Sheehan v Mercantile Mutual Life Insurance Co Ltd

[2001] QDC 324

DISTRICT COURT OF QUEENSLAND

CITATION: 

Sheehan v Mercantile Mutual Life Insurance Company
Limited [2001] QDC 324

PARTIES: 

ROBIN JAMES SHEEHAN  (Plaintiff)

And
MERCANTILE MUTUAL LIFE INSURANCE
COMPANY LIMITED A.C.N. 009 657 176 (Defendant)

FILE NO/S: 

92 of 1994

DIVISION: 

Chambers

PROCEEDING: 

Application to strike out for want of prosecution
Application for leave to proceed

ORIGINATING

District Court

COURT:

DELIVERED ON: 

14th December 2001

DELIVERED AT: 

Maroochydore

HEARING DATE: 

10th December 2001

JUDGE: 

Judge J.M. Robertson

ORDER: 

1.	The application to strike out for want of prosecution is dismissed. The plaintiff’s costs of this application will be his costs in the cause.
2.	The plaintiff is granted leave to proceed.
3.	That the defendant’s execution of the request for trial date be dispensed with and the matter placed on the call over of matters ready for trial.
4.	The plaintiff to pay the costs of the defendant thrown away as a result of the adjournment on the 26th November 2001.

CATCHWORDS: 

PRACTICE – Leave to proceed – application by plaintiff for leave to
proceed – delay – prospects of success – prejudice

PRACTICE – Want of prosecution – application by defendant to dismiss plaintiff’s claim – prospects of success

Cases cited:
Tyler v. Custom Credit Corporation & Ors [2000] QCA 178
Cooper v. Hopgood & Ganim [1999] 2 Qd R 113
Dempsey v. Dorber [1990] 1 Qd R 418
Raabe v. The Brisbane North Regional Health Authority [2000] QSC 257
Citicorp Australia Limited v Metropolitan Public Abattoir Board (1992)
1 QdR 592
MacDonnell v. Rolley [2001] QCA 32
Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541

Statutes considered:
Uniform Civil Procedure Rules, r 389

COUNSEL: 

S.R.D. Blaxland (for the plaintiff)
G.D. Garrick (for the defendant)

SOLICITORS: 

Boyce Garrick Lawyers (for the plaintiff)
Swanston & Associates (for the defendant)

1. There are two applications before the Court. The first in time is an application by the plaintiff for the execution by the defendant of a request for trial date to be dispensed with and the matter placed on the callover list of matters awaiting hearing. When this application came on on the 26th November 2001, Mr Garrick for the defendant submitted that the application was irregular, in that more than two years had elapsed since the last step had been taken, and therefore the plaintiff could only take another step with leave of the Court: r.389(2). On the 26th November 2001, Mr Blaxland for the plaintiff applicant was inclined to argue that an order pursuant to r 389 UCPR was not required and that the application was not irregular. After some debate, he requested an adjournment to enable his client to place material before the Court relevant to the granting of leave to proceed: Tyler v. Custom Credit Corporation & Ors [2000] QCA 178. The defendant then applied to strike out the plaintiff’s claim for want of prosecution pursuant to r.280 UCPR. As the relevant principles overlap to a significant degree: Tyler; Cooper v. Hopgood & Ganim [1999] 2 Qd R 113, Dempsey v. Dorber [1990] 1 Qd R 418; the r.389 point and the defendant’s application to strike out can be considered together.

2. The plaintiff’s claim is for damages for breach of a contract of insurance for income protection, and was commenced by plaint on the 3rd August 1994. There are a number of issues joined in the pleadings; in particular the defendant pleads non- disclosure of material facts at the time the plaintiff applied for the relevant insurance. In his earlier submissions, Mr Garrick set out a chronology which is reproduced.

