Argo Pty Ltd v Attorney-General (No 4) - [2006] TASSC 22

[2006] TASSC 22

CITATION: Argo Pty Ltd v Attorney-General (No 4) [2006] TASSC 22

PARTIES:  ARGO PTY LTD
  WRIGHT, George Peter
  NATURELAND OF TASMANIA PTY LTD

TATLOW, Michael Winston
v
ATTORNEY-GENERAL FOR THE STATE OF TASMANIA
TASMANIAN DEVELOPMENT AUTHORITY
CHANDLER, Philip Joseph
FAIRCLOTH, Peter Leonard

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  570/1990
DELIVERED ON:  10 April 2006
DELIVERED AT:  Hobart
HEARING DATE:  17 – 19, 23 August 2005
JUDGMENT OF:  Blow J

CATCHWORDS:

Procedure – Supreme Court procedure – Tasmania – Practice under Rules of Court – Time – More than six years since a step taken in a proceeding.

Supreme Court Rules 2000 (Tas), r56(1).
William Crosby & Co Pty Ltd v Commonwealth (1963) 109 CLR 490, applied.
Aust Dig Procedure [283]

REPRESENTATION:

Counsel:
             Plaintiffs:  C W R Harrison and C J Gunson
             First and Second Defendants:      T J Ellis SC
             Fourth Defendant:  R E Hudson
Solicitors:
             Plaintiffs:  Phillips Taglieri
             First and Second Defendants:      Director of Public Prosecutions
             Fourth Defendant:  Butler McIntyre & Butler

Judgment Number: [2006] TASSC 22
Number of paragraphs: 84

Serial No 22/2006
File No 570/1990

ARGO PTY LTD, GEORGE PETER WRIGHT, NATURELAND
OF TASMANIA PTY LTD, MICHAEL WILLIAM TATLOW
v ATTORNEY-GENERAL FOR THE STATE OF TASMANIA,
TASMANIAN DEVELOPMENT AURHOTITY,
PHILIP JOSEPH CHANDLER, PETER LEONARD FAIRCLOTH

REASONS FOR JUDGMENT BLOW J

10 April 2006

The plaintiffs have applied for an order under the Supreme Court Rules 2000, r56(1), permitting them to take further steps in this action. The application is opposed by the first, second and fourth defendants. The third defendant, Mr Chandler, died in June 1994. The plaintiffs applied for orders substituting the administrators of his estate as defendants in his place, but that part of their application has been abandoned and dismissed. It is therefore necessary only to consider whether the plaintiffs should be permitted to proceed in relation to their claims against the other three defendants.

The subrule relied upon the plaintiffs, r56(1), provides as follows:

"(1) If a step, other than an application on which no order has been made, has not been taken in a proceeding for 6 years since the last step was taken, a party may not take any further step in the proceeding without the order of the Court or a judge."

On an application of this nature, the applicant needs "to show that there is good reason for excepting the particular proceedings from the general prohibition which the rule imposes": William Crosby & Co Pty Ltd v Commonwealth (1963) 109 CLR 490 per McTiernan, Kitto, Taylor and Owen JJ at 496. In deciding whether good reason has been shown for a plaintiff to be permitted to take a further step in a proceeding, it will ordinarily be necessary to consider the length of any delays, the reasons for them, and any prejudice that the respondent will or might suffer if the order is made: Campbell v United Pacific Transport Pty Ltd [1966] Qd R 465; Dempsey v Dorber [1990] 1 Qd R 418; Appleby v Mobil Oil Australia Ltd 120/1997 Underwood J; Koziol v Gergel [1999] TASSC 12 (Wright J); Aylett v Attorney-General [2003] TASSC 68 (Cox CJ). Delay on the part of an applicant's solicitor will not be treated in the same way as delay on behalf of the applicant personally: Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229; Ulowski v Miller [1968] SASR 277 at 282 – 283; Williams v Smith [1984] Tas R 176 at 186; Aylett v Attorney-General (supra) at par12. If the applicant's case lacks merit, that factor will weigh against the granting of the application: Appleby v Mobil Oil Australia Ltd (supra) at 2.

The parties

The third plaintiff ("Natureland") was the holder of a mining lease and had applied for three further mining leases. The evidence indicates that it held all relevant property as the trustee of a unit trust. The other plaintiffs appear to have been the owners of the units in the unit trust, and of the shares in Natureland.

This action was instituted before the commencement of the Crown Proceedings Act 1993. Since it involves claims in tort against the Government of Tasmania, the Attorney-General was an appropriate defendant when the writ was issued. The plaintiffs have applied for the State of Tasmania to be substituted for the Attorney-General as a defendant, but that part of their application will not be dealt with unless and until they obtain an order under r56(1) permitting them to proceed. The second defendant ("the TDA") is a body corporate established by the Tasmanian Development Act 1983. The fourth defendant (Mr Faircloth) was an officer of the TDA at all material times.

The plaintiffs' claims

The statement of claim alleges a course of tortious conduct on the part of the defendants amounting to knowing and intentional interference with the business and contractual rights of the plaintiffs, unlawfully and without justification, between 22 May 1984 and 25 June 1985. The plaintiffs allege that they were developing an enterprise involving the extraction and sale of peat moss; that they had entered into a contract with a company named Dranale Pty Ltd for the sale of the assets of that enterprise for $3 million; that senior officers of the Tasmanian Government decided that it should share in any capital gain that was available; that the plaintiffs were prevented from proceeding with the $3 million transaction; and that the best they were able to achieve was a sale of their interests for $160,000. They are seeking to recover the difference of $2.84 million, plus interest, exemplary damages, and other relief.

The significant allegations in the statement of claim, in more detail, are as follows:

·     Natureland was the holder of a mining lease and had applied for three further mining leases and for licences to operate scheduled premises pursuant to the Environment Protection Act 1973.
·     On or about 22 May 1984, the other plaintiffs (Argo Pty Ltd, Wright and Tatlow) entered into an agreement with Dranale for the sale by them and the purchase by that company, for $3 million, of all the shares in Natureland and all the units in the unit trust of which it was trustee.
·     On or about 23 May 1984, Mr Tatlow advised the Government of Tasmania of the details of the agreement. He also advised the TDA and its general manager, the late Mr Chandler, of the terms and effect of the agreement.
·     Negotiations between the plaintiff and Dranale took place from about 26 June 1984 until after 11 July 1984 as to a possible extension or variation of the agreement.
·     On or about 11 and 12 July 1984, Mr Chandler encouraged the Director of Mines and the Acting Director of the Department of the Environment to withhold the issue of any leases and licences to Natureland, thus indulging in conduct which amounted to knowing and intentional interference with the plaintiffs' contractual rights, and which was unlawful and without justification. The TDA and Mr Chandler knew of the agreement, had formed the view that the Government should share in any capital gain which might be available, and intended to interfere with the performance of the agreement.
·     Following communications between Mr Chandler and the Premier, the Government withheld the issue of one of the mining leases that had been applied for, and restricted the Director of Environmental Control from issuing the necessary licences, until about 25 March 1985. It is alleged that the Government acted in bad faith in respect of the withholding of the leases and licences.
·     In January 1985, Mr Faircloth attended a meeting with representatives of Dranale, who advised him that the development of peat moss as an industry was only marginally viable, but that the development of a sphagnum moss industry using the same land was potentially profitable.
·     That information was deliberately withheld from Natureland.
·     On or about 24 January 1985, the TDA provided the plaintiffs with a copy of a report prepared by it and Dranale as to the marginal viability of peat moss as an industry, not mentioning the potential profitability of sphagnum moss exports, and recommended to the plaintiffs on the basis of that report that they sell their interests to Dranale for only $20,000.
·     On or about 27 February 1985, the TDA and its officers subsequently purported to arbitrate between Dranale and the plaintiffs without having passed on their information as to the profitability of sphagnum moss, and knowing that Natureland had been required by the Government to submit a full development proposal by the following day.
·     The purported arbitration resulted in the three vendors dropping their price from $3 million to $160,000. An agreement for sale at that price was made on or about 25 June 1985.

