Moran v Seifert

[2000] VSC 434

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 8351 of 1995

MORAN & ANOR	Plaintiffs
v
SEIFERT & ANOR	Defendants

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JUDGE:	Gillard J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 October 2000
DATE OF JUDGMENT:	12 October 2000
CASE MAY BE CITED AS:	Moran & Anor v Seifert & Anor
MEDIUM NEUTRAL CITATION:	[2000] VSC 434

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr N. Jones
For the Defendants	Mr P.G. Cawthorn

HIS HONOUR:

1. I have before me an appeal from orders made by Master Wheeler on 19 September this year.  By reason of the Rules of Court the appeal is a hearing de novo. 

1. On 19 September, Master Wheeler made a number of orders, the one that is indeed most important being that the proceeding be reinstated.  The proceeding had in fact been dismissed by reason of the operation of an order made by Master Bruce on 7 October 1999. 

1. The circumstances leading to the application before the Master can be briefly summarised.  The plaintiffs alleged in 1990 that the estate of J.P. Moran, deceased, lent $142,000 to a company called Marino Quest Pty Ltd.  The first and second defendants, Mr and Mrs Seifert, guaranteed the loan.  Security was provided in respect to the loan over a property known as Unit 1, 16 Irving Road, East Ivanhoe.  Eventually that property was transferred into the name of the third defendant, Luxury Developments Pty Ltd, a company controlled by Mr Seifert. 

1. On 24 November 1995, some five years after the loan was made, a writ was issued and the plaintiffs were the two executors of the estate of John Patrick Moran, deceased.  The evidence reveals that in fact the loan back in 1989 was made by the estate after Mr Moran had died.  The defence was fairly promptly delivered on 19 January 1996, but nothing then occurred for the next eleven months, when the plaintiffs delivered interrogatories for the examination of the defendants, which were again fairly promptly answered.

1. On 18 September 1997, nearly two years after the issue of the proceedings, an amended statement of claim was delivered, followed, again fairly promptly, by an amended defence.  In 1998 the plaintiffs delivered affidavit of documents and on 26 August 1998 a further amended defence was delivered and a counter claim was made on behalf of some of the defendants.

1. If one goes to the year 1999, we find that in March 1999 further and better particulars to the amended statement of claim were provided, and then on 24 June 1999 Master Bruce referred the matter to mediation and directed notice of trial be filed by 21 August 1999.  I have been informed that a mediation took place, and clearly the issues were not compromised.  Having made that order, Master Bruce made other orders and, in addition, so did Master Kings.  Then on 7 October 1999 Master Bruce, in his capacity as the judge administering the Litigation Support Group, made some orders, on the papers, no party or practitioner appeared.  Order 2 is in these terms:

"2. If, within a period of three months from the date of this order, no further order is made in this proceeding, the proceeding shall stand dismissed at the end of that period, without prejudice to the right of any party to apply to reinstate it if there are adequate grounds for doing so."

1. Unfortunately, within the three-month period no further order was made and hence the order operated and the proceeding was dismissed as at 7 January 2000. 

1. The order made by Master Bruce was pursuant to the practice and procedure adopted by the Litigation Support Group, the main purpose being to ensure that the interlocutory steps in litigation are taken in a timely fashion and to ensure a proceeding is brought on for trial within a reasonable period.  It is noted that Master Bruce preserved the right to the plaintiffs to apply to reinstate if there were adequate grounds for doing so, and Mr Cawthorn, who appears on behalf of the first, second and third defendants, submits that the order contemplates a two-part inquiry, namely, whether there were adequate grounds to apply and, secondly, if there are, the court should then consider whether or not the proceeding should be reinstated.  Mr Cawthorn on behalf of the said defendants submits that the proceeding should not be reinstated. 

