Nogarap Pty Ltd v Commonwealth Bank of Australia
[1999] TASSC 86
•19 August 1999
[1999] TASSC 86
CITATION: Nogarap Pty Ltd v Commonwealth Bank of Australia [1999] TASSC 86
PARTIES: NOGARAP PTY LTD
v
COMMONWEALTH BANK OF AUSTRALIA
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 1412/1993
DELIVERED ON: 19 August 1999
DELIVERED AT: Hobart
HEARING DATE: 3, 4 August 1999
JUDGMENT OF: Evans J
CATCHWORDS:
Procedure - Supreme Court procedure - Tasmania - Jurisdiction and generally - Dismissal of action for want of prosecution - Delivery of statement of claim deferred by agreement - Statement of claim delivered out of time - Inordinate delay - Prejudice to defendant - Inherent jurisdiction.
Khavounitis v NRMA Insurance Ltd [1999] TASSC 2; Orr v Kemp [1962] Tas SR 155; Closer Settlement Board v Thomas [1982] Tas R 179; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, followed.
Limitation Act 1974 (Tas), ss4(1), 32(1).
Tortfeasors and Contributory Negligence Act 1954 (Tas), s3(5) and (6).
Aust Dig Procedure [265]
REPRESENTATION:
Counsel:
Plaintiff: T J Williams, M Duvnjak
Defendant: A M Blow QC
Solicitors:
Plaintiff: Gunson Pickard & Hann
Defendant: Simmons Wolfhagen
Judgment Number: [1999] TASSC 86
Number of paragraphs: 37
Serial No 86/1999
File No 1412/1993
NOGARAP PTY LTD v
COMMONWEALTH BANK OF AUSTRALIA
REASONS FOR JUDGMENT EVANS J
19 August 1999
On 28 October 1993, the plaintiff issued a writ against the defendant, its former bank, endorsed as follows:
"The Plaintiff's claim against you is for damages arising out of your breach of contract and/or negligence in acting as banker for the Plaintiff whereby you negotiated various cheques from and including the 23rd day of March 1987 to and including the 13th day of January 1989."
On 19 May 1998, the defendant filed an application seeking an order that the plaintiff's writ be struck out pursuant to the Rules of Court, O31, r1 by reason of the non-delivery of a statement of claim or alternatively in reliance upon the Court's inherent jurisdiction to strike out actions. The plaintiff delivered a statement of claim on 18 June 1998. The statement of claim was delivered out of time and the plaintiff had not obtained an extension of the time within which it could effect delivery. Whilst this meant that the delivery of the statement of claim was an irregularity, it was not a nullity and the delivery defeated the defendant's application to have the action dismissed under O31, r1. Orr v Kemp [1962] Tas SR 155, Caflish v Reilly (1887) 9 ALT 35, Lewthwaithe v Turner (1989) 9 QLJ (NC) 76 and Ernest Lyon Ltd v William Sturgess & Co [1918] 1 KB 326.
The defendant pursues its application to have the plaintiff's action struck out in reliance on the Court's inherent jurisdiction. As to that jurisdiction, see Orr v Kemp (supra) and the Closer Settlement Board v Thomas [1982] Tas R 179, Neasey J at 188 and Nettlefold J at 190.
Facts
In the late 1980's, the plaintiff carried on business as a furniture manufacturer under the business name Paragon 2000. The directors of the plaintiff were George Durovic and Ralph Caccavo. Half the shares in the plaintiff were owned by members of the Durovic family and the other half were owned by Mr Caccavo and Caccavo Wholesale Pty Ltd.
In 1990, Mr Durovic was charged with stealing from the plaintiff company and with making improper use of his position as an officer of the company. The charges related to Mr Durovic's dealings with various cheques drawn on the company's account with the defendant. The total value of the cheques was about $1,200,000. On 12 February 1993, after a trial conducted before Slicer J which ran for seven months, Mr Durovic was convicted of 165 counts of stealing and 71 counts of making improper use of his position as a corporate officer.
Following Mr Durovic's conviction, in about March 1993 Mr Caccavo sought advice from Mr Melick, a partner in the legal firm of Gunson, Pickard and Hann, on the prospects of suing the defendant in relation to the funds stolen from the company by Mr Durovic.