The pleaded causes of action - Introduction

The following causes of action are pleaded in the statement of claim:

·A cause of action for damage suffered as the inevitable consequence of the unlawful, intentional and positive acts of the defendants, in accordance with Beaudesert Shire Council v Smith (1966) 120 CLR 145.
·Interference with the plaintiffs' contractual relations.
·Unlawful interference with the plaintiffs' trade or business interests.
·Conspiracy to commit an unlawful act intended to cause economic loss.
·Conspiracy to commit a lawful act intended to cause economic loss.
·Breach of fiduciary duty.

The claim based on Beaudesert Shire Council v Smith cannot possibly succeed since that case was overruled by the High Court in Northern Territory v Mengel (1996) 185 CLR 307. The other pleaded causes of action all have substantial weaknesses. I will deal with them individually.

Interference with contractual relations

In order to establish this cause of action, the plaintiffs must establish that there was a contract on foot at the time of the alleged interference: McKernan v Fraser (1931) 46 CLR 343 at 358 – 359, 369 – 370. An uncommunicated subjective desire that the contract be breached or not performed does not amount to actionable interference: Sanders v Snell (1998) 196 CLR 329 at 339. The defendants contend that there was only ever one contract between the plaintiffs and Dranale; that the plaintiffs and Dranale cancelled that contract on 10 July 1984; and that no conduct on the part of the defendants capable of being regarded as interference occurred until after that date. The plaintiffs contend that a contract between themselves and Dranale was on foot at all material times. Their primary contention is that a written contract dated 22 May 1984 remained in force at all material times. In the alternative, they contend that a further agreement was made orally on or about 6 July 1984, and that that second agreement thereafter remained in force at all material times.

The evidence before me as to those contentions is by no means complete. However, there appears to be incontrovertible evidence of the following facts:

·     On 22 May 1984, Argo, Wright and Tatlow entered into a contract with Dranale. By that contract they promised to sell all the units in the Natureland unit trust and all the shares in Natureland to Dranale for $3 million. Clause 1(a) of the contract provided that, in substitution for the payment of a deposit, Dranale was to provide a bank guarantee in an amount of $50,000 in favour of the vendors. Clause 4 of the contract provided that completion was to take place on or before 28 June 1984. There was no provision making time of the essence in that respect.
·     Pursuant to cl 1(a), Dranale provided the vendors with a bank guarantee in the sum of $50,000.
·     On 27 June 1984, Wright, Tatlow and Mrs Tatlow wrote to the directors of Dranale. They referred to a "recent discussion" during which the directors of Dranale were said to have advised that they were unable to complete the contract by 28 June 1984. They said they were prepared to enter into a fresh agreement "in substantially the same terms as those currently applying", with certain variations, which they listed.
·     On 27 June 1984, Mr Tatlow wrote a separate letter to the directors of Dranale. In that letter he said, "… the quicker we can get the fresh contract signed the better."
·     On 29 June 1984, after the completion date has passed without completion occurring, the bank guarantee lapsed or expired.
·     On 6 July 1984, the directors of Dranale sent a telex to the solicitor who was acting for the three vendors, Mr Harry. It read:
"further to your letter of 27 june 1984 re the variations to be included in the agreement for sale, we confirm our previous verbal agreement to the inclusion of these changes regarding dranale p/l".

· On 10 July 1984, Mr Harry made a file note recording a telephone attendance on one of the directors of Dranale, Mrs Auyeung. In that note he recorded, "She confirms they agree to forfeit the $50,000 deposit & start again."
· On 11 July 1984, Mr Harry's firm, Page Seager, wrote to Dranale's solicitors, Baker & McKenzie. That letter began as follows:
"As you would probably be aware, Dranale Pty Ltd have confirmed termination of the Agreement for Sale dated 22nd May, 1984 and forfeiture of the amount of $50,000.
It is proposed that a new agreement be entered into along the lines of the previous one with some minor variations and we enclose herewith a redrafted Agreement executed by the parties for whom we act. This documentation is delivered in escrow pending receipt by us of two executed counterparts."

· On 19 July 1984, Baker & McKenzie sent a telex to Page Seager expressing various concerns. The second last paragraph of that telex read as follows:
"in the circumstances, our client must reconsider its position under the agreement of 22 may, 1984, and instructs us that it will not execute the agreement which you sent to us on 11 july, 1984."

· On 27 July 1984, Mr Tatlow sent the directors of Dranale a telex referring to discussions with them. The second paragraph read as follows:
"it is agreed that the execution of the agreement sent to messrs baker and mckenzie on the 11th july, 1984 be deferred subject to you receiving copies of official tasmanian government mining leases and licences to conduct scheduled premises issued to natureland pty ltd for the three peat bogs in the mersey valley district … once the copy documents are in your possession you are to comply with the undertakings previously confirmed in your telex of the 6th july 1984."

· On 1 August 1984, Mr Harry sent a telex to Baker & McKenzie advising that Tasmanian Government sources had just indicated an intention to look into and develop a policy with respect to peat mining with particular reference to the imposition of royalties and transfer fees on licences. In that telex he wrote:
"however, in view of this unexpected turn of events our clients feel that their current offer of sale should be withdrawn pending clarification and we are instructed to formally advise you of its withdrawal and request the return of the documents sent to you on the 11th july, 1984."

· Later on 1 August 1984, Baker & McKenzie sent a telex back to Mr Harry. Their telex included the following paragraph:
"we are instructed that our client has expended a considerable amount of time, effort and money concerning the leases and their development in reliance upon the agreement which it entered into with your clients on 22 may, 1984. that agreement remains in effect but, in view of the circumstances mentioned in our telex of 19 july, 1984 and yours of 1 august, 1984, it is obvious that settlement cannot be effected at present."
·On 2 August 1984, Page Seager wrote to Baker & McKenzie. That letter included the following paragraph:
"Given the present relationship between our mutual clients and the expectancy that matters will proceed to ultimate mutual benefit it is, perhaps, inappropriate, to take issue with you in your assessment of their relative legal positions. However, for the record, it is our opinion that the agreement of the 22nd May, 1984 is at an end. For one thing, your client company has never provided the bank guarantee in the terms stipulated in Clause 1 (a) of that agreement and, in any event, the guarantee given has lapsed leaving our client without the practical remedy intended to be conferred. With no 'deposit' having been forthcoming we would not have thought the position could be clearer. Second, as we understand it and as is evidenced by the correspondence between the parties and subsequent discussions, it was mutually agreed that the contract of the 22 May 1984 be abandoned and a fresh agreement entered into."

· Subsequently, the plaintiffs sued Page Seager for damages for negligence in relation to the dealings with Dranale. In their statement of claim in that action, dated 22 August 1991, they pleaded that Page Seager was negligent in that, having been instructed by Argo, Wright and Tatlow to extend time for Dranale to complete the agreement of 28 May 1984, but to otherwise enforce that agreement, Page Seager confirmed in writing to Dranale's solicitors by letter of 11 July 1984 that the agreement was cancelled.

In the light of the evidence that I have referred to, I think there is a very strong chance that the plaintiffs' claim for damages for interference with their contractual relations will fail on the basis that the agreement of 22 May 1984 was cancelled on or about 10 July 1984; that no new agreement replaced it; and that there was no contract on foot at the time of the conduct that is alleged to have constituted interference.

This cause of action has another weakness. One of Natureland's mining lease applications related to 200 hectares at Borradaile Plains. According to a file note written by Mr Harry and some answers given by Mr Tatlow under cross-examination, that land was owned by a Mr Downie, and his title to that land was of such a nature that a mining lease over it could not be granted without his concurrence. It may be that a mining warden would have had the power to make an order permitting the lease to be granted without Mr Downie's concurrence: Mining Act 1929, s39(3). I have no evidence that a hearing under the Mining Act was ever contemplated. I am not in a position to make any assessment as to the chances of a warden making a determination adverse to Mr Downie. The defendants contend that the plaintiffs had not made any arrangement with Mr Downie. The agreement of 22 May 1984 contained a warranty that the mining lease applications were "in good standing". If there was a fresh agreement entered into with Dranale on or about 6 July 1984, it is very likely that a finding would be made that Dranale would not have been obliged to complete that agreement unless Mr Downie consented to the grant of a mining lease over his land or was unsuccessful in proceedings before a mining warden. In the light of the evidence concerning Mr Downie's title, I think there is a significant possibility of a finding at trial that, even if there was a subsisting contract between the plaintiffs and Dranale and interference in relation to that contract, the contract was not enforceable and would not have proceeded to completion. In order to prove that the tort in question was committed, it would be necessary to prove that the vendors suffered damage: Exchange Telegraph Co v Gregory & Co [1896] 1 QB 147; Bents Brewery & Co Ltd v Hogan [1945] 2 All ER 570. The plaintiffs might not be able to prove that they suffered damage, and might therefore fail. Alternatively, they might recover only nominal damages for this tort.