1. The plaintiffs applied to Master Wheeler on 19 September and he did order that the proceeding be reinstated.  He further ordered that the second plaintiff, Ian Wallace Dunlop, be removed as a plaintiff and that he be added as a fourth defendant.  He also gave leave for the plaintiffs to file and serve an amended statement of claim.  This statement of claim contains a cause of action against Mr Dunlop in negligence.  I should say that Mr Dunlop was a solicitor as well as being the executor of the estate, and the allegation is that he was negligent in the performance of his work as a solicitor.  At an early point, and indeed for most of the period in relation to this claim, Mr Dunlop has acted as solicitor for the plaintiffs.

1. Mr Cawthorn has submitted that the court should consider the question of delay and has submitted that no reasonable explanation has been given in relation to the delays, first in relation to the dilatory approach to the procedural orders that have been made in the past, and secondly, he submitted, there was no reasonable explanation for the delay in making the current application for reinstatement.

1. The explanations for delays are set out in the affidavits of Kim John Whitby, who was engaged as a solicitor by the estate.  He is with the firm of McKean and Park, who was engaged some time in mid-1999 to act for the then plaintiffs.  Mr Whitby has sworn that from the time when he was first engaged, which appears to be in mid-1999, he wrote on a number of occasions to a
   Mr Frank Sableberg, who was a solicitor then acting on behalf of the plaintiffs, and he also followed that up with a number of telephone calls.  Unfortunately, Mr Sableberg did nothing and the inquiries made by Mr Whitby took a long time to bear fruit.  Eventually Mr Whitby ascertained the existence of the order of Master Bruce and he did seek to press Mr Sableberg to do something about it.  Unfortunately, nothing was done.

1. In the meantime there was the concern about Mr Dunlop continuing to be an executor of the estate and a plaintiff in the proceeding, and application was made to remove him.  It eventually came on before the Honourable Mr Justice Beach on 16 March 2000, and His Honour ordered that Mr Dunlop be removed as an executor.

1. It was not until 7 April this year that Mr Whitby received a box of files from Mr Dunlop relating to the current proceedings, and clearly, as Mr Whitby has pointed out, the documents were not complete and they were in some disarray.

1. So far as the question of delay is concerned and what effect it should have on an application such as this, I repeat what I said in the case of Denzil Griffiths v. Malika Holdings, a judgment which I delivered on 27 August 1997 in relation to delay and the effect it should have upon an application such as the present in relation to an application to extend time:

"   In considering this delay it is pertinent to note that the defendant has not alleged any prejudice.  As against this one must weigh up the fact that the rules are there to be observed;  and, secondly, that the delay here has been inordinate.  The question of delay was considered by the New South Wales Court of Appeal in Danny Kidron & Andrew Spaile Architects Pty Ltd v. Garrett (1994) 35 NSWLR 572. In that case a Court of Appeal judge refused an extension of time based solely on what was said to be a failure to explain delay. Not surprisingly, the Court of Appeal allowed the appeal. At p.578, Priestly, J.A. (with whom Sheller, J.A. agreed) said –

'   It seems to me that it follows from the above that Meagher JA's  exercise of discretion miscarried in that it was based solely on what was said to be a failure to explain delay and did not take into account the absence of any prejudice on which the other parties could rely.  It was not argued that the architect's appeal had no prospect of success.  Where delay is small, an appeal is not hopeless, and no relevant prejudice will be caused by an extension of time, it seems to me that a due exercise of discretion requires the granting of an extension of time.  To refuse to grant an extension in such circumstances solely because of lack of satisfaction with the reasons for delay seems to me to show failure to take into account the other highly relevant factors I have mentioned and in this case to have led to a miscarriage of discretion.'

His Honour's reference to other factors included lack of prejudice.  It is noted that his Honour used the phrase 'where delay is small'.  The delay in that case was something less than 14 days.  An explanation for delay is expected from a party seeking an extension of time to apply for leave to appeal, but whether it is adequate or not carries little weight one way or the other.

