Preston v Colquhoun
[2010] NSWDC 281
•25 November 2010
CITATION: Preston v Colquhoun [2010] NSWDC 281 HEARING DATE(S): 10 and 11 June 2010 followed by written submissions to 19 November 2010 when judgment was reserved
JUDGMENT DATE:
25 November 2010JURISDICTION: Civil Jurisdiction JUDGMENT OF: Johnstone DCJ DECISION: 1. Judgment for the defendants
2. Plaintiffs to pay the defendants’ costs, on the ordinary basisCATCHWORDS: PROFESSIONAL NEGLIGENCE - claim in contract and tort against solicitors by a former client alleging a failure to properly investigate and advise in connection with certain civil litigation - claim for the refund of the practitioner/client legal fees paid to the solicitor LEGISLATION CITED: Civil Liability Act 2002
Limitation Act 1969: s 14CASES CITED: Heydon v NRMA Limited (2001) 51 NSWLR 1 PARTIES: Preston Australia Pty Limited (First Plaintiff)
John Preston (Second Plaintiff)
Peter Colquhoun & Paul Alice trading as Colquhoun & Colquhoun Solicitors (Defendants)FILE NUMBER(S): 08/318586 COUNSEL: Mr T Anderson (Plaintiffs)
Mr J Lynch (Defendants)SOLICITORS: Davidson Gallagher Gerathy Lawyers (Plaintiffs)
DLA Phillips Fox (Defendants)
REASONS FOR JUDGMENT
The proceedings and the issues
1. The plaintiffs sue their former solicitors seeking a refund of the practitioner and client fees paid for legal work done in connection with civil proceedings instituted in the Supreme Court in 1987 against the directors of Favelle Cranes and Services Pty Ltd in respect of certain trade debts (the “Favelle proceedings”).
2. The Favelle proceedings were commenced by a different firm of solicitors whose instructions were subsequently withdrawn. In April 2001 the plaintiffs retained the defendant solicitors to act for them and those solicitors performed work in connection with the proceedings until 18 February 2002 when the Supreme Court delivered a judgment in which it determined that the proceedings had in fact been dismissed in September 1992 and were a nullity.
3. It is alleged that when the defendant solicitors were retained in April 2001, they failed to adequately review the court file and discover that the proceedings had in fact been dismissed in September 1992 and were a nullity, as a consequence of which the plaintiffs were not advised of that fact, and further work was performed unnecessarily under the misapprehension that the proceedings were still extant.
4. The plaintiffs’ principal complaint is that all the work done by the defendant solicitors in connection with the Favelle proceedings from April 2001 was wasted or useless. They claim in negligence and for breach of contract, seeking damages in an amount of $39,972.70, plus interest, being the practitioner and client costs paid by them to the defendant solicitors in relation to the Favelle proceedings.
5. The plaintiffs’ second complaint is that after the judgment of 18 February 2002 the defendant solicitors wrongly advised them to seek reimbursement of their legal costs from the Attorney General’s Department of New South Wales, as a result of which an application was made, which was unsuccessful. They claim a refund of the practitioner and client costs paid by them to the defendant solicitors in relation to that application.
6. The defendants deny liability. They say that the Favelle proceedings were not in fact dismissed in September 1992 and were not a nullity. Rather the proceedings were only struck out of the General List in the Supreme Court, such that they were still in existence in April 2001 and remained extant until the judgment of the Supreme Court delivered on 18 February 2002.
7. The defendant solicitors contend that all work done by them between April 2001 and February 2002 was validly and appropriately performed, on instructions, such that the costs incurred by the plaintiffs could not be said to have been wasted. They contend further that the application to the Attorney General’s Department was for an ex gratia payment in respect of the plaintiffs’ costs, and was properly and appropriately made on instructions, on the basis that correspondence sent by the Supreme Court deceived the plaintiffs into believing the proceedings were still extant as at April 2001.
8. The principal issues for determination are:
· Were the Favelle proceedings dismissed in February 2002 such that they became a nullity, or were they only struck out of the General List and technically still extant?
· Did the defendant solicitors adequately investigate and advise the plaintiffs, in April 2001, in relation to the status of the Favelle proceedings?
· Did the defendant solicitors wrongly advise the plaintiffs, in February 2002, that they were entitled to reimbursement of their legal costs by the Attorney General’s Department?
· Did the plaintiffs suffer any loss caused by negligence or breach of contract?
· Are the plaintiffs’ claims out of time: s 14 Limitation Act 1969?
Factual background
9. In April and May 1984 Preston Erection Pty Ltd, a company controlled by the second plaintiff, Mr John Preston, performed certain work for Favelle Cranes and Services Pty Ltd (the “debtor company”), for which it issued various invoices totalling $39,989.64. The invoices were not paid.
10. Proceedings were instituted against the debtor company in the District Court (No 9795 of 1984) for recovery of the amounts due under the invoices. A judgment was obtained in respect of the indebtedness, but the judgment was never satisfied because on 26 November 1995 the debtor company was wound up.
11. Accordingly, by Statement of Claim filed in the Supreme Court on 17 February 1987 (1440 of 1987), Preston Erection Pty Limited commenced the Favelle proceedings against the four directors of the debtor company. It was alleged that at the time the indebtedness was incurred pursuant to the invoices, the debtor company was insolvent, such that its directors were personally liable for the company’s debts by reason of its insolvent trading: s 556 of the then applicable legislation, the Companies (NSW) Code.
12. Mr Preston alleges that in 1988 Preston Erection Pty Limited assigned the proceedings and the debt owed to it to Preston Australia Pty Limited, the first plaintiff in the current proceedings. This Deed of Assignment has not been located. Mr Preston alleges it was in a large box of documents given to Mr Peter Colquhoun, the first defendant in the current proceedings when he first retained his firm in early 2001.
Mr Colquhoun denies he was given such a Deed of Assignment and the defendants dispute its existence.
13. In the 14 years between February 1987 and January 2001 the prosecution of the Favelle proceedings was dilatory, to an extraordinary extent.
14. The original firm of solicitors that filed the Favelle proceedings was M D Nikolaidis & Co. That firm had conduct of the proceedings for the next 5½ years, until September1992. It appears that the Statement of Claim was only served on 3 of the 4 directors, each of whom filed a Defence. A Notice to Set Down for trial was filed in December 1989 and the proceedings were added to the General List.