In order to advise Mr Caccavo, Gunson Pickard and Hann needed access to the company's records, all of which had been seized by the Crown for the purposes of Mr Durovic's prosecution. Many of the documents were exhibits in Mr Durovic's trial and were in the custody of the Supreme Court. The balance of the documents were held by the Crown. Mr Durovic had appealed against his conviction. Whilst access to the documents was available by arrangement during ordinary working hours, there was no prospect of the documents being released to Mr Caccavo's solicitors until Mr Durovic's appeal was determined. The appeal was dismissed on 15 March 1994.
Gunson Pickard and Hann sought advice from a mainland Queen's Counsel in relation to the course which Mr Caccavo should pursue. Counsel advised that proceedings should be taken by the plaintiff company rather than Mr Caccavo. The company had ceased operations and on 10 July 1992, its registration had been cancelled by the Australian Securities Commission ("ASC") pursuant to the Corporations Law, s574(1). Before proceedings could be instituted, it was accordingly necessary to apply to the Supreme Court for the reinstatement of the registration of the company. The necessary order was obtained on 28 August 1993. On the same date, the company issued the writ referred to in par1 above against the defendant. That writ was not served until 7 October 1994.
In the course of the hearing of the reinstatement application, Mr Caccavo gave an undertaking to the Supreme Court that the company would lodge all outstanding annual returns and other documents required by the ASC within a reasonable time. Gunson, Pickard and Hann arranged for Mr Caccavo's accountant, Mr Garrity, to examine the records of the company held by the Court and the Crown and prepare the necessary returns. Mr Garrity's assistance was also sought in relation to an assessment of the damage which had been caused to the company by what had occurred. Access was only available to the records during normal working hours. Mr Garrity required that the records be delivered to his office, as he needed access to them out of normal working hours in order to do the necessary work. Mr Melick endeavoured, without success, to obtain the release of the records from the Court. In about mid-1994, following the dismissal of Mr Durovic's appeal in March 1994, the Crown provided Gunson, Pickard and Hann with copies of all the trial documentation.
After service of the plaintiff's writ, Mr Melick had a discussion with Mr Quartermaine of Simmons Wolfhagen, the solicitors for the defendant. Mr Melick told Mr Quartermaine that Slicer J, who had presided over Mr Durovic's trial, had a lot of information on computer which Mr Melick thought would be of assistance to the parties and which he believed the judge would release if the parties made a joint application for it. It was agreed that Mr Melick would pursue that course. Mr Melick said he did not want to finalise a statement of claim until he had seen the information. Mr Quartermaine said he was not going to demand a statement of claim within the time required by the Rules of Court and that before making any application to the Court in that regard, he would give the plaintiff's solicitors notice.
The defendant's solicitors subsequently searched the plaintiff's records at the ASC and found that they contained no record of the reinstatement of its registration as a company after the same was cancelled in 1992. This prompted Mr Quartermaine to prepare an application on 16 January 1995 to have the plaintiff's action struck out on the basis that the plaintiff was not a registered company. When informed that the plaintiff's registration as a company had in fact been reinstated, the defendant abandoned the application.
In February 1995, the ASC wrote to Gunson, Pickard and Hann expressing concern about the non-lodgment of the plaintiff's annual returns in accordance with Mr Caccavo's undertaking to the Court. At about this time, Mr Caccavo obtained the release of the company's records from the Court. Mr Garrity was no longer able to undertake the work he had been approached to perform, so another accountant, Mr Byrne, was engaged. He found that the available records were insufficient to enable him to prepare returns containing the key financial data required by the ASC and approached the ASC about the information to be included in the returns. During mid-1995, there were communications between Gunson, Pickard and Hann and the ASC about the preparation of the returns and the possibility that the ASC would again administratively cancel the registration of the plaintiff as a company. Whilst Mr Melick's belief was that the ASC would not move to deregister the company without informing Gunson, Pickard and Hann, that in fact occurred on 8 December 1995 when the ASC again deregistered the company. On 5 February 1996, Mr Melick was advised of the deregistration by Mr Quartermaine. This was a day prior to the date on which Mr Melick was due to leave Gunson, Pickard and Hann to take up another position. Thereafter, Mr Williams, another partner in the firm, assumed primary responsibility for the conduct of the plaintiff's file.
