Equuscorp Pty Ltd v Percival
[2008] VSC 116
•18 April 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 7219 of 1995
| EQUUSCORP PTY LTD (formerly EQUUS FINANCIAL SERVICES LIMITED) | Plaintiff |
| v | |
| JOHN MORGAN EDWIN PERCIVAL | Defendant |
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JUDGE: | MASTER EVANS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 April 2008 | |
DATE OF JUDGMENT: | 18 April 2008 | |
CASE MAY BE CITED AS: | Equuscorp v Percival | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 116 | |
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PRACTICE AND PROCEDURE – Reinstatement of dismissed proceeding – Want of prosecution – Prejudice to defendant to be inferred
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr F.G.A. Beaumont QC with Mr S.J. Maiden | |
| For the Defendant | Mr M.J. Campbell |
THE MASTER:
Before the court is an application by the Plaintiff made 19 September 2007 to reinstate the proceeding and for summary judgment. The proceeding was dismissed by Beach J ‘with a right of reinstatement’ on 2 February 2001.
The proceeding was commenced by Writ on 4 June 1993 in the County Court. In it the Plaintiff seeks to recover a debt arising from an agreement made 27 June 1989 between the Defendant and Rural Finance Corporation (now liquidated). On 7 January 1991 Rural assigned the benefit of that agreement to the Plaintiff . The debt is alleged to have arisen by reason of the Defendant’s default under the agreement on 27 June 1991. The Plaintiff’s business was and is the acquisition and recovery of debts. It is a professional litigator.
The Defendant alleges inter alia that the Plaintiff is estopped from recovering the debt by reason of oral promises made by Rural employees before the agreement was signed.
The proceeding is one of many similar proceedings bought by the Plaintiff against borrowers from Rural under the same forms of agreement in Victoria and other jurisdictions including Queensland.
In September 1995 the proceeding was transferred to this court so it could be determined as a test case for the other proceedings brought in this state. On 9 October 1995 it was entered into the Long Cases List, a managed list, under the supervision of the Listing Master. At the stage that it was transferred amended pleadings had closed and each party had made discovery of documents.
On 29 February 1996 at the request of the Plaintiff’s solicitors the proceeding and all other similar proceedings were brought to a halt pending the determination by the Queensland Supreme Court of the Plaintiff’s proceeding against Glengallan Investments Pty Ltd which involved some issues in common with this proceeding. The Defendant’s solicitor agreed to this course but reserved the right to pursue defences not raised in the Glengallan proceeding notwithstanding the adverse determination by that court of those common issues.
On 10 August 1998 the Plaintiff sought to have this proceeding ‘reinstated’ in the Long Cases List and for directions with a view to bringing it to trial. In fact it remained in that list, the directions hearing having been adjourned sine die by Master Kings on 24 March 1997.
During the hearing of the application, which was opposed somewhat equivocally by the Defendant, counsel for the plaintiff submitted that the Glengallan proceeding bore ‘no resemblance’ to this proceeding and as a reason for bringing this case to trial without delay the Plaintiff’s concern about the effect on the recollection of witnesses of the passing of nine years since the events which they would be required to recall at trial.
Master Kings ordered that the proceeding be ‘reinstated’ and gave directions inter alia including leave to the Plaintiff to file and serve an Amended Statement of Claim by 12 September 1998, leave to the Defendant to file and serve a further amended defence and counterclaim and for discovery in relation to fresh issues arising on the amended pleadings and adjourned the directions hearing to 9 February 1999.
No amended pleadings were served and nothing was done to progress the proceeding before the adjourned directions hearing.
In September 1998 Phillip Kotsanis took over the conduct of the proceeding on behalf of his employer the Plaintiff. He formed the view that to proceed with this proceeding would be to unnecessarily duplicate the work then being done in the Glengallan proceeding. He did not communicate this view to the Defendant’s solicitor before 9 February 1999. The delay in this period of 6 months must be regarded as inordinate and inexcusable as the only explanation for it was that the Plaintiff had made a unilateral decision not to prosecute this proceeding.
The Defendant’s solicitor consented to an adjournment of the directions hearing on 9 February 1999 to 18 June 1999. Kotsanis deposes in his affidavit sworn 10 September 2007 in support of this application that he had an understanding that it was the parties ‘mutual intention to await the outcome of the Glengallan case’. He did not state the basis for this understanding. It was not referred to in the Defendant’s solicitors letter dated 9 February 1999 consenting to the adjournment. In his affidavit sworn 3 April 2008, over 9 years after the event, his understanding underwent a Damascene conversion to a strong recollection of the substance of the conversation on 9 February 1999 with the defendant’s solicitor. He now averts positively that that solicitor consented to the adjournment of this proceeding pending the outcome of the Glengallan proceeding. As this evidence was not answered, I will proceed on the assumption that this was the agreement between the parties.
Kotsanis deposed to attending the court and providing it with a copy of the letter of consent from the Defendant’s solicitor.
There is no record on the court file of the making of an order adjourning the directions hearing or of any correspondence from the solicitors for the parties in relation to the adjournment. There is no record of any order being made on 18 June 1998. This unsatisfactory situation could have been corrected had the Plaintiff’s solicitor ensured that the parties intention was carried into effect by the court by seeking an authenticated copy of the order he sought.
The proceeding remained in limbo until an audit of the Scalis files in the registry in early 2001 revealed that there had been no action on the file since the order made in 1998. In particular the Plaintiff’s solicitor did not attend court on 18 June 1999 or seek to arrange a further adjournment by consent.