15. The proceedings were called over on 8 July 1992 when the matter was stood over by consent. The next call over was on 9 September 1992 but on that occasion there was no appearance for Preston Erection Pty Limited, as plaintiff in those proceedings, and the Registrar, Mr Berecry, made an order. The endorsement on the file record reads:
“ ORDER: TERMS: STRUCK OUT”
16. It is that order which gives rise to the main area of dispute in the current proceedings.
17. Soon after, on 12 October1992, Mr Preston caused the instructions to M D Nikolaidis & Co to be terminated. Subsequently, on 24 August 1993, Mr Preston caused proceedings to be instituted in the Supreme Court against M D Nikolaidis & Co for negligence (No 4001 of 1993). It seems those proceedings have not yet been finalised.
18. According to the Court record no further substantive steps were taken in connection with the Favelle proceedings by or on behalf of Preston Erection Pty Limited, as plaintiff, for the next 10 years. All that is recorded on the file record thereafter is some administrative steps.
19. In January 1995 the firm of Wheelers Solicitors filed a Notice of Change of Solicitor and came onto the record in place of M D Nikolaidis & Co. But they took no steps to prosecute the proceedings over the next 3½ years, and on 1 October 1998 the file was marked:
“ FILE CLOSED. Reason: INACTIVE”
20. Some 9 months later, on 17 August 1999, the file was re-opened to enable a Notice of Change of Solicitor to be filed and Mr Kitamura, solicitor, came onto the record in place of Wheelers Solicitors. The file was then marked:
“ FILE CLOSED. Reason: FINALISED”
21. A month after that, on 17 September 1999, the file was again re-opened to enable a Notice of Change of Solicitor to be filed by Wheelers Solicitors, who came back onto the record in place of Mr Kitamura.
22. But still no steps were taken to prosecute the proceedings, and on 25 January 2001 the file was marked:
“ Document printed: PART 32A – DISMISSAL OF PROCEEDINGS)
(INACTIVE FOR 12 MONTHS)”
23. Thus, by letter dated 25 January 2001, the Principal Registrar of the Supreme Court wrote to Wheelers Solicitors, as solicitors for Preston Erection Pty Limited, warning that the Court would dismiss the proceedings after 28 days unless satisfied that special circumstances existed that rendered it undesirable to do so (the “first Supreme Court letter”):
“ DISMISSAL OF INACTIVE PROCEEDINGS UNDER PART 32A
Court records indicate that in the above proceedings no step has been taken by any party to the proceedings for over one year.
Pursuant to Part 32A the Court will, of its own motion, dismiss these proceedings upon the expiration of 28 days from the date of this letter unless a party satisfies the Court that special circumstances exist that render it desirable that such an order should not be made.
The Court will not make an order dismissing the proceedings pursuant to Part 32A without giving the parties a reasonable opportunity to be heard. Your written application must be lodged with the Court before the expiration of 28 days from the date of this letter.
For the PRINCIPAL REGISTRAR”
24. It seems that Mr Preston soon became aware of the first Supreme Court letter because on 13 February he caused a letter to be sent to the Supreme Court by Preston International Pty Ltd acknowledging receipt and requesting that the proceedings not be dismissed until finalisation of the claim against M D Nikolaidis & Co:
“ Dismissal of Inactive Proceedings Under Part 32A
We have received your notice dated 25 January 2001, attached.
We are in Court with matter 4001 of 93 in regards to the recovery of our files on this matter.
Mr Leon Nikolaidis who commenced this action claims a lien on the files. We cannot proceed with this matter until our files are recovered from Mr Nikolaidis.
We request the matter not be dismissed until matter 4001 of 93 Supreme Court of New South Wales Common Law Division is finalised.
John Preston
Managing Director”
25. The Supreme Court sent a second letter dated 20 February 2001, to both Wheelers Solicitors and to Prestons, listing the proceedings for Directions (the “second Supreme Court letter”):
“ NOTICE OF LISTING
These proceedings will be listed for Directions on 09/03/2001 at 9.30am.
Your attendance on this date is required.
For the PRINCIPAL REGISTRAR”
26. Mr Preston attended at the Directions Hearing on 9 March 2001 himself, when he was directed to show cause why the proceedings should not be dismissed. The matter was next listed for 26 April 2001.
27. It was not until 19 April 2001 that Mr Preston approached Mr Peter Colquhoun, the first defendant, a partner in the firm of Colquhoun & Colquhoun Solicitors. According to Mr Preston he had begun using that firm for some of his companies’ legal work. Mr Colquhoun confirmed that he was at that time assisting Mr Preston with a number of matters.
28. Mr Preston caused Preston International Pty Ltd to fax documents to Mr Colquhoun on 19 April 2001 with the following letter:
“ Attached are documents which I have received and I attended court on 9 March 2001.
I believe that on the next hearing date on 26 April 2001 at 9.30am we must show cause why this mater should not be dismissed. Could you please advise me what we should do.”
29. In a typed file note dated 20 April 2001, Mr Colquhoun recorded that on receipt of that fax he rang Mr Preston and discussed the matter.
30. Mr Preston’s version of his conversation was to the effect that Mr Colquhoun said he would look after it and would get someone to go to the Supreme Court and obtain a print out of all the orders. His version of the conversation was as follows:
Preston: “ I have a letter from the Supreme Court telling me that some proceedings I have may be dismissed if no action is taken. I’m not sure what’s going on with it.”
Colquhoun: “ Don’t worry. I’ll look after it. I’ll get someone to go to the Supreme Court and get a print out of all the orders that have been made so we can see where we’re up to.”
31. Mr Colquhoun’s denied saying “Don’t worry. I’ll look after it”, because at the time of the conversation he had no knowledge of the proceedings. He says that Mr Preston was vague about the history of the proceedings. In an affidavit he set out the following version of the conversation:
Preston: “ I have a letter from the Supreme Court telling me that some proceedings I have may be dismissed if no action is taken… I thought these proceedings were dismissed years ago but they have sent this letter to me out of the blue. Do you think I might be able to do something with it?”
Colquhoun: “ I’ll get David Andrews to look at it and see what he can find out. Please send me correspondence you refer to and any pleadings you have. Please also provide me with a summary of the matter to date.”
32. Mr Colquhoun conceded in the witness box that this was wrong to the extent that David Andrews was not yet employed by him as at 19 April 2001.
33. Mr Colquhoun said he reviewed the material received and noted there was a Directions Hearing listed on 26 April 2001 at 9.30 am, that is, in 6 days time. In response he undertook some preparatory steps. He prepared a file note and he briefed a barrister, Mr Matthew Richardson, to appear at the Directions Hearing.
34. The file note, which is dated 20 April 2001, reads as follows:
“ PC perused the fax from John Preston dated 19.4.2001. I rang & discussed with him the matter.