11 November 1957	Plaintiff’s date of birth
June/July 1987	Plaintiff sought treatment for chronic low back pain
8 December 1987	Plaintiff completed application for accident and disability insurance (Occidental)
23, 24, 29 December 1987	Plaintiff obtained treatment for chronic low back pain
16 February 1988	Policy issued
23 March 1991	Date of policy
4 July 1991	Date of plaintiff’s injury
3 August 1994	District Court plaint issued
2 November 1994	Entry of appearance and defence filed
3 November 1994	Amended entry of appearance and defence filed
14 December 1994	Amended plaint filed
13 February 1995	Further amended defence filed
5 June 1995	Plaintiff filed affidavit of documents
19 June 1995	Defendant received plaintiff’s affidavit of documents
13 September 1995	Defendant filed affidavit of documents
27 October 1995	Plaintiff filed supplementary affidavit of documents
3 April 1997	Plaintiff requested further and better particulars of defence
2 May 1997	Defendant provided particulars requested

25 February 1999 · Plaintiff gave defendant first notice of intention to
proceed

· Plaintiff filed notice of change of solicitors (from
Duncan & Swanston to Swanston & Associates)

21 October 1999	Plaintiff tendered request for trial date
3 September 2001	Plaintiff gave defendant second notice of intention to proceed
1 November 2001	Application filed

1. There may be some debate about the events said to have occurred prior to the issue of the proceedings, which may be resolved on the evidence at trial. The chronology for my purposes is only relevant insofar as it relates to the course of the proceedings. It is common ground that the plaintiff applied for the insurance in 1987.

Is leave required: r.389(2) UCPR?

1. Mr Blaxland submits that the giving of notice of intention to proceed pursuant to r.389(1) on the 3rd September 2001 constitutes a step in the proceeding. He relies on some obiter remarks of Holmes J in Raabe v. The Brisbane North Regional Health Authority [2000] QSC 257. In that case Her Honour had to decide if the delivery of an unsigned list of documents constituted a step in the proceeding for the purposes of r.389. At the time of delivery of the list, Order 90 rule 9 of the Rules of the Supreme Court was still in force. Her Honour said (at paragraph 9 of her judgment):

   “There is a good deal of authority in relation to Order 90 rule (9) of the Rules of the Supreme Court, which was the predecessor to rule 389. That rule referred to the circumstance that “No proceeding has been taken” rather than, as in rule 389, that “No step has been taken in a proceeding”. While the substitution of the expression “step… ..in a proceeding “ for “proceeding” suggests that something less formal may suffice, it also conveys a necessary quality of constituting an advance in the action. It remains, therefore, apposite to say, as did McPherson SPJ (as he then was) in Citicorp Australia Limited v Metropolitan Public Abattoir Board (1992) 1 QdR 592 at 594, that “ the act or activity must have the characteristic of carrying the cause or action forward”.”

2. Her Honour went on to hold that the delivery was not a step in the action; rather it was designed as “a holding action” designed to reassure the opposing solicitors. When one reads the whole of the passage from Her Honour’s judgment set out above; rather than the short summary set out in Mr Blaxland’s submission; it is clear to me that Her Honour was in no way suggesting that the obligations upon a party to proceed expeditiously (to which r.389 relates) are less stringent under UCPR than under the RSC. I think the converse is true, and that is taking into account the need for leave after two years, as opposed to three under the former rules, and, in particular, r.5 UCPR; the consequences for a party not proceeding expeditiously are potentially more significant under the new Rules. However, the complete answer to Mr Blaxland’s argument is found in the wording of r.389(1) UCPR. As Mr Garrick submits the very wording of that sub-rule clearly indicates that the giving of notice is not a step in the proceeding. It follows that the last step in the proceeding was the tendering of the request for trial date by the plaintiff on the 21st October 1999; and therefore the plaintiff does require leave to proceed pursuant to r.389(2).

Should leave be given?

1. As the principles overlap, I can deal with both applications together. It is convenient to deal with the relevant issues that arise here in terms of the 12 matters to be considered as set out in the judgment of Atkinson J in Tyler:

