Johnson v Kinetic Superannuation Ltd

Case [2023] QDC 50

DISTRICT COURT OF QUEENSLAND

CITATION:

Johnson v Kinetic Superannuation Ltd & Ors [2023] QDC 50
PARTIES:

AMBER CAROLINE JOHNSON

(plaintiff)

v
KINETIC SUPERANNUATION LTD (ABN 14 05614 056 917 303) AS TRUSTEE FOR KINETIC SUPERANNUATION FUND (ABN 98 503 137 921)

(first defendant)
and
SUNSUPER PTY LTD (ABN 88 010 720 840) AS TRUSTEE FOR SUNSUPER SUPERANNUATION FUND (ABN 98 503 137 921)
(second defendant)
and
HAYS SPECIALIST RECRUITMENT (AUSTRALIA) LTD (ABN 47 001 407 281)
(third defendant)

FILE NO/S:

BD 2265/2019

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

29 March 2023

DELIVERED AT:

Townsville

HEARING DATE:

2 March 2023

JUDGE:

Judge A J Rafter SC

ORDERS:

1.   The plaintiff’s application for leave to proceed is refused.

2.   The plaintiff’s claim is dismissed.

3.   The plaintiff pay the defendants’ costs of the application and the proceeding.

CATCHWORDS:

PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – DELAY – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – TIME AND EXTENSION – COURT SUPERVISION – WANT OF PROSECUTION OR LACK OF PROGRESS – where the plaintiff applies for leave to take a further step in the proceeding pursuant to r 389(2) Uniform Civil Procedure Rules 1999 – factors relevant to the exercise of discretion to give leave to proceed – whether the plaintiff’s claim has reasonable prospects of success – whether the delay was caused by the plaintiff’s legal representatives – whether the defendants have suffered prejudice because of the delay

Uniform Civil Procedure Rules 1999, r 389(2)

Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529
Drake v PKF (Gold Coast) Pty Ltd [2023] QSC 45
Dukker v Challenge Recruitment Limited [2011] QDC 108
Fortuna Seafoods Pty Ltd v The Ship “Eternal Wind” [2008] 1 Qd R 429
Lilyville Pty Ltd v Colonial Mutual Life Assurance Society Ltd [1999] QSC 372
Oldmeadow v Trevorrow [2023] QSC 38
Perre v Apand Pty Ltd (1999) 198 CLR 180
Pittaway v Noosa Cat Australia Pty Ltd [2016] 2 Qd R 556
Tyler v Custom Credit Corporation Ltd [2000] QCA 178
United Super Pty Ltd v Built Environs Pty Ltd & Anor (2001) 80 SASR 513

COUNSEL:

M Horvath for the plaintiff
M May for the first and second defendants
S C Russell for the third defendant

SOLICITORS:

Taylors Solicitors for the plaintiff
McInnes Wilson Lawyers for the first and second defendants
Results Legal for the third defendant

Introduction

  1. The plaintiff applies for leave to take a further step in the proceeding pursuant to r 389(2) Uniform Civil Procedure Rules 1999 (“UCPR”) after a delay of more than two years.

  2. The plaintiff’s claim is for $279,600 which she says should have been payable to her for a total and permanent disability (“TPD”) under an insurance policy taken out by her superannuation fund.

  3. In November 2015 the plaintiff and the third defendant (“Hays”) entered into Terms of Engagement whereby the plaintiff…

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Details
AGLC
Johnson v Kinetic Superannuation Ltd [2023] QDC 50
Case
[2023] QDC 50
Decision Date

CaseChat Overview and Summary

In Johnson v Kinetic Superannuation Ltd, the plaintiff sought leave to amend her statement of claim after the limitation period had expired, as well as an extension of time to take further steps in the proceeding. The defendants opposed the application, arguing that the plaintiff had poor prospects of success and that they had been prejudiced by the delay. The court was required to determine whether the plaintiff's claim had reasonable prospects of success, whether the delay was caused by the plaintiff's legal representatives, and whether the defendants had suffered prejudice because of the delay.

The court found that the plaintiff's prospects of success were limited and that the delay was largely due to the failings of the plaintiff's lawyers. The court also found that the defendants had been prejudiced by the delay, as members of the community are entitled to plan their affairs without the consequences of ongoing litigation. The court concluded that the application for leave to proceed should be refused and that the plaintiff's claim should be dismissed. The plaintiff was ordered to pay the defendants' costs of the application and the proceeding.