He (Preston) advised that Edward Favelle was a director of a company that went into liquidation. He is suing the director for trading while knowing the company was insolvent.
The matter was commenced in 1986, continued until late 1989 by Nikolaidis solicitor. Nothing has been done since then because Nikolaidis has retained a lien over the file.
John will bring in the papers that he has got in relation to this matter. An Affidavit will then be prepared setting out a timetable which is:
1. Date for hearing of the matter against Nikolaidis
2. Allow 14 days for judgment
3. Allow one month for the payment of money and collection of the file
4. Allow a further month for the payment of money and collection of the file
5. PC will do a letter to the solicitors on the other side.”
35. The letter to Mr Richardson of counsel is also dated 20 April 2001. It reads as follows:
“ I’m informed by my client that this matter is listed for 9.30am 26 April 2001.
It would be appreciated if you would confirm:
I. The date and time of the Court
II. What matters are required to be put before the Court
Please find enclosed the following documents:
1. Dismissal Notice from the Court dated 25 January 2001
2. Letter from Preston International Pty Ltd dated 13 February 2001
3. Notice from the Supreme Court to Wheelers Solicitors dated 20 February 2001
4. Letter from Preston International Pty Ltd dated 19 April 2001
5. My file note of the 20 April 2001.”
36. In evidence, Mr Preston sought to suggest that documents relating to the Favelle proceedings had been given to Mr Colquhoun some time earlier. In his file note of 20 April 2001 Mr Colquhoun records that he asked Mr Preston to bring in the papers that he had in relation to the Favelle proceedings. Mr Preston said he hand delivered to Mr Colquhoun three manila files and two lever arch folders of documents relating to the matter on 20 April 2001. It is clear that this was the first time Mr Colquhoun was consulted in connection with the Favelle proceedings.
37. Mr Preston caused a longer letter dated 20 April 2001 to Mr Colquhoun, to accompany the material he delivered. This letter provided some further background, and instructed Mr Colquhoun to file the necessary documents so that the case was not dismissed:
“ Further to my letter dated 19 April 2001 and our discussion on the same day I give you further information.
1. The matter was started by Leon Nikolaidis in 1987 and the main action of this matter which was the recovery of money from Favell Cranes (in liquidation) as the company was liquidated Leon Nikolaidis decided to sue the directors as the company was trading while insolvent at the time of issuing the contract to Preston Erection.
2. My accountant Mr Greenwood under the direction of Leon Nikolaidis inspected the liquidator’s documents and from those documents it showed that the minutes of the directors that the company was insolvent at the time of issuing the contract. Mr Greenwood asked Leon Nikolaidis to copy all the records that were all in a box. Leon Nikolaidis failed to copy all the documents in that box.
3. Currently I have inspected the Favell claim that is in Leon Nikolaidis possession which is a matter of the assessment 4001/93 and the Favell file contains very few documents.
4. This matter 1440/87 cannot proceed till we finalise 4001/93 the assessment of cost as Leon Nikolaidis has a lien on the file and the Favell Crane file is one part of the 16 matters under assessment.
Could you please file the necessary documents before the 26 April 2001 so that the case is not dismissed. Attached is a bundle of documents which are in our possession.
Also attached are two business cards of two solicitors who attended the hearing on 9 March 2001. I do not know which one represents which party, if you could ring them to find out.
Yours sincerely
Preston International Pty Ltd
John Preston
Managing Director”
38. Mr Richardson of counsel replied in writing to Mr Colquhoun on the same day as he was briefed, by letter dated 20 April 2001:
“ I refer to your letter dated 20 April 2001.
The best option in these circumstances is to approach the other side and their consent to a timetable for directions. If this occurs, normally the Registrar will not refer the matter to the Master for a hearing and possible dismissal. If the matter is contested, or the delay is exceptional the matter will normally be referred to the Master.
I advise that you prepare an affidavit deposing as to the following matters:
1. Explaining that you only recently received instructions;
2. Outlining the nature of both sets of proceedings and why no progress whatsoever can be made in these proceedings without the conclusion of the other proceedings and receipt of the file from the former solicitor Mr Nikolaidis;
3. Outlining the status of Proceedings 4001 of 1993 of the SCNSW, including any explanation for delay in those proceedings. If the main excuse for delay in Proceedings No 1440 of 1987 is the existence of these related proceedings then it is important to show that Mr Preston and his company have not been responsible for any delays in the related proceedings;
4. The efforts currently in progress to advance both matters, including nterlocutory steps. In particular it is vital to show that some action has been taken since receipt of the Part 32A Notice.
The affidavit should be forwarded to the other side.
It is relatively unusual for the Court to strike out matters arising under a Part 32A application. However, I note that the delay in these proceedings is exceptional and gross and unless a satisfactory explanation is provided then the prospects of the proceedings being struck out are high.”
39. The following Monday, 23 April 2001, Mr Colquhoun attended to various steps in connection with the matter: he prepared an affidavit setting out the circumstances along the lines recommended by counsel, he wrote to M D Nikolaidis & Co requesting the files, he wrote to Wheelers requesting any information they had, and he wrote to the Registrar of the Supreme Court advising as follows:
“ We have just received instructions in relation to this matter from the Plaintiff…
It is proposed that we file in Court an Affidavit setting out the position of the Plaintiff, requesting a Directions Hearing for three months time…”
40. By a Memo dated Monday 23 April 2001 addressed to Jenners, Mr Colquhoun also ordered a printout for the Court file in respect of the Favelle proceedings:
“ Could you please attend at the Supreme Court Registry on Tuesday, 24/4 and obtain “Matter Listing Printouts” for Plaint
Nos: 001440/87 Preston Erections P/l –v- FAVELLE
No. 4001/93 Preston International –v- Nikolaides
Please find attached the Court’s Fee in the sum of $10.00. (X2)
Would you kindly fax this listing to our office as a matter of urgency on Tuesday 24/4 (fax No. 9555 1083)
We note this matter is next before the Court on 26/4/01.
We are wanting to find out represents (sic) the other parties in this matter. We will be acting for the Plaintiff – Preston Erections Pty Ltd.”
41. The next day, Tuesday 24 April 2001, Mr Colquhoun spoke to Mr Grant Spedding, the solicitor acting for the first defendant in the Favelle proceedings, Mr Favelle. He then wrote to Mr Spedding in the following terms:
“ Further to our conversation of 24 April, please find enclosed affidavit of Peter Colquhoun sworn 24 April 2001. I confirm that in accordance with paragraph 9 of the Affidavit, it is proposed to have the matter put over for 3 months from 31 May 2001.