Unlawful interference with the plaintiffs' trade or business interests

A tort of interference with trade or business interests by an unlawful act has been recognised by courts in England and New Zealand: J T Stratford & Son Ltd v Lindley [1965] AC 269 at 324, 328 - 329; Merkur Island Shipping Corporation v Laughton [1983] 2 AC 570 at 609 – 610; Lonrho plc v Fayed [1990] 2 QB 479 at 487 – 488, 491 - 492, 493; Van Camp Chocolates Ltd v Aulsebrooks Ltd [1984] 1 NZLR 354 at 358 – 359. However in Sanders v Snell (supra) the High Court left open the question whether such a tort should be recognised in Australia: per Gleeson CJ, Gaudron, Kirby and Hayne JJ at 341; Callinan J at 351. Such a tort has received limited recognition by single judges in Australia: Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association [1970] 2 NSWR 47 at 52; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 at 667. There are reasons why this tort might not be recognised by Australian appellate courts. See Balkin & Davis, Law of Torts, 3rd ed, at pars 21.65 – 21.71. The claim based on this pleaded cause of action might fail on the basis that there is no such cause of action.

Another possibility is that the plaintiffs' claims in relation to this tort might fail on the basis that none of the conduct relied upon by the defendants was unlawful. The plaintiffs' contentions as to unlawfulness are based upon the provisions of the Mining Act, the Environment Protection Act, and the Tasmanian Development Act.

Mining Act 1929 and Environment Protection Act 1973

As far as these Acts are concerned, it appears from the statement of claim that the conduct relied upon as the basis for alleging the commission of this tort comprises the following:

· Mr Chandler wrote to the Director of Mines on 11 July 1984 in relation to Natureland's pending applications for exploration and mining leases. He said that the TDA was "naturally anxious to ensure that Tasmania benefits to the highest possible level in the economic exploitation of this resource". He said that it was "of prime importance that we devise a mechanism for protecting the State's interests which may be lost or substantially eroded through the transfer of licensing rights held by Natureland to another party." He made a request in these terms:
"Whilst we are working on a policy in this regard, I would appreciate your co-operation by holding the issue of any licences to Natureland pending our further advice."

·   Mr Chandler wrote a letter in identical terms to the Acting Director of the Department of the Environment on 12 July 1984 in relation to Natureland's pending applications for licences to operate scheduled premises.
·   On or about 12 September 1984, the Minister for the Environment allegedly wrote to the Acting Director advising him to delay issuing any licence to Natureland until Cabinet's wishes were known.
·   By a Cabinet decision on 17 September 1984, the Government allegedly resolved to issue mining licence 36M/83 and to advance other applications by Natureland only on condition that it submit a full development proposal which inter alia would be subject to acceptance by Natureland that mining royalties would be charged.
·   By a Cabinet decision of 3 December 1984, the Government allegedly resolved that a deadline of 28 February 1985 be set for the receipt of such a development proposal, and that all Natureland's lease applications would be reviewed by Cabinet if the deadline were not met.
·   By a Cabinet decision of 25 March 1985, the Government allegedly resolved to issue mining lease 36M/83 to Dranale; to accept an application by Natureland to transfer a mining lease to Dranale; to accept an application by Natureland to transfer a mining lease application to Dranale; and no longer to restrict the Director of Environmental Control from issuing licences to allow operations to commence at Borradaile Plains and Dublin Plains.
·   The Government allegedly withheld the issue of a mining lease in respect of Natureland's application 36M/83.
·   The Government allegedly restricted the Director of Environmental Control from issuing licences to allow mining operations to commence at Borradaile Plains and Dublin Plains until about 25 March 1985.

There is very little in the statement of claim, and nothing at all in the particulars subsequently delivered, as to how it is alleged that such conduct was unlawful. The only two sentences particularising the allegations of unlawfulness read as follows:

"The conduct was unlawful in that the issue of mining leases was at all times governed by the Mining Act 1929 and the issue of a license [sic] to operate scheduled premises was at all times governed by the Environment Protection Act 1973. The withholding of leases and the licence was not based on the application of either Act and was not based on any proper policy consideration under either Act or otherwise but was based on a desire by the Government to share in any capital gains made by the Plaintiffs out of the transfer of such leases, applications for leases and the application for licence and a desire to benefit Dranale over the Plaintiffs."

Under the Mining Act, s42(1), the granting of any lease was "in the absolute discretion of the Governor". Under s45(1), leases under that Act were required to be by deed. Under s45(2), every such deed was to be prepared in duplicate, with one copy executed by the Minister and issued to the lessee, and the other executed by the lessee and filed in the office of the Director of Mines. The evidence before me suggests that a decision to grant mining lease 36M/84 was made by the Governor-in-Council on 9 July 1984, but that the plaintiffs were never told of that decision, and that the mining lease was never issued to Natureland.

Counsel for the plaintiffs drew my attention to the Mining Regulations 1930 (reprinted as SR1970, No 114), reg37, which provided as follows:

"Immediately upon the Governor's consent to the granting of a lease being obtained the Director shall notify the lessee thereof."

Under reg74 it was an offence to commit a breach of a duty imposed by that regulation. However that regulation applied to the director, and the director is not a defendant to this action. Non-compliance with the regulation has not been pleaded. There is nothing in the material before me to suggest that any of the defendants instigated or abetted a contravention of the regulation. There is nothing in the material before me to rule out the possibility of the appropriate letter having been written by the director and having gone astray in the post.

It may be that, once the Governor-in-Council had decided to grant a particular mining lease, the Minister had a duty, enforceable by the obtaining of a writ of mandamus, to prepare and issue the appropriate lease. This action therefore raises the question whether the breach of such a duty is a type of unlawful act that will entitle a plaintiff to bring an action for interference with trade or business interests by unlawful means, assuming that such a tort exists. In Sanders v Snell, (supra) at 342 – 346, Gleeson CJ, Gaudron, Kirby and Hayne JJ took the view that a lack of procedural fairness was not conduct that could be characterised as "unlawful means" for the purposes of this tort, if there is such a tort. What their Honours called "the boundaries of unlawfulness" have not been drawn for this tort. It might well be held that, if there is such a tort, a breach of a public law duty enforceable by mandamus or any other prerogative writ would not constitute "unlawful means" entitling a plaintiff to relief.

No question arises as to any application to transfer a mining lease or an application for a mining lease since the plaintiffs' case, as pleaded, is that Dranale contracted to acquire the shares in Natureland and the units in the Natureland unit trust, rather than any leases or applications.

Under the Environment Protection Act, s24(1), a person seeking a licence to operate scheduled premises was required to make a written application to the Director of Environmental Control. The director was empowered to grant such licences by s25(1) of that Act. The relationship between the director and the Minister administering that Act was the subject of s5(2) thereof, which read as follows:

"The Director has, under the direction and control of the Minister, the functions, powers, and duties set forth in this Act."

Provision was made for the director to consult with other public authorities by s5(5), which read as follows:

"(5) Before exercising any of his powers under this Act the Director may consult with –
(a) the council;
(b) any relevant committee of the council;
(c)any head of a Government Department, within the meaning of the Tasmanian State Service Act 1984; and

(d) any public or local authority concerned,
either generally or in respect of the particular exercise."

It may be that, in relation to Natureland's applications for licences to operate scheduled premises, the TDA would be held to be a concerned public authority for the purposes of s5(5)(d). In the light of s5(1) and (5), it is difficult to see how the alleged conduct of the Government could be held to have been unlawful.

