Crystal Creek Pty Ltd v Cairns City Council [2001] QSC 9

SUPREME COURT OF QUEENSLAND CITATION: Crystal Creek Pty Ltd v Cairns City Council [2001] QSC 009 PARTIES: CRYSTAL CREEK PTY LTD. (Plaintiff) v CAIRNS CITY COUNCIL (Defendant) FILE NO/S: No 164 of 1995 DIVISION: Trial PROCEEDING: ORIGINATING COURT: Supreme Court at Cairns DELIVERED ON: 7/02/01 DELIVERED AT: Cairns HEARING DATE: JUDGE: Jones J ORDER: 1. That the plaintiff have leave to take a further step in the action by the delivery of a Statement of Claim within 28 days of today’s date. 2. That the plaintiff pay the respondent’s costs of and incidental to this application to be assessed. CATCHWORDS: PRACTICE – LEAVE TO PROCEED - LIMITATION OF ACTIONS – WHEN TIME BEGINS TO RUN Whether plaintiff to be granted leave to proceed with action pursuant to rule 389(2) of the UCPR notwithstanding no step taken in action for more than 2 years – whether reasons for delay adequate Uniform Civil Procedure Rules 1999 (Qld) Limitation of Actions Act 1974 (Qld) Local Government (Planning and Environment) Act 1990 (repealed) Tyler v Custom Credit Corporation Ltd (2000) QCA 178 COUNSEL: Mr. D. Turnbull for the Applicant/Plaintiff Mr. M. Jonsson for the Defendant/Respondent SOLICITORS: Dale Treanor for the plaintiff MacDonnells for the defendant -- 1 of 4 -- 2 [1] JONES J: This is an application by the plaintiff pursuant to Rule 389 of the Uniform Civil Procedure Rules (“UCPR”) for leave to proceed with the action notwithstanding that no step has been taken for more than two years. [2] The plaintiff’s claim is for the repayment of monies allegedly paid by mistake to the defendant local authority as headworks charges in connection with a subdivisional development. The claim is one of a number of similar claims by other developers paid in respect of various subdivisions in a number of local authority areas. In the instant case the monies were paid to the Mulgrave Shire Council which has since been amalgamated as part of the new Cairns City Council area. The plaintiff alleges that the council was entitled to charge developers the headworks rate applicable as at 1 September, 1998 and relies upon s.6.2(6)(a) of the Local Government (Planning and Environment) Act and the terms of various by-laws and policies which make provisions for the method of calculation of such charges. [3] The plaintiff in this case paid the charges in 1988, some 12 years ago. The action was commenced on 14 November, 1995, a date outside the six year period of limitation prescribed by s.10 of the Limitation of Actions Act 1974. [4] The entry of appearance was filed on 31 October, 1996 and is the last step taken in the action. Since then three notices of intention to proceed have been delivered respectively on 14 March, 1998, 9 March 1999 and 25 May, 2000. [5] I am informed that the defendant proposes to raise a defence based on the Limitation of Actions Act that the plaintiff will contend that s.38(1)(c) applies, namely that the monies were paid as a consequence of a mistake and the period of limitation did not begin to run until the plaintiff discovered, or could have with reasonable diligence discovered, the mistake. This is not an issue upon which any judgment can be made on the present material and it therefore does not assist the respondent’s argument that the leave to proceed should not be granted because of this particular defence. Reason for delay [6] The plaintiff first became aware of the circumstances upon which the claim is based in or around January, 1995 and thereafter, through its legal advisers, made application under the Freedom of Information legislation for the disclosure of local authority documents relating to the policies and the manner of calculations for headworks charges. That process took in excess of a year to complete and was a necessary precursor to the plaintiff obtaining legal advice on its position. As a consequence of the legal advice obtained further inquiries were necessary, further discovery of council documents was requested and there were delays attending the provision of those documents. [7] Since the institution of these proceedings the applicant’s solicitors have instituted similar proceedings against the defendant on behalf of five other claimants. Those proceedings were instituted on various dates between October 1996 and June 2000. [8] One of those actions – (Kamerunga Villa Pty Ltd) in which the proceedings were further advanced than the present case - was the subject of an interlocutory dispute as to whether this Court had jurisdiction to determine the issue or whether the claim -- 2 of 4 -- 3 should properly have been heard in the Planning and Environment Court. On 14 March, 1997 it was determined that the claims were properly brought in the Supreme Court. The defendant appealed