Electro Industry Group Queensland Ltd v O'Donnell Griffin Pty Ltd [2017] QCA 24

SUPREME COURT OF QUEENSLAND CITATION: Electro Industry Group Queensland Ltd v O’Donnell Griffin Pty Ltd [2017] QCA 24 PARTIES: ELECTRO INDUSTRY GROUP QUEENSLAND LIMITED ABN 98 084 199 333 (appellant) v O’DONNELL GRIFFIN PTY LTD T/A DIVERSE DATA COMMUNICATIONS also T/A DDC COMMUNICATIONS ABN 78 003 905 093 (respondent) STEVE JULIAN CLAUDE MEDINA (not a party to the appeal) FILE NO/S: Appeal No 8212 of 2016 SC No 4825 of 2009 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane – [2016] QSC 143 DELIVERED ON: 3 March 2017 DELIVERED AT: Brisbane HEARING DATE: 1 February 2017 JUDGES: Holmes CJ and Gotterson JA and Bond J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. Appeal allowed. 2. Set aside the orders made on 18 July 2016. 3. Order that the originating application filed on 6 May 2016 be dismissed. 4. Order that the defendant have leave pursuant to r 389(2) of the Uniform Civil Procedure Rules to take a new step in the third party proceeding on the condition that the third party claim is to be litigated on the basis of the statement of claim of the defendant against the third party filed on 11 November 2009. 5. There be no order as to costs in respect of each of the appeal and of the originating application at first instance. -- 1 of 13 -- 2 CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COURT SUPERVISION – WANT OF PROSECUTION OR LACK OF PROGRESS – where a claim was brought against the appellant in May 2009 by an employee for personal injury arising from the appellant’s negligence – where the appellant commenced third party proceedings against the respondent in November 2009 – where between 2010 and 2016, there were significant delays between steps taken in the third party proceeding – where the appellant took steps without first delivering a Notice of Intention to Proceed or obtaining an order of the Court in accordance with Uniform Civil Procedure Rules (“UCPR”) r 389 – where the appellant sought leave nunc pro tunc pursuant to UCPR r 389 to take the irregular steps and proceed with the claim – where the primary judge refused leave and struck out the third party proceeding for want of prosecution – where the primary judge misapprehended the true facts due to unsatisfactory evidence – whether the misapprehension of fact infected the exercise of the discretion in a material way – whether it is appropriate to grant leave pursuant to UCPR r 389(2) to take a new step in the third party proceeding APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL – JUDGE MISTAKEN OR MISLED – GENERALLY – where the primary judge struck out the third party proceeding for want of prosecution – where, in exercising his discretion, the primary judge attached “heavy” weight to the inability of the respondent to locate a particular witness – where evidence adduced on appeal demonstrated the relevant witness is available to testify – whether the misapprehension of fact infected the exercise of the discretion in a material way – whether the respondent was materially prejudiced by the delay Uniform Civil Procedure Rules 1999 (Qld), r 389 Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40, cited Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621; [1953] HCA 25, followed Cassimatis & Anor v Commonwealth Bank of Australia [2016] QSC 281, considered House v The King (1936) 55 CLR 499; [1936] HCA 40, followed Tyler v Custom Credit Corp Ltd & Ors [2000] QCA 178, applied COUNSEL: R Douglas QC, with R Morton, for the appellant M T O’Sullivan for the respondent SOLICITORS: Kaden Boriss Legal for the appellant Hall and Wilcox for the respondent [1] HOLMES CJ: I agree with the reasons of Gotterson JA and the orders he proposes. -- 2 of 13 -- 3 [2] GOTTERSON JA: The plaintiff in the principal proceeding, Steve Julian Claude Medina, was employed by a labour hire company, Electro Industry Group Queensland Ltd (“EIG”) as an electrical apprentice. O’Donnell Griffin Pty Ltd (“ODG”) carried on business variously as Diverse Data Communications and DDC Communications. Although there is no agreement on the pleadings as to the precise legal relationship between EIG and ODG, it is uncontroversial that during 2003, the plaintiff was placed by EIG with ODG under a labour hire arrangement and that in 2004, he was placed with D&J Harrison Electrical (“Harrison”) under a similar arrangement. [3] After pursuing pre-court procedures under Chapter 5 of the Workers’ Compensation and Rehabilitation Act 2003 (Qld), the plaintiff commenced proceedings in the Supreme Court of Queensland against EIG on 8 May 2009. The