On 8 February 1996, the ASC provided Gunson, Pickard and Hann with an "administrative reinstatement kit" to assist them with the preparation of an application to have the plaintiff's registration as a company reinstated. Annual returns of the company for the eight years to 1995 were prepared and forwarded to the ASC. They were returned, as they lacked key financial data required by the ASC. Revised annual returns were prepared by Mr Byrne in consultation with the ASC. On 2 December 1996, Gunson Pickard and Hann wrote to Mr Caccavo requesting him to attend their office to sign the returns. No action was taken to advance the matter from that date until 28 August 1997 when the defendant served Gunson, Pickard and Hann with an application to have the action struck out on the basis that the plaintiff was not a registered company. Following service of the application, Gunson, Pickard and Hann forwarded documents in support of an application for the reinstatement of the company to the ASC. The ASC did not persist with its insistence on the provision of key financial data in relation to the company and on 15 September 1997 it restored the company's registration "as if deregistration had not occurred". As a consequence, the defendant's strike out application was dismissed.
On 17 September 1997, the plaintiff gave the defendant notice that it intended to proceed with the action. This did not bring about any change in the defendant's approach to the matter. The defendant did not request the delivery of a statement of claim or pursue any of the avenues available to it, such as a directions hearing, which could have prompted the delivery of a statement of claim. Instead, by letter of 19 September 1997, the defendant's solicitors wrote to the ASC requesting reasons for the reinstatement of the plaintiff's registration and, in due course, on 28 January 1998, the defendant applied to the Federal Court for a review of the reinstatement. The matter was listed for directions before Heerey J, who ordered the defendant to serve notice of the review application on the plaintiff. This appears to have brought about a change in the defendant's tactics. The defendant issued the application to this Court that I am now considering in which it seeks an order that the plaintiff's action be struck out for want of prosecution on grounds which include the non-delivery of a statement of claim. That application, and notice of the defendant's Federal Court challenge to the reinstatement of the plaintiff's registration, were served on the plaintiff on 19 May 1998. That was the first occasion on which the defendant indicated to the plaintiff that it no longer agreed to deferral of delivery of a statement of claim.
The parties agreed to the adjournment of the application to this Court to strike out the plaintiff's action for want of prosecution pending the determination of the defendant's application to the Federal Court to review the reinstatement of the plaintiff's registration. Following a contested hearing of that review, the reinstatement was confirmed by Heerey J on 7 September 1998.
The plaintiff's claim
I will not reproduce the plaintiff's statement of claim. It is 20 pages long and there are 10 pages of particulars. In summary, the plaintiff claims that the defendant, as its banker, breached its contract with the plaintiff, or the duty of care it owed the plaintiff, by allowing Mr Durovic to cash cheques drawn against the plaintiff's bank account with the defendant and paying the proceeds of the cheques to Mr Durovic or at his direction.
Damages are claimed for a sum representing the amount of the cheques the plaintiff says were wrongly debited against its account, the loss of the value of the plaintiff's business as a consequence of it having to cease trading and interest. The potential damages are several million dollars.
The claim relates to 231 cheques, all of which the plaintiff alleges the defendant cashed in breach of the authority it had from the plaintiff in relation to the operation of its account. It is also asserted that the defendant was only authorised to honour cheques signed by two of four authorised signatories and that in contravention of this authority, some cheques were honoured although they only had one signatory. The value of these cheques is about $36,000. It is also asserted that in cashing cheques which were made payable to third parties, some of which were crossed and not negotiable, the defendant acted negligently and in breach of its contractual obligations to the plaintiff.
