Elesanar Constructions P/L v Thiess Contractors P/L [2001] QDC 293

DISTRICT COURT OF QUEENSLAND CITATION: Elesanar Constructions Pty Ltd v. Thiess Contractors Pty Ltd [2001] QDC 293 PARTIES: ELESANAR CONSTRUCTIONS PTY LTD (Plaintiff) v. THIESS CONTRACTORS PTY LTD (Defendant) FILE NO/S: Plaint 453 of 1999 DIVISION: PROCEEDING: Applications ORIGINATING COURT: District Court Brisbane DELIVERED ON: 20 November 2001 DELIVERED AT: Brisbane HEARING DATE: 5 November 2001 JUDGE: McGill DCJ ORDER: Leave to the plaintiff to proceed. Defendant’s application dismissed. Plaintiff to pay the costs. CATCHWORDS: PRACTICE – Leave to Proceed – dismissal for want of prosecution – 2½ year delay in 7½ year old claim – commercial dispute – recollection evidence not paramount – fault of solicitor – no prejudice – leave granted – Uniform Civil Procedure Rules r. 389(2) Tyler v. Custom Credit Corporation Ltd [2000] QCA 179 - applied William Crosby & Co Pty Ltd v. The Commonwealth (1963) 109 CLR 490 - cited Quinlan v. Rothwell [2001] QCA 176 - considered Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 – cited I.H. Demptster Nominees Pty Ltd v. Chemgoods Pty Ltd [1993] 2 Qd.R. 377 – cited COUNSEL: S.J. Lee for plaintiff D.G. Clothier for defendant SOLICITORS: Andrew Abaza for plaintiff -- 1 of 11 -- 2 Clayton Utz for defendants [1] This is an application by the plaintiff for leave to proceed, no step having been taken in the proceedings for upwards of two years: r.389(2). The last step was an application for summary judgment which was dismissed by Wilson J on 22 January 1999. Her Honour ordered the action be remitted to the District Court, which occurred the following month, but that did not count as a step: I.H. Demptster Nominees Pty Ltd v. Chemgoods Pty Ltd [1993] 2 Qd.R. 377. The application was opposed by the defendant, which has filed a cross-application to dismiss for want of prosecution. It was accepted on both sides that that application depended on the outcome of the plaintiff’s application. Nature of the action [2] The plaintiff claims for money owing pursuant to a contract between the parties. The contract was for the plaintiff to supply and deliver bulk road base material to the defendant. The material was delivered between January and April 1994. A dispute arose later in the year. Broadly speaking, the plaintiff’s claim, which is for a total of $143,300.72, is made up of three components: $23,587.10 as an extra charge imposed by the plaintiff as a result of its having to comply with a direction from the defendant to use a particular type of truck to deliver the material; $32,261.55 for the supply of cement mixed into the material (where there is a dispute as to the amount of cement for which the defendant is liable to pay), and $87,452.07 claimed as underpayments on various disputed invoices. The defendant denies these sums are payable, and also asserts that it has a set off and counter- claim against the plaintiff because of the supply of defective material. [3] The nature of the various claims, and defences of the defendant to them, and some discussion of them, appear in more detail in the reasons for judgment of Wilson J which were delivered on 22 January 1999. It is necessary for me to comment on only one aspect of the matters discussed, the claim for additional payment for extra cement. Her Honour said (para. 24) that she had difficulty understanding the basis of this claim. As I understand it, with the assistance of submissions from counsel for both parties, it turns on the fact that some of the material delivered was to be cement stabilised, that is, was to have a small percentage of cement mixed in with it. The contract estimated 3.7%, but there is apparently some issue as to how that percentage was to be measured in order to satisfy the requirements of the contract, and the directions of the defendant as to how much cement was to be added. The plaintiff says the defendant required extra cement to be added to the material so that, notwithstanding natural and, so the plaintiff says, inevitable variation in the percentage from sample to sample, test percentages would always be above 3.5%. This was done by the defendant’s specifying a “characteristic value” of 3.5% The practical effect of this was to require an average concentration of somewhat greater than 3.5% of cement content in the material. [4] The plaintiff claims an entitlement to be paid for cement actually supplied, whereas the defendant says it is not obligated to pay for more than the amount required to -- 2 of 11 -- 3 provide precisely 3.5% cement for all the material delivered. That is essentially a matter of determining what quantity of cement was in fact delivered, and of interpretation of the contract to determine for what quantity of cement the plaintiff is entitled to payment in accordance with its terms. There may be some factual issues there, but I would not expect that there would be very much which would not emerge simply from documents, including records. Unsurprisingly, Her Honour found that there was a triable issue as to this claim. The counterclaim asserts that some of