The court's decision was based on the principles set out in Oldmeadow v Trevorrow, which held that the proper approach is to identify the relevant factors, assess the weight to be given to each of them, and then determine whether, on balance, there is good reason for making the order. The court found that the plaintiff had not shown that leave to proceed should be granted, as the delay beyond the two-year period was not substantial and the plaintiff's poor prospects of success and the prejudice to the defendants weighed against granting leave to proceed.

In conclusion, the court refused the plaintiff's application for leave to proceed and dismissed her claim, ordering her to pay the defendants' costs of the application and the proceeding. The decision highlights the importance of timely prosecution of claims and the potential consequences of delays caused by legal representatives.

Orders

Orders of the court

1. The plaintiff’s application for leave to proceed is refused.

2. The plaintiff’s claim is dismissed.

3. The plaintiff pay the defendants’ costs of the application and the proceeding.

Background

Background to the litigation

After receiving Hays’ amended defence, the plaintiff’s solicitor briefed counsel to advise whether an amended reply was necessary. Counsel advised that the statement of claim should be amended. An amended statement of claim (“ASOC”) was filed on 20 December 2022. However, by that time the two year period had elapsed. The plaintiff’s solicitor says that counsel miscalculated the two year period. He says that in October 2022, counsel advised him to send a notice of intention to proceed and that the deadline to take the next step was 20 December 2022.[6][6]Mr Taylor’s first affidavit at para 51.Factual background The Terms of Engagement stated that Hays places superannuation contributions into Kinetic Superannuation, but workers could nominate their own complying fund. The plaintiff nominated “ANZ Smart Choice” as her nominated superannuation fund.[7][7]Defence of Hays filed 20 December 2019 para 4(a); reply to defence filed 23 March 2020. Between 29 January 2016 and 22 July 2016 Hays made superannuation contributions on behalf of the plaintiff. On 21 June 2016 the plaintiff sent Hays an email requesting a change to where her superannuation contributions were to be paid.[8] It seems that there was an error in the details provided because the superannuation contributions that Hays attempted to make on the plaintiff’s behalf were rejected. On 2 September 2016, 11 October 2016 and 25 November 2016 Hays requested that the plaintiff provide the correct details of her superannuation fund. Having received no response from the plaintiff, Hays applied for her to become a member of the Kinetic Fund, which was its default superannuation fund option. [8]Mr Taylor’s first affidavit, exhibit DAT-1 at p, 11. Kinetic wrote to the plaintiff on 5 December 2016. The letter stated that the sum insured for total and permanent disablement was $279,600. The letter went on to state:“When cover starts: Your cover (insurance benefit shown above) is currently pending. It is subject to us receiving an initial contribution from your employer within 180 days of the date you commenced work. If we don’t receive a contribution or another payment we may treat your account as if it was never opened for you.”[9][9]Mr Taylor’s first affidavit, exhibit DAT-1, p 23. The group life insurance policy (“the policy”) maintained on behalf of members of the Kinetic Fund provides as follows:[10]“Date Joined Fund Means the later of:(a)the date the person commenced employment with an employer (where that date is known); and(b)the beginning of the period to which the first Participating Employer contribution relates.”[10]Mr Taylor’s first affidavit, exhibit DAT-1, p 88. The spreadsheet maintained by Hays states that a superannuation contribution of $241.20 was paid to the Kinetic Fund on behalf of the plaintiff on 12 December 2016 in respect of the period 1 June 2016 to 30 June 2016.[11][11]Mr Taylor’s first affidavit, exhibit DAT-1, p 10. The policy provides for default cover in clause 4.2 as follows:[12][12]Mr Taylor’s first affidavit, exhibit DAT-1, pp 66-67.“4.2 Default Cover4.2.1An Eligible Person will be automatically accepted as an Insured Member for a level of cover provided on a default basis known as Default Cover unless either of the following apply:(a)We have been notified prior to the Changeover Date that they do not wish to be covered under this Policy; or(b)if the first Participating Employer contribution is received more than 180 days after the Date Joined Fund.Where paragraph (a) or (b) applies that person will be deemed never to have been covered under this Policy until such time as they meet Our underwriting requirements described in condition 4.4.4.2.2Default Cover will begin for an Eligible Person who receives it under condition 4.2.1 from the later of:(a)the date the person commenced employment with their Participating Employer;(b)the beginning of the period to which the first Participating Employer contribution relates; and(c)where applicable the date We accept the Member for cover in writing.4.2.3 The amount of Default Cover that an Insured Member obtains under this condition 4.2 is determined by condition 5.3.1.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Although the delay in the winding up of Kinetic has no relevance to whether there can be a fair trial, it is nevertheless a relevant consideration. A factor to be taken into account is that members of the community are entitled to plan their affairs without the consequences of ongoing litigation.[98] The adverse consequences of delays in litigation extend to corporate defendants.[99] The prejudice to the defendants weighs against granting leave to proceed.[98]Tyler v Custom Credit Corporation Ltd [2000] QCA 178 at [2].[99]Drake v PKF (Gold Coast) Pty Ltd [2023] QSC 45 at [72] (Cooper J).Conclusion Balancing all relevant factors, I conclude that the plaintiff has not shown that leave to proceed should be granted. The delay beyond the two year period is not substantial and is largely due to the failings of the plaintiff’s lawyers. However, having regard to the plaintiff’s poor prospects of success and the prejudice to the defendants, I consider that the application should be refused. In those circumstances the application for leave to proceed should be refused. The plaintiff’s claim should be dismissed. Unless any party submits otherwise, the plaintiff should pay the defendants’ costs of the application and the proceeding.

