Eccles v Westpac

IN THE SUPREME COURT

OF QUEENSLAND
No. 1397 of 1991
Brisbane

[Eccles v. Westpac]

BETWEEN

JOHN MARK ECCLES
Plaintiff
AND
WESTPAC BANKING CORPORATION
Defendant

CATCHWORDS: CIVIL LAW - R.S.C. O.90. r. 9(1) - R.S.C. O.90 r. 90 (2) - application for fresh proceedings - no step taken within three years - whether any excuse for delay - whether defendant would be prejudiced by delay.

R.S.C. O. 90 r. 9
Trade Practices Act 1974 (Cth)
Limitation of Actions Act 1974 (Q)
Dempsey v. Dorber (1990) 1 Qd.R. 418
William Crosby et co Pty Ltd v Commonwealth (1963)
109 C.L.R. 490
Hayne v. Nyst (unreported Appeal No. 242 of 1995
delivered 4 September 1996
Brisbane South Regional Health Authority v. Taylor (1996)
186 C.L.R. 541

Counsel: Mr D. Fitzgibbons for the plaintiff

Mr R. Hanson Q.C. for the defendant
Mr T. Sullivan with him

Solicitors: Woodgate Morgan for the plaintiff

Allen Allen & Hemsley for the defendant

Hearing date: 22 September 1998

REASONS FOR JUDGMENT - B.W. AMBROSE J.

Delivered the 24th day of September 1998

This is an application by the plaintiff under R.S.C. O.90 r.9(2) for leave to take a fresh proceeding in the action because no step has been taken in it for a period in excess of three years.
The application first came on for hearing on 28 August 1997 when upon the application of the plaintiff it was adjourned to a date to be fixed to enable further material to be prepared for use on the application. Eventually the matter was re-listed for hearing on 22 September 1998, the additional affidavit material on which the plaintiff sought to rely having been filed in this Court on 29 July 1998 - eleven months after the application was adjourned to enable such material to be filed.
It is clear from the pleadings delivered in the action that the events said to give the plaintiff a cause of action occurred between about November 1984 and about mid 1987.
The plaintiff claims damages for breach of warranty, negligence, breach of fiduciary duty, and an order pursuant to s.82 and 87 of the Trade Practices Act declaring a release given by the plaintiff to the defendant in April-May 1987 void ab initio and damages under that Act also.
It emerges from the material that in about August 1985 the plaintiff obtained a foreign currency loan in Swiss francs using the services of the defendant. This loan was used to re-finance existing borrowings in Australian dollars.
Subsequent to that foreign loan being obtained variations occurred in the exchange rate between the Swiss franc and the Australian dollar - to the disadvantage of the Australian dollar.
It is asserted in the Statement of Claim that discussion took place between the plaintiff and named officers of the defendant bank concerning steps that might be taken to prevent or at least minimize loss resulting from a drop in the exchange rate to which I have referred. These alleged discussions took place in April-May 1986.
It is alleged that in March-April 1987 as a condition of converting the foreign currency loan into a domestic Australian dollar loan with the defendant the defendant required the plaintiff and his then wife to release it from any claim or cause of action which they might have against the defendant out of or in connection with the foreign currency loan or any foreign currency transaction.
When that release was executed the foreign currency loan was converted into an Australian dollar loan. There is a dispute on the pleadings as to the nature of any consideration the defendant gave for that release. It is unnecessary however to embark upon consideration of such matters upon this application.
The defendant opposes the application for leave to take a fresh proceeding in the action on a number of grounds. Firstly it contends that on his own material the plaintiff really fails to give any acceptable reason for the significant delay.
It is secondly contended that in any event the delay in relevant respects is so long as to inevitably cause prejudice to the defendant.
Critical to the plaintiff’s action will be proof of conversations, advice etc. given to him by bank officers in November 1984. The plaintiff will also rely significantly on conversations alleged to have taken place and advice given by bank officers in about May 1985 at a time after the Australian dollar value had depreciated against that of the Swiss franc.
The Writ of Summons commencing the action issued on 16 August 1991. The Statement of Claim was delivered on 2 October 1991 to which was delivered a defence and counter claim on 20 December 1991. On behalf of the plaintiff a reply and answer was delivered on 17 January 1992. No step was even purportedly taken by the plaintiff in the action after delivering his reply and answer on 17 January 1992 until on 25 May 1994 a Notice of Intention to take a further step in the action was delivered pursuant to O.90 r.9(1).
It is convenient at this stage to refer to the terms of that rule -
“9(1)When no proceeding has been taken in a cause for one whole year from the time when the last proceeding was taken any party who desires to proceed shall before taking any step in the cause, give a month’s notice to every other party of his or her intention to proceed.”