the material provided had an inadequate amount of cement content, and claims for the cost of rectifying the deficiency. [5] Two things emerge from my analysis of the claim and, so far as I can at the present time, the defence and counterclaim1: the first is that the plaintiff’s claim is not one which is clearly bound to succeed or highly likely to succeed, or conversely one which is apparently very weak or hopeless. There is authority that the apparent strength or weakness of the plaintiff’s case is a relevant consideration in an application of this nature. In my opinion, it becomes a consideration of some significance only in those cases where the outcome is either clear or fairly clear. For example, in a personal injury case where liability had been admitted, that would be a significant consideration. Equally, if the plaintiff’s case appeared doomed to fail, it might be a kindness to refuse leave to proceed. But in the ordinary case where nothing can be said with any degree of confidence about the likelihood or otherwise of the plaintiff’s ultimately succeeding without a great deal more examination of the matter than can be conveniently applied in the course of a hearing of an application in chambers, I do not think that this is a particularly important consideration one way or the other. [6] I note that the defendant has allowed the limitation period to run out without having commenced its counterclaim. That suggests that the defendant does not believe that there is overall a balance in its favour. I proceed on the assumption that the defendant can still plead a set-off, otherwise I would impose an appropriate condition on the grant of leave. [7] The other feature which is of significance is that it does not appear that there will be a great many matters in dispute which will turn on conflicting oral evidence. The matters in dispute largely turn on issues as to the correct interpretation of the contract, in the events that happened, and there are apparently detailed records kept on both sides about what has actually happened. There may be some disputes as to some issues which could produce a conflict of oral evidence, but on the basis of the material before me, my general assessment is this is not a case where oral evidence as to what did or did not occur is likely to loom large in the ultimate resolution of the matters in issue. This is relevant because it reduces the significance of the effect of the passage of time on the quality of recollection of witnesses. 1 No defence and counterclaim has been filed and served, or delivered, but there was a draft exhibited to the affidavit of Peter Neville Lyons filed 16 November 1998. -- 3 of 11 -- 4 History of the proceeding [8] There was some dispute between the parties as early as the latter part of 1994, but no proceedings were commenced until 27 October 1997 when a writ was issued in the Supreme Court. The writ was specially endorsed and claimed simply the amount payable under four specific invoices issued in January, February, March and April 1994. That pleading in its present form does not expose the details of the true nature of the dispute between the parties, although it may well be that the pleading is accurate as far as it goes, in that there were four sums which in each case represent the difference between the amount claimed on a particular invoice by the plaintiff and the amount paid in respect of that invoice by the defendant. Certainly the pleading does not properly set out the basis on which the plaintiff claims to be entitled to be paid an additional amount in respect of the use of a particular type of delivery truck. However, there has never been an application to strike out the statement of claim endorsed on the specially endorsed writ. The nature of the plaintiff’s claim was sufficiently exposed in the course of the application for summary judgment. [9] There was at least some attempt to resolve the dispute by negotiation prior to the commencement of proceedings; as to the extent of this, there is relatively little material from the plaintiff and no material from the defendant, so all I can say is that on the plaintiff’s material there is vague evidence that there was extensive negotiation. [10] Evidently the writ was served promptly because on 3 November 1997 the defendant entered a conditional appearance. Under the former O.12 r.22 of the Rules of the Supreme Court a defendant entering a conditional appearance “may thereupon apply to a court or a judge in order to set aside the service upon the defendant of the originating proceeding … ”. By subrule (3) if the defendant does not make such an application promptly the court or a judge may set aside the conditional appearance. In the present case there was neither an application to set aside service (prompt or otherwise) nor an application to set aside the conditional appearance. It is not entirely clear to me why the appearance which was entered was conditional; in any case the practical effect was that neither party did anything in court until the plaintiff filed a judgment summons on 30 October 1998. [11] During the period