Dunseath & Anor v Kazanis [2001] QCA 104

[2001] QCA 104 COURT OF APPEAL McMURDO P McPHERSON JA BYRNE J Appeal No 11310 of 2000 EARL ROSS DUNSEATH and URSULA MERLE DUNSEATH Applicants (Plaintiffs) and FEBRIWAY PTY LTD Not a party to the appeal (First Defendant) and EMMANUEL DRIVAS Not a party to the appeal (Second Defendant) and GEORGE FRINTZILAS and MARIA FRINTZILAS Not a party to the appeal (Third Defendant) and JOHN FRINTZILAS and ROSALIA FRINTZILAS Not a party to the appeal (Fourth Defendant) and CHRIS KAZANIS Respondent (Fifth Defendant) BRISBANE ..DATE 15/03/2001 JUDGMENT -- 1 of 15 -- 15032001 T25/JLP15 M/T COA62/2001 2 JUDGMENT THE PRESIDENT: Justice McPherson will deliver his reasons first. McPHERSON JA: This is an application for leave to appeal against an order striking out as against the fifth defendant an action commenced by the plaintiffs in the District Court in 1991. The action arose out of the sale to the plaintiffs, who now reside in New Zealand, of a fruit market. The sale took place in 1988 and the fifth defendant was the vendor's agent. There were some four vendors and they are the other defendants in the action. The action is founded on an alleged oral representation that the business was in fact more profitable than was disclosed in the profit and loss statement. After the plaint issued on 12 August 1991, it was amended in September of that year and, by 5 August 1993, the action had progressed to the stage where the fifth defendant had answered the plaintiff's interrogatories. Nothing more happened after that until 19 April 1995 when a notice under O.90, r.9 of intention to proceed in the action was given by the plaintiffs. Despite that notice, nothing was done except that on 14 January 1997, the plaintiffs answered interrogatories which had been delivered to them by the fifth defendant in 1995. -- 2 of 15 -- 15032001 T25/JLP15 M/T COA62/2001 3 JUDGMENT The last correspondence between the solicitors for these parties consisted of a communication on 15 August 1997. The action then lay dormant until 14 November 2000 when the fifth defendant filed an application to strike out the plaintiffs' action as against the fifth defendant. On 20 November 2000, the order against which leave to appeal is now sought was made by the Chief Judge of the District Court. On 18 December 2000, the period of 28 days for appealing against that order expired and, on 21 or 22 December, an application was filed seeking an extension of time within which to appeal. No explanation, except perhaps that the plaintiffs had engaged new solicitors, was advanced for that application or extension. It seems likely that what prompted the sudden interest by the plaintiffs in the action was the arrival of an attempt by the respondent to enforce against them a costs order which the respondent had obtained in consequence of the striking out of the action against them. The plaintiffs claim they are in a position of some financial difficulty and have been saving to run the action. That, however, is an item of information which has come to us in support of the application for leave to appeal and it was not, as I understand, among the material before the learned Judge. -- 3 of 15 -- 15032001 T25/JLP15 M/T COA62/2001 4 JUDGMENT Authority suggests that an order striking out an action or dismissing it for want of prosecution is interlocutory only (see Neimann v. Electronic Industries Limited [1978] VR 431) and the proposition is not really controverted before us. In consequence, the plaintiffs need leave of this Court to appeal against the order made on 20 November 2000. In considering whether leave should be granted, it is legitimate to consider the likely prospects of success on the appeal and it is solely to that end and with a view to adducing evidence on that appeal if it is allowed to take place, that an affidavit of Ursula Merle Dunseath, who is the second plaintiff, was read before us at the hearing of this application. In my opinion, however, if leave to appeal were to be granted the plaintiff's prospects of success in the appeal would be extremely slight and in my opinion are not such as to justify the grant of leave in this matter. I return now to the order made by the learned Judge on 20 November 2000 and the application as it was when it came before her. There were two sources from which her Honour derived or could have derived authority to make the order that is now challenged. One is Rule 280 UCPR under which the Court may dismiss a proceeding or make another order as it considers appropriate in a case where a plaintiff is required to take a -- 4 of 15 -- 15032001 T26/LE25 M/T COA62/2001 5 JUDGMENT step within a stated time and does not do so. The rule is an approximate equivalent