Baviv Pty Ltd v J & R Cuda Pty Ltd & Ors [2001] QSC 11

SUPREME COURT OF QUEENSLAND CITATION: Baviv Pty Ltd v J & R Cuda Pty Ltd, Cuda & Cuda [2001] QSC 011 PARTIES: BAVIV PTY LTD. (Plaintiff) v J & R CUDA PTY LTD. (First Defendant) JOSEPH CUDA and RITA THERESE CUDA (Second Defendants) FILE NO/S: No 179 of 1997 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court at Cairns DELIVERED ON: 7/02/01 DELIVERED AT: Cairns HEARING DATE: 24/01/2001 JUDGE: Jones J ORDER: 1. The Plaintiff have leave to proceed by delivery of a Statement of Claim within 14 days from the date hereof. 2. The Plaintiff pay the Defendants’ costs of and incidental to this application to be assessed. CATCHWORDS: PRACTICE – LEAVE TO PROCEED – whether Plaintiff to be granted leave to proceed with action pursuant to r389(2) of the Uniform Civil Procedure Rules 1999 notwithstanding no step taken in action for 2 years. Tyler –v- Custom Credit Corporation Limited & Ors (2000) QCA 178, applied Uniform Civil Procedure Rules 1999 COUNSEL: Chris Ryall for the Plaintiff Douglas Turnbull for the Defendants SOLICITORS: Morrow & Associates for the Plaintiff Robin Smith for the Defendants -- 1 of 4 -- 2 [1] This is an application by the plaintiff pursuant to Rule 389(2) of the Uniform Civil Procedure Rules (“UCPR”) for leave to proceed with this action notwithstanding that no step has been taken in the proceeding for more than two years. [2] The plaintiff’s claim is for damages relating to its purchase in November 1996 of a furniture removal business from the first defendant for a price of $420,000.00. The plaintiff alleges that its purchase of the business was made in reliance upon misrepresentations as to the earlier profits of the business. The plaintiff claims the business was unprofitable and worth far less than the purchase price paid. [3] The plaintiff’s principal Mr. Braes made oral complaints about the substance of the present claim in conversation with the second defendant between 6 December, 1996 and 13 January, 1997. He also made a complaint in writing on 8 January, 1997 suggesting that the business be retransferred to the first defendant. [4] The Writ of Summons was issued on 23 December, 1997 claiming damages of $700,000.00 for breach of contract and breaches of the Trade Practices Act and/or Fair Trading Act. [5] An entry of appearance was filed on 15 January, 1998 and served on the plaintiff on 20 January, 1998. The only step taken (if it be a step) since then was the issue of the Writ of Non Party Discovery on 13 January 1998 and the inspection of documents produced by the defendant’s accountants, Price Waterhouse, on 2 February, 1998. [6] The period of inactivity in the pursuance of this action is less than the three year period which gave rise to the general prohibition under the former rules of the Supreme Court, specifically O 90 r9(3). However, with the introduction of the new regime, the Uniform Civil Procedure Rules 1999 on 1 July 1999, the relevant period of delay was decreased to 2 years. Rule 389(2) of the Uniform Civil Procedure Rules 1999 is applicable. The terms of r389(2) are as follows:- “(2) If no step has been taken in a proceeding for two 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.” [7] A list of the factors which the court will usually take into account in determining whether to accept a particular case from the general prohibition imposed by that rule are set out in the decision of the Court of Appeal in Tyler v Custom Credit Corporation Limited & Ors 1. This list which is not intended to be exhaustive includes the following:- (1) how long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced; (2) how long ago the litigation was commenced or causes of action were added; (3) what prospects the plaintiff has of success in the action; 1 (2000) QCA 178 -- 2 of 4 -- 3 (4) whether or not there has been disobedience of court orders or directions; (5) whether or not the litigation has been characterised by periods of delay; (6) whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant; (7) whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff’s impecuniosity; (8) whether the litigation between the parties would be concluded by the striking out of the plaintiff’s claim; (9) how far the litigation has progressed; (10) whether or not the delay has been caused by the plaintiff’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; (11) whether there is a satisfactory explanation for the delay; and (12) whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial.” [8] The reasons for the delay in delivering the statement of claim are identified in the affidavit of Mr. Braes to be – “(a) the attempts to have the first defendant accept a re-transfer of the business; (b) delay in arranging discovery of financial documents prepared by external accountants; (c) establishing the identity and whereabouts of a bookkeeper formerly employed by the first defendant; (d) attempts to sell the business in order to establish a basis for the calculation of loss and damage. Such sale ultimately being agreed by contract dated 15 October, 1999; (e) the fact that on 18 May, 1999 Mr. Braes was seriously injured in a shooting accident which prevented his being able to give instructions to his solicitors over an extended period.” [9] Considering all these matters there does appear to me to be a satisfactory explanation for the delay which in any event is not particularly significant in the conduct of this type of litigation. -- 3 of 4 -- 4 [10] The defendants do not assert that any of them have suffered any specific prejudice as a consequence of the delay. The outcome of the action is likely to be determined by evidence from financial documents and from witnesses who have a personal knowledge of the conduct of the business. The lapse of time in the delivery of the statement of claim is not such that any of the access to this type of evidence has been lost – certainly no such assertion is made of the defendant. The issues have now been defined in the draft statement of claim and the defendants are therefore in a position to determine what evidence is necessary to meet the plaintiff’s claim. [11] I am satisfied that the plaintiff ought to have leave to proceed, that the plaintiff ought to have the opportunity to litigate its claim in all the circumstances. Orders [12] 1. The plaintiff shall have leave to proceed by delivery of a statement of claim within 14 days from the date hereof. 2. I order that the plaintiff pay the defendants’ costs of and incidental to this application to be assessed. -- 4 of 4 --