A letter was sent by the Court Listings Section to the Plaintiff’s solicitor on 10 January warning that unless consent orders disposing of the proceeding were sent by 31 January 2001 the file would be referred to the Judge in the Practice Court on 2 February 2001 at 10.30 am with a request to make the following order:
‘The proceeding is dismissed with a right of reinstatement and no order as to costs”.
The Plaintiff’s solicitor briefed counsel to attend and seek to have the directions hearing further adjourned. He does say that he consulted the solicitor for the defendant about this course of action. Counsel attended court and then reported to Kotsanis that the proceeding had been dismissed with a right of reinstatement. There is no affidavit from counsel as to what occurred at the court.
Some light is cast on the events of that morning by a memorandum dated 2 February 2001 from the Listing Section officer to the Prothonotary. It seems that the file had been sent to the Practice Court and had been returned prior to 10.30 am that morning with a Court Record of Hearing signed by Beach J’s Associate dismissing the proceeding. It is not surprising then that counsel’s appearance was not noted on the record or on the authenticated court order based on it.
The Memorandum reveals that the Judge’s Associate assumed that the case was one of a group of cases involving the Plaintiff that the Judge was managing. This was not in fact so as it remained in the Long Cases List.
The dismissal of the proceeding brought it to an end. This was not what was contemplated by the agreement made between the solicitors. I apprehend that the reservation of a ‘right of reinstatement’ was nothing more than a reservation of a right to apply for reinstatement upon proper materials and reflected the provisions of Order 34.05 (now revoked) which provided for the automatic dismissal of certain proceedings in certain events but reserved a right to apply to reinstate a proceeding so dismissed. The rule was a conceptually original method of dealing with cases which had not been properly prosecuted.
The explanation offered by the Plaintiff’s solicitor for failing to apply to resurrect the proceeding promptly is completely unsatisfactory. He simply considered that it was the common view of the parties that the proceeding should wait until the resolution of the Glengallan case in which the trial by that time had commenced. His basis for that belief is that certain of the other similar proceedings in the County Court had been struck out with a right of reinstatement on 7 February 2001. He does not say that those orders were made by consent but it would be immaterial that they had been as striking out does not bring a proceeding to an end.
On 30 November 2001 judgment was given in the Glengallan proceeding in favour of the defendants. As the proceeding had been resolved the agreement as to the postponement of this proceeding, if it had survived the dismissal, was beyond any doubt at an end. There is no evidence that the Plaintiff’s solicitor sought a postponement of the reinstatement and prosecution of this proceeding pending the resolution of any appeals in that proceeding.
It is not necessary to set out the history of appeals and rehearing in the Glengallan proceeding. Suffice it to say that all hope for the defendants in it was lost when the High Court refused special leave to appeal on 8 December 2006.
On 1 November 2006 and 3 April 2007 the Plaintiff’s solicitor wrote to the Defendant’s solicitors seeking their consent to the reinstatement of the proceeding and judgment against their client. On 7 May 2007 he spoke to the defendant’s solicitor. He said he would seek instructions but did not contact him subsequently.
It was not until 19 September 2007 that this application was filed.
I am satisfied that there is no adequate explanation for the following periods of delay in the prosecution of this proceeding:-
(i)from 10 August 1998 to 9 February 1999
(ii)from 30 November 2001 to 17 September 2007
I am also satisfied that there is no adequate explanation for the failure of the Plaintiff to apply expeditiously for the reinstatement of the proceeding after it was dismissed on 2 February 2001 so that it was in a position to prosecute it expeditiously once the Glengallan proceeding had been determined by the Supreme Court of Queensland. It was important that it did so because it was clear that unless that court decided the common issues in favour of the Defendant it would be necessary to litigate those issues raised in this proceeding which had not been raised in that proceeding.
Accordingly, I am satisfied that those delays alone or in combination were inordinate and inexcusable.
The question then arises as to whether or not those delays have occasioned such prejudice to the Defendant that it will not be possible to have a fair trial of the proceeding.
Counsel for the Plaintiff conceded at the outset of the hearing of this application that even if the proceeding was reinstated the court would not accede to the application for summary judgment because the promissory estoppel defence might be arguable and accordingly the Plaintiff would not persist in that application.
The resolution of that issue will test the recollection of witnesses of conversations which took place in or about June 1989. The Defendant bears the burden of persuasion in relation to that issue. The generality of the Defendant’s affidavit in relation to the alleged conversations does not satisfy me that his recollection is sufficient to do justice to his defence. It is only in cross examination that the precision of his recollection or lack of it will be revealed. The evidence does not reveal how old the Defendant is but he is certainly almost 19 years older than he was when he had those conversations. Common experience dictates that such a lapse of time is likely to diminish the capacity of the human mind to recall satisfactorily those conversations and the circumstances surrounding them.
This proceeding, if reinstated now would not be ready to be fixed for trial. Amendments to pleading consequential discovery and interrogatories would be required. It is unlikely that, when ready to be fixed for trial, it would be given a trial date earlier than March 2009. That further lapse of time will only aggravate the erosion of the Defendant’s recollection of events.
I am satisfied that for this reason alone there is more than a substantial risk it will not be possible to have a fair trial of this proceeding.
If further reason be needed to dismiss this application it is that no person should remain at risk in litigation for such an unconscionable period without good cause being shown for lengthy periods of delay in the prosecution of it. The claim against the Defendant was relatively minor when commenced but with interest now exceeds $200,000. The Defendant has since he learned of the first decision in Glengallan believed that he could arrange his finances without concern about any liability to the Plaintiff. It would in the circumstances to which I have adverted be unjust to disabuse him of that belief.
The application will be dismissed.
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