of a provision in the former Rules of the Supreme Court which was O.39, r.30A(8). The other source of power is the inherent power of the Court to strike out or dismiss proceedings for want of prosecution. It is a subject that was considered and, so far as the power is concerned, confirmed by the House of Lords in Burkett v. James [1970] AC 297. In practice, what has almost always happened in Queensland in the case of long delay of this kind is that the defendant would apply under O.39, r.30A(8) to have the action struck out because of the plaintiff's failure to tender or to sign the certificate of readiness for trial or otherwise to ensure that the matter was listed for trial when it was ready. When such an application by a defendant came before the Court it was common for the plaintiff to apply under O.90, r.9 for leave to proceed. Order 90, r.9 is a provision unique to the Queensland rules and the original High Court Rules, where it was introduced by Sir Samuel Griffith. That rule, which is now represented in the Uniform Civil Procedure Rules by Rule 389(2) provides or requires that a party who has failed for two years to take a step in the action should apply to Court for leave to do so before taking a step. If leave was not -- 5 of 15 -- 15032001 T26/LE25 M/T COA62/2001 6 JUDGMENT granted on an application such as that, the action in practical terms or effect became subject to a permanent stay from which it could only be rescued, if at all, by striking it out. A long line of authorities establishes that a party seeking leave to proceed under a rule in that form was bound to show good reason why that party's case should be exempted from the general prohibition which was imposed by O.90, r.9 and is now imposed in slightly, but not materially different, terms in Rules 389(1) and 389(2). In the present case, it seems to me that Rule 389(2) would have prevented the plaintiffs from proceeding with the action, unless it applied for and was granted leave, so to do. In my view, it was unlikely that it would have been granted leave to proceed, unless a very compelling reason was presented which explained the delay and demonstrated that there was good reason for allowing this action to proceed after such a passage of time. Her Honour was not directly confronted with an application of that kind, because the plaintiffs in this case never applied for leave to proceed and, as I have suggested, probably would not have obtained it if they had done so. Not having done so, their action was subject to the prohibition or stay, as I have called it, imposed by -- 6 of 15 -- 15032001 T27/JJD24 M/C COA62/2001 7 JUDGMENT Rule 389(2). When, therefore, the fifth defendant applied to strike it out on the ground of the delay that had taken place, her Honour was faced with an action that had come to a halt some years before and would not be able to proceed except by leave of the Court, which the plaintiffs gave no indication at all of asking for. Far from seeking such leave and establishing a case to support it, the plaintiffs simply asked that the fifth defendant's application to strike out be adjourned. The plaintiffs put forward no material to justify such an adjournment. The solicitor who appeared for the plaintiffs said simply that they wished to think the matter over. It is important to notice that he was the solicitor who had acted for the plaintiffs throughout the action from its inception, and that he had communicated with the plaintiffs in New Zealand, and that those were the only instructions he had been given. In view of the importance of what took place on that occasion, I think it right for me to refer to the transcript of those proceedings or that hearing, as it appears from page 6 of the appeal record in this case. The solicitor appearing for the plaintiffs on that occasion was Mr Marsden and her Honour said to him: "You have had the carriage of the matter and you well understand the matter and you have candidly conceded, based on your own knowledge of the matter, there is no -- 7 of 15 -- 15032001 T27/JJD24 M/C COA62/2001 8 JUDGMENT basis, or there is nothing that there could be reasonably set up, to oppose the fifth defendant's claim, though as you say, your clients, the plaintiffs, who have now moved to New Zealand, were not appraised of this application till Friday and they asked you to make an application for an adjournment so that they could think about it." To which Mr Marsden responded: "That is correct, your Honour." After a few more words, Mr Marsden said: "Your Honour, I am not instructed to say this, but the situation is that I can think of no basis upon which the application could be opposed." Her Honour in recording her reasons for the decision that she gave in this