The following are the particulars pleaded of the defendant's negligence in allowing Mr Durovic to cash the cheques:
"Particulars of Negligence with Respect to all Cheque Groupings and Interest
The Defendant should have been alerted of the fraud or the reasonable possibility thereof in respect of any of the following matters or any combination of one or more of them and either refused to cash or pay as directed by Durovic or made enquiries of the Plaintiff:-
(i) that each cheque was cashed outside the terms of the authority to cash cheques (which was only to cash wages cheques less than $5,000.00) and further, that those cheques above $5,000.00 should not have been cashed even if the Defendant mistakenly believed that it was cashing a wages cheque;
(ii) in respect of cheques signed by only one party, the Defendant failed to check and have regard to the terms of the mandate;
(iii) that in respect of cheques signed only by George Durovic, that suspicion should have been aroused when the only signatory to a company cheque made payable to a third party or to cash, was alone requesting that such cheque be cashed;
(iv) in respect of cheques made payable to third parties, that suspicion ought to be aroused when a cheque made out by a company to a third party is sought to be cashed particularly by a director;
(v) in respect of cheques payable to third parties the Defendant should have been put on notice by the Defendant's letter Mr Pikula's enquiry of Mr Durovic when he asked him why he just didn't send the cheques and was told to the effect that the other companies preferred cash because it was easier to pay their employees. This was an unusual response which should have put the Defendant on notice;
(vi) that the frequency of the transactions ought to have raised a suspicion;
(vii) that particular cheques made payable to third parties who would not be in the practice of cashing them such as the Australian Taxation Office and JMO (cheques totalling $280,855.48) and Richard Small Distributors (cheques totalling $39,596.42) was most unusual and should have aroused suspicion;
(viii) in respect of cheques made payable either to cash or more particularly to third parties which were cashed and the proceeds transferred by the Bank as part of the same transaction, either to George Durovic's Mastercard or to other accounts the same comprised highly unusual transactions and should have raised a suspicion. Further various tellers acted in an entirely erroneous belief and negligently in dealing with cheques. The Defendant:
(aa)acted negligently in each transaction particularised; and
(bb)acted negligently generally in that any two or more of these transactions should have alerted the Defendant to a fraudulent course of conduct;
(cc)acted in the mistaken belief that as Mr Durovic was a director he was authorised to cash cheques;
(dd)acted in the mistaken belief that Mr Durovic was entitled to cash cheques as he was the Company;
(ee)acted negligently in that Mr Durovic being the person cashing the cheques was known to the bank and particularly the tellers cashing the cheques as being a director of the Plaintiff.
(ff)Acted by its tellers on numerous occasions in the mistaken belief that because Mr Durovic owned the business he had authority to cash the cheques (as particularised in the particulars of negligence teller by teller".
The statement of claim also includes particulars of negligence specific to 13 named tellers in relation to 40 of the cheques.
I am satisfied that the plaintiff has an arguable claim against the defendant for substantial damages.
The law
In Khavounitis v NRMA Insurance Ltd [1999] TASSC 2 at 4 and 5, Underwood J dealt with the law referable to the exercise of the discretion to determine an action for want of prosecution. He said:
"The discretion that has to be exercised is not expressly fettered, but must be exercised in accordance with principles that have been developed by the common law. See Norbis v Norbis (1986) 161 CLR 513. In Tasmania, those principles are authoritatively set out in the Closer Settlement Board v Thomas [1982] Tas R 179. In that case, Neasey J referred with approval at 185 to Witten v Lombard Australia Ltd (1968) WN (Pt1) NSW 405 and Stollznow v Calvert [1980] 2 NSWLR 149 and said at 186:
'The exercise of discretion in a summons of this kind is to be determined according to the overall justice of the matter, which depends upon all its facts and circumstances. The exercise of the court's discretion is not to be confined by fixed rules. The nature of this exercise of discretion does, however, require close consideration to be given to some of the same factors which are of importance in an application to extend time after the expiration of a statutory limitation period; namely the extent and quality of delay, whether primary responsibility for it lies with the party or his legal advisers, and the extent and nature of prejudice to one party or the other. In particular, as it is relevant in this case, I agree with Moffitt P that according to circumstances, although consideration of the plaintiff's delay and the reasons for it are by the nature of the case of primary importance, inaction or delay on the part of the defendant may be relevant.'
At 194, Cosgrove J also referred with approval to Stollznow v Calvert and said at 195:
'…a litigant who applies for the dismissal for want of prosecution of his opponent's action (or counter-claim) should be able to assert and establish at least—
(a) that his opponent has delayed for a significantly long time;
(b) that, viewed against the background of the whole matter, including the conduct of both the applicant and his opponent, that delay is inexcusable; and
(c) that in all the circumstances it would be unjust to the applicant to allow the action (or counter-claim) to proceed and that the justice of the case requires that the action (or counter-claim) be dismissed.'
The above principles have since been applied at first instance on many occasions. See, eg, W Coogan & Co (Hobart) Pty Ltd v Reid, Lawless, Thompson and Yapp 48/1992; Gutteridge Haskins & Davey Pty Ltd v Seaview Properties Pty Ltd & Ors B31/1990; Barrow & Anor v Kearney B5/1995; Wing v Stewart B11/1995.
The same broad approach has been taken in all other States. See Masel v Transport Industries Insurance Co Ltd & Others [1995] 2 VR 328, a recent case in which the exercise of the discretion in other States is surveyed.