statement of claim then filed alleged that on 7 July 2003, the plaintiff had sustained an injury to his back and right leg while he was standing on mobile scaffolding in order to affix overhead cable trays to the underside of concrete flooring above, at an ODG worksite at Charlotte Street, Brisbane.1 He required surgery and then returned to work on 26 January 2004.2 In April 2004, EIG directed him to work at Harrison where he was required to carry out lifting duties. As a result of carrying out those duties, his back was injured further.3 [4] The plaintiff alleged that the injuries sustained by him as a result of the two incidents were the result of negligence on the part of EIG.4 Those injuries were particularised as a prolapsed intervertebral disc in the lumbo-sacral spine with radiculopathy and scarring of the lumbar region following surgery.5 Significantly, the plaintiff alleged that as a result of these injuries, he has been unable to continue employment as an electrical apprentice. [5] EIG filed a notice of intention to defend and a defence on 11 June 2009. On 11 November 2009, EIG commenced third party proceedings against ODG to which the latter filed a notice of intention to defend and defence on 4 January 2010. The essence of the third party claim was that the injuries alleged by the plaintiff to have been sustained by him on 7 July 2003 were caused by the breach by ODG of duties it owed to the plaintiff with respect to the safety of the workplace at Charlotte St.6 [6] Disclosure of documents in the third party proceeding was completed by 8 March 2010. An unsuccessful mediation took place on 15 April 2010. The learned primary judge identified the following steps as having been taken thereafter:7 “ 28.04.2010 [ODG] made an offer to [EIG] 14.05.2010 [EIG] sent letter to defendant querying progress 01.07.2010 [EIG] confirmed that the matter is proceeding 1 Amended Statement of Claim filed 18 May 2015, paragraph 5: AB295. The original statement of claim is not in the appeal record. However, it is clear that this paragraph and other paragraphs to which I specifically refer were in the original statement of claim in the form in which they appear in the amended statement of claim. 2 Ibid paragraph 6. 3 Ibid paragraphs 7-11. 4 Ibid paragraphs 13, 14. 5 Ibid paragraph 17. 6 Statement of Claim of the Defendant against the Third Party filed 11 November 2009, paras 11, 12: AB281-283. 7 Reasons [6]. -- 3 of 13 -- 4 23.08.2011 Plaintiff discloses accountant’s report 13.01.2012 [EIG] disclosed reports of Dr English to the third party 23.10.2013 [EIG]’s current solicitors advised ODG’s solicitors that they were acting. 29.10.2013 ODG’s solicitors wrote to [EIG]’s solicitors advising them that they had closed the file. ” [7] During 2014, there was correspondence between the parties in respect of a possible mediation of the matter. The mediation did not take place. Also, EIG’s solicitors disclosed some documents to ODG from time to time without first delivering a Notice of Intention to Proceed. On 14 September 2015, ODG’s solicitors sent a letter to EIG’s solicitors noting that there had been a number of periods of time where more than 12 months had elapsed before a step was taken in the third party proceeding and that on at least one of them, the lapse was for more than two years.8 [8] An amended statement of claim was filed by the plaintiff in the principal proceeding on 18 May 2015.9 The amendments made at that time principally concerned quantification of the plaintiff’s claim for past and future economic loss.10 No amendments were made to the paragraphs to which I have already referred. Also an updated statement of loss and damage and an expert report were provided. [9] On 26 April 2016, EIG filed a further amended statement of claim in the third party proceeding.11 The amendments in this pleading focused upon the plaintiff’s allegations concerning injuries sustained during his placement with Harrison.12 EIG alleged that those injuries were a direct and inevitable consequence of the incident at ODG’s workplace for which ODG was liable in negligence to the plaintiff.13 Case flow directions for the further prosecution of the proceedings were made on 29 April 2016.14 [10] These developments were quickly followed by the filing by ODG on 6 May 2016 of an application which sought by way of substantive relief, a declaration that neither EIG nor it might take a step in the third party proceeding by virtue of the operation of r 389 of the Uniform Civil Procedure Rules (“UCPR”) or, alternatively, an order dismissing the third party proceeding for want of prosecution.15 The application was heard on 20 May 2016. For the purposes of it, EIG accepted that the steps purportedly taken by it during 2014 and 2016 were taken irregularly. It sought leave nunc pro tunc pursuant to r 389(2) to take them and to proceed further with the prosecution of the third party claim. [11] I note that at the hearing of the appeal, this Court was informed that, at first instance, both EIG and ODG had accepted that the principal proceeding and, if it were to proceed, the third party proceeding, were both ready to proceed to trial.16 8 Ibid [8]. 