matter proceeded to explain that the last time that the defendant had heard from the plaintiffs' solicitors before this application was filed was a letter dated 15 August 1997, in response to the fifth defendant's proposal to seek security for costs. In that letter, the plaintiffs' solicitors advised that their clients were no longer resident in Australia and that they were impecunious. Her Honour went on: "The respondents, being the plaintiffs, have had the weekend to think about this matter and no doubt could have contacted their solicitor prior to attending Court this morning." She added: "It does not appear they have done so and in all those circumstances, I have refused the application for an adjournment and will grant the fifth defendant's application." -- 8 of 15 -- 15032001 T27/JJD24 M/C COA62/2001 9 JUDGMENT It was submitted that that was the point at which her Honour's discretion had gone wrong. To my mind, however, it is not surprising that her Honour refused the adjournment and struck the action out. Saying only that, after all the time that had elapsed, the plaintiffs wished to think over the question, as I take it to be, of whether they wished to proceed with the action manifested to my mind an attitude of disdain both for the action and for the Court processes. It is said that under the principles stated in Burkett v. James something approaching contumelious disregard of the Court's procedure is required before striking out or dismissing for want of prosecution may occur. That has not, in my experience, generally been considered to be, or regarded as, a condition precedent for dismissal in Queensland where long delay has occurred. No doubt, because of the presence in our rules of O.90, r.9 or, as it now is, Rule 389(2), the attitude has been generally that if the action cannot go on without leave, and no application for leave is made or foreshadowed, it should be struck out. In any event, even if the attitude of the plaintiffs was not one of contumelious disregard, it came as close as possible to showing that they did not intend to proceed with the action or intend to proceed with it with any kind of expedition. -- 9 of 15 -- 15032001 T28/LE25 M/T COA62/2001 10 JUDGMENT It was suggested that her Honour had no power to adjourn unless she was satisfied that refusing the adjournment was the only way justice could be ensured. I am by no means persuaded that that is the rule that applies in the case of an adjournment of a matter like this or indeed perhaps of any kind. The problem is, however, that even if one accepts that to be the rule, there was simply nothing before her Honour that suggested that any injustice would result. The obligation of a party who asks for the adjournment of a matter is at least to present the Court with sufficient evidence or material to enable it to exercise a proper discretion in the matter. A party cannot stultify that discretion by refraining from producing, or failing to provide, necessary material to the Court, without some evidence or statement from their solicitors as to what they propose to do, or whether they propose to do anything at all. Adjournments are not to be had for no reason at all. In relation to the action, it seems to me that her Honour was in the circumstances correct in dismissing the application for an adjournment of the application. Once that stage was reached, the order striking out the action as against the fifth defendant was an almost inevitable consequence. It has been said that the plaintiffs were people who live in -- 10 of 15 -- 15032001 T29/LE25 M/T COA62/2001 11 JUDGMENT New Zealand; but I must say for myself that New Zealand, although overseas, is not so far away that they cannot readily pass instructions to their solicitor. I would expect that if proper instructions had been given in this case foreshadowing some proposed action or step to be taken by the plaintiffs, it is more likely than not they would have succeeded in obtaining the adjournment. Simply, however, to say that they were entitled to or would like time to think about the matter, and then not to explain what further step they might be interested in taking, is in my view not the proper way of presenting material with a view to obtaining an adjournment in a matter of this kind. In my view, should they be given leave to appeal the prospect of the plaintiffs succeeding on the appeal that was presented to her Honour is, as I have implied in what I have said, very slight indeed. I would therefore refuse the application. THE PRESIDENT: I agree that the application should be refused. Whilst the plaintiffs have now given some explanation for the delay in filing the notice of appeal they have not in my view demonstrated that the decision of