What the plaintiff did on 25 May 1994 - about 2_ years after taking his last procedural step was to deliver with the notice under O.90 r.9(1) a slightly amended Statement of Claim and various other documents and also a request for particulars of the defence and counter claim which had been delivered by the defendant on 20 December 1991.
In my view it is clear from the terms of O.90 as construed over the years that the mere giving of a Notice of Intention to Proceed does not constitute taking a proceeding in the action.
It follows in my view that the delivery of the amended Statement of Claim and the various other documents delivered with it could not constitute taking a “step” in the action. Presumably that was why the defendant took no steps with respect to the various documents all “delivered” to the solicitors for the defendant on 25 May 1994. These steps were all taken apparently upon the plaintiff changing his legal representatives.
In any event on 29 July 1997 an application was made by summons for leave to proceed under O.90 r. 9(2). In support of that application was filed an affidavit by the plaintiff, paragraph 3 of which reads:
“I do not recall being advised by my previous solicitors of any time limits in respect of these proceedings and was only made aware of the provisions of O.90 r.9 by my present solicitor in late April 1997 after he commenced acting for me.”

In his written submissions prepared for the second day of the hearing, counsel for the plaintiff observed:
“(h)The applicant swears to a number of issues which caused delay. Principally marriage and monetary issues and also he does not recall being advised about the time limits by his previous solicitors. That does not constitute a waiver of privilege.”

In the course of his oral submissions, counsel for the plaintiff confirmed that he contended that the terms of para. 3 of the plaintiff’s affidavit to which I have referred did not waive privilege with the result that the plaintiff could be cross-examined on what, if anything, he had been informed by his solicitor or indeed that enquiry might be made of that solicitor if called as a witness. In fact this interesting matter was not debated upon the hearing of the application and it is unnecessary for me to give further consideration to it. I simply observe however that the statement by the plaintiff that he did not recall being advised by his former solicitor of time constraints under O. 90 r. 9(2) for the taking of steps towards the determination of his action made with a claim directed to avoid cross-examination on that very point does little to evoke a sympathetic appraisal of the circumstances of the delay in conducting his action which has made it necessary for the plaintiff to obtain leave under O. 90 r. 9(2). In Dempsey v. Dorber (1990) 1 Qd.R. 418 in delivering the judgment of the Full Court, Connolly J. at 420 having observed that the offering of a satisfactory explanation for delay on an application under O. 90 r. 9(2) “is not a condition precedent to the granting of leave to proceed ---” observed:
“This however is not to say that a satisfactory explanation for the delay is not a relevant circumstance. On an application for leave to proceed under O. 90 r. 9 the applicant for leave must ‘show that there is good reason for accepting the particular proceedings from the general prohibition’ on the taking of a fresh proceeding without the order of a Court or Judge in a case in which three years have elapsed from the time when the last proceeding was taken. See William Crosby et co Pty. Ltd. v. Commonwealth (1963) 109 C.L.R. 490 at 496.”

At 42 His Honour continued:

“The facts as I have said are meagre in the extreme. There is not satisfactory explanation for delay if indeed there is any explanation at all. There is no evidence of any effort to serve the defendant. The delay has on any view been inordinate. If there were any evidence of specific prejudice to the defendant the answer must surely be that the action should not be permitted to continue. Again if it were an ordinary witness action, that is to say if liability were likely to be in issue the lapse of time is such that a defendant might well be able to point to inability to find relevant witnesses and quite apart from this he could point to the inevitable blurring of recollection over so long a period ---”

His Honour then turned to the facts of that case where liability in a personal injury action was not in issue and held that an order ought be made in favour of the plaintiff in the circumstances of that case.

