Paul Ernest Beaumont v Andrew Chang
[2013] NSWSC 147
•01 March 2013
Supreme Court
New South Wales
Medium Neutral Citation: Paul Ernest Beaumont v Andrew Chang [2013] NSWSC 147 Hearing dates: 7 February 2013 Decision date: 01 March 2013 Jurisdiction: Common Law Before: Slattery J Decision: Orders extending time for service of the Amended Statement of Claim not discharged. Directions made for filing a Defence to the Amended Statement of Claim. Amendments incorporating causes of action under Trade Practices Act 1974, s 51AC not struck out. Submissions directed in relation to the costs of the defendants' motion
Catchwords: PROCEDURE - Supreme Court procedure - judgments and orders - time for service of Amended Statement of Claim extended in May 2012 pursuant to UCPR, rules 1.12 and 6.2(4)(a) - amended pleading served - defendants move for discharge of these orders extending time - whether orders extending time should now be discharged.
LIMITATION OF ACTIONS - amendment to unserved Statement of Claim - addition of causes of action for unconscionable conduct under Trade Practices Act 1974, s 51AC - whether additional causes of action are statute barred - defendants move to strike out amendments - whether amendment should be allowed.Legislation Cited: Trade Practices Act 1974
Uniform Civil Procedure Rules 2005Cases Cited: Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq.) [2009] NSWCA 104; Agricultural and Rural Finance Pty Ltd v Kirk [2011] NSWCA 67, 82 ACSR 390; Weston in capacity as special purpose liquidator of One.tel Limited (in liquidation) v Publishing and Broadcasting Limited [2012] NSWCA 79; The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2007] 1 Qd R 148; Illawarra Coke Co Limited v Leplastrier (1916) 34 WN (NSW) 23; Mills v Mills (1948) 65 WN (NSW) 115 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA; Barker v Wingo (1972) 407 US 514; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25; Barker v Wingo (1972) 407 US 514, Mearns v Australian Litigation Fund Pty Ltd (2006) FCAFC 81 Texts Cited: Starke JG, Assignments of Choses in Action in Australia Category: Interlocutory applications Parties: First Plaintiff:- Paul Ernest Beaumont
Second Plaintiff:- Brimbella Pty Ltd atf Judith Beaumont Settlement Trust
First Defendant:- Andrew Chang
Second Defendant:- Jaza Pty LtdRepresentation: Counsel:
Plaintiffs:- C.Freeman; Y.Guo
First and Second Defendants:- D.H. Murr SC; R.W. Tregenza
Solicitors:
Plaintiffs:- Peter Zipkis, Watson Stafford Zipkis
First and Second Defendants:- Steve Agosta, Nelson McKinnon Lawyers
File Number(s): 11/257723 Publication restriction: No
Judgment
Paul Beaumont, an ophthalmic surgeon and a Beaumont family corporate trustee, Brimbella Pty Limited ("Brimbella"), as the assignee of Paul Beaumont Pty Limited, both sue Andrew Chang, another ophthalmic surgeon, and a corporate trustee associated with Dr Chang, Jaza Pty Limited ("Jaza") in these proceedings. The plaintiffs seek remedies arising out of the alleged breach of a February 2002 agreement said to have been made between Dr Beaumont and Paul Beaumont Pty Limited on the one side and the defendants on the other side. The alleged February 2002 agreement related to the occupation of certain premises in Macquarie Street Sydney ("the premises"), from which they both practised as surgeons. The plaintiffs say that Dr Chang and Brimbella breached the agreement between May and July 2006.
The plaintiffs' Statement of Claim, filed in August 2011, was not immediately served on the defendants. Nor was it served within the requisite six months for which it was valid for service: Uniform Civil Procedure Rules ("UCPR"), r 6.2(4)(a). In early February 2012 the plaintiffs applied to the Registrar and were granted under UCPR, r 1.12, an extension of time for service of the Statement of Claim by 11 May 2012. But the Statement of Claim was not served within this extended time. So, just after the extended time expired on 13 May 2012, the plaintiffs sought yet a further extension until 13 July 2012. With their second request for an extension of time the plaintiffs also sought leave to file an Amended Statement of Claim. They were granted both leave to amend and granted their further time extension. The leave granted required the Amended Statement of Claim to be served by 13 July 2012. Pursuant to this leave, the plaintiffs filed the Amended Statement of Claim on 12 June 2012, after which it was sent by facsimile and by post to Dr Chang's solicitor on 11 July 2012.
The defendants now move under UCPR, r 12.11(1)(e) to discharge the Registrar's May 2012 orders extending time for service of the Amended Statement of Claim. The plaintiffs oppose the order for discharge sought in the defendants' motion. They seek instead that the defendants now file their Defence.
The defendants also take issue with amendments the plaintiffs introduced into the Amended Statement of Claim. These amendments add a claim alleging that Jaza engaged in unconscionable conduct in contravention of s 51AC of the Trade Practices Act 1974 and that Dr Chang was a person involved in that contravention. The defendants contend that an action based on that additional claim was out of time when the Amended Statement of Claim was filed, and that the Court had no power to allow it to be added to the original Statement of Claim. Against this, the plaintiffs contend that these amendments were all validly effected and should remain in the pleading.
The arguments on both sides are more complex than this. But it is convenient to divide these reasons for decision into two parts: the first part, dealing with the defendants' application under UCPR, r 12.11(1)(e) for the discharge of the orders giving the plaintiffs' the extension of time for service of their pleading; and the other part, dealing with the defendants' application to strike out the allegedly statute barred portion of the Amended Statement of Claim, namely paragraphs 23A to 23D. But before these recent procedural contests are considered, a little of the underlying dispute between these two doctors must be explained. In doing so the Court is not making any final findings about the matters alleged. But many of the basic facts put on each side are not contested by the other side, so an uncontentious narrative is possible.
Two Ophthalmologists Disagree about their Practice Arrangements
Dr Beaumont practised in Macquarie Street for at least a decade prior to the year 2000; and he did so in association with a number of different corporate trustees of family trusts related to the Beaumont family, the last of which, Brimbella, is the second plaintiff to these proceedings.
At least from the early 1990's Dr Beaumont practised from rooms in the same building as the premises the subject of these proceedings. The rooms from which he earlier practised ("the rooms") were located on a lower floor in the same building. In conformity with the Court's policy of reducing the risk of identity theft arising from publication of the Court's judgments neither the title details nor the precise address or floor numbers of the rooms, or the premises, are recorded in these reasons.
