Cooper v Touche Ross and Co - [2010] QSC 251

SUPREME COURT OF QUEENSLAND

CITATION: Cooper & Ors v Touche Ross & Co & Anor [2010] QSC 251
PARTIES: RALPH DUNCAN COOPER,
GRAEME ROBERT COOPER and
GRAEME COOPER HOLDINGS PTY LTD
(Plaintiffs/applicants)
v
TOUCHE ROSS & CO
(First Defendant/respondent)
WARREN AUSTIN
(Second Defendant/respondent)
FILE NO/S: 1672 of 1995 1673 of 1995
DIVISION: Trial Division
PROCEEDING: Application
ORIGINATING
COURT: Supreme Court
DELIVERED ON: 21 June 2010
DELIVERED AT: Brisbane
HEARING DATE: 10 March 2010
JUDGE: Philippides J
ORDER: 1. The application for leave to proceed is granted.

2. The application to strike out the proceedings for want of prosecution is refused.
CATCHWORDS: PROCEDURE – DELAY – DELAY OF MORE THAN TWO YEARS – Uniform Civil Procedure Rules, r 389 – LEAVE TO PROCEED – striking out for want of prosecution
Uniform Civil Procedure Rules, rules 5, 280, 371(2), 389(2)
Aon Risk Services Australia Ltd v Australian National
University [2009] 239 CLR 175
Brisbane South Regional Health Authority v Taylor [1996]
186 CLR 541
Cooper v Hopgood & Ganim [1999] 2 Qd R 113
Cummins & Anor v Davis & Anor [2001] QCA 293
Hood & Anor v State of Queensland & Ors [2003] QCA 408
Perez v Transfield (Qld) Pty Ltd (1979) Qd R 444
Porzuczek v Toowoomba District Health Services [2007]
QSC 177
Quinlan v Rothwell [2002] 1 Qd R 647
The Commonwealth v Verwayen (1990) 170 CLR 394
Tyler v Custom Credit Corp Ltd & Ors [2000] QCA 178
COUNSEL: L Bowden for the plaintiffs S Brown for the defendants
SOLICITORS: Gateway Lawyers for the plaintiffs
Walsh Halligan Douglas for the defendants
PHILIPPIDES J:
Background

The plaintiffs, Ralph Cooper, Graeme Cooper and Graeme Cooper Holdings Pty Ltd, have brought an application for leave to proceed pursuant to r 389(2) UCPR, two years having passed since the last step in the proceedings. The first defendant, Touche Ross & Co, and the second defendant, Warren Austin, have brought a cross application that the proceedings be dismissed for want of prosecution, pursuant to rules 5, 280 and 371(2) UCPR and the inherent jurisdiction of the Court, on the grounds that there has been extensive delay in this matter, and that to continue the action after such extensive delay would be prejudicial to the defendants.
The plaintiffs make claims relating to losses allegedly suffered by them in relation to the Mooloolaba Wharf Joint Venture entered into by them on 11 September 1987 with Woodwark Bay Development Corporation Limited, Nessale Pty Ltd and other parties. The plaintiff’s claim against the defendants arises from allegations of breach of contract and negligence, the defendants being auditors of the Joint Venture appointed pursuant to letters of 14 September 1989.
The joint venture concerned the development of certain land at Mooloolaba into a shopping complex, marina and licensed premises. It is alleged that by the terms of the joint venture agreement, substantial sums were to be borrowed for the puposes of the joint venture, Nessale was entitled to a 40% interest or equity in the joint venture,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Cooper v Touche Ross and Co and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2010] QSC 251
Decision Date: 21/06/2010

CaseChat Overview and Summary

In the case of Cooper v Touche Ross and Co, the plaintiffs sought leave to proceed with their legal action against the defendants, Touche Ross and Co, and a related application to dismiss the proceedings for want of prosecution. The primary issue before the court was whether the plaintiffs' significant delay in pursuing the case, coupled with the defendants' claimed prejudice, justified refusing leave to proceed and dismissing the proceedings. The court was also required to determine whether the plaintiffs' prospects of success in the case were sufficient to warrant granting leave to proceed despite the delay.

The court considered various factors, including the plaintiffs' explanation for the delay, the defendants' claims of prejudice, and the potential for irreparable unfair prejudice due to the delay. It noted that the defendants had not raised any issues of prejudice when the plaintiffs' representative passed away, and that the defendants had been aware of the proceedings and the plaintiffs' case for an extended period. The court emphasised the importance of documentary evidence in the case and acknowledged that while there were some matters of prejudice to the plaintiffs arising from the delay, the prejudice did not extend to the loss of documentary evidence. Ultimately, the court concluded that the plaintiffs' claim could not be determined to be clearly unmeritorious, and that the refusal of leave to proceed and the striking out of the proceedings would terminate the plaintiffs' ability to prosecute their claim. Therefore, the court granted the application for leave to proceed and refused the application to dismiss the proceedings for want of prosecution.