the primary Judge was flawed and that they have sufficient prospects of success on the appeal to warrant the granting of an extension of time, generally for the reasons given by Justice of Appeal McPherson. -- 11 of 15 -- 15032001 T29/LE25 M/T COA62/2001 12 JUDGMENT The applicant/plaintiffs took no steps to progress the action for well over three years. When informed of the fifth defendant's application to strike out the action on the Friday before the application, they provided no sensible instructions to their solicitor beyond requesting an adjournment for an unspecified period for unspecified reasons, other than to generally consider their position. Their then solicitor candidly informed the Court that he had no basis to oppose the application. In those circumstances, the primary Judge was entitled in the exercise of her discretion to refuse the requested adjournment and grant the fifth defendant's application. The plaintiffs have now changed their attitude, perhaps only when confronted with the prospect of paying the costs of the action and the application of the fifth defendant. There are insufficient prospects of success on any application for leave to appeal to warrant an extension of time within which to appeal. I would refuse the application with costs to be assessed. BYRNE J: I do not find it necessary to express an opinion on the prospects of success of an application for leave to proceed were the applicants minded to bring it. Beyond that, I express my general agreement with the reasons of -- 12 of 15 -- 15032001 T29/LE25 M/T COA62/2001 13 JUDGMENT Mr Justice McPherson and the President, and wish to add a few words. In circumstances where there was no material before the Chief Judge to indicate that an adjournment would serve any purpose, and the applicant's solicitor was unable to suggest to her Honour that the adjournment might actually serve a purpose, no sufficient reason for the adjournment was demonstrated, and the Judge was right to refuse it. Once that application for an adjournment failed, the facts put before the Judge disclosed an adequate case for the discretionary order her Honour made dismissing the proceedings, so far as they related to the respondent, for want of prosecution. There had been significant delay. As the Judge recorded, the last steps which the applicants themselves had initiated had occurred in May 1993 when they had delivered interrogatories for the examination of the fifth defendant. The delay was relevantly unexplained by any material put before the Judge. There was at the time no assurance by the solicitor of any commitment by the applicants to proceed with the litigation. And as has been mentioned, the solicitor had acknowledged that he could not think of anything to say in opposition to the respondent's application. -- 13 of 15 -- 15032001 T29/LE25 M/T COA62/2001 14 JUDGMENT Having regard to the circumstances as they emerged before the Judge, her decision to dismiss the proceedings, so far as they related to the respondent, for want of prosecution was in my view plainly correct. The applicants would wish that leave be granted to appeal to adduce further evidence on the appeal to show that the Judge's discretion with respect to the adjournment ought to have been exercised differently and also with respect to the order ultimately made for the disposition of the proceedings. That evidence relates to facts concerning the applicants and their circumstances, especially their financial position, during the pendency of the litigation. It appears to me to be all material which might have been placed before the primary Judge were the applicants sufficiently anxious to have done so. But none of it was communicated to the Judge in any form. Further, although the additional material speaks of an inability to fund the litigation, it does now show a basis for supposing that the applicants have, or might yet, acquire the financial capacity to prosecute the action diligently through to the trial. They say that their solicitors have been placed in funds "for the immediate continuation of the matter" but do not attempt to show that they have the resources to see the case through to a conclusion. -- 14 of 15 -- 15032001 T29/LE25 M/T COA62/2001 15 JUDGMENT In these circumstances, even if the additional evidence were to be received on the hearing of any appeal, which in my opinion it should not, still it would not provide a satisfactory basis for interfering with the Judge's order dismissing the proceedings for want of prosecution. Despite Mr Green's carefully considered and well expressed submissions, I also would refuse the application for leave to appeal. THE PRESIDENT: The order is the application is refused with costs. ----- -- 15 of 15 --