against this ruling but such appeal was dismissed on 10 February, 1998. Proceedings in respect of all of the respective claims were put on hold pending the determination of this jurisdictional point. [9] As a number of the claimants have retained the same firm of solicitors there was agreement between the claimants that a “test” case should be agreed upon on the basis that all claimants would contribute to the costs of that test case. Such a strategy would result in considerable savings of legal costs, not only for the claimants but also for the defendant. [10] It appears from the affidavit of Mr. Dale Treanor that the first test case was discontinued for reasons beyond control of the other claimants. The second test case, that of SBK Pty Ltd, was then advanced ahead of the other claims but it still awaits determination. [11] When this action was commenced the solicitors for the respondent sent a letter dated 10 November, 1999 formally suggesting that the instant case await the determination of the SBK case. The proposal was expressed in the following terms:- “It is proposed that the claim by SBK Pty Ltd. be proceeded with as the sole case so as to enable the issues to be litigated without the costs associated with multiple litigation. The proposal is that the claims by the other parties be held in abeyance pending the outcome of the SBK Pty Ltd. claim on the basis that the other claimants will not be prejudiced in respect of any time limitations as a consequence. Accordingly, if any claim becomes statute barred whilst being held in abeyance, the council will not argue that the claim is statute barred and will not utilise any time limit under the rules of the Court to prejudice any of these claimants.” 1 [12] There was no immediate response to that proposal until a reminder letter was sent on 10 March, 2000. On 29 March, 2000 solicitors for the defendant local authority advised they would not agree to the proposal using SBK Pty Ltd as a test case. This advice placed the applicant in the position then of having to make this application which was done after giving the further notice of intention to proceed on 25 May, 2000. [13] Mr. Treanor has sought legal advice from senior counsel which is to the effect that the plaintiff has a good cause of action. This is not a matter in which I should embark upon any detailed consideration except to note that on behalf of the defendant it is suggested that the claim will be defended on four bases, namely – (a) the payments were not charged by the local authority but were voluntary payments made by the plaintiff; 1 Ex. DRT 36 Affidavit of Dale Robert Treanor 29/11/2000 -- 3 of 4 -- 4 (b) that the payment was not made pursuant to any causative mistake of fact or law; (c) any right to restitution is lost because the parties cannot be restored to their former positions; and (d) the claim is statute barred [14] I have already commented on the issue in respect of the limitation period. Having perused the draft proposed statement of claim and considered the matters likely to be raised in a defence to that claim it seems to me that the issues between the parties will be determined, mainly on the interpretation of the relevant legislation and policy documents and by reference to contemporaneous documents which ought to be available to the parties. As these documents are not before me I cannot form any view as to the strength of the plaintiff’s case but there is sufficient in the material to show that the claim involves a significant amount and that the plaintiff has always maintained an intention to pursue the claim. [15] The defendant has also raised the question of prejudice arising from the fact that the Mulgrave Shire Council and the Cairns City Council have amalgamated, that there is a new record system adopted by the amalgamated council and that three potential witnesses for the defendant have left its employ. The defendant also points to the passage of time and its effect on the recollection of witnesses and the availability of documents. Given that the outcome of the case will most likely turn on the construction of documents the question of prejudice will not be of such concern that might otherwise arise in a case of where there has been such an extensive delay. [16] In the exercise of the discretion inherent in Rule 389 and having due regard to the principles recently stated in Tyler v Custom Credit Corporation Limited 2 I have come to the view that the plaintiff ought to be allowed to pursue its claim. [17] My orders will be – 1. That the plaintiff have leave to take a further step in the action by the delivery of a statement of claim within 28 days of today’s date. 2. That the plaintiff pay the respondent’s costs of and incidental to this application to be assessed. 2 (2000) QCA 178 -- 4 of 4 --