prior to the judgment summons there were some further without prejudice negotiations between the parties, in the course of which in March 1998 the plaintiff provided the defendant with a consultants’ report which set out the plaintiff’s case, and the defendant responded with a report provided to the plaintiff in April 1998. [12] That summons was heard on 16 November 1998, and judgment was given on 22 January 1999. On 20 November 1998 an unconditional appearance was entered. The order of 22 January 1999 did not expressly provide for the defendant to have leave to defend, but the application for summary judgment was dismissed so that it could be taken as impliedly giving leave. Accordingly, pursuant to RSC O.25 r.8, -- 4 of 11 -- 5 the defendant was required to deliver a defence within 28 days of 22 January 1999, there being no other time limited by Her Honour’s order. Although a draft defence and counterclaim had been put in evidence on the hearing of the application for summary judgment, the defence and counterclaim was not delivered and still has not been delivered. [13] It does not appear that there was ever any arrangement between the parties for the time for delivery of the defence to be extended, or for the delivery of the defence to be postponed until after an amended statement of claim was delivered on behalf of the plaintiff. The defendant does not claim that it expected that the plaintiff would amend the statement of claim and was delaying pleading until that had occurred. Strictly speaking, under the rules, after the last step in the action it was for the defendant to take the next step, and it has not yet done so. It is true that the plaintiff did not ever take any step to enforce compliance with the rules by the defendant, or to carry the action forward. Nevertheless, I think it is relevant that that the delay occurred during a period when it was for the defendant to take the next step. [14] Another matter which may be noted is that the plaintiff has not disobeyed any orders of the court. Although an order for costs was made by Her Honour in January 1999, and the plaintiff has not yet paid those costs, those costs have not yet been taxed or assessed on behalf of the defendant. Unless and until a certificate of taxation, or, since the commencement of the Uniform Civil Procedure Rules, an order of assessment, has been signed and filed, the order for costs has not been quantified and is not enforceable. The defendant obtained an assessment (that is, an estimate by a costs consultant) which the plaintiff said was excessive, and the question of costs has not proceeded past that point. [15] The explanation for the failure to pursue the matter during the period since the judgment summons was dismissed is that the plaintiff’s solicitor (a sole practitioner) failed to carry the matter forward. He claims that to some extent that was because of some uncertainty on his part about whether the plaintiff was in fact prevented from litigating its claim by the existence of an arbitration clause in the sub-contract, and in respect of the first six months of the year because of his concentration on the preparation for and conduct of a trial in another matter for the same plaintiff in this court. As to the former point, since late 1998 it ought to have been clear that no issue is going to be taken on behalf of the defendant about this, as the defendant waived any such right by letter from its solicitors on 5 November 19982 [16] There was evidence of some activity on the part of the plaintiff, in that the person running the plaintiff company mentioned the matter to the solicitor a number of times in the early part of this year and was told that he would get on with it once the other trial was out of the way. There was also evidence of some health problems suffered by that person last year, although the evidence is very vague and does not 2 The previous day the solicitors had written insisting on that right: Affidavit of J.A. McVeigh filed 16 November 1998, Exhibits JMV1, JMV2. -- 5 of 11 -- 6 indicate that there was any particular period during which that person would have been distracted by his health problems from concern about the business affairs of the plaintiff, nor does it establish that there was no one else associated with the plaintiff company whose responsibility might have extended to keeping track of litigation the plaintiff was conducting. Overall, this is not a case where the plaintiff simply did nothing, but the plaintiff has not shown that it did very much during the relevant period with a view to having the action carried forward. [17] Insofar as there were conversations relied on by the defendant, these were covered in the affidavit evidence and draft defence prepared on behalf of the defendant for the purpose of resisting the application for summary judgment in November 1998. There is no evidence from the defendant asserting any particular prejudice as a result of the delay, although the defendant submitted that on general principles any delay in the conduct of the litigation is likely to make it more difficult to have a fair trial. I