Dr Beaumont began practice in association with a trustee of a family trust, Jeams Pty Ltd ("Jeams"). As trustee of the Beaumont family trust, Jeams operated Dr Beaumont's ophthalmological practice from the rooms on this lower floor. In mid 2000 Dr Beaumont decided to share use of the rooms with Dr Chang. But perhaps unwisely, in retrospect, their mutual sharing arrangements were informal and undocumented. Just whether these arrangements involved Dr Chang's service company, Jaza, is in dispute. But the basic Beaumont-Chang arrangement in mid 2000 seems to have been that Dr Chang could use all the facilities in the rooms, provided he paid Jeams a portion of the cost of maintaining the rooms, with payment being made in arrears. In the plaintiffs' Amended Statement of Claim this mid 2000 Beaumont-Chang sharing arrangement is described as "the model agreement".
By mid 2001 Dr Beaumont wanted to retire from full time practice. He wished to pursue other interests less connected with practice management and more closely involved with research with The Royal Australian and New Zealand College of Ophthalmologists. So he began preparing to sell his practice. About mid 2001 Jeams transferred the practice assets to Beaumont Employees Pty Ltd ("Beaumont Employees") as trustee for the Beaumont Employees Unit Trust.
More serious sale negotiations ensued. During the rest of 2001 and into early 2002 the plaintiffs allege that Beaumont Employees, Dr Beaumont and another company, Paul Beaumont Pty Ltd, negotiated with Dr Chang and Jaza for the sale of the goodwill and assets of the practice. The plaintiffs claim that the defendants made a number of representations to the plaintiffs in the course of these negotiations.
By the end of 2001 the parties reached agreement for a practice transfer. But again, perhaps unwisely, the agreement was informal and not recorded in any document. There is little doubt though that there was some kind of practice transfer and that the transfer involved Dr Chang's interests taking over the operating assets and practice facilities at the rooms and all the liabilities associated with occupation of the rooms. But Dr Beaumont did not sell his patient roster to Dr Chang, because he intended to continue in some reduced form of medical practice after the sale. That is what he did, ultimately triggering the events that bring the parties into this dispute.
The terms of the practice transfer are in contest. It is sufficient to record what the plaintiffs allege were its agreed terms, and then what terms alleged are disputed. The plaintiffs contend that: (1) Beaumont Employees agreed to transfer the practice's plant and equipment and the right to manage the practice and to employ its staff, to Dr Chang and Jaza; (2) the defendants would pay the Beaumont interests the sum of $250,000; and (3) the defendants would permit Dr Beaumont and Paul Beaumont Pty Ltd to use the practice facilities in the rooms "for so long as they wished to do so, upon the same terms that the first defendant [Dr Chang] had used the facilities pursuant to the model agreement". Thus, the transfer involved a role reversal for the future operation of the practice. Dr Beaumont would now pay in arrears a portion of the cost of maintaining the facilities in the rooms equal to the portion of the time that he made use of the facilities, with responsibility for the balance lying with Dr Chang.
On the face of it, the agreement seemed a sensible one for both parties. The incoming owner, Dr Chang should have well understood the practical position of his prospective licensee, Dr Beaumont, because shortly before the sale he, Dr Chang, had been in exactly the same position as a licensee. But what had at first seemed sensible became complicated by other changes. Dr Chang wished to move his practice from the existing rooms to a higher floor in the same building, where the premises are located.
By September 2001 the parties had further agreed with one another to move to the higher floor and to conduct the practice from the premises there. The plaintiffs allege that this new agreement, to move from the rooms to the premises, was made between Dr Beaumont and Paul Beaumont Pty Limited on one side and Dr Chang and Jaza on the other side. Again perhaps unwisely, this agreement too was informal and not recorded in writing.
Undoubtedly some agreement to move from the rooms to the premises was made. Dr Chang did move his practice to the premises on the higher floor. The terms of that agreement are in dispute. Dr Beaumont alleges that the September 2001 agreement to move up to the premises had the following terms:-
(1) the practice would move to the premises on the higher floor;
(2) the same arrangements would exist between Dr Beaumont and Paul Beaumont Pty Limited on the one part and Dr Chang and Jaza on the other part, concerning occupation of the premises, as had existed with respect to the rooms; but
(3) the continuing arrangements in (2) would be different in one respect, namely that Dr Beaumont and Paul Beaumont Pty Limited would not, as is pleaded, "be obliged to pay any more in relation to the use of [premises]...than they would have had to have paid had the facilities remained [in the rooms]".
In short Dr Beaumont alleges that he agreed with Dr Chang's proposal to move to the higher floor but that he did so on terms that his outgoings were kept at the old rate that had applied to the rooms.
The pleadings suggest that trouble between the doctors started soon after the move up to the premises. On Dr Beaumont's side the allegation is that between September 2001 and mid 2006 Dr Chang and Jaza breached the September 2001 agreement (what the Amended Statement of Claim calls "the new agreement"), by issuing invoices to Dr Beaumont and Paul Beaumont Pty Limited in excess of the amounts actually due under the new agreement. Dr Chang contends that when moving to premises on the higher floor he did not agree to capping Dr Beaumont's outgoings at the rate applicable to the old rooms.
By early 2006 disputes about the terms of their earlier agreements had led to a serious deterioration in the relationship between Dr Chang and Dr Beaumont. So they turned to their lawyers. In March 2006 solicitors for Dr Chang and Jaza demanded that Dr Beaumont and Paul Beaumont Pty Limited sign, within 7 days, a deed governing their use of the premises which incorporated terms that were inconsistent with the capping arrangements Dr Beaumont said applied from September 2001. Dr Beaumont and his lawyers regarded the request for such a deed, as a repudiation of the September 2001 agreement.
Matters escalated. As the plaintiffs plead, on 5 April 2006 the defendants' solicitors again demanded that Dr Beaumont and Paul Beaumont Pty Limited sign the requested deed, which they refused to do. Then on 24 April 2006 (later extended to 18 May 2006) the solicitors for the defendants claimed to terminate the September 2001 agreement on the basis of this refusal. The plaintiffs later alleged that these further actions were a repudiation of the September 2001 agreement.
Acceptance of the Repudiation - the Critical Limitation Period Dates
Then a further series of events took place which are central to the argument between the parties about the expiry of the Trade Practices Act, s 51AC causes of action. These events involved exchanges of correspondence, the legal effect of which is in issue.
