Spitfire Nominees Pty Ltd v Thompson and Hall (a firm)
[1998] VSC 193
•18 December 1998
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION
Not Restricted
No. 10046 of 1991
SPITFIRE NOMINEES PTY LTD & Plaintiff ANOR v THOMPSON & HALL (A FIRM) Defendant
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JUDGE: Warren J WHERE HELD: Melbourne DATE OF HEARING: 13 and 16 November 1998 DATE OF JUDGMENT: 18 December 1998 CASE MAY BE CITED AS: Spitfire Nominees Pty Ltd & Anor v. Thompson & Hall MEDIA NEUTRAL CITATION: [1998] VSC 193 ---
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APPEARANCES: Counsel Solicitors For the Plaintiff Mr R. Robson, Q.C. with Issac Brott & Co Mr R. Cook For the Defendant Mr S. Kaye, Q.C. with
Middletons Moore & Mr W. Alstergren Bevins
HER HONOUR:
The defendant appeals pursuant to Order 77 of the Rules of the Supreme Court against the refusal by the Master on an application made by the defendant for the dismissal of the proceeding for want of prosecution.
The claims brought by the plaintiffs against the defendant relate to the purchase by the first named plaintiff ("Spitfire") of a restaurant and takeaway food business ("the business") called Giardino's Pizza at 341-343 Toorak Road South Yarra. The plaintiffs retained the defendant to act as their solicitor with respect to the purchase of the business. The plaintiffs allege that Spitfire specifically retained the defendant to act in relation to an assignment of a lease for the premises of which Norman Herbert Johns was lessor. Mr Johns is an important figure in the proceeding as the defendant says it wanted to call him as a witness. It is alleged that the retainer was partly oral and partly to be implied. It is alleged, also, by the plaintiffs that the second plaintiff ("Melibee") retained the defendant to act on its behalf in relation to the purchase of part of the freehold of the premises being the land at 345 Toorak Road South Yarra. The plaintiffs allege that the retainer of the defendant was partly oral and partly to be implied.
The plaintiffs claim that the defendant breached the retainer, alternatively, was negligent on three grounds. First, the defendant failed to ascertain and advise the plaintiff that the premises did not comply with the town planning permit for the site and it was deficient of eight car parking spaces. Second, the defendant failed to ascertain and advise the plaintiff that the number of seats within the restaurant were less than the number represented to the plaintiff (this allegation was not specifically pleaded but was referred to in further and better particulars by the plaintiff). Third, the defendant failed to inform and advise the plaintiffs of the fact that a wood-yard at the rear of the premises formed part of the lease for the premises at 341-343 Toorak Road South Yarra. The plaintiffs allege that as a result they have suffered loss and damage. The plaintiffs allege that the defendant was retained in about July 1987, that the relevant town planning permit was issued on 6 May 1986 and it seems from the pleadings that the relevant contracts were entered into on about 19 September 1987.
The defendant alleges that it was retained on about 3 July 1987 by one Issac Brott to act for Mr Brott, Riad Hassan and Talal Hassan in relation to the purchase of the business and that the retainer was in writing by way of a letter from Issac Brott & Co to the defendant dated 3 July 1987. The defendant said that the terms of the retainer included the arrangement of the incorporation of Spitfire and the transfer of control of it to Mr Brott and Messrs Hassan and Hassan and the substitution of Spitfire as purchaser of the business. It is further alleged by the defendant that Mr Brott retained them to act for he and Messrs Hassan and Hassan in relation to the purchase of the property at 345 Toorak Road South Yarra.
Thereafter the facts become more complicated. The defendant alleges that after the sale of the business it was in fact conducted by a corporation known as Amlasam Pty Ltd and not Spitfire. The defendant claims that on 26 July 1993 Spitfire transferred all its interest in the premises to another entity, Hozsel Pty Ltd and that Hozsel thereafter received the income from the business. The defendant says, also, that insofar as it was negligent, the plaintiffs were guilty of contributory negligence in that Mr Brott did not require an express term in the contract of sale to the effect that the premises had a permit for a specific number of patrons, that the plaintiffs themselves attended the offices of the municipal council but failed to inspect the relevant files for the premises and/or failed to request a copy of any town planning permits that related to the premises.