9 AB295-306. 10 AB303-304, paragraphs 19.4.3, 19.7. 11 AB315-318. 12 AB316, the added paragraphs 6A-6A.3. 13 AB317, the added paragraph 12A. 14 Affidavit J Fraccaro affirmed 20 May 2016, paragraph 40: AB173. 15 AB319-320. 16 Appeal Transcript 1-32 l45 – 1-33 l1. -- 4 of 13 -- 5 [12] On 18 July 2016, the judge who heard the application struck out the third party proceeding and ordered EIG to pay ODG’s costs of and incidental to the third party proceeding and the application.17 The reasons at first instance [13] Rule 389 of the UCPR provides: “(1) If no step has been taken in a proceeding for 1 year from the time the last step was taken, a party who wants to proceed must, before taking any step in the proceeding, give a month’s notice to every other party of the party’s intention to proceed. (2) If no step has been taken in a proceeding for 2 years from the time the last step was taken, a new step may not be taken without the order of the court, which may be made either with or without notice. (3) For this rule, an application in which no order has been made is not taken to be a step.” [14] The learned primary judge proceeded on the footing, accepted by both EIG and ODG as correct, that a step taken in the primary proceeding was not a step taken in the third party proceeding for the purposes of r 389.18 His Honour observed that a step taken in the primary proceeding could, however, have relevance for the exercise of the discretion under the rule.19 [15] His Honour referred to the considerations listed by Atkinson J in Tyler v Custom Credit Corporation Ltd & Ors20 as relevant when a court is considering whether or not to dismiss an action for want of prosecution. He stated that since ODG had focused upon strike-out relief in argument before him, he should have regard to those considerations “(at a minimum)”.21 [16] Next, his Honour summarised the major issue raised by ODG in the following terms:22 “[25] The major complaint made by ODG is that the lapse of time has put it in a position of great difficulty because of the absence of witnesses. The history of ODG’s efforts concerning the collection of evidence commenced in September 2007. At that time, it became aware that a number of possible witnesses were unable to be found. They included John Smithers (an apprentice) and Martin Malkin (another employee). Another former employee (Paul Grannell) was able to be contacted but he had no recollection of the plaintiff and had no knowledge of any incident involving the plaintiff. The witness who appeared to be the most useful for the third party was the site foreman, Matthew Kirk. In October 2007 a solicitor for ODG spoke to the Kirk. Kirk told the solicitor that he kept a site diary (which he regarded as extremely accurate) and that he signed off on that 17 AB361. 18 Reasons [17]. 19 Ibid [18]. 20 [2000] QCA 178 at [2] (McMurdo P and McPherson JA agreeing). 21 Reasons [23]-[24]. 22 Ibid [25]-[29]. -- 5 of 13 -- 6 diary every day. He recorded the number of hours worked by each of the workers and if an accident, injury or the use of first aid was reported to him then it would have been entered in the diary. He could not recall the plaintiff and was unaware of any incident involving the plaintiff on site. Of importance was his statement that the absence of an entry concerning any type of injury meant that there had been no report made to him. [26] In April and May this year solicitors for ODG tried to contact Matthew Kirk. Those attempts were unsuccessful. The solicitors have no knowledge of his whereabouts nor do they have any contact details which would allow them to determine his whereabouts. The site diaries may well be admissible under s 92 of the Evidence Act 1977 but the inability to call the author would mean that its accuracy and the significance of the absence of an entry about an injury would not be in evidence. This is the problem confronting the third party. [27] In the defendant’s analysis of the considerations listed by Atkinson J in Tyler and their application to this case, it was submitted that the prejudice caused