accept that as a general proposition, although the period here is not very great. [18] One thing the defendant did do after the summary judgment application was dismissed was enquire, a number of times up to October 1999, of the plaintiff’s solicitor as to the file number which had been assigned to the action following its transfer to the District Court. These requests were ignored by the plaintiff’s solicitor, possibly because he was not himself aware of the number. It would have been easy enough for the defendant’s solicitors to obtain this information from the District Court Registry. [19] The defendant submitted that the clear inference, indeed the overwhelming inference, was that the plaintiff had simply abandoned the action in February 1999 following the failure of the application for summary judgment, but had now chosen to proceed with it. I do not accept this. The application for leave to proceed was filed on 17 October 2001; some of the delay this year was attributable to the sending of a letter under r.444 on 28 March 2001. In my opinion, this was unnecessary: an application under r.389 is not within the scope of r.443. Nevertheless, it was an attempt to resolve the matter without a court appearance. Applicable principles [20] A convenient and authoritative summary of most of the factors which are relevant to the determination of whether to give leave to proceed under r.389 may be found in the judgment of Atkinson J, with whom the other members of the court agreed, in Tyler v. Custom Credit Corporation Ltd [2000] QCA 179. The factors listed by Her Honour apply in the circumstance of this case in the following way: the facts with regards to the litigation occurred 7½ years ago, and there was a delay of about 3½ years before the action was commenced. There have been no causes of action added in the formal sense. The various claims now being made by the plaintiff, although not properly pleaded in the specially endorsed writ, were adequately ventilated in the course of an application for summary judgment in November 1998. I could not conclude anything either way as to the prospect of the plaintiff’s success -- 6 of 11 -- 7 in the action. There has been no disobedience by either party of any court orders or directions. The litigation has been characterised by periods of delay, and the delay is attributable to both parties. Accepting that it is particularly the plaintiff’s responsibility to carry the matter forward, this is a case where the defendant was content to allow the matter to drag on even in circumstances where it was the defendant’s responsibility to take the next step. There is no material as to impecuniosity or otherwise on the part of the plaintiff. The litigation between the parties would be concluded by striking out the plaintiff’s claim; the foreshadowed counterclaim on the part of the defendant would now be statute barred. The litigation has not progressed very far; the pleadings are not finalised or even close to being finalised. The delay was caused by the plaintiff’s lawyer being dilatory. There has been some explanation for the delay, but it has not been comprehensive except in the sense that it is generally attributable to the plaintiff’s solicitor not having carried the matter forward as he ought to have. Plainly that explanation covers a great deal of the relevant period. Part of the overall delay since the cause of action arose may be explained by attempts to resolve the matter by negotiation, but I am unable to conclude that that was the cause of the bulk of the delay, or indeed any particular part of it. No basis has been established which would excuse the delay since February 1999. I do not consider that the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial. [21] It is for the plaintiff to show that there is good reason for excepting this particular proceeding from the general prohibition imposed by the rules: William Crosby & Co Pty Ltd v. The Commonwealth (1963) 109 CLR 490 at 496; Tyler (supra) at para. 5. I am satisfied that the continuation of the proceeding would not involve injustice or unfairness to one of the parties by reason of the delay. Authorities [22] The facts of Tyler are interesting. The action had been commenced in November 1986 and leave to proceed was given almost 12 years later. The action was in respect of a dispute which arose out of facts occurring in June to October 1986, so the action was commenced reasonably promptly, and was one of a number of proceedings commenced between the parties. A new cause of action was added just days before the expiration of the 6 year limitation period. The litigation was characterised by long periods of delay, although not all of it was caused by the plaintiff. It appears that no step was taken for about 3½ years before the application for leave to proceed, and during that period the defendant had failed to plead to an amended statement of claim which had been delivered on behalf of the plaintiff. The defendant had also failed to progress third party proceedings which it had commenced by delivering third party notices in April 1996, to which appearances