In Hayne v. Nyst (unreported; Appeal No. 242 of 1995; judgment delivered 4 September 1996) the Full Court dismissed an appeal against a refusal of leave to proceed under O. 90 r. 9(2). That was a case where a writ had issued about three years after the alleged injury. The writ was not served for 12 months but no statement of claim had ever been delivered. When the application for leave under O.90 r. 9(2) was made a draft Statement of Claim was produced. In that case also a Notice of Intention to Proceed had been given and correspondence was exchanged between the solicitors but leave was not sought until 18 months later. At p.4 of his judgment Macrossan C.J. observed:
“The respondents had made clinical notes of the examinations taken in 1983 but their assertion amounted to the claim of significant difficulty of recollection of the full details of that conversation in which advice was alleged to have been given to the appellant. The claim of course for the appellant was that advice had been negligently given to her.

The original of those notes was lost but a copy was available. It has become accepted that a satisfactory explanation for delay is not a condition precedent to obtain a grant of leave to proceed under O.90 r. 9 but delay and the extent of any explanation offered for it are of course part of the relevant circumstances. Prejudice to defendants is also amongst the relevant factors.

This is a case where the essential basis of claim resided in the details of conversations in which advice was or may have been conveyed to the appellant. The Judge proceeded on the basis that the details of the conversations were critical in the circumstances and the respondents were disadvantaged by lack of full recollection and the extent of their dependence on unabridged notes of what had been said in the course of the consultation. ---

O.90 r. 9 imposes a real discretion requiring judicial consideration of all relevant circumstances before an entitlement to an order can be secured. Here there was a sufficient basis for a Judge’s finding of prejudice to the respondents. In any action precise determination will be called for in the area where the respondents had an impaired recollection and this is in circumstances where the appellant had inordinately and unreasonably delayed ---”

In concurring with the Chief Justice, Davies J.A. said:
“---The first point I would make is that unlike the appellant the respondents would be unlikely to have recalled the events as time went by with great clarity. They were not events of critical importance in their lives. ”

Notes are likely to have been merely that, that is notes. --- but the onus being on the appellant the learned primary Judge was in my view entitled to infer that the recollection of both respondents would have been impaired substantially by the long delay, more than twelve years after the birth of the appellant’s child.”

De Jersey J. in concurring with the Chief Justice observed inter alia:
“It must be remembered in the end that it fell to the plaintiff not the defendants to show why the action should have been allowed to proceed.”

While undoubtedly an application for an extension of a statutory limitation period under s.31 of the Limitation of Actions Act (1974) (Q) will involve the application of principles a little different from those upon an application for leave under O. 90 r. 9(2). Nevertheless, the weight to be given to inordinate delay for which no reasonable excuse is given will undoubtedly be similar.
It is interesting to have regard to what was said in Brisbane South Regional Health Authority v. Taylor (1996) 186 C.L.R. 541 with respect to consideration of delay in an extension application under s. 31 of the Limitation of Actions Act (1974). At page 548 in the joint judgment of Toohey and Gummow JJ. it was observed:
“A material consideration (the most important consideration in many cases) is whether by reason of the time that has elapsed a fair trial is possible. Whether prejudice to the prospective defendant is likely to thwart a fair trial is to be answered by reference to the situation at the time of the application.”

McHugh J. at 550 said:
“The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent. --- but the extent to which Dr Chang must rely on his notes must relate to the lapse of time involved. In all the circumstances it can hardly be gainsaid that there would be some prejudice to the appellant by reason of the delay that has ensued.”

At 551 he continued:

“But the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour ---

The enactment of time limitations has been driven by the general perception that ‘where there is delay the whole quality of justice deteriorates’ --- perhaps more often than we realise the deterioration in quality is not recognizable even by the parties. Prejudice may exist without the parties or anybody else realizing that it exists. --- so it must often happen that important perhaps decisive evidence has disappeared without anybody now ‘knowing’ that it ever existed ---

The longer the delay in commencing proceedings the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.

At 553 he said:

“--- the final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible ---”

A limitation provision is the general rule an extension provision is the exception to it ---

The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the state is best served by the limitation period in question. Accordingly --- he or she has the positive burden of demonstrating that the justice of the case requires that extension.

At p. 555 he continued:

“But the justice of the plaintiff’s claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who by reason of delay in commencing the action is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action.”

At 556 he continued:

“Besides the proved prejudice, the long delay gave rise to a general presumption of prejudice.”