Tasmanian Development Act 1983

As far as this Act is concerned, it appears from the statement of claim that the conduct relied upon as the basis for alleging the commission of this tort comprises the following:

·     On or about 3 October 1984, the TDA offered financial assistance to Dranale for the preparation of a business plan in relation to the establishment of a peat moss industry.
·     On or about 16 November 1984, the TDA provided Dranale with $20,000 for the preparation of such a business plan.
·     On or about 10 January 1985, at a meeting with the directors and representatives of Dranale, Mr Faircloth was informed that research indicated a peat moss export industry was only marginally viable, but that a sphagnum moss export industry was potentially profitable.
·     After 14 January 1985, Mr Chandler, Mr Faircloth and the TDA resolved to withhold the information as to the potential profitability of a sphagnum moss industry from Natureland, and to try to conclude the contractual arrangements and negotiations between the plaintiffs and Dranale on the basis that peat moss was an industry of only marginal viability.
·     On or about 24 January 1985, the TDA provided the plaintiffs with a report which stated that a peat moss industry was only marginally viable, but did not refer to the potential profitability of a sphagnum moss industry.
·     Mr Chandler and Mr Faircloth recommended that the plaintiffs accept an offer of $20,000 made by Dranale.
·     On or about 27 February 1985, the TDA, Mr Chandler and Mr Faircloth purported to arbitrate between Dranale and the plaintiffs at a meeting which resulted in "heads of agreement" whereby Natureland agreed to sell all its interests to Dranale for $160,000 plus agreed royalty payments.
·     The TDA, Mr Chandler and Mr Faircloth knew at the time of that meeting that the plaintiffs had been advised that all lease applications would be reviewed by the Government if a full development proposal was not submitted to the Government by 28 February 1985.

It is alleged in the statement of claim that that conduct was unlawful "in that it was not authorized by the Tasmanian Development Act 1983". More detailed particulars of the alleged unlawfulness apparently have neither been sought nor provided. Mr Chandler and Mr Faircloth were of course officers of the TDA. The allegation of unlawfulness is therefore essentially an allegation that the TDA exceeded its powers or its authority.

The core functions of the TDA were listed in the Tasmanian Development Act, s8. They included the following:

"(a)     to develop and carry out measures to encourage, monitor and promote employment in the private sector in Tasmania;
(b)       to develop and carry out measures to promote investment in Tasmania;
(c)       … ;
(d)       to support and expand … business opportunities in Tasmania;
… ".

The powers of the TDA were listed in s9(2) of that Act. It was given many powers, including powers to make loans and grants. Under s9(2)(i), it was empowered to "do any other act, matter, or thing as may be necessary or expedient for the performance of its functions under this Act." Given the wide-ranging nature of the TDA's functions, and the broad power given to it by s9(2)(i), I think the plaintiffs will have great difficulty establishing that the TDA exceeded its powers or authority if this action proceeds to trial. If they do establish that it exceeded its powers or authority, it would not follow that it or its officers thereby committed any tort or offence.

Conclusion

In short, it is quite likely that the plaintiffs' claims in relation to the tort of unlawful interference with its trade or business interests might fail, either on the basis that there is no such tort, or on the basis that the conduct of the plaintiffs did not involve unlawfulness, or an appropriate type of unlawfulness.

Conspiracy to commit an unlawful act intended to cause economic loss

There is no doubt that this tort exists. It is committed when two or more persons combine together to commit an unlawful act with the intention of harming a plaintiff's trade, business or economic interests. It is necessary for the plaintiff to prove that the agreement was carried into execution, and that damage was caused. The High Court has held that this cause of action is available against defendants who have conspired to commit torts: Williams v Hursey (1959) 103 CLR 30. It has also been held that this tort can be committed by conspiring to commit an offence: Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173; Maritime Union of Australia v Geraldton Port Authority (1993) 43 FCR 1. However I am unaware of any authority suggesting that this tort can be committed by public officers improperly agreeing not to perform a duty that one of them could be compelled by mandamus to perform.

In the statement of claim it is pleaded that the Government, Mr Chandler and Mr Faircloth committed this tort by certain conduct between about 3 October 1984 and about 27 February 1985. The alleged conduct relied upon is the same as that relied upon for the allegations of unlawfulness in respect of the Tasmanian Development Act. See par25 above. As I have said, I think the plaintiffs would have great difficulty in establishing that the TDA exceeded its powers or authority if this action proceeds to trial. I think it likely that the plaintiffs would be unable to establish that the TDA or its officers committed any tort or offence. I think it unlikely that the plaintiffs will be able to establish any unlawfulness of an appropriate kind, and that they will therefore not be able to establish that this tort was committed.

Conspiracy to commit a lawful act intended to cause economic loss

In order for the plaintiffs to establish this cause of action, it is insufficient to establish that the plaintiffs suffered damage, and that damage was a foreseeable result of the alleged conspirators' conduct. The plaintiffs need to establish that the alleged conspirators were motivated principally by a desire to cause damage to the plaintiffs: McKernan v Fraser (supra); Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 445; McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 at 434.

In McKernan v Fraser (supra) at 362, Dixon J, with whom Rich and McTiernan JJ agreed, said the following:

"It appears now to be settled that, for a combination or acts done in furtherance of the combination to be actionable in such circumstances, the parties to the alleged conspiracy must have been impelled to combine, and to act in pursuance of the combination, by a desire to harm the plaintiff, and that this must have been the sole, the true, or the dominating, or main purpose of their conspiracy."

In that case at 398, Evatt J said that the necessary motive approximated closely to "disinterested malevolence" as referred to in an American case. At 399 – 400 his Honour drew a distinction between the "immediate purpose" of conspirators and the "ultimate end or goal". At 400 he said:

"It may be that the 'intention' or immediate 'purpose' of the persons combined is to inflict harm, but their 'motive' or ultimate 'object' is the furtherance of their trade interests. It may be, on the contrary, that the 'motive' or ultimate 'object' beyond the immediate 'purpose' or 'intention' of the combination, is to do harm because the plaintiff is hated for some personal reason and his harm or ruin is desired as an end to be achieved by means of inflicting harm upon him."

There is nothing in the material before me to suggest that the defendants were motivated by anything other than a desire to advance the economic interests of Tasmania and its Government, and possibly a perception that this purpose would be better served by Dranale, rather than the plaintiffs, developing the sphagnum moss and peat moss resources in question. It seems possible that the plaintiffs will not be able to establish that the defendants were motivated principally by a desire to cause damage to the plaintiffs, and therefore that they will be unable to establish that this tort was committed.

Breach of fiduciary duty

In the statement of claim it is alleged that there was a breach of fiduciary duty on the part of the TDA, Mr Chandler and Mr Faircloth. The alleged conduct relied upon as the basis of that allegation is the same conduct that is relied upon for the allegation of unlawfulness concerning the Tasmanian Development Act. See par25 above. In particular, it is alleged that the defendants purported to arbitrate between the plaintiffs and Dranale when they were privy to Natureland's information as to the likely profitability of a sphagnum moss industry, and were keeping that information secret from the plaintiffs. The plaintiffs apparently contend that they placed trust and confidence in the TDA, Mr Chandler and Mr Faircloth. Mr Faircloth's solicitors sought particulars of the alleged fiduciary duty. On 25 July 1990, the solicitors for the plaintiff provided the following particulars:

"By virtue of the provisions of the Tasmanian Development Act 1983 and in particular Section 45 thereof the fourth named Defendant owed the Plaintiffs a duty of confidence and generally in accordance with the principles of the law of confidentiality the fourth named Defendant, given his knowledge of the Plaintiffs' business affairs, owed the Plaintiffs a duty of confidence and faith."

The section relied upon read as follows:

"45 (1) A director, administrator, or officer of the Authority who, in the course of the administration of this Act, obtains any information as to a process, technique, practice, plan, invention, specification, prototype, or design shall maintain and aid in maintaining the secrecy of that information except for the purposes of the administration of this Act.
(2) A director, administrator, or officer of the Authority who contravenes subsection (1) is guilty of an offence and is liable on summary conviction to a penalty not exceeding $1 000 or imprisonment for a period not exceeding 3 months, or both."