The plaintiff issued the writ on 31 July 1991 almost four years after the date when the defendant is said to have been retained to act for the plaintiffs. Over the next ensuing seven year period the plaintiffs prosecuted their case in bursts of activity interspersed with long periods of dormancy. The chronology of activities in the litigation of this proceeding is, as follows:
7/87 Date of Retainer. 31/7/91 Plaintiffs issued proceedings. 5/9/91 Defendant filed Notice of Appearance. 4/10/91 Defence delivered and Notice of Change of Solicitor on behalf of
Defendant filed and served.
4/11/91 Plaintiffs served Notice for discovery. 6/2/92 Plaintiffs filed Affidavit of Documents. 19/2/92 Defendant issued Summons seeking security for costs. 11/5/92 The Master adjourned the hearing of the Application for Security for
Costs to 19 May 1992 and orders Plaintiffs to pay the Defendant's costs
of the day.19/5/92 The Master ordered the Plaintiffs to pay into Court the sum of $8,000 as
security for costs and ordered the Plaintiffs pay the Defendant's costs
of the Application.11/11/92 Defendant filed Affidavit of Documents.
9/12/92 Defendant served Notice for Discovery.
3/3/93 Defendant served Notice of Default in Making Discovery of Documents. 29/10/93 Plaintiffs served Notice of Intention to Proceed under Rule 3.06.
30/6/94 Plaintiffs filed Summons seeking leave to amend Statement of Claim. 1/8/94 The Master granted leave to Plaintiffs to file and serve an Amended
Statement of Claim and ordered Plaintiffs to pay Defendant's costs of the
Application for leave to amend.8/8/94 Plaintiffs served Amended Statement of Claim. 23/11/94 Plaintiffs served Certificate of Readiness.
8/9/94 Defendant filed Defence to Amended Statement of Claim. 27/2/95 Defendant delivered Interrogatories for the examination of Plaintiffs. 21/6/95 Defendant served Notice of Default in Answering Interrogatories. 4/7/95 Plaintiffs swore (but did not deliver) Answers to Defendant's
Interrogatories.18/7/95 Defendant issued Summons seeking Plaintiffs' Answers to
Interrogatories.24/7/95 Defendant filed Summons seeking an Order pursuant to Rule
41.01(1)(.1) that the evidence of Norman Herbert Johns be taken
by an examiner.28/7/95 The Master ordered that the Defendant's Summons seeking Answers to
Interrogatories be dismissed but that Plaintiffs pay the Defendant's costs
of the application.10/8/95 The Master ordered that Norman Herbert Johns be examined before
a Judge's Associate.4/1/96 Norman Herbert Johns examined. 19/7/96 Defendant filed Summons seeking orders that Plaintiffs provide Further
and Better Particulars of Loss and Damage pursuant to Order 13.11.2/8/96 The Master adjourned the Application seeking Further and Better
Particulars of Plaintiffs' Loss and Damage to 16 August 1996.16/8/96 The Master ordered Plaintiffs to file and serve by 16 September 1996 Further
and Better Particulars of Loss and Damage and Plaintiffs to pay
Defendant's costs of the application30/9/96 Plaintiff's serve Further and Better Particulars of Loss and Damage
claiming $350,000 damages in respect of the purchase of the business
and $350,000 for damages for the purchase of the property and interest
or loss of opportunity to invest the said sums of $350,000.20/2/97 Teague J ordered that Rule 34.05 as to dismissal of proceedings
commenced by Writ and not managed did not apply and
the directions hearing was adjourned to 13 March 1997, and leave
was granted to Defendant to deliver an Amended Defence.14/1/97 Plaintiffs served Notice of Trial and a Certificate of Readiness for Trial. Defendant refused to sign Certificate of Readiness for Trial. 13/3/97 Teague J gave directions for an Amended Defence by 26 March 1997 and a further directions hearing on 10 April 1997. 26/3/97 Defendant filed Amended Defence to Amended Statement of Claim pursuant to the Order of Teague J made 13 March 1997. 10/4/97 Directions hearing adjourned to 21 April 1997. 21/4/97 Directions hearing adjourned to 3 June 1997. 24/4/97 Defendant filed Summons seeking further and better discovery from Plaintiff. 12/5/97 TheMaster ordered that the hearing of the Summons for further and better discovery be amended to 26 May 1997. 26/5/97 Defendant's Application for Further and Better Discovery further adjourned to 27 June 1997. 3/6/97 Teague J adjourned directions hearing to 10 July 1997 and reserved costs. 27/6/97 The Master ordered Plaintiffs to provide further and better discovery and the Plaintiffs pay Defendant's costs. 15/7/97 Teague J adjourned directions hearing to 14 August 1997. 24/7/97 Defendant filed Summons seeking to strike out Plaintiffs' claim for
failure to comply with Order of the Master made 27 June 1997.29/7/97 Plaintiffs issued Summons seeking to set aside or vary the orders of
the Master made 27 June 1997.30/7/97 The Master ordered that the orders made by the Master on 27
June 1997 be set aside, that Defendant's Summons filed 24 July 1997 be
struck out, that Plaintiffs file further Affidavit of Discovery of
certain other documents and that Plaintiffs pay Defendant's costs.25/8/97 Plaintiffs delivered a further Affidavit of Documents. 27/8/97 Defendant filed Summons seeking the Plaintiffs' claim be dismissed for
failure to comply with order of the Master made 30 July 1997.2/9/97 The Master ordered that by 9 September 1997 the Plaintiffs make and
serve an Affidavit as to possession of a particular document referred to
as "the Blue Sky Paper".15/9/97 Plaintiffs swore affidavit as to possession of "the Blue Sky paper". 18/9/97
Teague J made further directions that the Plaintiff answer further Interrogatories by 21 November 1997; Mediation be completed by
12 December 1997; Plaintiff give notice of trial by 19 December 1997;
Pre-trial directions hearing be held on 10 February 1998.