On the facts of the present case the facts relevant to the plaintiff’s claim were pleaded in the Statement of Claim delivered 2 October 1991 - between five years and seven years after the making of the alleged representations and the giving of the alleged advice upon which the plaintiff relies for relief. It was not until then that the defendant could understand the case it had to meet on the facts alleged against it.
By the time the defence and counter claim was delivered on 20 December 1991, the defendant had had the opportunity to take instructions from its officers alleged to have been responsible for the representations and advice pleaded in the Statement of Claim.
Counsel for the plaintiff put some stress upon the detail with which the draftsman of the defence and counter claim had dealt with the various matters pleaded in the Statement of Claim. However, my perusal of the pleadings leads me to conclude that the relevant representations and advices pleaded have simply been denied. Although there are admissions in a general sense of banking transactions and steps that were taken by bank officers in dealings with the plaintiff there is simply a denial of all material assertions upon which the plaintiff would rely to found his cause of action.
In my view this is the very sort of case involving likely conflict of oral testimony to which Connolly J. referred in Dempsey v. Dorber (supra) and to which Macrossan C.J. and Davies J.A. referred in Hayne v Nyst (supra). The observations in those cases which dealt with an application for leave under O. 90 r. 9(2) seem to me in so far as they touch on the effect of delay to be in accord with the observations made in Brisbane South Regional Health Authority v Taylor to which I have referred which touch on the effect to be given to it on an extension of limitation application under s. 31 of the Limitation of Actions Act (1974).
By way of explanation of the circumstances in which the delay occurred the plaintiff swore that since May 1994 he had had “very little income in order to pursue my case”. He said that it was estimated that fees of approximately $150,000 to $250,000 would be incurred on his claim. He said that since that time he had not had that amount of cash available in his bank accounts. However, interestingly he also said that he was a major shareholder in a company called Villa View Pty. Ltd. which in 1993 purchased the management and letting rights of an apartment building. That investment had not been successful.
That same company had been the former owner of a licensed hotel which had been sold in ??? and the proceeds then invested in acquiring the managing rights in respect of the apartment building. It is clear that subsequent to the delivery of the Statement of Claim on 2 October 1991 the plaintiff realized an investment producing a net return of some hundreds of thousands of dollars. He then reinvested that sum, borrowing nearly $½million for the new investment. He also purchased and commenced to develop a caravan park.
He said that he had certain family problems and these resulted in divorce.
I am quite unpersuaded that any significant delay in causing the orderly progress of his action after delivery of the Reply and Answer on 17 January 1992 was attributable to any shortage of funds. It seems likely that the interest of the plaintiff after the delivery of his Reply and Answer was distracted by his other business interests in which he invested - unsuccessfully as it has proved
At the end of the day I am unpersuaded that the material upon which the plaintiff has relied offers any reasonable excuse for his future to ensure the orderly progression of his action in accordance with the time constraints of the Rules of Court subsequent to 17 January 1992 up to and including 25 May 1994. In my view no steps of the sort contemplated by O.90 r. 9(1) were taken by the purported delivery of the amended Statement of Claim and other particulars etc. on 25 May 1994 in the absence of a month's notice given pursuant to that rule.

