Chavez v Moreton Bay Regional Council [2009] QSC 179

SUPREME COURT OF QUEENSLAND CITATION: Chavez v Moreton Bay Regional Council [2009] QSC 179 PARTIES: CHESTER GORDON CHAVEZ (plaintiff/applicant) v MORETON BAY REGIONAL COUNCIL (defendant/respondent) FILE NO/S: BS 10727 of 2003 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 7 July 2009 DELIVERED AT: Brisbane HEARING DATE: 3 July 2009 JUDGE: Chief Justice ORDER: 1. That the application filed on 17 June 2009 be dismissed. 2. That the plaintiff pay the defendant’s costs, to be assessed on the standard basis. CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF THE COURT – TIME – EXTENSION OF TIME – Non compliance with self-executing consent order – entry of judgment – whether time for compliance should be extended Uniform Civil Procedure Rules 1999 (Qld) r 7, r 280, r 668 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, considered Cummings and Anor v Davis and Anor [2001] QCA 293, considered FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268, considered Fairmont Suites and Hotels Pty Ltd v Duck Holes Creek Investments Pty Ltd and Ors [2009] QSC 98, cited Rankin v Agen Biomedical Ltd (1999) 2 Qd R 435, distinguished -- 1 of 9 -- 2 COUNSEL: P J Dunning QC with T F N Pincus for the applicant T P Sullivan SC with R G Fryberg for the respondent SOLICITORS: Everingham Lawyers for the applicant McInnes Wilson Lawyers for the respondent [1] CHIEF JUSTICE: Faced with an application for dismissal of his proceeding for want of prosecution, the plaintiff, on 11 May 2009, consented to orders in these terms: “… 3. The plaintiff provides security for costs in favour of the defendant in the sum of $50,000 by way of a registered first mortgage upon real property on or before 4 pm on 1 June 2009. … 7. In the event the plaintiff does not comply with any of orders 2-5 inclusive above, and upon the filing of an affidavit by the solicitor for the defendant to that effect, the proceedings be struck out for want of prosecution and the plaintiff shall pay the defendant’s costs of and incidental to the proceedings on a standard basis. …” [2] The plaintiff did not comply with order 3. On 2 June 2009, on an ex parte basis, the defendant obtained an order from the Registrar that the proceeding be struck out for want of prosecution. [3] The plaintiff’s solicitors became aware of that order on 10 June 2009. On 17 June the plaintiff filed an application seeking orders that the time for compliance with the orders of 11 May be extended, and that the order of 2 June be set aside. The plaintiff invokes Rules 7, 280 and 668 of the Uniform Civil Procedure Rules 1999 (Qld). [4] The circumstances in which the plaintiff failed to comply with order 3 were as follows. The plaintiff’s present solicitors commenced to act for the plaintiff on 8 -- 2 of 9 -- 3 May 2009. Following the orders of 11 May, Mr Everingham of that firm arranged for a mortgage to be drafted to secure the sum of $50,000 as required. It was to be given over property owned by the plaintiff’s wife. The plaintiff’s wife executed the mortgage and it was returned to Mr Everingham on 22 May 2009. Mr Everingham intended to send the executed mortgage to the solicitors for the defendant, so that the defendant might execute it, with the document then to be registered by 4 pm on 1 June. Through Mr Everingham’s oversight, that did not occur. Instead, the mortgage documents were apparently placed with his file, along with voluminous other documentation provided by the plaintiff to Mr Everingham on 22 May. [5] It was common ground that the court has a discretion to extend the relevant time limitation, under Rule 7, or to relieve the plaintiff from the consequences of the order of 2 June, under Rule 668. In FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268, 283, Wilson J referred to the breadth of the discretion under provisions like Rule 7, as follows: “It is a remedial provision which confers on a court a broad power to relieve against injustice. The discretion so conferred is not readily to be limited by judicial fiat. The fact that it manifestly is a power to be exercised with caution and, in the case of conditional orders, with due regard to the public policy centred in the finality of litigation does not warrant an arbitrary limitation of the power itself, not expressed in the words of the rule, so as to deny its capacity to reply to circumstances such as those which are to be found in the present case. It would be wrong to so read the rule as to deny to a court power to prevent injustice in circumstances where the party subject to a conditional order ought to be excused from non-compliance.” [6] The parties approached the matter on the basis that an extension of time is not unavailable just because of the circumstance that the self-executing order was made by consent. See Fairmont Suites and Hotels Pty Ltd v Duck Holes Creek Investments Pty Ltd and Ors [2009] QSC 98, paras 9-11. -- 3 of 9 -- 4 [7] I accept the submission made