had been entered in May 1996. That action was further advanced than the present action, and the matter was said to have been virtually ready for trial. Both parties failed to comply with directions made on one occasion, and the plaintiff had also failed to comply with a different order for further discovery. -- 7 of 11 -- 8 [23] There was evidence that the plaintiff, who lived in a rural area and had relatively little contact with his solicitors, had tried at times to push the action along, and that the delays were more attributable to the solicitors, although they were attributable in part to impecuniosity on the part of the plaintiff. The defendant had been in liquidation since 1994, and the liquidation was being delayed by the finalisation of the action. There was a greater prospect of prejudice because of dimming of memories because of the greater period which had elapsed since the occurrence of the relevant facts. On the other hand, there was a counterclaim which would not be struck out, and would involve traversing many of the facts in dispute in the claim, so that striking out the plaintiff’s claim would not put an end to the action. [24] In Tyler the chamber judge gave leave to proceed and the appeal from that decision was dismissed. There are a number of factual differences between that case and the present, but in respect of some of the matters at least the circumstances favouring the refusal of leave to proceed were stronger in that case. [25] There has been another recent decision in the Court of Appeal dealing with an application to dismiss for want of prosecution, where the court allowed the appeal and set aside an order that the action be dismissed for want of prosecution: Quinlan v. Rothwell [2001] QCA 176. That was not a case where there was a cross application for leave to proceed; there had been various steps taken shortly before the order was made, and so it was a situation where it was a matter for the defendant to show that the plaintiff’s claim should be terminated, rather than for the plaintiff to show that he should be allowed to proceed with his claim. Nevertheless, the approach of the Court of Appeal is of some significance because there was some discussion of questions of principle. [26] The Chief Justice said: “The discretion to dismiss for want of prosecution may these days confidently be exercised, in appropriate cases, with more robustness than would previously have been considered appropriate”. He referred to the decision of the High Court in Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 and the terms of r.5, and added: “None of this, however, justifies an unduly broad brush approach to identifying and balancing considerations relevant to the question whether the interests of justice require the proceeding to be dismissed”. All members of the Court expressed the view that the effect of the decision in Taylor was not that the proceeding must automatically be dismissed with the passing of a particularly lengthy period. -- 8 of 11 -- 9 [27] In Quinlan the plaintiff was suing for defamation in respect of a publication in October 1990. The proceedings were commenced very quickly, but, as Thomas JA put it, “progressed very slowly”. After some skirmishing about the pleadings and an inadequate attempt at discovery, the action went to sleep and was not revived until April 1997 when the plaintiff was ordered to provide some particulars and answers to interrogatories. That order was not complied with and they were not provided until the day before a subsequent guillotine order was due to take effect. There were then some consent directions, but the order was never taken out and a certificate of readiness was ultimately signed in May 1999. It subsequently emerged however that there were significant documents relevant to quantum which the plaintiff had not disclosed properly, and there were further applications in 2000 for further disclosure, and for dismissal for want of prosecution. Further disclosure was ordered, and was apparently made, but the action was then dismissed for want of prosecution. On appeal it was noted that although there had been serious deficiencies in making disclosure, at the time of the dismissal there was no outstanding order which had not been complied with by the plaintiff. [28] The court noted that the case was, as Mackenzie J put it: “Not obviously one where recollection of parties of matters of detail will assume paramount importance”. This was regarded as a factor which diminished the significance of delay on recollection discussed in Taylor (supra). It was also regarded as significant that, despite deficiencies in carrying the action forward in the past, it did now appear that the matter was almost ready for trial. Although an expert witness obtained on behalf of the defendant had died, the court held this was not of such great significance because the witness was an expert and could presumably be replaced by another expert. There was no other evidence of particular disadvantage arising out of the delay. Ultimately the court was not satisfied that it was a case where a fair trial