to the third party by not being able to call Matthew Kirk was not as a result of any delay in the court proceedings, but rather the failure of the third party’s solicitors to properly investigate the claim and maintain contact with their witnesses. [28] The third party’s solicitors did investigate the claim in 2007 and did obtain evidence at an appropriate level at that time. The submission that there is some obligation on solicitors to maintain contact with prospective witnesses is unsupported by authority. Solicitors owe many duties to their clients, but they are not required to engage in surveillance of the witnesses who might be needed in a trial. [29] I am not satisfied, though, that ODG has established that it will not be able to locate Mr Kirk. There was, for example, no evidence about searching electoral rolls or the other means which are available to locate people.” [17] In addressing the Tyler considerations one by one, his Honour made the following observations:23 “(1) how long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced; The relevant events occurred 12 to 13 years ago. (2) how long ago the litigation was commenced or causes of action were added; The third-party notice was filed in November 2009. 23 Ibid [30]. His Honour’s reference to “the defendant” in (12) is obviously a reference to “the third party” and has been corrected. The comment which follows in (12) is plainly directed to the discussion of prejudice in paragraphs [25] to [29] in the reasons for judgment cited above. -- 6 of 13 -- 7 (3) what prospects the [defendant] has of success in the action; The submissions from the defendant addressed this heading from the point of view of the plaintiff's action. While the failure of the plaintiff's action would end the third-party proceedings, success by the plaintiff does not guarantee success by the defendant in the third-party proceedings. EIG submitted that it has good prospects of success for contribution because ODG controlled the worksite where the plaintiff worked when the first injury is alleged to have occurred. That submission highlights the disadvantage occasioned to ODG by the inability to call Matthew Kirk as a witness. (4) whether or not there has been disobedience of Court orders or directions; Irrelevant. (5) whether or not the litigation has been characterised by periods of delay; The litigation has been drawn out and there have been periods (in excess of two years) in which the defendant has done nothing with respect to the third-party claim. (6) whether the delay is attributable to the [defendant], the [third party] or both the [defendant] and the [third party]; The defendant concedes that it did not press the plaintiff when there were periods of delay. There is also no evidence that the third-party ever pressed the defendant. (7) whether or not the impecuniosity of the [defendant] has been responsible for the pace of the litigation and whether the [third party] is responsible for the plaintiffs impecuniosity; Irrelevant (8) whether the litigation between the parties would be concluded by the striking out of the [third party's] claim; If the defendant's third party proceedings were struck out then, it says, it would seek to take advantage of s 40(1)(a) of the Limitation of Actions Act 1974 which gives a defendant two years after judgment is given against it to commence third party proceedings. But whether that is decisive is doubtful. It may be that any attempt to commence new proceedings would be an abuse of process.24 (9) how far the litigation has progressed; Apart from a proposed mediation, the matter appears ready for trial. (10) whether or not the delay has been caused by the [defendant's] lawyers being dilatory. Such dilatoriness will not necessarily be sheeted home to the client but it may be. Delay for which an applicant for leave to proceed is responsible is regarded as more difficult to explain than delay by his or her legal advisers; 24 See the discussion in Bendeich v Clout [2003] QDC 305. -- 7 of 13 -- 8 There is nothing to suggest that the defendant, itself, has been dilatory. There is an absence of satisfactory explanations by the defendant's solicitors. (11) whether there is a satisfactory explanation for the delay; EIG submits that some delay was caused by the third party's solicitors advising that they had closed their file. That could not prevent the defendant from taking a step. (12) whether or not the delay has resulted in prejudice to [the third party] leading to an inability to ensure a fair trial. This is dealt with above.” [18] The learned primary judge concluded that the third party proceeding