It was not until 29 July 1997 that this application for leave to proceed was made. That is, there was a delay of 5½ years from the time the last step in the action had been taken - the delivery of the reply and answer on 17 January 1992.
I disregard the delay in bringing this matter back on for hearing after its adjournment on 28 August 1997.
I will approach the matter on the footing that no step in the action in accordance with the Rules of Court was taken for the period of 5½ years from the delivery of the reply and answer on 17 January 1992 until the summons for leave to proceed was issued on 29 July 1997.
It seems likely that if leave to proceed is granted a trial date for this action will not be obtained until at least mid-1999.
The plain fact then is that the conversations, representations and advices crucial to the plaintiff’s action are alleged to have occurred 12 or 14 years ago. By the time the matter gets to trial at least another 9 months will probably have elapsed.
The terms of those conversations, representations and advices are all in dispute.
Three bank officers allegedly involved in these conversations have long since retired from employment with the bank.
From material filed on behalf of the defendant it is clear that one of the bank officers who had been a manager of one its branches for 21 years retired from employment on 5 November 1987 - nearly 11 years ago.
Another bank officer whom the plaintiff alleges was the source of important representations, advices, conversations etc. retired from the bank after 22 years service as a manager on 20 July 1995.
Another bank officer working at the bank’s Armidale branch in 1984 when one of the relevant transactions is alleged to have occurred resigned from the bank in 1993. Another of the bank officers retired in June 1993.
It emerges from the material filed on behalf of the defendant that there are some diary notes taken and contemporaneous letters composed from early 1984 until mid-1985 or a little later. There are further such documents prepared and composed in April 1987.
Copies of those documents were exhibited to the affidavit of a solicitor in the employ of the solicitors for the defendant. Careful examination of this material leaves me unpersuaded really that the officers of the defendant will obtain much assistance at all by perusing those documents in assisting them to recall with any precision the terms of any conversation, discussion or advice of the sort relevant to the issues pleaded by the plaintiff in his Statement of Claim.
Although the terms of some of the documents, if they be proved, would seem to me to contradict some of the matters pleaded by the plaintiff, it is really the contents of those documents some of which on their face do not purport to record any actual conversation which probably took place contemporaneously with their preparation or execution. Thus, on a letter addressed to the defendant and signed apparently by both the plaintiff and his then wife dated 19 August 1985, there is an acknowledgement that there was explained to them in a way which they fully understood -
(a) “The significant foreign exchange risk being undertaken in this transaction.”
There is a “diary memo” signed by a bank officer which reads:
“19th August 1985
Eccles J.M. et J.S.
Maroochydore Branch
Subject Off-shore loan aud. $650,000
Remarks Mrs Eccles called to sign documentation for the above loan. Prior to her signing liabilities were explained and also the significant exchange risk involved . Having understood this she signed the acknowledgement and other documents.”

It is signed by somebody purporting to be:
“Witness
R.G. McAlpine
Manager’s Assistant
Armidale NSW”
On one view of the matter, these documents might on their face tend to contradict some of the assertions in the Statement of Claim. On the other hand, the “diary memo” to which I have referred was obviously prepared after discussions which had taken place. It does not purport to record the discussions themselves but only the bank officer’s brief summary of what he perceived to be their important effect.
In my view, the diary note in these terms made more than 13 years ago would give the person making that note very little assistance in recording details of a conversation which the plaintiff would try to characterize as amounting to negligent advice or misrepresentations.
There is no diary note whatever that I can see to any similar discussion that may have taken place with the plaintiff personally when at some stage apparently he also signed the letter addressed to the defendant’s manager at Maroochydore.
Even when the Statement of Claim was delivered on 2 October 1991 containing the plaintiff’s allegations as to the content of advices, representations, etc. more than six years would have passed from the date of those documents of 19 August 1985. One might think that even at that time such diary notes would be of limited value in refreshing the memory of the person who made them as to the details of conversations for the reasons given in Hayne v. Nyst (supra) to which I have already referred.
It is my view however that the relevant period of delay in considering this application is that between the events upon which the plaintiff relies to establish his cause of action and the date of the application under O. 90 r. 9(2). I think it arguable that one might give some weight to the period of delay that will pass between the date of the conversations in issue and the date that the matter is likely to come to trial if leave to proceed is given. The better view perhaps is that the appropriate period of delay for consideration ends at date of the application to which I have referred. It is not of course sufficient that the officers of the bank specified in the Statement of Claim be in a position to give some instructions on the matters asserted in the Statement of Claim to constitute representations, advices etc. The plaintiff will give evidence first in the ordinary course of events and it will be necessary to take instructions from those persons (who may not even be allowed to sit in court while the plaintiff is giving evidence) with a view to the cross-examination of the plaintiff and perhaps his witness or witnesses on matters peripheral to the advice or representation the effect of which is baldly asserted in the Statement of Claim.
These in my view are all matters which in the absence of any acceptable explanation for the delay lead me to the conclusion that the plaintiff has not shown good reason for excepting his action from the general prohibition contained in O. 90 r. 9(2) where no proceeding in accordance with the Rules has been taken for a period in excess of three years. In this case in my view, no such step has been taken for a period of about 5½ years.
I dismiss the plaintiff’s application.
I order that the plaintiff pay the defendant’s costs of and incidental to the application to be taxed.

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Citations

Eccles v Westpac [1998] QSC 193

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[1998] QSC 193

24 September 1998