We are happy to mention the matter on your behalf and indicate to the court that the first defendant has no objection to the matter going over for that time.”
42. Mr Colquhoun then wrote to Mr Richardson of counsel enclosing the affidavit he had prepared, and instructing him to seek an adjournment to the end of August 2001 with the consent of Mr Spedding:
“ Please find enclosed the following:
1. 1 + 4 copies of the affidavit sworn by Peter Joseph Colquhoun dated 24 April 2001;
2. Letter to Grant Spedding solicitor for the first defendant.
It would be appreciated if you would have the court adjourn this notice to the end of August 2001. Grant Spedding has asked if we would mention this matter by consent, he acts for the first defendant, he was sure his client would have no objection. His client is in his 70’s, is retired and has been overseas.
When the matter was last before the court on 9 March, Registrar Berecry advised that the matter was last before the court 9 years ago…
We are presently getting a printout of the court’s record so that we can file a Notice of Change of Solicitor (copy attached) and have it served upon the address for service of each of the four defendants.”
43. Mr Colquhoun also wrote to Mr Preston at Preston International Pty Ltd sending him the affidavit:
“ Please find enclosed a draft Affidavit which we propose to file in court on 26 April 2001.
We have made enquiries of the two solicitors you spoke to on 9 March but they don’t appear to be too sure as to who they are acting for.
The Notice from the court indicated that there was only one defendant, Edward Favelle, however I notice in the recent papers you gave me, being the front sheet of an Affidavit of Service, there are in fact four separate defendants in this one proceeding.
We are obtaining a printout of the court file so that we can be better informed. I shall advise you of the replies.”
44. Mr Colquhoun said he rang Mr Preston on 24 April 2001, and told him:
Colquhoun: “ Matthew Richardson the barrister has advised that the delay in these proceedings is exceptional and gross and unless a satisfactory explanation is provided then the prospects of the proceedings being struck out are high.”
45. Mr Preston denies such a conversation and only recalls a short conversation as follows:
Colquhoun: “ Mr Richardson will attend Court on the 26th April 2010. I will contact you and advise you after the 26th.
Preston: “ Thanks. Ring me after the Court hearing.”
46. The matter was listed on 26 April 2001 for the Part 32A hearing. It first went before Registrar Berecry. Mr Richardson of counsel appeared for the plaintiff. Mr Kritharas of counsel appeared for the first defendant. The Registrar declined to receive Mr Colquhoun’s affidavit or listen to any submissions, commenting, “How can you possibly explain a delay of 14 years?” He referred the matter to the Master for dismissal.
47. Mr Richardson spoke to Mr Kritharas who consented to Mr Richardson mentioning the matter before the Master on his behalf and seeking a date for directions in August 2001.
48. The matter then went before Master Macready when Mr Richardson explained the reasons for the delay. He persuaded the Master to agree to list the matter before the Registrar on 6 August 2001.
49. Mr Richardson reported to Mr Colquhoun by telephone.
50. Mr Colquhoun rang Mr Preston to report the outcome verbally. Mr Colquhoun said the conversation was as follows:
Colquhoun: “ Hi John it’s Peter Colquhoun. I’ve just heard from Matthew Richardson the barrister who has just got back from court. We got the directions we asked for. The matter is listed for directions in August.
Preston: “ That’s good. Thanks.
Colquhoun: “ We might have got the directions but it’s going to be difficult. Registrar Berecry is highly regarded and is a good guide as to what the court will do. He said to Matthew Richardson “How could you possibly explain a delay of 13 years”. It’s going to be very difficult to win. I don’t like your chances. If Berecry says that, you could judges are likely to say the same thing.
Preston: “ Well, let’s see if we can settle.”
51. Mr Colquhoun prepared a file note briefly confirming his phone calls with Mr Richardson and Mr Preston.
52. Mr Preston then faxed a letter to Mr Colquhoun in which he said:
“ Just a reminder, which I think is a good idea, see if you can settle Favell.
I think the original debt was about $40,000 see if you can settle it for anything that you can get.
Mr Favell is the designer and used to be the owner of Favell Cranes. No doubt Favell Cranes does not belong to him now but he may have substantial assets after all these years, so put a bit of pressure on him to settle.
Proposed settlement, Mr Favell pays, say, $4,000 we settle with him only. Then settle with each other of the directors or altogether, say $100,000.
It will cost more than that if we all go to court.”
53. Meanwhile, Mr Richardson confirmed the court outcome in a letter to Mr Colquhoun which included the following:
“ The matter first went before Registrar Berecry who declined to receive my instructing solicitor’s affidavit or listen to any submissions, commenting “How can you possibly explain a delay of 14 years?” He referred the matter to the Master for dismissal…
I then appeared before Master Macready…
It is important that some progress be made in the proceedings before that date – because of the excessive delay this matter is very vulnerable to applications for dismissal whether by other parties or by the Court’s own motion…”
54. Mr Richardson’s letter was forwarded to Mr Preston the next day.
55. Mr Colquhoun received the results of the court file enquiry on 24 April 2001, but said he did not peruse them till 26 April 2001. These results were not sent to Mr Preston. Mr Colquhoun’s evidence was that the contents of the file record did not cause him any concerns or set off any alarm bells. He was satisfied that the matter was still alive, which provided the opportunity to do various things such as contact the other solicitors with a view to settling the matter. In cross-examination he was asked why he didn’t tell Mr Preston about the various notations indicating the matter had been struck out and the file closed, and he responded that he had told Mr Preston everything he needed to know at the time.
56. In his affidavit evidence Mr Preston did not deny the conversation with Mr Colquhoun on 26 April 2001 when Mr Richardson’s report on the proceeding was conveyed to him, although he made an attempt in the witness box to distance himself from the advice Mr Colquhoun gave him. Nor did he dispute having received a copy of Mr Richardson’s letter of 26 April 2001. Mr Richardson’s letter made it abundantly clear that it was going to be very difficult to explain 13 or 14 years of delay. In my view there could be little doubt that the gravity of the situation was explicitly brought to Mr Preston’s attention such that he well knew that the prospects of resisting the matter being dismissed under Part 32A were minimal. It is obvious to me that was why he instructed Mr Colquhoun to try and settle the matter. Even those instructions, it seems to me, were unduly optimistic in the circumstances.
57. Mr Preston conceded in cross-examination that he had been told the prospects of keeping the Favelle proceedings alive were slim, but complained that he was never told the proceedings had been dismissed. He wanted to keep the matter alive not just to try and get a settlement, but also to assist in grounding his negligence claim against Mr Nikolaidis.