ought to be struck out for the following reasons:25 “[32] The factors which weigh heavily in this case are: (a) The unsatisfactory explanation for the delay. (b) The current inability of the third party to locate witnesses, especially Kirk. (c) The inevitable deterioration in the memories of any witnesses who might be found. [33] In the absence of Mr Kirk, ODG has no witnesses upon which it can rely. Although the site diaries may be admissible under the provisions of the Evidence Act, the importance and meaning of the entries and, in particular, the absence of particular entries, cannot be conveyed to the court without Mr Kirk being available to give that evidence. Even if he were available, whatever recollection he might otherwise have had about general issues about the work system, the way scaffolding was used and the manner in which cables were laid in 2003 would have deteriorated substantially after the passage of 13 years. [34] This is a case in which the defendant has sat on its hands. That might have been due to a forensic choice or to mere unexplained inactivity. The third party should not be compelled to face a case in which, through no fault of its own, it would not be able to call an essential witness. Further, it should not be required to face a case which EIG seeks to enlarge by its most recent pleading. The effluxion of time does lead to the deterioration of memory and, in this case, the unavailability of witnesses. That leads to a prejudice to the third party and will prevent it receiving a fair trial. In those circumstances it is appropriate to make the order sought.” The appeal and evidence on appeal [19] On 12 August 2016, EIG filed a notice of appeal to this Court against the decision at first instance.26 At the hearing of the appeal, leave was granted, without objection, to the filing of three affidavits. They all concern the availability of ODG’s site foreman, 25 Reasons [32]-[35]. 26 AB362-365. -- 8 of 13 -- 9 Mr Kirk, to testify. As a prelude to detailing these affidavits, I note that Mr S A Sullivan, solicitor, who acts for ODG, had filed an affidavit in support of the application at first instance in which he had deposed that an employee of his firm had spoken to Mr Kirk on 11 October 2007 and was told the following by him:27 “10.1 he signed off on the site diary every day; 10.2 the site diary was extremely accurate; 10.3 he could not recall the plaintiff at all and was unaware of any incident involving the plaintiff on site; 10.4 he would have recorded the number of hours actually worked by each of the workers, including the plaintiff, in the site diary. If a worker, including the plaintiff, had not undertaken the work, Matthew Kirk would not have recorded the time in the diary; and 10.5 he would have made a note in the site diary if there was any report of an incident, injury or treatment of first aid on a particular day. The absence of an entry meant that there was no report of an incident, injury or treatment of first aid on that day.” but that in April and May 2016, he had been unable to locate Mr Kirk.28 [20] The first of the three recent affidavits is one affirmed by Mr J Fraccaro, solicitor, on 12 August 2016.29 His firm acts for EIG. He deposes that Mr Kirk was located on 3 August 2016. A statement signed by Mr Kirk, witnessed by Mr Fraccaro, and dated 9 August 2016, is Exhibit “JF1” to the affidavit. Exhibit “JF2” is a supplementary signed statement made by Mr Kirk on 11 August 2016. [21] In his signed statements, Mr Kirk says that he recalls the project at 33 Charlotte Street where the plaintiff was injured and that the duties the plaintiff alleges he was carrying out were of the type that apprentices would normally perform. He speaks of procedures carried out for instructing apprentices on work safety issues and their level of detail. He said he does not remember the plaintiff reporting an injury. Significantly, Mr Kirk addresses in detail entries in the Daily Site Diaries completed by him for 7 to 11 and 15 to 18 July 2003 as they concerned the plaintiff and his allegations. He vouches for their accuracy. [22] According to Mr Kirk, the activity carried out by the plaintiff as described in the Daily Site Diaries on 7, 8 and 9 July 2003 “is the installation of cabling and this would not have required (the plaintiff) to perform the activities described in paragraph 5 of the amended statement of claim”, that is to say, standing on scaffolding to affix cable trays to the concrete floor above. Mr Kirk also gives a description of the scaffolding on site at the time. [23] The second affidavit is one made by Mr Sullivan.30 He swore it on 29 September 2016. Exhibited to this affidavit is a signed statement made by Mr Kirk on 9 November 2016.31 In it, Mr Kirk says that he does not remember the plaintiff or of being told of any injury to him during work on the Charlotte Street project. He concedes that “it is 27 Affidavit S A Sullivan sworn 6 May 2016, paragraphs 10.1-10.5: AB18. 