Counsel for the plaintiffs described the pleaded allegation of a breach of fiduciary duty as unusual. The categories of fiduciary relationships are not closed: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96. However I am unaware of any case in which an intermediary volunteering to facilitate commercial negotiations has been held to owe a fiduciary duty to a negotiating party. The wording of s45 suggests that the TDA and its officers owed Natureland a duty of confidentiality, and that that statutory duty would have taken precedence over any duty of frankness owed to the plaintiffs. I think the claim for compensation for a breach of fiduciary duty has a strong element of novelty about it, and that there must be a strong risk that it will not succeed.

Damages issues

If the plaintiffs succeed at trial in establishing an entitlement to damages, or to equitable compensation for a breach of fiduciary duty, they would be fully successful only if they could establish that, but for the tortious or unconscionable conduct of the defendants, Dranale would have paid $3 million for the shares in Natureland and the units in the unit trust. To establish that, it would be necessary to establish that Dranale had the capacity to pay $3 million, or the capacity to arrange for $3 million to be paid. The evidence before me suggests that Dranale might not have had $3 million, and therefore that it might have needed either to borrow money or to resell the relevant assets. If the action were to proceed to trial, there is a possibility that the plaintiffs would fail to establish any capacity on the part of Dranale to pay $3 million from its own resources, loans, or other sources. Another possibility is that they would establish only that there was a chance that Dranale would have paid $3 million, with the result that the strength of that chance would have to be assessed, and damages awarded for the loss of the chance. I think it can fairly be said that the plaintiffs' claims have weaknesses not just in relation to the availability of each pleaded cause of action, but also in relation to the quantum of damages.

History of the proceedings

Although the alleged causes of action are said to have arisen during a period ending in June 1985, the writ by which this action was commenced was not filed until 8 May 1990. The pleadings were closed in July 1990. Mr Faircloth's solicitors delivered an amended defence in December 1990. Otherwise there have been no amendments to the pleadings.

Particulars of the statement of claim were requested by the solicitor for the first and second defendants on 29 May 1990, and provided three days later. Particulars were requested by Mr Faircloth's solicitors on 25 June 1990, and provided on 25 July 1990. There does not appear to have been any subsequent requests for particulars.

The discovery process has not gone smoothly. In June 1990, an unsworn list of documents signed by the plaintiffs' solicitors was sent to the solicitors for the defendants. It has never been filed. Mr Faircloth filed a list of documents, verified by affidavit, on 22 January 1991. Discovery by the other defendants was not a simple matter. After some correspondence between solicitors about discovery, the plaintiffs filed an interlocutory application on 27 August 1990 seeking orders for the first and second defendants to make discovery on oath. On 12 September 1990 the Master made a consent order requiring those defendants to make discovery within 14 days. Their sworn list of documents was filed on 28 September 1990. They claimed privilege in relation to some documents. There was correspondence between solicitors about privilege. On 26 October 1990 the plaintiffs' solicitors filed an interlocutory application seeking the striking out of the defences of the first, second and third defendants on the basis of an alleged failure to comply with the Master's order. On 8 November 1990 their solicitor (the Director of Public Prosecutions) provided the plaintiffs' solicitors with information as to claims for privilege, and asked that their application be withdrawn. On 9 November 1990 that application was adjourned sine die. It has never been relisted. On 23 November 1990 the plaintiffs' solicitors filed an interlocutory application seeking an affidavit from the first, second and third defendants by way of better discovery in relation to several specified documents and classes of documents. That application was returnable on 6 December 1990. It was not dealt with that day, and apparently has never been dealt with. Mr Chandler's unsworn list of documents was provided to the plaintiffs' solicitors that day. It was never filed. The plaintiffs' solicitors wrote on 10 December 1990 requesting a better list of documents from Mr Chandler, particularly requesting a better description of the documents in respect of which he claimed privilege. On 11 January 1991 the DPP wrote to the plaintiffs' solicitors suggesting that they inspect the discovered documents of the first and second defendants. There was an inspection of those documents in either March 1991 or July 1991.

On 11 January 1991 the plaintiffs made an application for legal aid. Nothing further seems to have happened in 1991.

On 1 May 1992, the plaintiffs' solicitors wrote seeking legal aid generally, and specifically for a challenge to the claims for privilege that had been made by the first and second defendants. On 2 September 1992 they wrote a follow-up letter. Nothing further seems to have happened in 1992.

On 18 March 1993 the DPP wrote a letter suggesting that his clients might apply for security for costs. On 24 June 1993 the first and third plaintiffs (Argo and Natureland) were deregistered. It seems likely that their annual returns had not been filed. On 1 July 1993 legal aid was granted for the plaintiffs' solicitors to seek an opinion from counsel as to the merits of the action. On 23 August 1993 the DPP wrote to the plaintiffs' solicitors advising of the deregistration of the two companies, and foreshadowing an application seeking orders in consequence of their deregistration, as well as orders for security for costs against Mr Wright and Mr Tatlow. This seems to have led to some activity on the part of the plaintiffs' solicitors. They wrote on 31 August 1993 saying that the plaintiffs intended to continue with the action, and foreshadowing a request for copies of discovered documents. They wrote again on 15 September 1993 requesting copies of specified discovered documents. They wrote a reminder letter on 8 October 1993. The DPP wrote back on 20 October 1993 requesting $743.40 to cover his photocopying costs. No cheque was forthcoming.

In 1994 there was correspondence about the photocopying expenses, but practically no other activity. On 11 August 1994, the Legal Aid Commission agreed to pay for the photocopies. On 12 October 1994, this information was passed on to the DPP. No cheque was sent. No photocopies were provided. In October 1994 the plaintiffs' solicitors filed and served a notice of intention to proceed.

On 2 February 1995, the plaintiffs' solicitors filed an interlocutory application seeking an order that the first, second and third defendants provide copies of their discovered documents. They seem to have been unaware that the third defendant had died. It seems that the interlocutory application was never dealt with. On 25 August 1995 the DPP wrote identifying the available documents and requesting $759.50 for his photocopying. On 15 September 1995 the plaintiffs' solicitors sent him a cheque for that amount. The copies were subsequently provided.

The new year saw some activity in relation to the proposal that counsel provide advice as to the merits of the action. When legal aid was granted for such an opinion in July 1993, the Legal Aid Commission had said that it would pay no more than $2,880 for the opinion. But on 12 January 1996 the plaintiffs' counsel estimated that his fees would be $4,000. On 29 January 1996, the Director of Legal Aid wrote to the plaintiffs' solicitors advising that aid in that sum would be granted. On 18 March 1996, legal aid was withdrawn. The plaintiffs needed to make a new arrangement for legal representation. After a delay of some nine months, Mr Tatlow approached a Melbourne firm, Slater & Gordon, in December 1996 with a proposal that that firm act on a "no win no fee" basis.

Slater & Gordon investigated the merits of the action, indicated a willingness to act, made arrangements with the plaintiffs as to their retainer, and engaged Hobart agents who filed a notice of change of solicitors. Amazingly, those steps took nearly three years. In May 1997 Slater & Gordon advised that they had formed the preliminary view that the action had merit. By August 1997 Argo and Natureland had been reregistered. In January 1998 Slater & Gordon confirmed their view that the case had merit, and began negotiating as to their retainer. Agreement was reached as to the terms of the retainer on 13 September 1998. After a delay of over four months, Slater & Gordon instructed a Hobart firm to act for them. However the partners in Slater & Gordon were not all admitted in Tasmania. There was a dispute with the Registrar as to whether the Hobart firm could file a notice of change of solicitor specifying that they were the agents of Slater & Gordon. The appropriate notice was eventually filed on 14 September 1999.

It had been more than six years since a step had been taken in the action. The plaintiffs needed an order under the Rules of the Supreme Court 1965, O79, r11(2) – the predecessor of r56(1). Accordingly, an application was filed on 22 November 1999 seeking leave to take a fresh proceeding in the action. An order was also sought in consequence of the first plaintiff having changed its name to Argo Pty Ltd. The first and second defendants responded on 6 December 1999 by filing an interlocutory application for the action to be struck out, as against them, for want of prosecution. They also sought an order under O79, r11(2), permitting them to make that application, and an order as to the change of the first plaintiff's name. Those two orders were made by consent on 13 December 1999. When the hearing of the competing interlocutory applications was approaching, the DPP gave notice requiring Mr Tatlow to attend for cross-examination, and to produce certain documents. Questions arose as to whether he had waived legal professional privilege in relation to those documents. On 6 April 2000, Cox CJ determined that he had not: Argo Pty Ltd v Attorney-General [2000] TASSC 27. The competing interlocutory applications came before Cox CJ on 18 April 2000. The plaintiffs' application was dismissed by consent. The application to strike out for want of prosecution was heard over three days. On 7 August 2000, Cox CJ dismissed that application: Argo Pty Ltd v Attorney-General (No 2) [2000] TASSC 109. The first and second defendants appealed to the Full Court. Their appeal was dismissed on 29 June 2001: Attorney-General v Argo Pty Ltd [2001] TASSC 70.

