Evans v Speakman & Anor [2008] QCA 34

SUPREME COURT OF QUEENSLAND CITATION: Evans v Speakman & Anor [2008] QCA 34 PARTIES: SIMON EVANS (plaintiff/appellant) v CLIVE WILLIAM SPEAKMAN (first defendant/first respondent) INSOLVENCY AND TRUSTEE SERVICE AUSTRALIA (second defendant/second respondent) FILE NO/S: Appeal No 5483 of 2007 SC No 5244 of 2002 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 29 February 2008 DELIVERED AT: Brisbane HEARING DATE: 14 February 2008 JUDGES: de Jersey CJ, Fraser JA, Atkinson J Separate reasons for judgment of each member of the Court, each concurring as to the orders made. ORDER: 1. The Official Trustee be substituted as the second respondent to the appeal 2. Appeal dismissed with costs to be assessed on the indemnity basis CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL GENERAL PRINCIPLES – ADMISSION OF FRESH EVIDENCE – IN GENERAL – where the appellant sought leave to file further affidavit material – where the appellant conceded that he knew of the matters deposed of in the affidavit at the time of the hearing – whether leave to read and file the affidavit material should be granted APPEAL AND NEW TRIAL – APPEAL GENERAL PRINCIPLES – APPEAL PRACTICE AND PROCEDURE – QUEENSLAND – POWERS OF COURT – AMENDMENT – where the appellant sought leave to amend his notice of appeal – where the amendments did not specify further grounds of appeal – whether leave should be granted to amend the notice of appeal BANKRUPTCY – PROCEEDINGS IN CONNECTION WITH SEQUESTRATION – PETITION AND SEQUESTRATION ORDER – EFFECT OF -- 1 of 9 -- 2 BANKRUPTCY ON PROCEEDINGS – ACTIONS BY AND AGAINST BANKRUPT – ACTIONS BY OR ON BEHALF OF BANKRUPT – ACTION INSTITUTED BEFORE SEQUESTRATION – ELECTION BY OFFICIAL RECEIVER OR TRUSTEE – where the appellant’s right of action had vested in the Official Trustee – where the Official Trustee would not consent to assigning a cause of action to the appellant – whether the decision not to assign was appropriate PROCEDURE – COURTS AND JUDGES GENERALLY – COURTS – DISMISSAL OF PROCEEDINGS FOR WANT OF PROSECUTION – where the appellant’s action had been left in abeyance – where the proceedings had not progressed beyond the pleading stage – where the last substantive step occurred five years ago – whether the action should be dismissed for want of prosecution APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL – GENERAL PRINCIPLES – FUNCTIONS OF APPELLATE COURT – GENERALLY – where the primary judge’s decision was of a discretionary character – whether the primary judge had erred in the exercise of his discretion Bankruptcy Act 1966 (Cth) s 5, s 27, s 60, s 129AA, s 178 Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s 6 Cooper v Hopgood & Ganim [1999] 2 Qd R 113; [1998] QCA 114, cited Freeman v Joiner [2005] FCAFC 149, cited Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245; [1999] QCA 389, cited Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, referred to COUNSEL: The appellant appeared on his own behalf G J Handran for the first respondent S D Anderson for the second respondent SOLICITORS: The appellant appeared on his own behalf Speakman Solicitors for the first respondent The Australian Government Solicitor for the second respondent [1] de JERSEY CJ: I have had the advantage of reading the reasons for judgment of Fraser JA. I agree with the orders proposed by His Honour, and with his reasons. [2] FRASER JA: This is an appeal against orders made in the Trial Division refusing the appellant’s application for leave to continue his proceedings against the first -- 2 of 9 -- 3 respondent, refusing to order that the appellant’s former trustee in bankruptcy be joined as a party to those proceedings, and dismissing the proceedings for want of prosecution. [3] The Insolvency and Trustee Service Australia ("ITSA") is named in the notice of appeal as the second respondent. There is no appeal from the order, which was not opposed, substituting the Official Trustee as second respondent in lieu of ITSA. The Official Trustee should be substituted as the second respondent to this appeal. Factual background [4] The principal claim in the appellant’s proceedings was for damages for the alleged negligence of the appellant’s solicitor, the first respondent. The appellant claimed that as a result of that alleged negligence he lost the benefit of a claim for damages for personal injuries he suffered in a motor vehicle accident because of the expiry of an applicable limitation period. [5] That motor vehicle accident occurred in Papua New Guinea on 5 November 1995. In December of the same year the appellant retained the first respondent as his solicitor to act for him in a personal injuries claim. [6] A dispute about the terms of the retainer arose. The appellant contended that the retainer obliged the first respondent to proceed on a speculative basis, whereas the first respondent claimed to be entitled to be paid fees as they were incurred. [7] On any view of the retainer and the various assertions as to when it was terminated, it was clear to the appellant by 28 September 2001 that it was terminated. As was pointed out by the learned primary judge, so much is asserted in the proposed amended statement of claim which the appellant sought leave to file. The appellant repeated that assertion in this appeal. [8] It is also not controversial that, at around the same time and before the expiry of the limitation period for his personal injuries claim of 5 November 2001, the appellant consulted other solicitors with a view to pursuing the claim. This