In my opinion delay per se is of little moment in an application to extend time.  The inadequacy or adequacy of the explanation likewise is of little moment.  What is of importance is the length of the delay and whether it has any prejudicial effect on the other party in relation to its affairs or ability to contest the case and present its own.  By way of example, where a party has a vested right resulting from the judgment and ordered its affairs accordingly, or by reason of the death or non-availability of a witness it cannot properly contest the case and/or present its own, such matters are of considerable weight.  A long delay may affect memories so that in all the circumstances a fair trial can no longer be had.  I mention these by way of examples.  But in my opinion mere delay and no more, or an adequate explanation for the delay, are hardly reasons for denying a party an extension of time if justice otherwise demands it.  Indeed even if there is prejudice it is necessary to closely examine it and see whether anything can be done to overcome it."

1. Much the same observations were made by the Court of Appeal in England in the case of Marshall v. Gradon Constructions (1997) 4 All E.R. 880.

1. In my opinion, a court is entitled to have an explanation, but the most important factor to weigh up in an application such as the present is the question of doing justice between the parties, which involves not only considering the interests of both parties but taking into account any prejudice.  Prejudice in itself will not deny a just case if that prejudice can be overcome.  As I say, the real issue is one of doing justice between the parties.  A party who has a good cause of action should not be shut out of bringing its proceeding and denied the opportunity to prosecute its claim because there has been some delay in prosecuting it.  In the absence of any prejudice to the other side because of the delay, delay in itself cannot deny the justice of allowing the matter to proceed.  As I say, in my view, in the end, it is a matter of doing justice between the parties.  I note that Mandie, J. said much the same thing in Michael Caruso v. Elvis Jafer and Ralph Manno (unreported), delivered 18 June 1998.

1. I am satisfied here that there has been an explanation for the delay:  whether it is adequate or inadequate does not seem to me to be of great moment.  The question is, what does justice demand, and I refer to what the Full Court said in the case of Cull v. Stewart in (1991) M.V.R.149. In that appeal the court was concerned with a self-executing order made in the County Court. It is unnecessary to consider the facts, but the observations made by the court at p.152 in my view should be accorded considerable weight. Their Honours said:

"The court is always reluctant to see a plaintiff shut out from the opportunity of having his claim tried in the court owing to the negligence of his solicitor in procedural matters.  The fact that he may have a claim against his solicitor is a relevant consideration to take into account in considering how the discretion should be exercised but it is not generally entitled to very much weight."

1. I have no doubt at all that to shut out the plaintiffs in this case would be indeed to do a grave injustice to them.  As Mr Jones of counsel for the plaintiffs has pointed out, most of the issues concerning the claim brought by the plaintiffs against the first three defendants are in small compass as many of the matters that have to be established have been admitted, and, further, I note that there is no statement by any of the defendants that they would suffer prejudice if this proceeding was reinstated.

1. Mr Cawthorn sought to rely upon the principles relating to striking out a case for want of prosecution and pointed out that, because of the lapse of time and the fact that there is a claim of fraud made against the first and second defendants, those factors would result in this proceeding being struck out for want of prosecution if an application was made.  I do not accept that submission.  In my view, the defendants, if they made such an application, would not succeed as presently advised to have the case dismissed for want of prosecution.  There is no real suggestion of prejudice other than the passage of time and, as I put to Mr Cawthorn in submissions, the issues between the parties would not be affected greatly by the passage of time because most of the evidence is documentary.

1. In the end, as I have said, it is a question of doing justice between the parties, and in my view, taking into account all the matters that have been put to the court, justice fairly and squarely comes down on the side of the plaintiffs in this application and accordingly I will dismiss the appeal. 

1. I make the following orders:

1.That the first, second and third defendants' appeal from the orders of Master Wheeler made 19 September 2000 be dismissed.

2.That the added defendant, Ian Wallace Dunlop, file and serve his defence by 17 November 2000.

3.That the plaintiffs and the added defendant file and serve affidavits of documents by 17 December 2000.

4.Liberty to apply generally to a Master.

5.That the first, second and third defendants pay the costs of the plaintiffs of the appeal.

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