58. Mr Colquhoun said he interpreted Mr Preston’s instructions to settle to mean that the defendants to the Favelle proceedings would be commercially wise to pay a small amount of money to settle rather than incur further costs of going to court. He recalled considering that a compelling reason was needed to persuade the defendants to offer some money, that Mr Preston needed to realistically demonstrate that he had sufficient evidence to prove the Directors had known the company had been trading while insolvent.
59. Over the course of the next few months Mr Colquhoun unsuccessfully attempted to settle the Favelle proceedings.
60. By letter dated 31 May 2001 Hunt & Hunt, solicitors for one of the director defendants, Mr Van Der Kwaak, wrote to Mr Colquhoun as follows:
“ Thankyou for your facsimile transmission of 30 May 2001. I have been informed by my office that this matter was archived as a completed matter some years ago and indeed we have received a notification of dismissal of the proceedings as inactive by the Supreme Court...”
61. That letter was forwarded to Mr Preston on 6 June 2001.
62. On 18 June 2001 Mr Colquhoun wrote to Mr Preston putting him clearly on notice of the problems confronting the plaintiffs in avoiding dismissal of the Favelle proceedings. In the letter Mr Colquhoun advised:
“ You will recall in the advice from Matthew Richardson that it was his strong suggestion that the position in respect of the 2nd, 3rd and 4th defendants be clarified before 6th August 2001.
Further this matter remains vulnerable to being struck out by the Court…
Having regard to the lapse of time, the onus will be clearly on you to satisfy the Registrar on 6th August 2001 that the evidence to prove your case is still available.
We are yet to locate and identify sufficient expert evidence to prove your case.
If we are in the same position on 6th August 2001, I think there is every possibility that the matter will be struck out.
It would be appreciated if you would review your files and advise if you have any further information which can be of assistance in relation to this matter.”
63. Mr Colquhoun did not say whether Mr Preston responded to this letter, but he continued to investigate the matter and to discuss settlement opportunities and the likely dismissal of the proceedings with Mr Preston.
64. In a further letter from Hunt & Hunt dated 22 August 2001, the status of the proceedings was again raised:
“ We have recently received instructions to act for Mr van der Kwak, the Fourth Defendant… We are currently attempting to ascertain whether or not these proceedings are active…however we note the following:
On or about 22 September 1992 our client’s former solicitors received a letter…informing them that the matter had been struck out of the list…”
65. A brief was prepared for the court hearing on 6 August 2001 and Mr Nicholas Confos of counsel was briefed. He appeared on behalf of the plaintiff. The precise outcome of the hearing is not in evidence but the Favelle proceedings were not struck out on that day, but were stood over.
66. According to Mr Colquhoun, Mr Confos of counsel advised Mr Preston as follows:
“ John, the Defendants do not seem to believe that they are at risk here. We will do our best, but it is likely that when the matter comes on for hearing it will be dismissed by reason of the delay and you will be at risk of having to pay the costs of the Defendants.”
67. Much work was undertaken over the course of the next 6 months in preparation for the hearing. In the meantime the three defendants who had been served in the Favelle proceedings filed Notices of Motion seeking an order that the proceedings be dismissed for want of prosecution.
68. The matter came before the Court on 18 February 2002 before the Registrar, who referred it to Master McLaughlin. The Master held that the proceedings had been struck out by the Registrar on 9 September 1992, and had never been reinstated, such that any orders or directions after that date were of no effect and were a nullity.
69. The judgment appears in full at on CaseLaw at [2002] NSWSC 181. Relevantly, for present purposes, the Master noted the long history of delay and said that even if, contrary to his conclusion that the proceedings were no longer on foot, he would in those circumstances have had no hesitation in making an order for the dismissal of the proceedings for want of prosecution.
70. The way in which the proceeding were decided benefited the plaintiffs to the extent that the Master made no order as to costs, with the intent that each party was to bear its own costs incurred since 9 September 1992.
71. Mr Preston complained that he was not given any advice regarding an appeal from the decision of Master McLaughlin. According to Mr Colquhoun, he was instructed not to appeal. He said he asked Mr Preston about an appeal:
Colquhoun: “ The matter was dismissed with no order as to costs. What do you want to do with it?”
Preston: “ Forget it. I half expected it. I don’t want to spend any more money on it.”
72. Mr Preston asserted that he was subsequently advised by Mr Colquhoun to make a claim against the Attorney General’s Department for his costs. He records a conversation as follows:
Colquhoun: “ We will make a claim against the Attorney General’s Department. The Court misled us and they will pay.”
Preston: “ Are you sure?”
Colquhoun: “ Yes, absolutely. They gave us the wrong information.”
Preston: “ But if you had checked the Court file as you said you would do, you would have found out that the case was dismissed.”
Colquhoun: “ It doesn’t work like that. Leave it to me and you will be reimbursed either by us or the Attorney General.”
Preston: “ What happens if the Attorney General doesn’t pay?”
Colquhoun: “ We’ll work something out. We don’t want you to sue us do we?”
73. Mr Colquhoun denied such a conversation. He said the conversation went as follows:
Colquhoun: “ Given the Registry has led us to believe the matter was still on foot you may be able to apply for an ex gratia payment with the Attorney General’s Department seeking reimbursement of my costs. However, there is only a remote possibility that you will get some money from the Attorney General. Would you like us to try?”
Preston: “ Yes, okay.”
74. An application was then made by letter dated 28 February 2002 to the Director General of the Attorney General’s Department making a claim for compensation in respect of the costs incurred by the plaintiffs. The Attorney General’s Department replied by letter dated 19 August 2002 declining any ex gratia payment. This was communicated to Mr Preston on 13 September 2002.
75. Interestingly, the following paragraph appears in the letter from the Attorney General’s Department:
“ The Principal Registrar, Supreme Court advises that the order on 9 September 1992 was intended only
to remove the matter from the General List. It would appear that no power existed at the time for a Registrar to make any more comprehensive dismissal of a case without the consent of all parties. Accordingly, the view of the Registry was that although the matter was removed from the List, it had not been dismissed.”
The expert evidence
76. Both sides qualified experienced senior solicitors as experts. The plaintiffs qualified Mr Kevin Emanuel, a partner in the firm Boyd House & Partners. The defendants qualified Mr Kieran Tapsell, a partner in the firm Watkins Tapsell. Both experts provided a written report and were cross-examined.