The plaintiffs were then back where they had been in late 1999. As no step had been taken in the proceedings for more than six years, they needed an order under r56(1), which by then had come into force, permitting them to take a further step. But their solicitors took the view that they did not need such an order. They erroneously believed that the dismissal of the application to dismiss the action for want of prosecution was just as good as an order permitting the taking of a further step. The plaintiffs' solicitors apparently made requests for case management in July 2001 and September 2001, but no directions hearing appears to have been held, possibly because an order under r56(1) was needed. In 2002 the costs of the Full Court appeal were paid, but nothing else appears to have happened. On 20 February 2003, the plaintiffs' solicitors filed a notice of intention to proceed and a notice of change of practitioner. A different firm had taken over as the Hobart agents of Slater & Gordon. On 6 October 2003 the plaintiffs' solicitors again wrote requesting case management. There was a directions hearing before Underwood J (as he then was) on 1 December 2003. It was adjourned sine die so that the surviving defendants could file applications to have the proceeding stayed. Those applications were necessary because the plaintiffs' solicitors did not concede that they needed an order under r56(1). Interlocutory applications seeking stay orders were filed on behalf of the first and second defendants on 8 December 2003, and on behalf of Mr Faircloth on 29 March 2004. Underwood J heard the stay applications on 30 March 2004. On 4 June 2004 he ordered that the proceedings in the action be stayed until the making of an order giving leave to take a further step in the proceeding in accordance with r56: Argo Pty Ltd v Attorney-General (No 3) [2004] TASSC 51.

The plaintiffs were still in the same position as they had been in late 1999. On 23 June 2004 they filed the interlocutory application that is now before me. As well as seeking an order under r56(1), they sought orders as to discovery, mediation, the substitution of the third defendant's personal representatives as defendants, service on them, and the substitution of the State of Tasmania for the Attorney-General as a defendant. That application came before me on 29 November 2004. Although it had been filed five months previously, the plaintiffs' solicitors had not filed any affidavits in support of it. I made orders fixing a timetable for the filing and service of further affidavits, and adjourned the matter for further mention in March 2005. I was told on 21 March 2005 that the DPP wished to have a subpoena issued for the production of certain documents prior to the hearing. The application was adjourned to May 2005. A subpoena was issued requiring Page Seager, the solicitors who had acted for the plaintiffs during the negotiations with Dranale, to produce that firm's file. The plaintiffs claimed legal professional privilege in relation to parts of the file. After several appearances relating to the claim for privilege, I was informed by counsel for the plaintiffs on 12 July 2005 that the claim of privilege was abandoned. The hearing of the part of the interlocutory application that relates to r56(1) proceeded in August 2005.

This action relates to causes of action that are said to have arisen during a period that ended on or about 25 June 1985. During the subsequent 20 years, there was a period of about nine months from May 1990 to February 1991 when this action proceeded at a reasonable pace, and there was a delay of about 19 months from December 1999 to June 2001 occasioned by the first and second defendants unsuccessfully seeking to have the action struck out for want of prosecution, and unsuccessfully appealing to the Full Court. For the rest of that 20-year period, little or nothing was done by the plaintiffs to prosecute this action.

Reasons for the plaintiffs' delays

There is a body of authority in relation to applications for dismissal for want of prosecution in which it has been said that plaintiffs are not to be penalised for waiting until very late in a limitation period before issuing proceedings, but that plaintiffs are obliged to move with greater speed if they have done that: Closer Settlement Board v Thomas [1982] Tas R 179 at 185; Birkett v James [1978] AC 297; Bishopsgate Insurance Australia Ltd v Deloitte Haskings and Sells [1999] 3 VR 863 at 874. I see no reason why a different approach should be taken in relation to applications by plaintiffs for permission to proceed in long dormant actions. I therefore think I need not consider whether events connected to the plaintiffs' claims that occurred before the issue of the writ made it reasonable for the plaintiffs to issue the writ as late as they did. Some of those events were most extraordinary. However the significant thing is that the plaintiffs should not be penalised or handicapped as a result of instituting proceedings towards the end of the limitation period.

As I have indicated, I think this action proceeded at a reasonable pace until January 1991. In the 15 years since then, too little has happened. The plaintiffs attribute the delay to their own impecuniosity, the complexity of the litigation, slow lawyers, delays on the part of the Court, and the attempts to have the action dismissed for want of prosecution.

I have some evidence as to the plaintiffs' impecuniosity. Mr Tatlow stated his occupation as journalist/publisher. When he applied for legal aid in January 1991, his application showed that he had assets worth $13,800 including one motor vehicle worth $600, debts of $25,930, a job as a marketing officer with a government department, and a disposable income of $189 per week after tax, rent or mortgage payments, electricity and telephone expenses, house and car insurance, and credit union payments.

Mr Wright did not give evidence. Mr Tatlow said that Mr Wright is a self-employed wine consultant. According to a letter from his solicitors to the Director of Legal Aid in May 1992, Mr Wright was then receiving social security benefits following the failure of a business in Tasmania, and following a period of lucrative employment in New South Wales when much of his income was applied towards loans connected with the failed business.

I was not provided with the plaintiffs' tax returns or any sort of detailed evidence as to their financial positions over the years in question. However, from the little evidence I have as to their finances, I think I can safely conclude that the costs of this litigation, if it had proceeded, would have been out of all proportion to their combined ability to pay. They needed to make some arrangement that did not require them to pay interim bills. They needed to arrange either legal aid, pro bono representation, a "no win no fee" retainer, or something of that nature. They needed to make such an arrangement in 1991, but did not finalise one until 13 September 1998. Making due allowance for the complexities of the litigation and the inertia of the legal profession, I see no reason why such an arrangement could not have been made by the end of 1991.

Mr Ellis SC submitted that the plaintiffs had neglected the proceedings because they preferred to use media publicity and political lobbying to seek to obtain a settlement of their claims. There is certainly a body of evidence as to Mr Tatlow's use of his journalistic and political skills in that regard, both before and after the issue of the writ. However I see no need to undertake an analysis of the evidence as to his pursuit of those methods of alternative dispute resolution. The simple fact is that he took nearly eight years to arrange low-cost legal representation when that ought to have been achieved in less than a year.

After the retainer agreement with Slater & Gordon was reached on 13 September 1998, there were significant periods of delay. There was a delay of 14 months between the signing of the retainer agreement and the filing of the application under O79, r11(2) on 22 November 1999. There were delays between the dismissal of the Full Court appeal on 29 June 2001 and the filing of the present interlocutory application on 23 June 2004. There was a delay in filing affidavit material in support of that application until December 2004. Slowness on the part of the plaintiffs' lawyers was a major cause of those delays, but by no means the only cause. A mistake as to the need for an application under r56(1) was another substantial cause. I do not think the plaintiffs should be regarded as having no responsibility for the tempo of their solicitors' work. Lawyers have a duty to complete any work that they undertake within a reasonable time. Slow lawyers respond to pressure from clients to speed up their work, to threats of complaints of delay to professional disciplinary bodies, and to the making of complaints of delay to such bodies. I am satisfied that the plaintiffs could have got Slater & Gordon to do their work more quickly if they had applied more pressure to that firm during the period that I have referred to.

Prejudice

The surviving defendants contend that the risk that they will not receive a fair trial is now so strong that the plaintiffs should not be permitted to proceed with the action. Of course it is very likely that the memories of the surviving witnesses will be dim and/or inaccurate in relation to events that occurred over 20 years ago. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, which concerned the discretion to extend a limitation period, McHugh J said the following at 551:

"The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates.' Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo (1972) 407 US 514 at 532, 'what has been forgotten can rarely be shown'. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose."