Dr Beaumont wrote to the solicitors for the defendants on 23 May 2006, accepting the defendants' alleged repudiation of the September 2001 agreement, and terminating that agreement. The 23 May 2006 letter relied for termination upon repudiatory breaches said to be constituted, by the defendants' issue of the incorrect invoices, charging amounts higher than what was authorized in the September 2001 agreement, and by the defendants other communications claiming to terminate the September 2001 agreement.
The plaintiffs did not allege that the acceptance of the defendants' repudiation operated immediately, but only from 26 June 2006. It appears that Dr Beaumont and Paul Beaumont Pty Limited continued to use the practice facilities at the premises for a period of time after 23 May 2006. The plaintiffs allege this use occurred whilst negotiations continued between the parties. As neither a defence nor any evidence has been filed by the defendants, it is not clear what the defendants say about the legal relationship between the parties during this period.
But the negotiations were not successful. The defendants brought them to an end on 18 July 2006. Their solicitors' letter on that day demanded that Dr Beaumont and Paul Beaumont Pty Limited vacate the premises and cease to use the facilities after 31 July 2006. It is not in contest that is what occurred. From 31 July 2006 the defendants barred Dr Beaumont and Paul Beaumont Pty Limited from use of the premises for ophthalmologic practice.
The plaintiffs allege as a result of the defendants' alleged conduct, outlined in these reasons, that they have suffered loss and damage. That damages case has only been traced out in outline during submissions to the Court. But the plaintiffs plead and give particulars that their losses include the loss of value of the assets and the goodwill of the practice (less the $250,000 received on the sale), together with loss of earnings. But before such a case was formulated and filed, Paul Beaumont Pty Limited went into liquidation.
Liquidation of Paul Beaumont Pty Limited and the Assignment
In parallel with the communications alleging breach of contract and repudiation, Paul Beaumont Pty Limited was having financial troubles. An administrator was appointed to the company on 19 May 2006 and a deed of company arrangement executed on 7 July 2006. But that deed was terminated on 15 August 2006 and a liquidator appointed to the company the following day.
The causes of action that from Dr Beaumont's perspective might arise out of the matters outlined above would belong either to Dr Beaumont or to Paul Beaumont Pty Limited (In liquidation). But on 11 February 2011 and before these proceedings were commenced, the liquidator of Paul Beaumont Pty Limited agreed by deed to assign the interests of Paul Beaumont Pty Limited (in liquidation) in the chose in action to pursue this litigation, to Brimbella, as trustee for the Judith Beaumont Settlement Trust.
The defendants question the validity of this assignment, as a matter relevant to the strength (or weakness) of any case brought in the name of the assignee Brimbella. The relevant terms of the assignment are set out later in these reasons, where the defendants' challenge to the assignment is analysed.
Application to discharge the Order to Extend Time for Service
The Orders Extending time
The plaintiffs obtained two orders extending time for the service of their originating process. The first order was made on 2 February 2012. That order was:-
"On application of the plaintiffs, the Court orders that:
1. Leave be granted to the plaintiffs pursuant to Part 19, rule 1 of the Uniform Civil Procedure Rules 2005 to amend the Statement of Claim filed on 10 August 2011.
2. Pursuant to Part 1, rule 12 of the Uniform Civil Procedure Rules 2005, the time for service of the Statement of Claim be extended to 10 May 2012."
That 2 February 2012 order extended time for service of the Statement of Claim to 10 May 2012. As these reasons have earlier indicated the Statement of Claim was not served within that time. Five days after expiry of that extended time, on 15 May 2012, the Court made the following further orders on the plaintiffs' application:-
"TERMS OF JUDGMENT/ORDER
The Court orders that:
1. Leave be granted to the plaintiffs pursuant to Part 19 rule 1 of the Uniform Civil Procedure Rules 2005 to amend the Statement of Claim filed on 10/08/11.
2. Any Amended Statement of Claim to be filed by 12/06.12.
3. Pursuant to Part 1, rule 12 of the Uniform Civil Procedure Rules 2005, the time for service of the Statement of Claim be extended to 13/07/12.
4. Liberty to restore on 3 days' notice.
5. Copy of Order to be served with Amended Statement of Claim."
As the plaintiffs served their Amended Statement of Claim within the period granted by the orders on 15 May 2012, but not within the period provided for in the orders on 2 February 2012, the defendants now only seek to discharge the later orders. The claim in prayer for relief 4 of the Motion is that the leave granted on 15 May 2012 to extend time for service "be set aside or revoked".
The defendants advanced two kinds of argument in support of their Motion to discharge the 15 May 2012 orders. The first is that in the circumstances in exercise of the Court's discretion under UCPR, r 12.11(1)(e), the Court should set the orders aside. If that order were made, the defendants also press Order 2 on the Motion that the Amended Statement of Claim "be struck out". The unserved Amended Statement of Claim is process which cannot be used against the defendants if it remains unserved. So the defendants say it should be struck out. This would have the acknowledged consequence that the plaintiffs could not re-agitate their claim, because the six year limitation period for the action for breach of contract would have expired in about mid 2012 some six years after the last identified breach in about July 2006: Limitation Act 1969, s 14(1)(a). On this part of the case, the defendants submit that a number of factors indicate the Court should exercise its discretion to discharge the 15 May 2012 orders for extension. These factors include: the plaintiffs' unexplained delay; the plaintiffs deliberate conduct in not serving the Statement of Claim; and, the weakness of the plaintiffs' case.
The balance of the defendants' Motion attacks the other part of the Registrar's 15 May 2012 orders, which allow the Statement of Claim to be amended. The defendants seek orders that: the amendment be set aside or revoked (paragraph 4 of the Motion); or alternatively, (paragraph 5 of the Motion) that paragraph 23B, 23C and 23D of the amendments be struck out. This application in relation to the amendments is dealt with in the next section of these reasons.
UCPR r 12.11 (1)(e) - applicable principles
The defendants' bring their motion for discharge under UCPR r 12.11(1)(e). That provision authorises the Court to make orders on a defendants' application "discharging any order extending the validity for service of the originating process". Such an order must be applied for by a notice of motion, without entering an appearance, and does not constitute submission to the jurisdiction of the Court: UCPR r 12.11(2), (3) and (4).