14/10/97 Defendant delivered further Interrogatories for examination of
Plaintiffs.
9/12/97 Teague J adjourned directions hearing to 16 December 1997 and
reserved costs.16/12/97 Teague J extended the time within which Defendant may deliver
Interrogatories to 15 October 1998 and extended the time for filing and
service of Answers to Interrogatories to 30 January 1998 and vacated the
other dates in his Order of 18 September 1997. He directed that the
matter go before him again on 6 February 1998 unless orders could bemade, "on the papers".
30/1/98 The Master adjourned Defendant's Application for Further Security
for Costs (pursuant to liberty to apply reserved 19 May 1992) to 25
February 1998.6/2/98 Plaintiffs served Answers to Defendant's further Interrogatories dated
12 September 1997.6/2/98 The Master ordered that mediation be completed by 7 April 1998 and
further directions hearing occur on 1 May 1998.6/2/98 The Master ordered that Issac Alexander Brott and Natalie McAra-Brott
pay to the Defendant any costs that may be ordered to be paid to the
Defendant by the Plaintiffs.20/4/98 Mediation of this proceeding occurred together with mediation of a
related proceeding 10047 of 1991. The mediation in this proceeding was adjourned
so that Plaintiff could prepare Further and Better Particulars of Loss and
Damage.1/5/98 The Master adjourned directions hearing to 31 July 1998 and reserved
costs.15/5/98 Plaintiffs served Statement of Expert Witness and Plaintiffs' Particulars
of Loss and Damage.31/7/98 The Master ordered that mediation conclude by 26 August 1998,
Plaintiffs file and serve any further Interrogatories by 11 September 1998 and
Defendant answer those Interrogatories by 16 October 1998, Notice of
Trial to be given by Plaintiff by 23 October 1998 and pre-trial directions to be held
on 1 December 1998.21/8/98 The mediation in this proceeding continued and was terminated with
the case unresolved.28/9/98 Summons to dismiss for want of prosecution filed by Defendants. 12/10/98 Further Particulars of Loss and Damage provided by Plaintiff.
In order to succeed the defendant must show inexcusable delay in the prosecution of the action and prejudice occasioned to the defendant as a consequence of that delay (see Spitfire Nominees Pty Ltd v. Dacco (1998) 1 VR 242, 245-6; Birkett v. James (1978) AC 297, 318; Neto v. Faul (1980) VR 26, 30-31). In demonstrating delay on the part of the plaintiffs such delay need not consist solely of periods of complete inactivity. It may also consist of a failure by the plaintiffs over an extended period of time to prosecute the claim with due and proper expedition (see Bishopsgate Insurance Australia v. Deloitte Haskins & Sells, unreported judgment of the Full Court of this court delivered 9 September 1994. Whilst delay before the commencement of the relevant proceeding is not a matter to be taken into account in calculating delay on the part of the plaintiff in prosecuting the proceedings it nonetheless behoves a plaintiff where delay has occurred in issuing proceedings to prosecute the proceeding with full expedition (see Bishopsgate, supra, pp.11-12, 20; Birkett v. James, supra, p.323). In the present matter there were periods of total inactivity by the plaintiffs. Moreso the plaintiffs have been guilty of delay in the provision of particulars of loss and damage and discovery of documents relating to that loss and damage. The history of the proceeding on first blush appears to be a matter that has muddled along with irregular activity.