is reflected in a letter from Mullins & Mullins of 3 September 2001, who declined to act on the appellant’s behalf but referred him to other firms who might do so. [9] The appellant told the learned primary judge that the relevant limitation period expired without the appellant bringing action because he did not have the money to pursue the proceedings other than on a speculative basis. [10] The first respondent sued for his fees and obtained a summary judgment against the appellant on 11 January 2002 in the Magistrates' Court. The appellant appealed to the District Court. The judge who heard that appeal concluded that there was no substance in the appellant’s claim that the retainer obliged the first respondent to act without payment of his fees. His Honour also allowed the appellant to file material -- 3 of 9 -- 4 in support of his claim that the first respondent had failed to act in the appellant's best interests, but concluded that the material did not support such a claim. The appeal was dismissed. [11] The appellant applied to the Court of Appeal for leave to appeal and for a stay of the enforcement of the first respondent’s judgment against him. Those applications were refused. [12] The first respondent served a bankruptcy notice on the appellant in May 2002. The appellant applied to the Federal Magistrates' Court to set that aside. That application was dismissed. [13] Shortly thereafter, on 11 June 2002, the appellant brought proceedings in the Trial Division of this Court against the first respondent, who filed a defence on 17 June 2002. On 15 October 2002 the appellant filed a reply to that defence. [14] On 18 October 2002 a sequestration order was made against the appellant. [15] On 14 January 2003 the Registrar of this Court sent an intervention notice to the appellant pursuant to Practice Direction No 4 of 2002 requiring him to show cause within 21 days why his proceeding against the first respondent should not be deemed resolved. The appellant did not show cause. [16] On 5 February 2003, the appellant’s trustee in bankruptcy, the Official Trustee, wrote to the appellant and advised him that the litigation he had commenced against the first respondent was deemed to have been abandoned by the Official Trustee because notices under s 60(2) of the Bankruptcy Act 1966 (Cth) had expired. The appellant did not contend to the contrary. (The submissions below and in this appeal assumed in the appellant’s favour that the abandonment of the litigation did not destroy the appellant’s underlying causes of action, so that they remained vested in the Official Trustee: see Freeman v Joiner [2005] FCAFC 149 at [14]; State of Queensland v Beames [2004] 2 Qd R 99, at 102 – 103 per McMurdo J; [2003] QSC 399.) [17] In a subsequent letter of 17 September 2004, the Official Trustee made it plain that no election had been made to allow the appellant to continue his proceeding. [18] The appellant was automatically discharged from bankruptcy on 9 November 2005. [19] On 30 March 2007 the appellant filed his application for leave to continue his proceeding against the first respondent. [20] On 3 April 2007, ITSA advised the appellant that consent would not be given to an assignment of the relevant cause of action to him. ITSA assigned as reasons that it had no evidentiary material to ascertain what action or causes of action were sought -- 4 of 9 -- 5 to be assigned, nor any material to consider any entitlement for a set off of any mutual debts between the appellant and the first respondent, nor any evidence to indicate the merits of the proposed proceedings, nor any evidence that the claims were not frivolous or vexatious or to be utilised to embarrass a third party. Preliminary matters [21] The appellant applied for leave to rely upon an affidavit by him sworn on 8 February 2008. In response to submissions opposing leave, the appellant accepted that at the time of the hearing below he knew the matters in his affidavit upon which he now wishes to rely. He did not offer any acceptable explanation for his failure to provide a similar affidavit when the applications were heard. The affidavit does not in any case advance the appellant’s appeal. Leave to rely upon the affidavit should be refused. [22] The appellant also applied for leave to amend his notice of appeal. The proposed amendments purport to specify further grounds of appeal, but they do not do so. Instead they make wide ranging assertions about the alleged conduct of the respondents and the supposed effect of the Bankruptcy Act 1966 (Cth) and the Commonwealth of Australia Constitution Act (Cth). These assertions do not identify any error in the discretionary decisions from which the appellant appeals. I would refuse leave to amend the notice of appeal. The appellant's application for leave to continue his proceedings [23] The appellant's application for leave was required by paragraph 5.4 of Practice Direction No 4 of 2002, and by Uniform Civil Procedure Rules 1999 (Qld) r 72(1)(a) (because the appellant had become a bankrupt) and r 389(2) (because no step had been taken by the appellant for more than two years). [24] As the primary judge observed, with the exception of a claim for defamation and with the possible exception of a proposed claim for personal injuries, the claims which the appellant wishes to pursue relate to his complaints about the legal representation provided to him by the first respondent. The appellant accepted that his choses in action relating to those claims had vested in the Official Trustee by operation of the