77. In the opinion of Mr Emanuel, the order made by Registrar Berecry on 9 September 1992 when he struck the matter out meant that the Favelle proceedings had been struck out of the General List, such that the plaintiffs were required subsequently to have the matter restored to that list. By April 2001 there was no real prospect of the proceedings being activated by an application to the court. A party in those circumstances would have to argue very forcefully to prevent the proceedings being dismissed. The proceedings, however, were not a nullity, although the prospects of reviving them were very slim. In cross-examination, however, he conceded that the prospect of reviving the Favelle proceedings was not impossible, but would require a satisfactory explanation for the delay, evidence as to the merits, and evidence that the matter was ready to proceed without further delay.
78. Thus, the plaintiffs’ own expert rejected the principal allegation upon which their claim is based. The Favelle proceedings were never a nullity. They were merely inactive.
79. Mr Emanuel went on to say, however, that Mr Colquhoun should have advised the plaintiffs in a more detailed form that they would, on the balance of probabilities, be unsuccessful in attempting to re-activate the proceedings, having regard in particular to the order made by Registrar Berecry, and that they should not seek to oppose an order dismissing the proceedings.
80. It seems however, that Mr Emanuel was unaware that Mr Colquhoun had in fact advised Mr Preston of the comments made by Registrar Berecry on 26 April 2001 to the effect, “How can you possibly explain a delay of 14 years?” and that it was going to be very difficult. Mr Emanuel was asked in cross-examination whether such advice was sufficiently strong and he responded that it was appropriate advice. Nor, it seems was Mr Emanuel aware of Mr Preston’s response, instructing Mr Colquhoun to try and settle the proceedings. In his view, the best outcome the plaintiffs could have hoped for was an agreement that each party walk away and bear their own costs. He accepted, however, that Mr Preston did not want to walk away.
81. Thus, in my view, the plaintiffs’ expert did not ultimately support their case.
82. Mr Emanuel was also critical of Mr Colquhoun for relying on the court File Enquiry summary and not inspecting the file itself. In cross-examination, however, he was unable to point to what further information such a search would have revealed.
83. Finally, Mr Emanuel was of the opinion that the plaintiffs should not have been advised to make the claim for his costs from the Attorney General’s Department. He doesn’t say why, but the inference is that he thought the claim was futile. In cross-examination, however, he conceded that he was not aware of the basis upon which the application had been made.
84. In the opinion of Mr Tapsell, the order made by Registrar Berecry on 9 September 1992 when he struck the matter out meant that the Favelle proceedings had been struck out of the call-over list, because there was no appearance on behalf of the plaintiffs. The words “struck out” do not mean that proceedings have been dismissed. The notations on the court File Enquiry that the file had been closed were not court orders, merely administrative notations. It was put to him in cross-examination that his opinion was at odds with the judgment of Master McLaughlin, to which he responded, “With great respect to his Honour, he got it wrong.” The proceedings, in his opinion, had not been dismissed and were not a nullity.
85. Mr Tapsell noted Mr Emanuel’s opinion that there would have been no real prospect of the Favelle proceedings being reactivated had such an application been made, but said even if that were true, it was not really the point because the court had itself relisted the proceedings for show cause as to why they should not be dismissed under Part 32A. The court had invited the parties to satisfy it of special circumstances that render it undesirable that the proceedings be dismissed. He went on to say:
“ The Second Plaintiff’s letter of instructions of 26th April 2001…could only have been interpreted by a solicitor acting in accordance with competent peer practice to mean that the Plaintiffs wished to use the relisting of the proceedings not only to argue against summary dismissal, but also to apply some pressure on the defendants to settle the matter for a sum of money.”
86. In Mr Tapsell’s opinion, the plaintiffs were adequately advised as to the poor chances of success. The letter from the barrister, Mr Richardson, dated 26 April 2001 advised the plaintiffs in clear and unambiguous terms that the proceedings were vulnerable to dismissal. Mr Tapsell’s went on to say given the letter from Mr Preston instructing the defendants to attempt settlement, a solicitor acting in accordance with competent peer practice, faced with those instructions, would have used the opportunity created by the court’s notification under Part 32A to advance every reasonable argument that would support his client’s case that the proceedings not be dismissed. Such a solicitor would not have formed the view that the plaintiffs had no hope of success. He would not have expected the defendants to advise the plaintiffs to consent to dismissal under Part 32A on the grounds that the proceedings had already been “struck out”.
87. In cross-examination, Mr Tapsell was asked whether Mr Colquhoun should have examined the actual court file, and he said that would only be indicated if there was something that made him suspicious, something that really needed to be checked. There was nothing here to warrant a search of the file, as the court File Enquiry contained all the information necessary.
88. In respect of the application made to the Attorney General’s Department for the plaintiffs’ costs, in Mr Tapsell’s opinion the advice to make the application was consistent with competent peer practice. Of its nature, an application for an ex gratia payment implies there was no entitlement as of right.
89. Ultimately, there was not a wide difference between the opinions of the two solicitors. In my view, Mr Tapsell’s written opinion was better reasoned and argued, and set out the factual material on which his opinions were based in a more comprehensive and logical fashion. His presentation in the witness box was more convincing. Ultimately, I have preferred his opinions on all the issues, and, in any event, they accord with my own views.
90. For these reasons I find that the order made by Registrar Berecry on 9 September 1992 did not have the effect of dismissing the Favelle proceedings. Rather they were removed from the General List and rendered inactive. The proceedings were not a nullity, but remained extant until they were dismissed by Master McLaughlin on 18 February 2002.
The plaintiffs’ submissions
91. After the hearing of this matter on 10 and 11 June 2010, I stood the matter over for written submissions.
92. A written Outline of Submissions for the plaintiffs was not provided until 6 November 2010. These submissions confirm that the plaintiffs’ principal contention is that Mr Colquhoun undertook work in relation to the Favelle proceedings for 9 months when there was “no hope of progress.” He simply failed to appreciate the significance of the entries on the court File Enquiry and continued acting on the file without considering whether doing so was futile, and without giving notice to Mr Preston.
93. On the critical issue as to whether the proceedings remained active, or were a nullity, the plaintiffs submitted:
“ Mr Tapsell gave evidence to the effect that the Favelle claim was in his view active and that there was no problem with continuing to act in those circumstances. This interpretation of the file is clearly at odds with the view taken by Master McLaughlin. Mr Tapsell reconciled that contradiction by concluding that Master McLaughlin “got it wrong”. The plaintiff says Master McLaughlin “got it right”.”