However, the defendants assert that analysis of the proceedings reveals five distinct periods of delay. The above chronology discloses that during the first period between 11 November 1992 until June 1994 there was total inactivity by the plaintiff. With respect to the first period of alleged delay the defendants allege that the defendant took well over a year to serve its affidavit of documents, that the plaintiffs took a positive step by seeking discovery from an individual partner of the defendant, that the plaintiffs served a notice of intention to proceed and sought and obtained leave to amend their statement of claim. On close analysis the only actual step taken by the plaintiff during the first period of alleged delay (a period of 19 months) the plaintiffs sought and obtained leave to amend the statement of claim on 1 August 1994. In my view they did not take any positive steps during the first period of delay in the proceedings save at the very end of the period by way of amending their statement of claim. In the expeditious prosecution of litigation a plaintiff ought do more than serve a notice of intention to proceed. I consider that the plaintiffs were guilty of inexcusable delay during the first period.
During the second period between 8 September 1994 until 25 July 1995, a period of ten months, there was a further period of complete inactivity save for the plaintiffs serving a certificate of readiness upon the defendant. The defendant refused to sign the certificate as the matter was not ready for trial. With respect to the second period of alleged delay (8 September 1994 - 25 July 1995) the plaintiffs allege that they filed a certificate of readiness which they pursued, that the defendant indicated its desire to interrogate within a week to ten days of 16 December 1994 but in fact did not serve interrogatories until 27 February 1995, that the plaintiffs served sworn answers to interrogatories on 24 July 1995 (five months later) and, in particular, the defendant's solicitor indicated that as soon as sworn answers to interrogatories were provided the defendant would serve a certificate of readiness on the plaintiffs. The certificate was not provided. The plaintiffs allege that the only matter that delayed the signing of the certificate of readiness was the defendant's desire to interrogate and which interrogation could have occurred at any time during the period from 1992 - 1994. The plaintiffs emphasise that the defendant has not provided an explanation for the delay in delivering interrogatories. The plaintiffs concede that they took three months beyond the 42 day period for providing answers to interrogatories required by the Rules but assert that such delay is inconsequential given that the defendant delayed a period of two years in delivering interrogatories.
On close analysis, during the second of alleged delay period of delay (a period of ten months) the defendants did not take any positive steps in the proceedings save for serving a notice of certificate of readiness on 23 November 1994 and serving very late answers to interrogatories on 24 July 1995. I consider that the plaintiffs were guilty of inexcusable delay during the second period.
During the third period from 5 January 1996 until 30 September 1996 there was a another period of intermittent delay as the defendant sought and eventually issued a summons seeking further and better particulars of loss and damage from the plaintiffs. Eventually, the particulars of loss and damage were provided on 30 September 1996 after the making of an order by the Master. This period involved a further delay of nine months.
With respect to the third period of alleged delay (5 January 1996 - 30 September 1996) the plaintiffs allege that they were active during this period. The plaintiffs rely upon the fact that they attended the giving of evidence de bene esse by Mr Johns on 4 January 1996. However, this action occurred at the behest of the plaintiff and clearly as a result of the protraction of the proceedings reaching a trial date and the concerns of the defendant that Mr Johns may die or be incapacitated by the time of the trial date. During this period the plaintiffs rely upon the fact that the defendant requested further and better particulars on 1 February 1996. Again, this action is a matter initiated by the defendant and not the plaintiffs. During February and March there was an exchange of correspondence between the solicitors until finally on 19 July 1996 the defendant issued a summon for further and better particulars before the Master. An order was eventually made by the Master on 16 August 1996 and the further and better particulars provided by the plaintiffs on 30 September 1996. Again during this period analysis discloses that no action was taken or initiated by the plaintiffs, rather, all activity was instigated by or carried out by the defendant. In my view the plaintiffs were guilty of inexcusable delay during the third period (a period of nine months).