by Mr Sullivan, who appeared for the defendant, that matters relevant to the exercise of these discretions are the conduct of the defaulting party and the prosecution of the proceeding generally, the circumstances in which the self-executing order was made, any aspect of prejudice to the innocent party, and the circumstances of non-compliance. [8] It is necessary now to say something about the nature of the claim, and the conduct of the proceeding to date. [9] The plaintiff’s claim is for damages for negligence against the defendant local authority, arising out of the issue of a building permit on 26 November 1997 in relation to a property at Beachmere being developed by the plaintiff. Construction commenced in December that year. According to the plaintiff’s amended statement of claim, the construction was substantially complete by late May or early June 1998. The plaintiff alleges that because of the defendant’s negligence, he suffered loss in that his ability to sell the land was delayed. The plaintiff’s particulars specify that the delay commenced in June 1998. It may therefore be accepted that by then, the plaintiff’s cause of action had accrued – notwithstanding further losses may subsequently have been suffered. [10] The plaintiff commenced the proceeding towards the end of the limitation period, by filing a claim and statement of claim on 25 November 2003. It was not until 24 November 2004 that the plaintiff served the defendant. That was the last day for service to avoid the proceeding’s becoming stale. The plaintiff’s solicitor then advised the defendant in these terms: “My client is in the process of providing me with more detailed instructions concerning the quantum of damages being claimed in -- 4 of 9 -- 5 this proceeding. Consequently, an amendment to the statement of claim will be necessary to further particularize those damages. In those circumstances, my client does not require a notice of intention to defend and defence to be filed until 28 days after an amended statement of claim is served upon you.” [11] The amended statement of claim was served about a year later, on 22 November 2005. The amendments were substantial, and not limited to quantum, as may be seen from the extent of underlining on the document and its content. An extension for the filing of defence was granted until 17 January 2006. [12] On 16 January 2006, the defendant’s solicitors wrote to the plaintiff’s solicitors advising their inability to finalize a defence at that stage, referring to the fact that the alleged cause of action arose more than 8 years before, and of a need for further and better particulars. A request for further and better particulars was enclosed. [13] On 24 February 2006, in response to further correspondence from the defendant, the plaintiff’s solicitors confirmed that they were still waiting for information for the purpose of preparing the further and better particulars, and expected a further three to four weeks would be required. They confirmed that no steps would be taken adversely to the defendant’s interests in the interim. The defendant agreed to the extra time requested by plaintiff for the provision of the particulars. [14] On 22 December 2006, the solicitors for the defendants served a notice of change of solicitors, and enquired when they might receive the further and better particulars. No action was subsequently taken by the plaintiff to progress the action. [15] Then on 2 April 2007 a second notice of change of solicitors was served on behalf of the plaintiff. -- 5 of 9 -- 6 [16] On 20 February 2008 the solicitors for the defendant wrote to the solicitors for the plaintiff noting that no step had been taken for a period of more than two years, since the request for the particulars of the amended statement of claim was served on 16 January 2006. They indicated that any application for leave to proceed would be resisted. Again no action was taken by the plaintiff to progress the action. [17] Then on 16 April 2009, approaching 11 years after the alleged cause of action arose, the defendant filed an application to strike out the proceeding for want of prosecution. It was that application which led to the self-executing order made by consent on 11 May 2009. [18] This was a case as described in Rankin v Agen Biomedical Ltd (1999) 2 Qd R 435, 438, where a self-executing order was necessary, in extreme circumstances, “to move the party in default into action”. [19] As may be seen from the above summary, the plaintiff was responsible for substantial delay in the prosecution of the proceeding. Mr Dunning SC, who appeared for the plaintiff, relied in response (among other things) on the defendant’s failure to file a defence, and he referred to Cummings and Anor v Davis and Anor [2001] QCA 293, para 20. But significantly here, there was agreement between the parties that the defendant need not deliver a defence until the statement of claim was properly particularized. [20] Prior to the dismissal of the proceeding, it