94. This submission conveniently overlooks the evidence of the plaintiffs’ own expert to the effect that the Favelle proceedings were not a nullity. Not only was Mr Tapsell at odds with the decision of Master McLaughlin, but so was Mr Emanuel. And so it seems was the Principal Registrar of the Supreme Court, who advised the Attorney General’s Department that the order of Registrar Berecry made on 9 September 1992 was intended only to remove the matter from the General List, adding that no power existed at that time for a Registrar to make any more comprehensive dismissal of a case without the consent of all parties.
95. The plaintiffs’ Outline of Submissions relies principally on the allegation that the Favelle proceedings were a nullity. Assuming, however, that the Favelle proceedings were still technically extant, it is alleged that Mr Colquhoun should nevertheless not have continued to act on the file given the relatively hopeless nature of the matter generally, and that it had no hope of progress. When these matters are combined with the fact that the matter was struck out, his efforts were hopeless. The error of Mr Colquhoun in not comprehending the significance of the entries on the court File Enquiry was made in circumstances where:
a) Mr Richardson of counsel had advised that the claim was liable to be struck out;
b) Hunt & Hunt had raised their concerns about the status of the Favelle proceedings in two letters, neither of which Mr Colquhoun appears to have considered;
c) The significance of the entries had simply not crossed his mind. It was only after the judgment of Master McLaughlin that Mr Colquhoun took steps to investigate the actual Supreme Court file.
96. The plaintiffs’ Outline of Submissions does not address the allegation in respect of the application to the Attorney General’s Department for an ex gratia payment. It would appear that this claim is not pressed.
The mention on 19 November 2010
97. The proceedings were listed for mention before me on 19 November 2010, when the defendants’ written Outline of Submissions was handed up in final form. Mr Preston appeared in person on behalf of himself and the first plaintiff.
98. Mr Preston informed the court that the plaintiffs were no longer legally represented. He was asked whether the plaintiffs wished to make any submissions by way of reply to the defendants’ submissions and he advised the court they did not. However, he did subsequently email some short written submissions to my Associate, which I have taken into account.
The defendants’ submissions
99. The defendants’ written Outline of Submissions addresses the various allegations of negligence set out in the Second Further Amended Statement of Claim and the evidence of the experts. Submissions are also addressed to the competing credit of Mr Preston and Mr Colquhoun. Finally, the submissions address the defence raised under the Limitation Act 1969.
100. The defendants agreed with the plaintiffs’ submissions that the conflicts in the testimony between Mr Preston and Mr Colquhoun are of limited significance. The main area of dispute relates to whether Mr Preston was advised about various matters, but in particular whether he was advised about the plaintiffs’ bleak prospects of avoiding dismissal of the Favelle proceedings. To the extent that there was any conflict between the evidence of the two witnesses, it was submitted that Mr Preston should not be preferred to Mr Colquhoun: his recollection of events was poor; he was wholly self-interested on such matters as the assignment; he was wilful and determined, not heavily reliant on legal advice as claimed; and he was wrong about the issue of the correct plaintiff. His account of conversations was inconsistent with objective facts. His evidence about not complaining to Mr Preston at the time of the dismissal of the Favelle proceedings, because he could not afford to jeopardise the relationship, was improbable.
Credit
101. Having regard to the opposing versions of some of the events and conversations in this matter, the determination of various factual issues must inevitably involve a consideration of the credit of the two main protagonists, Mr Preston and Mr Colquhoun. In assessing their credit, I have sought to rely predominantly on contemporary materials, objectively established facts, independent support from other witnesses, and the apparent logic of events, and I have placed limited reliance on an assessment of their demeanour and appearance: Fox v Percy [2003] HCA 22.
102. Unfortunately, the poor quality of Mr Colquhoun’s file notes and the paucity of written confirmatory correspondence on some of the critical matters have led to deficiencies in the supportive useable trail. Ultimately, however, I was comfortably satisfied about which of these two witnesses was the more reliable.
103. In my assessment, the evidence of Mr Preston was unconvincing and beset by improbabilities in a number of key respects. I refer in particular to his evidence about the assignment, his professed “innocence” and inexperience in litigation, and his selective memory.
104. Mr Preston contrived to present himself as commercially naïve. But when one reads his letters it became very clear that he is a sophisticated businessman who was well able to understand and appreciate the nuances of events. Much of Mr Preston’s evidence was a reconstruction, and designed to advance a case that fitted the available documents but avoided their consequences. I also respectfully concur with and adopt the defendants’ submission on Mr Preston’s credit.
105. For these reasons I have concluded that much of Mr Preston’s evidence was unreliable such that it is not possible to readily discern which matters are accurate and which are not. On the other hand, Mr Colquhoun’s evidence was straightforward and consistent with the documentation and other objectively established facts. I found his version of events and conversations inherently more probable. The result is that I am not prepared to accept the evidence of Mr Preston where it has not otherwise been independently supported or corroborated, and where it conflicts with Mr Colquhoun I prefer the evidence of Mr Colquhoun.
Findings and conclusions on liability
106. I am satisfied that Mr Colquhoun advised Mr Preston in clear and unequivocal terms that the prospects of reviving the Favelle proceedings and successfully resisting them being dismissed were very poor, but that Mr Preston obstinately refused to confront the reality, preferring instead to use the opportunity presented by the letters from the Supreme Court under Part 32A to try and salvage something by way of a settlement of the Favelle proceedings, and to bolster the negligence claim against Mr Nikolaidis.
107. In this regard I prefer Mr Colquhoun’s versions of the disputed conversations with Mr Preston, in particular those of 19 April 2001, 24 April 2001 and 26 April 2001. I find that Mr Preston first instructed Mr Colquhoun in connection with the Favelle proceedings on 19 April 2001, and not earlier as he appeared to suggest in his oral evidence, and that he had not delivered any documentation relating to the Favelle proceedings to Mr Colquhoun before 20 April 2001. If there was a formal written assignment of the Favelle proceedings from one of Mr Preston’s companies to another, which was not proved, I was not satisfied that it was ever given to Mr Colquhoun. I find that Mr Richardson’s letters of 20 April 2001 and 26 April 2001 were sent to and received by Mr Preston. I have no doubt that he read them, and that he had an appropriate understanding of their significance. He simply chose to ignore the advice.
108. It is true that Mr Colquhoun never advised Mr Preston that the Favelle proceedings had been dismissed by the order of Registrar Berecry on 9 September 1992. That is because they had not been dismissed, but only removed from the list, as both experts agreed and as I have found.
109. The proceedings were never a nullity, and they remained dormant, but extant, and therefore capable of revival up until the judgment of Master McLaughlin on 18 February 2002 when they were effectively laid to rest, in my view correctly on the alternative basis articulated, namely the unexplained and inappropriately long delay and the prejudice to the defendants: at [14] - [16].
