Marvon Nominees Pty Ltd v Reeves-Saunders

[2000] QCA 438

[2000] QCA 438

COURT OF APPEAL

DAVIES JA
MACKENZIE J
HELMAN J

Appeal No 7821 of 2000

MARVON NOMINEES PTY LTD          Applicant/Appellant

v.

RALPH REEVES-SAUNDERS AND
KATHRYN ANNE REEVES-SAUNDERS             Respondents

BRISBANE

..DATE 20/10/2000

JUDGMENT

DAVIES JA: This is an application for leave to appeal pursuant to s.118 of the District Court Act against an order of a District Court judge dismissing the applicant's action for want of prosecution.

Although the order was interlocutory, it is conceded by the respondents that its effect is final, any action by the applicant now being time barred.

The parties agree that it is appropriate to hear argument both on the applicant for leave to appeal and on the appeal so that, if were granted, the appeal could also be decided, and that was the course which this Court took.

The applicant concedes that the learned primary judge applied the correct principles but submits that he gave too much weight to four factors.  These, as set out in the outline of argument of the applicant are:  the prospects of success of the applicant's action; the applicant's responsibility for delay because the applicant was too patient with Baker Johnson and was at fault in leaving its file with them; that if proceedings were to remain with Baker Johnson it is more likely the litigation will suffer from more of the same delay and disputation about interlocutory matters; and the likelihood that the respondents have been prejudiced.

Before turning to those submissions, it is necessary to say something about the nature of the action and its history.  The applicant claims that two companies, the applicant and Plaistow Nominees Pty Ltd, were co-debtors to a financier pursuant to a deed of loan dated 6 November 1982 in the sum of $247,500.  The respondents guaranteed Plaistow's obligations under that deed by a guarantee of the same date.  By a subsequent written agreement between the applicant and Plaistow it was agreed that Plaistow's share of liability for that debt was 73.26 per cent.  On 20 November 1984 the applicant paid out the debt and, consequently, it is entitled to recover from the respondents Plaistow's share of that debt together with legal costs which it incurred, and interest.  It also makes allowance in its claim for the amount owing by the applicant to Plaistow of $150,000.

That claim is disputed on its merits and the respondents also allege that it was compromised.

It is common ground that the applicant's cause of action arose on 20 November 1984 when it paid out the loan.  However, the action was commenced only on 3 October 1994 towards, at least on a view which hasn't been disputed so far, the end of the relevant limitation period.  This delay of nearly 10 years is said to have been caused by dilatoriness on behalf of the applicant's legal advisers who were, in turn, Messrs Smith & Fitzgerald, Messrs Crawfords and, finally, in 1991, Messrs Baker Johnson.

The dilatoriness of the first two of those firms resulted, it was said, in the applicant terminating their services in turn.  There was also some delay in having the applicant's file passed from Crawfords to Baker Johnson.  However, things did not improve for the applicant once they retained Baker Johnson.  Events since then reveal a history of extraordinary dilatoriness and incompetence on the part of that firm.

The plaint was issued, as I have mentioned, on 3 October 1994.  The respondents sought further and better particulars of the plaint on 1 February 1995 and, on the following day, filed and served an entry of appearance and defence.  Nothing further happened until 16 October 1996 when a notice of intention to proceed was given.  Again nothing further happened until 11 August 1997 when the applicant provided a document in purported compliance with a request for further and better particulars of the plaint.  On the same day, the respondents' solicitors delivered a notice requiring discovery on oath but again nothing further happened in the action until 26 May 1999 when the applicant's solicitors gave a further notice of intention to proceed.

On 2 December 1999 the applicant requested copies of documents referred to in the defence.  These were provided on 7 February 2000, and on 23 March 2000 the respondents delivered a list of documents.  On that day they also requested the applicant's list of documents immediately, the applicant never having responded to the notice of 11 August 1997.  They also foreshadowed an application for dismissal for want of prosecution if a list of documents was not provided within 21 days.  On the following day they also sought further and better particulars.  These related specifically to the claim for legal costs, the previous particulars supplied having been rather general in nature.

The applicant has never answered the request for further and better particulars and, although it has provided a list of documents, it is plain that that list of documents is defective, it not including in it the documents relevant to the claim for costs.  This was pointed out to the applicants by a letter from the respondents of 27 July 2000 but that defect has never been remedied.

The only further relevant correspondence, apart from those which I have mentioned, was that letter requiring further and better disclosure, and the matter then proceeded to hearing before the learned primary judge.