had been advanced only to a small extent. The cause of action had arisen about 11 years previously. The pleadings had not closed. An amended statement of claim had been filed, but because of the need for further and better particularization, as agreed between the parties, the requirement -- 6 of 9 -- 7 for the filing of a defence had not been pressed. The action had not proceeded beyond the first stage of prosecution. [21] This case is factually very different from Rankin v Agen Biomedical Ltd, supra, where relief was granted: there the proceeding was only 15 months old, and a defence had been delivered three months before the striking-out order was made. [22] The defendant relies on prejudice of the variety discussed McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551. That was a limitations case, as Mr Dunning pointed out, but His Honour’s observations nevertheless remain relevant to the issue of prejudice arising here. Mr Dunning suggested that this would not be a “witness intensive” case, with emphasis more on the documentation. He took me to the further and better particulars, contained in the material exhibited to Mr Everingham’s affidavit. But I would not confidently conclude from that that individual recollections may not feature importantly in any resolution of this proceeding. As but one example the other way, paragraph 2(a) of the particulars refers to face-to-face negotiations between the plaintiff and the defendant’s chief town planner Peter Tabulo. [23] I mention another matter, albeit of subsidiary relevance in the end. The mortgage which was prepared would not appear to have satisfied the requirements of the order. That flows from clause 2.1 of the schedule to the mortgage, which is in these terms: “The Mortgagor must pay the secured money or part thereof to the Mortgagee or as the Mortgagee directs within thirty (30) days of delivery by the Mortgagee of a costs assessment in Queensland Supreme Court matter number 10727 of 2003 following on a conclusion of the action in favour of the Mortgagee including an order for the payment of costs against the Mortgagor.” -- 7 of 9 -- 8 [24] There are three problems with that provision. First, the clause requires delivery of a “costs assessment”, which is not a creature known to the Uniform Civil Procedure Rules 1999 (Qld). The end point of the process of cost assessment under the Rules is a certificate of assessment. Second, the clause allows a period of up to 30 days after the delivery of a “costs assessment” before the defendant may act on the security. The order of 11 May contained no such limitation. Third, payment is predicated upon the “conclusion of the action in favour of the mortgagee including an order for the payment of costs against the mortgagor”. There is arguable ambiguity about that form of expression: would the clause be enlivened, for example, where the matter were concluded in favour of the plaintiff for a nominal amount, but with orders for costs against the plaintiff? Also, the provision would not secure interlocutory costs orders in favour of the defendant prior to a determination of the overall proceeding. [25] Mr Dunning pointed out in response that Mr Everingham’s intention was to give the mortgage to the solicitors for the defendant in advance, so that these objections would have come to light and could have been rectified. [26] Any deficiency in the draft mortgage is not a critical point for the present, because were time extended as sought, a mortgage in due form could be prepared. The deficiency of the mortgage is however of some significance, albeit not great, as a further reflection of the plaintiff’s approach to the proceeding. [27] Factors bearing critically on the ultimate exercise of discretion in this situation are the substantial delay in the plaintiff’s prosecution of the proceeding; the limited progress which had been made prior to the dismissal of the proceeding; namely, the -- 8 of 9 -- 9 prompt for the self-executing consent order, the amply warranted application for dismissal for want of prosecution; and the prejudice which would inevitably be occasioned were the proceeding now to be revived. One should also mention the public policy principle of finality (cf. Brisbane South Regional Health Authority v Taylor at p 552). All of this is in the context of a cause of action which allegedly arose approximately 11 years ago. [28] While one may sympathize where, as here, the explanation for the fate of the proceeding is inadvertence, the court is now called upon to exercise a discretion which must look more broadly to a wide range of relevant considerations. The aggregation of those considerations militates against granting an extension of time, or relieving the plaintiff of the consequences of his non-compliance with the order of 11 May. [29] The orders I make are that the application filed on 17 June 2009 be dismissed, and that the plaintiff pay the defendant’s costs, to be assessed on the standard basis. -- 9 of 9 --