110. I am further satisfied that the initial advice to Mr Preston about the poor prospects in respect of the Favelle proceedings was subsequently reiterated and confirmed when Mr Colquhoun told him so in his letter of 18 June 2001, and Mr Confos of counsel advised him accordingly in conference on 6 August 2001.
111. But Mr Preston consistently chose to ignore the advice and pressed on with the attempt to revive the claim and resist the strike out applications. Perhaps the clue to his never say die attitude may be discerned from the evidence he gave about what Mr Meagher QC once told him about the outcome of litigation never being hopeless so long as there remained a 10% chance of success.
112. Much was made of the fact that Mr Colquhoun relied on the court File Enquiry summary and that he did not search the actual file. For my part I never understood what it was in the file that he would have found in the file that would have provided any more information than was evident from the summary.
113. The plaintiffs contend in their written submissions that they suffered economic loss resulting from negligence on the part of Mr Colquhoun in failing to properly read and understand the court’s file enquiry report when his firm assumed conduct of the file in April 2001. They say that if he had read the file properly, he should have appreciated the file had been struck out and in the circumstances of the matter, had no hope of being reactivated. Instead, the defendant solicitor incurred fees on work which was useless. The negligence occurred in April 2001. The test to be applied is not the ‘Boland style’ approach adopted in the Civil Liability Act 2002, but the higher standard of duty provided for under the common law, specifically, whether the solicitor failed to exercise reasonable care: Heydon v NRMA Limited (2001) 51 NSWLR 1 at 52 - 53. They allege that Mr Colquhoun failed to meet that standard. He did not commit an error of judgment. It is not a question of whether or not he gave poor advice or made an incorrect assessment of the best tactics to be employed. The plaintiffs say this is not a case where the advice led to a loss of a chance, rather it was a more fundamental error, that is, the failure to appreciate the significance of the entries that appeared on the court file enquiry. This failure was magnified in circumstances where the solicitor gave the client an express assurance he would read the Supreme Court file and get on top of the issues, and where the client clearly had no idea what was going on in the Favelle proceedings. And it was only after the judgment of Master McLaughlin that Mr Colquhoun took steps to investigate the actual Supreme Court file.
114. I have already dealt with most of these allegations. I find, specifically, the following: Mr Colquhoun both read and understood the entries in the court File Enquiry summary, and, in circumstances which I have already detailed, the significance of those entries was brought to Mr Preston’s attention. It is not true to say that the matter had no hope of being reactivated, or that the fees were incurred on work that was useless. Mr Colquhoun did not fail to appreciate the significance of the entries. Nor is it true to say that Mr Preston had no idea what was going on in the Favelle proceedings. Even if Mr Colquhoun had read the actual file, there was nothing in it that would have added to his state of knowledge, or that would have required him to give any different advice to Mr Preston than was in fact given. The later letters from Hunt & Hunt raising concerns about the status of the matter added nothing to Mr Colquhoun’s knowledge about that status, since they were still extant.
115. The particulars of the specific acts of negligence alleged and relied on by the plaintiffs are set out at paragraph 21 of their Second Further Amended Statement of Claim, and I now come to each of them in turn.
Particular of negligence (a)
116. Particular of Negligence (a) alleges:
“ Failing to adequately review the Supreme Court’s file in relation to the proceedings, despite expressly undertaking to the plaintiffs that he would do so on 24 April 2001, specifically:
(i) Failing to review the orders made by the Supreme Court in relation to the proceedings during the period 1987 to April 2001.
(ii) Alternatively, failing to appreciate the significance of the orders made by the Supreme Court during the period 1987 to April 2001.”
117. Mr Colquhoun did not review the actual file, but I am satisfied that he did review the court File Enquiry summary, which contained all the relevant information required to properly and adequately advise the plaintiffs, and that he correctly appreciated the significance of the orders made by the Supreme Court during the period 1987 to April 2001. Furthermore, the clients were appropriately advised as to the significance.
Particular of negligence (b)
118. Particular of Negligence (b) alleges:
“ Failing to undertake any settlement negotiations with the defendants in the proceedings.”
119. This allegation was not pressed. In any event, I am satisfied that Mr Colquhoun did in fact undertake settlement negotiations.
Particular of negligence (c)
120. Particular of Negligence (c) alleges:
“ Incurring fees on behalf of the plaintiffs between 24 April 2001 and 20 February 2002 when the work undertaken was wasted and had no hope of success because the proceedings had been struck out in 1992.”
121. I am satisfied that the work undertaken was not wasted, for the reasons already expressed.
Particular of negligence (d)
122. Particular of Negligence (d) alleges:
“ Negligently advising the plaintiffs on or about 20 February 2002 that they would be entitled to have their legal costs reimbursed by the Department.”
123. It was not clear whether this allegation was pressed, as no submissions were made in support of it. In any event, I find that it was not proved. That was not what Mr Colquhoun advised. I am satisfied that Mr Preston was advised that there was a possibility of recovering an ex gratia payment. Mr Preston was in my view appropriately advised and he gave instructions that the application was to be made knowing it might not succeed. There was no evidence that the attempt was futile in the sense that the prospects of an ex gratia payment were completely hopeless. In my view the attempt to obtain an ex gratia refund of the costs was reasonable and appropriate in the circumstances.
Particular of negligence (e)
124. Particular of Negligence (e) alleges:
“ Failing to properly advise the plaintiffs in their 13th September 2002 letter in relation to the matters outlined in the Department’s letter dated 19 August 2002.”
125. This allegation was not pressed. In any event, it is not clear what the alleged failure was or what damage it caused. What is clear from the letter, and what was in my view obvious to Mr Preston, is that the Principal Registrar of the Supreme Court agreed with the experts that the order of 9 September 1992 made by Registrar was intended only to remove the matter from the General List. Furthermore, it was to be doubted that he had the power to make any more comprehensive order such as dismissal of the Favelle proceedings.
Determination
126. For all these reasons I find that there the plaintiffs did not suffer any loss caused by negligence or breach of contract by the defendants. It is not, therefore, necessary for me to determine the defence under the Limitation Act 1969. The plaintiffs’ claim fails and I find for the defendants.
Costs
127. Orders for costs are to be made in accordance with r 42.1 and r 42.2 of the UCPR, unless some other order or orders are appropriate. There is nothing before me to indicate that some other order is appropriate.
Disposition
128. There will, therefore, be a verdict for the defendants.
129. I direct the entry of judgment for the defendants.
130. I order the plaintiffs to pay the defendants’ costs, on the ordinary basis.
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