Bankruptcy Act 1966 (Cth). The appellant has no entitlement to pursue them. [25] The primary judge therefore concluded that there was no point in giving the appellant leave to continue his proceedings to pursue those claims. That conclusion was inevitable, and the appellant’s submissions on appeal did not purport to identify any error in it. The appeal against this order should be dismissed for that reason. [26] The primary judge also accepted that there were good reasons for concluding that those claims could not proceed against the respondent either because there had been a determination of those issues against the appellant in the District Court and the Court of Appeal decisions mentioned earlier, or because an estoppel arose under the -- 5 of 9 -- 6 principle expressed in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. [27] The appellant challenged this view, arguing that the earlier proceedings related only to the first respondent’s claim for fees. His argument overlooked the fact that in the District Court the appellant raised as a defence to that claim his contention that the first respondent had not acted in the appellant’s interests. That defence was rejected as lacking merit. It is not necessary to consider this point further, however, because leave to proceed was appropriately refused for the more fundamental reason that the relevant choses in action were not vested in the appellant. [28] That leaves for consideration the appellant’s claims against the first respondent for defamation and personal injuries. [29] The appellant's defamation claim in paragraph [105] of his amended statement of claim pleads as the only material fact that on or about November 2000 the respondent defamed the appellant. The particulars assert that during a private function the first respondent on three occasions "made remarks toward the plaintiff from a distance indicating that the plaintiff was not a trustworthy and credible person." The primary judge concluded that the pleading was fundamentally defective because it did not plead the alleged words of the defamation. That conclusion was plainly correct: the pleading asserts only the appellant’s conclusion about what the words conveyed. [30] In the recently proposed amended statement of claim, a new paragraph [112] pleads: "The plaintiff claims damages to be assessed, for personal injury caused to the plaintiff by the defendant." [31] No other material facts or particulars of this claim are pleaded. The pleading is obviously fundamentally defective. [32] The primary judge considered that leave should not be granted to permit these defectively pleaded claims to be pursued so long after the events. The appellant made lengthy submissions to the contrary, but he did not articulate any error in the primary judge’s reasoning. The application to join the second respondent [33] The main purpose of this application appears to have been to facilitate a proposed challenge in this Court, under s 178 of the Bankruptcy Act 1966 (Cth), to the Official Trustee's refusal to assign to the appellant his former causes of action against the first respondent. The appellant presumably contemplates that if he succeeds in that challenge he might then obtain leave to continue his proceedings against the first respondent on those causes of action. [34] Section 178 of the Bankruptcy Act 1966 (Cth) provides: -- 6 of 9 -- 7 "(1) If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable. (2) The application must be made not later than 60 days after the day on which the person became aware of the trustee’s act, omission or decision." [35] Section 178 empowers a bankrupt to apply to "the Court", an expression defined in s 5 of that Act to mean a Court having jurisdiction in bankruptcy. Section 27 provides that the concurrent jurisdiction in bankruptcy of the Federal Court and the Federal Magistrates Court is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court under s 75 of the Commonwealth of Australia Constitution Act (Cth) or the jurisdiction of the Family Court under other provisions of the Bankruptcy Act 1966 (Cth). [36] It therefore appears that the Supreme Court has no jurisdiction to hear the appellant’s proposed application against the Official Trustee under s 178, except possibly under the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth): see Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245, at [18]-[19]; [1999] QCA 389. If that Act is the source of jurisdiction, joinder might be refused on the ground that the proposed application under s 178 of the Bankruptcy Act 1966 (Cth) is a "special federal matter" which should be dealt with in a federal court: see s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and Porteous v Donnelly (2003) 200 ALR 274 at [21]-[26]; [2003] FCA 783. [37] The primary judge declined to grant the order for different reasons. His Honour held that joinder was inappropriate in light of his Honour's decision to dismiss the proceedings against the first respondent for want of prosecution. The appellant appealed against the dismissal of his proceedings for want of prosecution, but his submissions did not otherwise seek to impugn this reasoning which, in my respectful opinion, was unassailable. [38] His Honour also held that it would not have been appropriate to grant leave to add the Official Trustee as a respondent, even if his Honour had been of a mind to allow the proceedings to continue, because the decision not to assign the relevant causes of action to the appellant was appropriate. Although the appellant criticised that