The greater the delay between the events giving rise to a civil claim and the trial of the action, the more likely it is that the case will be decided on less evidence than was originally available.

During 1986 serious allegations were made in the media and in the Tasmanian Parliament concerning Dranale (which had changed its name to Fairfield Horticultural Products Ltd), its dealings with the plaintiffs and the Tasmanian Government, and its affairs following the acquisition of the peat moss assets. A legal practitioner, Mr W P M Zeeman, who subsequently served as a judge of this Court, was appointed to conduct an investigation. He conducted an enquiry, took evidence, and wrote a report which was eventually tabled in the Tasmanian Parliament during 1988. There is a suggestion in the evidence before me that he was not validly appointed, but I do not think that matters for the purposes of this application. Significantly, a lot of documents relevant to the plaintiffs' claims in this action were produced and preserved, and a quantity of evidence relevant to this case was given.

The surviving defendants contend that they will suffer specific prejudice as a result of, inter alia, the death of Mr Chandler in June 1994; the death of a director of Dranale, Mr Conyngham, in about 1997; the death of the TDA's inaugural chairman, Mr Rickard, in October 1994; and the unavailability of documents from certain sources.

Mr Chandler died suddenly, without a proof of evidence, statement or deposition having been obtained from him by the DPP. He had given instructions for his defence, and had written four letters to the DPP in June 1990. As a result of a claim of legal professional privilege, I am unaware of the contents of those letters. If he had lived, Mr Chandler could have given important evidence as to a great many issues and potential issues in this action, including the following:

·Whether the TDA or its officers intentionally instigated or abetted a breach of the regulation requiring the Director of Mines to notify the grantee of a mining lease immediately after the giving of the Governor's consent.
·Whether he, Mr Faircloth and the TDA resolved after 14 January 1985 to withhold information as to the potential profitability of a sphagnum moss industry from Natureland, and to try to conclude the contractual arrangements and negotiations between the plaintiffs and Dranale on the basis that peat moss was an industry of only marginal viability.
·Whether he and Mr Faircloth recommended that the plaintiffs accept an offer of $20,000 made by Dranale in early 1985.
·Whether on or about 27 February 1985 he, the TDA and Mr Faircloth purported to arbitrate between Dranale and the plaintiffs at the meeting which resulted in the "heads of agreement" whereby Natureland agreed to sell its interests for $160,000 plus royalty payments.
·His knowledge, intentions and motives at the time of the negotiations between the plaintiffs and Dranale in early 1985.
·Whether the TDA, Mr Faircloth, or any government officer intended to cause any of the plaintiffs economic loss.
·Whether anything was ever said to him or in his hearing to indicate that the plaintiffs placed trust and confidence in him, the TDA, or Mr Faircloth.

Mr Rickard died in Melbourne on 3 October 1994. There is evidence that he had been ill for a long time before he died. However it appears that no proof of evidence, statement or deposition was taken from him, and that there was no correspondence between the DPP and him about these proceedings. According to an affidavit of Mr Tatlow, the plaintiffs concede that he would have been an important witness. He could have given evidence as to the allegations made concerning the conduct of the TDA under his chairmanship.

During the period of Dranale's dealings with the plaintiffs in 1984 and 1985, it had directors named Ray Conyngham and Dorothy Auyeung. The plaintiffs' case is that the negotiations to which the action relates were conducted on behalf of Dranale by them, and by Dranale's solicitors, Baker & McKenzie. Mr Conyngham died in about 1997. He could have given evidence as to some very important issues, including the following:

·Whether it was orally agreed that the sale contract dated 22 May 1984 was to remain in force and, if so, upon what terms.
·Whether a further oral agreement for the sale of the shares in Natureland and the units in the Natureland Unit Trust to Dranale was made orally on or about 6 July 1984 and, if so, what its terms were, and how long it remained in force.
·The attitude of Dranale's directors in 1984 and 1985 towards completion of its proposed purchase.
·The financial resources of Dranale in 1984 and 1985; its capacity to complete the proposed purchase; its capacity to borrow; and the chances of it funding its purchase by re-selling the assets in question.
·The roles of the defendants in the negotiations leading to the agreement dated 25 June 1985 for the sale of the assets for $160,000 plus royalties.

There is no evidence that any piece of information that was within the knowledge of Mr Conyngham was not also within the knowledge of Mrs Auyeung. When her memory was fresh, she could have given evidence as to each of the issues I have listed in relation to him. She was spoken to in January and February of last year by two private investigators who had been engaged by the DPP. She said she had almost no recollection of the matter in question, and was not in possession of any relevant documents. Those assertions may well be true. She is either unable or unwilling to give any useful evidence.

For a time the plaintiffs were represented by a man named John Bennetto for the purpose of their negotiations with Dranale. In April or May 2000, he said that he had only a very vague recollection of the relevant events, and thought that his file had been destroyed, but that he was not certain about that. When his memory was fresh, and when he had his file, he could have given evidence as to the oral contractual negotiations. It is an agreed fact that he died on 16 December 2005, after I had reserved this decision.

Another potential witness who could possibly give important evidence as to the oral negotiations between the plaintiffs and Dranale is Mr Harry, the plaintiffs' former solicitor, to whom I have referred. If called as a witness, he would have a duty to claim legal professional privilege as to communications between him and his former clients in connection with the provision of legal advice. However he would be a compellable witness in relation to discussions with the representatives of Dranale. He of course owes his former clients a duty of confidentiality. Unless and until he is called as a witness, he has a duty not to provide the defendants' solicitors with information about the plaintiffs' negotiations without their consent. Such consent has been sought and refused. The defendants have been able to establish much of the evidence that Mr Harry would be able to give since the file of his firm was made available for inspection following the issue of the subpoena that I have referred to, and since he swore two affidavits in relation to the negligence action brought by the plaintiffs against his firm. He said in one of those affidavits that his file was delivered to Mr Zeeman; that he provided it to Mr Tatlow within a day or so of getting it back from Mr Zeeman; that he next saw it on 14 April 2000; and that he then realised that many of the documents that had been in his original file were no longer there. I am not able to make a finding as to who had the file when the missing documents left it. However, since Mr Harry is a potential witness, the incompleteness of his firm's file is a potential source of prejudice to the defendants. Documents that might be helpful to them at a trial of this action could well be missing, and Mr Harry might not be able to remember their contents confidently, accurately, or at all.

If this action were to proceed to trial, I think there is a very substantial risk that the trial would not be a fair one for the defendants because of the dimming and distortion of memories, the deaths of important witnesses, and the absence of documents from Mr Harry's file. I think that risk is particularly strong in relation to the issues concerning the subsistence or otherwise of a contract between the vendor plaintiffs and Dranale after 10 July 1984. Anything said by Mr Tatlow or Mr Wright about oral negotiations might be inaccurate or incorrect, but cannot now be contradicted by Mr Chandler, Mr Conyngham or Mr Bennetto, is unlikely to be contradicted by Mrs Auyeung, and might have been inconsistent with a note made by Mr Harry that has been missing for years. I am not in a position to make any assessment of Mr Wright's memory or credibility. Having seen Mr Tatlow cross-examined at length, but not as thoroughly as he would be at trial, I think he is an unreliable witness. However, as Mr Ellis SC pointed out, there is a risk that he could give plausible evidence that is incorrect but uncontradicted, and that that evidence would be believed simply because it is plausible. That particular risk strongly contributes to the risk of an unfair trial.

