
    I am also satisfied that the passage of time will hamper the defendants’ ability to adequately defend the proceeding more generally, in circumstances where:[46]
    1. (a)
      the second defendant is aged 67, has retired as a director of the first defendant and is scaling back his professional commitments with a view to full retirement;
    2. (b)
      aside from the second defendant, the two most senior staff members who previously worked on matters involving the plaintiff and his related entities ceased employment with the first defendant more than five years ago and have had no continued contact with the firm;
    3. (c)
      the only remaining staff member of the first defendant who had some involvement in the matters involving the plaintiff and his associated entities was a junior employee in 2013;
    4. (d)
      the first defendant has substantially changed its record keeping practices, systems and software since 2013, such that it would be difficult to locate all material that might be relevant to a defence, even if all personnel were available and able to recall what material may be relevant.
  5. [70]
    I do not accept the plaintiff’s assertion that the case raises only issues of fact capable of resolution by reference to documentary evidence or other objective evidence not likely to be affected by the effluxion of time.[47]  A document such as the Cash Flow Projection is a case in point.  The projections contained in that document must be based on numerous assumptions.  While analysis of the source file may enable the defendants to discern what those assumptions were, it is less clear that the defendants will now be able to identify the reasons why those different assumptions were adopted and whether those assumptions remained valid given the time which passed between the date the Cash Flow Projection was prepared on 29 January 2013 and the alleged negligence in March 2013.
  6. [71]
    In these circumstances, I am satisfied that the plaintiff’s continued delay in preparing a compliant statement of claim has resulted in prejudice to the defendants which substantially reduces the chance of a fair trial.
  7. [72]
    The defendants relied on other prejudice, including a significant increase in the first defendant’s professional indemnity insurance premiums, less favourable terms of cover and reduced willingness of insurers to offer cover in light of the unresolved proceeding.[48]  That prejudice does not go to the ability to ensure a fair trial.  Nevertheless, it is relevant in my view to the consideration that members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them.[49]  This extends to corporate defendants.[50]

Conclusion

  1. [73]
    Balancing the various factors, I am satisfied that this is an appropriate case in which to exercise the court’s inherent power to dismiss the action for want of prosecution.
  2. [74]
    In those circumstances it is unnecessary to consider the defendants’ application in the alternative for directions.

Orders

  1. [75]
    The orders will be:
  1. Paragraphs numbered 48 to 51 and 65 of the statement of claim filed on 9 December 2022 are struck out, without leave to replead.
  2. The proceeding is dismissed for want of prosecution.
  3. The defendants file and serve written submissions on costs limited to four pages by 4 pm on 23 March 2023.
  4. The plaintiff file and serve written submissions on costs limited to four pages by 4 pm on 31 March 2023.
  5. The question of costs will be decided on the papers.

Footnotes

[1]  Court document 77.

[2]  [2022] QSC 197, [4] – [5] (emphasis in original).

[3]  Court document 73.

[4]  See particular (v) to paragraph 51 of the tenth statement of claim which states: “LMIM, LMA and each of the managed Funds were at all material times prior to 19 March 2013 solvent and would have remained so.”

[5]  Paragraph 3(h)(ii) of the tenth statement of claim.

[6]  See particulars (ii), (iii), (iv) and (vi) to paragraph 51 of the tenth statement of claim.

[7]Graham & Linda Huddy Nominees Pty Ltd & Anor v Byrne & Ors [2016] QSC 221, [50].

[8]Drake v PKF (Gold Coast) Pty Ltd & Anor [2022] QSC 197, [34] – [38].

[9]  Paragraphs 48 to 51 and 65.

[10]  Paragraphs 61 to 65.

[11]  Exhibit DAC-A to the affidavit of Drew Andrew Castley filed 11 January 2023 (Court document 78).

[12]  Exhibit CLM-A to the affidavit of Ceri Lynn McDonald filed 27 February 2023 (Court document 80).

[13]  Note the distinction drawn between the power of dismissal conferred by the rule and the wider inherent power in Quinlan v Rothwell [2002] 1 Qd R 647, [24].

[14]  Court document 82.

[15]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [2].

[16]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [10].

[17]  Exhibit CLM-B to the affidavit of Ceri Lynn McDonald filed 27 February 2023 (Court document 80).

[18]  See paragraphs 2.9(d), 2.9(e) and 2.9(i) of the response.

[19]  See paragraphs 2.9(h), 2.13, 2.15, 2.18, 2.21, 2.27, 2.28 and 2.29 of the response.

[20]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [11] – [14].

[21]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [30] – [31].

[22]  Affidavit of Ashleigh Frances Armstrong filed 30 January 2020 (Court document 22) at [3] – [4].

[23]  Exhibit AFA-1 to the affidavit of Ashleigh Frances Armstrong filed 30 January 2020 (Court document 22).

[24]  Exhibit AFA-2 to the affidavit of Ashleigh Frances Armstrong filed 30 January 2020 (Court document 22).

[25]  Exhibit CLM-O to the affidavit of Ceri Lynn McDonald filed 2 August 2022 (Court document 69).

[26]  T1-6:25 to T1-8:21.

[27]  T1-8:23-45; T1-9:30-38.

[28]  T1-10:6-7; T1-11:3-6.

[29]  T1-9:18-19.

[30]  T1-15:6-8.

[31]Drake v PKF (Gold Coast) Pty Ltd & Anor [2020] QSC 401, 2.