   (a) Delay

   There has been considerable delay attributable largely to the impecuniosity of the plaintiff. His affidavit filed the 5th December 2001 sets out a litany of personal financial disasters over the years since commencement of the action. Mr Blaxland’s submission insofar as it relates to the course of the action up to May 1997, that there was “slow but continuous progress”, is accurate. From there until the 25th February 1999, when the plaintiff gave the first notice of intention to proceed; I cannot accept that the fault was “equally attributable to both parties”, as Mr Blaxland submits. The plaintiff’s affidavit deposes to financial difficulties throughout the whole period but particularly during this period (see paragraph 30) in which he says “negotiating with creditors and entering into the cross-hire arrangements to avoid insolvency took priority over my District Court claim”. Mr Garrick submits that there is no adequate explanation for the delay between October 1999 and September 2001, a period of approximately 23 months. However, the affidavit of the plaintiff’s solicitor Ms Swanston filed the 1st November 2001 discloses that throughout this period there was correspondence back and forth between the solicitors. Certainly the plaintiff’s solicitors were dilatory, for example on the 15th February 2000 they wrote a r.444 letter indicating that unless the request for trial date sent on the 21st October 1999 was executed, an application would be made to the Court. No application was made, as I have found, until some 20 months later and after the two year period had elapsed. The defendant’s position throughout was that it could not execute the request for trial date because the plaintiff had not fully complied with the duty of disclosure. The plaintiff’s position was that as his claim was amended in December 1994 to confine the claim only to a period of three years after the date of his incapacity, the defendant’s request for records outside that period was unreasonable. At the hearing on the 10th December, Mr Garrick seemed to accept that financial records outside the period of the claim were irrelevant. Indeed, he said that the only additional document he required was the plaintiff’s tax return which covered the financial year immediately following the end of the three year period; and Mr Blaxland indicated that would be supplied. I am satisfied therefore that the delay in that last period was at least partially contributed to by the defendant’s solicitors unreasonable refusal to execute and return the request for trial date.

   (b) Prospects of success

   Mr Garrick submits that as the plaintiff has very poor prospects of success, this is an important issue to be considered in relation to both applications. I have noted that the defence pleads material non-disclosure by the plaintiff. Mr Garrick refers me to a report of Dr Peter Winstanley, Orthopaedic Surgeon, dated the 25th May 1992 which is Exhibit RJS6 to the plaintiff’s affidavit filed the 5th December 2001. He relies particularly on these passages in the report:

   “He had had a past history of intermittent problems associated with his lower back but had not had any significant increase in his symptom level or leg referral.”

   and

   “In my opinion, your client has sustained an aggravation of pre- existing degenerative change within his lumbar spine associated with his lifting episode.”

   Mr Garrick submits that, in the light of that evidence, the prospects of the plaintiff succeeding are not good. The original policy was provided by Occidental Life Insurance Company of Australia Limited. The plaintiff applied for the insurance in December 1987 and a copy of the original application is Exhibit RJS1 to the plaintiff’s affidavit. The pleading alleges that the policy given by the defendant was on “take over terms” from the policy formerly given by Occidental after it apparently went into liquidation. Mr Blaxland submits by reference to the affirmative answer to Question 16 in the original application in which the plaintiff to some extent discloses a pre-existing back problem – described as “Aug 1987 – “Chill in Back … ”; the defendant should have been on notice when it “took over” the original policy in 1991. The plaintiff does not have to satisfy me that he has good prospects of success. He need only show that there is some substantive issue or cause to be tried on a prima facie case: MacDonnell v. Rolley [2001] QCA 32.

   The disclosure issue cannot be determined by me at this stage. At the very least, there is an arguable case, and it cannot be said that the plaintiff’s prospects are so poor – based on the material before me – to render this issue dominant so as to prevent him from proceeding.

   (c) Prejudice

   There is no specific prejudice relied on; rather Mr Garrick relies on the general presumptions of prejudice arising from long delay referred to in the authorities, e.g. Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 at 556. As Mr Blaxland submits, it is clear that the circumstances surrounding the claim were fully investigated by the defendant before it decided not to accept the claim; and it is not suggested that the defendant has suffered any specific prejudice, such as the fading of memories of material witnesses because of the passage of time.

2. The issues referred to above (by reference to Tyler) were the dominant issues argued before me. Mr Garrick’s written submissions does make reference to some of the other issues that are mentioned by Atkinson J. I have considered those submissions in reaching my conclusions.

3. The orders of the Court are as follows:

1.	The application to strike out for want of prosecution is dismissed. The plaintiff’s costs of this application will be his costs in the cause.
2.	I grant leave to the plaintiff to proceed pursuant to r.389(2) UCPR.
3.	I order that the defendant’s execution of the request for trial date be dispensed with and the matter placed on the call over of matters ready for trial.
4.	As the plaintiff’s application was irregular, which necessitated the adjournment, the defendant should have its costs thrown away as a result of the adjournment on 26th November 2001 in any event.