The nature of the discretion the court exercises in making UCPR r 2.11(1)(e) orders has been well described. The Court of Appeal has stated the principles governing the exercise of this discretionary power in a number of decisions: Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq.) [2009] NSWCA 104 ("Buzzle") and Agricultural and Rural Finance Pty Ltd v Kirk [2011] NSWCA 67, 82 ACSR 390 ("Kirk"). In the more recent decision of the Court of Appeal in Weston in capacity as special purpose liquidator of One.tel Limited (in liquidation) v Publishing and Broadcasting Limited [2012] NSWCA 79 ("One.Tel) the Court of Appeal summarised the effect of Buzzle and Kirk and stated the applicable principles in the following terms:
"20. The principles governing the exercise of the power conferred by UCPR, r 12.11(1)(e) can be summarised as follows:
(1) The principles relevant to an application to extend time for service under r 1.12 also apply to a motion pursuant to r 12.11(1)(e) to discharge orders for extension: Kirk, at 402 [58], per Tobias JA (with whom Macfarlan JA and Sackville AJA agreed).
(2) In exercising the discretion conferred by r 12.11(1)(e), the court should consider:
"the attempts that have been made at service, the length of the delay, the reasons for the delay, whether the delay was deliberate, whether notice was given to the defendant, the conduct of the parties generally and the hardship or prejudice caused to the plaintiff by [discharging the orders] or to the defendant [by refusing to discharge the order]." Buzzle, at [43], per Ipp JA (with whom Tobias and McColl JJA agreed) cited with approval in Kirk, at [94].
(3) The discretion is to be exercised in the context of, and by reference to, the statute by which it is conferred: Buzzle, at [28]. Consequently, in New South Wales, ss 56-59 of the Civil Procedure Act 2005 ("CP Act") require a judge exercising the discretion to have regard to whether the relevant party has:
(a) diligently pursued the object of disposing of the proceedings in a timely way;
(b) used, or could reasonably have used, available opportunities under the rules or otherwise, to avoid delay; and
(c) reasonably implemented the practice and procedure of the court with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination: Buzzle, at [36].
(4) The court must take into account the policy considerations underlying the relevant limitations statute. Thus, defendants or potential defendants should be made aware of claims against them within a reasonable time and liquidators who do not commence proceedings until just before expiry of the limitation period should be especially diligent in pursuing prompt service: Buzzle, at [37]-[39]; cited with approval in Kirk, at 410 [98]-[99].
(5) It is for the court and not one of the litigants to determine whether there should effectively be a stay of proceedings. Accordingly, it is generally:
"inappropriate to allow an extension of time for the service of a ... statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court's duty to exercise, alone, the discretion conferred upon it." Buzzle, at [82] cited with approval in Kirk, at 411 [101].
(6) Ordinarily, it is not a good reason for delay that a plaintiff wishes to hold up proceedings while some other case is tried: Buzzle, at [90]. However, this is not an inflexible rule: Kirk, at 411 [102].
(7) If a defendant knows that claims have been made against him or her and understands the nature of the claims that have been made, that may mitigate the prejudice the defendant might otherwise suffer by reason of a delay in service: Kirk, at 415 [123].
In Buzzle, Ipp JA referred (at [32]) with approval to IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission[2006] QCA 407; [2007] 1 Qd R 148 ("IMB"). In IMB, Keane JA (with whom McMurdo P and Cullinane J agreed), observed (at 160 [54]) that no case had held that the Queensland rules or their equivalents authorise renewal of a claim in favour of a party who:
"chooses not to serve a claim where the facts of the case sufficient to enable the claim to be pleaded are known to the plaintiff."
This observation was made having regard to the requirement in the Queensland rules that a party impliedly undertakes to the Court and to the other parties to proceed in an expeditious way. In Buzzle, Ipp JA pointed out that (at [35]) the provisions of the CP Act are "akin to (and, in some aspects, go further than) the Queensland ... rules". In Kirk, Tobias JA distinguished IMB on the facts, but cast no doubt on the applicability of the reasoning in that case in New South Wales.
These are the principles which the Court applies in the present case. The defendants' motion proceeded in the conventional way contemplated by UCPR r 12.11: it was filed within the time for filing an appearance but without the defendants' entering an appearance and therefore not constituting a submission to the jurisdiction of the Court.
Discretionary Factors - Delay and Deliberate Non-Service
The defendants use the plaintiffs' alleged delay to support their claim for discharge of the 15 May 2012 orders for extension of the time for service. The defendants contend the plaintiffs have not explained: why the original statement of claim was not served; why it took so long to prepare an amended statement of claim; and, why there was a further delay of one month between the filing and service of the amended statement of claim. The defendants submit that in the absence of these matters being explained, the orders extending the time for service of the Amended Statement of Claim should be discharged. The defendants further submit that these circumstances ground the inference that the plaintiffs, knowing all the necessary facts, deliberately chose not to serve the statement claim, and should now therefore not have the r 12.11 discretion exercised in their favour.
This section of the Court's reasons first examines the course of events after commencement of proceedings, and then examines the defendants' contentions as to delay. Then it deals with whether the plaintiffs made a deliberate decision not to serve the Statement of Claim.
Events from August 2011 to July 2012. The course of events after the filing of the Statement of Claim lies within a narrow time period, from August 2011 to July 2012. Through their solicitor, Mr Agosta, the plaintiffs have given an account of much of this period; an account to which the defendants' submissions on the issue of delay and deliberate conduct are addressed. There certainly was procedural delay on the plaintiffs' side during this period. But whether it is unexplained, and whether it warrants a discharge of the 12 May 2012 orders further extending the time for service, are in issue.
The filing of the original statement of claim is the start of the analysis. On 11 February 2011 the liquidator of Paul Beaumont Pty Limited assigned that company's chose in action against the defendants to Brimbella. These proceedings were commenced six months later on 8 August 2011. That original Statement of Claim pleaded a case in contract only against the defendants. Four months later on 16 December Mr Agosta reveals in his evidence that the plaintiffs' then solicitors, Antunes Lawyers, briefed senior counsel to advise generally and draft any required amendments to the Statement of Claim. As Mr Leung of Antunes Lawyers explained to Mr Agosta at the time: once the Statement of Claim had been filed, there was no particular difficulty in serving it; but the filing actually occurred because of the time limits in the Deed of Assignment, which required (clause 8) that the assignee, Brimbella, commence the proceedings the subject of the assignment within six months of the 11 February, 2011 assignment date. That explains why proceedings were commenced just under six months later, on 8 August 2011.
But Antunes Lawyers, acting for the plaintiffs, took a number of procedural steps between commencement in August 2011 and the first extension application in February 2012. Communication between Dr Beaumont and Antunes Lawyers was certainly slow. But on 25 October 2011 Antunes Lawyers foreshadowed to senior counsel that he would be briefed in the matter. Registrar Bradford in the Common Law Division of the Court on 15 November 2011 adjourned the first return date of the unserved summons, for further directions, to 3 February 2012.