28 Ibid paragraphs 10, 15: AB19. 29 AB238-270. 30 AB271-276. 31 AB275-276. -- 9 of 13 -- 10 possible, although unlikely” that the plaintiff did work other than that recorded in the Daily Site Diary for a given day, but that he cannot now be definitive on the issue because events occurred so long ago. He does not recall being interviewed in 2007 by anyone from Mr Sullivan’s firm. [24] I note that there is an overall consistency between Mr Kirk’s signed statements concerning the Daily Site Diaries and the position taken by ODG throughout the pre- court procedures and the litigation, namely, that the plaintiff did not undertake the work alleged in paragraph 5 of the amended statement of claim.32 [25] In the third affidavit, which Mr Fraccaro swore on 31 January 2017, he states that in view of what Mr Sullivan had said in his affidavit sworn on 6 May 2016, he thought that further investigations to locate Mr Kirk would have been fruitless and that, in any event, any evidence Mr Kirk could give would be limited to what he allegedly told the employee of Mr Sullivan’s firm in 2007. Miscarriage of discretion – misapprehension of fact [26] It is, I think, evident from the reasons of the learned primary judge that a factor to which he attached “heavy” weight in the exercise of the discretion to strike out the third party proceeding was that ODG was unable to locate witnesses, especially Mr Kirk.33 The influence that the “unavailability” of Mr Kirk played in his Honour’s thinking is illustrated in paragraph [33] in the reasons for judgment where he explains the implications of that for the ODG case: “… the importance and meaning of entries and, in particular, the absence of particular entries [in the Daily Site Diaries], cannot be conveyed to the court”. Moreover, as that paragraph and the paragraph that immediately precedes it reveal, his Honour exercised the discretion on the basis that Mr Kirk was, in fact, not available to testify. He clearly did so notwithstanding his earlier, and arguably inconclusive, observation at paragraph [29] that he was not satisfied that ODG had established that it would not be able to locate Mr Kirk. [27] The affidavits filed by leave reveal that the learned primary judge misapprehended the true facts.34 Mr Kirk is available to testify. He is in a position to give evidence with respect to the entries to which his Honour specifically referred. [28] I hasten to say that the misapprehension as to fact was one to which his Honour was led by the unsatisfactory state of the evidence before him. It was not a misapprehension of his own making. Nevertheless, it has infected the exercise of the discretion in a material way. Consistently with basic principle, as formulated in House v The King35 and affirmed in Australian Coal and Shale Employees’ Federation v The Commonwealth,36 this Court must, on that account, set aside the exercise of the discretion by the learned primary judge and the orders his Honour made to give effect to it. [29] Before leaving this topic, I would record my reservation with respect to his Honour’s finding that, in 2007, the solicitors for ODG obtained evidence “at an appropriate 32 See the response by ODG’s solicitors to WorkCover Queensland’s Contribution Notice dated 18 December 2006, which referred to the Daily Site Diaries: AB25-26; and the third party defence at paragraph 5.2: AB71. 33 Reasons [32]. 34 As this appeal is an appeal by way of rehearing, the Court has regard to all the evidence now before it in order to discern whether the order of the learned primary judge was the result of some legal, factual or discretionary error: cf Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 at [23]. 35 [1936] HCA 40; (1936) 55 CLR 499 per Dixon, McTiernan and Evatt JJ at 505. 