Counsel for Mr Faircloth submitted that the continuation of these proceedings would be likely to prejudice him, in that the proceedings would be likely to have adverse psychological and medical effects on him. Mr Faircloth is now 58 years old. He lives in England. He is an economist. He was diagnosed as suffering from a depressive illness in 1991, and has been treated with anti-depressants ever since. He also has a number of physical ailments, including a severe heart condition. His doctor thinks that he is not fit enough to cope with the stress of a lengthy trial in England, let alone a trial in Tasmania, and thinks that his difficulties in coping with a trial and the consequent detrimental effect to his health are likely to be significantly worse in respect of a trial held now than they would have been if the trial had been held during the 1990s. I accept that evidence. The continuation of these proceedings will leave Mr Faircloth at risk not only medically, but also financially. The claim is an enormous one. Mr Faircloth is not a rich man, is nearing retirement, is unwell, and is concerned about his financial position in retirement. There are a number of reported cases concerning applications for dismissal for want of prosecution in which it has been held that, in considering the prejudice suffered by a defendant, the courts should not just consider the risk of an unfair trial, but also should consider in appropriate cases the prejudice that a defendant suffers when he or she is kept at risk, and the psychological and commercial effects of such a state of affairs: Bourke v Kecskes [1967] VR 894 at 897 – 898; Berrigan v McIver [1974] VR 811 at 815 – 816; Cooper v Hopgood & Ganim [1999] 2 Qd R 113 at 124. In my view it is logical, and in the interests of justice, that the same approach should be adopted when considering questions of prejudice in relation to an application of the present kind. As a professional man undertaking work for a range of clients, Mr Faircloth would have no income for the duration of the trial and a preparatory period beforehand. Otherwise his earning capacity would not be affected. But, more significantly, the continued psychological burden of these proceedings, and the worry that they could result in his bankruptcy, are likely to be extremely detrimental to him.

The public interest issue

Although the High Court made it clear in William Crosby & Co Pty Ltd v Commonwealth (supra) that applicants in the position of the plaintiffs need to show "good reason" for the making of the order sought, counsel for the plaintiffs has not articulated any particular "good reason" for the making of the order that his clients seek. However it appears from material in one of Mr Tatlow's affidavits that the plaintiffs contend that there are public policy reasons for permitting them to proceed. According to that affidavit, the plaintiffs intend at trial to adduce evidence as to inappropriate conduct on the part of ministers and senior public servants in 1984 and 1985 in relation to the mining lease applications, environmental licence applications, and contractual negotiations; the bribery of two senior public servants; and an arrangement for a senior politician to become a director of Dranale after retiring from politics.

Counsel for the plaintiffs made a submission to me about the public interest. He referred me to only one case, namely Jet Corporation of Australia Pty Ltd v Petres Pty Ltd (1983) 74 FLR 1. That case involved an application for security for costs in proceedings for damages for an alleged contravention of the Trade Practices Act 1974 (Cth), s52. One of the factors taken into account by Northrop J was that it was in the public interest that the damages proceedings should go ahead. At 12, his Honour said this:

"… the obligations placed upon the respondents by the Trade Practices Act are in the nature of public standards of conduct which are considered desirable and in the public interest. To some extent the existence of that public interest transcends the private interests of the parties to these proceedings and at this stage weighs in the balance against making the orders sought by the respondents."

The allegations as to the bribery of public servants were thoroughly investigated by Mr Zeeman (as he then was) in 1986. He concluded that they had not been bribed. The plaintiffs have not produced any fresh or additional evidence as to the alleged bribes. If there is fresh or additional evidence, the appropriate course is to provide it to the police. It is not in the public interest that the bribery allegations be revisited at a trial of this action.

The material before me does not indicate what evidence, if any, the plaintiffs may have as to the alleged arrangement for a senior politician to become a director of Dranale. If they have any evidence as to such an arrangement, the appropriate course is to provide it to the police. It is not in the public interest that any such allegation should be investigated during the trial of a civil action. If there are to be criminal proceedings, it would be appropriate to delay the trial of this action until they were concluded, and that would be a factor weighing in favour of refusing the present application.

Allegations as to improprieties on the part of senior public servants in relation to the applications by Natureland for mining leases and environmental licences, and in relation to the plaintiffs' negotiations with Dranale, were thoroughly investigated by Mr Zeeman in 1986. Some findings adverse to senior public servants were made in relation to those matters by him in his report. It is not in the public interest for his investigation, insofar as it related to those matters, to be repeated during the trial of a civil action 20 years later.

Mr Tatlow said in one of his affidavits that the plaintiffs proposed to call the then Attorney-General, Mrs Jackson, to give evidence at the trial. He said she was one of a group of Labor members who investigated allegations made in 1986. He did not say what evidence the plaintiffs proposed to lead from her at the trial. Without knowing what she might say, I am not in a position to make a finding that it would be in the public interest for her to say it.

Mr Tatlow said in an affidavit that the plaintiffs would raise concerns about the conduct of the office of the DPP in relation to a letter from the then DPP to the then Attorney-General on 20 April 1988 concerning criminal proceedings that were then pending against him. There is evidence that this letter was discussed in Parliament in 1988. The full text of the letter appears in an extract from Hansard annexed to Mr Tatlow's affidavit. It appears from the letter that the DPP was concerned that, if Mr Tatlow stood trial before a jury, his right to a fair trial could be prejudiced by further debate in the Parliament about the conduct of the TDA and senior public servants. He asked the Attorney-General to use every endeavour to prevent any further debate on the issue. He pointed out in his letter that Mr Tatlow could either be committed for trial by a magistrate or, if no committal order was made, become the subject of an ex-officio indictment. That was correct. In my view the letter gives absolutely no indication of impropriety. I cannot see how it can possibly be relevant to any issue in this action. There has been no suggestion that the former DPP or the then Attorney-General would be a witness if the action proceeds to trial. I have no reason to think that it would be in the public interest for the background to the writing of the letter to be investigated. Even if such an investigation were in the public interest, it would be inappropriate to conduct such an investigation in the context of a trial of this action.

It is ordinarily in the public interest for damages to be awarded when a tort has been committed. That is why the State provides courts in which its citizens may litigate their disputes. However, there is no public interest factor that weighs in favour of granting the order sought, in my view. It is not in the public interest that plaintiffs should be permitted to revive long dormant proceedings after the risk of defendants not receiving a fair trial has become strong. The public interest requires disputes to be resolved as quickly as possible: Brisbane South Regional Health Authority v Taylor (supra) per McHugh J at 553.

The duty of the Crown to be a model litigant

Counsel for the plaintiffs made a submission to the effect that the Crown has a duty to act as a model litigant; that a model litigant would have consented to an order under r56(1); and that the plaintiffs should therefore be permitted to proceed against the first and second defendants. It is true that there is a well established principle that the Crown should act as a model litigant, both in criminal and civil litigation. The Crown should therefore maintain a standard of fair play, never take technical points, always act reasonably and fairly, not take advantage of its own default, and act in accordance with good conscience: Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342; SCI Operations Pty Ltd v Commonwealth (1996) 69 FCR 346 at 368; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 196 – 197; Yong v Minister for Immigration and Multicultural Affairs (1997) 75 FCR 155 at 166.

However I do not accept that a model litigant would have consented to the present application. This is a case in which the Crown and the TDA face a substantial risk of an unfair trial as a result of delays over many years which, to a large extent, are attributable to the plaintiffs. I see nothing unfair or unreasonable in the Crown and the TDA opposing the present application in those circumstances.

Abuse of process

Mr Ellis SC submitted that, since the plaintiffs applied for leave to proceed on 22 November 1999 but consented to the dismissal of that application on 18 April 2000, it was an abuse of process for them to make their present application under r56(1). I doubt that that is right since the November 1999 application was not determined on the merits, and since its dismissal was apparently consented to as a result of a mistaken view that the application to dismiss the action for want of prosecution made the plaintiffs' application unnecessary.

Estoppel

Counsel made submissions to me as to whether the findings of fact made by the Full Court in 2001 resulted in issue estoppels. Since none of the findings of fact made by the Full Court were inconsistent with the found facts that I have relied on in determining this application, I do not need to consider those submissions.

Conclusion

But for the delays on the part of the plaintiffs, this action might have gone to trial before the deaths of Mr Chandler, Mr Rickard, Mr Conyngham and Mr Bennetto. The risk of an unfair trial is now so strong that I consider it to be unacceptable. I think that has been the position since at least 1998. The psychological, medical and financial implications of this litigation proceeding would also severely prejudice Mr Faircloth. There are substantial weaknesses in each of the plaintiffs' claims. This is not a case in which the plaintiffs have a clear right to the relief that they are seeking, or even a strong claim. No good reason has been shown for them to be permitted to take a further step in the action. Because of all these factors, I think it would be unjust to permit them to do so. The interlocutory application is therefore dismissed.

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Citations

Argo Pty Ltd v Attorney-General (No 4) [2006] TASSC 22

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