Ratio Decidendi

Legal Principle Established

In Oldmeadow v Trevorrow[30] Freeburn J, referring to the decision of Chesterman J in Lilyville Pty Ltd v Colonial Mutual Life Assurance Society Ltd[31] said:“In that case, His Honour approved the comments of Connolly J in Dempsey v Dorber that the proper approach is to identify the relevant factors, assess the weight to be given in the circumstances of the case to each of them, and then to determine whether, on balance, there is good reason for making the order. Chesterman J then went on to state:Whether there is a satisfactory explanation for the delay in the prosecution of the action and whether the defendant will suffer prejudice if the action proceeds are always relevant factors. The discretion conferred to rule 389 is one to allow an action to proceed despite the general prohibition against an action continuing in which no step has been taken for three years. The applicant must satisfy the court that grounds exist for exercising the discretion in its favour. There is an evidentiary onus on the defendant to raise any consideration telling against the exercise of the discretion but the ultimate onus of satisfying the court that the action should be allowed to proceed remains on the applicant: see Brisbane South Regional Health Authority v Taylor(1996) 186 CLR 541 at 547; 139 ALR 1; 70 ALJR 866; per Toohey and Gummow JJ.”[30][2023] QSC 38 at [48].[31][1999] QSC 372Consideration I turn then to address the factors identified in Tyler v Custom Credit Corporation Ltd which are relevant to the exercise of discretion to give leave to proceed under r 389 UCPR.How long ago did the events occur and what delay was there before the proceeding was commenced It is not contentious that the plaintiff commenced employment in November 2015. The events surrounding the plaintiff joining the Kinetic Fund occurred in 2016. The plaintiff developed symptoms in June 2017. The plaintiff attempted to return to work in February 2018 but she suffered panic attacks, and the return-to-work program was abandoned.[32][32]Mr Taylor’s first affidavit at para 21. The plaintiff would have become eligible for a TPD payout under the policy in about August 2018. She obtained medical evidence to support her claim in February 2019.[33] There was no delay in the commencement of the proceeding. [33]Mr Taylor’s first affidavit at para 34.How long ago was the litigation commenced The plaintiff’s claim was filed on 27 June 2019. Prospects of success The plaintiff’s prospects of success is just one of many factors to be considered: Pittaway v Noosa Cat Australia Pty Ltd.[34] Mr Horvath for the plaintiff emphasised the observations of Morrison JA that any assessment of prospects is necessarily provisional, as the issue will be determined without the evidence that would be adduced at trial.[34][2016] 2 Qd R 556 at 569 [23] (per Morrison JA; Douglas and North JJ agreeing) Mr Horvath submitted that where the plaintiff’s prospects are identified as limited, the question becomes whether the case is unarguable or doomed to fail.[35] However the context in which Pittaway v Noosa Cat Australia Pty Ltd was decided is that the primary judge had placed undue emphasis on the plaintiff’s failure to give a detailed response to the defendant’s affidavit material. The court found that there was tension between the primary judge’s findings that the plaintiff had an “arguable case” and that his prospects of success could not be considered strong.[36][35]Outline of submissions for the plaintiff at para 23 citing Pittaway v Noosa Cat Australia Pty Ltd at [30].[36][2016] 2 Qd R 556 at 572 [31]-[32].