There was some delay in Antunes Lawyers briefing senior counsel. It was legitimate of Antunes Lawyers to wait for senior counsel's advice before proceedings further at this point. But Antunes took until 16 December 2011 to send the brief to senior counsel. There is no evidence that this delay was the plaintiffs', as distinct from their solicitor's, fault.
Two things should be observed about this timing so far. First 16 December 2011, just before the Court vacation, was not a well-chosen time for sending a fresh brief to counsel, who at that time of the year would most likely be pre-occupied with the discharge of existing advisory commitments to clients before the holiday break. Neither senior nor junior counsel advised on the matter before Christmas 2011. None of that is entirely surprising, in the circumstances. I infer from Mr Agosta's general account that the delay on the plaintiffs' side before Christmas 2011 is more to be explained by indecision on the part of Antunes Lawyers rather than any other cause, or any deliberate conduct readily to be attributed to the plaintiffs themselves.
Senior Counsel had not advised before the first extension application on 2 February 2011. Antunes Lawyers seem to have followed up the brief with a number of phone calls but without any result in the short term. But the plaintiffs decided to change lawyers, from Antunes Lawyers to their current solicitor, Mr Agosta, at Leonard Legal. Whether that was due to a perception of recent lack of progress in their case is unclear.
The looming February 2012 deadline for service of the Statement of Claim seemed to concentrate minds on the plaintiffs' side. New lawyers made the first extension application. I infer that the new lawyers wanted a little time to consider whether and in what form to amend the Statement of Claim. This in my view was not unreasonable, given the situation they faced: having taken over a matter that was already old, they appeared to want to get the form of pleadings right before a contest with the other side took place. That exercise took them from February to June 2012. This was longer than first anticipated, and no doubt the period could have been shortened by being driven harder at the plaintiffs' end. But this was still not an unreasonable period given what was, ultimately accomplished within it.
Senior Counsel indicated on 23 February 2012 he could not prepare a draft of an Amended Statement of Claim. So on 7 March 2012, Leonard Legal briefed junior counsel to undertake this exercise of preparing amendments. He did this by 20 March 2012. But I infer from the known course of events, even though client privilege has been claimed for most of the solicitor-counsel-client communications of the plaintiffs' during this period, that junior counsel wanted to see some evidentiary support for the plaintiffs' claim that they had suffered a loss of some value, before serving the Amended Statement of Claim. So, on 21 March 2012, the plaintiffs engaged a forensic accountant, a Mr Andrew Ross, to investigate that issue. In the six week period between late March and early May 2012, the plaintiffs were heavily engaged in obtaining and providing documents, financial statements and accounting information to Mr Ross. But, this material was not fully available to Leonard Legal even by 11 May 2012, when the first service extension period expired. So they obtained their second extension on 15 May 2012.
From the second extension until the service of the Amended Statement of Claim on 13 July, Mr Agosta continued to work on preparing the accounting aspects of the case. Again, I infer from the known course of events that by mid July 2012 the plaintiffs had sufficient financial information to decide to file and serve Amended Statement of Claim. But they still did not yet have the forensic report that they wanted.
Assessing the delay. The plaintiffs' recent delay in service does not warrant discharge of the 15 May 2012 extension order. The defendants contend this delay is excessive and is unexplained. Although the procedural conduct of the plaintiffs' case overall is quite unsatisfactory, and in proceedings where the primary agreements are over ten years old, neither of the defendants' criticisms is justified. Whilst there has been long and unexplained delay in commencing these proceedings, they were still arguably commenced within the applicable limitation period. The law also permits a first six months after filing for service of originating process. The plaintiffs' delay beyond that period is a period of a further five months, to July 2012. The delay here is not of the order of that examined in One.Tel. In the first half of 2012 the plaintiff was active in formulating and progressing the pleading of a case that they believed could be supported by admissible evidence.
Moreover, the effect of the delay here was alleviated to an extent. The Liquidator of Paul Beaumont Pty Limited in September 2011 disclosed in the February 2011 assignment that these proceedings had been commenced. From then on the defendants had at least some notice of the proceedings, although they did not have the full pleading. They could take some steps as a result to retain the relevant evidence in their possession.
Deliberate conduct. The plaintiffs' recent delay is not unexplained. The first half of this year is accounted for by the solicitors and counsel for the plaintiff ensuring that the defendants' and Court's time were not wasted with litigation that later turned out to be lacking in the essential (for some causes of action at least) ingredient of loss and damage. There was in this sense a degree of calculation in the course the plaintiffs' took.
The defendants also submit that this case enlivens the same considerations as led to discharge of the extension orders in the One.Tel litigation: One.Tel at [32] and [40] and TheIMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission [2007] 1 Qd R 148 ("IMB"), per Keane JA at [54]. But these proceedings are not a case, as those cases were, of a plaintiff deliberately refraining from serving process when in full knowledge of the facts. Here the plaintiffs feared that an essential ingredient of their causes of action may be missing, and the delay is accounted for by their search for it.
There is little doubt that the delay in this case was "deliberate" in the sense that this is not a matter where the plaintiffs were unable to find the defendants for the purposes of service. I accept that the plaintiffs consciously refrained from serving their originating process. But this case is far removed from both the principles and the circumstances of cases such as IMB upon which the defendants sought to rely in argument. In IMB the Queensland Court of Appeal rejected an application for extension which would have validated service five years after the filing of a Statement of Claim after seven or eight applications for extension. Here, originating process was served within eleven months after it was filed, after two extension applications, the second of which only permitted service within a period of two months. The facts here are quite removed from those in IMB and in One.Tel, which involved delay and multiple applications of a similar order to IMB.
But IMB and the cases like it, which discharge extension orders, exhibit disapproval of a level of plaintiffs' calculation which is not present in this case. Both IMB (at 54) repeated in One.Tel (at [21]) emphasise that no case supports renewal of a claim in favour of one who "chooses not to serve a claim where the facts of the case sufficient to enable a case to be pleaded are known to the plaintiff". Here, the plaintiffs' affidavit in support of the second extension application (affidavit of Mr Stephen Peter Agosta of 15 May 2012) explains that between March 2012 and just before the application was made in May 2012, the new solicitors for the plaintiff were preoccupied with obtaining documents to deal with what was described as "a valuation matter which required the services of an expert forensic accountant". The second extension was granted in circumstances where the Registrar was told that additional documentation was coming from Dr Beaumont's accountant to finalize the forensic accountants' advice and where as at 9 May 2012 Mr Agosta was able to say "I anticipate receiving [this documentation] within the next seven to ten days". But the defendants argue that such explanations did not assist the plaintiffs to avoid the consequences of IMB and One.Tel that the Courts will not vindicate extension applications deliberately taken where facts sufficient to plead the case are known. The defendants put this attack several ways, all of which in my view fail.