In reciting the history as I have so far, I have not said anything about the conduct of the applicant's directors, Dr and Mrs Godsall.  Throughout the period since commencement of the proceedings they, in particular Mrs Godsall, made fairly frequent inquiries and occasional complaints to the solicitors but to no avail.  Perhaps they should have done more.  A commercial litigant, for example, would never have accepted the fobbing off which she apparently did and perhaps, with hindsight, it is difficult to see how anyone could have tolerated delays of the magnitude, in total, of more than 15 years since the cause of action arose.

Accordingly, in my view it is not difficult to understand the approach which the learned primary judge took or the conclusion which he reached.  Delay of this magnitude should not generally be tolerated.  Moreover, nothing which I am about to say should in general discourage a fairly robust approach by judges to delays of this kind.

There are, however, a number of factors in this case which, in my opinion, together should have justified permitting the action to survive, at least conditionally, originally, on the applicant complying promptly with the outstanding request for further and better particulars and with the outstanding requirements with respect to disclosure.  Those factors are:

1.The nature of the applicant's case. 

To the extent that it claimed 73.26 per cent of the money which it paid to the financier, less the amount of a setoff for another matter, it appears to be a straightforward claim depending almost entirely on documentary evidence.

Moreover, assuming the correctness of the facts as pleaded, which may readily be proved or disproved by documentary evidence, it appears to have good prospects of success. The claim with respect to costs, at least in general if not in all respects, appears to be one which would succeed or fail with the primary claim. 

The defence, which alleges a compromise, depends primarily in any event on evidence coming from the respondent and I shall mention that again when dealing with the question of prejudice.

2.Little prospect of prejudice to the respondents. 

The respondents' solicitors swore an affidavit in general terms asserting prejudice but nothing specific has been proved or even asserted.  No doubt it is true that memories fail and documentary evidence is lost after a lapse of time of this magnitude but, given what has happened to the applicant's affairs and the need for it to prove its case with some particularity, in the case of its case for legal expenses it seems to me at the moment that it is the applicant who is more likely to be prejudiced in respect of the main claim by the delay which has occurred.

The case, I have already mentioned, seems almost entirely to depend on proof of matters within and, in some cases, solely within the knowledge of those controlling the applicant. 

So far as the compromise alleged by the respondents is concerned, I accept that there is substance in an assertion that that depends upon the memories of people associated with the respondents or the respondents themselves.  No specific assertion has been made of prejudice and it is reasonable to infer from that that there is none; in other words, to the extent that a compromise claim relies upon oral evidence, proofs were taken at an early stage sufficient to enable parties to give evidence of a kind which, at least so far as the respondents' satisfaction is concerned, is likely to be credible.

3.That the fault throughout has been almost entirely that of the applicant's solicitors. 

No doubt, as I have already said, some criticism may be made of Dr and Mrs Godsall for failing to do more than they did.  On the other hand they did inquire and complain, and with some frequency.  Moreover, as it has been said in their defence, they had already terminated the services of two solicitors before they, unfortunately, fell into the hands of Baker Johnson.  No doubt they found it hard to believe that such incompetence was continuing.

4.The undertaking by the Godsalls. 

Dr and Mrs Godsall undertook before the primary judge to pay personally any costs which may be awarded against the applicant.  That undertaking was renewed here.  Consequently, any fear that the respondents might have that their success in the action might result in an empty costs order against the applicant may be assuaged by that undertaking. Nevertheless, it is incomprehensible to me that, knowing that the respondents intended to make the application which resulted in his Honour's order, the applicant didn't either provide an amended list of documents or attempt to give the further and better particulars sought.

Mr Bates, moreover, has been unable to assure us that that has been done or can be done.  Nevertheless, it seems to me that the failure to comply with either of these requirements of which it is necessary to comply with, will only affect adversely the applicant's case because it will mean that the applicant does not have documents which would enable it to prove its claim in respect of costs.

On that basis and only because of the combination of factors to which I have referred, I would grant leave to appeal, allow the appeal, set aside the order made below and substitute an order dismissing the application that the action be dismissed for want of prosecution.  I would also order that the applicant file and serve an amended list of documents within seven days and that it provide the further and better particulars requested also within seven days.

The respondents were plainly entitled to bring the application which they did and, in view of the extraordinary delay by the applicant, it seems to me that the respondent should have the costs of the proceeding before the learned District Court Judge below.  Those, I should add, are costs which should be included in the undertaking to which I have already referred and I understand Mr Bates to accept that.

I would also, for the same reason, order that applicant pay the costs of this appeal.

MACKENZIE J:  I agree.

HELMAN J:  I agree.

DAVIES JA:  The orders are as I have indicated.

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