In considering the justice of the case, regard must now also be had to the provisions of the Rules of Court, O32A. Neasey J referred to the provisions of this Order as then enacted in the Closer Settlement Board v Thomas (supra) and said, at 188-189:
'In deciding such an application, however, the nature and content of our pre-trial rules is certainly a relevant consideration. The indicated remedy for a defendant where the plaintiff delays in setting down is not a summons to dismiss; rather it is that he should take the next step himself, which he has as much opportunity as the plaintiff to do. A defendant's right to "let the sleeping dog lie", to which many of the cases elsewhere refer, still exists here, but where the defendant seeks to avail himself of it and to have an action dismissed for want of prosecution by the plaintiff, the defendant's own conduct in relation to the trial rules will in my view be under review as well as the plaintiff's.'
Almost two decades have passed since those words were written and in that period of time the concept of court management of the pre-trial conduct of proceedings has become entrenched in the philosophy and practice of litigation in all Australian jurisdictions. The principal aims of case management are the reduction of delay and expense in the achievement of a resolution of litigation. At any stage of the proceedings, a party thereto is entitled to come to the court with a complaint of delay and, if appropriate, the court will step in and make pre-trial orders to manage the conduct of those proceedings to eliminate that delay. The sanction for failure to comply with such orders is the striking out of the pleadings of the defaulting party. In my view, an applicant who complains of delay and asks for a strike out order but has not sought pre-trial orders pursuant to O32A, needs to explain why he or she did not have recourse to the case management offered by O32A in an attempt to eliminate that delay at an early stage. Unexplained failure to invoke case management to eliminate delay may, as it does in this case, lead to the inference that no objection was taken to the delay. Although an applicant is entitled to 'let sleeping dogs lie', the case for resultant prejudice is much harder to make out when such prejudice could have been avoided by a simple application for directions."
I agree with Underwood J's observation that unexplained failure to invoke case management to eliminate delay may lead to the inference that no objection was taken to the delay and add that it may also indicate that a party perceived that the benefit it might obtain from acquiescing to delay outweighed the prejudice it might suffer as a consequence of delay.
Matters relevant to the discretion
The plaintiff's delay in relation to the institution of proceedings, the service of the writ and the delivery of a statement of claim has been inordinate.
It is apparent from the date of the cheques detailed in the statement of claim that the activities to which the proceedings relate occurred between April 1987 and October 1988. The endorsement on the writ referred to the relevant period as being between 23 March 1987 and 13 January 1989. The limitation period applicable to the plaintiff's claim is six years, Limitation Act 1974, s4(1). When the writ issued on 28 October 1993, the claim was potentially statute barred as to cheques negotiated prior to 28 October 1987. Approximately one-third of the cheques detailed in the statement of claim were negotiated prior to that date.
Mr Caccavo was aware of the activities of Mr Durovic, which are the basis of the action, by at least July 1989, when police were interviewing witnesses for the purpose of Mr Durovic's prosecution. As the Crown assumed control of the company's records and the prosecution of Mr Durovic was focused on the cheques which are the subject of the plaintiff's action, it is understandable that Mr Caccavo put off taking action against the bank until the conclusion of the prosecution of Mr Durovic.
Upon Mr Caccavo instructing Gunson, Pickard and Hann to act, there was a further delay in the institution of proceedings as it became apparent that an essential precondition to this was the reinstatement of the plaintiff as a registered company. Once that exercise had been achieved, the writ was issued. The plaintiff's solicitors delayed serving the writ, presumably because of difficulties in relation to the preparation of a statement of claim. My concern about this delay is lessened because of the response of the defendant when the writ was served in October, 1994. Rather than insisting on the prompt delivery of a statement of claim, the defendant agreed that delivery could be deferred and that no application would be made to the Court referable to the non-delivery of a statement of claim without prior notice to the plaintiff. I infer from this concession and what subsequently occurred that it was decided not to utilise the means available to the defendant under the Rules of Court to oblige the delivery of a statement of claim and minimise further delay in the conduct of the proceedings. The endorsement on the plaintiff's writ showed that it related to activities that had occurred about seven years prior to its service. It was obvious that the defendant could have considerable difficulty getting instructions on any matters raised in the course of the litigation. Notwithstanding this, the deferral of the delivery of a statement of claim was agreed to. It seems that the defendant perceived that the longer the preparation of a statement of claim was put off, the greater the prospects of the action dying. Whilst the defendant went to considerable lengths in an effort to have the action struck out because the plaintiff was not a registered company, it did nothing to elicit a statement of claim or progress the action. I conclude that the defendant considered that the advantage it might obtain from acquiescing to the non-delivery of a statement of claim and the tardy conduct of the proceedings outweighed the prejudice it might suffer from continuing delay.