The court further highlighted that while undue delay can lead to palpable deterioration, such as the death of crucial witnesses or the destruction of important documents, prejudice can also exist without the parties realising it. The court recognised the importance of considering the prospects of success of a plaintiff's case in determining whether to grant leave to proceed. In this instance, the court found that the plaintiffs' prospects of success were not so bleak as to warrant refusal of leave to proceed, especially given the stage the proceedings had reached.

In conclusion, the court granted the application for leave to proceed, allowing the plaintiffs to continue with their legal action against the defendants. The court noted that it would hear submissions regarding costs and directions for the conduct of the proceedings in due course.

Orders

Orders of the court

1. The application for leave to proceed is granted.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I also note that, notwithstanding that Ms Aitken died in August 2004, the defendants’ solicitors did not raise any issue of prejudice at that time. In any event, the defendants have known of the proceedings and the details of the plaintiffs’ case for many years and ought to have been in a position to obtain relevant proof of evidence. The defendants did not contend that they have been unable to do so. As regards Mr Adams, the defendants are no doubt disadvantaged by the death of Mr Adams, but it is not clear how he would be a “crucial witness” as the defendants assert in their written submissions. Conclusion While the plaintiffs have not provided an adequate explanation for the delay since May 2004, the defendants accommodated the plaintiffs’ delay in proceeding with their action and to some extent encouraged it. In circumstances where the plaintiffs’ claim cannot be determined to be clearly unmeritorious, and bearing in mind the stage the proceedings have reached, and that the refusal of leave and the striking out of the proceedings would terminate the plaintiffs’ ability to prosecute their claim, I am unable to conclude, that the delay and prejudice pointed to by the defendants should result in leave to proceed being refused. I also note that, while there are matters of prejudice to the plaintiffs following from the long delay, the case is one where documentary evidence will feature prominently and where the prejudice is not said to extend to the loss of documentary evidence. Accordingly, the application for leave to proceed is granted and the application to dismiss the proceedings for want of prosecution is refused. I shall hear submissions as to costs and directions for the conduct of the proceedings.

Ratio Decidendi

Legal Principle Established

A court should take into account whether there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings: Aon Risk Services Australia Ltd v Australian National University [2009] 239 CLR 175 at 182 per French CJ. Undue delay can lead to palpable deterioration, such as when crucial witnesses are dead, or an important document has been destroyed. But the deterioration in quality of justice may not be so readily recognisable and prejudice can exist without the parties realising that it exists: Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 at 551 per McHugh J. Undue delay has ramifications outside the parties as it can undermine confidence in the rule of law: Aon Risk Services Australia Ltd v Australian National University [2009] 239 CLR 175 at 189 per French CJ. Unnecessary delay has a tendency to bring the legal system into disrepute and to decrease the chance of there being a fair and just result: Tyler v Custom Credit Corp Ltd [2000] QCA 178, per Atkinson J. Consideration of the relevant factors In relation to the consideration of a plaintiff’s prospects of success, it is unnecessary for a defendant opposing the grant of leave to demonstrate that the plaintiff has no prospects of success: Hood & Anor v State of Queensland [2003] QCA 408, [32]; Porzuczek v Toowoomba District Health Services [2007] QSC 177, [23]. Nor must the plaintiff demonstrate a certainty of success. The issue of the merits of the plaintiffs’ claim is not one that can be easily determined presently and was not the subject of any lengthy submissions. Counsel for the plaintiffs acknowledged that the matter was a complicated one, but submitted that the strength of the plaintiffs’ case was supported by their two expert witnesses who are highly critical of the conduct of Mr Austin in the performance of his audit duties: see Calibro report, 3.3 – 3.7 and Traynor report, part 3. The defendants’ submissions focused on the plaintiffs’ pleading. It was contended that the plaintiffs’ statement of claim is flawed in a number of respects. It was said that it was not suggested that the plaintiffs relied on the audit report provided to the Joint Venture. Further, it was submitted that the claim for loss of $4,500,000 concerned the equity of Nessale in the joint Venture and that any losses of Nessale could only be recovered by Nessale (which was wound up and deregistered in 2001) not the shareholders. Even if this were not so, Mr GR Cooper was not alleged to have been a shareholder of Nessale. Further, while the amended Statement of Claim (paragraph 28) alleges that, as a result of the breaches, the plaintiffs and/or Nessale were deprived of the opportunity to appoint receivers of the joint venture, no allegation of reliance was made by the plaintiffs upon the audit report. As such any breach by the defendants is not causative of the loss claimed. In response, counsel for the plaintiffs pointed out that the plaintiffs’ case is pleaded in both contract and tort and that the plaintiffs contend that there was an assumption of responsibility by the defendants in circumstances where the audit report was relevant to the calculation of the sale price formula under the joint venture. In relation to the assertion that any loss suffered was that of Nessale, the plaintiffs say that they suffered loss in relation to the value of the shareholding to be purchased using the audit reports. In so far as the plaintiffs’ pleading is said to be deficient, the defendants may of course apply to strike it out. The defendants have not chosen to take that course notwithstanding that the amended Statement of Claim was provided a considerable time ago. An appraisal of the prospects of success is problematic until such deficiencies are addressed.