decision as prejudicial to his personal interests, nothing was submitted that suggested any error in the Official Trustee’s reasons for the decision set out in paragraph [20] above. [39] In my opinion, the appellant has not demonstrated any error in the primary judge’s decision to refuse the application to join the Official Trustee as a party to the proceedings against the first respondent. -- 7 of 9 -- 8 Dismissal of the proceedings for want of prosecution [40] The uncontentious facts outlined in paragraphs [7]-[9] above suggest obvious difficulties in the appellant’s claim that the alleged negligence of the first respondent was a material cause of the appellant’s loss of the benefit of his personal injuries claim. [41] The events which sparked the proceedings, the first respondent’s performance of its retainer, occurred from about late 1995 until the respondent’s retainer was concluded by 28 September 2001. The appellant’s claims turn in part on disputed conversations in that period, some six to twelve years ago. [42] The last substantive step in the proceedings was taken (when the appellant filed a reply in October 2002) more than five years ago. The proceedings have not progressed beyond the pleading stage. [43] The appellant had been on notice, also for some five years, that his proceedings were deemed resolved pursuant to the Practice Direction and that the principal causes of action had vested in the Official Trustee and were deemed to have been abandoned. [44] The appellant argued that he was not personally responsible for the delay in the prosecution of claims since they vested in the Official Trustee. There is no reason to think that the learned primary judge overlooked this point. The fact remains that the proceedings, which concern matters stretching back for some twelve years, have not progressed for some five years. [45] The appellant could only obtain title to pursue the claims vested in the Official Trustee if he succeeded in his proposed claim against the Official Trustee under s 178 of the Bankruptcy Act 1966 (Cth). As I have indicated, I see no reason to doubt the primary judge’s decision that the Official Trustee’s decision not to assign the relevant causes of action to the appellant was appropriate. [46] Even if (contrary to that view) the appellant ultimately persuaded a court that the Official Trustee’s decision was inappropriate, it does not necessarily follow that the court would order the Official Trustee to assign the causes of action, rather than, for example, affording the appellant some other “just and equitable” remedy under s 178; and the prosecution of the appellant’s claim against the Official Trustee necessarily would involve further, indeterminate delay while the principal claims in the proceedings against the first respondent continued to lie dormant. [47] The appellant submitted that his proceedings should not be struck out because the causes of action presently vested in the Official Trustee will re-vest in the appellant in 2011 pursuant to s 129AA of the Bankruptcy Act 1966 (Cth). That submission wrongly assumed, amongst other things, that it is acceptable for the litigation of those claims to remain dormant for a further three years. [48] The defamation claim concerned oral statements which were not pleaded but which were allegedly made some seven years ago. If the personal injuries claim had any arguable basis it did not appear from the pleading. -- 8 of 9 -- 9 [49] In relation to all of the claims, the primary judge referred to the consideration that ordinary members of the community should be entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them. In the light of the unfortunate history of the appellant’s proceeding against the first respondent and the inevitable further delay in its prosecution while the appellant would litigate his difficult application against the Official Trustee or await the re-vesting of his claims, that is a very significant consideration here: see Cooper v Hopgood & Ganim [1999] 2 Qd R 113, esp at 124 per McPherson JA; [1998] QCA 114, Tyler v Custom Credit Corporation Ltd & Ors [2000] QCA 178, per Atkinson J at [2] – [3]. [50] The primary judge’s decision was of a discretionary character. The appeal cannot succeed unless the appellant establishes an error of the kind mentioned in House v The King (1936) 55 CLR 499, at 504-505. [51] The appellant was unable to articulate any such error. In my opinion, it was within the primary judge's discretion to dismiss the proceedings for want of prosecution. Disposition [52] I would dismiss the appeal. [53] The appellant opposed an order that he pay the respondents’ costs of the appeal in this event. He argued that the second respondent failed to advise him about any issue concerning the Court’s jurisdiction to make orders under the Bankruptcy Act 1966 (Cth). Putting aside the novelty of the proposition that the second respondent owed any relevant duty to advise the appellant, the appellant lost below and in this Court for reasons other than lack of jurisdiction. [54] The appellant did not identify any reasonably arguable basis for his contention that the primary judge’s discretion miscarried in any respect. That being so, the respondents should have their costs assessed on the indemnity basis. Orders [55] The Official Trustee should be substituted as the second respondent to the appeal. The appeal should be dismissed with costs to be assessed on the indemnity basis. [56] ATKINSON J: I agree that the appeal should be dismissed for the reasons given by Fraser JA. -- 9 of 9 --