The plaintiffs' underlying materials were not available. The defendants pointed out that the plaintiffs had not waived privilege in respect of the communications with the forensic accountant, the communications with counsel, the efforts to gather documents for the forensic accountant sufficient to show that these materials were needed to plead their case. The plaintiffs claimed privilege over these materials and the claim was not challenged. But Mr Agosta was not cross-examined to suggest that his account of facts in his affidavit of 15 May 2012 was wrong and I accept his account both as to the events and his reasons for acting at the time. His evidence supports the inference that the plaintiffs needed documents to resolve "a valuation" with an expert forensic accountant.
But, without the valuation report, did the plaintiffs' know the facts of the case to an extent "sufficient to enable the case to be pleaded", using Keane JA's words in IMB, at [54]. The definitive way of establishing this for a plaintiff would be to waive privilege and show how the valuation material was necessary for the pleading. But the plaintiffs have not done this, strengthening the defendants' argument. Then the defendants advance their analysis further pointing out that the Amended Statement of Claim was ultimately filed before the valuation report was received and the form of the pleading as filed does not refer to the report. The defendants submit that this establishes the plaintiffs had sufficient knowledge of the facts to plead their case from as early as the time they first received the form of Amended Statement of Claim from counsel in March 2012, and before they embarked upon obtaining an expert forensic advice.
The defendants' argument is not persuasive. The relevant pleaded facts here are the plaintiffs' allegations that they "suffered loss and damage" by reason of the defendants' breach of the December 2011 agreement, paragraph [23] and, the allegation that the plaintiffs have "suffered loss and damage and continue to suffer loss and damage" by reason of contraventions of s 51AC of the Trade Practices Act 1974, at, [23B]. Both these paragraphs were refer to particulars of the claimed losses, which losses were described as "the loss of value of the assets and goodwill of the practice". The particulars describe more information being supplied "by way of service of expert's report". I infer that this is the expert's report the plaintiffs were attempting to prepare in March-May 2012. It is identified in the pleading. I infer that if the expert's report had been available then no doubt particulars of the "loss of value of the asset and goodwill" could have been given with greater precision.
Proving loss is an essential ingredient of the statutory cause of action pleaded in the Amended Statement of Claim. Mr Agosta was attempting to ascertain whether the facts as known supported a pleading of loss and damage. But the defendants' point can be accepted that the claim was credible without the expert's report because it was filed before that report was available. Although this a basis to infer that sufficient facts were known to plead the case when the extension was sought, the principles in cases such as IMB must be applied having proper regard to the pleading obligations of the parties.
The rules of this Court expect Mr Agosta to plead to a particular standard. He must certify pursuant to the Legal Profession Act s 347 "that there are reasonable grounds for believing on the basis of provable facts" that the claim for damages in the proceedings has reasonable prospects of success. The actions Mr Agosta was taking in March to July 2012 were certainly consistent with ascertaining what were the provable facts about the damages being claimed.
Moreover, a plaintiff's pleading obligation includes the giving of such particulars of any claim pleaded "as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet": UCPR r 15.1(1). In general a plaintiff should fairly inform a defendant of the nature and extent of the damages claimed and if the claim cannot be precisely calculated particulars should be given of the facts which make such a calculation possible: Illawarra Coke Co Limited v Leplastrier (1916) 34 WN (NSW) 23 and Mills v Mills (1948) 65 WN (NSW) 115. Ultimately, the plaintiffs failed in their endeavour to provide such particulars because the expert forensic report was not available. But because their attempts, though unsuccessful, were consistent with their obligations to correctly plead their claim, their delay cannot be simply characterised as a deliberate choice not to serve a claim where the facts of the case are sufficiently known. In my view this case is not analogous to IMB. The authorities make clear that the Court can take into account "the conduct of the parties generally" in the exercise of its discretion. In my view, for this reason, the conduct of the solicitors for the plaintiff in delaying for the reasons that they did was part of the responsible discharge of professional obligations, including obligations to the Court, and should not be weighed in the exercise of discretion to the disadvantage of the plaintiffs.
Finally, the terms of the second extension were comparatively modest. It was only for two months. Any prejudice to the defendant is likely to be less demonstrable with such a short extension then it might be with one for a longer period, even accepting the difficulties which defendants often have in these circumstances of establishing prejudice because "what has been forgotten can rarely be shown": Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25 per McHugh J citing Barker v Wingo (1972) 407 US 514.
Discretionary Factors - Strength of the Plaintiffs' case.
The strength of the plaintiffs' case is another relevant discretionary factor. The stronger the plaintiffs' case the greater the prejudice the plaintiffs' may suffer if the Court either refuses to extend the time for filing, or discharges an order to extend. But this is not a decisive consideration on this motion.
The strength of the two plaintiffs' cases must be analysed separately. The prospects of success of each plaintiff's action is quite different because the elements to be established in each plaintiff's action are distinct. The defendant submits both plaintiffs' cases have real weaknesses and that therefore this is not a discretionary factor that assists the plaintiffs.
The first plaintiff, Dr Beaumont, was involved in the events which found the allegations of misleading and deceptive conduct. But Dr Beaumont did not personally own the assets and undertaking of the opthalmological practice with which his name was associated. The defendants submit that if Dr Beaumont relied on misleading and deceptive conduct that he suffered no loss as a result.
In contrast, the second plaintiff, Brimbella, sues as the assignee of causes of action which was originally vested in Paul Beaumont Pty Ltd. The assignment to Brimbella only took place on 11 February 2011, from when Brimbella's involvement first commences. But the defendants say that this assignment was ineffective, and that Brimbella's case must fail if allowed to go to trial.
There was little dispute that the primary contest, about whether the defendants engaged in misleading or deceptive conduct, about whether Dr Beaumont or Paul Beaumont Pty Ltd relied on that conduct, and about whether Paul Beaumont Pty Limited suffered any damage as a result, are matters that would depend upon the Court's assessment of the credibility of Dr Beaumont, Dr Chang and their respective witnesses at a trial. Neither party's prospects of success on this primary contest can now be assessed with any certainty. All that can be said is that each party has an arguable case. The argument about the strength or otherwise of the plaintiffs' case depends upon (1) whether Dr Beaumont suffered any loss, and (2) whether the assignment to Brimbella was effective.