During the fourth period from 1 October 1996 until 25 August 1997 the defendant sought further discovery concerning loss and damage. With respect to the fourth period of delay (1 October 1996 - 25 August 1997) the plaintiffs allege that they were active in attempting to expedite the proceedings. On 14 January 1997 they served a notice of certificate of readiness to which the defendant's solicitors responded by way of indicating that the defendant wished to amend its defence and seek further discovery. The plaintiffs submit that they awaited further action by the defendant. In the meantime on 20 February 1997 the matter came on for general directions before Teague, J and again on 13 March 1997. Not a great deal appears to have happened at this point. On 26 March 1997 the defendant delivered an amended defence. A further directions hearing occurred before Teague, J on 1 April 1997 and nothing much further appears to have happened again. During the month of March 1997 further and better discovery was sought by the defendant and which was opposed by the plaintiffs. On 25 May 1997 the parties appeared before Teague, J and again on 30 June 1997. On 27 June 1997 orders were made by the Master at the initiation of the defendant in the absence of the plaintiffs. On 15 July 1997 further directions occurred before Teague, J. During July 1997 affidavits were exchanged by the parties and the summons issued on behalf of the plaintiffs seeking to set aside the self-executing order made by master Wheeler. On 30 July 1997 the Master set aside the orders of Master Wheeler and there was a further order for discovery. On 10 August 1997 the plaintiffs appeared before Teague, J on further directions. On 10 August 1997 the plaintiffs filed an affidavit of documents.
On close analysis it appears that the fourth period of delay (a period of almost 11 months) did not expedite the matter very much at all. However, in my view it cannot be said that the plaintiffs delayed the matter particularly in light of the fact that the matter came before Teague, J on many occasions for directions during this period. Whilst very little happened during this period it would be difficult to find the plaintiffs guilty of inexcusable delay.
During the fifth period from 1 October 1997 until 28 September 1998 there was what can best be described as tardiness on the part of the plaintiffs in that it took from 14 October 1997 until 6 February 1998 to provide answers to interrogatories concerning loss and damage, took from 17 December 1997 until 23 March 1998 to notify an agreed mediator of a proposed mediation between the parties and did not provide further particulars of loss and damage until 15 May 1998 and again on 12 October 1998. With respect to the fifth period of delay (1 October 1997 - 29 September 1998) the plaintiffs provided answers to interrogatories and which answers were six days late in breach of the order made by Teague, J. There were delays with respect to mediation but they were inconsequential in the overall scheme of things. The plaintiff took further steps during this period by way of serving an expert witness statement pursuant to order 44 of the Rules on 15 May 1998 and providing amended particulars of loss on 12 October 1998.
On analysis the fifth period of delay (a period of 12 months) some positive steps were taken by the plaintiffs namely mediation and the service of particulars of loss and damage. Consequently, it could not be said that the plaintiffs were guilty of inexcusable delay during the fifth period.
The defendant criticises the plaintiff for continuous delay throughout the conduct of the proceeding to provide proper particulars and discovery of loss and damage. The defendant asserts that the plaintiff has an obligation to provide such particulars and discovery and that the plaintiffs have consistently failed to do so. Indeed the chronology reveals that during the period from July 1995 until October 1998 the plaintiffs persistently were slow in providing particulars, discovery and answers to interrogatories in relation to loss and damage.
In this proceeding the matter is not all that far off from seeing a trial date on the horizon. On one view it could be said that the defendant has left the application very late, even has launched the application as a tactical manoeuvre. However, the application is brought in the context of ongoing delay on the part of the plaintiff including the provision of particulars of loss and damage as recently as 12 October 1998 after the date of the issue of the summons for dismissal. Furthermore, the defendant has applied for dismissal of the proceeding by way of self-executing orders for non-compliance by the plaintiff with orders made by the court on 24 July 1997 and 27 August 1997.
The defendant complains that the plaintiffs' particulars of loss and damage remain inadequate. It is emphasised that a witness statement setting out the most recent particulars of loss and damage demonstrate such particulars will be established by capitalisation of earnings however there are no documents on which such earnings can be properly established. The defendant submits that if the plaintiffs proceed to trial on the basis of existing particulars provided to date such particulars will require further revision. Furthermore, the defendant apprehends that the plaintiffs' amended statement of claim will require further amendment as it does not plead at present representations as to seating capacity despite the fact that such representations are described in the further and better particulars.
I turn now to consider the issue as to whether or not the plaintiffs have been guilty of inexcusable delay.
The plaintiffs deny that there has been inexcusable delay or any prejudice to the defendant. The plaintiffs have addressed the alleged periods of delay by asserting that there was in fact activity underway on the party of the plaintiffs during each period. The plaintiffs say, further, that insofar as there were any delays they were delays by the defendant and that the defendant engaged in obstructive tactics.
Weighing up and assessing each of the alleged periods of delay it is apparent that the matter has indeed been protracted. However, the issue for me to determine is whether the delay has been inexcusable delay on the part of the plaintiffs in prosecuting their actions.
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