[32]PKF (Gold Coast) Pty Ltd & Anor v Drake [2021] QSC 326, [24] – [25] (emphasis in original).

[33]  Exhibit CLM-N to the affidavit of Ceri Lynn McDonald filed 2 August 2022 (Court document 69).

[34]  T1-26:4-39.

[35]  T1-26:44-45.

[36]Drake v PKF (Gold Coast) Pty Ltd & Anor [2022] QSC 197, [44].

[37]Tyler v Custom Credit Corp Ltd [2000] QCA 178, [2]; applied in Drake v PKF (Gold Coast) Pty Ltd & Anor [2021] QCA 83, [26].

[38]PKF (Gold Coast) Pty Ltd & Anor v Drake [2021] QSC 326, [24].

[39]Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863, 874 [32].

[40]Drake v PKF (Gold Coast) Pty Ltd & Anor [2022] QSC 197, [43].

[41]Drake v PKF (Gold Coast) Pty Ltd & Anor [2020] QSC 401, 2.

[42]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [28].

[43]  (2013) 250 CLR 303, 321 [51].

[44]  Jackamarra v Krakouer (1998) 195 CLR 516, 526 [29].

[45]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551-552.

[46]  Affidavit of Matthew David Butler filed 4 May 2022 (Court document 62), [8].

[47]  Affidavit of Peter Charles Drake filed 8 March 2023 (Court document 83), [15].

[48]  Affidavit of Matthew David Butler filed 4 May 2022 (Court document 62), [2] – [7]; Affidavit of Matthew David Butler filed 8 March 2023 (by leave).

[49]Tyler v Custom Credit Corp Ltd [2000] QCA 178, [2].

[50]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 214 [101].

Close

Editorial Notes

  • Published Case Name:

    Drake v PKF (Gold Coast) Pty Ltd & Anor

  • Shortened Case Name:

    Drake v PKF (Gold Coast) Pty Ltd

  • MNC:

    [2023] QSC 45

  • Court:

    QSC

  • Judge(s):

    Cooper J

  • Date:

    16 Mar 2023

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
2 citations
Jump To
Cite 1 - (2009) 239 CLR 175
Cite 2 - (2009) 239 CLR 175
Aon Risk Services Australia Limited v Australian National University (2009) HCA 27
1 citation
Jump To
Cite 1 - (2009) HCA 27
Bishopsgate Insurance Australia Limited v Deloitte Haskins & Sells [1999] 3 VR 863
2 citations
Jump To
Cite 1 - [1999] 3 VR 863
Cite 2 - [1999] 3 VR 863
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
2 citations
Jump To
Cite 1 - (1996) 186 CLR 541
Cite 2 - (1996) 186 CLR 541
Brisbane South Regional Health Authority v Taylor [1996] HCA 25
1 citation
Jump To
Cite 1 - [1996] HCA 25
Drake v PKF (Gold Coast) Pty Ltd [2021] QCA 83
3 citations
Jump To
Cite 1 - [2021] QCA 83
Cite 2 - [2021] QCA 83
Cite 3 - [2021] QCA 83
Drake v PKF (Gold Coast) Pty Ltd [2020] QSC 401
3 citations
Jump To
Cite 1 - [2020] QSC 401
Cite 2 - [2020] QSC 401
Cite 3 - [2020] QSC 401
Drake v PKF (Gold Coast) Pty Ltd [2022] QSC 197
5 citations
Jump To
Cite 1 - [2022] QSC 197
Cite 2 - [2022] QSC 197
Cite 3 - [2022] QSC 197
Cite 4 - [2022] QSC 197
Cite 5 - [2022] QSC 197
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46
1 citation
Jump To
Cite 1 - [2013] HCA 46
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303
2 citations
Jump To
Cite 1 - (2013) 250 CLR 303
Cite 2 - (2013) 250 CLR 303
Graham & Linda Huddy Nominees Pty Ltd v Byrne [2016] QSC 221
3 citations
Jump To
Cite 1 - [2016] QSC 221
Cite 2 - [2016] QSC 221
Cite 3 - [2016] QSC 221
Jackamarra v Krakouer (1998) 195 CLR 516
2 citations
Jump To
Cite 1 - (1998) 195 CLR 516
Cite 2 - (1998) 195 CLR 516
Jackamarra v Krakouer [1998] HCA 27
1 citation
Jump To
Cite 1 - [1998] HCA 27
PKF (Gold Coast) Pty Ltd v Drake [2021] QSC 326
3 citations
Jump To
Cite 1 - [2021] QSC 326
Cite 2 - [2021] QSC 326
Cite 3 - [2021] QSC 326
Quinlan v Rothwell[2002] 1 Qd R 647; [2001] QCA 176
3 citations
Jump To
Cite 1 - [2001] QCA 176
Cite 2 - [2002] 1 Qd R 647
Cite 3 - [2002] 1 Qd R 647
Tyler v Custom Credit Corp Ltd [2000] QCA 178
3 citations
Jump To
Cite 1 - [2000] QCA 178
Cite 2 - [2000] QCA 178
Cite 3 - [2000] QCA 178

Cases Citing

Case NameFull CitationFrequency
Drake v PKF (Gold Coast) Pty Ltd (No 2) [2023] QSC 665 citations
Johnson v Kinetic Superannuation Ltd [2023] QDC 504 citations
1

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