It is at least arguable, that Dr Beaumont suffered loss from the causes of action pleaded in the Amended Statement of Claim. The precise arrangements between Dr Beaumont and Paul Beaumont Pty Limited are not pleaded and are not in evidence. Indeed the deed of assignment from Paul Beaumont Pty Limited (in liquidation) to Brimbella contemplates that the "business practice and goodwill" of the practice belonged to that company. But such a claim is not obviously without merit. Dr Beaumont is not obliged to put on all his damages evidence at this point to respond to this motion before a defence is filed. The pleading makes clear that he relied upon the pleaded representations. His retainer arrangements with Paul Beaumont Pty Limited may well have been prejudiced as a result of acting on the representations. There does not appear to be any insuperable obstacle to Dr Beaumont in due course filing evidence to support the claim that he has suffered loss and I should not infer at this stage that his case is not arguable. But I accept the defendants' submission that I cannot assume in Dr Beaumont's favour that he has a strong case and I do not.
The same conclusion is drawn in respect of the defendants' assignment point. The defendants argue that the 11 February 2011 assignment from Paul Beaumont Pty Limited to Brimbella of the various causes of action pleaded in the Amended Statement of Claim is ineffective. The plaintiffs concede that they cannot assign the Trade Practices Act causes of action. But the defendants contend the assignment of the remaining causes of action to Brimbella was ineffective because the assignment is not an "absolute assignment" within that provision. The problem to which the defendants point is that although the deed of assignment in its operative part appears to be absolute, "the assignor hereby assigns all its legal and equitable rights arising from the documents, facts or circumstances set out in Item 5" (clause 2), those apparently absolute words are qualified by other conditions subsequent: the assignment deed terminates if the action is not commenced within time (clauses 4 and 8); the assignment terminates in circumstances of the assignee's insolvency (clause 7); and nowhere does the assignment deed make clear that on termination for any of these reasons the assigned chose in action revests in the assignor. Authority suggests that assignments that ceased to be operational on the happening of certain events are not absolute assignments but conditional: see Interstate Investment Co. Ltd v Mobbs (1928) 28 SR 572 at 574 and Starke JG, Assignments of Choses in Action in Australia, Sydney, Butterworths 1972, p 14.
The contrary position is at least arguable. As the full Federal Court of Australia explained in Mearns v Australian Litigation Fund Pty Ltd (2006) FCAFC 81 at [11], "it is important to distinguish the deed providing for assignment from the assignment itself. Section 12 is concerned with the act of assignment and not with an agreement for assignment, whether or not contained in a deed. It is possible for parties to vary the terms upon which an assignment is to take place and when the assignment does take place it is absolute. This is a matter for argument at trial. Brimbella's case is arguable. But I accept the defendants' contention that it should not be assessed as being a particularly strong case.
There is therefore to be weighed in the exercise of the Court's discretion the prejudice that would arise due to loss of the plaintiffs' causes of action if the extension orders are discharged and the plaintiffs' originating process becomes ineffective.
Application to Set Aside the Amendments
The defendants seek to strike out paragraphs 23B, 23C and 23D of the Amended Statement of Claim. The amendments which were introduced into the Statement of Claim filed on 12 June 2012 pleaded causes of action in unconscionable conduct under the general law and specifically sought relief under Trade Practices Act, s 51AC. The parties submitted that the Trade Practices Act has application to the facts of this case, rather than the Australian Consumer Law, because the pleaded acts and omissions relied upon all occurred before the commencement of the Australian Consumer Law on 1 July 2010. The most recent pleaded conduct of the defendants was in 2006.
After pleading the model agreement that applied to the two doctors' use of the rooms, the plaintiffs next pleaded a series of representations that the defendants are alleged to have made in the course of negotiations for the sale of the practice as follows:-
"6A. In or around mid 2001 Jeams transferred the assets of the Practice to Beaumont Employees Pty Ltd as trustee for the Beaumont Employees Unit Trust ('BEPL').
6B. During 2001, BEPL, the first plaintiff on behalf of himself and Paul Beaumont Pty Ltd ('PBPL') (of the one part) and the first and second defendants (of the other part) entered into negotiations for the sale and transfer of the goodwill and assets of the Practice to the first and second defendants ('Negotiations').
6C. During the course of the Negotiations, the first plaintiff informed the first and second defendants, and it was the fact, that:
(a) He had done the fit out of the premises and a reasonable market value of the assets and goodwill of the Practice exceeded $1,000,000;
(b) In order for the first defendant to set up an equivalent practice to the Practice, he would incur initial set-up and fit-out costs of approximately $1,000,000 together with annual running costs;
(c) If the first plaintiff was to set up a new practice which was equivalent to the Practice, he would incur initial set-up and fit-out costs of approximately $1,000,000 together with annual running costs;
(d) The first plaintiff was prepared to sell the Practice to the first and second defendants at a sale price well below its reasonable market value provided that the first and second defendants permitted the first plaintiff and PBPL to use the facilities of the Practice on the 6th Floor for so long as they wished to do so upon the same terms that the first defendant had used the facilities pursuant to the Model Agreement;
(e) If the proposal in paragraph 6(d) above was not acceptable to the first and second defendants, the Practice would not be sold to the first and second defendants;
(f) the first plaintiff was prepared to cause BEPL to sell the Practice for a total of $250,000 and at an undervalue provided the condition as to continuing occupation and use in paragraph 6(d) above was accepted by the first and second defendants.
Particulars
Oral conversations between the first plaintiff on behalf of BEPL and the first defendant (on behalf of himself and the second defendant) in 2001.
6D. During the course of Negotiations, Gray Eisdell Timms Pty Limited prepared a market valuation of the plant, equipment, furnishings and furniture on the 6th Floor for existing use in an amount of $615m785 ('Valuation')
6E. The first and second defendants received a copy of the Valuation shortly after it was published.
6F. During the course of the Negotiations, the first defendant on behalf of himself and the second defendant represented to first plaintiff and PBPL that:
(a) He knew that the sale price of the Practice of $250,000 was below a reasonable market value of the assets and goodwill of the Practice ('First Representation'); and
(b) On the basis that sale price of the Practice was $250,000, he would permit the first plaintiff and PBPL to use the facilities of the Practice on the 6th Floor for so long as they wished to do so upon the same terms that the first defendant had used the facilities pursuant to the Model Agreement ('Second Representation').