It took the plaintiff almost five years to prepare and deliver a statement of claim. Whilst there were difficulties in obtaining access to the plaintiff's records, a statement of claim could have been drafted much more expeditiously. The records could have been examined in situ and, where necessary, photocopies could have been obtained. Changes in the personnel at Gunson, Pickard and Hann involved in drawing the statement of claim impacted detrimentally on its preparation. During two periods, attention to the task was distracted by the more pressing problem of reinstating the plaintiff's registration as a company. Without this, no benefit would be derived from the preparation of a statement of claim. Between December 1996 and August 1997, nothing was done to advance the matter. The plaintiff's solicitors were probably discouraged by the apparently intransigent attitude of the ASC in relation to the provision of key financial data. The chore of preparing a statement of claim was daunting. Regard had to be given to documents generated by Mr Durovic's trial and related documents, which included:
· a transcript of the trial contained in 20 folders totalling 11,106 pages;
· three exhibit books;
· Crown witness statements and documents contained in five volumes;
· two volumes of indictments;
· seven volumes including Crown witness' statements and documents; and
· five folders of the plaintiff's documents.
The preparation of a statement of claim was a time-consuming and formidable task. It required considerable care and attention and would have been difficult to delegate or brief out. In the absence of any pressure from the defendant for the delivery of a statement of claim, the task was not given the attention and priority it required.
As I have said, I am satisfied that the plaintiff has an arguable claim for a substantial amount of damages. The plaintiff will suffer significantly if its action is struck out.
The defendant will suffer general prejudice as a consequence of the delay and as to this, I have regard to what is said in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 by McHugh J at 551 - 553.
Affidavits were read from four tellers, three teller supervisors and three managers who are likely to be witnesses to events to be canvassed in the course of the litigation. All the deponents in substance say that they have no recall of or a very vague and poor recall of what occurred. This is not surprising. Police interviewed many bank personnel in relation to Mr Durovic's conduct. The statements obtained by police from tellers named in the statement of claim were taken in August and September, 1989. It is clear from the statements that the recall of each teller of relevant events was reliant upon the defendant's records. Many of the tellers expressly said that they had no specific recall of the transactions about which they were questioned, apart from the documents to which they referred.
To a significant degree, the plaintiff's action relates to recorded transactions and to the extent that witnesses' memories are reliant on records, I doubt that the delay since they made statements to police and gave evidence in the criminal trial will have much impact on that aspect of their evidence. Whilst witnesses will find it extremely difficult to give evidence in relation to matters as to which there are no records, it seems that to a substantial degree, that was already the case in 1989. The same observation applies in relation to witnesses who did not make statements to the police, although their task will be more difficult as they will not have the assistance of prior statements. This could prejudice the defendant in relation to issues raised by the statement of claim and issues which may be raised by way of defence such as contributory negligence, waiver, estoppel or an effort by the plaintiff to overcome a limitation of actions defence by asserting the postponement of the limitation period by reason of fraud or mistake pursuant to the Limitation Act, s32(1).
The defendant may also suffer prejudice if it now seeks to issue third party proceedings. It is not difficult to envisage claims the defendant might make against Mr Durovic and Mr Caccavo and possibly others. The effect of the Tortfeasors and Contributory Negligence Act 1954, s3(5) is that third party proceedings could have been issued as of right within a period of twelve months of the service of the writ. They can now only be taken with the leave of the Court pursuant to s3(6). Whilst this is a real potential prejudice, it is one which should have been anticipated when the writ was served and to which the defendant, in a sense, acquiesced by agreeing to the deferral of the delivery of a statement of claim.
Should the defendant seek to establish that any of the cheque proceeds paid to Mr Durovic were applied for the purposes of the plaintiff, I doubt that it will be prejudiced by the delay which has occurred. This issue was at the heart of the matter investigated by the police for the purposes of Mr Durovic's trial.
I am not persuaded that the delay will have a significant adverse impact on the defendant's ability to deal with issues such as the plaintiff's claim for interest or the plaintiff's claim for damages based on the allegation that what occurred obliged it to cease trading.
Conclusion
In the light of the matters to which I have adverted and in particular the defendant's acquiescence to the plaintiff deferring delivering its statement of claim, I am not satisfied that the overall justice of the matter requires that this action be struck out for want of prosecution. I will dismiss this aspect of the defendant's application and grant the plaintiff an extension of the time within which it may deliver its statement of claim.
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