could not be held because of the delay in proceeding, and allowed the appeal. [29] There are differences between that case and the present: that case was closer to trial, but the delay since the event which gave rise to the matter litigated was greater. There had been only a very short period between those events and when the proceedings commenced, but greater delay in the course of the conduct of the proceeding. In that matter there had been occasions where the plaintiff had failed to comply with the requirements of the rules or orders of the court. Not all of these differences favour the same party. There were also similarities: in that case, the defendants, as Thomas JA put it: “… appear to have been content over very lengthy periods to allow the action to go to sleep”. This is also a case where it is not obvious that the recollection of the parties as to matters of detail will be of any great significance in the resolution of the matters in issue. -- 9 of 11 -- 10 [30] Thomas JA said at para. 29: “There is now a consciousness of the need for some level of efficiency in the use of the courts as a public resource. That, of course, must not displace the need for reasonable access to the courts and the provision of justice according to law in each matter, but it highlights the fact that the former laissez faire attitude by courts towards the leisurely conduct of actions at the will of the parties has ended. At the same time the rules of court are not an end in themselves. They do not exist for the discipline of practitioners or clients, or for the protection of courts from inefficient litigants, but rather as a means of ensuring that issues will be defined in an orderly way and that parties have the opportunity of full preparation of their case before the trial commences.” Conclusion [31] Although the present action is still at a relatively early stage, it does not follow that it will necessarily take a long time before it will come to trial. There is now little delay in having matters tried in this court once they are ready for trial, and directions can be made which will have the effect of getting the matter in order quickly. If the plaintiff fails to comply with directions and orders of the court, jurisdiction will arise to dismiss for want of prosecution. There is no reason, it seems to me, why the matter could not be ready for trial and be able to be tried by about the middle of next year. The fact that there has been undue delay up until now would put the plaintiff under a particular obligation to be expeditious in the future. [32] I am bearing in mind the statements of principle in the Court of Appeal authorities to which I have referred, and also taking note of the actual decisions arrived at and the particular circumstances of those cases. In my opinion, it is appropriate to exempt this proceeding from the general prohibition in r.389 in view of the following particular matters: There is some explanation for most of the delay, the explanation generally being a failure on the part of the plaintiff’s solicitor to pursue the matter as he ought to have. The responsibility for the delay is principally that of the solicitor rather than the client. The action is one where the resolution of the matters in issue will not turn particularly on the resolution of conflicting oral evidence as to primary facts. The position of the parties has already been thoroughly examined in connection with the judgment summons application. The defendant was the party required to take the next step during the period when the delay occurred which triggered r.389, and has in general been content to allow the matter to go to sleep. The plaintiff has not been in breach of any order of the court. In my opinion, notwithstanding the lapse of time since the dispute arose, a fair trial on the issues can still be held. No particular prejudice to the defendant as a result of the delay has been shown. -- 10 of 11 -- 11 [33] It is therefore appropriate to give leave to proceed, and to dismiss the defendant’s application. Because the plaintiff was seeking an indulgence from the court, the plaintiff should pay the costs of the application. I therefore order: On the plaintiff’s application, that the plaintiff have leave to proceed pursuant to r.389(2). I order the plaintiff to pay the defendant’s costs of the application to be assessed. On the defendant’s application, the application is dismissed, I order the plaintiff to pay the defendant’s costs of the application to be assessed. In the circumstances it was reasonable for the defendant to file the cross-application, and no other costs are involved. I reserve leave to the defendant to apply for an order for costs against the plaintiff’s solicitor in the event of the costs order against the plaintiff not being satisfied. I propose to make directions as to the future conduct of this matter. I will circulate these reasons and invite the parties to give consideration to what directions are appropriate, and the matter will be listed for further hearing if the parties cannot agree on the directions which are appropriate. -- 11 of 11 --