6G. At all material times, the first and second defendants were aware of the matters in paragraph 6C-6E above."
Paragraphs 7 and 8 of the Amended Statement of Claim then plead the agreement to transfer the practice and the September 2001 agreement to move from the rooms to the premises in the higher level in the building. Then the alleged capping arrangement accompanying the move to the higher level is pleaded in the Amended Statement of Claim, as a further representation, in paragraph 8A as follows:-
"8A. Prior to entry into the New Agreement, the first defendant on behalf of himself and the second defendant represented to the first plaintiff and PBPL that the first plaintiff and PBPL would not be obliged to pay any more in relation to the use of the facilities on the [premises] than they would have had paid had the facilities remained on the [rooms] Floor ('Third Representation')."
Between paragraphs 9 and 23, the Amended Statement of Claim alleges breach of the new agreement by the issuing of the erroneous invoices and by the various defendants' demands, leading to the alleged repudiation of the September 2001 agreement and the alleged acceptance of that repudiation.
After pleading the events of 23 May to 31 July 2006 the Amended Statement of Claim then alleges (paragraph 23) that "by reason of the defendants' breach in repudiation of the new agreement [Paul Beaumont Pty Limited] suffered loss and damage".
Upon this platform allegations the plaintiffs then plead the Trade Practices Act, s 51AC claim in paragraphs 23A to 23D, as follows:-
"23A. Each of the First-Third Representations were made by the first and second defendants in trade or commerce.
23B. The plaintiffs repeat paragraph 6B-6E and 7A above and say that in the premises:
(a) it was unfair and unconscionable for the second defendant to have engaged in the conduct referred to at paragraphs 9-17 and 21-22 above ('Conduct') because:
(i) the Conduct was contrary to the Second and Third Representations;
(ii) the Conduct resulted in the first plaintiff and PBPL being in the position of having caused the Practice to be sold well below a reasonable market value;
(iii) as a consequence of the Conduct, the first plaintiff and PBPL lost the benefit of the Practice, including its business and goodwill, in an amount of not less than $365,785;
(iv) the Conduct was a breach of the Transfer Agreement and the New Agreement;
(v) as a consequence of the Conduct, the first and second defendants have obtained a financial benefit of at least $365,785 at the expense of the first plaintiff and PBPL;
(b) The Conduct constituted conduct in trade and commerce in connection with the acquisition and/or supply of goods or services by the second defendant which was in all the circumstances unconscionable within the meaning of section 51AC of the Trade Practices Act 1974 (Cth) ('Act'); and
(c) Constituted a contravention by the second defendant of section 51AC of the Act.
23C. All acts and omissions of the second defendant were undertaken by the first defendant as its director and in the premises the first defendant has:
(a) Aided, abetted, counselled or procured the contravention referred to in paragraph 23B ('Contravention'); and/or
(b) Been, directly and indirectly, knowingly concerned in the Contravention.
23D. As a consequence of the Contravention and the conduct of the first defendant referred to in paragraph 23C herein on and from 31 July, 2006 the first plaintiff and PBPL suffered loss and damage and continue to suffer loss and damage."
The defendants argued that the allegations and remedies claimed in paragraphs 23B to 23D were not authorised by the 15 May 2012 orders. Although Mr Murr SC and Mr Tregenza persuasively advanced this argument, Mr Freeman's counter arguments were ultimately more successful on this point.
Conclusions and Orders
Mediation
This case has never been mediated. That is unfortunate. A striking feature of these proceedings is the waste of professional energy that it represents. It diverts the energy and intellect of two highly skilled medical professionals away from their own patients and their medical research. Apart from the consumption of their financial resources that the litigation involves, their skills are sufficiently special to the community that I doubt that the continuation of this litigation could advance the public interest.
The defendants' application has been mostly unsuccessful. But it is timely. The plaintiff has long delayed in bringing on this litigation. This has prolonged uncertainty for all the parties.
The Court raised the issue of mediation in the course of submissions, as one of the options that might be considered if the proceedings were not to be dismissed. In the limited time that counsel had available to take instructions, neither side sought to oppose the making of a mediation order. In my view, whether or not the parties consent to such an order, one is appropriate in this case. It is included among the orders made below.
The circumstances are now appropriate in my view for the Court to refer the whole of these proceedings to mediation pursuant to Civil Procedure Act, s 26(1). If the parties wish to vary the timing of the order for mediation the Court can make consent orders to achieve such a mutually agreed variation in chambers.
Summary of Orders to Be Made
In the result, the defendants have failed to discharge the 15 May 2012 orders extending the time for service for the Statement of Claim. They have also failed to strike out paragraphs 23A to 23D of the Amended Statement of Claim. The limitation point the defendants raise is one which should be determined at trial, not upon an interlocutory application, such as the present Motion.
But should costs follow the event? UCPR r 42.1 commands that costs follow the event, unless the Court "otherwise orders". If necessary, I will briefly hear the parties as to whether or not the Court should make an order for costs in the plaintiffs' favour. But the defendants' Motion was not unreasonable, given the plaintiffs' delay in commencing and advancing these proceedings. The plaintiffs' two applications on 2 February and 15 May 2012 extending time for service were themselves indulgences that the defendants were not unreasonably entitled to question. The costs result which suggests itself in the circumstances is that each party's costs will be his or its costs in the cause. But both sides may wish to advance more submissions on this issue. If necessary, the Court will hear brief oral submissions about the question of costs. This is not a matter where any more legal energy should be spent on written submissions about costs. The parties will no doubt be mindful that if the argument about costs does not produce a result different from each party's costs being costs in the cause, that the party seeking a different result may have to bear the costs of a such a costs argument.
In the circumstances therefore the Court will make the following orders:
1. The defendants' motion is dismissed.
2. Order that these proceedings be referred to mediation, which is to take place by 31 May 2013.
3. Direct the defendants to file a defence to the Amended Statement of Claim by 28 March 2013.
4. Direct the parties to confer within 7 days (a) with a view to agreeing upon the appropriate order for costs resulting from this motion, and (b) if no such agreement is reached, arranging a date with my associate for the putting of brief oral submissions on costs.
5. Liberty to apply.
I certify that this and the preceding pages are a true copy of the reasons for judgment of Justice Slattery delivered on
Associate..................................
Decision last updated: 04 March 2013
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