36 [1953] HCA 25; (1953) 94 CLR 621 per Kitto J at 627. -- 10 of 13 -- 11 level” at the time.37 I say this because no signed statement was obtained from Mr Kirk at the time. Further, the assertion made by the solicitors in their reply to WorkCover Queensland in December 2006 that the Daily Site Diary entry for 7 July 2003 indicated that the plaintiff “was not doing cabling work as alleged”38 appears to have been based on inference by the solicitors, and not on specific comments made by Mr Kirk concerning that entry.39 It is, however, unnecessary to determine whether this finding was erroneous in order to decide whether or not to set aside the exercise of the discretion. Re-exercise of the discretion [30] It is open to this Court to exercise any of the discretions which the parties respectively sought to be exercised by the learned primary judge. For that purpose, I would express my overall concurrence with the comments made by his Honour with respect to each of the Tyler considerations with two exceptions. The first exception concerns the consideration of prejudice to ODG to which I shall return. The second exception is the adequacy of the investigation by ODG’s solicitors in 2007 for which I have expressed my reservation. [31] Two of the three factors identified by the learned primary judge as weighing heavily in the exercise of the discretion, namely, (b) and (c) in paragraph [32] of the reasons for judgment, are related to prejudice. It is appropriate to review each of these factors, for the purpose of assessing the influence that prejudice ought to bring to bear in the re-exercise of the discretions. [32] Factor (b) has been exposed as a misapprehension of fact. Mr Kirk is available. The thrust of his evidence concerns the meaning and comprehensiveness of contemporaneous record keeping by him. Its evidential value largely lies in the inferences that might be drawn from those records as to what task or tasks the plaintiff did in fact undertake on the day he alleges he was injured. Mr Kirk was not a witness to any incident involving the plaintiff. He did not have any relevant conversation with him. I accept that Mr Kirk’s recollection as to detail might not now be as sharp as it was. Significantly, however, there is no critical incident or conversation, his recollection of which has been impaired by lapse of time. [33] Factor (c) is the “inevitable deterioration in the memories of any witnesses who might be found”. His Honour evidently had in mind other possible witnesses to whom he had referred at paragraph [25] of his reasons, apart from Mr Kirk or Mr Paul Grannell. The latter had told ODG’s solicitors in October 2007 that he had no recollection of the plaintiff and no knowledge of an incident involving him.40 Thus, Mr Grannell did not have any relevant knowledge of which his memory might have deteriorated over the time since then. [34] Two other potential witnesses for ODG were identified by his Honour, Mr John Smithers and Mr Matthew Malkin. So far as they are concerned, each was contacted by an investigation firm, LKA Management Pty Ltd, appointed by WorkCover Queensland during the latter part of 2006. The firm’s report dated 1 November 2006 is exhibited to Mr Sullivan’s affidavit sworn on 6 May 2016.41 37 Reasons [28]. 38 AB25. 39 Affidavit S A Sullivan sworn 6 May 2016, paragraph 10: AB18. 40 Affidavit S A Sullivan sworn 6 May 2016, paragraph 9: AB17; Reasons [25]. 41 Affidavit S A Sullivan sworn 6 May 2016, Exhibit “SA11”: AB57-59. -- 11 of 13 -- 12 [35] In that report, the firm states that Mr Smithers was interviewed. He vaguely recalled the plaintiff but had no knowledge of his duties or how the alleged incident at the Charlotte Street site occurred. Mr Malkin was also interviewed. He said that he did not recall the plaintiff and had no knowledge of the alleged incident. Mr Malkin’s name apparently appeared on an incident report form as the ODG representative to whom the plaintiff reported the incident. He was asked about that and said that he was suffering depression around the time of the alleged incident and left ODG shortly afterwards. The information in this report indicates that Mr Smithers did not have knowledge of any relevant event, his recollection of which has deteriorated since the interview. Such knowledge that Mr Malkin may have had, had been lost by the time he was interviewed. [36] For these reasons, I am unable to agree with his Honour that ODG has been materially prejudiced in the defence of the third party proceeding by delays on the part of EIG in prosecuting the third party claim. [37] I would accept that all delay in prosecuting the third party proceeding has not been satisfactorily explained by those representing EIG. Despite that, there is no evidence that dilatoriness on the part of EIG itself has been responsible for the delay. In any event, I would not regard the absence of a satisfactory explanation for the delay as, of itself, weighing significantly against a continuation of the third party proceedings. [38] To my mind, factors that do weigh in favour of a continuation of it are the readiness of the principal proceeding for a trial, the readiness of the third party proceeding for trial, the availability of Mr Kirk to give evidence in it, and the absence of significant prejudice to ODG in the prosecution of its defence to the third party claim, attributable to delay on the part of EIG. [39] Two particular aspects of this case serve to distinguish it from the circumstances in Cassimatis & Anor v Commonwealth Bank of Australia,42 to which counsel for ODG referred. In that case, Bond J ordered that a proceeding where there had been extensive delays and failure to comply with Court orders and directions, be dismissed. As to prejudice, the evidence to which I have referred, shows positively that the delays in the third party proceeding will not significantly disadvantage ODG in the presentation of its case. In other words, the influence of the “working assumption” of prejudice through the passage of time of which Bond J spoke43 is moderated by specific evidence here. Secondly, unlike the position in Cassimatis where “significant work” remained to be done to bring the matter to readiness for trial, here, both the principal proceeding and the third party proceeding are ready for trial. [40] I would mention at this point that, as paragraph [34] of the reasons indicate, his Honour was also concerned that EIG’s case against ODG had been enlarged by amendments made in the further amended statement of claim filed by EIG on 26 April 2016. I do not accept that the claim was, in fact, enlarged at that point. EIG had always claimed that the personal injury loss and damage suffered by the plaintiff was caused by a breach by ODG of its duty to the plaintiff. The loss and damage claimed by the plaintiff had always been alleged by him to have been the result of personal injuries suffered in both the incident at the Charlotte Street site and in his work at Harrison. The amendments in 2016 clarified, if clarification was necessary, that the indemnity claim extended to loss and damage claimed by the plaintiff to have been sustained during the latter. 42 [2016] QSC 281. 43 Ibid at [31], citing McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 551-552. -- 12 of 13 -- 13 [41] It is unnecessary to consider this matter in greater detail. At the hearing of the appeal, senior counsel for EIG stated that, in the event that leave to proceed were given, his client would be content to proceed to trial on the third party statement of claim filed on 11 November 2009.44 Disposition [42] For these reasons, I consider that the appeal should be allowed and the orders made on 18 July 2016 be set aside. I would dismiss ODG’s application. It is appropriate that EIG have leave pursuant to r 389(2) of the UCPR to take a new step in the third party proceeding on the basis of the claim made by it in the statement of claim of the defendant against the third party filed on 11 November 2009. At the hearing of the appeal, EIG did not identify precisely the next step it proposes to take. In this exceptional circumstance, the order ought, in terms, grant leave to take a new step without specifying it. [43] As to costs, at the hearing of the appeal, counsel for both sides accepted that in the event that the appeal were to succeed, there should be no order as to costs of the appeal.45 In my view, that is appropriate. Neither side had diligently enquired as to the availability of Mr Kirk prior to the hearing of the first instance. That oversight largely contributed to the need for the appeal. [44] As to the costs of the application at first instance, while ODG’s application will be dismissed, EIG will have the advantage of a grant of leave to proceed without having needed to bring a separate application for it. Had it done so, it would have been ordered to pay ODG’s costs of it in the ordinary course. In these circumstances, neither side ought to have an award of costs in its favour. Orders [45] I would propose the following orders: 1. Appeal allowed. 2. Set aside the orders made on 18 July 2016. 3. Order that the originating application filed on 6 May 2016 be dismissed. 4. Order that the defendant have leave pursuant to r 389(2) of the Uniform Civil Procedure Rules to take a new step in the third party proceeding on the condition that the third party claim is to be litigated on the basis of the statement of claim of the defendant against the third party filed on 11 November 2009. 5. There be no order as to costs in respect of each of the appeal and of the originating application at first instance. [46] BOND J: I agree with Gotterson JA. 44 Appeal Transcript 1-18 ll1-6. 45 Appeal Transcript 1-21 ll20-21; 1-22 ll31-34. -- 13 of 13 --